Corporate Social Responsibility and Business Ethics at Woolworths

This report critically analyzes the Corporate Social Responsibility (CSR) and business ethics of the Woolworths company. It begins with an executive summary highlighting the wage scandal and its negative impact on the brand image. The report explores the application of decision-making and stakeholder theories to improve Woolworths' effectiveness and market competitiveness. A literature review covers the historical background of CSR, conceptualization of business ethics, and the evaluation of ethics and CSR in the context of Woolworths. The analysis delves into the ethical issues, utilizing relevant models, and examines the CSR initiatives of Woolworths, including its commitment to sustainability practices such as reducing food waste and promoting gender equality. The report concludes with a discussion on the importance of ethical behavior and CSR for long-term business success and customer satisfaction, emphasizing Woolworths' efforts to create a greener future and improve relationships with stakeholders. The report also mentions the use of the Classical or Rational Model to improve decision-making, and the application of stakeholder theory in the context of the company.

Running head: MANAGEMENT
Management
Name of the Student
Name of the University
Author note

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Executive Summary
The report has thrown light in analyzing judgment on the Corporate Social Responsibility along
with Business Ethics related practices in Woolworths Company. In the company Woolworths,
the main aspect which has been noticed is that there was wage scandal of Woolworths which
impacted their brand image negatively. In such scenario, the usage of the decision making theory
along with stakeholder theory played a major role in improving the effectiveness of the company
and gain competitiveness in the market. In addition, it has been noticed that Woolworths, in the
current scenario have been capable of gaining high efficiency in the appropriate manner for
improving the appropriateness of the company.

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Table of Contents
Introduction......................................................................................................................................4
Literature Review on Business Ethics and Corporate Social Responsibility of Small and
Multinational Businesses.................................................................................................................4
Historical Background of CSR....................................................................................................4
Conceptualization of Business Ethics and CSR..........................................................................6
Evaluation of Ethics and CSR in case of Woolworths....................................................................7
Analysis of Business Ethics in Woolworths Group.....................................................................7
Analysis of Ethical Issues and Utilize Relevant Models.................................................................7
Analysis of CSR of Woolworths Company.................................................................................8
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

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Topic- Judgment on Implementing the Sustainability and CSR Practices in the Company
Woolworths
Introduction
The report throws light on analyzing as well as criticizing of not implementing
sustainability and practices related to CSR in Woolworths Company. The main aim and purpose
of the report is to understand the importance of the CSR and business ethics in multinational
businesses. As commented by Baumane-Vitolina, Cals and Sumilo (2016), the social
responsibility and ethics are the crucial elements in the business prospects as it is vital for
achieving success. The corporate social responsibility helps in demonstrating that the businesses
are highly keen in taking care of the wider social issues, rather than the ones which will be
impacting their profitability in the market. Moreover, as commented by Crane, Matten and
Spence (2019), the proper implementation of ethics and CSR helps in attracting the different
customers who take proper interest and share same kind of values. The report will be dealing
with the Woolworths Company which previously did not follow the sustainability practices and
it impacted their business to a great extent.
Literature Review on Business Ethics and Corporate Social Responsibility of Small and
Multinational Businesses
Historical Background of CSR
As commented by Cui, Jo and Na (2018), Corporate Social Responsibility is when the
organization operates in the ethical as well as sustainable manner and deals with environmental
and social impacts. It means the careful consideration of the different human rights, community,

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social and environmental impacts. Moreover, as opined by Dyck et al. (2019), it is incredibly
essential that the company operates in the vital manner which helps in demonstrating the social
responsibility. The ethical practices along with social responsibility are vital for the success of
the company and from the surveys of different studies related to CSR, it has been found that
more than 91% of the global customers expect the business to function and operate in such a
manner which will be capable of addressing environmental and social issues. As stated above,
the different customers are highly aware regarding importance of social responsibility and
actively seek the products from businesses which operate in an ethical manner. As commented
by Jamali and Karam (2018), the corporate social responsibility consists of major three elements
in the pyramid forms which are showcased in the following manner:
Legal Responsibility- As opined by Jones, Wicks and Freeman (2017), it is reflected in
the form wherein the company has the responsibility for complying with law and the companies
which are capable of working maintaining such aspects in mind, they will be considered to be
legally following the standards of the business ethics.
Economic Responsibility- As commented by Jamali and Karam (2018), it is considered
to be the basic responsibility of organization in terms of the profitability of the company through
the satisfaction of wants of the customers strongly.
Philanthropic Responsibility- As stated by Lins, Servaes and Tamayo (2017), it helps in
assuming the fact that company is considered to be the good citizen and it helps in contributing
towards the different resources of the community. The CSR is capable of encompassing two
major prospects which include transparency and accountability. The companies are highly

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accountable to their stakeholders for their performance in terms of the human rights and business
moral principles.
Conceptualization of Business Ethics and CSR
As commented by Pearson (2017), the advocates of the CSR have been capable of
becoming good citizen and it helps in increased engagement along with retention of the
customers in the market. Moreover, as opined by Schrempf-Stirling, Palazzo and Phillips (2016),
reputation is the key element for the corporate success and it comes on top of the intangible
assets list. On the other hand, as opined by Perason (2017), the business ethics help in stopping
the different malpractices along with safeguarding society. It is capable of creating healthy
business environment is helpful for improving the confidence of the customers towards trusting
the company. In addition, as opined by Wang et al. (2016), the business ethics are highly
required for improving confidence of the different customers regarding quality, utility along with
reliability of the products and services.
According to Werhane et al. (2017), ethical behavior not only improves profitability,
moreover, it helps in fostering the productivity of the different employees. As the unethical
business practices create problems to businessman along with business units, therefore, it is
highly recommended that ethicality is the key element that is needed to be implemented for
improving performance of the company as a whole. In addition, as opined by Pearson (2017),
when the business tries to follow the business ethics, the employees, consumers along with
suppliers will be happy. It will be resulting in the smooth functioning of the company and it will
be allowing the business to grow quickly within a short span of time.

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In the current scenario, the satisfaction of the customers is the key element that is needed
to be considered by the company as customers are king of the organization. Their each and every
wish needs to be taken as command and must be fulfilled at the earliest. Any business simply
cannot survive without their customers and when the customers are highly satisfied, there will be
high level of sales and profitability in the market as well.
Evaluation of Ethics and CSR in case of Woolworths
Analysis of Business Ethics in Woolworths Group
From the respective one instance of Woolworths, it can be analyzed that CSR and the
Business Ethics are the two crucial elements that are needed to be implemented by the different
other companies in any sector. In case of Woolworths, the company first mainly focused on
managing profitability and gaining strong brand image. In such prospect, the fundamental issues
faced by Woolworths included trust and integrity and it all started in the year 2019 wherein the
company was not able to pay workers at least $315 million amid profit drop (The Sydney
Morning Herald 2020). Due to the same, it caused high drop in the profitability of the company
and in such scenario, it is facing grilling over wages scandal at AGM (Financial Review 2020). It
is the most unethical practice which has been impacting the performance of the company to a
large extent.
Analysis of Ethical Issues and Utilize Relevant Models
From the analysis and judgment of the CSR and ethical issues faced by Woolworths, it
can be seen that company was not able to manage the decision-making prospects in a successful
manner. In such scenario, there are different models related to decision-making which can be

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implemented by Woolworths for improving the performance of the company as a whole and
improve effectiveness in a suitable manner (Werhane, Freeman and Dmytriyev 2017).
With the implementation of the Classical or Rational Model, it will be able to make the
problems clear and it will be enhancing the practices appropriately. In case of Woolworths, the
scandal related to non-payment of salary and wages to the different employees had taken a toll
on the profitability and reputation of the company. Through the same, the company will be
capable of finding alternatives which will be maximizing the desired results. It will be helping
them in anticipating the present as well as future consequences of the decisions successfully
(Woolworths.com.au 2020).
Analysis of CSR of Woolworths Company
However, after such incidents towards the business ethics, the company is now
committed towards creating the greener future and the company is getting there with reducing
the wastage of the food, reducing the usage of the plastic along with welfare of the animals. At
Woolworths, the corporate social responsibility has been always been about doing the right
things and with their presence in Australia and New Zealand; the priorities set by Woolworths
influence the communities, environment and nations (Woolworths.com.au 2020). Woolworths is
capable of serving more than 900 million customers each year and the suppliers’ network is
highly extensive in nature. Woolworths has been the part of the fabrics society and their main
aim is to be environmentally responsible for meeting the needs of the customers in a proper
manner (Woolworths.com.au 2020).
For instance- Woolworths have been successful in reaching major milestones in order to
fight against wastage of the food. On 4th June 2019, Woolworths have bid to tackle the $20

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billion problem of the wastage of the food in Australian economy. Their commitment towards
reducing the wastage of the food from going to the landfill, Woolworths have been successful in
announcing that 100% of their supermarkets have active food waste diversion program which is
active (Woolworthsgroup.com 2020).
Figure 1: Sustainability Practices of Woolworths
(Source: Woolworths.com.au 2020)
From the respective figure, it can be analyzed that Woolworths Group’s purpose is to
create better experiences in partnership with customers, communities along with networks. They
are capable of making positive impact on the entire world through listening to their customers
concerns through the reduction of the amount of the single use plastic along with packaging from
their supermarkets. The three major sustainability aspects of Woolworths include:
People- In the respective aspect, the main aim and purpose of Woolworths have been
promoting gender based equality wherein at least 40% of the executive along with senior

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managerial positions are held by women. Building of the diversity is the other major element
which has been adopted by them wherein cultural diversity is the first and foremost technique
wherein the group will be affecting the effectiveness in a positive manner (Woolworths.com.au
2020).
Planet- In the respective case, Woolworths have been successful in moving to the
circular economy as towards zero food wastage going to landfill. It is capable of improving
recyclability of their own brand packaging and contributing towards the circular economy
(Woolworths.com.au 2020).
Prosperity- It will be helpful in focusing on positive relationships with the different
suppliers wherein they will be capable of giving back to communities in which they will be
operating and rebuilding trust with investors and customers.
From the analysis of the CSR activities and business ethics practices, it has been seen that
WECU will be mainly concentrating their sponsorship as well as initiatives in Woolworths
Group due to their unique role within it. Be respectful to the environment and actively managing
environmental impact in a sustainable manner which will be effective in increasing the
awareness of environmental issues and acting in the sustainable manner (Woolworths.com.au
2020). However, in New Zealand economy, Woolworths is still facing criticisms from any many
stakeholders regarding not providing them with value and respect which is deserved by them.
In such scenario, the stakeholder theory can be implemented by Woolworths wherein the
management of the company will be working towards and on behalf of the different stakeholders
and deliver maximum returns through increased share price. There is an interconnected
relationship between the business along with customers, suppliers along with employees and

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investors. The firm needs to create value for the shareholders as they are the asset of the
company and the CSR will be maintained in such manner (Woolworths.com.au 2020).
For instance- The credit union of the Woolworths is committed towards implementing
along with maintaining efficient program of CSR which helps them in integrating environmental
and social responsibilities in their daily operations. Woolworths have been always capable of
understanding that success can never be measured in terms of growth and profitability, rather
how the company has been capable of minimizing the environmental impact. The employees and
the entire board believe in integrating the financial performance with non-financial criteria which
enhances the value for the members along with stakeholders successfully.
Conclusion
From the analysis and judgment of the CSR and business ethics practices of Woolworths,
it has been analyzed that the company has faced few criticisms regarding the non-payment of
wage scandals along with not providing the required support required by stakeholders. However,
after the realization of the issues, the company has been capable of achieving high level of
profitability and gained effectiveness in their performance. Woolworths have been capable and
successful in implementing the different CSR practices such as reduction of usage of plastic bags
along with saving the planet and inclusion of diversity. However, there is still lack in New
Zealand economy which can be solved with the help of different theories related to decision-
making and stakeholder theory which will be making the company highly sustainable in nature in
the different places wherein they have their presence in the suitable manner.

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References
Baumane-Vitolina, I., Cals, I. and Sumilo, E., 2016. Is Ethics Rational? Teleological,
Deontological and Virtue Ethics Theories Reconciled in the Context of Traditional Economic
Decision Making. Procedia Economics and Finance, 39, pp.108-114.
Crane, A., Matten, D. and Spence, L. eds., 2019. Corporate social responsibility: Readings and
cases in a global context. Routledge.
Cui, J., Jo, H. and Na, H., 2018. Does corporate social responsibility affect information
asymmetry?. Journal of Business Ethics, 148(3), pp.549-572.
Dyck, A., Lins, K.V., Roth, L. and Wagner, H.F., 2019. Do institutional investors drive corporate
social responsibility? International evidence. Journal of Financial Economics, 131(3), pp.693-
714.
Financial Review 2020 Woolworths facing grilling over wages scandal at AGM (Online)
Retrieved from https://www.afr.com/companies/retail/woolworths-faces-grilling-over-wages-
scandal-at-agm-20191214-p53k1g [Accessed on 5th April 2020]
Jamali, D. and Karam, C., 2018. Corporate social responsibility in developing countries as an
emerging field of study. International Journal of Management Reviews, 20(1), pp.32-61.
Jones, T.M., Wicks, A.C. and Freeman, R.E., 2017. Stakeholder theory: The state of the art. The
Blackwell guide to business ethics, pp.17-37.