Importance of Corporate Social Responsibility for TUI Plc

This article discusses the importance of corporate social responsibility (CSR) for TUI Plc, a tourism entity. It explores how CSR contributes to increased sales and sustainability, and provides an explanation of the CSR pyramid of Archie Carroll.

TUI Plc

Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................1
ASSESSMENT TASK 1.................................................................................................................1
ASSESSMENT TASK 2.................................................................................................................6
Evaluation of importance of corporate social responsibility for the business.............................6
Explanation of the CSR pyramid of Archie Carroll....................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment is a term that is delineated to sum of various factors which have
possibilities of effecting performances and influencing situations pertaining with an enterprise. It
assists in planning, recognising better opportunities, improving overall efficiency, tapping useful
resources and managing profitability (Adnan, Hay and van Staden, 2018). TUI Plc is a tourism
entity which operates worldwide. It owns cruise ships, travel agencies, retail outlets and hotels. It
offers services related to travel agencies and have around 70000 employee size working with it.
The report is bifurcated in two assessments in which Assessment is all about innovation. It
includes assessment of impacts of innovation and technology together with the ways it affects
profits, growth addition to sales of the enterprise. On other hand, assessment 2 evaluates
importance that corporate social responsibility for the entity. It also covers application of Archie
Carroll’s model of corporate social responsibility to the business.
ASSESSMENT TASK 1
Define innovation and technology
Innovation is the main task for each business organization that uses by people to develop
their business and managing the higher performance. Innovation is the practical implementation
of ideas and thoughts which uses by companies to introduce new products and services and
increase the productivity. This is important for each organisation to conduct the market research
and bring new products and services which can help to develop the business productivity and
profitability (Kazandzhieva and Santana, 2019).
Technology is the sum of techniques, methods, skills and process which uses by
organization to introduce something new which influences the number of customers and makes
their life easier. The needs and wants of customers is changing where a company uses new
technology and increase the business performance by providing new products and services.
Give practical examples of how innovation and technology have contributed to the economic
growth of the country. (relationships between innovation and economic development)
Innovation and technology are important factor which affecting the economic growth of a
country by introducing new products and services effectively. It has been seen in past period
people were living their life critically where jobs are less that stated the slow growth. For
example, UK was the slow growth and continued volatility where people were faced the
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problems. After introducing innovation and ICT the country is growing continuously as all
companies have adopted the new technology that have the create jobs, participating in tax,
improving education system and increasing sustainability. The GDP rates of UK has increased
by 2.5% after adopting the new technology and innovation in their country. At the global level
per capital growth rate has increased by 0.5% (Kumar and Kumar, 2019).
In other words, companies who are established in other country are operating their
business globally with the help of technology as it provides various connection and online
presence that have developed the contribution in economic growth. Thus, from the different
illustration it can be understand that technology and innovation is contributing in economic
growth of country. The companies and people are using internet that provides new ways to
reaching out the customers and completing market share. ICT tool employed in organization that
can help to streamline business process and improves the efficiency.
Describe how business organisations use new technologies in their operations
The success of business depends on new technology which can help to reach the targeted
customers and developing the higher productivity. The companies are using new technology in
their operations as Artificial Intelligence, machine learning, data recording, different marketing
channel and others which can help to develop the business performance and productivity
effectively. New changes and process are also introduced by management of company who
identify the customers’ needs and provide the products accordingly which can help to increase
the organizational profitability. Moreover, day to day operation such as communication,
customer service, project management, conferencing, video call, meeting, and conference all are
possible through new technology which can help to develop the business performance and
country economy growth (Sakunasingha, Jiraporn and Uyar, 2018).
2.
A brief overview of your chosen company
TUI Plc is also known as TUI Group, that is a Anglo German multinational company,
founded in 1923, for the purpose of running their business in travel and tourism industry. This is
the largest leisure, travel and tourism company, headquarter in Hanover, Germany. The products
and services are charter and scheduled passenger, airlines, holiday packages, cruise lines, hotels,
and resorts that attracts the large number of visitors and increase the productivity. The
management of TUI focuses on innovation and new technology which can help to introduce new
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services and managing all functions effectively. TUI announced a merger of its travel division
with the British tour operator First Choice in March 2007, which approved by the European
Commission on 4 June 2007. Different types of services are providing by organization that can
help to increase number of customers and profitability (Wang and Sarkis, 2017).
Describe the new technologies and how they are being used by your chosen company
For all organization it is needed to satisfy their customers and make them happy so that
new technology is adopting by companies which can help to increase the business performance.
If companies are unable to adopt new trend and technology then it might be challenging situation
to operate their business continuously in changing trend. TUI Plc is the large size travel and
tourism company that offers range of travelling services and developing the business
performance. This organization is adopting new technology for the purpose of attaining
competitive advantages and brand image that are as explained:
Digitalization and innovation – This is the fast element for fast paced to developing the
TUI future. This organization is brining digitalisation and new products are introducing which
attracts the large number of customers and develop the business profitability. By using
digitalization customers can booking online and get the facility of cancellation (Buijtendijk, van
Heiningen and Duineveld, 2021).
Different marketing channel – TUI is using different marketing channel such as print
media, social media, Face Book, Instagram and others for the purpose of providing details about
their unique services in relation to travel and tourism that can help to increase the organizational
sales and profitability effectively.
Using AI – The chosen organization is using AI for providing the online customer
service, Robotics delivery, and Data processing & Analysis which can help to develop the
business performance and productivity effectively (Barna and Semak, 2020) .
24/7 hours services – By using new technology TUI is keeping touch with their
customers 24/7 hours which can help to developing the higher customer satisfaction and
increasing the business performance.
Compare the sales and profits of the company before and, after the new technologies were
introduced
TUI AG is a leisure and tourism company with operations around the world, including
airlines, tours, cruises, hotels, and resorts. The business is divided into six segments: Hotels and
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resorts in the Northern, Southern, and Western regions. TUI Plc is the travel and tourism service
provider that operated its business with limited sources and capital. The management and
employee were operating their business by providing normal services. At that time organization
was using the innovation and new technology where it was getting less profits and growth rate.
From the above chart and operating performance of TUI Plc it can be understand
that probfit ratio and growth rates of selcted company is lower as it was not focusing on new
products and services that might be influence the customers and increase the business
performance (Schäfer, 2020).
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In second diagram, it can be understand that sales, operating performance, and
profitability ration of TUI Plc is increasing year by year as it is adopting new technology where
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it introduces new traveling and tourism services. This can help to convert the visitors in to
customers and attaining the higher profitability effectively. This attain the competitive
advantages in changing environment (Comparison of financial performance. 2021).
Comment on your finding
By using the secondary analysis it can be found that innovation and new technology is
the continuous process which uses by TUI Plc to provide the new travelling and tourism services
for the purpose of reaching their targeted customers and increasing the profitability ratio. This
uses different marketing channel with the help of new technology that can help to increase the
business performance and brand image efficiently.
ASSESSMENT TASK 2
Evaluation of importance of corporate social responsibility for the business
Corporate governance as well as corporate social responsibility
As per Zhang 2019, the term corporate governance could be defined as system of
policies, regulations and so on which guides and control behaviour of an entity. Moreover, it is a
framework which describes relationship among stakeholders that are management, shareholders,
employees and Board of Directors. It is viewed as structure along with relationship that
determines corporate performance along with direction. Similarly, corporate social responsibility
is seen as a self-regulating model that corporates undertake for having positive and favourable
influence on the globe. Purpose behind CSR is to pursue operations for giving back to
community and engaging with philanthropic causes. Businesses are increasingly working
towards the model for making differences as well as building positive brand nearby to the
business concern.
History related to corporate governance in UK
In UK, corporate governance came in existence after a committee that is led by Sir
Adrian Cadbury researched on various governing practices within the period of 1991 and 1992.
Governance is a term which existed years ago. The revolution started in 1990s along with
Cadbury Report on key financial aspects related to corporate governance that was attached with
code of practice. In 1995, Report of Greenbury added set of principles about compensation of
certain stakeholders that are executive Directors (Elgergeni, Khan and Kakabadse, 2018). In the
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year 1998, Hampel report have produces a Combined Code. After a year, Turnbull report have
made an concentration towards managing risk and internal controls.
In 2002, an investment banker that is named as Derek Higgs was given the responsibility
to look towards corporate governance as well as building on past reports for the purpose of
devising an individual and comprehensive code. Later, in 2006, a code with name of 2003 code
was updated with some amendments having new version to imply for financial years on or
before November 1, 2006. In 2012, attention to governance by all businesses was good and
several surveys have claimed that having entities adopting corporate governance are generally in
more profits. In recent years, there is no doubt that demand of shareholders for effective
corporate governance is strong along with continuing (Sakunasingha, Jiraporn and Uyar, 2018).
Government and various assorted parties are all increasingly condemning business which fails to
work with rules. Having business case with effective governance is not complex to build by
entities of United Kingdom.
Importance of CSR for TUI Plc
CSR is important for all business. Mentioned below are some significances of working
with corporate social responsibility in context to TUI Plc:
Increased sales: Businesses which lead practices with objective positively by customers
achieves increment in sales. It is seen that most of population buy commodities from a
responsible entity. With TUI Plc, millennials as well as generation Z devises relation with
businesses that have positive impact on society or community. With this, the managers
significantly translate greater sales in present highly connected globe (Wang and Sarkis, 2017).
Making business more sustained: At the time when business make plans for fulfilling
responsibility towards society a focus, it requires wider innovate and creative aspects. It can not
be organisation as usual. TUI Group is an organisation that nurtures innovation together with
creativity which forces an institution for staying relevant addition to making adjustment as per
demands of customers. For foreseeable outcomes, the potential for working with CSR is
important for sustainability as well as longevity.
Explanation of the CSR pyramid of Archie Carroll
CSR pyramid was devised by Archie Carroll in the year 1991. Best CSR program consider
overall strategy, core competences and talents of employee. For crafting CSR foundation, it is
essential for C-suite together with mid-level leaders to make their consideration towards
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workforce engagement as well as philanthropic. It suggests the all-business concerns have to
meet responsibilities at four levels that are ethical, economic, philanthropic and economic.
Economic responsibility: The responsibility states that all entities are responsible for
producing commodities and services which are needed by society addition to make profit.
Businesses have certain shareholders that expect along with demand a reasonable return on their
investment, workforce that demands safety and customers wants quality of commodities for fair
prices. It is what foundation of the pyramid on which other layers rest. In context to TUI Plc,
economic responsibility comprises of responsibility for making huge profits and performing in
the manner for surviving along with supporting society in future. Furthermore, economic
responsibilities of the business are aimed to work with methods which meet standards for legal
practices and ethics (Crowther, Gomez and Vargas, 2017).
Legal responsibility: It is all about complying with minimum number of rules which are
already set. Business concerns are expected to operate along with function with all the set
legislations. The basic rule including regulations and legislations which represents views of
society as working with codified ethics. For TUI Plc, legal responsibilities for society are of
meeting legal obligations, operating consistently as per requirements of laws, behaving as citizen
on community and supplying services which meet all requirements. It also engrosses not
focusing on other mechanisms at the time grey areas of legislations are circumvented or ignored
as it endangers establishment (Kaymak and Bektas, 2017).
Ethical responsibility: Organisational ethical responsibility goes beyond normative
expectations of society that are regulations and laws. Moreover, society expects entities to carry
out practices and managing ethically. Working with ethical responsibility states that all activities,
practices and standards are embraced which are not written down rather expected. TUI Plc work
with ethical responsibility that is performing with expectations of society, preventing ethical
standards being fringed to reach success and acknowledging integrity. Emphasis of entity on
ethics is all related to offering fair environment for workforce and its suppliers (Breitbarth,
Schaltegger and Mahon, 2018). Business practice in honest aspect includes equal pay for
working together with compensation initiatives.
Philanthropic responsibility: It comprises of voluntary as well as discretionary practices
of entity. Nowadays, entities are expected to participate in activities of society. Nature as well as
quantity of such type of activities are seen as voluntarily and are directed through desires of
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business for taking part on social practices. Managers of TUI Plc have developed philanthropic
activities which give society the impression of giving something back to community. For this,
the owners have adopted variants of philanthropy comprising of volunteer work, developing
community and donations to community along with group of stakeholders which make a
community. For the tourism entity, philanthropic responsibility are donations in kind of
resources, time and international charities (Kumar and Kumar, 2019).
CONCLUSION
From the report it can be concluded that it is important for business organization to
understand what is running in trend and how the customers can be delight. TUI is using
innovation and new technology for the purpose of developing its business activities and
performance in tourism sector which can help to increase brand image and competitive
advantage. CSR is the main activity in which company participate to improve the performance
and profitability.
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REFERENCES
Books and Journals:
Adnan, S. M., Hay, D. and van Staden, C. J., 2018. The influence of culture and corporate
governance on corporate social responsibility disclosure: A cross country
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Breitbarth, T., Schaltegger, S. and Mahon, J., 2018. The business case for sustainability in
retrospect: AS candinavian institutionalism perspective on the role of expert
conferences in shaping the emerging “CSR and corporate sustainability space”. Journal
of Public Affairs. 18(3). p.e1855.
Crowther, D., Gomez, L. and Vargas, L., 2017. Corporate Social Responsibility and Corporate
Governance: Concepts, Perspectives and Emerging Trends in Ibero-America. Emerald
Group Publishing.
Elgergeni, S., Khan, N. and Kakabadse, N. K., 2018. Firm ownership structure impact on
corporate social responsibility: evidence from austerity UK. International Journal of
Sustainable Development & World Ecology, 25(7), pp.602-618.
Kaymak, T. and Bektas, E., 2017. Corporate social responsibility and governance: Information
disclosure in multinational corporations. Corporate Social Responsibility and
Environmental Management. 24(6). pp.555-569.
Kumar, N. and Kumar, P., 2019. The Impact of CG and CSR Index on Profitability. IUP Journal
of Corporate Governance. 18(2). pp.39-59.
Sakunasingha, B., Jiraporn, P. and Uyar, A., 2018. Which CSR activities are more
consequential? Evidence from the Great Recession. Finance Research Letters. 27.
pp.161-168.
Wang, Z. and Sarkis, J., 2017. Corporate social responsibility governance, outcomes, and
financial performance. Journal of Cleaner Production. 162. pp.1607-1616.
Buijtendijk, H., van Heiningen, J. and Duineveld, M., 2021. The productive role of innovation in
a large tourism organisation (TUI). Tourism Management. 85. p.104312.
Barna, M. and Semak, B., 2020. Main Trends Of Marketing Innovations Development Of
International Tour Operating. Baltic Journal of Economic Studies. 6(5). pp.33-41.
Schäfer, J.C., 2020. The case of TUI: sailing into a bright future or sinking like Thomas
Cook? (Doctoral dissertation).
Kazandzhieva, V. and Santana, H., 2019. E-tourism: Definition, development and conceptual
framework. Tourism: An International Interdisciplinary Journal. 67(4). pp.332-350.
Online:
Zhang. J. 2019. What is corporate governance and why is it importance. [Online]. Available
through: https://www.accru.com/2019/06/what-is-corporate-governance/
Comparison of financial performance. 2021. [Online]. Available through:
https://www.morningstar.com/stocks/xetr/tui1/financials
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