Business Ethics in Australia: Woolworths' CSR and Governance Report

This report provides a comprehensive analysis of Woolworths' business ethics, corporate social responsibility (CSR), and corporate governance practices. It begins with an introduction to Woolworths, its history, and core values, followed by an examination of ethical dilemmas, particularly the underpayment of employees. The report delves into Woolworths' ethical sourcing policies, including labor rights and living wages, and evaluates its CSR initiatives, focusing on diversity, gender equality, and support for indigenous employment. It also examines Woolworths' response to underpayment issues and includes a personal recommendation for employee feedback. The report concludes by emphasizing Woolworths' commitment to ethical practices and social responsibility, highlighting its initiatives in various areas such as people, planet, and prosperity, while also mentioning relevant references.

Assignment 2: Business Ethics
Woolworths

Introduction
 To analyse the business ethics, the report sheds
light on the corporate social responsibility and
corporate governance to derive an insight about
how these two areas are being addressed
 The major purpose of the report is to derive a
comprehensive insight about the business ethics
and its application to business
 Ethical practices applied by businesses are often
filled with public controversies due to clashes in
public opinion, laidback attitude of the
organization itself in relation to performing the
social and ethical duties and poor initiatives
taken for the same

Introductory notes
 Woolworth’s business practices and
ethics have been the fundamental
context of the report
 Business ethics is a specific set of
policies along with some relevant
practices that usually deal with the
controversial subjects with the
inclusion some controversial subjects.
This broad series of subjects may
include corporate governance, insider
training, corporative governance,
corporate social responsibility and
some other relevant aspects

Company Background and History
 Introduction of the company: Woolworths
 It is noted that Woolworths is known to be Australia’s biggest supermarket along with
the establishment its 995 stores across the nation across Australia
 Woolworths is a large chain of supermarkets and grocery in Australia that are
significantly owned by Woolworths group Organization was founded in 1924 along with
Coles
 This supermarket chain accounts 80% of Australian supermarket

Background Notes
 The overall workforce strength of
Woolworths is 100,000 (Aguinis & Glavas,
2012). According to Devin and According to
Devin and Richards (2018) Woolworths is a
diverse group of retail businesses with the
aim of becoming a purpose-driven
organisation. The core values of
Woolworths is aligned with three different
core aspects like care deeply, performing the
right thing and learn. In present, the firm
pay its attention to major growth drivers
like providing desirable outcome for
consumers, team and enhance the core
values.

History of Woolworths
 Woolworths first started its journey in 1924 with its varieties of
stores which is known as Woolworths Stupendous Bargaining
Basement
 The organization its chain of services with five dime stores in
USA.
 Woolworth went ahead opening another new branch and within
six years of establishment, Woolworths’ business was able to
build 16 store new stores

Contd…
 After the launches of food
section in Woolworths acquired
32 BCC (Brisbane Cash &
Carry).
 Woolworths Limited in 1982
acquired two different stores in
Tasmania such as Reolf Vos and
Purity. This was further in
converted into Woolworth store
(Lund-Thomsen & Lindgreen,
2014)

Ethical Dilemma of Woolworth
 Woolworths has underpaid its economically lower class labour
 Almost 6000 of its employees are paid less (Dominic Powell,
2020).
 The people who are immigrants working as the ground staff at
Woolworths are not paid as per the industry wage standards
 Onrganization exhibited a poor governance as well as
complacency carelessness towards employee entitlement (Dos
Santos, Svensson & Padin, 2013).

Ethical dilemma
 The organization has failed to pay about 5700 of its salaried workers
especially the departmental managers
 The underpayment can be tracked back as far as 2010 and the
organization estimates the overall cost of remediation to be between
$200 million and $300 billion
 Share of Woolworths dropped following this controversy which seemed
to be closing down to 1.4% at $37.20 (Parkinson, 2016)

Business Ethics
 Woolworths’ ethical sourcing policies
 To enhance flexible working conditions for the people working in
the supply chain network
 All suppliers of Woolworths irrespective of the regions operating across
the globe are subject to the policy
 Protect the corporate image and rely on brands by doing the right thing
 Policies are significantly complemented by compliance audit programs for
the own products of suppliers

Contd…
 Even though the ethical policy of Woolworths encompasses the labour rights
but in practice the organization is falling short to meet the commitment if the
recent underpayment issues of immigrants labours are taken into account
(Methner, 2013).
 Woolworths is one such organisation in which Ethical Sourcing Policy
embraces as well as enacts United Nation Global Compact (UNGC)
 Policy focuses on communicating a clear set of requirements for the suppliers
and work to
 Improve existing working conditions for the employees in its supply chain

Adherence to international labour standards and national
legislation
 Labour rights
 Under the norms, employment is chosen freely and the terms condemn the forced or any kind
of involuntary prison labour when they are not followed properly
 Worker are entitled to incur debt via recruitment fees, fines and other possible means
 Employees may not necessarily deposit their identity papers with the employer and they can
leave the contract after the mentioned notice
 Employees are free to leave the workplace when the shift timing is over

Contd…
 Even though the organisation claims
to be at the top with respect to its
business ethics, in practice it has
seemingly been laidback about
ensuring that the policies are in place
for the betterment of workforce and
business as well. Woolworths’
laidback attitude resulted in
underpayment of ground staff labour
since 2010 (Mayer, 2014)

Living Wages
 Employee pays and benefits for required
working days should meet the national legal
standards and meet the industry benchmark.
Under all circumstances the pays should be
sufficient to satisfy the fundamental needs
and to deliver discretionary earning for the
labours and families
 All labours should be provided with written
and comprehensive information about the
employment conditions aligning with the
wage structure before they are considered
under the employment contract of specific
wage framework

Contd…
 Any categories of deduction
from the payment as
disciplinary measure or any
sort of deduction from
payment not processed by
the regulations should not
take place under the
expressed consent of
workers.

Corporate Social Responsibility
 Corporate Social Responsibility
at Woolworths is often reviewed
and developed on the basis of
environmental needs
 For example, the corporate
strategy of the organization
brings new focus on three major
areas like resource, energy and
overall sustainability

Corporate Social Responsibility: People
 In the segment of people, the Woolworths promote diversity by embracing targets that
significantly support diversity with the aim, tolerance and respect.
 Ensuring Gender Equality:
 It is noted that at least 40% of executive and senior manager positions
should be held by women
 There should not be any sort of wage gap between male and female
employees of equivalent positions based on a per hour rate at all
ranges of the organization, along with the step of change enhancement
in closing gap by FY19

Contd…
 The organisation Woolworths is taking
care of women empowerment as men in
the corporate place as the percentage of
women in the executive positions
increased by 20% in last four years
(Pickles, Barrientos and Knorringa 2016)
 Gap in the salary wages has been a
contemporary concern for all corporate
partners due to global awareness in
relation to social and ethical duties and
meaning that consumer across the world
would prefer a brand that is socially and
ethically responsible (Aguinis and
Glavas 2012)

Embracing the diversity
 Almost 100% of the individuals for
selecting new team members to have
attended unconscious bias training
(Spence & Rinaldi, 2014)
 Woolworth would persistently focus
on driving cultural diversity based on
the commitment so that there can be
a complete understanding that by
2020 the same will be reflected on
the communities it serves.

Support the aboriginal as well as Torres Strait islanders’
employment
 A greater level of percentage of indigenous group need to be
under equal Federal Government Parity Contract
 A large percentage of indigenous graduates should be under the
norms of Federal Government Employment Parity Contract
 Global Cone Communication Survey indicating almost 90% of
customers have stated the fact that people in the Modern world
would most likely to purchase a brand which is a socially
responsible (Devin and Richards 2018)

Woolworths’ take on preventing underpayment issues
 Woolworths has admitted the issue publicly and to ensure
people that it has breached the conduct and the organisation
itself declared that since 2010, it might have been paying its
labour less than it actually should be paying for.
 The organization has publicly ensured that all underpaid
labours will be paid following date and dues

Contd…
 The organization Woolworths
has amended its labour
policies to ensure that there is
no any gap salary wages. All
workers working in the
organization needs to receive
the wages which is similar to
industry standard wages.

My personal recommendation
 Employee feedback method, in which I would suggest the company to take
feedback from employees about the work, wages, leadership and other
compensation related scheme
 Evaluation: I would ask for a routine check on the policy and procedures
related to CSR, Corporate Governance and other business ethics. In order to
implement the initiative, the organization needs to look at the industry
dynamics in relation to changes in policies and procedures

Conclusion
 The above presented findings presented on business ethics of Woolworths state
the fact that the organization Woolworth is always a step ahead with respect to
the corporate norms and practices. The corporate responsibility initiatives of
the organization have been developed considering a number of social elements
that need urgent attention such as people, planet prosperity, etc, When it
comes to taking care of people as the social responsibility, the organization
paid its attention to development and equal rights of aboriginal society.
Likewise, to ensure diversity, it has bridged the gap of women’s position in
the senior executive positions.


References
 Aguinis, H., & Glavas, A. (2012). What we know and don't know about corporate social responsibility: A review and
research agenda. Journal of Management, 38 (4): 932–968.
 Akbar, S., & Ahsan, K. (2014). Analysis of corporate social disclosure practices of Australian retail firms. International
Journal of Managerial and Financial Accounting, 6(4), 375-396.
 Akbar, S., & Ahsan, K. (2014). Analysis of corporate social disclosure practices of Australian retail firms. International
Journal of Managerial and Financial Accounting, 6(4), 375-396.
 De Roeck, K., Marique, G., Stinglhamber, F., & Swaen, V. (2014). Understanding employees’ responses to corporate social
responsibility: Mediating roles of overall justice and organisational identification. International Journal of Human Resource
Management, 25 (1): 91–112.
 Devin, B., & Richards, C. (2018). Food waste, power, and corporate social responsibility in the Australian food supply
chain. Journal of Business Ethics, 150(1), 199-210.
 Dominic Powell, P. (2020). Woolworths executive bonuses cut after workers underpaid up to $300m. Retrieved 25 January
2020, from https://www.smh.com.au/business/companies/woolworths-underpays-workers-by-up-to-300-million-20191030-
p535l5.html
 Dos Santos, M. A., Svensson, G., & Padin, C. (2013). Indicators of sustainable business practices: Woolworths in South
Africa. Supply Chain Management: An International Journal.
 Lund-Thomsen, P., & Lindgreen, A. (2014). Corporate social responsibility in global value chains: Where are we now and
where are we going?. Journal of Business Ethics, 123(1), 11-22.
 Mayer, D. M. (2014). A review of the literature on ethical climate and culture. In Schneider, B. & Barbera, K. (Eds.), The
Oxford handbook of organizational climate and culture. Oxford University Press.

References
 Methner, N. (2013). Adaptation to Climate Change: An Investigation into Woolworths’ Water Management
Measures. In Business and Climate Change Governance (pp. 135-155). Palgrave Macmillan, London.
 Methner, N. (2013). Adaptation to Climate Change: An Investigation into Woolworths’ Water Management
Measures. In Business and Climate Change Governance (pp. 135-155). Palgrave Macmillan, London.
 Moxham, C., & Kauppi, K. (2014). Using organisational theories to further our understanding of socially
sustainable supply chains. Supply Chain Management: An International Journal.
 Parkinson, M. M. (2016). Corporate governance during financial distress–an empirical analysis. International
Journal of Law and Management.
 Parkinson, M. M. (2018). Case Study 4: Woolworths Group plc. In Corporate Governance in Transition (pp. 203-
221). Palgrave Macmillan, Cham.
 Pickles, J., Barrientos, S., & Knorringa, P. (2016). New end markets, supermarket expansion and shifting social
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 Pulker, C. E., Trapp, G. S., Scott, J. A., & Pollard, C. M. (2018). Global supermarkets’ corporate social responsibility
commitments to public health: a content analysis. Globalization and health, 14(1), 121.
 Spence, L. J., & Rinaldi, L. (2014). Governmentality in accounting and accountability: A case study of embedding
sustainability in a supply chain. Accounting, Organizations and Society, 39(6), 433-452.
 Trevino, L. K., Weaver, G. R., & Reynolds, S. J. (2006). Behavioral ethics in organizations: A review. Journal of
Management, 32 (6): 951–990