CSR activities and its effect.

1. Department of Marketing
Assignment
Corporate Social
Responsibility a bright
idea?
HEMPLE, James Grant
Professor Heiner Evanschitzky | Globalisation and CSR | MK 924 | Elective
Individual Essay | Session 2009/2010 | Semester B | Submission Date 02/03/2010 | Msc
International Marketing

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
2

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).
3

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.
4

5. Figure 2.0 highlights Lee et al (2009) conceptual framework which proposes that CSR
and Corporate Reputation are closely correlated when measuring the impact of CSR
activities.
Figure 2.0: CSR and Reputation
Principles of CSR
Economic Legal Ethical Philanthropic
Processes of CSR
Environmental
Economic Program Social Program Educational Program
Program
Outcomes of CSR
Corporate Reputation
Source: adapted from Lee et al (2009)
Walsh and Beatty (2007) proposed the five
) five-dimensional Customer-based C
based Corporate
Reputation (CBR) scale which was further developed by Fombrun et al (2000) who
proposed the six-dimensional Reputation Quotient (RQ) as a tool to measure CSR
dimensional CSR.
Figure 2.1: Reputation Quotient (RQ)
:
Workplace
Vision & Financial Environment ->
> Social
Emotional Appeal
Leadership Performance Products & Responsibility
Services
Source: adapted from Fombrun et al (2000)
5

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
6
Source: Porter and Kramer (2006)

7. Furthermore, the conceptual framework is underpinned by Carroll’s (1991) pyramid
theory of CSR. Carroll (1991) puts forward four kinds of social responsibilities that
constitute total CSR: economic, legal, ethical, and philanthropic. The conceptual
e
framework ranks the organisations based upon these responsibilities.
Figure 3.1: Pyramid of CSR
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
Source: Adapted from Carroll (1991)
e:
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 lowest and 5 being the highest). The
lowest
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 rigorously based upon the three theories above the
analysis of the CSR activities is objective and subjective in its nature.
7

8. 4.0 Four CSR Strategies
This section will now describe and evaluat the key CSR strategies, initiatives and
evaluate
actions of Marks and Spencer, Tesco, Sainsbury and The Co
Co-Op based on the conceptual
model that has been developed. Figure 4.0 highlights the numerous different forms of
CSR activities.
Figure 4.0: CSR Activities
CSR Activities
Social Activism/
Environmental/ Green
Community Corporate Philantropy Corporate Ethically
Marketing
Involvemnet
Source: adapted from McWilliams and Siegel (2001)
4.1 Marks and Spencer’s CSR Strategies
Utilising the conceptual framework portrays Marks and Spencer in positive light when
considering their overall impression of CSR. Central to the organisations core values is
its plan A programme. The company’s dedication to this programme is the prin
principal
reason it scores highly in the conceptual framework. Mintel (2008) state that M&S has
intel
committed itself to the Plan A strategy despite the current economic downturn. Plan A
was launched in 2007, setting out 100 commitments to achieve in 5 years. Plan A
incorporates the company’s customers and suppliers to “combat climate change, reduce
to: combat
waste, use sustainable raw materials, trade ethically, and help customers to lead
trade
healthier lifestyles.” (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 ac
achieved by 2012: “Become carbon
ecome carbon-neutral,
Send no waste to landfill, Extend sustainable sourcing Set new standards in ethical
xtend sourcing, et
trading and Help customers and employees live a healthier lifestyle.” (Marks and
elp lifestyle.”
Spencer, 2010).
8

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
9

10. 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.
10

11. 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.
11

12. 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.
12

13. 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
13

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.
14

15. 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 5.1: 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- 7,692.9 7,538.2 7,407.3 3,676.8
op/Somerfield
9. Alliance Boots 4,651.1 5,731.0 5,956.0 nya
10. John Lewis 4,757.5 5,149.3 5,698.4 6,052.2
Partnership
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)
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).
15

16. Table 5.3: Consumer trust in retailers compared to usage, June 2008
Base: 1,007 adults aged 15+
Used store in last
Trust retailer Trust:Use ratio
12 months
% %
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
16

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).”
17

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).
18

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).
19

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23

24. 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)
24

25. Appendix ii – Marks & Spencer and Tesco
Company 1 Company 2
Marks and
Name of company 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
25

26. (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
26

27. 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
27

28. 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
28