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The Impact of CSR on Financial Performance

   

Added on  2021-02-21

30 Pages11112 Words231 Views
Research Project

Table of ContentsINTRODUCTION ...........................................................................................................................................4Overview of the research............................................................................................................................5Research aims and Questions .....................................................................................................................6Research Aim.....................................................................................................................................6Research questions:...........................................................................................................................6Hypothesis ........................................................................................................................................6Significance of the research...............................................................................................................6Rationale of the research..................................................................................................................7Limitations of the research................................................................................................................8LITERATURE REVIEW..........................................................................................................................8Overview of CSR................................................................................................................................8Benefits of CSR on business performance.......................................................................................10Impact of CSR on Financial Performance.........................................................................................11The UK Supermarket........................................................................................................................12Relationship between CSR and Financial performance of company................................................14CSR improve the financial performance..........................................................................................15RESEARCH METHODOLOGY.......................................................................................................................16Types of Research............................................................................................................................17Research design ..............................................................................................................................18Research Approach..........................................................................................................................18Data Collection Method/Analysis....................................................................................................19Primary data:.........................................................................................................................19Research choice...............................................................................................................................21Ethical consideration ................................................................................................................................22Research Plan............................................................................................................................................22DATA ANALYSIS..........................................................................................................................................22CSR activities done by Tesco and its impact upon financial report............................................................23CSR activities done by Sainsbury's and its impact upon financial report.........................................25

Conclusion and Recommendations ...........................................................................................................27Reflection........................................................................................................................................27CONCLUSION.............................................................................................................................................29RECOMMENDATIONS................................................................................................................................30

INTRODUCTIONResearch project is going to show how corporate social responsibility impacts uponfinancial performances of big four supermarkets that are doing business in United kingdom andin other countries as well like Tesco, Asda, Sainsbury's and Morrison's. Within United kingdom,it can be said that the supermarkets are carrying a market share approximately to 76% or maybemore than that which helps them in grabbing a good position not only in the UK market but it inother countries as well. On the other side, corporate social responsibility is said to be crucialelement, which is playing important role for supermarkets like Tesco, Asda, Morrison’s andSainsbury’s. Building a positive image among customers with the help of CSR has becomenormal in present time but it is also required for companies to focus upon financial performanceis well as this can directly e impact upon company’s performance level as well. Along with this,many researchers has developed reports on both financial performance level of the company,which good affected by CSR activities performed by them. But, this present research report willhelp in focusing upon the four different supermarkets of United kingdom that are famous in allover the world. This will automatically make the whole investigation to go much more authenticand detailed in regards to the four supermarkets like ASDA, Tesco, Sainsbury’s and Morrison’s.Therefore, it can easily be understood that focus that research is going to be built withauthenticity. Apart from that, it has been analysed that CSR activities are directly connected withthe investors and other sources from which an organisation within the supermarket can raisefunds for itself. Therefore, it is important for companies to perform CSR activities so that theirfinancial performances can be improvised based on the trends, just because in present time thecompetition among different supermarkets like Tesco, Sainsbury’s, Morrison’s and Asda is highin nature. It is much required for business organisations that are dealing within the supermarketthat conducting CSR activities is not only a part of making profits out of it, but it carries a widerarea that gets affected of the company. In simple words, CSR not only e helps a company inenhancing the profit margins but it can also help them in sustaining within the competitivemarket for a longer period of time and this can only be done through building a much effectiveCSR act that could help company in grabbing the attention of investors. Along with this,corporate social responsibility is also helping business organisation like Tesco, Sainsbury’s,Morrison’s and Asda in reaching to new heights, where they raised competition for other retail

supermarkets like JS Supermarket, LIDL and so on. This has raised many questions not only forthe retail industry but for other fields as well, where corporate social responsibility is somethingthat could help business firms in reaching to new heights. There are many cases, which came in front where an organisation was looking forward toconduct the CSR activity, but somehow it lead the company to face a range of issues like lessattention of investors was being grabbed and many more. This happened because of the objectivethat company was trying to improve profit margins through conducting CSR act. This madeinvestors realize that the company is moreover believing in earning profits, but it should also sokeep its focus upon social responsibilities as well that they are having in regards to the public ofall over the world.Overview of the researchCompanies that are dealing within the Supermarket industry of United Kingdom, hasfaced a range of issues in regards to their financial performance in last few years. This hashappened due to less CSR activities, that has been done by the business organizations. Thisimpacted negatively upon overall financial positions of different supermarkets like Asda, Tesco,Sainsbury’s and on Morrison’s as well. Therefore, for the famous supermarkets it will berequired for companies to take into consideration of all the activities that are directly linked withthe corporate social responsibility. This will help, business organisations like Tesco, Asda andmore to improve their overall financial position throughout the world. It is much required forbusiness organisations to develop a range of strategies in regards to the CSR, so thatdevelopment can easily be seen within the market of United Kingdom. If it is talked about,corporate social responsibility along with the financial performance of a business companydealing within retailing business sector as a supermarket. Along with this, it can also be said thatit is pretty much required for a business organisation to develop much more effective corporatereports, as this helps in developing the interests of targeted investors. Various big organisationshas now developed both integrated non-financial along with financial information within theirannual reports.

Research aims and QuestionsResearch AimPresent investigation research is being developed “To analyse the impact of corporatesocial responsibility reporting on the financial performance of 4 Big supermarkets of the UnitedKingdom.” In order to attain this, researcher will be calculating the profit ratios of differentorganisations like Asda, Tesco, Morrison’s and Sainsbury’s considering there financial books. Inregards to CSR, and the activities related to this are being done by these 4 supermarkets and theresearcher will be comparing all of these organisations focusing upon theirs financialperformances. Researcher will use annual report, news articles, UK supermarket CSR report andsustainability report to gather information on where these firms have been socially responsible. Research questions:How the Big 4 supermarkets measure CSR ?Does CSR improve the financial performance ?To assess the extent to which CSR report meets the guidelines ?To provide the positive and negative impact the supermarkets have on social,environmental and economy ?Hypothesis Based on the aims of the research, the hypothesis will be as follows:H1: There is a relationship between the CSR activities and the financial performance.H2: There is an impact between CSR activities and financial performanceSignificance of the researchThe reason behind conducting the investigation is to analyse how CSR activities couldhelp a business organisation that is dealing in the supermarket industry of United kingdom. Thistitle has been taken into consideration because of companies has kept their focus on CSRactivities only to improve their profit margins but they also should understand that how CSR actscan help organisation to a wider context. It is important for companies to innovate themselvesand developed CSR activities in a way where they could help both profit margins of the companyand raise standards of living beings. In past few years, business organisations has let themselvesto go through range of problems in regards to their fundraising techniques. This happened due to

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