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TESCO an Ethical Audit

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TESCO an Ethical Audit

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  1. TESCO AN ETHICAL AUDIT (CASE STUDY) Company Name: Home Of Dissertations Website: https://www.dissertationhomework.com Contact Number: +44 7842798340 CONNECT NOW

  2. anEthical Audit

  3. Introduction • Tesco is a leading retailer in the UK • Tesco has: • 450,000 colleagues, • more than 6,800 shops around the world, and • around 80 million shopping trips per week (Tesco 2019) • This presentation critically analyses Tesco’s approach to corporate social responsibility (CSR) and sustainability

  4. Tesco’s approach to CSR A CSR driven organisation “should strive to make a profit, obey the law, engage in ethical practices and be a good corporate citizen” (Carroll p. 43) • CSR refers to the social responsibility of a business that incorporates legal, economic, discretionary, and ethical societal expectations of firms at a specific time period (Carroll 1979) • Carroll’s pyramid model is used to analyse Tesco’s approach to CSR • The pyramid has four dimensions namely legal, economic, ethical and philanthropic

  5. The economic dimension The society expects a company to secure its survival and development by effectively balancing risks and projected benefits (Carroll 2015) • Tesco has continually made profits thus its meets the society’s economic expectations. • For example, in the 2019 financial year, Tesco had an operating profit of £2,153m which reflects a 17.1% increase in operating profit when compared to 2018’s profit of £1,839m (Tesco 2019). • With such a profit margin, the society and investors are able to trust that Tesco can secure its development through its operational activities.

  6. The legal dimension A legally responsible business offers products and services that meet the minimum legal requirements, fulfils legal obligations towards stakeholders, and remains a law-abiding corporate citizen (Carroll 2016) • Despite its commitment to comply with all legal requirements, Tesco has been charged with several non-compliance issues:For example, • Gender is among the protected characteristics in the Equality Act 2010 yet according to Mirror (2019), Tesco store workers who are predominantly women have been paid up to £3 less per hour than warehouse and distribution centre workers who are predominantly men. • Several Tesco employees including Chris Bush have sued the organisation for unfair dismissal (Financial Times 2019). • Tesco has been caught in accounting scandals where three of its executive officers were accused of overstating profits; for example, in 2014, Tesco was found to have inflated its profits by £250m in order to retain its share price (Financial Times 2017). • However, Tesco has also complied with some regulations. For example, following the introduction of the sugar tax, Tesco has been taking sugar out of its drinks by an average of 5% each year (Tesco 2016).

  7. The ethical dimension • Tesco is committed to maintaining the highest standards of ethics and integrity in the way it does business. • Tesco relaunched the Code of Business Conduct in 2015 setting out its minimum expectations for all colleagues. • The Code outlines the three values that guides Tesco to include: • no one tries harder for customers, • we treat everyone how they like to be treated, • we use our scale for good (Tesco 2015). • Tesco is active in assessing consumer needs and responding to them by developing their products (Kucharska 2019) • Tesco responds the customer complaints is a friendly way and covers up for any losses. For example, in 2016, a shopper found a worm in a cucumber he had purchased from a Tesco shop in Dinnington and complained to Tesco in the form of a poem. In response, Tesco wrote another poem and sent the shopper £10 to cover for the loss (BBC 2016).

  8. The philanthropy dimension • In the 2018/19 financial year, Tesco supported over 29,000 local projects and causes (Tesco 2019). • Additionally, Tesco approved a Health Charity Partnership with Diabetes UK, Cancer Research UK and The British health Foundation in the 2019 financial year and its committee members visited these partnerships to help the organisation better understand how it can help (Tesco 2019). • Further, Tesco launched its Community Cookery Schools Programme in 2019 to help community groups make the best use of the food they receive in donation programmes (Tesco 2019). • Finally, the organisation has 320 Community Champions in different stores across the UK who help Tesco build relationships with communities and support local events (Tesco 2019).

  9. Tesco’s Approach to Sustainability • Sustainability refers to the ability of an organisation to achieve the direct and indirect needs of its stakeholders without compromising its ability to meet the stakeholders’ future needs (Revert et al. 2018). • The “triple bottom line” (TBL) model is used to critically analyse Tesco’s approach to sustainability. • The model has three dimensions namely economic, environmental, and social dimensions

  10. The economic dimension • Tesco acknowledges that great value is more than great prices and therefore commits to provide its customers, colleagues, suppliers, and communities what is of good value which results in profit maximisation (Tesco 2019). • In addition, Tesco’s sustainability programme (Little Helps Plan) has made it better in business helping the company differentiate its brand and as such respond to the changing needs of customers while reducing operating costs and minimising resource consumption and waste (Tesco 2019). • The Little Helps Plan can therefore be seen to drive economic value for Tesco. • Through the Little Helps Plan, Tesco was able to offer leadership training to 17,156 of its managers (Sparks 2018). • Additionally, the plan helped the company develop its products resulting in increased supplier satisfaction, reduced waste and increased cost saving.

  11. The environmental dimension • In its sustainability report, Tesco states that its packaging will be fully recyclable by 2025 and by 2018 83% of Tesco’s packaging in the UK were fully recyclable (Tesco 2019). • In addition, Tesco seeks to reduce absolute carbon emissions from its operations to a 100% by 2050 and use electricity from renewable resources by 65% in 2020 and 100% by 2030 (Tesco 2019). • Tesco has lived according to its promises; according to Financial Times (2019), Tesco is among the six out of 16 global food companies that have set targets and committed to reduce supply chain emissions from livestock agriculture. • Additionally, Financial Times (2012) considers Tesco an early champion of the green revolution, which signals Tesco’s level of commitment to environmental protection. • In minimising food waste, Tesco worked with sustainability consultancy Anthesis to develop ways of measuring where food waste occurred from ‘farm to fork’ as seal the loops (The Guardian 2014), which has helped Tesco minimise food wastage by 81% as at 2018 (Tesco 2018). • In 2018, Tesco admitted that some of its packages are hard to recycle thus promised it would remove them by the end of 2019 (The Guardian 2018). • By February 2019, Tesco had removed 2.914 tonnes of hard to recycle materials from its brand packaging which is commendable progress towards its end of 2019 goals (Tesco 2019).

  12. The Social Dimension • Tesco helps its colleagues look after their physical and mental wellbeing so they can be at their best at work and at home (Tesco 2019). • Tesco also partners with leading health charities in the UK to help colleagues and customers make healthy choices (Kucharska 2019). • Further, Tesco encourages customers and communities to consume fruits and vegetables; in fact, Tesco given children a Free Fruit in all its major stores in UK (Johnson et al. 2018). • Moreover, Tesco makes its food and drink brands more healthier while raising awareness of healthier choices (Faulkner et al. 2014). • In 2019, Tesco was awarded the Bupa Health and Wellbeing Award for helping 300,000 staff tackle their health concerns (Business in the Community 2019), which confirms that Tesco is committed to fulfil its promises to the society

  13. References • BBC 2016. Tesco customer finds a worm in his cucumber and his complaint goes viral. [Online] Available at https://www.bbc.com/news/uk-england-37014050 [Accessed 4 December 2019] • Business in the Community 2019. The Bupa Health and Wellbeing Award: Tesco. [Online] Available at https://www.bitc.org.uk/case-study/the-bupa-health-and-wellbeing-award-tesco/ [Accessed 5 December 2019] • Carroll, A.B., 2016. Carroll’s pyramid of CSR: taking another look. International journal of corporate social responsibility, 1(1), p.3. • Financial times 2012. Tesco steps back on carbon footprint labelling. [Online] Available at https://www.ft.com/content/96fd9478-4b71-11e1-a325-00144feabdc0 [Accessed 5 December 2019] • Financial Times 2017. Former Tesco executives accused of falsely boosting profits. [Online] Available at https://www.ft.com/content/eae8d5ce-a51c-11e7-9e4f-7f5e6a7c98a2 [Accessed 4 December 2019] • Financial Times 2019. Former Tesco executive Chris Bush sues retailer alleging unfair dismissal. [Online] Available at https://www.ft.com/content/6f616bca-20ca-11e9-b126-46fc3ad87c65 [Accessed 5 December 2019]

  14. References Cont. • Mirror 2019. Thousands of Tesco employees could be owed £10,000 each in equal pay row. [Online] Available at https://www.mirror.co.uk/money/thousands-tesco-employees-could-owed-20378188 [Accessed 4 December 2019] • Revert, A. G., Garcia-Sabater, J., & Insa, C. M. (2018). Triple bottom-line business model. case study on the organic food retailing. Working Papers on Operations Management, 9(1), 30-52. • Sparks, L., 2018. Sustainable Development and Food Retailing: UK Examples. In Food Retailing and Sustainable Development: European Perspectives (pp. 67-80). Emerald Publishing Limited. • Tesco 2015. Our Code of Business Conduct. [Online] Available at https://www.tescoplc.com/media/1143/code_of_business_conduct_2015.pdf [Accessed 4 December 2019] • Tesco 2016. An update on our corporate responsibility commitments. [Online] Available at https://www.tescoplc.com/media/475739/corporate-responsibility-update_nov-2016-final.pdf [Accessed 4 December 2019] • Tesco 2019. Serving shoppers a little better every day: Annual report and financial statements 2019. [Online] Available at https://www.tescoplc.com/media/476423/tesco_ar_2019.pdf [Accessed 3 December 2019] • The Guardian 2014. Tesco: working with suppliers to cut food waste. [Online] Available at https://www.theguardian.com/sustainable-business/sustainability-case-studies-tesco-food-waste [Accessed 5 December 2019]

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