Strategic Management and Corporate Responsibility

This report explores the current approach of Innocent Drinks company towards corporate responsibility and sustainability. It discusses the key tensions and dilemmas involved in being an ethical company and assesses two proposals for enhancing business. The report also suggests a further proposal for consideration by directors.

Strategic management and
corporate responsibility
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Table of Contents
MAIN BODY...................................................................................................................................3
An introduction to the company and its current approach to corporate responsibility and
sustainability...........................................................................................................................3
Appropriate theory in order discuss the key tensions or dilemmas involved in being an
‘ethical’ company...................................................................................................................4
Assess of two proposals..........................................................................................................7
State and develop further proposal that needs to be consider by directors..........................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
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INTRODUCTION
Strategic management can be describe as all those activities that is supportive in
enhancing business activities. This is an effective way through which organisation can develop
better and effective strategies that will lead to growth of business (Rothaermel, 2016). Strategic
management is a process which includes setting of goals, identifying competitive environment as
well as developing better strategies in order to achieve set objectives. Corporate social
responsibility will lead to have major impact on business and its image in market environment.
Organisation needs to conduct different corporate social responsibility in order to attract more
customers. This report is based on Innocent Drinks company. This organisation is dealing in
beverage industry as well as providing different types of juice and smoothies products to
customers. Innocent Drink organisation was established in 1998 and founder of this organisation
was Richard Reed and Adam Balon or Jon Wright. This organisation is owned by The Coca-
Cola company. This report includes current approaches of organisation for enhancing corporate
responsibility and sustainability. In this different theory has been analysed and different business
tensions or dilemmas of business regarding business ethics. In this report different proposals for
enhancing business and reducing cost has been effectively identified. Apart from this various
proposal for benefits of business has been clearly analysed.
MAIN BODY
An introduction to the company and its current approach to corporate responsibility and
sustainability.
Innocent drinks company is developing different types of products which includes
smoothies and juices. This organisation is conducting business activities in beverages industry
and Innocent drinks organisation was developed in 1998. Founder of respective organisation was
Adam Balon, Richard Reed and Jon Wright. Respective organisation is offering its products and
services to different areas such as Coffee shops, supermarkets as well as other outlets. Major
products of Innocent Drinks company are juices, smoothies, dairy free range, bubbles, coconut
water, juices for kids refreshers and so on (Thompson, Strickland and Gamble, 2015). This
company is conduct high quality products that is 100 % recyclable or reusable. This recycling
revolution is taken by this company in order to enhance the performance of organisation as well
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as full fill its responsibility towards society and environment. This organisation is focusing on
brighter future as well as enhancing environmental activities.
Current approaches of Innocent Drink for corporate responsibility and sustainability
It is important for organisation to conduct business activities and task by considering
corporate social responsibility as well as sustainability. It is important for business to consider
effective and efficient approach that will helps in full filling social responsibility as well as
sustainability of business. Current approaches for corporate responsibility and sustainability of
Innocent Drink company is mention below.
This company is focusing on recycling revolution by creating and developing bottle that
is reusable. This will help in reducing the wastage from society by minimizing the usage of
plastic in business activities (Ioannou and Serafeim, 2015). This approach of Innocent Drink
company will have in improving environment condition. Current approach of innocent drink
company is for reducing the waste material form society and environment by packaging its
product in 100 % recyclable material.
Innocent drink organisation is developing high quality juices and smoothes products that
is as per need and requirement of customers. This approaches of respective company will lead to
provide products that will have positive impact on health of consumer. It is important for
organisation to consider customers and their preferences in order to develop better relationship
with customers.
Appropriate theory in order discuss the key tensions or dilemmas involved in being an ‘ethical’
company.
Ethics can be describe as the moral and principles of business that needs to be consider
by organisation while performing business activities. It is very important for company to conduct
business activities ethical and responsibly in order to correctly achieve desired goals of
organisation. Innocent Drinks company is facing various issues and dilemmas while taking
business decisions as well as conducting business activities. It is important for this organisation
to consider different ethical theories in order to take better and effective decision for growth and
development of business (Shiu and Yang, 2017). Ethical theories are majorly includes
deontology, Utilitarianism and Virtue. All of these theories are very supportive in taking better
decision for enhancing performance of organisation.
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 Utilitarianism ethical theory - This is one of the most powerful theory that is helpful in
understanding and determining difference between right and wrong by focusing on
outcomes. Utilitarianism ethical theory is a framework that will guide organisation by
analysing and evaluating the consequence of business activities. This theory holds the
most ethical choice in which organisation can develop products as well as offer it to large
number of customers. Through this theory respective organisation can analyse and
evaluate the moral reasoning that can be used for business functioning. This theory helps
in determining the cost of business as well as benefits that is achieve by organisation by
providing its services to market area. For example Innocent Drinks company wants to
minimize the cost of business by introducing products which contain less amount of fruit
in juices and smoothies. It has been determined by this organisation that it is very cost
effective for business to use high amount of fruits in its products. So in order to reduce
the cost of business and earn more profits respective company is focusing on reducing the
quantity of natural fruits form drinks or reducing the proportion. This will lead create the
tension of decision making process as well as dilemmas for business. Innocent Drinks
company is offering its products as high quality drink products that include natural fruit
in its drinks and smoothies (Flammer, 2015). Utilitarianism ethical theory state that it is
important for organisation to identify the consequence by the actions taken by
organisation by determining what is good and what is bad for organisation. By reducing
the quantity of fruit from its drink product respective company is not conducting its
business activities ethically. Utilization of source of proportion of fruit from non
sustainable sources in its juices and smoothies can lead to have impact in health of
consumer. It is unethical activities of Innocent Drink organisation to neglecting the
importance of customers health. Deontology ethical theory - Deontology theory is described as a ethical theory that uses
rules and regulations and provide the basis to differentiate right from wrong. In other
words, the special emphasise is placed on the relationship between duty and morality of
human action and provide the consequences of human welfare. The situation depends
upon the good or bad causes as it provide the basis of the moral norm in the society.
Deontolgy is compared to virtual ethics and pragmatic ethics which consist of set of rules
that is integral to the universe, personal or cultural values. Deontology ethical theory
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refers as that people will follow rules and regulations while working business activities
in better and appropriate manner. With the help of this theory organisation will be able to
take correct decisions for organisation by clearly understanding the difference between
right and wrong. This theory is helpful in providing the guidelines to employees so that
they can take correct and appropriate decision to conduct business activities. This ethical
theory will help organisation to take effective decision by considering the ethics and
moral of organisation. For example Innocent Drinks company is considering different
other non sustainable sources as the proportion of fruits. This can not be consider as the
ethical decision of respective company as non sustainable sources can have negative
impact on health on consumer. This theory believe that it is very important for this
organisation to treat people correctly and appropriately. It is ethical responsibility of an
individual to take correct actions so that business is able to conduct activities more
ethically. Ignorance of customers health in order to save the cost of business is the major
dilemmas that is involved in ethical business practices of organisation. Tension that occur
in decision making as well as conducting organisational activities includes the negative
impact on its products to customer and society.
 Virtue ethical theory - Virtue approaches can be consider as the one of the major
approach of normative ethics. This theory has provided more importance to the trait and
character of individual rather than way of doing any task. Virtue ethics is more of a moral
advice in order to act properly by taking ethical decisions. This is an effective theory that
will help in providing guidelines to organisation and business so that they can correctly
conduct business task as well as behave ethical while dealing with circumstances of
organisation. This is accurate theory that needs to be consider by Innocent Drinks
company while dealing with dilemmas and tension in business decision making process.
It is a useful theory in order to possession of virtue with in organisation and its functions.
For example implementation of non sustainability sources as the proportion of fruits or
reducing the quantity of fruit content form the drink products with the motive of reducing
the cost of business. These are the proposal advice by the board of directors of Innocent
Drinks company. It is very difficult for employees to ignore this proposal.
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Assess of two proposals
For an organisation it is very much important to bring new products and services into the
marketplace. In that series they need to evaluate the internal and external business
environment. in context of Innocent drinks that deals with large product portfolio but due
to high bargaining power of consumers director of respective organisation bring two
proposals and suggest to access respective areas to enhance profitability and sustainability
in to marketplace (Stead and Stead, 2013). Organisation first proposal consist of reducing
fruit content of the product. From the above discussion it has been evaluated that
respective organisation devoted their money and efforts for ethical activities that helps in
building distinctive image in the marketplace. in that regards they need to analyze the
competitors in the marketplace and way they acquired profitability and sustainability into
marketplace. for gaining higher level of profitability it has been examined that fruits are
very much expensive in marketplace if the content of fruits reduces from juice it proved
beneficial for organisation to gain desirable outcomes. It proved beneficial as consumers
focus more on taste of juices that can be enhance by using various kinds of ingredients
such as ice cream, nuts and chocolates and many more. Before applying respective
proposal it is very much important to analyze the consumers taste and preferences such as
they are taste sensitive or health sensitive. In case of first one then respective proposal
proved very much beneficial in enhancing profitability and sustainability of organisation in
positive manner. on other hand if consumers consume products of innocent drinks due to
consider it is healthy then administration not to apply respective concept in wider
marketplace. there are some major kind of advantages behind using respective proposal
that it enhance organisational profitability that is very important for organisation in
marketplace. it also increase market base as consumers in summer wants to consume some
child and liquid so it relevant for such perspective (Cheng, Ioannou and Serafeim,
2014). On other hand there are some disadvantages of respective proposal that if
organisation applied it hurts the emotions of people. On other hand it come under unethical
working practices that never devote for sustainability in organisation. In that regards they
need to visualise the important outcomes that occurs by organisation after implied it in
wider marketplace. Innocent drinks can use the ice creams and ingredients that liked
mostly by youngsters reduce the consumption of fruits in their juices as in summer people
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like to consume ice creams. Although it divert their attention on their core product but also
proved beneficial in gaining profitability in positive manner. in above discussion it has
been evaluated that organisation faces dilemma to being an ethical organisation, such kind
of problem also arise in front of innocent drinks as they invest lots of money in CSR
activities. If they reduce content of fruits from their juices they may face lack of
consumers. In that regards they can also use essence of fruits that provides taste of fruits
and not harmful for body (Petrenko, and et.al., 2016). By taking help of researchers and
taking reviews from people proved beneficial to acknowledge about consumer taste and
preferences in positive manner. with the help of primary and secondary source of
information they can be able to demonstrate the impact of implementation of respective
proposal in wider marketplace. in that regards organisation need to access the competitors
and their products available in market with help of Porter’s five force model. Respective
model denotes not only about competitors but also suppliers with their bargaining power in
business environment. In that regards it has been evaluated that for an organisation it is
very much potential to collect all the necessary knowledge and information regarding their
consumers, competitors and suppliers before applying respective proposal in potential
manner. Innocent drinks need to apply respective proposal at small scale at initial level and
after that they need to apply it in wider marketplace so that they can access response of
their consumers and bring out major modifications in their plan in potential manner. In
context of Innocent drink their first and foremost responsibility is to think about ethical
perspective and second about profitability into the marketplace. Ethical activities directly
contribute in remaining enough competitive for longer duration in market, in that regards it
has been suggested them to use the essence of fruits that seemed as fruits so that people
also pay higher for it and it also not harm their body. In that regards it has been
summarised that before implementing the new project into the marketplace it is important
to collect necessary knowledge and information as it helps in remaining competitive in
marketplace (McWilliams, 2015). By using various kinds of tools such as qualitative and
quantitative data organisation can be able to reach at desirable outcomes in potential
manner. so they can consider respective proposal as it proved beneficial for them in
gaining higher level of profitability into wider marketplace.
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As per the second propel suggested by directors of innocent drink company the source of
proportion of fruit form non sustainable sources. Director has suggested this proposal in
order to maximize the profits of company as well as accomplish desired goals. In order to
implement this proposal respective organisation have to use non sustainable sources in the
proportion of fruit. Execution of this proposal can lead to have both positive as well as
negative impact on business (Engert, Rauter, and Baumgartner, 2016). There are different
types of non sustainable sources avaible in market that can be used as a source of fruit in
development of juice products. Innocent Drink company is creative and offering different
types of juices to its customers. these juices are developed with fresh fruits and other
ingredients. Due to high cost required in order to make juice product, respective company
is facing major issue in earning profits. Decrease is profits is one of the major issue of this
company and in order to resolve this issues director has suggested different proposal.
It has been determined that is crucial for organisation to conduct business activities by
considering moral and ethical responsibility. By reducing fruit proportion for juice and
adding non sustainable resource in juice product can lead to minimize the cost of business
as well as earning more products. Fruits are quite expensive for company and non
sustainable sources are available in market in cheaper rates. Implementation of this
proposal will lead to have direct impact on revenues of respective company. Due to this
cost of Innocent drink company will be decrease as well as profits will directly increase.
Non sustainable resource used in development of juice will be able to provide similar taste
to customer as compare to fruits. Sources can be used by respective company in proportion
of fruits can be fruit or vegetable powder for taste, liquid or power for the colour of juice
and so on. This will help company to sale its products with low of production and less
investment in manufacturing of products. respective company will be able to accomplish
its goals and objective by offering its juice products with a source of proportion of fruit
from non sustainable sources. It has been analysed that Innocent Drinks company can lead
to face some major consequence of this proposal (Capaldi, 2013). Adding of noon
sustainable sources or ingredients in creation of products can lead to have impact on health
of consumer. This is lead to some serious health issues as non sustainable product may not
suit to human. Each and every individual is very different in health system and taste of
food. Consideration of non sustainable ingredient in developing and creation of juice in
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ethical activities as organisation is not informing customer about the proportion of using
non sustanbale sources. Respective organisation is offering its products as fresh fruit juice
and this will lead to misinforming customer. This can have negative impact on business
and break to trust of customers. Implementation of this can lead to have influence over
relationship of Innocent drink company with it potential customers. These negative affects
will have direct impact on sales and profitability of respective business.
State and develop further proposal that needs to be consider by directors.
Proposal that needs to consider by this organisation is reduce the content of fruit from
the products. Implementation of this proposal will lead to have less negative impact on
customers as well as consumers. It is essential for Innocent Drink organisation to use high
quality and fresh fruit in creation of juice (Flammer and Luo, 2017). Less quantity of fruit will
support respective company to manage its cost as well as earn more profits. It is crucial for this
organisation to develop effective relation with suppliers of fruit and other raw material. This will
help in regular supply of products at low cost of material. There are number of suppliers in
market area that is helpful in providing different types and quality of fruit and other resource to
company. Through this Innocent Drink company will be able to manufacture high quality of
products to customer with less cost of manufacturing. Due to rise in climate emergency and
adverse pattern of climate changes, price of fruits has been increase and this will lead to improve
the overall cost of Innocent company. There are various ways though which company can reduce
it cost of business and it is crucial for organisation to identify the other reason of increasing
business. Reduction in other departments of business will lead to create stability and balance
with the organisation as well as support in effective performance of organisation. Innocent drink
company should consider the first proposal of direct that includes reduction in fruit content of its
products. Execution of this proposal will be more beneficial as it does not include any unethical
business practices. Innocent Drink company is advertising its products as products which include
high quality and fresh fruits in its juice (Julian and Ofori‐dankwa, 2013). Respective company is
consider this in manufacturing of products as well as it does not miscommunication to
customers. By reduction of quantity of fruits from its products while not lead to have major
impact on quality and taste of juice. This organisation can add other substitute products which is
more healthy for customers. This will lead to protection of customer health and does not
misconduct business activity. Innocent drinks company can should develop strong and effective
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relationships with various suppliers as they will support in providing high quality resources for
creation. Content with large number of suppliers will also lower the bargaining power of buyers.
Innocent drink company will have advantage of power switching cost. This will be beneficial for
organisation as well as help in accomplishing desired profits and attaining set objectives.
CONCLUSION
From the above report it can be concluded that there are various factors that affect
performance of business as well as image in market area. It is essential for organisation to
conduct business activities by considering the impact of corporate social responsibility as well as
sustainability of business. This will help organisation to develop strong image in market area and
develop strong relationship with customers. There are various ethical theories that will support
organisation to identify and determine whether business is conducting its activities in ethical
manner or not. By analysing and assessing different proposal of business better and effective
decision could be taken by organisation. Apart form this it is significant for company to develop
an effective proposal that will help in meeting with the needs of organisation as well as
performing business activities more ethically.
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REFERENCES
Books and Journals
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Thompson, A., Strickland, A.J. and Gamble, J., 2015. Crafting and executing strategy: Concepts
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Ioannou, I. and Serafeim, G., 2015. The impact of corporate social responsibility on investment
recommendations: Analysts' perceptions and shifting institutional logics. Strategic
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Shiu, Y.M. and Yang, S.L., 2017. Does engagement in corporate social responsibility provide
strategic insurance‐like effects?. Strategic Management Journal, 38(2), pp.455-470.
Flammer, C., 2015. Does product market competition foster corporate social responsibility?
Evidence from trade liberalization. Strategic Management Journal, 36(10), pp.1469-
1485.
Stead, J.G. and Stead, W.E., 2013. Sustainable strategic management. ME Sharpe.
Cheng, B., Ioannou, I. and Serafeim, G., 2014. Corporate social responsibility and access to
finance. Strategic management journal, 35(1), pp.1-23.
Gamble, J.E., Peteraf, M.A. and Thompson, A.A., 2014. Essentials of strategic management:
The quest for competitive advantage. McGraw-Hill Education.
Petrenko, O.V. and et.al., 2016. Corporate social responsibility or CEO narcissism? CSR
motivations and organizational performance. Strategic Management Journal, 37(2),
pp.262-279.
McWilliams, A., 2015. Corporate social responsibility. Wiley encyclopedia of management,
pp.1-4.
Engert, S., Rauter, R. and Baumgartner, R.J., 2016. Exploring the integration of corporate
sustainability into strategic management: a literature review. Journal of cleaner
production, 112, pp.2833-2850.
Capaldi, N. ed., 2013. Encyclopedia of corporate social responsibility (Vol. 21). Berlin,
Germany: Springer.
Flammer, C. and Luo, J., 2017. Corporate social responsibility as an employee governance tool:
Evidence from a quasi‐experiment. Strategic Management Journal, 38(2), pp.163-183.
Julian, S.D. and Ofori‐dankwa, J.C., 2013. Financial resource availability and corporate social
responsibility expenditures in a sub‐Saharan economy: The institutional difference
hypothesis. Strategic Management Journal, 34(11), pp.1314-1330.
Bansal, P. and Song, H.C., 2017. Similar but not the same: Differentiating corporate
sustainability from corporate responsibility. Academy of Management Annals, 11(1),
pp.105-149.
Heikkurinen, P. and Bonnedahl, K.J., 2013. Corporate responsibility for sustainable
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strategies. Journal of Cleaner Production, 43, pp.191-198.
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