Concept of Ethical Trading Of Tesco

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Corporate Social Responsibility (CSR)

Corporate social responsibility (CSR) refers to a self-regulating business model. This model enables companies to be socially accountable to various parts of the society like itself, its stakeholders, society at large and environment. This model and practice of CSR which is also known as corporate citizenship companies enables them to see what impact they are making on the society and on the environment and also what they can do better for the society (Matten and Moon, 2020). To practice CSR refers to operation of the companies in ways that enhances society and the environment and add value to these. Along with that avoid any negative impact that company can make on society and environment.

Concept of CSR

From above discussion it has been clear what is CSR this study attempts to throw light on the concept of CSR and how does it work.

CSR is broad concept and have many forms of it. Rest depends on the industry and organisation what of CSR they chose. Through CSR activities, philanthropy and volunteer efforts of the company it can benefit society and environment and along with companies can also enhance their brand image.

This is important to highlight that as CSR is important for society and community it is equally important for the Tesco. This is because efforts of CSR and valuable efforts for the benefit of the society increase and enhance brand value of Tesco (Brown, Goll and Rasheed, 2017). Brand value refers to value which is given by the people to a particular brand which enables people and customers to differentiate it from other brand and competitors. Activities of CSR can develop a strong bond between Tesco and its employees, improves morale of employees and employees and employer both feels more connected to the world around them.

Companies when consider and think that they should be socially responsible and contribute to the well-being of the society. For this firstly they need to be responsible towards themselves and their shareholders. Tesco adopts CSR as its business have grown to a extent that they can give back to society. Large Corporations like Tesco need to involve themselves in CSR because this is visible and successful and such corporations have more responsibility to set high standards of ethical behaviour with peers, competition and industry.

Importance of CSR and Whether Tesco Should Subscribe to CSR Codes

There are various reasons which suggest that why Tesco subscribed CSR codes. Some of them are as follows-

Improved Public Image

Tesco subscribed to code of CSR and important reason behind this is that this improves the image of the company (Blake, 2017). Often companies which are involved in positive and good activities for the benefit of others are liked by companies. This improves the image of company in minds of the public who are customers of the Tesco and even those who are not and increase the chances that these people will be added in the customers of Tesco.

Increase Brand Awareness and Recognition

Brand awareness refers to how many people know about the existence of the brand and their experience with the brand. To increase their brand awareness and recognition companies adopt many effective strategies for marketing and when companies practice CSR their companies become visible and companies are able to increase its brand awareness as the name of the company is associated with CSR practice of the company which benefit lots of people.

Competitive Advantage

Companies when are engaged in good cause it enables them to have competitive advantage which would not have been possible otherwise (Brammer and Pavelin, 2016). Reason behind this is that it enables company to stand out of competitors in the industry.

More benefits of Employee

First step of CSR is that Tesco considers well-being of people who are working for it which are its employees. CSR includes various things like adequate pay to employees. Work life balance, proper incentives and bonus, appropriate working conditions which makes it easy and comfortable for employees to work in the company. Employees when have all such things this will increase their engagement with company by motivating them, and they will also think about the Tesco and its benefits. Employees of Tesco are also known as very effective and are very concerned for customer satisfaction that they are ready to go to any extent to fulfil needs and requirements of the customers.

Corporate Sustainability

Practices of CST includes that company adopts to activities and practices for its business which are sustainable in this case in long term such business practices results useful and reduce cost through sustainable practices in long term (Harjoto, Laksmana and Yang, 2018). For example company start using renewable sources of energy for its production or other operations, this may prove costly in initial time of its establishment but these are cost friendly in long term.

All this reasons suggest why CSR is important for Tesco and which made it to subscribe CSR code.

Ethical Theories

This part of the study includes referencing CSR with ethical theories for that three ethical theories which affects decision-making of the Tesco about their CSR practices are being discussed. Theories are-

Utilitarian Ethics

This theory of ethics is equated with the concept of greatest good for greatest number. In this ethical decision are based on the consequences of the action. This involves that ethical decision are made when people are able to see adequate favourable consequences. This theory of ethics attract people because this theory attempts to weigh out the impact of the activities and behaviour (Fryer, 2016). In relation with CSR this theory can be referred and Tesco practice activities which are more beneficial on both sides for company and for society which means greatest good for greatest number. This theory is most likely to be used by companies during their CSR practices and their decisions the reason is that companies are profit seeking organisations which like to gain profit from all its activities and involves itself in activities which have highest potential for return in other words which are able to give highest return on investments. Though there are some limitations of this such as authorities who are involved in decision-making focus on the outcome rather than their action. In this decision-makers have to deal with question that which part of the society is more important than others. Another limitation of this theory is that it is not always possible to assess the outcome of the action (Klein, 2017). Decision-makers and Tesco may suppress benefit of the society in front of their own benefits.

Deontological Ethics

This theory of ethics is based on the idea that human beings should be treated with dignity and respect as they have rights. In a different way this can also be said that people have duty to respect other people's rights and dignity and treat them accordingly. This theory of ethics in this manner refers that companies and Tesco are required to take decisions according to the right and wrong action itself rather than what impact does the action create. This theory should be considered when organisations' CSR is concerned with well-being of people including internal and external (Lazar, 2017). This will exclude many activities which are not right like discrimination with employees and taking undue advantage of people when company can do that for its benefit. This theory morally sound very good and worth being considered by organisation while making CSR decision but there are some limitation which also need to be considered such as Right action may not necessarily have right implication. It becomes difficult to make decision when duties of the organisational people conflict. It is not necessary that all people agree with the idea of this theory and decision-making.

But if the consequences of the action are not bad then this theory is most appropriate because it considers moral values and moral judgement.

Virtue Ethics

This theory is based on the character based approach to morality. This considers that by practising person develops some character virtue and when dealing with moral situation make decisions on the basis of their character virtues which are honesty, brave, generous and so on. Just like a individual develops virtues character in the same manner companies also develop their virtues character which is affected by people working in the organisation. There are companies who develop their virtue and make decision accordingly and this virtue of the company decides what value they deliver to the people or their customers (Sison, Beabout and Ferrero, 2017). If according to virtue Tesco thinks that it can and should deliver high quality good to customers then it will charge high price from customers but will not compromise on quality of the product. On the other hand if virtue of the Tesco and people associated with it feels that company should be selling products at low and affordable price in such case product quality may suffer but price of the product will be affordable. This same principles and virtue of character of people and Tesco will affect their decision about CSR and their decision will not include taking actions and doing activities which are right or doing activities which gives best return but this decision will include what should be. What should company do which is good for people and society (Nyame-Asiamah and Ghulam, 2019). This should is answered by character of decision-makers. They will decide what should Tesco be doing for CSR and which activity should it practice through its CSR. If company thinks that virtue of education is most important for the society then will practice activities which ensures that company is able to provide education to people who are not able to receive it through mainstream mediums of education.

Virtue ethics requires decision-maker that what virtues are good for people and for the purpose of CSR. Later all the decision are taken considering those virtues. This theory in recent time if growing the most (Tench and Topić, 2017). This theory focus on what should be rather than doing what is good and doing what can achieve and derive most beneficial results. This depends on the virtue of decision-maker what decisions they make for CSR.

Real-Life Examples of the Companies Which Have Codes of CSR

There are many real-life examples of companies which are practicing CSR and Tesco is one of them some of the activities practiced and undertaken by the company are as follows-

In relation with CSR every year Board Members of Tesco discuss its CSR strategy and review the performance of CSR every quarter. Some activities under CSR of Tesco are as follows-

Tesco committed itself to maintain a healthy environment and encouraging al its employees to take active role in environmental initiatives.

Energy, Water and Fuel

Tesco launched its energy awareness campaign in 1996. staff of the company was expexted and encouraged to take active part in the campaign (Bene and Salamon, 2016). For the same reason managers of all Tesco stores, depots and offices monitored energy uses and worked on reducing the waste of energy. After this initiative was launched between 1997 to 2005 Tesco reduced its energy consumption by 35% per square foot. Resco after this planed to reduce the use by 5% by 2006.

Recycling

Tesco recycles, re-use and convert to energy about 80 percent of food and non-food waste.

Societal Responsibility

Because of its size and scale of operation Tesco is bale to influence society at large this enables Tesco to encourage its employees and customers to become socially responsible. Company following this took may initiatives to fulfil social responsibility which included charity, fund raising for a cause and promoted education. Tesco considered that it van play major role in promoting health food and that is why company strove to make healthy food available at affordable prices. These efforts of the company not limited at UK but extended to all those countries where Tesco is operating.

Communities

At least 1% of before tax profit of Tesco is given to charity in form of charity, donation, employee time and gifts. Tesco grants its charity to local and national charities.

Economic Responsibility

In all the locations of Tesco across the world Tesco made strong efforts to contribute overall economic growth. This includes that Tesco plays an active role in providing employment, supplying goods at affordable prices and giving opportunities to expand and grow.

Regeneration

To trigger growth Tesco deliberately moved into areas where unemployment is high and development is low and make this area commercially attractive (Bene and Salamon, 2016). Through its job guarantee scheme in span of 6 years Tesco provided job to 2000 people who were unemployed and disadvantaged. Tesco also focused on training people who were single parent, old and first time workers.

In 2005, Tesco carried out two large scale regeneration partnerships at Dumfries and Stockport.

This activity in Coventry City, UK resulted in creation of 1000 jobs.

In other areas of CSR performance of Tesco is as follows-

In Gender Equality and Minorities

Percentage pay gap in male and female employees at Tesco is less than 1 percent and 57% of all its employees are female. This is not limited to only low level employees but 23 percent of board of director and 24% of senior manager and directors are also represented by females.

Sustainable Sourcing

Tesco has created sustainable farming groups which comprises of around 650 dairy farmers.

Education and Empowerment of Workers

70 percent of employees of Tesco stated that they would recommend Tesco as great place to work (Tench and Topić, 2017). This has been accompanied by 77 percent of managers, directors and business leaders within the company that they have made career progress in the company.

CONCLUSION

On the basis above study, it can be concluded that CSR which means that companies become socially responsible. This includes that companies do good for the society as they use all their resources from the society it works like giving back to the society. Just as doing good company should also avoid bad impact of its activities on society and environment. To discuss this in detail study firstly included what is CSR and whether should a company subscribe CSR code or not whose answer is YES. This have been supported with various reasons and importance of the CSR. Concept of CSR then in study was related and explained in reference with various ethical theories and for which various ethical theories like Utilitarian Ethics, virtue Ethics etc.

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