Strategic Management

5 May 2016

Corporate Social Responsibility refers to an organisation’s obligation to act to protect and improve society’s welfare as well as its own interests. (Bartol, K, Tein, M, Matthews, G, Sharma, B, Scott-Ladd, B, 2011, pp 106.) In the twenty first century the perceived responsibility of businesses to do good for society also helps build their reputation, public image and brand marketing which help contribute to creating a competitive advantage (Khan, A, Muttakin, M, & Siddiqui, J ,2013)

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Woolworths Limited as the largest retail company in Australia prides itself on having high ethical and moral standards dedicated to improving society’s welfare. Woolworths is dedicated to being an industry leader in its supply chain, providing innovation in fresh food to suit consumer’s needs and providing a high exceptional level of customer service.

Corporate social responsibility today is used as a way to gain a competitive advantage. Companies that do not participate in Corporate Social responsibility constantly become the targets of the media and public outrage as they are not doing anything to contribute to the greater good of society. Woolworths successfully manages and actively improves it’s CSR activities which help it gain a competitive advantage.

Woolworths was established in 1924 when it opened its first store in Sydney as a bargain basement outlet. (Hassan, K, Uddin, M, Arafat, B, 2012) Since then Woolworths Limited has expanded and now operates a number of brands to reflect consumer needs such as BigW (Discount General Retail), Master Home Improvement (DIY) and Dan Murphy’s (Liquor).

In addition to operating a large amount of brands in retail, Woolworths limited also offer a range of insurance products and finance products. Woolworths also have a large interest and ownership of Hotels/Motels worldwide (particularly a high number in Australia) and operate a huge network of pokies machines.

Woolworths have business interests throughout the world including operating 156 supermarket stores in New Zealand. It has joint ventures in India with supermarket chain Tata which in 2007-2008 financial year generated 104 Million in revenue. (Hassan, K, 2012). Woolworths 2011 Corporate Social responsibility report identified a number of ways in which Woolworths participates in it’s obligation to act to protect and improve society’s welfare as well as it’s own interests.

The report was compiled using the Global Reporting Initiative (GRI) G3.1 Guidelines, underwent independent assurance by Net Balance Management Group, and achieved an A+ rating (Woolworths Responsibility Report 2011). Woolworths corporate social responsibility programs for employees across all divisions for 2011 include; advancing opportunities for indigenous Australian’s within the workplace, reducing lost time injury rate, increasing the employees receiving paid maternity relief and investing millions into learning and development training.

Environmentally; Woolworths reduced its water consumption and carbon and energy intensity levels. To achieve this Woolworths signed the Carbon Disclosure Project (CDP) Carbon Disclosure Leadership Index 2010: one
of seven Australian companies, and the only Australian retailer, to be listed (Woolworths moves in right CSR direction, 2011)

Woolworths currently has four strategic priorities in place for it’s growth; 1. Extend leadership in food and liquor
2. Act on our portfolio to maximize shareholder value
3. Maintain our track record of building new growth businesses 4. Put in place the enablers for a new era of growth (Woolworths Limited, 2013). These four priorities provide the building ground to grow the company. Corporate Social Responsibility is a source of opportunity, innovation and competitive advantage (Porter, M, Kramer, M, 2006). To achieve these strategic priorities corporate social responsibility can be used through the principal of sustainability.

The principal of sustainability appeals to enlighten self-interest, often invoking the so-called triple bottom line of economic, social and environmental performance (Porter, 2006). In general terms this means that Woolworths can secure long term economic performance by avoiding short-term behavior that is not socially detriment or acceptable (Porter, 2006).

An example of Woolworths successfully using the principal of sustainability to achieve its strategic priorities of growth can be seen in their investment of 55.7 Million dollars into energy efficiency. It is expected by 2015, this will give Woolworths a saving of 93 Million Dollars.

That is a total benefit of 37.3 Million and a 10.9% reduction of energy emissions (Woolworths Corporate Responsibility Report, 2011). Woolworths prides it’s self on having a well-advanced supply chain for it’s various branches. In Woolworth’s a change was undertaken to reduce the need for waxed cardboard cartons, string nets, and especially Styrofoam plastic boxes.

(Doing the Right Thing Woolworths, 2007) In 2007 1.7 million crates in the pool with around half a million issued through our produce distribution centers each week in Victoria, NSW, Queensland and Western Australia. The reusable crates in 2007 eliminated the need for 26 million cardboard cartons each year (Doing the Right Thing Woolworths, 2007). Another social environmental practice Woolworths Is working towards is having a zero food waste target by 2015.

This means that all efforts will be made to sell the food and products in our stores, and where products cannot be sold, their first choice is to donate surplus fresh food to local food relief organisations (Corporate Responsibility Report, Woolworths, 2011). This corporate social responsibility target fits inline with Woolworth’s first point of growth to extend its leadership within food and liquor. If a multi-site and major Australian retailer can achieve this target, then surely a household of four family members is able to achieve it.

This target like the previous investing in carbon scheme will produce greater long-term financial gain (Through the reduction in stock loss). It must be identified however, that the 2011 Woolworths corporate responsibility report does not identify a plan or strategy of how this plan will be implemented and maintained. It is fair to assume that for it’s 1000’s of stores worldwide it would not be able to monitor what is being thrown into landfill. (If stock is unable to be sold, that is where it ultimately will end up).

To overcome this if Woolworths seriously wanted to overcome this issue it could donate all the fresh produce food waste to garden center’s, farms etc. within the local community to be used compost for gardens and animals. This is in line with reducing Woolworths zero landfill target and also it’s community programs.

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