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He Corporate Social Responsibility : Tesco Study Case

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Management report: The Corporate Social Responsibility

CRS in terms of marketing strategy and competitive advantage.

Propose:

This present paper tries to enhance the different views about CSR, in the global vision of all the stakeholders, in the particular context of retailing. We will treat the interest for a company to deal with responsible actions and activities, and the main breaks found by certain authors. The subject is treated in relation with marketing strategies and tries to persuade the readers that CSR is a good solution to gain competitive advantage.

Executive summary:

Several organizations such as governments, activists or the media, want to make the general public aware about the social consequences of the companies' activities, by publishing different rankings classifying companies according their involvement in Corporate Social Responsibility (CSR). Porter and Kramer (2006a) explain that this concept of CSR has taken an increasing importance in the companies' corporate strategies, in order to escape from the bad publicity entailed by such publications. So, what is the final thought about CRS, and is it a relevant subject today? First, we will see the main discussions about CSR, secondly, how to implement such a strategy in a retailing context, and finally, we will discuss the Tesco's Corporate Social Activities (CSI) in a CSR strategy.

Findings:

To turn or not to turn into a CSR strategy? That is the question

Definitions

First, let us try to define the concept of Corporate Social Responsibility. Generally, one agrees to consider that the first notion of social responsibility was broached in 1953 by Bowen, who explains that companies have the obligation "to pursue those policies, to make those decisions, or to follow those lines of actions which are desirable in terms of the objectives and values of society" Bowen (1953:6). As Carroll (1979) who defines CRS as the economic, legal ethical and discretionary demands that society places on business, Boatright (1997) describes CSR as "the voluntary assumption by companies of responsibilities beyond purely economic and legal responsibilities."

As we can realize, there is not any defined definition of the CSR term, but most of the time, scholars admit that CSR is the involvement into social, environmental and ethical activities from part of a company in its business.

As we have given some CSR definitions, we will discuss now the customers' expectations and other stakeholders' pressures about being a responsible company. The first stage is to determine who are the stakeholders, and try to meet their wishes in terms of CSR, Piacentini, MacFayden, Eadie (2000). Then, their expectations are enhanced thanks to enquires, questionnaires or academic surveys, and compared with the company's values. CRS can take several forms of applications, which correspond to social, environmental or ethical goals: Corporate Ethicality, Corporate Philanthropy, Environmental/Green Marketing and Social activism/Community involvement, West et al. (2006).

Corporate Philanthropy (CP) should be used to merge two goals: social and economic aims. For that, the company "can focus itself on the business approach of charitable giving", because remain honest, the apparent company's willingness is more led by the search of profitability than philanthropy, Porter and Kramer (2002b:204). The current tendency is to use opportunities more than in a voluntary strategy, because firms do not really understand the importance of dedicate financial supports to suitable recipients. Actually, they hardy choose charitable activities and causes without taking care about the conformity with their own values and/or competitive advantage, Porter (2002). Furthermore, according the same authors, CP is more related with public relations than with the will to improve a situation.

However, if a firm accurately communicates about its CP activities towards all the stakeholders and the general public, the reputation can be improved.

Another field where the company can be involved is Corporate Ethicality (CE), which represents the "set of moral principles or values that shape the actions of either an individual or a group of individuals", West et al. (2006:437). Companies should give attention to CE, because there are a lot of cases which demonstrate the bad effects of a damaged public trust, such as the Enron scandal. These American and European scandals have been since 2001 the departure point of awareness from part to companies to highlight how critical CRS could be, MacMillian et al. (2002).

Either about Corporate Philanthropy or Corporate Ethicality, the thing is even truer in a food retailing context. Food retailers like Sainsbury's use this CSR activity by communicating about the efforts they do in terms of farmers and suppliers protection, the local and regional support, the promotion of biological or ethical products...

In parallel of CE and CP, the Corporate Communication (from the marketing department), pursues the same goal: making the audience aware about values and cultural positioning.

The third CSR domain is the social activism which "includes the actions undertaken by a firm, individuals, or a group that are aimed at making the Quality Of Life (QOL) in society better for all the inhabitants", West et al. (2006). About food retailers, we can underline the efforts done into these social activities. Actually, your company is one of the most leading companies to help and create local and regional communities' projects. In partnership with more than 60 Non-Governmental Organizations (NGOs), Tesco is providing financial and organizational aids to support social and ethical events towards selected worthy causes (such as the Race for Life, in June 2006).

The last (but not the least) field is the environmental marketing. Why has it a so big interest? Nowadays, with the global warming, we can find measures in environmental regulation everywhere, particularly in manufacturing sectors, where the necessity to transform the product leads to a certain environmental pollution. Marketing strategies, in the one hand, does not have the choice to take into consideration the environmental impact, because of the regulation and laws, Nevertheless, on the other hand, the strategy could be to make efforts into this domain beyond these obligations, to gain a competitive advantage in comparison with other firms. The effort can be on just some

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