Csr strategy and brand promotion

2

Contents

1.0 Introduction ................................................................................................ 3

2.0 Measuring CSR Activities ............................................................................... 4

3.0 CSR Conceptual Framework ........................................................................... 6

4.0 Four CSR Strategies ..................................................................................... 8

4.1 Marks and Spencer’s CSR Strategies ............................................................... 8

4.2 Tesco CSR Strategies .................................................................................. 10

4.3 Sainsbury CSR Strategies ............................................................................ 11

4.4 The Co-operative Group CSR Strategies ........................................................ 12

5.0 Impact of CSR Activities .............................................................................. 15

5.1 Marks and Spencer’s ................................................................................... 16

5.2 Tesco ........................................................................................................ 16

5.3 Sainsbury’s ................................................................................................ 17

5.4 The Co-Op ................................................................................................. 17

6.0 Conclusions ............................................................................................... 19

References ......................................................................................................... 20

Bibliography ....................................................................................................... 23

Appendix i – Principles of CSR ............................................................................... 24

Appendix ii – Marks & Spencer and Tesco ............................................................... 25

Appendix iii – Sainsbury’s and The Co-Op ............................................................... 27

3

1.0 Introduction

Corporate Social Responsibility (CSR) goes beyond the name and symbol of the brand

and encompasses a much deeper understanding. de Chernatony (2006) offers the brand

iceberg to permit a holistic view of the organisation.

Figure 1: Brand Iceberg

Source: adapted from de Chernatony (2006)

CSR has created a concentrated discussion among academics (Carroll, 1999; Pearce and

Doh, 2005). Luo and Bhattacharya (2006, pg 2) highlight the importance of CSR by

stating that:

“CSR has quickly become an inescapable fact in corporate environments. As many as 90 percent of

Fortune 500 companies have strategic social responsibility plans and initiatives in place.”

Robins (2008) states that CSR is the concept of what comprises “good” or “attractive”

business behaviour and relates to what can be judged “morally” or “ethically” good.

Waddock (2004, pg 6) defines CSR as:

“The subset of corporate responsibilities that deals with a company's voluntary/discretionary

relationships with its societal and community stakeholders.”

Companies view integrating a dynamic CSR existence as a device to increase their

competitive advantage with interior and exterior stakeholders (Branco and Rodrigues,

2006).

4

This essay will briefly discuss the different approaches for measuring CSR and develop a

set of objective and subjective criteria to analyse CSR activities. Additionally, this essay

will describe and evaluate the CSR strategies, initiatives and actions of four British

retailers: Marks and Spencer, Tesco, Sainsbury’s and The Co-Operative. Finally, the

essay will conclude by evaluating the impact of these CSR activities based on observable

evidence.

2.0 Measuring CSR Activities

This section briefly discusses the various approaches to measuring Corporate Social

Responsibility. Walsh and Beatty (2007, pg 128) argue that:

“Corporate reputation may be viewed as a customer’s evaluation that results from either

a personal interaction experience with the service firm, as well as from reputation-

relevant information received about the firm.” Brammer and Millington (2005) suggest

that existing literature portrays a correlation between corporate reputation and social

responsibility this viewpoint is underpinned by Fombrun and Shanley (1990) and Gregory

(1991). Brammer and Millington (2005, pg 30) suggest that:

“Philanthropic spending may play a significant role in stakeholder management and lead

to stakeholders holding philanthropic corporations with higher esteem.”

Bhattacharya and Sen (2003) state that some of the strongest consumer–company

relationships are based on consumers’ identification with the companies that help them

satisfy one or more key self-definitional needs.

Shuili et al (2007) argue that there is a quantifiable link between consumers CSR

awareness and CSR beliefs. Furthermore, Shuili et al (2007) state that consumers'

awareness of a brand's CSR activities leads to a more favourable decisions when

consumers make decisions regarding how much they believe the CSR activities.

Figure 2.0 highlights Lee et al (2009)

and Corporate Reputation are closely

activities.

Walsh and Beatty (2007) proposed the five

Reputation (CBR) scale which was further developed by Fombrun et al (2000)

proposed the six-dimensional Reputation Quotient (RQ)

Figure 2.1: Reputation Quotient (RQ)

Economic

Economic Program Social Program

Outcomes of CSR

Corporate Reputation

Emotional AppealVision &

Leadership

Figure 2.0: CSR and Reputation

Lee et al (2009) conceptual framework which proposes

Reputation are closely correlated when measuring the impact of CSR

Source: adapted from

) proposed the five-dimensional Customer-based C

scale which was further developed by Fombrun et al (2000)

dimensional Reputation Quotient (RQ) as a tool to measure CSR

: Reputation Quotient (RQ)

Source: adapted from Fombrun et al (2000)

Principles of CSR

Legal Ethical

Processes of CSR

Social ProgramEnvironmental

ProgramEducational Program

Corporate Reputation

Vision & Leadership

Financial Performance

Workplace Environment ->

Products & Services

CSR and Reputation

5

proposes that CSR

when measuring the impact of CSR

Source: adapted from Lee et al (2009)

based Corporate

scale which was further developed by Fombrun et al (2000) who

as a tool to measure CSR.

Source: adapted from Fombrun et al (2000)

Philanthropic

Educational Program

> Social Responsibility

6

3.0 CSR Conceptual Framework

The criteria used to analyse CSR activities is underpinned by three main theories; the

Stakeholder Theory (Carroll, 1999) Porter’s (1985) Value Chain and the Pyramid of CSR

(Carroll, 1999). The stakeholder theory states that organisations have responsibilities to

a range of stakeholders, including those internal and external to the organisation

(Freeman, 1984; Clarkson, 1995; Donaldson and Preston, 1995). The main stakeholder

groups identified by Carroll (1991) include: consumers, employees, suppliers,

community, social activist groups.

The first stage of the conceptual framework assesses the CSR activities of the selected

organisation ranking the organisations performance against each of these key groups by

considering their role in the company mission statement. Additionally, Porter’s (1985)

Value Chain has been utilised to assess the CSR activities. The value chain highlights

the activities within a company that add value to the goods or services produced. The

principal idea is that the value added at each stage of the chain exceeds the cost of the

activities. The conceptual framework rates the organisations based upon its initiatives

in the Primary and support activities of the value chain.

Figure 3.0: Value Chain

Source: Porter and Kramer (2006)

Furthermore, the conceptual framework

theory of CSR. Carroll (1991) puts forward

constitute total CSR: economic, legal, ethical, and philanthropic.

framework ranks the organisations

Figure 3.1: Pyramid of CSR

The conceptual framework concludes by analysing if the CSR activities of the

organisation are: Proactive or reactive, Short term or long term, Local or geographic,

and a strategic fit or not.

The conceptual framework encompasses the theories above and rates the organisations

CSR score on a scale of one to five (one being the l

conceptual model concludes by rating the organisations overall impression of the

organisation CSR activities and a ten point scale.

It is important to note that although

analysis of the CSR activities is objective and subjective

Furthermore, the conceptual framework is underpinned by Carroll’s (1991)

Carroll (1991) puts forward four kinds of social responsibilities

constitute total CSR: economic, legal, ethical, and philanthropic. The conceptual

framework ranks the organisations based upon these responsibilities.

Source: Adapted from Carroll (1991)



encompasses the theories above and rates the organisations

CSR score on a scale of one to five (one being the lowest and 5 being the highest).


and a ten point scale.

It is important to note that although rigorously based upon the three theories above the

analysis of the CSR activities is objective and subjective in its nature.

Philantropic Responsibilities: be a good corporate citizen

Ethical Responsibilities: be ethical. The obligation to to what is right

and fair. Avoid Harm

Legal Responsibilities: obey the law. The law is society's codification

of right and wrong

Economic Responsibilities: the foundation upon which all others

rest

7

is underpinned by Carroll’s (1991) pyramid

four kinds of social responsibilities that

e conceptual

e: Adapted from Carroll (1991)



encompasses the theories above and rates the organisations

owest and 5 being the highest). The


based upon the three theories above the

4.0 Four CSR Strategies

This section will now describe and evaluat

actions of Marks and Spencer, Tesco, Sainsbury and The Co

model that has been developed.

CSR activities.

Figure 4.0: CSR Activities

4.1 Marks and Spencer’s

Utilising the conceptual framework portrays Marks and Spencer in positive light when

considering their overall impression

its plan A programme. The company’s

reason it scores highly in the conceptual framework.

committed itself to the Plan A strategy

was launched in 2007, setting out 100 commitments to achieve in 5 years.

incorporates the company’s customers and suppliers to

waste, use sustainable raw materials, trad

healthier lifestyles.” (Marks and Spencer, 2010).

director of Plan A to ensure the company stays focused on it.

five key elements of Plan A that will be ac

Send no waste to landfill, Extend sustainable sourcing

trading and Help customers and employees live a healthier lifestyle.

Spencer, 2010).

Social Activism/ Community Involvemnet

Environmental/ Green

Four CSR Strategies

This section will now describe and evaluate the key CSR strategies, initiatives and

of Marks and Spencer, Tesco, Sainsbury and The Co-Op based on the conceptual

model that has been developed. Figure 4.0 highlights the numerous different forms of

Source: adapted from McWilliams and Siegel (2001)

Spencer’s CSR Strategies


considering their overall impression of CSR. Central to the organisations

company’s dedication to this programme is the prin

in the conceptual framework. Mintel (2008) state that M&S

committed itself to the Plan A strategy despite the current economic downturn.

was launched in 2007, setting out 100 commitments to achieve in 5 years.

customers and suppliers to: “combat climate change, reduce

waste, use sustainable raw materials, trade ethically, and help customers to lead

” (Marks and Spencer, 2010). The company has even appointed a

director of Plan A to ensure the company stays focused on it. Marks and Spencer outline

five key elements of Plan A that will be achieved by 2012: “Become carbon

xtend sustainable sourcing, Set new standards in ethical

elp customers and employees live a healthier lifestyle.” (Marks and

CSR Activities

Environmental/ Green Marketing

Corporate Philantropy

8

strategies, initiatives and

based on the conceptual

Figure 4.0 highlights the numerous different forms of

McWilliams and Siegel (2001)


Central to the organisations core values is

dedication to this programme is the principal

intel (2008) state that M&S has

despite the current economic downturn. Plan A

was launched in 2007, setting out 100 commitments to achieve in 5 years. Plan A

combat climate change, reduce

e ethically, and help customers to lead

The company has even appointed a

Marks and Spencer outline

ecome carbon-neutral,

et new standards in ethical

” (Marks and

Corporate Ethically

9

Marks and Spencer’s commitment to environmental strategies is a key consideration for

ranking the companies score highly. Marks and Spencer’s have indicated their intention

to reduce their carbon footprint throughout its supply chain. The company has created

two state of the art eco factories in Sri Lanka that are at the forefront of energy

management and onsite energy production highlighting the companies long term and

global commitment to CSR.

Additionally, Marks and Spencer’s had utilised its waste from 38 food stores to power

stores in November 2007, following the development of its first anaerobic digestion plant

this action again highlights its long term commitment to CSR while also suggesting a

perfect strategic fit. Furthermore, Marks and Spencer’s can be credited with

revolutionising consumers’ revolt against the use of plastic bags. The introduction of

carrier bag charging in May 2008 to reduce usage where 5p is now levied on single-use

carrier bags with profits directed to an environmental charity. This strategy has been

replicated by many competitors within the retail environment and caused the rise of

several ‘bag for life’ programmes.

Marks and Spencer’s have also opened three next generation eco stores in October 2007

with features that result in the store emitting 95% less CO2 and using 55% less energy

than other M&S stores. The company announced in June 2008 that about half the

initiatives tested in these stores will be rolled out to all stores and that other initiatives

will be tested further before being developed across the whole estate again emphasising

their long term commitment to CSR activities.

Marks and Spencer launched a clothing recycling programme in Partnership with Oxfam

where customers could return unwanted clothing and get a £5 M&S voucher. Industry

experts Mintel (2008) reported that the scheme attracted 234,000 participants between

November 2007 and May 2008 with donated clothes sold by Oxfam topping £1 million in

August 2008. This CSR activity is a perfect strategic fit with the company’s core

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competences while highlighting the company’s commitment to its customers and

community.

4.2 Tesco CSR Strategies

Tesco represents a truly globalised company that operates in 12 countries throughout

the world with global sales of nearly £50 billion (Mintel, 2008). Tesco’s multi-format

retail offering accounts for 12% of all UK retail sales which equates to £1 in every £8

being spent in a Tesco store (Mintel, 2008). Analysing Tesco in regards to the

conceptual framework sees the retailer receive a high positive score when assessing its

overall CSR activities. Tesco highlights the key elements of its CSR Strategy as:

1. Helping its customers by making green choices more affordable.

2. Claims to be setting an example by committing to measuring and making big cuts in

its greenhouse gas emissions around the world.

3. Working with others to develop new low-carbon technology throughout the supply

chain.

Tesco score highly on their CSR activities that look to combat environmental issues. This

is underpinned by their concerted research programme to develop a universally accepted

and commonly understood measure of the carbon footprint of its products from

manufacture to use and disposal. This focus has allowed Tesco to reduce its energy

usage by 50% compared to 2000 this action demonstrates the company’s long term

strategy towards CSR. Tesco have halved the cost of energy-efficient light bulbs in stores

to encourage consumer take up of the product. Tesco have also successfully recruited

employees to become ‘energy champions’ who have been extensively trained in

environmental issues and are found in its superstore format in the United Kingdom and

Republic of Ireland. This CSR activity further emphasise the company’s commitment to

its stakeholders mainly its employees but also allows employees to educate its

consumers.

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Tesco also scores highly for its ethical sourcing practices within the conceptual

framework. Tesco failed to achieve its target of independently auditing 100% of its

high-risk supplier sites in 2007 (Mintel, 2008). However, it directed increased resources

to the task in 2008 to raise auditing levels from 73% to 100% showing the company’s

long term commitment and focus towards CSR.

Tesco also scores highly within the conceptual framework for its sourcing practices. In

2008, local produce accounted for £ 2.2% of UK sales, compared with 1.7% the previous

year (Tesco, 2010). Tesco’s long term commitment to sourcing local produces has

benefited local suppliers for example a local watercress producer in Hampshire saw its

sales grow 93% due to this strategy (Tesco, 2010).

4.3 Sainsbury CSR Strategies

Sainsbury’s operates within the UK and is striving to create and maintain a point of

difference over Tesco and other rivals by focusing on the quality of its offer. However,

Sainsbury’s achieves an identical score to Tesco when considering the overall impression

of their CSR Strategies in the conceptual framework. Sainsbury’s main CSR aims are as

follows:

1. Improve energy efficiency.

2. Raise colleague awareness of energy costs and environmental impact.

3. Transporting products more efficiently by reducing miles travelled by its delivery fleet

and using electric vehicles in its home delivery fleet.

Within the conceptual framework Sainsbury’s rank highly for its CSR activities especially

in regards environmental issues. Sainsbury’s has invested in energy efficiency projects,

including lighting, refrigeration, heating and ventilation showing the company’s long

term financial commitment to CSR activities. Sainsbury’s have also developed a five-site

energy and waste study with the Carbon Trust to improve current practice in energy and

waste management. Furthermore, they announced plans to convert 20% of its home

delivery fleet to electric vehicles by 2010 (Mintel, 2008) this justifies the company’s high

score within the conceptual framework for its inbound logistics.

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In August 2008, Sainsbury’s launched what it claims to be the first monitoring scheme to

help dairy farmers reduce their carbon emissions. The scheme is certified by the Carbon

Trust and aims to reduce CO2 emissions by 10% among 325 participating dairy farms.

This CSR activity underscores the company’s long term commitment to CSR activities

and highlights the strategic fit of its operations.

Sainsbury’s has also invested significantly in its store design with the latest concept

stores built from timber and heated by a bio-mass boiler, the store also features

rainwater harvesting for flushing toilets; minimised heat loss from draughts; lower

lighting levels; and quiet wind turbines (Sainsbury’s, 2010).

Sainsbury’s ethical strategy is also an important consideration for the company scoring

highly in the conceptual framework. Sainsbury’s aims to source with integrity in the way

it does business and sells products to ensure that ethical, social and environmental

considerations are built into its processes. It is the UK leading fair trade retailer and

sells only fair trade bananas this emphasises the company’s global reach of its CSR

activities and its desire to protect its suppliers.

Sainsbury’s emphasis on sourcing specific types of products exclusively from British

producers, including all rotisserie chickens, all potatoes used in its own-label potato

crisps and all deli counter hams and cooked meats is another consideration for it high

scores within the conceptual framework. Furthermore, Sainsbury’s appointed a regional

sourcing team to strengthen its sourcing programme underlining the company’s

commitment to its local suppliers and the community.

4.4 The Co-operative Group CSR Strategies

The Co-op has an extensive custom of ethical and Fairtrade supported by its mutual

ownership arrangement and values. The Co-Op’s values are detailed as “of self-help,

self-responsibility and democracy, equality, equity and solidarity.” (Co-OP, 2010).

Utilising the conceptual framework to analyse the company sees them score highly in

regards to the overall impression of their CSR activities.

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The Co-op re-launched its brand in 2009 utilising the strapline ‘Good for everyone’ and

focused on its ethical position and ownership by its members.

The Co-Ops ethical strategy also ensures they score highly within the conceptual

framework. The company are dedicated to ethical sourcing and trading as a component

of sustainable development which extends beyond legislative compliance. The Co-Op is

committed to increasing the amount of MSC-certified fish available to UK retailers and

consumers and is part of the Co-op’s Responsible Fish Sourcing Policy. Within its ethical

sourcing policies they run a Responsible Fish Sourcing Policy covering canned to fresh

fish and from ready meals to sandwiches to ensure it doesn’t use any fish from the

MSC’s vulnerable stocks list. The Co-Op committed £200,000 over two years to support

Marine Stewardship certification process of UK fisheries. This CSR activity emphasises

the company’s dedication to various stakeholders such as suppliers and consumers.

The Co-Op launched a new ethical policy in 2008 based on a six-month consultation with

members that found that ethical business and animal wellbeing were the most significant

topics. It immediately switched all its own-brand tea to fair trade product and banned

the sale of eggs from caged hens. Ongoing review of food supply chain to ensure

compliance with sound sourcing criteria that are embodied into trading agreements.

Within the conceptual framework The Co-Op scores highly for its ethical production

process this is due to its emphasis on moving its supply base to the adoption of SEDEX

(Supplier Ethical Data Exchange) guidelines on assessing supplier compliance with ETI

standards to define its annual auditing programme. The above CSR activities bring to

light the company’s long term commitment to its various stakeholder groups while

ensuring the scheme is a perfect strategic fit.

The Co-Op has supported the fair-trade movement since its inception in 1994 with the

company launching its long-term plan to ‘mainstream’ Fairtrade in 1998. This long term

commitment is also a major factor for the company scoring well in the conceptual

framework. The Co-Ops partnership with Supreme Creations (the world leading ethical

14

manufacturer of reusable bags) has made the cotton bag on of its most successful CSR

activities.

Furthermore, the Co-Op has lobbied to protect the environment and continue their

support for Fairtrade. The Co-Ops stance on Fairtrade has created over 2000 jobs with

the average employee earning thirty three percent above the minimum salary which has

had an encouraging result on the neighbouring area. Fairtrade price premiums have

earned over £360,000 which has been used to educate communities and provide

unsoiled water (Co-Op, 2010).

The Co-Op also philanthropically donated £75,000 to orphaned children in Malawi and

India which has funded over two hundred years of schooling. This CSR activity is

justification for the company scoring highly within the conceptual framework for its

geographical focus and support of communities.

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5.0 Impact of CSR Activities

This section evaluates the successful impact of the selected retailers CSR activities.

Industry analysts Mintel (2008) suggest state that Tesco, Sainsbury’s, Marks and

Spencer and The Co-Op are amongst the most successful retailers by Turnover. These

figures suggest that there may be a positive relationship between the companies CSR

activities and its performance within the market.

Table 5.2 highlights the Top four most trusted retailers in the UK according to Mintel’s

(2008) consumer research.

Table 5.2: Consumer trust in retailers, 2007 and 2008

March 2007 June 2008 % point change

Base: adults aged 15+ 2,068 1,007 2007-08

1. Marks and Spencer 22 22 -

2. Sainsbury’s 23 19 -4

3. Tesco 28 18 -10

4. Co-op - 18 -

Source: Adapted from Mintel (2008)

Table 5.3 highlights consumers trust in retailers and compares this figure to the

frequency that they shop with the retailer (Mintel, 2008).

Table 5.1: Leading Retailers by Turnover

Retailer 2004/05 2005/06 2006/07 2007/08

£m £m £m £m

1. Tesco 27,146.0 29,990.0 32,665.0 34,874.0

2. J Sainsbury 14,914.0 15,731.0 16,860.0 17,837.0

3. Asda 14,225.9 14,786.2 15,657.1 nya

4. Morrisons 12,103.7 12,114.8 12,461.5 12,969.0

5. Marks & Spencer 7,034.7 7,275.0 7,977.5 8,309.1

6. Somerfield 4,676.8 4,554.8 4,369.5 nya

7. Co-operative Group 3,016.1 2,983.4 3,037.8 3,676.8

8. Total Co-

op/Somerfield

7,692.9 7,538.2 7,407.3 3,676.8

9. Alliance Boots 4,651.1 5,731.0 5,956.0 nya

10. John Lewis

Partnership

4,757.5 5,149.3 5,698.4 6,052.2

11. Home Retail Group 5,232.0 5,455.0 5,519.1 5,889.4

12. DSG International 4,368.0 4,495.2 4,659.7 nya

13. Kingfisher 4,277.2 4,172.2 4,409.0 4,395.0

14. Next 2,660.2 2,901.8 3,029.5 3,054.9 Source: Adapted from Mintel (2008)

16

Table 5.3: Consumer trust in retailers compared to usage, June 2008

Base: 1,007 adults aged 15+

Used store in last

12 months Trust retailer Trust:Use ratio

% %

1. Co-op 34 18 1.9

2. John Lewis/Waitrose 25 12 2.1

3. M&S 52 22 2.4

4. Sainsbury’s 55 19 2.9

5. Asda 52 15 3.5

6. Tesco 74 18 4.1

7. Morrisons 45 10 4.5

8. IKEA 20 4 5.0

9. Amazon 16 2 8.0

10. Boots 58 7 8.3

Source: Adapted from Mintel (2008)

The above tables can be utilised to suggest the effectiveness and success of the retailer

CSR activities.

5.1 Marks and Spencer’s

Marks and Spencer receives global recognition for its CSR activities by ranking in

Ethisphere’s 2009 World’s Most Ethical Companies. Furthermore, research by Mintel

(2008) states that Marks and Spencer’s have a considerable gap between itself and the

other clothing companies. This suggests that all its competitors need to be doing a lot

more to convince customers that ethical sourcing is being tackled properly.

Mintel (2008) further concludes that Marks and Spencer’s has one of the highest

consumer ratios regarding trust versus usage (see table 4.3). Suggesting that Marks

and Spencer consumers are very receptive to the company’s strong corporate

commitment to it plan A. British Branding Group (2010) reports that Marks and

Spencer’s Plan initiative has seen consumers use 70% less carrier bags with three

quarters of M&S customers using a substitute product.

5.2 Tesco

Tesco scores highly in the conceptual framework and holds the position as the most

successful retailer in terms of turnover (see table 4.1). However, Tesco has suffered a

significant worsening of its trust ratio (see table 4.2) implying that it is not delivering

17

against expectations or is seen as not doing enough. Mintel’s (2008) research shows

that most consumers have purchased goods in Tesco more than any other retailer and

still holds a decent trust versus usage score (see Table 4.3).

5.3 Sainsbury’s

The Global 100 Most Sustainable Corporations in the World annual report see Sainsbury’s

rank 49th. The company scores highly in CO2 productivity and waste productivity

suggesting the broad success of its CSR activities (Global 100, 2010). Furthermore,

Sainsbury’s place second in Mintel’s (2008) most trusted retailers survey (see table 4.2).

Additionally, the retailer scores highly in Mintel’s (2008) trust versus usage question

further underpinning the success of its CSR activities (see Table 4.3).

5.4 The Co-Op

Similarly to Marks and Spencer’s, the Co-op, has positive ratios of trust versus usage

ratio again suggesting that the Co-Op’s consumers are highly receptive to the

organisations CSR activities (see table 4.3). The Co-op is the most trusted company by

its shoppers to ‘make a real difference’.

However, Mintel (2008) reports that food retailing and distribution is where the most of

its energy use and waste originates, figures indicate that its performance is no better

than median, which suggests that it has considerably more to do to live up to its

stakeholders’ expectations.

The Co-Op is the most decorated retailer in terms of their CSR activities accumulating

various awards from independent sources:

1. “Retail Week's Responsible Retailer of the Year was awarded to The Co-operative

Food in both 2008 and 2009 (Retail Week, 2009).”

2. “The Co-operative Group was awarded the Renewable Energy Association's Pioneer

Award 2009 (REA, 2009).”

3. “The Co-operative Group is ranked within the UK's 50 Best Workplaces 2009

(Greatplacetowork, 2009).”

18

4. “In March 2009, The Co-operative Food was rated the number one supermarket for

addressing social and environmental issues, for the second consecutive year, in the

Concerned Consumer Index (Populus, 2009).”

However, an important consideration on future awards must be given to The Co-Op’s

acquisition of Somerfield. The acquisition will involve extensive integration in terms of

environmental measurement and management, as Somerfield placed very little

importance to these issues (Mintel, 2008).

19

6.0 Conclusions

In conclusion, this essay has briefly discussed the different approaches for measuring

CSR through the Lee et al’s (2009) corporate reputation theory. Additionally, Fombrun

et al (2000) six-dimensional Reputation Quotient (RQ) was discussed.

Furthermore, this essay has developed a conceptual framework to analyse CSR

activities. The conceptual framework is primarily underpinned by Carroll’s (1999)

Stakeholder Theory, The Pyramid of CSR (Carroll, 1999) and Porter’s (1985) Value

Chain.

This essay has successfully described and evaluated the CSR strategies, initiatives and

actions of four British retailers: Marks and Spencer, Tesco, Sainsbury’s and The Co-

Operative based upon the conceptual framework developed.

Finally, the essay has concluded by evaluating the impact of these CSR activities based

on observable evidence. Research by industry experts Mintel (2008) highlights the

success that the selected retailers have had in their CSR activities. Marks and Spencer

receives global recognition for its CSR activities by ranking in Ethisphere’s 2009 World’s

Most Ethical Companies. Tesco has suffered a significant worsening of its trust ratio (see

table 4.2) implying that it is not delivering against expectations or is seen as not doing

enough. The Global 100 Most Sustainable Corporations in the World annual report see

Sainsbury’s rank 49th. Co-Op is the most decorated retailer for its CSR activities winning

copious awards such as Retail Week's Responsible Retailer of the Year was awarded in

both 2008 and 2009 (Retail Week, 2009).

20

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Appendix i – Principles of CSR

Carroll (1991) Principles of CSR:

Level Main Components: It is important…

Economic

To perform in a manner consistent with maximising earnings per share

To be committed to being as profitable as possible

To maintain a strong competitive position

To maintain a high level of operational efficiency

That a successful firm be defined as one that is consistently profitable.

Legal To perform in a manner consistent with expectations of government and the law.

To comply with various national and supra-national laws and regulations.

To be a law-abiding corporate citizen.

That a successful firm be defines as one that fulfils its legal obligations.

To provide goods and services that at least meet the minimal legal requirements.

Ethical To perform in a manner that is consistent with the expectations of societal mores and

ethical norms.

To recognise and respect new or evolving ethical/moral norms adopted by society.

To prevent ethical norms from being compromised in order to achieve corporate goals.

That good corporate citizenship is defined as doing what is expected morally or ethically.

To recognise that corporate integrity and ethical behaviour go beyond mere compliance

with laws and regulations.

Philanthropic To perform in a manner consistent with the philanthropic and charitable expectations of

society.

To assist the fine and performing arts.

That managers and employees participate in voluntary and charitable activities within

their local communities.

To provide assistance to public and private educational institutions.

To assist voluntarily those projects that enhance a community’s ‘quality of life’.

Source: Adapted from Carroll (1991)

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Appendix ii – Marks & Spencer and Tesco

Company 1 Company 2

Name of company

Marks and

Spencer Tesco

(rate all item on 5-point scales, 1 being the lowest)

Useful Benefit 5 5

Mission Statement 5 5

Stakeholders (overall assessment) 4

Employees 4 5

Customers 4 4

Suppliers 5 3

Shareholders 4 5

Environment 5 4

Community 5 5

Government 4 3

Social Activist Groups 3 3

Primary Activities (overall assessment) 3 4

Transport (Inbound Logistics) 4 4

Materials 5 5

Parts from Suppliers 4 3

Ethical Practice Towards Suppliers 5 3

Energy 5 3

Efficiency 5 5

Waste Management 5 4

Ethical Production Practice 5 4

Transport (Outbound Logistics - Distribution) 3 4

Packaging 3 4

PR / Advertising 3 3

Privacy, Confidentiality, Ethics in Market Research 2 4

Pricing Practice 3 3

Ethical Selling Practice 3 4

Consumer Information 3 5

Feedback 3 4

Lifecycle Management of Products 4 4

Support Activities (overall assessment) 3 5

R&D - Product / Service Innovation (If the product itself as well as the

process of making & disposing the product is Eco-friendly) 4 4

External Links (Universities, Research Institutes) 2 2

Ethical Research Practice / Product Testing 3 5

Transparency, Code of Conduct 5 4

Financial Reporting, Accounting Standards 5 5

Lobbying 1 4

Governance 2 4

Employee Welfare & Benefits (e.g. Insurance, Social Benefits, etc.) 3 5

Health & Safety Issues 3 5

Training Opportunities 3 5

Policy towards Lay-Offs 4 5

Diversity 4 5

Economic Responsibility 4 5

Legal Responsibility 5 5

Ethical & Environmental Responsibility 5 4

Philanthropy 4 3

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(1) Proactive … (5) Reactive CSR Strategy 2 2

Time Horizon (1) Short Term … (5) Long Term 5 5

Geographic Focus: (1) Local … (5) Global 5 5

Strategic Fit: 1=perfect fit … 5=total misfit 1 1

(rate on 10-point scales, 1 being the lowest)

Overall Impression of CSR Activities 9 8

Annual Sales (2008 year) 712.9M 58,588

Annual Sales (2009 year) 897.8M 59,426

EBIT 2008 (=earnings before interest and tax) 1007.1M 2,803

EBIT 2009 604.4M 2,954

Stock Price (1.1.2009) 221.00P 365.20p

Stock Price (1.1.2010) 412.40p 412.05p

Stock Price (1.3.2010) 330.10p 419.70p

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Appendix iii – Sainsbury’s and The Co-Op

Company 3 Company 4

Name of company Sainsbury The Co-Op

(rate all item on 5-point scales, 1 being the lowest)

Useful Benefit 4 4

Mission Statement 5 5

Stakeholders (overall assessment) 5

Employees 4 5

Customers 5 4

Suppliers 4 5

Shareholders 5 5

Environment 5 5

Community 4 5

Government 4 5

Social Activist Groups 3 4

Primary Activities (overall assessment) 4 5

Transport (Inbound Logistics) 4 4

Materials 5 5

Parts from Suppliers 5 5

Ethical Practice Towards Suppliers 4 5

Energy 3 4

Efficiency 4 5

Waste Management 4 5

Ethical Production Practice 5 5

Transport (Outbound Logistics - Distribution) 4 4

Packaging 5 5

PR / Advertising 4 4

Privacy, Confidentiality, Ethics in Market Research 3 4

Pricing Practice 4 4

Ethical Selling Practice 4 5

Consumer Information 5 5

Feedback 4 4

Lifecycle Management of Products 4 5

Support Activities (overall assessment) 4 4

R&D - Product / Service Innovation (If the product itself as well as the

process of making & disposing the product is Eco-friendly) 3 4

External Links (Universities, Research Institutes) 2 2

Ethical Research Practice / Product Testing 3 5

Transparency, Code of Conduct 3 5

Financial Reporting, Accounting Standards 4 5

Lobbying 2 5

Governance 3 5

Employee Welfare & Benefits (e.g. Insurance, Social Benefits, etc.) 4 5

Health & Safety Issues 4 5

Training Opportunities 4 4

Policy towards Lay-Offs 4 4

Diversity 5 4

Economic Responsibility 4 5

Legal Responsibility 5 5

Ethical & Environmental Responsibility 5 5

Philanthropy 3 4

(1) Proactive … (5) Reactive CSR Strategy 2 1

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Time Horizon (1) Short Term … (5) Long Term 5 5

Geographic Focus: (1) Local … (5) Global 4 5

Strategic Fit: 1=perfect fit … 5=total misfit 1 1

(rate on 10-point scales, 1 being the lowest)

Overall Impression of CSR Activities 8 10

Annual Sales (2008 year) 19287M 5079.5M

Annual Sales (2009 year) 20383M 6655.5M

EBIT 2008 (=earnings before interest and tax) 17837M 3953.9M

EBIT 2009 18911M 5720.4M

Stock Price (1.1.2009) 336.50p 118.00p

Stock Price (1.1.2010) 324.20p 131.75p

Stock Price (1.3.2010) 330.40p 128.25p

Csr strategy and brand promotion

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