CSR Case Studies

1. CSR Case Studies Presented by ArtemSinelnikov (Student ID: 32922) SahrKoroma (Student ID: 25932) IsaakBabalola (Student ID: 25315) Nelson Fernandes (Student ID: 25976) Lecturers: Corina Chin Submission Date: 31st March 2014

2. What is CSR? According to Howard Bowen, CSR is ''an obligation of businessman to pursue those policies, to make those decisions, or to follow those lines of action that are desirable in terms of the objectives and values of our society'' (Bowen, 1953). However, Milton Friedman in 1962 championed the idea that the only obligation a business has is to increase its profit.

3. Business Ethics According to Paul Taylor, ethics is ''an inquiry into the nature and grounds of morality'' (1975, p.1). He further defines morality as ''moral judgements, standards and rules of conduct'‘. David Boddy (2010) also outlines 4 main approaches to what is ethical: • Moral Principles • Human Rights • Utilitarianism • Individualism International Code of Ethics, developed in 1994 in Switzerland, is governed by 7 main principles (Kreitner, 2009): • Responsibility of Business • Economic and Social impact of business • Business behaviour • Respect for rules • Support for multilateral (free) trade • Respect for the environment • Avoidance of unethical practices

4. Stakeholder Analysis and Mapping ''Stakeholder analysisis the process of identifying the individuals or groups that are likely to affect or be affected by a proposed action, and sorting them according to their impact on the action and the impact the action will have on them’’ (Larson, 2011) Aims • To identify most influential stakeholders • To identify stakeholder orientation • To recognise social, economic and political trends Application • To help shape potential strategies • To win over antagonistic stakeholders Customers Managers and Directors The Media Shareholders Power Core Suppliers Other Suppliers Employees Communities Interest

5. Morrisons Related CSR Policies Regular shareholder meetings 2. Creation of 'Let's Go' children's program Tackling social exclusion Supporting charities 3. Promoting healthy lifestyles Affordable prices Honest product information 4. Working closely with farmers Encouraging fair conditions at home and abroad Enhanced construction Health & Safety 5. MorrisonsAcademy training Hardship fund Fair internal promotions Conflict 1. Shareholders Sale of property without consulting shareholders (The Telegraph, 2014) 2. Community Noise pollution from main stores 3. Customers Short-time returns policy 4. Suppliers No supplier logistics support 5. Employees Stores overstaffed

6. Marks & Spencer Related CSR Policies Producing a detailed governance report at the end of each year Ensuring high levels of sustainability to increase profitability 2. Internships Charity and community funding under Plan A 1% of company's profits is donated to charitable projects 3. Collecting customer feedback on Plan A activities Reducing the amount of salt and fat in M&S products and introducing healthier products Protecting customers' personal data 4. Suppliers are involved in training and education Assisting suppliers in providing high standards of animal welfare Fairtrade 5. Generous employee performance rewards M&S employee retirement club Conflict 1. Shareholders Overly enthusiastic yearly report (M&S, 2013) takes focus away from the company's debt 2. Community Closing unprofitable stores in ROI (BBC, 2003) 3. Customers 87% rise in profits (M&S, 2013) did not result in savings for the customers 4. Suppliers Short notice termination of supplier agreements (BBC, 2000) 5. Employees Cutting staff redundancy benefits by 25% (PersonnelToday, 2008)

7. Tesco Related CSR Policies Consulting shareholders on all strategic decisions Annual shareholder meetings 2. Charity work and own food banks Promoting internships Tackling the global obesity crisis 3. Honest nutrition labelling Long opening hours Affordable healthy products policy 4. Suppliers are involved in the decision making process Supporting fair trade 5. Tesco leadership and business management training Diversity advisory group Conflict 1. Shareholders UK shareholders suffering loss of profit (Financial Times, 2013) 2. Community Superstores defacing historic UK landmarks (The Telegraph, 2013) 3. Customers Sale of horse meat scandal (BBC, 2013) 4. Suppliers Demanding cash from suppliers to cover profit losses (The Guardian, 2013) 5. Employees 24-hour working shifts in parts of S. Korea and Thailand (BBC, 2014)

8. ASDA Related CSR Policies 1. 3 Interactive shareholder meetings in addition to the regular annual meetings (ASDA, 2013) 2. Supporting government anti-alcohol campaign in Scotland 3. Introduced price information per unit of weight Launched ASDA price guarantee (Price match) Long opening hours Affordable healthy products policy 4. Supplier development program Supporting small and medium sized farmers 5. Supporting workers' freedom of association Working closely with Unions Disaster relief effort with Japanese unions by parent company Wallmart Conflict 1. Shareholders No apparent conflicts 2. Community Sale of cheap alcohol to the public (The Alcohol Academy, 2011) 3. Customers Using misleading sales tactics (BBC Panorama, 2011) 4. Suppliers Forcing suppliers to trade at below-market prices (The Independent, 2010) 5. Employees Bribing employees out of union membership (Glatuc, 2006)

9. Comparison

10. The Conclusion The authors have looked at 4 large companies operating in the UK and abroad and the conflicts they have had with their stakeholders in the past 10 years. Almost every one of these conflicts led to the development of CSR policies aimed at diffusing the situation and preventing the conflict from happening again in the future. It has also been noted that 3 out of 4 companies made strong efforts to keep their key stakeholders happy by responding swiftly to their ethical concerns. However, they displayed different degrees of commitment to their less influential stakeholders. Finally, the authors concluded that Marks & Spencer currently has the most complete CSR policy, covering the widest range of environmental and social issues around the world.

11. References Felsted, A. 2013. Tesco shareholders question management’s grip after profits fall - FT.com. [online] Available at: http://www.ft.com/cms/s/0/bb8bd7aa-34f4-11e3-8148-00144feab7de.html#axzz2xHtNsFCS [Accessed: 28 Mar 2014]. BBC News. 2000. M&S sued by supplier. [online] Available at: http://news.bbc.co.uk/1/hi/business/598435.stm [Accessed: 27 Mar 2014]. BBC News. 2009. Marks and Spencer cuts 1,000 jobs. [online] Available at: http://news.bbc.co.uk/1/hi/7812917.stm [Accessed: 20 Mar 2014]. BBC News. 2013. Four M&S shops to close in Republic. [online] Available at: http://www.bbc.co.uk/news/world-europe-23598678 [Accessed: 27 Mar 2014]. BBC News. 2013. Tesco publishes horsemeat apology. [online] Available at: http://www.bbc.co.uk/news/uk-21054688 [Accessed: 28 Mar 2014]. BBC News. 2014. Tesco labour relations under fire. [online] Available at: http://news.bbc.co.uk/1/hi/business/8127477.stm [Accessed: 25 Mar 2014]. BBC Panorama. 2011. [TV programme] BBC, channel 1, 5th December 2011. Beyond 50 years: building a sustainable future. 2012. [e-book] ASDA-Wallmart. p. 39. Available through: ASDA.com http://your.asda.com/system/dragonfly/production/2012/04/17/10_38_46_632_WMT_2012_GRR.pdf [Accessed: 28 Mar 2014]. Boddy, D. (2010) Management. [S.l.]: Financial Times Prentice. Bowen, H. Social Responsibilities of the Businessman. New York: Harper and Row, 1953 Butler, S. 2013. Tesco accused of squeezing suppliers to support its profits. [online] Available at: http://www.theguardian.com/business/2013/nov/28/tesco-accused-of-squeezing-suppliers [Accessed: 28 Mar 2014]. Code of Ethics and Behaviours. 2012. [e-book] Marks & Spencer. pp. 5-7. Available through: Marks & Spencer http://corporate.marksandspencer.com/documents/specific/investors/governance/code_of_ethics.pdf [Accessed: 16 Mar 2014]. Corporate responsibility review 2011-2012. 2012. [e-book] Available through: Morrisons Corporate http://www.morrisons-corporate.com/Documents/Morrisons_CR_Review_5MB.pdf [Accessed: 28 Mar 2014]. Friedman M., Capitalism and Freedom, Chicago, University of Chicago Press, 1962. Glatuc. 2006. ASDA found guilty of anti trade union activity. [press release] 10 February 2006. Kreitner, R. 2009. Management. Boston: Houghton Mifflin Co.

12. References Larson, E. W., Gray, C. F. and Gray, C. F. 2011. Project management. New York: McGraw-Hill Irwin. Logan, G. 2008. Redundancy pay cut by 25% as Marks & Spencer denies cutting costs. [online] Available at: http://www.personneltoday.com/hr/redundancy-pay-cut-by-25-as-marks-spencer-denies-cutting-costs/ [Accessed: 20 Mar 2014]. Marks and Spencer. 2014. Marks & Spencer: Plan A - What we're doing. [online] Available at: http://plana.marksandspencer.com/we-are-doing [Accessed: 16 Mar 2014]. Martin, B. 2014. Morrisons under fire as activist investor revealed . [online] Available at: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10581962/Morrisons-under-fire-as-activist-investor-revealed.html [Accessed: 25 Mar 2014]. Philipson, A. 2013. Historic market town in Dorset becomes latest community to battle Tesco over superstore plans - Telegraph. [online] Available at: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9902738/Historic-market-town-in-Dorset-becomes-latest-community-to-battle-Tesco-over-superstore-plans.html [Accessed: 28 Mar 2014]. Simpson, J. and Taylor, J. 2013. Corporate governance, ethics, and CSR. London: Kogan Page. Sustainability Policy and Targets to 2015. 2013. [e-book] Available through: ASDA http://your.asda.com/system/dragonfly/production/2013/11/21/10_28_40_945_ASDA_SUSTAINABILITY_POLICY_GOALS.pdf [Accessed: 28 Mar 2014]. Tesco and Society 2013. 2013. [e-book] Available through: Tesco http://www.tescoplc.com/files/pdf/reports/tesco_and_society_2013_ipad.pdf [Accessed: 28 Mar 2014]. Taylor, P. W. 1974. Principles of ethics. Encino, Calif.: Dickenson Pub. Co. The Independent. 2010. Leaked memo reveals how Asda sought to beat down suppliers. [online] Available at: http://www.independent.co.uk/news/business/news/leaked-memo-reveals-how-asda-sought-to-beat-down-suppliers-2102448.html [Accessed: 28 Mar 2014]. Wood, D.J. (1991) Corporate Social Performance Revisited. Academy of Management Review 16, 691-718.