Key Performance Indicators (KPIs) and Tesco's CSR Practices Analysis

This essay provides an in-depth analysis of Tesco's Corporate Social Responsibility (CSR) initiatives, focusing on the application and impact of Key Performance Indicators (KPIs). The study examines Tesco's commitment to environmental sustainability, ethical trading, and community support, highlighting specific targets and achievements, such as reductions in carbon emissions and waste recycling rates. The essay explores how Tesco's CSR practices, including support for local communities, healthy eating initiatives, and employment opportunities, have enhanced its brand image, customer loyalty, and overall market performance. Through the analysis of Tesco's financial statements and CSR reports, the essay demonstrates how the company's dedication to social responsibility has contributed to its competitive advantage, profitability, and ability to navigate challenges within the retail sector. The reflection section highlights the learning experience, including enhanced knowledge of KPIs and CSR, improved research skills, and an understanding of Tesco's effective strategies in balancing business goals with social welfare objectives.

ESSAY

Key Performance Indicator (KPI) is regarded as the type of performance measurement
tool which directly assists in knowing the overall success of business in the market. Further, it
supports in knowing how well business is performing efficiently and on the basis of same
corrective actions are taken. As compared with past, criteria for developing key performance
indicators have changed where at present, businesses have started to undertake social
responsibility as one of the major KPIs and it directly has positive impact on the brand image of
the company. Moreover, it is well known fact that when any company indulges into practices of
working in favour of society, then it provides a base in accomplishment of desired goals and
objectives (Macdonald, 2013). Apart from this, the main motive of every organization is to
enhance its profitability level along with market share but in the modern era, to focus on social
responsibility has become necessity. For conducting the present study, organization chosen is
Tesco which operates in retail sector of the UK and well known in the market for range of
products it offers to its target market. Corporate responsibility KPI’s of business involves
priorities of target market which are local sourcing, healthy eating etc. Further, the government
requirements such as energy efficiency, packaging reduction along with business concern such as
ethical trading are also undertaken.
One of the main KPIs undertaken by Tesco to operate efficiently in the market is caring
for the environment where main focus is on development of products which are environmental
friendly. Organization focuses on reducing CO2 emission where targets have been set. Business
has set targets of reducing CO2 emission by 6% but actual one is 12.9% (Tesco and society
report, 2014). Further, target of 95% was set in relation with percentage of waste recycled and
actual one obtained was 96%. This information supports in knowing the ethical activities carried
out by business with the motive to save environment. Apart from this, this KPI has supported in
enhancing profitability level of organization and customers are easily attracted towards the range
of products as they are environmental friendly. All the wastes are recycled by business and this is
one of the main reasons due to which Tesco is considered as socially responsible firm.
Business has set targets to support local communities which have been efficiently
obtained by organization. Further, it is well known fact that stakeholders associated with the firm
have some sort of expectations and same can be easily met if business carries out overall
operations in favour of all the parties. Local communities are supported with the help of charity
and providing donation (Webb, 2014). Therefore, this has also played the major role in business
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success where Tesco is able to accomplish its major goals. Apart from this, it is well known fact
that when any business take corrective measures for maximizing its contribution towards society,
then it directly assist in strengthening its customer base (Tesco Corporate Responsibility. 2016).
Without fulfilling overall expectations of the local public, it is not possible for company to
survive in the market for longer period of time. Every business operating in the market is socially
responsible and has to conduct overall activities through which it is ensured that its contribution
towards local public is high.
But on the other hand, some businesses are focusing on enhancing their profitability level
rather than social responsibility activities. So, this has become one of the reasons behind their
failure in the market. Tesco has highlighted its major KPI’s through its financial statements and
has developed trust along with confidence in its target market (Tesco and society. 2016). Another
key KPI being undertaken by company is supporting customers to live healthy lives and firm is
able to achieve this target where its worldwide operated stores are efficient enough in satisfying
needs of target market. Tesco is able to operate efficiently in the market in the form of reducing
carbon emission, supporting local communities and with the help of this management knows its
overall performance in the market. Different plans have been prepared with the motive to carry
out ethical activities which are favourable for the local communities. This has built positive
image of business in the mind of its stakeholders where each and every party is highly satisfied
with the overall activities of company. Tesco is strongly working in favour of government,
customers, suppliers etc (Randall and Seth, 2011).
Times to time new KPI’s are developed by business through reviewing its Corporate
Social Responsibility (CSR). At present business has collaborated with Ethical tea partnership
and UNICEF with the aim to protect vulnerable children. This highlights the responsibility taken
by Tesco for providing support to society in every possible manner. Code of business conduct is
updated through which major areas are identified where company can contribute in welfare of
society. The targets actually set by business to be socially responsible has lead to rise in
profitability level of company in the market and has delivered other kinds of benefits such as
strong customer base etc (Caulfield, 2013). All the actual measures taken by business are quite
meaningful and have provided advantage to organization on long term basis.
One of the main targets set by Tesco is to reduce food wastage at global level where
surplus food is present which company has stocked and in turn it is not possible to sell it.
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Therefore, business is focusing on minimizing surplus and in case, if eatable items are not sold,
then same is donated to charities. Organization sends all the bakery wastes so that it can be
converted into animal feed for livestock. By focusing on all these activities on regular basis
Tesco has enhanced its profit margin as compared with past. Behind development of any KPI in
favour of society, business has some specific reasons and they are directly associated with the
welfare of local public (Smith, 2007). In short, through large number of ways business is
contributing in favour of society and it has directly lead to favourable outcomes. Improving
health is another ambition of business through which proper support is provided to customers. It
involves reformulation of products so that healthy eatable items can be consumed by target
market and it also plays significant role in business success. Management ensures that its
customers are delivered healthy items so that they can live better life.
One of the main contributions of Tesco towards society is in the form of employment
where 74 million young people across the world are unemployed. So, as a responsible business
Tesco supports young people and they are delivered appropriate employment opportunities. All
these KPI’s which are being used by the largest supermarket are effective. In short, it allows
company to well satisfy the need of its target market and has acted as development tool (Jones,
Comfort and Hillier, 2007).
Tesco is working in partnership with Diabetes UK and it has supported in raising fund of
around £18.6 million. Providing monetary support to the local charities in the form of donation
has enhanced brand loyalty. In short, no other companies in the market can compete with Tesco
in terms of KPI developed by business for serving local society. Apart from this, food poverty
has become one of the major issues where organization assists charities who are in the front line
of supporting to feed people. The overall contribution for the welfare of society has enhanced
worldwide presence of Tesco where its operations are highly appraised (Webb, 2014). By
indulging into practices of social welfare, firm is able to gain competitive advantage and in turn
it is possible to deal with the range of challenges being present in the business environment.
Profit of Tesco in the year 2014 was £52.8 (million) but in the year 2015 it was £55.0 (million)
which is the real outcome of effective KPI’s associated with corporate social responsibility.
Further, the contribution in favour of society is assisting Tesco to gain large number of
benefits present in the business environment and is able to sustain in the market for longer period
of time. Apart from this, it has supported in market expansion also where company is well
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known in the other market for its ethical practices. In short, the rise in level of growth has
become possible due to KPI’s undertaken which are linked with social responsibility.
Management of Tesco well understands its responsibility towards the society and goals have
been set so that development of overall society can take place at faster pace. Apart from this,
business is capable enough to accomplish all the goals linked with the social welfare and this has
strengthened customer base of organization. The benefits gained by becoming socially
responsible business are rise in profitability level, market share, strong customer base, improved
brand image etc (Macdonald, 2013). One of the main KPIs undertaken by business is reducing its
carbon emission and it has been accomplished effectively. Apart from this, issues such as
competition, political barriers etc are tackled easily by business due to presence of effective
socially responsible practices. Hence, from the above information, it can be easily said that
practices of Tesco are quite effective and company is strongly contributing towards public
welfare which is also one of the main reason behind its success in the market.
REFLECTION
The entire study being carried out has enhanced my knowledge level where I am able to
gain information in relation with the social responsibility of business. Further, before
undertaking this study, I was having little information about key performance indicators but now
it has become possible to understand about this concept and same can be applied in different
areas. I gained knowledge regarding the ways through which business can contribute maximum
in welfare of society. In short, the entire study has provided a base to me in knowing about
corporate social responsibility practices of the business. Apart from this, significance of
developing KPI in relation with social responsibility has enhanced at faster pace where every
business has started to focus on its performance indicators. Further, I was also able to gain
information regarding the most efficient retail organization named Tesco operating in the market
of UK. Moreover, for obtaining data in relation with the KPI of the business, I accessed annual
report of Tesco through which I came to know about the social practices of organization. Apart
from this, the overall research showed that how efficient is Tesco in meeting with the overall
requirement of its target market. In short, the overall social responsibility practices of Tesco have
assisted management in gaining competitive advantage.
By undertaking this study, I have developed various areas where major one involves
knowledge in relation with the key performance indicators and other one is skill development.
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With the help of this study, I have enhanced my research skills where information which is
fruitful for the research has been gained from different sources. Further, the overall knowledge
obtained by me by obtaining master degree has been applied in this study. In short, it has
enhanced my confidence level and in turn, I can easily undertake different studies in near future
also. Moreover, before undertaking this study I was totally unaware about the KPI practices of
supermarkets in relation with social responsibility. So, through this research, I have gained
knowledge regarding CSR practices of Tesco and it is enhancing business performance in the
market. Apart from this, different sources were undertaken for obtaining information such as
online, annual report of Tesco etc and they were quite effective.
This research has provided me platform to use knowledge acquired through master
degree and it became possible to obtain fruitful results. Further, I have developed my critical
thinking skills and same has enhanced usefulness of the entire research. I obtained knowledge
about the social welfare practices of Tesco and initiatives taken by business for serving society in
better manner. Overall growth and market performance of Tesco is rising at faster pace and one
of the main reasons behind same is presence of effective KPI’s which are linked with social
responsibility of business. Indulging into such type of practices has supported company to deal
with the range of challenges being present in the business environment. Therefore, with the help
of this information, it can be stated that entire research has provided me support to enhance my
knowledge level.
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REFERENCES
Books and Journals
Caulfield, A. P., 2013. The evolution of strategic corporate social responsibility. EuroMed
Journal of Business. 8(3). pp.220 – 242.
Jones, P. Comfort, D. and Hillier, D., 2007. Marketing and corporate social responsibility within
food stores. British Food Journal. 109(8). pp.582 – 593.
Macdonald, R., 2013. Global Corporate Social Responsibility of Tesco (Grocery Retailer, UK):
Critical Evaluation. GRIN Verlag.
Randall, G. and Seth, A., 2011. The Grocers: The Rise and Rise of Supermarket Chains. 3rd ed.
Kogan Page Publishers.
Smith, D. A., 2007. Making the case for the competitive advantage of corporate social
responsibility. Business Strategy Series. 8(3). pp.186 – 195.
Online
Tesco and society report. 2014. [PDF]. Accessed through
<http://www.tescoplc.com/files/pdf/responsibility/2014/tesco_and_society_review_2014.pd
f>. [Accessed on 5th March, 2016].
Tesco and society. 2016. [Online]. Accessed through <http://www.tescoplc.com/index.asp?
pageid=642>. [Accessed on 5th March, 2016].
Tesco Corporate Responsibility. 2016. [Online]. Accessed through
<http://www.tesco.ie/corporate-responsibility/about-tesco>. [Accessed on 5th March, 2016].
Webb, L., 2014. Tesco Corporate Responsibility 2014/15 update. [Online]. Accessed through
<https://www.2degreesnetwork.com/groups/2degrees-community/resources/tesco-corporate-
responsibility-201415-update_2>. [Accessed on 5th March, 2016].
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