CSR Strategy and Stakeholder Conflict

This assignment analyzes the significance of corporate social responsibility (CSR) in today's business environment. It highlights the mutually beneficial nature of CSR for both organizations and stakeholders. The document delves into different strategies for implementing CSR, including the 'Pull' and 'Push' approaches, to effectively manage potential conflicts arising from stakeholder expectations. Additionally, it examines how a strong CSR score can enhance brand recognition and provide a competitive advantage over rival firms.

Running head: MANAGEMENT THEORY
Management Theory
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Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
CSR Efforts of Woolworths.........................................................................................................2
CSR Efforts to Ensure Environmental Sustainability..................................................................3
CSR Efforts to Improve Community Well-being........................................................................3
CSR Efforts to Ensure Employee Well-being.............................................................................4
CSR and Stakeholder Interest Conflicts......................................................................................5
Conclusion.......................................................................................................................................7
Reference List..................................................................................................................................9

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Introduction:
The importance of Corporate Social Responsibility in determining the sustainability of a
company cannot be overrated. The idea behind implementing CSR activities, is that a business
organization cannot be guided by profit motive only, and rather it should choose to conduct
business in a responsible way, so that it does not harm the interest of any of the stakeholders
(employees, shareholders or consumers), nor does it harm the interest of the community, it is
serving. Thus, it is expected that an organization should carefully evaluate the impact of its
business activities on the stakeholders, communities as well as the environment, it is conducting
business in. While in some countries, the engagement o a company in CSR activities in an
integral legal requirement for conducting business there, in case of CSR, the obligation is
expected to extend beyond the statutory obligation to comply with legislation and sees
organizations voluntarily taking further steps to improve the quality of life for employees as well
as for the local community and society at large (Tai & Chuang, 2014). The engagement of an
organization in moral, ethical and philanthropic activities has become an important part of the
business strategy of many organizations, and this is exactly the reason why most of the
companies issue a CSR report, that offers an elaborate idea of the company’s social, non-
financial activities. This report intends to carefully analyse the importance of CSR practice in an
organization, how reputed Australian organizations like Woolworths implement and benefit from
CSR activities, and finally to evaluate the various perspectives of the stakeholders regarding the
incorporation of CSR activities in business.
Discussion:
CSR Efforts of Woolworths:

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Founded in the year of 1924, Woolworths has emerged to become one of the most
recognized Australian companies with extended interest in retail trade in Australia and New
Zealand. Apart from the implementation of effective business strategies, Woolworths has been
able to sustain its brand recognition, because of its increased engagement in CSR efforts. The
management authority of the company has always been aware that its organizational success
cannot be measured only in terms of profitability and growth, but it is to be gauged in terms of
the well-being it brings in the society. The company has incorporated CSR activities as part of an
important business action, and has eve announced the recent Corporate Social Responsibility
Strategy 2020, that announced the company’s decision to implement 20 sustainability goals that
it intends to accomplish by the end of 2020 (Devin & Richards, 2016).
CSR Efforts to Ensure Environmental Sustainability:
One of the most important aspects of its CSR strategy is its collaboration with the
suppliers, service providers as well as operations, so as to innovate sustainability plans to ensure
a healthy planet. Accordingly, the company has already stopped offering its customers free
plastic bags, so as to stop contamination of the environment by the non-biodegradable
substances. On the contrary, the consumers have been advised to bring in their own carry bags,
or they can buy more durable bags at 15 cents per piece from the retail stores of Woolworths
only (Santos et al., 2013). Further, the company has also funded its own awareness raising
campaigns to make the consumers aware of the importance of quitting plastic bags, and looking
for alternatives. The company has also invested to reduce the food wastes going to the landfill,
and has even reduced its carbon emission by 10% (Klettner et al.,2014).
CSR Efforts to Improve Community Well-being:

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It is important for organizations to integrate societal impacts of business on the members
of certain communities in its business plans, and address vital issues such as poverty and
unemployment infesting the community. Since the last sixteen years, Woolworths has been
engaged in community services in Australia. The company regularly donates a lump sum amount
of money to Foodbank, an organization that utilizes the grant received, for providing hunger
relief to the impoverished Australians. In order to contribute to the spread of educational
opportunities in the backward communities, the company has also introduced MySchool Fund
Raising Programs, and Making the Difference Educational Program for uplifting educational
opportunities amongst the young children of the disadvantaged communities of Australia
(Balmer et al., 2016). Most importantly, in order to ensure food security, the company has
established a system of diverting surplus food from the Woolworths stores from going to waste.
The company donates this surplus food to needy communities with the help of structured charity
organizations.
CSR Efforts to Ensure Employee Well-being:
The employees, the human resources of an organization, are the real assets of any
organization and hence promoting their well-being is an important aspect of the CSR strategy as
well. As the second largest private employer of Australia, the company ensures 100% workplace
diversity. Accordingly, it not only hires old and disabled people (18,000 employees above the
age of 55 years), and offers them relevant training, but has also appointed as many as 78, 848
young employees below the age of 25 years (Smith, 2014). At the same time, the company has
appointed 33% of its female workforce in managerial and executive roles within the organization
(Smith, 2014). Lastly, the company not only hires the employees belonging to indigenous
communities, but also in the year of 2015 Woolworths has also supported two indigenous

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suppliers: Young Guns Container Crew, a Labour hire company and Message Stick
communications, so as to extend help to them, and make them more self-sufficient (Santos et al.,
2014).
CSR and Stakeholder Interest Conflicts:
Edward Freeman was one of the first persons to create an awareness regarding the idea of
stakeholder interest, with the help of his Stakeholder Theory. According to Freeman, the
stakeholder of any company possesses financial or non-financial ownership and while the
material stakes can claim includes stock dividends or salary, while non-financial stakes may
include the right of a consumer or a community member to enjoy access to clean water and air. It
is the responsibility of each organization to create wealth in all forms for its stakeholders.
Accordingly, the business ethics theory claims that the cumulative result of corporate
performance over time, that may include all the assets, revenue and competencies of the firm,
should be directed to the interests and issues of a wider set of stakeholders, such as the
employees, consumers and community members (Jo et al., 2016). This in turn, does help in
maximizing the intangible assets such as employer-employee or company-consumer
relationships, goodwill and brand reputation, trust as well as opportunities for innovation.
Considering the possibility of long-term sustenance, the management authority of Woolworths
has been focusing on CSR efforts since a long time. Accordingly, the company’s CSR
performance (as described in the diagram below) is comparatively better than many
organizations though there are still chances for improvement in areas such as community
development initiatives:

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Figure 1: CSR Rating of Woolworths
Source: (Methner et al., 2015)
However, the very fact that an organization has multiple stakeholders is the reason why at
times the stakeholder perspectives about a company’s CSR efforts are at variance or even in
long-term conflict with the CSR strategies of the organization. Often large and recognized
companies such as Woolworths invest lump sum amount of money in CSR activities, simply
because it’s internal stakeholders such as the corporate managers, directors or employees are
expected to benefit from the huge CSR expenditure. Huge investment in CSR activities helps in
enhancing the reputation of a company and improving its CSR score, which in turn improve the
brand recognition of the firm, thereby ultimately benefitting the company’s internal stakeholders.
However, although a huge CSR expenditure easily benefits the internal stakeholders, the non-

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affiliated shareholders may not approve of the expenditure, as it may reduce the firm’s value.
Thus, this often creates stakeholder conflict as well. It should be remembered that CSR is not just
an initiative that an organization undertakes to improve social, community well-being and
ecological balance, but it is essentially an integral part of the business strategy. Thus, if the
stakeholders hold mutually contradictory attitudes towards a CSR initiative, the company may
not be able to benefit from the implementation of CSR activities (Coopers, 2017). The
organization will fail to accommodate these kinds of self-defeating contradictions in
perspectives. Often organizations need to address issues that are of vital interest to the society,
and yet end up being viewed negatively in the public eye, because of the erroneous perception of
the organization. For example, 80% of the total spending by organizations on community issues
go for charitable organizations spending the money on so called neglected diseases, such as HIV
AIDS and Tuberculosis. However, as per the reports by WHO, these account for only a 10% of
the diseases, in the entire world, and much awareness needs to be spread against the tendency to
over-consume green products, that can lead to exacerbation of current environmental problems
(Kotler & Maon, 2016). However, if an organization invests a huge amount of money in
spreading awareness against the over-consumption of green products, the consumers may not
value and attach much importance to the CSR effort of the organization, due to sheer ignorance
of the public.
Conclusion:
CSR is highly important in today’s world, as it is mutually beneficial. While an
organization is not any longer driven only by the profit motive, and actively contributes to
promote the well-being of the stakeholders, the stakeholders are aware that the organizations
have become morally aware and their duties are beyond the provision of goods and services.

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CSR score helps in improving the brand recognition of the company, offering it competitive
advantage over the rival firms. Hence, in case any form of stakeholder conflict arises, during the
implementation phase of the CSR strategy, the company needs to adopt either the CSR Pull
strategy or the CSR Push strategy. In case of the CSR Pull strategy, the company has no a priori
position of its own, and hence it must adapt its strategy matching the expectations of the
stakeholders. On the other hand, in case of the CSR Push strategy, the company does possess a
strong a priori position, and it can train, educate and mould the stakeholder beliefs so as to
change the stakeholder perspectives and resolve the stakeholder conflict.

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Reference List:
AO Dos Santos, M., Svensson, G., & Padin, C. (2014). A “fivefold bottom line” approach of
implementing and reporting corporate efforts in sustainable business
practices. Management of Environmental Quality: An International Journal, 25(4), 421-
430.
Balmer, J. M., Abratt, R., & Kleyn, N. (2016). Corporate brands and corporate marketing:
Emerging trends in the big five eco-system. Journal of Brand Management, 23(1), 3-7.
Cooper, S. (2017). Corporate social performance: A stakeholder approach. Taylor & Francis.
Devin, B., & Richards, C. (2016). Food waste, power, and corporate social responsibility in the
Australian food supply chain. Journal of Business Ethics, 1-12.
Dos Santos, M. A., Svensson, G., & Padin, C. (2013). Indicators of sustainable business
practices: Woolworths in South Africa. Supply Chain Management: An International
Journal, 18(1), 104-108.
Jo, H., Song, M. H., & Tsang, A. (2016). Corporate social responsibility and stakeholder
governance around the world. Global Finance Journal, 29, 42-69.
Klettner, A., Clarke, T., & Boersma, M. (2014). The governance of corporate sustainability:
Empirical insights into the development, leadership and implementation of responsible
business strategy. Journal of Business Ethics, 122(1), 145-165.
Kotler, P., & Maon, F. (2016). A stakeholder approach to corporate social responsibility:
Pressures, conflicts, and reconciliation. Routledge.

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Methner, N., Hamann, R., & Nilsson, W. (2015). The Evolution of a Sustainability Leader: The
Development of Strategic and Boundary Spanning Organizational Innovation Capabilities
in Woolworths. In The Business of Social and Environmental Innovation (pp. 87-104).
Springer International Publishing.
Smith, C. (2014). Diversity in the workplace: the good, the bad, the necessary.
Tai, F. M., & Chuang, S. H. (2014). Corporate social responsibility. Ibusiness, 6(03), 117.