Business Studies: The Cooperative - Assignment Example

Part A ‘The Cooperative’ is a leading chain of supermarket that specializes in selling wide ranging products, including food at competitive prices in all its stores across UK. With more than 4,000 thousand outlets, 81,000 employees and 1,700,000 trading members, it prides itself in its sourcing policy of its goods and services. The leadership has recognized the importance of people’s participation in the overall strategy of having collective goals through shared learning. Thus making it an intrinsic part of the work methodology which is characterized by the stability provided by the system and the integrated approach of the workers. Ethical practices are intrinsic part of its business strategy that promotes transparency in delivery of its goals and objectives of all its stakeholders, especially the chain suppliers who are equal partners in its business. Supply chain helps coordinate the organization’s various linkages with the external agencies and promotes efficient receipt and delivery of goods and services. The Cooperative food suppliers are the source agents for all the food products that are sold from the various outlets. Ethical Trading Initiatives (ETI) is an alliance of companies, non government organizations and unions that promotes ethical practices through improved working conditions and concept of fair wages. The Cooperative, being a founding member of ETI, ensures that its various suppliers conform to the pre-defined and pre-determined principles of ethical business practices. The organization recognizes the importance of sustainable development that percolates down to the people living at poverty line. In 1999, ‘Sound Sourcing Code of Conduct’ was developed by the trading group, incorporating the guiding principles of ETI and ILO conventions. International Labour Organisation (ILO) is one of the leading facilitator of equal opportunity and fair wages in labour practices across the world. The ‘continuous improvement code’ is general management format that needs to be observed by all the suppliers. Compliance with the code is intrinsic part of contract with the trading parties dealing with food products, thus making it mandatory for the suppliers to maintain minimum wage policy and affirmative actions in workforce relations. The organization must recognize that it has duties towards its stakeholders and must make efforts to meet the various demands of its stakeholders to promote good business practice and establish credibility in the cutting edge business paradigms. The cooperative plans to extend the code to its other affiliated businesses. In the recent times, internet has emerged as one of the most popular medium of communication with its wide range of applications in the ever expanding and highly competitive business environment. In 2005, Cooperative became a member of Sedex (Supplier ethical data Exchange). Sedex is an internet based database that provides a platform for traders to expand their business across the globe through transparent work culture. The traders and trading parties post their labour standard information, including the audit reports. The advantage of being a member of Sedex is that it provides the Cooperative and all its stakeholders, including its various members and consumers, an opportunity to verify and share the ethical practices of the suppliers. Though, Sedex only encourages the trading partners towards transparency in work culture through sharing of relevant information regarding labour practices and business ethics, the onus of verifying those information remains with the trading partners. By making membership to Sedex, a mandatory practice with all its suppliers, Cooperatives has ensured that social audit would promote transparency and fair practices within the work environment of all its suppliers. It accepts a minimum quality of food products that is deemed to be ‘sufficient’. It has also create a new position of ‘Ethical Trading and Sustainability Officer’ who would be overlooking the quality control of food products and ensuring strict compliance for the code within its supply chain. Sedex membership has also provided the Cooperative with wide scope of opportunity to improve and improvise its capacity building processes and focus on strategic partnership with suppliers who are increasing more inclined towards ethical considerations in their labour practices and business operations. ‘Sound Sourcing Code of Conduct’ gives The Cooperative an opportunity to spread its business and at the same time provides it with a credible public image, making it popular with the masses. Indeed, Sedex has provided the organization with new opportunities for diversification of its products and services through creative inputs. The various internal and external resources facilitate organization’s mission of generating new avenues of employment and promotion of fair practices. (730) Part B Sound Sourcing policy is highly relevant issue with the management of the cooperative. While the initial phase has included only the food products, the company’s plan to bring all its affiliated business interests under its purview is really commendable. The ‘Sound Sourcing Code of Conduct’ is important criteria for promoting responsible business practices that take into consideration the wider interests of its various stakeholders. The fast changing socio economic dynamics have created a fiercely competitive business environment. In the rapidly changing environment of globalization, change is essential for development and organizations tend to adapt to the constantly evolving business environment. The cooperative also needs to improve and improvise its business outcome through strategic business initiatives while maintaining their competitive prices. Since sound sourcing policy has become a crucial factor in the strategic partnership with its suppliers, the company must ensure its compliance while dealing with all its suppliers of food and non food products. In an expanding market organizations get trapped into the illusion of increasing profit with growing affluent population and miss the wider implications and imaginative applications of the products and services, thereby often losing out to more progressive competitor. Good business ethics promote better understanding of changing perspectives of their customers that goes a long way to maintain sustainable growth pattern of the organizations. The organization would need to evolve more innovative approach to its marketing strategy and product diversification. Supply chain management becomes an intrinsic part of business strategy which facilitates smooth flow of information, goods and services and financial transactions at different levels of operations. While the policy of sound sourcing would provide the company with the opportunity to only work with people who are guided by ethical consideration and sound labour practices, the company would need to follow more effective checks and control measures to restrict the spirally cost. The new plans would significantly impact the existing goals of the supply chain as the diversification of products would require inclusion of more tools and controls to oversee smooth execution of short term goals and objectives. With the increased productions and product lines, transportation logistic would need to evolve more dynamic strategy that is cost effective and efficient so as to provide a competitive edge to its rivals. The organization also needs to test new approaches. E-commerce has emerged as one the most promising instruments of advancing one’s business base. Internet, used as a potent communication tool, would provide a vast scope of income generation avenues through increased opportunities. E-commerce provides the organizations with the opportunity to develop unique relationship with its customer that is based on mutual trust and helps the organization to build committed clientele. It would also facilitate in analysing the changing preferences of the customers and thereby, focus on market strategy that is totally focused on the needs and requirements of the people. Indeed, e-commerce activities would greatly improve its business outcome while strictly adhering to code. Becoming a member of Sedex has significantly expanded the database of organisation’s business partners and suppliers. The increasing database of prospective suppliers has provided the Cooperative with more informed choice regarding the food products and suppliers. The organization would also need to introduce value added services that would significantly improve the overall quality of its products. At the same time, the internet has opened a huge scope of opportunities to expand its business across the nation and probably take it across the globe. Ethical practices provide the organizations with credibility that cuts across race, culture and regional interests. It must make efforts to project its people-centric image by providing its customers with products and services which were customised as per their individual demands. It is important that online and offline customers are taken seriously, thereby making customer satisfaction its priority which is fundamental to any retail business. The fundamental success of ecommerce depends on keeping tabs on the pulse of the public. The Group would maintain its leadership position in the global business environment by adapting to the changing equations of global business environment. Indeed, the company would continuously make efforts to assess the in meeting all its aims and objectives within the framework of its mission and vision through the evolving process of entrepreneurial creativeness and effective supply chain management. (702) Reference The Cooperative. The Sustainability Report 2007-08. Available from: [Accessed 26 July, 2009]. Read More