Case Study on Woolworths

The case study report highlights on the ethical sourcing issue faced by Woolworths in recent times. The issue affected the brand image of the retailer in that the management body of Woolworths failed to duly check and monitor the reports issued by the contractual firms concerned with employing and compensating of cleaning staffs.

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Case Study on Woolworths

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Executive Summary
The case study report highlights on the ethical sourcing issue faced by Woolworths in recent
times. The issue affected the brand image of the retailer in that the management body of
Woolworths failed to duly check and monitor the reports issued by the contractual firms
concerned with employing and compensating of cleaning staffs. The payment made to the
cleaning staffs being quite low regards to industry and regulatory standards made them
incompetent in meeting their medical bills. The case study report thereby carries out a qualitative
analysis for underlining the factors that prompted the happening of the issue and the different
interventions that were sought thereafter.

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Table of Contents
Introduction......................................................................................................................................5
About Woolworths.......................................................................................................................5
Rationale of the report.................................................................................................................5
Ethical Sourcing Policy in Woolworths..........................................................................................5
Ethical issues in Woolworths...........................................................................................................7
Political and Social influences on Woolworths’ management........................................................8
Case Study Research Methodology.................................................................................................9
Strategies for Data Collection and Analysis....................................................................................9
Inferences from the Interview........................................................................................................10
Following of Ethical Sourcing Standards..................................................................................10
Take on the recent issue regarding non-compliance to ethical sourcing guidelines..................10
Impact of the issue on the organisation.....................................................................................11
Actions focused on being undertaken by the management.......................................................11
Conclusions....................................................................................................................................11
References......................................................................................................................................13
Appendix........................................................................................................................................15
Personal Information.................................................................................................................15
Interview....................................................................................................................................15

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Introduction
About Woolworths
Woolworths based in Australia operates as a leading supermarket chain or retailer in the region
that focuses on aptly meeting the food and non-food based merchandise needs of large numbers
of Australian consumers. The company has around 995 stores operating across different regions
of Australia and has also focused on incorporating the use of e-commerce applications and other
mobile apps for generating consumer convenience (Woolworths , 2019).
Rationale of the report
The report focuses on carrying out a detailed study of an ethical issue that affected Woolworths
operations and in turn aims in analysing the issue through the use of an effective case study
methodology.
Ethical Sourcing Policy in Woolworths
The ethical sourcing policy at Woolworths implies that the firm focuses on looking after and
sustenance of human rights in terms of generating the right type of working conditions for the
staffs employed along its diverse retail and distribution units and also along the diverse supply
chain firms. The sourcing policy also reflects that Woolworths’ management strongly focuses on
carrying out close monitoring and governance regarding the activities of the suppliers and other
outsourcing firms for taking care and in meeting the compensation needs of the staffs. The
payments to the staffs whether belonging directly to the company or to the suppliers and
contractors are focused on being met in terms of effectively complying with the legislative and
industry standards associated to Australia. Further, the management of Woolworths also focuses
on effectively informing the staffs concerning the payment both before their employment and in
due course with the payments issued to them. Thus, generation of payslips along with the
payment was considered mandatory by Woolworths’ management. Again, in cases of overtime
the same is held to be carried out on a voluntary basis by the staffs and the management observes

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that effective payment is required to be made to the staffs concerning the overtimes carried out
by them. Woolworths’ management in the ethical sourcing policy also observed that payment to
the staffs would not be affected by discriminatory policies and actions such that relationship
status with the staffs is not ignored in cases where they are employed by contractual partners. In
terms of employing people, Woolworths’ management rightly focuses on obliging by the
standards set by the International Labour Organisation concerning employment of staffs,
regulation and maintenance of workplace standards and also regarding generation of monetary
compensations (Woolworths Limited , 2014).
The Corporate Social Responsibility (CSR) report of Woolworths reflect on the commitment
made by the organisation in effectively abiding by the rules and guidance rendered by the United
Nations associated to the dimension of Human Rights. Transparency in the reporting standards is
outlined both for the firm and also its supply chain and other outsourcing or contractual firms
associated to employment and management of workers’ needs. Further, the retail institution is
also observed in encouraging the engagement of third party external auditors for scrutinising the
degree of compliances of the firm to the sourcing and employment regulations and thereby in
taking of corrective actions as and when required (Woolworths Limited , 2017). The same is
reflected in the following illustration.

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(Woolworths Limited , 2017)
Ethical issues in Woolworths
An investigation carried out by the Fair Work Ombudsman or FWO associated to the Tasmanian
market revealed that the management of Woolworths had significantly breached the cleaning
contracts. The same accounted for the large scale exploitation of employees associated to the
cleaning operations while also affected its record keeping practices. An enquiry into the matter

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carried out during 2014 highlighted that that the staffs involved in carrying out the cleaning
operations in the firm on a day-to-day basis were potentially underpaid (Blake, 2018). The
inquiry further reflected that around 90 percent of Woolworths’ contractors looking after the
cleaning operations did not rightly comply with the workplace laws of the region and underpaid
the staffs. Woolworths’ management was accused in the inquiry of not applying strict
governance measures regarding record keeping practices pertaining to the cleaning contractors.
To this end, Woolworths is thus accused for fostering an environment of non-compliance to the
regulatory and legislative practices and thereby in exploiting the employees through
underpayments. The amount of underpayments as reflected by the inquiry amounted to around
$64,000 that reflects the level of seriousness associated to the issue (Sit, 2018).
Political and Social influences on Woolworths’ management
The ethical issues concerning Woolworths’ operations in Tasmania concerning the
underpayment of cleaning staffs supplied by contractor cleaners accounted for the growth of
political and social tensions in the region. The senators both pertaining to the liberal and labour
sectors identified the practice as horrendous and vehemently slammed the firm for its fraudulent
conducts. In that the cleaning staffs were severely underpaid at around $7 on an hourly basis they
stated that it was quite difficult for them to carry out their medical treatments and in meeting of
their personal needs (Sit, 2018). The cleaning staffs also reflected that underpayments were
carried out by the firm in terms of paying cash in hands that went unrecorded and unaccounted
for no payslips were issued to them against the payments done. The political and social tensions
concerning the underpayment of cleaning staffs made the management body of Woolworths to
apologise before the senators and the masses for such conducts (Marin-Guzman, 2018). The
senators further accused Woolworths of acting in an irresponsible fashion regarding generation
of low payments and in avoiding to check into the matter that made the cleaning staffs vulnerable
to increased monetary losses. The workers further reflected that the retail firm is not at all
concerned for the betterment of the cleaning staffs in that the management body still depended
on the contractors for carrying out the cleaning works and also in paying the cleaners (Zwartz,
2018).

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Case Study Research Methodology
The case study research methodology implies the undertaking of in-depth research associated to
the research issue wherein the study concerning specific groups of individuals or on an
organisation/individual is carried out in a detailed fashion. The inferences to the case study
research activity are held to be of narrative and qualitative type in nature wherein the narrative
inferences reflect on the behaviour and perception of the individual or group associated to
specific event or circumstances. Further, the case study research activities are also featured in
being narrowly focused and that which tends to encompass both subjective and objective datasets
for generation of in-depth understanding (Sarvimaki, 2017). Case study research activities focus
on providing answers to questions of why and how associated to an issue. Different types of case
study research activities are carried out like illustrative, exploratory, cumulative and also critical
assistance associated to the undertaking of the research. The carrying out of the exploratory
nature of research activity focuses on the undertaking of interviews and observations for gaining
of inferences that are basic and of initial nature than that of detailed datasets. Apart from
carrying out of primary research other secondary research enabled activities are also carried out
by the researcher based on the study of various literatures associated to the research issue. The
researcher can aptly focus on the selection of a single data collected method or also can focus on
the use of multiple modes for the gathering of needed datasets (Yin, 2017).
Strategies for Data Collection and Analysis
The data collection activity associated to the case study of Woolworths is focused on being
undertaken based on the designing of unstructured questions that would be used for carrying out
interview of a focused group of managers. The researcher focuses on using a microphone and
recording mediums for the recording of the statements rendered by the managers in the focused
group. Further, field notes and interview transcripts are also focused on being prepared by the
researcher for carrying out future analysis of the inferences gained. Along with interview, the
researcher also focuses on carrying out a detailed observation of the focused groups at the time
of undertaking of the interview and thereby in noting down of field notes (Klenke, 2016).

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The qualitative natures of inferences gained from the focused group are focused on being
analysed by the researcher based on the using of the grounded theory and coding approach.
Ethnographic research activity is focused on being carried out in this regard wherein the
inferences gained based on the interview are grouped under different categories and data heads
such that an effective relationship is sought between such for the development of a profound
understanding of the issue and managerial perceptions thereof (Duff, 2018).
Inferences from the Interview
The inferences regarding the interview activity are gained in a detailed and qualitative fashion by
the researcher based on the collection of interview transcripts. The inferences are grouped under
different heads.
Following of Ethical Sourcing Standards
The managers highlighted that the company focuses on effectively following the ethical sourcing
standards and policies as underlined by the rules and conducts laid down by the International
Labour Organisation and the United Nations associated to the dimension of Human Rights. In
that effective focus is undertaken to help reduce the chances of discrimination associated to the
generation of compensation to employees directly working for the firm and other contractors and
suppliers. Similarly, the management also focuses on developing and sustaining effective
workplace conditions along its retail and distribution outlets and supply chain arms in
compliance with sourcing standards.
Take on the recent issue regarding non-compliance to ethical sourcing
guidelines
The management observed that yes it was a failure in their part on not revamping its processes
regarding checking, monitoring and auditing of the records submitted by the contractual firms
employing and sourcing of cleaning staffs. The failure in revitalising the existing processes
accounted for the management’s failure in checking the issue of under-compensation of the
cleaning staffs in comparison with the industry and employment standards by the contractors

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responsible for employing and sourcing of such staffs. The same accounted for the emergence of
an ethical problem where the cleaning staffs became severely underpaid and thereby failed to
meet their medical bills.
Impact of the issue on the organisation
The management reflected that the publicising of the issue concerning the non-ethical practices
on the company’s part in not checking and serving for the betterment of contractual staffs as an
event of non-compliance to the ethical sourcing policies accounted for the firm to face legislative
issues in that senators potentially criticised Woolworths for such action. Further, the same is also
reflected by the management to account for loss of employee commitment and loyalty and
thereby affected the productivity of both the cleaning and other company staffs.
Actions focused on being undertaken by the management
Different actions are underlined by the management team at Woolworths to focus on reducing
the chances of re-emergence of such events of non-compliances to the ethical sourcing standards
as is evident in the case. The management underlined the growth of auditing functions on an
annual basis to check the records submitted by the contractual firms regarding the employment
and payment of compensation to the cleaning staffs. Moreover, the management body also
highlighted the growth of training programs that are required to be designed for training of the
contractors and other supplier firms for duly complying with the rules and regulations associated
to ethical sourcing standards. The undertaking of the above measures is held by the management
to help in the generation of greater awareness for looking after the needs of the contractual staffs
in an integrated fashion.
Conclusions
The case study carried out in the report potentially underlies the issue faced by Woolworths
concerning the payment of contractual cleaning staffs at rates highly lower compared to that of
the industry and regulatory standards. It reflected that management’s failure in aptly checking
and monitoring of the payment records submitted by the cleaning contractors accounted for the

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issue for which they ideally reflect on the revising of the auditing mechanisms such that the same
would help in better control and monitoring and thereby in bringing about necessary changes.

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References
Blake, D. (2018, July 10). Woolworths to revamp responsible sourcing program. Retrieved April
1, 2019, from https://www.insideretail.com.au/news/woolworths-to-revamp-responsible-
sourcing-program-201807
Duff, P. (2018). Case Study Research in Applied Linguistics. New York : Routledge .
Klenke, K. (2016). Qualitative Research in the Study of Leadership. United Kingdom : Emerald
Group Publishing.
Marin-Guzman, D. (2018, February 13). FWO uncovers rampant exploitation in Woolworths
cleaning supply chain. Retrieved April 1, 2019, from
https://www.afr.com/news/policy/industrial-relations/fwo-uncovers-rampant-
exploitation-in-woolworths-cleaning-supply-chain-20180213-h0w0hf
Sarvimaki, M. (2017). Case Study Strategies for Architects and Designers: Integrative Data
Research Methods. New York : Taylor and Francis.
Sit, S.-S. (2018, February 19). ‘Serious exploitation’ in Woolworths cleaning supply chain.
Retrieved April 1, 2019, from
https://www.cips.org/en-SG/supply-management/news/2018/february/fwo-finds-serious-
exploitation-in-woolworths-supply-chain/
Woolworths . (2019). Woolworths Supermarkets. Retrieved April 1, 2019, from
https://www.woolworthsgroup.com.au/page/about-us/our-brands/supermarkets/
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Woolworths Limited . (2017). Corporate Responsibility Report . Sydney: Woolworths Limited .
Woolworths Limited . (2014). Ethical Sourcing Policy . Australia : Woolworths Limited .
Yin, R. K. (2017). Case Study Research and Applications: Design and Methods. United
Kingdom : SAGE.

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Zwartz, H. (2018, July 25). Senators tear into Woolworths over its contract cleaners being
'systematically ripped off'. Retrieved April 1, 2019, from
https://www.abc.net.au/news/2018-07-25/senate-inquiry-probes-exploitation-claims-
against-supermarkets/10034586

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Appendix
Personal Information
Name:
Age:
Designation:
Interview
Q. What are ethical sourcing standards followed by Woolworths concerning the employment of
people directly or in the hands of sub-contractors?
Q. What is your take in the recent issue concerning the non-compliance to the ethical sourcing
policies and standards concerning the compensation of cleaning workers?
Q. What is the impact of the issue on the image of the retail firm and its operations?
Q. What actions are being focused on being undertaken by the management for aptly addressing
the impacts of the issues associated to non-compliance of ethical sourcing policies?