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Corporate Social Responsibility and it’s Effects: Case Study

   

Added on  2021-02-19

34 Pages13450 Words88 Views
Corporate Social Responsibilityand it’s Effects on FinancialPerformance: A case study onMarks and Spencer

ABSTRACTThis report is based on the relationship between the Corporate Social Responsibility andthe financial performance of the retail industry within the UK. This will discuss about what arethe various effects of CSR that are generalised within the retailing industry of UK. Present reportwill also include the various effects of CSR on the financial performance of the retail companyand how its affect the decision-making process of the company. Report will also evaluate thevalues of CSR that have an effect on the decision-making process of MS&S and what are thepositive and negative consequence which a CRS policies and strategies have can have on theorganisation. This report will also provide proper findings from the secondary research whichwill based on the proper discussion and analysis from the secondary data collected. It willprovide a proper conclusion based on the findings and will also provide a properrecommendations for the company to improve their financial performance with the help of CSRactivities.

TABLE OF CONTENTSCHAPTER 1- INTRODUCTION....................................................................................................11. 1 Background......................................................................................................................11.2 Company Overview .........................................................................................................21.3 Aim and objectives...........................................................................................................31.4 Research Questions..........................................................................................................31.5 Rationale...........................................................................................................................41.6 Scope of the study............................................................................................................4CHAPTER 2- LITERATURE REVIEW.........................................................................................42.1 CSR and its role within the organisation..........................................................................42.2 Impact of CSR on the financial performance of organisation..........................................52.3 CSR values affecting decision-making process of company...........................................72.4 Benefits and negative consequences of CSR on the organisation....................................82.5 Challenges in implementing CSR practices and policies...............................................10CHAPTER 3-RESEARCH METHODOLOGY............................................................................113.0 Overview........................................................................................................................113.1 Research Design.............................................................................................................113.2 Research Type................................................................................................................123.3 Data collection................................................................................................................123.4 Data analysis...................................................................................................................123.5 Ethical Considerations....................................................................................................133.6 Research Limitations......................................................................................................13CHAPTER 4-DISCUSSION, ANALYSIS AND FINDINGS........................................................14.1 Impact of CSR on retail industry......................................................................................14.2 Reason for retail brands to invest in CSR........................................................................24.3 Impact of CSR on the financial performance...................................................................34.4 CSR and Financial performance negative association....................................................44.5 CSR values and practices affecting decision-making process in retail industry..............64.6 Assessing the impacts of CSR on retailing business........................................................74.7 Recent trends in CSR within retail industry....................................................................9

CHAPTER-5 CONCLUSION AND RECOMMENDATIONS....................................................105.1 Conclusion......................................................................................................................105.2 Recommendations..........................................................................................................13REFERENCES..............................................................................................................................15

CHAPTER 1- INTRODUCTION1. 1 BackgroundCorporate social responsibility or CSR can be referred as self regulation model which canhelp an organisation to accountable for itself, public and their stakeholders. Practising a CSR byany organisation is also called corporate citizenship and it is important for a company to becautious towards any kind of impact which they have on the society and environment as well(Frynas and Yamahaki, 2016). Company's engagement in CSR means that within the normalcourse of business, company is operating in such a way that it is playing an important role inenhancing environment and society in opposite contributing negatively towards them. In order tobe socially responsible first it is important to be responsible towards itself and towards itsshareholders. Now companies are adopting CSR programs in order to grow their business byreturning to the society and environment that they have taken from. Corporate social responsibility helps in the integration of various social beneficialprograms as well as practices within the organisation's business culture and model. There arevarious strategies which can be incorporated by the company in order to achieve the long termprofits for both types of businesses such as offline and online businesses. CSR also acts as a toolof making the business more efficient as well as more attractive for the customer which plays avital role in increasing the financial performance of the organisation. Both brick-and-motor ande-commerce business has been standing to gain benefit from the implementation of variousstrategies of CSR and there are number of activities which fall under the corporate socialresponsibility umbrella. With the help of CSR practices companies can achieve higher financialperformance in various ways like it can prevent financial ramifications by preventing fine fromthe national and international law. It also puts the business less on the radar of regulatory screensas well as less legal expenses. Over the period of time importance of social responsibility haverecognised by the different organisations of the world and now they got indulged with theactivities of CSR. It is equally important for the companies across the world to recognise howsocially responsible efforts are important for their stakeholders, employees, customers, etc andthey can focus on these efforts accordingly. 1

1.2 Company Overview Marks and Spencer is a retailing company of UK which have never step back from takingresponsibilities to its employees, customers, shareholder, suppliers, partners as well as localcommunities seriously. Company has been operating its business in a responsible way whichunderpins their values such high quality products and services, trust and innovation. M&S is amultinational brand of UK which has been taking care of each and every important issues of thesociety whether it be climatic change charity, waste management, ethical trading, sustainable rawmaterials or health of its customers (Jamali, Karam and Blowfield, 2017). Operating asustainable business have come under the spotlight as there has been rise in awareness ofeconomic aspects and environmental aspects towards the resource management of theorganisation. CSR has changed the structure of doing business and now companies have todevelop the strategies with respect to CSR in order to gain a competitive edge over its rivals.M&S is a company which has been always strong in their values and with a paternalisticapproach of operating their business (Glavas, 2016). M&S have launched various initiatives likeintroducing ISO 26000 to their biggest suppliers and it has made their suppliers moreenvironmentally and socially responsible. So, M&S is a company which has always beenresponsible towards society and towards the environment. Company is still facing challenges inkeeping their social responsible practices on track and it has also recognised the need for keepingtheir business working systematic way in order to keep their business more sustainable. Also,M&S have made 1000 commitments related to various social and environmental issues formaking their business more sustainable by focusing on selling of products which may alsoincrease the financial performance of the organisation. Various research has shown that majority of companies are turning to CSR in order toimprove their financial performance of their business. It has also been analysed by the researchesthat by practising CSR practices can have a strong impact on the financial performance of theorganisation (Rao and Tilt, 2016). It is not only the financial performance that increase but canalso result in increase of reputation, demand of products, competitive advantage and can alsohelp in reducing the legal issues of the company. This can also result in increase the salesperformance of the company and also increases the investment if shareholder. So, it can be saidthat by practising CSR, it can have a strong impact the stock performance as well as financialperformance of the company. It is a concept which has always gained public attention and has2

become a new means of becoming a global economy (Wickert, Scherer and Spence, 2016). Asthe interest of social responsibility is growing across the world, this has put a pressure onvarious organisations of the world to adopt the practices of corporate social responsibility inorder to survive. So, this has put forward various challenges to the firm and result in change inthe structure of the company as per CSR strategies and policies (Corporate SocialResponsibility, 2019). If the pressure of social responsibility is ignored from the stakeholders andvarious motives which are behind engagement and it has got various benefits for theorganisation's financial performance in major factor among them. Also, research have entailedthat social activities can provide the financial benefits but is also entailed to various risks such asrise in costs, risk of failure of CSR strategies, etc which may lead to the failure of business ormay damage the company's performance (Flammer, 2015). So, it is vital for the organisation tobe cautious with their social responsibility strategies and policies as well. 1.3 Aim and objectivesAim:To identify the relationship between Corporate Social Responsibility (CSR) on thefinancial performance in the UK retail industry- A study on Marks and Spencer.Objectives:To identify the effects if CSR that are generalised amongst companies in the retailindustry. To analyse the affect of CSR on the financial performance of M&S.To evaluate the values that effect the decision-making process of M&S.To analyse the positive and negative consequences of CSR on the organisation. 1.4 Research QuestionsWhat are the effects of CSR general to the industry or do they differ to eachcompany?Does Corporate socially responsible affect the financial performance of M&S?What are the values that affect the decision-making process for the selectedcompany?Are there any negatives and positives to CSR? 3

1.5 RationaleOne of major reasons of conducting research is that the concept of CSR is becomingmore popular across the world and it can have a strong impact on the financial performance ofthe organisation. Also, this research has been conduct to know the impact of CSR on the retailingindustry and why it has become important for the retailing companies. Another reason for thisresearch is that analyse the various challenges that are faced by retailer by implementing oradopting CSR strategies in organisation. Also, researcher wants to know how corporate socialresponsibility can affect the decision-making process of the organisation and what are the factorsthat have an impact on the decision-making process related to CSR. 1.6 Scope of the studyScope of this research is broad and can be used in various fields of business in order togain information related to CSR and its impact on the financial performance of the company.This research can be used by investors who want to make investment in corporate socialresponsibility within the retailing industry. This research can be used as a secondary data in orderto gather information in order to take various decisions related to CSR and investment in it. Thisresearch can be used in various academic fields as it can provide the insights to them about thecorporate social responsibility it benefits and consequences.CHAPTER 2- LITERATURE REVIEW2.1 CSR and its role within the organisationAs per the views of Story and Neves, (2015) CSR is a strategy through which companiesor enterprises conduct their business in the way of being ethical, social friendly as well asbeneficial to society and environment as well. The issue of CSR is being debated from the 1950and it has been analysed that it has changed the practices of conducting business. By taking upthe concept and strategies of social responsibility can have a strong impact on the investors,customer, employees, suppliers and shareholders of the organisation. It involves the range ofactivities such as working in collaboration with national and international communities,development of relationship with stakeholders and their families and also involves the variousactions of environmental sustainability and conservation. Corporate social responsibility hasbecome one of the most prominent part in the 21st century of business world. Expectations ofpeople rose in recent years which has changed the ideology regarding the environmental and4

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