Tesco's Corporate Social Responsibility: A Case Study

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Corporate Social Responsibility

Executive summary
Cooperate social responsibility is a deliberate effort for an organization in terms of enhancing the
positive impact on society for reducing the negative impact. CSR is important for all the business
nowadays. So, the organization is practising CSR activities in various ways. Tesco is maintaining
strong CSR activities effectively in its business. In the study, it will be shown that Tesco
maintains all regulation and rules that whatever is given by the government and even they also
added some of the ideas to make different from the other competitors.

TABLE OF CONTENTS
Introduction......................................................................................................................................1
Lecturer review................................................................................................................................2
1. A brief summary of the business you have selected and the rationale for your choice?.........2
2. According to your research, how does the organization rank with regard to CSR?................3
3. Describe specific examples of cooperate actions that resulted in this organization ranking?.4
4. Does an organization approach to CSR influence on your purchasing decision? Why or why
not?..............................................................................................................................................6
5. In the current business environment is CSR still relevant?.....................................................8
Recommendation.............................................................................................................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

Introduction
Cooperate social responsibility (CSR) is an important issue which is needed to be gaining the
momentum in food retailer organization. To analyse the activities of CSR in the approach the
report will present activities of CSR of the Tesco that is one of the most leading retail chain
located in the UK. The report will also analyse the non-market and market environment that
explains the external and internal alignment as for understanding the important factor of CSR
motivation and activities development and design. Also, the report will show how Tesco will
rank with regard to the CSR by showing with specific examples. The approach of the
organization to the CSR influence on the purchasing decision of the consumer will also be shown
in the report.
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Lecturer review
1. A brief summary of the business you have selected and the rationale for your choice?
Tesco is a large supermarket chain in the UK and is number as third world largest retailer of the
grocery with its multiple stores all across Europe. The organization has a long term strategy and
well established for its effective growth. The net profit of Tesco is around £3 billion before the
tax that is why I have selected this organization whose annual revenue is high. Tesco department
has a good reputation in the market as the reliable organization real state gives the first priority to
the needs and desires of the consumer that has been created by more efforts and hard work and
workforce dedication (Karim et al., 2015). The Tesco select the employees as per on their
innovation, creativity, intelligence and their decision making power.
Tesco uses the best quality material and the finished products that ensure in the durability as well
as in more consumer satisfaction. In terms of meeting with some of the changes in the demand of
the consumer the Tesco closed their many stores mainly to concentrate on the larger stores along
with the best facilities.
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2. According to your research, how does the organization rank with regard to CSR?
Tesco was ranked the first in Drug and Food retailer category and it was placed as a most
socially responsible organization in the UK. The Tesco is considering the activity of CSR as to
being in the integral part of a cooperate framework as well as its CSR spread all across the
several external and internal activities that include the project of local regenerations to being
conscious towards environment and effectively resolve the issues of community (Edinger et al.,
2018). The CSR strategy of Tesco is to gain the consumer trust and loyalty through acting
responsibly in a community in which they operate, through maximizing the profits in which they
work and reduce the negative impact if any occur in the organization.
Tesco is ranked as 26th in annual business in the community of the corporate responsibility
index. It was the big retailer in the UK along with £33.97 billion annual revenue as well as £2
billion profit in the 2005 year. Tesco has a 29% of market share in the grocery market of the UK.
The organization published the CSR review each year along with the complete details of
organization CSR approaches, policies and implementation.
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3. Describe specific examples of cooperate actions that resulted in this organization ranking?
Cooperate action is the change that is initiated by the public organization which impact directly
on the issues of the security by an organization such as debt and equity. Such actions generally
are approved by the organizational board of the directors as well as it also requires the
organization shareholders approval too. In some of the cases, the cooperate action which resulted
in the Tesco ranking is triggered by the market rules, contracts, third party or regulations (Bene
and Salamon, 2016). Some of the following examples of the cooperate action are as follows:
Stock split: To increase the shares number of the Tesco is outstanding by the several issues of
the more shares of the market to the current shareholders. It is done typically by increasing the
stock liquidity or makes a stock available at a higher price to the small investor in terms of
achieving the best ranking position in the market.
Reverse stock split: In terms of decrease in the shares number is outstanding through exchanging
the organizational current shares from the lesser shares. It will further result in the increase in
more prices of the shares. This stock split is done often to meet with the minimum price for the
institutional investor or stock exchange which will also result in achieving the best rank in the
market.
Merger and acquisition: A consolidation of the organization is done by several financial
transactions types. It can also result in the new shares or cash by distributing to the current
shareholders for exchanging the existing shares number (Śmigielska and Oczkowska, 2017). The
acquisition and merger will also help the Tesco to achieve the top ranking position compared to
the competitors.
Rights issue: The offering of the shares with an existing organization shareholder at the discount
towards market shares also plays an important role in the market. The shares number is typically
offered in the proportion to shares number that is held by each organizational shareholder. The
organization shareholders not obligated to purchase the offered shares. To find the right issue at
the right time will result in the effective outcome and this will enhance the organization ranking
position also.
Bonus issue: The new shares for the current shareholders are for the free. It is as similar to the
stock split because this increases the shares number without any impact of the financial to the
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organization. So if Tesco effectively resolves the issue of the bonus on time it will attract more
consumers towards the organizational products and services which is a positive point for the
organization (Chen et al., 2015). The positive feedback from the consumer enhances in the
organization productivity and performances and it will put the topmost ranking position in a
market.
Tender offer: The type of the takeover is bid in which the bidder makes the public which is used
to offer in acquiring the stock at a particular price for a specific time period. It may or may not
endorse by organization director board. An offer price is higher usually than that of market price
during the offer time period. It will also give better outcome and productivity in the organization.
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4. Does an organization approach to CSR influence on your purchasing decision? Why or why
not?
The increased sales on the products and services are seen often that impact on the consumer
purchasing decision because of the ultimate effect of the cooperate programme that includes
social responsibility, advertising, sponsorship and promotions. The consumer purchasing
decision intention should be positive and must need to have a favourable attitude and opinion
towards the products. The consumer decisions are used in an investigation the various variables
that include mainly the sponsorship recognition, brand equity, perceived value and huge
satisfaction that provide a strong link between the consumer reaction and consumer perception
towards the use of a product (Manning, 2018). It has been found that the cooperative association
that includes the CSR and cooperate ability affect the product evaluation by the cooperate
evaluations. This is indicated that the CSR in both domains has a positive impact on the
organizational evaluation and the purchase decision intention. In an environmental domain, the
CSR that affected the consumer purchasing intent strongly is that of the price. It has been
suggested that the overall attitude towards the organization will provide the benefits to the
society and the organization using its resources to provide the benefits to the society that is
related to the CSR concepts.
To determine the CSR influence on the behaviour of the consumer purchasing power, for this the
consumer considers the ethical behaviour as the most important indication by their purchasing
decisions. It has also been found that consumer viewed to the legal concern which is also an
important responsibility, economic responsibility, and subsequently ethical. The CSR also
impacts on the consumer purchase decisions and attitude based on their knowledge towards the
CSR activities. It has been indicating that there should have a strong relationship between
consumer behaviour intention and CSR (Crowther and Seifi, 2018).
In the Tesco, CSR includes several factors that is reduced in the operations cost, enhanced
innovative capacity, increased the staff commitment develop the strong link with the customer as
well as also create the greater awareness towards their desire and needs. It has been analysed that
there must need to have a positive relationship between organization action and customer
reaction of that organization and their product. The investigation has demonstrated that the
relationship between the ethical consumerism and CSR is not evident and direct always. Its result
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is in the many cases that establish the various factors which affect the organizational activities of
CSR that translated in the customer purchase. The consumer takes the unethical and ethical
behaviour of the business in an account when they are buying the products. The consumer also
expects the organization should ethically behave and is willing to do punish those organizations
that do not this (Kolk, 2016). The customer is willing to pay price higher on the products which
are produced ethically and only purchase the same products from the unethical organization at
low cost.
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5. In the current business environment is CSR still relevant?
In the Tesco, the CSR is still relevant because it is used in describing the organizational efforts
that are used in improving the society in many ways. Such efforts are range from the money that
is donating to the non-profit for implementing policies which are related to environmental
friendly on its stores. The CSR is relevant for the organization, employees and non-profits alike.
The CSR is the management concept where an organization integrates the environmental and
social concern in the business operation as well as interacts effectively with its stakeholders.
In Tesco, CSR is more relevant as it includes the positive business reputation, good brand
recognition, customer loyalty and increased in the sales. It aims to ensure that the organization
conducts the business activities in an ethical manner (Petrenko et al., 2016). It is necessary for
the organization for protecting the international and national way in which the social licence is
operated only there where the CSR is very important.
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Recommendation
 Tesco can create awareness among the local public regarding the activity of CSR to make
the activities of CSR effective in the approach and nature.
 Tesco can also undertake the required steps for a purpose in building the efficient bridges
in stakeholders for the appropriate implementation of the activities of CSR.
 Tesco can also conduct to launch a campaign in spreading the issue of CSR in local
public and also involves the small enterprise to give their maximum contribution and
participate in CSR activities actively (Unit, 2015).
 Tesco can also take the initiatives in building the national alliance of its CSR activities.
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