CORPORATE SOCIAL RESPONSIBILITY THEORY AND PRACTICE IN UK- a case study of Tesco

7/23/2019 CORPORATE SOCIAL RESPONSIBILITY THEORY AND PRACTICE IN UK- a case study of Tesco

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Contents Page No.

Chapter one (Introduction) 04

1.1 Background of the study 04

1.2 Problem discussion

1.3 Purpose of the research 04

1.4 Research Aim and objectives 04

1.5 Research questions 05

1.6 Research Hypotheses

1.7 Rationale for choosing the proposed research 05

1.8 Background of Tesco (Case Company)

Chapter Two (Literature review) 06

2.1 Introduction 06

2.2 Corporate Social Responsibility 06

2.3 Reasons for companies to engage in CSR 06

2.4 The application of CSR

2.5 Aspects of CSR

2.6The correlation between CSR usage and financial performance2.7 Summary 09

Chapter 3 (Research methodology)

3.1 OVERVIEW

3.2 Research approach

3.3 Research method

3.4 Research strategy

3.5 Case selection

3.6 Data collection method

3.7 Sampling technique

3.8 Proposed questionnaire

3.9 Data analysis & presentation method

3.10 Research design

3.11Validity

3.12 Reliability

3.13 Ethical Consideration

Chapter four (Findings & Analysis)

4.1 Overview

4.2 Findings regarding the reasons why an organization(Tesco) involves in CSR

4.3 Findings regarding the application of CSR at Tesco

4.4 Findings regarding the connection between financial operation and CSR atTesco

4.5 Findings regarding the Importance of Social Responsibi lity for the UKConsumer

Research Title

CORPORATE SOCIAL RESPONSIBILITY THEORY AND PRACTICE IN UK- acasestudy of Tesco

Executive Summary

This study is to analyze how and why organizations engage in CSR. In the recentyears the corporate social responsibility has been an admired topic for discuss, aswell as al though different insights exist on the position of organizations in thesociety, businesses, large or little, cannot overlook the idea any longer.Organizations which are close to social responsibili ty issues became concernabout the principled ground of achieving social obligation. But there are peoplewho said that an institute should give priority to the ethical issues rather than thestructured law. They also believed that responsibil ity towards society can depritiatethe values of economic growth which is a big critics in fact. There were fourobjective of this study such as to analyze why companies engage in CSR; toevaluate how companies apply CSR; toanalyze the relation between the use of CSR and financial performance; toexamine the feelings of the consumers toward CSR. An empirical study has beenconducted by the researcher himself to collect the primary data among the selectedsamples (110) to achieve above objectives. The survey among the respondentswas conducted following the semi structured interview on the basis ofpredetermined questionnaire. From the findings it can be said that the reseaonsbehind the engagement in CSR is to improve organizations reputation and image.In the study it is found that the company (Tesco) participates in CSR in the area ofenvironmental protection, charity work, sponsorship and work envi ronment. Fromthis study it could be said that CSR investments of the company will affect theperformance of the company since customers value CSR activities. From thehypotheses testing it is found that consumers have positive feelings towards CSR,so, they will be loyal to the company that is being engaged in CSR and therebyincrease the sales.

Table of Contents


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4.6 Summary

Chapter five (Conclusion & Recommendation)

5.1 Research Overview

5.2 Conclusion

5.3 Recommendation for future research

Reference 11

Appendix 12-13

CHAPTER ONE

INTRODUCTION

1.1 Background of the study

In the recent years the corporate social responsibil ity has been an admired topic fordiscuss. Corporate social responsibili ty, certainly, comprises more aspect than justconcerning about the environmental effects of organizations. It came in peoplesmind at the later 1880, period of primary industrial development that organizationsshould care about the idea of social responsibility. Organizations which are close tosocial responsibili ty issues became concern about the principled ground ofachieving social obligation. But there are people who said that an institute shouldgive priority to the ethical issues rather than the structured law. They also beli evedthat responsibility towards society can depritiate the values of economic growthwhich is a big critics in fact. Latter 1880 manifestation of the accountability forsociety has got stablity but after that period the organization began to involve inhumanitarian force strongly (Adamsson and Johansson 2008).This study aims toanalyze the corporate social responsibility andas well as how and whyorganizationits engage in corporate social responsibility.

Many people say that the idea of Corporate Social Responsibility (CSR) isrelatively a new idea to grow more attention and focus from the businessperson,companies, customers and academician etc. It contracts with the accountability ofthe of institutions in business exercises and aftermath of the involvement like theattention of the consumers, buyers, businessperson, environmentalist and otherrelated people as in total. A lot of international firms giving importance to the socialand business entity which can give a company a humanitarian face and ultimately itwill bring reputation and instant commercial benefit as people become loyal to this.Thats why companies are taking CSR issue as a must do things for getting anextra benefit on present very competitive world and thus gladly keeping theirconsumer community safe from other competition. Many international organizationshave already integrated social responsibil ity issue in their future strategy, aim,vision and supporting social customs and values on their manual to increase itsgoodwill by incorporating the buyers, officials, business plans and among thewhole process.

A data shows that in January 2008 the Bain & Company accessing firm exposedalmost 50% of the top 50 sellers and 70% of them frequently publish sustainabili tyreports In January 2008 the Bain & Company consulting firm revealed thatapproximately 50% of the top 50 retailers and 70% of the top 50 consumer productscompanies distribute their sustainability papers (Rigby, 2008).

In recent years the call for expanding more in CSR has been strongly emerged fromthe consumer, staff, higher officials and community leaders. As the consciousnessfor global warming has gradually upgraded it automatically lead to the furtherdemand of CSR (Diana, 2006). Many firms have respected it by doubling their CSRcost (McWilliams & Siegel, 2000). There are huge corporations relentlessly workingwith this issue now days. Corporations become concern about the effect of climatechange and environmental degradation. Anyway, there are many who actuallydoing this to benefit more from other side (McWilliams & Siegel, 2000).

1.2 Problem discussion

There are huge pressures that company takes the social obligation from all i tsshareholders and consumers today are starting to make comments in decisi onmaking of the corporations. They are concerned about the working place, condition,

human rights protection, environmental stability, child l abor and many things whento buy a particular product (Rahmani & Nil sson, 2007; Jenkins, 2005).

There are mainly five key players in guiding focus on the CSR issue and these are-Shareholders concern about human rights, ethics and values with the directinvestor compression and its an ongoing tendency towards social accountability(Comfort, Hiller and Jones 2006). Besides, companies taking CSR as the image ofa company to increase popularity (Comfort et al. (2006). There are also row thatCSR has many benefits l ike to improve its public face, popularity, marketing,reducing further marketing cost and many a lot. It also improves the capability of theemployer and creates a comfortable environment in office. Moreover, it developsgood relation with government; civil society organizations create more well-wishersand importantly increase its capacity in idea generating. It creates a close l ink withthe customer for the company.

1.3 Purpose of the research

Corporate social responsibil ity has di fferent advantages for the organizations toimprove the economical conditions as well as the outcome, to reduce the cost of theoperations etc. Thepurpose of this study is to achieve a deeper understanding about CSR.


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1.4 Research Aim and objectives

The aim of this research is to analyze corporate social responsibility and itsapplication in the business. Following objectives will be fulfilled through thisresearch.

i. To analyze why companies engage in CSR;ii. To evaluate how companies apply CSR;iii. To analyze the relation between the use of CSR and financial performanceiv. To examine the feelings of the consumers toward CSR.

1.5 Research questions

The purpose of the research will be done byanswering the following research questions:

i. Why do companies engage in CSR?ii. How do companies apply CSR?iii. What is the correlation between the use of CSR and financial performance?

1.6 Research Hypotheses

H 1: Consumers have positive feelings toward CSR

H 2: There are no differences between men and women behaving in a social lyresponsible manner

1.7 Rationale for choosing the proposed research

An institution takes the responsibility of CSR cost from all of its shareholders whichcreate a pressure. When a customer goes to buy he or she is highly concernedabout the working conditions, humanitarian involvement, environmental issues,individual protection and these are sometime get attraction more than a goodproduct(Rahmani and Nilsson (2007), Jenkins (2005).

Basically five categorical factors are involved in increasing the changing focus of acustomer at present day. Virtuous average, Respect to individuals, behavior of theofficials, attachment with the community and some humanitarian factors are gettingpriority.

Moreover, almost all organizations are taking CSR issue as a brand whi ch shouldpromote in a very decent manner and they are taking this as to increase theirrespect to individual s needs (Comfort (2006). There are also many types of benefita corporation can get by strongly implementing its corporate social responsibili tyand fact is sometimes it can give an economic benefit too. When people see theattachment of a company towards their interest, they will never hesitate to consumemore from that particular institution (Drum write2007). The best practice of CSR cannot only bring the face value rather it can manipulate the sense of peoples choicesometimes which is really a big factor in economic competition. Therefore, it isessential to study about corporate social responsibility.

1.8 Background of Tesco (Case Company)

Tesco was founded by Jack Cohen. It was established to sell the groceries thatwere surplus from the stall in the ending point of London. The founder of TescoCohen consolidated this small scale stall by joining the forces with T.E. Stockwelthen the name of Tesco was started its activities. In 1929 the first stall of Tesco wasestablished.

Chapter Two

Literature review

2.1 Introduction

This study is to analyze how and why organizations engage in CSR. In the recentyears the corporate social responsibility has been an admired topic for discuss, as


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well as al though different insights exist on the position of organizations in thesociety, businesses, large or little, cannot overlook the idea any longer. Bigorganizations are continually being targeted as well as judged in society for thecareless actions, such as, a recent movement from Greenpeace alongside Nestleto use palm oil in the goods that gives to the obli teration of rainforest. The socialaccountability of organizations encompasses the financial, lawful, moral as well asoptional prospect that society has organization at a known point in time.

2.2 Corporate Social Responsibility

According to Crane, Matten and Spence (2008), Corporate social responsibility canbe identified by various ways and it i s the most popular idea that is conquered thedebate of it are the ethics of business, sustainability as well as the citizenship of thecorporations. Archie Carroll said that the idea by the pyramid of corporate socialresponsibility that is said to be greatly accepted the definition of corporate socialresponsibility for the breadth. This pyramid is consists of the foundations made by

the economic responsibility of the firm. The ethical as well as the philanthropicresponsibility is the contents of the first two stages that represent the activitiesvoluntarily.

2.3 Reasons for companies to engage in CSR

For the participation in the corporate social responsibil ity Miles as well as Munilla(2005) identified the motives by utilizing the corporate social responsibilityframework of Marrewijk (2003) and pyramid of corporate social responsibili ty ofCarroll (1991) that is said in the following table. From this table the ways of therelationship of the motives as well as the outcomes can be identified. This systemsaid that corporate social responsibility phi losophy of the company may be, drivethe compliance, and drive the profitability, etc.

In the first phase the organization engage in the corporate social responsibil ity andit is the duty as well as the responsibili ty to obey the laws in addition to regulations.In the phase of the economy the organizations utilize the corporate socialresponsibility for creating a competitive benefits as well as gaining the developedeconomic performance.

Different writers said that the organizations may attain a great advantage throughthe corporate social responsibility (Idowu and Papasolomou, 2007). On the otherhand a great number of the dissimilar views of the means of the engagement of theorganizations in corporate social responsibility.

According to Kotler and Lee ((2005), the organization participate in the corporatesocial responsibili ty for looking better, feeling better, as well as l iving long time.They also said that the organizations will l ook good by the participation in thecorporate social responsibility to the potential consumers, colleagues, investors aswell as the media. On the other hand all the stakeholders for example, employees,consumers, customers, shareholders as well as members of the board wil l feelhappy. Many authors said that corporate social responsibi lity improve the brand ofthe organizations as well as it increases the reputations. The two theory of theengagement in corporate social responsibili ty can be given in the table below:

The above table describes that the company engage in the CRS due to the

Moral obligation: as the companies believe that they should be a good citizen tothe right thing at the right time so they engage in the CSR. It is also a part of theirmoral obligation.

Sustainability: the environment and the community are emphasized by thecompany as the company believes that such kind of CSR is the most effective forthe company itself. The world council describes the sustainability as the fulfillmentthe need of the currents demands by not compromising the eligi bility of futuregeneration in meeting their needs.

License to operate: however some companies conduct the CSR as they arerequired or forced to follow some rules and regulations and allowances from thecommunities, stakeholders and government. Conducting the CSR is considered asthe partial requirement for being able to attain the license.

Reputation: to improve the image and reputation many companies are mainlyengaging themselves into the CSR operation. The CSR is also conducted by somecompanies to enrich the brand name with a view to demonstrating the moral as itmay facilitate to inflate the stock value of the company. According to Kotler et at(2005) the companies are contemplating to attain some objectives and hence thecompanies are engaged themselves in some CSR. Several of the objectives of the

companies behind the operation of the CSR are as follow:

To increase the market share and sales: Strong evidence has been found thatthe customers contemplating to buy the products or services of companies aremainly concerned with the companies conducting or not conducting the CSR.


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To improve brand positioning: the customers of the companies possess thebrand image of the companies and the customers are seemed to have a positiveattitude toward the company which is conducting the CSR as a partial commitmentof its overall operation.

To improve clout and image: the companies in different business magazines andreports can publish different publications related to the CSR activi ties.

To enrich the ability to motivate, attract and retain the employees: theemployees working in the companies having the operation of CSR feel proud abouttheir companies and it ensures the satisfaction of the companies.

To reduce cost of operation: The CSR activities of the companies are mainlyengaged with the reduction of cost and increment of the revenue of the companies.The companies conducting the CSR activities is seemed to have a free publicity asa result of the CSR agreement. Hence the company can reduce the cost of themarketing campaigns.

To attract the financial analysts and investors: it is argued by some analysts thatthe CSR activities can facilitate to increase the stock price of the companies and i tis also easy for the company to participate in the CSR to ensure a huge access inthe sources of fund.

Many authors said that the organizations gain a lot of benefits from the corporatesocial responsibili ty but it is very difficult to identify the benefits what anorganization gain from it (Kramer 2006). On the other hand these writers said thatcorporate social responsibility become very important for the competitive gain i n thenear future period. Furthermore a number of the writers said that corporate socialresponsibility do not influence the corporation in any way as others said that

corporate social responsibility yet can influence the corporation unenthusiastically(Mc Guire 1988). The major opponent for corporate social responsibili ty is that itconfronts the conventional business objective for profit maximization.

According to Smith (2007) organizations rated very high in the participation ofcorporate social responsibili ty have the great performance that the organizationscoring the low at this nature. In addition he said that through appealing incorporate social responsibility may gain competitive benefits and improve thereputations for the organizations.

According to Idowu (2007), the stock market as well as the economical institutionshas begun to register the organizations that are attaining in corporate socialresponsibility and data about the activities. It has increased the pressure to theorganizations for participating in the corporate social responsibili ty.

Kramer (2006) said that, form the stakeholders, governments, media as well as theactivists the pressure can come for participating in the corporate socialresponsibility. On the other hand Kramer also said that individuals are beginning forholding organizations to account for the consequences of the society of thebusiness actions. The similar view is shared by Golob as well as Podnar (2007)

and they said the main theme of corporate social responsibili ty as the issue that noorganization can afford for acting opposed to otherwise with any concern for thesociety.

2.4 The application of CSR

The application of the CSR by the companies is mainly concerned with this part ofthe paper. The CSR is concerned with the set of the highly diverse and behavioralaspects in companies (Graafland, Stoffele and Ei jffinger, 2004). The previousresearch conducted by the Graaflandetal (2004) differentiated more than 60concrete of the CSR aspects. To provide a specific explanation of CSR the highdiversity of the CSR becomes difficult in term of the CSR. According Grafland et al(2004) the significance of the CSR to the companies is important because itfacilitates the companies to choose the type of CSR that best matches with theinternal and external formation of the companies. The following three examples areprovided by the Social and World Business Council to ensure the sustainabledevelopment to describe this (ibid).

Example 1: The business organization having the played the role to the society thatsurpassing the area of traditional business operation that is required by the law andsuch operation will lead the more added value to the business firm.

Such kind of definition is constructed with a view to advising the firms about theeffectiveness of the CSR. According to Graafland et al (2004) that such kind ofdefinition is considered as very much narrow due to the two reasons. At first theCSR is considered to be concerned with the core business of the firm. As forexample the mining a oil companies engage in investment having the lessvulnerability to the environment and having attitude to do wel fare to the society.

Then according to the criticism the CSR is not only concerned with the aspects thatis beyond the law rather it is within the law. As for example the companies whileguranteering the safety and preventing the fraud the question generally arise thatwhether the companys activities are consistent with the intention of the law andapply a minimum explanation (ibid).

Example 2: CSR involves the following two things

The focus by the enterprise on the contribution to the improvement of the public in the longrun.The proper maintenance of the stake holders and society relationship.


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In term of the criticism of the former definition criteria the definition was constructed.That a company can be observed as a entity of value creation the first paragraphdescribes this. The only value creation is not only concerned to the company in thiscase. However the value creation is concerned with the value creation in term ofthree dimensions that is called the Triple P bottom line. The Triple P bottom line isdecomposed into the Planet, Profit and People:

The profit is considered as the economic dimensions. The economic dimensions mean theproduction of goods and services and the creation of income and employment whichensures the value creation.The people are considered as the social dimension. Different aspects like the safety, goodlabor relations, outside and inside information are considered in this case.The ecological dimensions are considered as the planet. It is concerned wi th the naturalenvironment of the ecology.

According to Graafland et al (2004) the most crucial fact of the second exampleinfers that the companys relationship with the society and the stakeholders shouldbe taken into consideration. It also infers that an open way of doing business andthe good stakeholder relationship are also important in this case. However thedifference between the primary and the secondary stockholder are identified bythis. The stockholders and the employees are regarded as the initial stockholdersas they possess the constructive discussion with the companys managers.

The other individual having the activities with the companys stock holders areconsidered as the stakeholders. The government, competitors, suppliers andconsumers are included this (ibid).

Example: 3: when it is determined that the quality of the workforce life to beimproved, their quality of their family to improved then the CSR is designed as acontinuous commitment by the business to act for ensuring the ethics and theeconomic development. The 3rd example is considered as the most important andsomewhat distinct than the others. At first the ethical means have been describedin the 3rd example which was not described in the other examples previously. Thethree Ps are described in the example two which is regarded as the quality of lifecomparing with the other examples. However the relationships wi th thestakeholders are not described by the example three.

2.5 Aspects of CSR

Although the Graafland et al (2004) stressed that there exist more than 60 antiaspects of the CSR activities and the more explanations that illustrated above, theyare categorized into some major category by the Lyall, Phillips and Balabanis(1998). Such kinds of aspects were regarded to in 1970 to possess the followingcharacteristics:

Information disclosure to the stockholderInformation disclosure to the board of directorsThe behavior of monopoly i.e. the predatory pricingThe equal treatment for the minorities group.Sharing of profitProtection of the environment

Advertisement of ethicsThe impact of technology on the society.

According to Balabanis et al (1998) some of the facts are controlled by the law now.The focus of the CSR operations become changed due to this the main focus of thecompanies has been found by them to focus on the following areas:

The protection of environment i.e. recycling the waste of materials for the reductions ofemissions.Benevolence i.e. donation to the charity.Engagement to the social causes i.e. involvement from human rights related educationslike the awareness of AIDS.

Ensuring urban investment i.e. work with the regional government ensure the inner cityenvironment and to launch the small business.Ensuring schemes of employees i.e. flexible time, job- sharing, proper standard of staff

treatment, higher standards of professional health and safety.

2.6 The correlation between CSR usage and financial performance

In the third part whether there exist a correlation between the financial performanceand the CSR are determined. According to Mc Guire et al (1988) there are someinconformity with determining the relationship between the financial performanceand the engagement of the firm with the CSR.

According to Mc Guire et al (1988) there are three major view points of determiningthe relationship between the CSR usage and the financial performance of the firm.

The first view point stresses that the CSR investment causes the company to facean economic disadvantaged situation than the company not performing the CSR.Second viewpoint stresses that the company performing the CSR activities arebenefited in term of the productivity and employee morale. In term of the third viewpoint the cost aroused from the operation of the CSR activities can be offset by thebenefits come from this area. The benefit in this case may be the increasedpositioning of the products and services to the customers mind by offering differentsocial and natural favorable project by the company. Such kinds of

CSR are seemed to increase the consciousness among the customer which will be


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seemed to affect the customer loyalty and ensure the profitability of the firm.However the CSR is considered to have a correlation with the performance of thefirm and it is argued by some individuals that the company having highengagement of the CSR possess a highly motivated workforce and satisfiedcustomers that they may prefer the products or services of the CSR conducting firmto the other firm not in operation of the CSR. It is also noticed that the CSR is notonly effective to establish relationship with the customer but also it is helpful toconstruct the relation with the other stakeholders li ke the shareholders, bankersand governmental officials and other specialized persons. Such kinds ofrelationship facilitate the business and ensure the profitability.

According to the Mc Guire et al (1988) the increment in the cost of the company dueto the operation of the CSR may down fall the profitability of the business incomparison with the competitors not performing the CSR. The incremental cost ofthe operations result from the maintenance of plants in the areas economicallydepressed and establishing the environmental protection, promotion of the

development of community plan, charitable contributions to the societysdisadvantaged units etc. On the other hand the strategic limits of the alternativesare limited by the CSR policies of the company. As for example customers are notinterested to the companies that are not interested in maintaining the properworking conditions and the CSR activities as this is not supposed to be consistentwith the ethical

CSR guide l ine policy. This may indulge the firm to generate the reduced financialperformance that may also choose the alternatives which is less cost effective.

According to the Sarbutts (2003) the timing of the question is most important whenthe CSR activities are important. As the values of the society and the policies arebeing changed are very much important there and this is due to the fact of suchchange.

The earlier results about the correlation between the financial performance and theCSR of the company generated mixed results. The methods of investigations andthe typical outcome of the investigation and the shortcomings of them have beenpresented in the following table:

Table - Ways of measuring financial performance

Establishing a question about how and why the companies are engaged in theCSR the economic result of a company into the CSR engagement can bedetermined. The major objective of the CSR engagement of the companies is toimprove the financial performance of the company. However not all the companiesare engaged in the CSR wi th such a objectives to improve their financialperformance it rather depends on the attitude of the management of the companyand the degree to which the company regard itself to be responsible to the society.

2.7 Summary

In this chapter the researcher have explained various literatures related to the CSR.Corporate social responsibility can be identified by various ways and it is the mostpopular idea that is conquered the debate of it are the ethics of business,sustainability as well as the citizenship of the corporations.

Chapter Three

Research Methodology

In this chapter the research methodologies which have been followed to conduct

this study have been explained. The research approach, method, strategy, sourcesof data, research design, reliability, validity and ethical consideration of thisresearch have been justified as follows.

In regular research we are generally acquainted wi th three types of researchingapproaches like- Investigative, expressive and finally descriptive technique(Saunder et al 2007). Investigative or exploratory method is very essential whenthere is an occurrence of fundamental facts because it is a growing theory. So theinvestigative or exploratory research method will be appli cable in this particularstudy.

Dubois and Gadde (2002) said that there are three types of research approachessuch as, abcuctive, deductive and inductive. From them generally people whoresearches choose as per their necessi ty. According to Proctor (2000) in respect ofestablishment quantitative technique of psychoanalysis is ahead of quali tativetechnique of psychoanalysis. That may have influence both on the publ ic thequantity of significant data for well matched thesis. In respect of deep quarry intothe place and manner of the populace is also feasible in regards to the ground ofqualitative research approach. Saunder et al (2007) argued that if there is anyimportance or requirement of a theory on an ongoing basis with a view to risingshock or blow of the hypothesis the inductive or qualitative research is helpful. Asexpressed by Burns and Grove (1997) in respect of study the qualitative thesisapproach is helpful and it is basical ly rely on the connotation, which is subjective,of the respondents.


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Abreast it the quantitative study along with qualitative study has some refunds aswell as it has some confines too. Quantitative hypothesis have some benefits.Because, it focuses a certain picture from a huge data field, according to therequirement and this is why quantitative hypothesis overcomes the sagacity ofqualitative hypothesis. Abreast it, quantitative hypothesis is more effective than thequalitative hypothesis because it may persuade the people who are to readenormous stage and numeric information. This is why the quali tative researchmethod has been chosen for this study.

Hypothesis strategies are of four types. Such as-

1. hi storical analysis2. archival

3. surveys and4. experiments and the case hypothesis

The case hypothesis is considered as highest used technique. The casehypothesis of the research strategy is perfect at the time when the respectivehypothesis is concerned with the questions like How and Why as explained byYin, 2003. So the among the all strategy the case study strategy is being chosen forthis study.

3.5 CASE SELECTION

For this study I have selected Tesco superstore as the case company.

Mainly there will be two prime sources of my data collection. Like primary data andsecondary data.

According to Zikmun (2000) those data can be referred as secondary data whichalready have been collected or processed for any specific purpose. Secondaryneeds respectively low time, and costs than primary data. There are somementionable sources of secondary data. Such as editorial features, magazines,thesis, internet, web searching etc. all they are very significant in accumulation ofsecondary data.

Generally the data which are accumulated at the time of study, investigation,quarry, experiment and others direct sources. For this particular study I havecollected primary data by means of survey approach. The primary data for thisstudy have been col lected from the premises of Tesco superstore, Becton City.

In this study to recognize the sample I have followed the simple random sampling.This respective sampling approach is such a method where all the items in acertain population possess equal probabil ity to be selected. The predeterminedsize of the sample for this particular study is 110. These samples include five toplevel employees of Tesco and remaining respondents are the general people whousually prefer Tesco to shopping.

At the time of gathering primary data I have followed a prearranged questionnaire.The particulars of the respective questionnaire have been focused in the appendixof the hypothesis

To recognize the nuance of the information, the dimension of the information isimportant and in regards to have apparent surveillance, information which has beengathered at first needs a detailed scrutiny. In the analyzing stage of data, thehypothesizer has to go through three stages. Such as-data decrease, data showand Sketch termination plus creation authentication.

Figure: Components of data analysis (Source: Amaratunga et al 2002)

According to Creswell (2007) the hypothesis concludes the sequential stages offunctions which have to be followed up in data analyzing process.

Data organizing: This stage of data organizing process the data which have beengathered has to arrange in a perfect way.

Reading: I this stage all the data are gone though.

Description: this stage is basically related wi th the explanation of the relevantcase and it history.

Classification: here data are categorized to found a perfect or suitable archetype.

Understanding: it is tough stage where straight understanding is made and i tmeans making the respective topic simple.

Demonstration: it is related wi th the detailed presentation the concerned data be


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Research method qual itative research method

Research approach Exploratory research approach

Research strategy case study

Data collection method Survey through interview

Sample technique Simple random sampl ing

Sample size 110

Data analysis techniques

Descriptive statistics (mean,standard deviation), Frequencydistribution and inferentialstatistics.

means of charts, tables, pictures etc.

In this study I have followed al l the respective processes those have been statedabove. Abreast it I have used the demonstration process where I have used table,portrait to enrich my presentation.

As expressed by Saunder et al (2003) validity is the situation or fact ofnervousness regarding the replies that are they applicable. Yin has suggestedaccumulating the particular data or substantiation on series basis because itenhances the validity of hypothesis.

Yin (2003) stated that the main fact of reliability is that if any one executes similartypes of hypothesis he will have the identical outcome and answers and equalconclusions wil l be found also. Yin also recommended keeping the documentsproperly because it enhances the reliability.

As expressed by Saunder et al (2007) moral or ethic of the hypothesis includes thehypothesis realization, assumption of thoughts on the obligation of respondents thatare directly effected by the outcomes of the respective thesis. So the researchingpeople should have a sound knowledge on the code of conduct of the researches.So I wil l learn about the code of conduct of the researches before doing this job tocomplete it satisfactorily. This is why I will keep any records regarding therespondents. So there will no possibi lity of disclosure of the information about therespondents who has delivered me the required information and helped me in thisparticular ground. Thus I will be able to follow the code of conduct of theresearches.

Chapter Four

Findings and Analysis

4.1 Overview

An empirical study has been conducted by the researcher himself to collect theprimary data among the selected samples. The survey among the respondents wasconducted following the semi structured interview on the basis of predeterminedquestionnaire. The findings of this study have been shown and analyzed asfollows.

4.2 Findings regarding the reasons why an organization(Tesco) involves in CSR

There is an illustration about why Tesco involved i n CSR, because they think thatbeing a good ci tizen is valuable and to inform the people that everything they aredoing is to be a good citizen. They think that living and l earning are of sameimportance. And it needs acquire the name and fame. They also think that beingthe first among others entity in invol vement of CSR is signi ficant to them because atpresent they are focusing CSR as red hot. The intention of Tesco that they arewill ing to focus themselves as a pioneering concern with an approach of advancedmentality. According to Verksamheten (2006-2007) Tesco disclosed in their AR thatto enrich their top market position they are participating in CSR.

Tesco firmly believed that policies that were harmful to the environment would notproject the right image of the company, and would cause damage to the company,its customers and society at large. Tesco launched its energy awareness campaignin 1996. The company's staff was expected to take active part in it. Tesco reducedthe energy consumption per square foot by 35% between 1997 and 2005.

Tesco considers the involvement in CSR as media of communication for them. It isalso considered as a pattern of publicity because; by means of CSR they are easilybeing noticeable i n many segments. They describe that by means of CSR they cantake them to the new customers along the huge number of present customers. Theyexplain their participation if CSR in a title sentence and that is it is all about beingvisible in the society.

Tesco has a further thinking that as they are a participant in CSE the employee and

working people of their concern get inspi ration and feel conceited to be a part ofTesco or work in such a company.

According Tesco CSR is going to be more significant in upcoming future. Theythink that in near future stakeholders of the companies will create pressure to thecompany that the entity will have to look after them. They argue that to disclose acontinuous report, companies wil l face constraining influence. According to Tescothere will a transformation of annual report from traditional to a modern onebecause the traditional reports does not have concept of continuous reporting.Tesco has also states that in upcoming days there may be some legal requirements


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to disclose report on continuous basis at corporate level.

4.3 Findings regarding the application of CSR at Tesco

Tesco was the pioneer in their relative types of business in establishing poli cyguideline on ethics which are being called as code of conduct. These codes wereframed up on values of companys excellence, teamwork and leadership.Excellence can be explained as the intention to provide or meet up the expectationand keeping up of assurance. Here the teamwork refers the mutual cooperation andcoordination among the employees and outsiders to deliver the best service. Andleadership is related with struggle in regards to improvement and competency ofcontrol the market. This code of conduct includes CSR. This policy guideline ofCSR was introduced in 2001. According to Verksamheten (2006-2007) it is inaccordance of Global Compacts ten principles. These principles were with anintention by the UN to encourage the international companies in regards to theirenvironmental and social responsibility. The ten principles were on labor

standards, human rights, anti corruption and environment. Here is tablepresentation of the principles.

Table: Global Compacts ten principles

Source: Adapted from the ten principles, n. d.

It is the claim of Tesco that they have involved in CSR by implementing a policyguideline for cars which is envi ronmentally friendly. They have introduced anincentive to promote their employees to have vehicles which are environmentallyfriendly. They are also drafting a guideli ne for travels; those are with a great anxietyin regards to environments. They are running analytical movements in theircompany with an intention of analyzing the approaches which wil l make them moreenvironmentally friendly. They also argue that they have provided a decent workingenvironment to the employees and even to develop the working environment betterthey have employed experts. In several social, cultural and sporting events they getinvolved in sponsorship. Tesco has chosen the Association for the Help of MentallyHandicapped People as the partner for its largest charity project Tesco Charity ofthe Year 2005. Tesco is launching a new PR drive to promote its Computers forSchools 2008 voucher collection scheme.

There are proofs of CSE activities by Tesco which is not so material but significantyet:

Ensuring a continuous support in regards to human rights and to take steps to befar from such acts which harms human rights.

Perform in manner of responsibili ty being in the regulations, traditions and customsof the respective place where they are running their business and promoteimprovements of the peoples of there.

They are running their business operation wi th an intention of reducing the impactsor harms to the environment

They are promoting some activities like education, cultural and charity

They are very strong against the crimes and corruption whether it is committinginternationally and locally.

Tesco expects that they are in a preliminary stage in the i nvolvement in CSR. Theyhave more plans that will be in upcoming days.

4.4 Findings regarding the connection between financial operation and CSRat Tesco

Tesco argues that there is growing attention in their services. But it is very tough toindentify that it is the outcome of CSR involvement or not. Their involvement inCSR is in a very primary stage. So only a few stakeholders are aware of what isbeing done by the entity.

The annual report and the webpage is the only means of communication ofcompanys CSR activities. After the wider introducing of CSR activities they have aplan to communicate it on a wider extent. However they are considering it as atraditional investment.


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Type of socially responsible issueGlobalconsumers* (%)

UK consumers(%)

Protecting the environment 92 96

Enabling everyone to live a healthy life 90 95

Reducing poverty 89 90

Equal opportunity to education 89 91

Fighting HIV/AIDS 83 90

Building understanding/respect for other

cultures82 85

Helping to raise people's self esteem 77 68

Supporting the creative arts 69 70

4.5 Findings regarding the Importance of Social Responsibility for the UKConsumer

The hypothesis I tested using the Chi Square test that there exist no signi ficantdiscrepancy among the women and men in term of the manner of behavior.However both the women and men are considered as equally available in theexamination of the population. The probability of observing such discrepancy isshown by the 1 degree of freedom of the chi square test. In this case if the numberof men and women are equal in this population then the chi square show a value of.09 that is somewhat higher than the traditional statistical measure of significance

i.e. .001 to .05. Thus the null hypothesis, that the sample of men in included in thisstatistical measure behave in the in the same manner as the women do, cannot berejected (Chi Square Test1).

Chi Square Test1: Respondents that say they are socially responsible

Sex

Observed N Expected N Residual

Male 40 54.5 -14.5

Female 69 54.5 14.5

Total 109

Test Statistics

SexChi Square 2.951

Df 1

Asymp. Sig. 0.86

Then the importance of some socially responsible reasons to UK is examined bythe questionnaire. A grading of 1 to 5 is constructed here (the 1 means, it is notsignificant to me, the 5 means; it is very much significant to me). According to theresults it is shown that the caring for the environment having a mean (4.63) ismostly valued by the UK customers than the better working condition having amean (4.51) and the other variables l ike the spending time with friends and familyand helping other and contributing to the community possess the mean of (4.50)and (4.34) respectively. However it is interested that the average worldwideconsumer found by Edelman regard the two variables like the helping other andcontributing to the community and spending time family and friends as the majorsources of the customer satisfaction, even though the mentioned four causes of SRare highly important to the UK customer (having value of means = 4.33).

However I tried to analyze the degree to which the UK customer cares personallyabout the actions socially responsible in term of the degree to which the worldcustomer care (in this case the measure of scale is same as from 1 to 5). Generallythe protection of the environment is mostly cared by most of the UK customers(representing value of 95.70% and the mean of 4.71). It is seemed to be consistentwith the foreign situation but it is also somewhat larger the global average customer(see table 4.1). Then the variables the customers mostly care are the equalopportunity to education (having 91.48% and mean=4.62), reducing poverty(having 90.36% and mean= 4.62), fighting HIV AIDS (having 89% and mean=4.54), building understanding respect for other culture (having 85.12% andmean= 4.42), having better opportunity to yourself (having 86.29% andmean=4.41). The customer care least about variables self esteem (having 67.61%and mean = 3.91) and supporting the creative arts (having 70.43% and mean=3.96). In term of the average global consumer (see Table 4.1) the UK customerscare slightly more than the other worldwide customers apart from the last socialcause.

The importance order is identical to the abroad. Considering some of the aboveissues the companies should implement some CSR in their operations which wi ll

represent their responsibili ties to the public of UK.

Table 4.1: How much the consumers personally care about CSR

*Source: Edelman Goodpurpose Community, 2007

In examining the purchasing behavior of the customers concerned with the CSR i tis found that about 90.99% of the customers are interested to change their productbrand to the brand regarded as most friendly. As mentioned by results among the90.99% the women are 95.26% and men are 86.11%. The hypothesis we testedusing the Chi Square test that there exist no significant discrepancy among thewomen and men in term of the will ingness of switching from one brand to otherbrand considered as friendly. It was found that such type of probability is nearly0.04 which is regarded less than the traditional criteria for the significance of


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statistics. Thus the null hypothesis can be rejected and it can be claimed that thefriendlier the brands are the more the women will be interested in switching to thebrand. (Chi Square Test 2)

Chi-Square Test 2: Respondents will ing to switch from their favorite brand to onethat is more environmentally friendly

Sex


Male 35 52.5 -17.5

Female 70 52.5 17.5

Total 105

Test Statistics

Sex

Chi Square 4.391

Df 1

Asymp. Sig. 0.36

Chi-Square Test 3: Respondents will ing to switch from their favorite brand to onethat is more environmentally friendly even if the price would be higher


Male 38 50.5 -12.5

Female 63 50.5 12.5

Total 105

Test Statistics

Sex

Chi Square 4.391

Df 1

Asymp. Sig. 0.36

However we cannot reject the null hypothesis when it tested that the customers willbe more willi ng to the more environment friendly brand although the price i s higher.If there are equal number of men and women then the value is nearly 0.09 which islarger than the statistical significance criteria (Chi Square Test 3). However the UKcustomers are being more and more interested to the consumptions of the brandacting friendly to the environment. It represents that the companies should considerthe importance of genial environment as their CSR.

It is found that 67.87% of the customers are interested in swi tching to the brandfriendly to the environment. This means that the CSR of the companies is not just anecessity or trend it i s considered as the greater means of generating indirect profit.

The company generally targets all segments of the market. But the companies aremore interested to the women than the men as the women are seemed to come tothe brand environment friendly than men. It is found that between the ages 18 to 2494.30% are interested to switch and between 40 to 49 year ages about 93.76% arewill ing to change. However the other groups having no i ntention to change brand

should not be ignored. But the major segments targeted by the company to conductthe CSR involve the 18-24 and 40-49 year age.

To conclude it can be said that the social responsibility is important to the company.According to Edelman Goodpurpose Community (2007) the social responsibility isvital to the general UK customers and the customers are more concerned with thesocial responsibil ity. So it can be said that the exits a great need for the socialinitiative for the companies contemplating to launch the social responsibilityespecially to the present UK customers by implementing both the corporate policiesand regulations with a view to attaining the profitability of the firm ensuring thecustomer satisfaction.

4.6 Summary

From the findings it can be said that the reseaons behind the engagement in CSRis to improve organizations reputation and image. In the study it is found that thecompany (Tesco) participates in CSR in the area of environmental protection,charity work, sponsorship and work environment. From this study it could be saidthat CSR investments of the company will affect the performance of the company

since customers value CSR activi ties. From the hypotheses testing it is found thatconsumers have positive feelings towards CSR, so, they will be loyal to thecompany that is being engaged in CSR and thereby increase the sales.


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Chapter Five

Conclusion and Recommendation

5.1 Research Overview

This study aims to analyze the corporate social responsibil ity andas well as howand why organizationits engage in corporate social responsibili ty. In the recentyears the corporate social responsibility has been an admired topic for discuss.Corporate social responsibili ty, certainly, comprises more aspect than justconcerning about the environmental effects of organizations. It came in peoplesmind at the later 1880, period of primary industrial development that organizations

should care about the idea of social responsibility. Organizations which are close tosocial responsibili ty issues became concern about the principled ground ofachieving social obligation. There were four objective of this study such as toanalyze why companies engage in CSR; to evaluate how companies apply CSR;to analyze the relation between the use of CSR and financial performance; toexamine the feelings of the consumers toward CSR.

An empirical study has been conducted by the researcher himself to collect theprimary data among the selected samples to achieve above objectives. The surveyamong the respondents was conducted following the semi structured interview onthe basis of predetermined questionnaire.

5.2 Conclusion

The first objective was to analyze why companies engage in CSR. From thefindings it can be said that the reseaons behind the engagement in CSR is toimprove organizations reputation and image. In addition, organization by

participating in CSR could be able to maintain its parket position since CSRprovide the company competitive advantage. So in nut shell a company engages inCSR to enhance financial performance, to achieve competitive advantage, and tobroaden its reputation & image.

The secon objective was to evaluate how companies apply CSR. In the study it isfound that the company (Tesco) participates in CSR in the area of environmentalprotection, charity work, sponsorship and work environment. Tesco launched itsenergy awareness campaign in 1996. Tesco reduced the energy consumption persquare foot by 35% between 1997 and 2005. In several social, cul tural and sportingevents they get involved in sponsorship. Tesco has chosen the Association for theHelp of Mentally Handicapped People as the partner for its largest charity project Tesco Charity of the Year 2005. Tesco is l aunching a new PR drive to promote itsComputers for Schools 2008 voucher collection scheme.

The third objective was toanalyze the relation between the use of CSR and financial performance. There arenumerous regarding the connection between the CSR activities and their impactson organizations financial performance. From this study it could be said that CSRinvestments of the company will affect the performance of the company since

customers value CSR activities. From the hypotheses testing it is found thatconsumers have positive feelings towards CSR, so, they will be loyal to thecompany that is being engaged in CSR and thereby increase the sales.

The last but not least objective was to prove hypothetically that consumers havepositive feelings towards CSR and there are no differences between men andwomen behaving in a social ly responsible manner. From the findings it is seen thatboth of the hypotheses are supported that means consumers have positive feelingstowards CSR and there are no di fferences between men and women behaving in asocially responsible manner.

5.3 Recommendation for future research

This study has provided a deeper knowledge within the field of CSR. However, there are stillmany interesting areas to study. Therefore,I have made a list wi th our recommendations for future research:

The interest and customer demand for CSR is high right now.However, it is hard to say what the future holds. Therefore,

it would be interesting to conduct this type of study toanalyze if there have been any changes in CSR engagement(e.g. customer demand for CSR or how companies appl y CSR) and i f so, why?

Theaim was to investigate the correlation between CSR engagement and financialperformance. SinceTesco had not released any annual report after they implemented CSR.It was not possible to investigate if the company'sCSR engagement had affected the company's performance.Therefore, we recommend this for future research.

We recommend a broader study of CSR where the researcherinvestigates more than one company in order to distinguish similarities anddifferences between these companies andthereby be able to stipulate a more general answer.

Reference

1. Adamsson, S., Johansson, J. (2008).Vilka r hllbarhetsredovisningens viktigaste intressente?RetrievedMay24,2008fromhttp://www.divaportal.org/diva/getDocument?urn_nbn_se_sh_diva-1457-1__fulltext.pdf

2. Berger, I.E., Cunningham, P., & Drumwright, M.E. (2007, Summer).Mainstreaming CorporteSocial Responsibility: DEVELOPING MARKETS FOR VIRTUE. Cal ifornia managementreview, 49(4), 132-157.

3. Comfort, D., Hiller, D., & Jones, P. (2007). What's in store? Retail marketing and corporatesocial responsibil ity. Marketing Intelligence & Planning, 25(1), 17-30.


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4. Golob, U., & Podnar, K. (2007). CSR expectations: the focus of corporate marketing.Corporate Communications: An International Journal, 12(4), 326-340.

5. Idowu, S.O, & Papasolomou, I.I. (2007). Are the corporate social responsibility matters basedon good intentions or false pretences? An empirical study of the motivations behind theissuing of CSR reports by UK companies, 7(2), 136-147.

6. Jenkins, R. (2005). Globalization, Corporate Social Responsibility and poverty.Retrieved April 5, 2012, from http://www.blackwell-synergy.com/doi/pdf/10.1111/j.1468-2346.2005.00467.x?cookieSet=1

7. Kotler, P., & Lee, N. (2005). Corporate Social Responsibi lity: Doing the Most Good for YourCompany and Your Cause. Hoboken, New Jersey. John Wiley & Sons, Inc.

8. Kramer, M.R., & Porter, M.E. (2006, December). Strategy & Society: The Link BetweenCompetitive Advantage and Corporate Social Responsibility. Harvard Business Review,84(12), 78-92.

9. Matten, D., & Moon, J. (2008, April). Implicit and explici t CSR: a conceptual framework fora comparative understanding of corporate social responsibi lity. Academy of ManagementReview, 33(2), 404-424. Retrieved April 1, 2008, from EBSCOhost database.

10. McGuire, J., Sundgren, A., and Schneeweis, T. (1988), Corporate social responsibility and

firm financial performance, Academy of Management Journal, 31(4), 854-72.11. Miles, M.P., & Munilla, L.S. (2005). The Corporate Social Responsibil ity Continuum as a

Component of Stakeholder Theory. Business and society review, 110(4), 371387.12. Nilsson, C., & Rahmani, S. (2007). Cause Related Marketing From a Swedish Retail

Perspective. Bachelor thesis. Lule University of Technology. Retrieved April 5, 2012 fromLule University of Technology Digital Theses.

13. Saunders, M, Lewis, P and Thornhill, a (2007), research methods for business students (4thedition), new jersey: financial times/prentice hall.

14. Yin, R.K. (2003), Case Study Research, Sage, Beverly Hills, CA.

Appendix

Questionnaire for interview

Hello. My name is.from.. I am conducting a researchstudy among the general public of Becton city, UK on the topic of corporate social

responsibility from the viewpoint of the UK consumer.Let me first explain the concept of corporate social responsibility. Companies thatact in a socially responsible manner are those that, for example, implement morerigorous measures to protect the environment than is required by law; they reducethe use of health hazardous chemicals in their products to lower values than arerequired by law; they issue public reports for consumers on the composition andprocessing of food; they enable better working conditions than are required by lawfor employees and stimulate their personal growth; they financially supporthumanitarian issues and social activity in culture, sports etc. In short: sociallyresponsible companies do not poll ute the environment, are employee and customerfriendly, and contribute noticeably to good causes.

Questions for the employees of Tesco

1. When did the company implement a CSR policy and why?2. Do you believe that your customers consider it important that a company actively

work with CSR?3. Do your customers know about the companys CSR engagement?4. Do you believe that your employees are affected by the companys CSR participation?5. How does the company work with CSR?

6. Which CSR activities have been implemented recently?7. What CSR activities does the company plan to implement in the near future?8. In what way has CSR activities affected your daily work?9. Do the company have CSR activities within the areas of:

EnvironmentPhilanthropySocial issuesUrban investmentWorking environment

10. Does the company communicate the CSR activities to the public, customers andemployees?

11. Which methods are used to communicate the CSR activities?12. To what extent does the company communicate the CSR activities?13. Why does the company communicate the CSR activities?14. Do you believe that the companys CSR activities can affect the companys reputation?

15. In what way CSR activities can affect the companys reputation?16. Approximately how much money have the company invested in CSR activities?17. Do you believe that a CSR investment can be compared to a traditional investment?18. Do you believe that companies working with CSR thereby can increase their sales?

Questions for consumers

1. Please grade how important each one is for you. Grade on the scale from 1 to 5,where 1 means it is not at all important and 5 means it is very important:

a) Helping others and society

1 2 3 4 5

b) Spending time with family and friends

1 2 3 4 5

c) Protecting the environment

1 2 3 4 5

d) Better working conditions for employees

1 2 3 4 5
http://www.blackwell-synergy.com/doi/pdf/10.1111/j.1468-2346.2005.00467.x?cookieSet=1http://www.blackwell-synergy.com/doi/pdf/10.1111/j.1468-2346.2005.00467.x?cookieSet=1


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2. Do you feel i t is your duty to contribute to a better society and environment?

Yes

No I dont know

3. Do you beli eve that you personally can evoke changes i n your environment?

Yes

No I dont know

4. What about in the society as a whole?

Yes

No I dont know

5. Would you be wi lling to switch from a product of your favorite brand to a productof a brand that is more environmentally friendly?

Yes

No I dont know

IF 3.1=YES; 6. What if that meant that the price of the product would be higher?

Yes

No I dont know

7. Could you say that you are socially responsible in your behavior?

Yes

No I dont know

8. If YES: In what way?

9. Please grade how important the following categories are for you personally.

a) Protecting the environment

1 2 3 4 5

b) Enabling everyone to live a healthy li fe

1 2 3 4 5

c) Reducing poverty

1 2 3 4 5

d) Enabling everyone to have equal opportunity to education

1 2 3 4 5

e) Fighting HIV/AIDS

1 2 3 4 5

f) Building understanding/respect for other cultures

1 2 3 4 5

g) Helping others

1 2 3 4 5

h) Helping to raise own self esteem

1 2 3 4 5

h) Helping to raise people's self esteem

1 2 3 4 5

i) Supporting the creative arts

1 2 3 4 5


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Thank you for participating in this survey

Documents

CORPORATE SOCIAL RESPONSIBILITY THEORY AND PRACTICE IN UK- a case study of Tesco