How Tesco Understands and Treats Its Customers, Working and Social Environment - Report Example

Corporate Social Responsibility Corporate social responsibility (CSR) can be defined in a myriad of ways and among these is that CSR is a concept that entails companies expressing their behavioural values to their stakeholders by integrating environmental and social concerns to their business operations. CSR behaviour is voluntary, goes beyond the mere compliance with legal requirements, is often carried out in partnership with other individuals or organizations, and is more than the good intensions that an organization may have. CSR can take a number of forms including community involvement, social responsible investments, corporate governance, fair trade and sustainability. CSR has been practiced by numerous companies for the past few decades but the last decade has seen CSR gain more momentum in many corporate organizations. Tesco is among the companies that has demonstrated a high degree of commitment towards CSR. The Working and Social Environment in Tesco Employee support Tesco employs more than half a million employees in its stores that are spread in different parts of world and is commitment to creating a work environment that will make the company’s employees consider it as one of the best employers in the world. Tesco recognizes that its employees in stores, distribution networks and in its offices work exceptionally hard while providing the best services to the millions of customers who visit Tesco’s stores every year and in order to continue inspiring its employees, equipping the employees with great leadership skills, and providing the employees with the right training, Tesco has developed a number of programmes aimed at promoting job satisfaction among employees. The main factor that drives these programs is the equal provision of opportunities to employees and potential employees to begin and grow their careers in the company. The fact that more than three quarters of the company’s directors, business leaders and managers were promoted to their current positions from their former positions within the company is a clear indication that the company is keen on giving its employees the opportunity to grow their careers in the organization (Purcell 2003). Tesco is also very keen when it comes to listening to its employees, improving the issues that are important to them, and providing them with the tools that they require to effectively carry out their duties. Tesco’s approach towards creating equal opportunities to its clients is based on five elements namely welcoming anyone to work with the company, training its leaders, providing growth opportunities, supporting future growth and connecting with its employees who are referred to by the company as colleagues. The company seeks to connect with its employees to a deeper level and build a relationship with them that that is founded on shared values. Tesco pursues this goal by listening to and addressing the needs of its employees and also through the use of technology to provide more opportunities to its employees and to recognize the important contribution of its employees to the company day-to-day operations. In order to meet present and future challenges, Tesco recognizes that it requires collaborative, innovative and empathetic leaders who can organize winning teams. The company has made plans to foster a new leadership culture that will equip the company with the kind of leaders that it needs in order to achieve its goals. The organization’s excellent development and training programs help it to attract employees from a variety of backgrounds who are then given the opportunity to realize their maximum potential in their respective careers. Tesco notes that the future of retailing will require that employees and organizational leaders to approach their duties using a new set of skills and therefore works towards training its employees to acquire the new skills. Tesco aims to create career and job opportunities by equipping, enabling and inspiring as many young people as it can to achieve success in their respective jobs (Tesco 2014). This CSR goal matters to Tesco because the company recognizes that young individuals need to be supported if they are to overcome many of the challenges facing young people around the world make the most from their lives. Tesco aims to support young people through its capability to employ, train and grow employee’s careers. Tesco gives young people the opportunities they seek by enabling as many young people as they can to begin their careers it the organization, inspiring the young people who they recruit to broaden their vision so they can achieve their full potential, and equipping them with specialist and social skills that they need to develop their careers. Tesco has for a long time had the culture if taking young people who have just completed their studies and training these individuals for management roles. This is one of Tesco’s cultures that have equipped it with the knowledge to develop the careers of individuals and provide opportunities that give individuals the opportunity to maximize their potential at the work place. Tesco’s CSR target to create job and career opportunities is also aimed at breaking the vicious cycle of being jobless due to the lack of required experiences. Most of the desirable jobs in almost any part of the world are limited in number and require that one possesses a certain degree of experience before one can be given the job. Now the problem is without a job, one never gets the opportunity to develop the required experience and this vicious cycle denies many young people the opportunity to begin their careers. Tesco realizes that young people cannot break this cycle on their own and that they need organizations that can step up and provide them with the much required initial opportunities to begin a career. Tesco has offered itself to be one of those organizations that steps up to provide young people with their first opportunity at a career in order to fulfil their CSR target of making a useful difference in the lives of young people. As observed by Williams (2013), the Tesco School Outreach and Tesco-Homeplus Academy are some of the programs that have been initiated by Tesco in order to equip young people with the knowledge required to succeed in business, and to inform young people to know where to look for opportunities and how to make the most of the opportunities that they get. Through these outreach programs, Tesco hopes to widen the focus of young people by matching Tesco leaders with young people in local schools so the leaders can visit these schools and share the kind of advise that would activate the myriad of skills possessed by the young people. Tesco hopes that its outreach program will not only inspire young individuals to take up business opportunities but to also open up to a wide range of other opportunities ranging from farming to opportunities in cutting edge technology. The Tesco-for-Thais Foundation (TFTF) is an example of a program initiated by Tesco to equip young people with the opportunities they require to begin and succeed in their careers. Tesco initiated this program in order to equip young people with the new and innovative skills that they need to succeed in the current crowded job market and also need to succeed in future career challenges (Tesco 2013). Through the TFTF, Tesco offers close to 6000 scholarships annually to needy students and therefore provides these students with the chance to complete their undergraduate programs and enable young people to study and succeed in farming activities. Advantages and Disadvantages of CSR and improving CSR There are several ways the CSR has benefited Tesco the first of which is that it has helped the company in its efforts to satisfy both its employees and clients. CSR efforts have helped employees have a positive attitude towards the company and the high number of the company’s employees confirms that many employees are proud to work for the company. CSR has also helped to improve the image of CSR in the eyes of its customers. The company’s CSR efforts to improve the society may have influenced many customers purchase their goods from the company’s many stores. CSR has also helped Tesco to get more business opportunities. The growing number of branches in different countries illustrates the many opportunities that the company has. The disadvantages of CSR include its hindrance to productivity, in particular, the company’s efforts to cut down carbon emissions. Embracing environmentally friendly practices normally requires a high initial investment and this could have cut down on the company’s profit margins. Tesco can improve its CSR by embracing a number of measures such as sustainable purchasing, transparency, community development, employee relations and accountability. Sustainable purchasing involves continuing with its efforts to base its purchasing decisions on sustainability and responsibility. Tesco should also ensure that its organization is honest and provides its stakeholders with the information required to get insight into relevant issues. Tesco should also ensure that it takes full responsibility for all actions undertaken by the organization and continue with its community development initiatives. Improving employee relations is likely to both improve employee productivity and ensure that that the company’s CSR efforts succeed and meet the desired goals. Relationship between Employees and Management Tesco makes efforts towards building a closer relationship between employees and management by encouraging communication. The management of Tesco always works towards listening to and motivating employees in order to encourage them to work towards meeting the organization’s goals. The communication between the management and employees is held through direct discussions with managers, through newsletters of the organization’s intranet, and though appraisals and other formal structures. Line managers in Tesco organize daily meetings with their teams so they can update the employees on the tasks of the day and give high performing employees value awards as a way of celebrating employee achievements and appreciating the employees. The company has also invested in a feedback mechanism to enable the management and the employees to exchange information useful for the company and employee career development. Tesco’s Social Environment When Tesco was formed, its main focus was to make profits for its stake holders and issues such as CSR rarely featured in its plans. This situation has since changed and now the company considers the needs of the community as an integral part of its operations. Given that Tesco operates in a number of different countries, Tesco has developed a number of community plans that are tailored to suit the specific needs of the surrounding communities in each of the countries the retail chain operates. As outlined by Tesco (2011), there are five factors that characterize Tesco’s CSR commitments to local communities and these are active participation in local community support, care for the environment, responsible buying and selling of merchandize, creating careers and jobs, and providing clients with healthy choices. Tesco aims to actively participate and support local community activities because it perceives that its stakeholders, colleagues and customers expect the company to embrace its responsibilities due to the dominant position that the company holds in the market. Tesco recognizes that customers respect and appreciate organizations that have strong compliance and ethics cultures, companies that deal with emerging societal issues, those that openly converse about societal challenges, and organizations that can be depended on in times of a crisis. In order to become an excellent corporate citizen, Tesco works with surrounding communities in all its operations, supports values and cultures that it is interested in fostering, and makes positive contributions to surrounding communities. Tesco supports local communities through its efforts to become an excellent corporate citizen, become an excellent neighbour and support charities and by engaging in causes that are beneficial to local communities. Tesco strives to become a good corporate citizen by embracing the highest corporate governance standards in its operations. Tesco ensures that its operations adhere to each and every relevant regulation and legislation and these include making sure that its employees get just financial remunerations and providing transparency and accountability in the way its operations are run. Tesco aims to be an excellent neighbour to the surrounding communities by doing more than settling its tax obligations and adhering to the law. Becoming a good neighbour, according to Tesco entails responding to the concerns of local communities and working towards creating thriving prosperous local communities. Tesco therefore contributes significant amounts of resources to employ workers from local communities and also to widen opportunities for the local traders and farmers by enabling them to sell their products both locally and internationally. In Malaysia, Tesco has worked with the Malaysian government to modernize small shops owned by local families while in the United Kingdom, Tesco tries to be an excellent neighbour by assisting in the renovation of neglected or abandoned properties and by opening partnership stores in localities that have been deprived of such stores. Alongside these efforts, Tesco also supports needy people in the society and contributes to good societal causes. Each year, Tesco targets to spend about one percent of its profits before taxation towards societal causes and charities through cause-related marketing, donating staff time, monetary donations, and giving out gifts. How Tesco Understands and Treats its Customers Tesco aims to trade responsibly because it wants to achieve the status of being the most trusted retail company in the world. According to Tesco, customers’ trust is the most important thing and in order to gain customer trust, the company listens to all needs communicated by clients and then makes efforts towards addressing customer hopes and concerns. The company’s service to customers prioritizes three issues that are important to customers and these are providing quality and safety of products, having a pricing system that is honest, accurate and fair, and protection of any information given to the company by clients. Tesco always makes efforts to demonstrate that the products on its shelves are safe for use and consumption, have been appropriately labelled and that the highest standards have been adhered to while sourcing the products. Tesco faces a number of sourcing challenged in the numerous countries it sources its products from but regardless of where it sources its products from, the company applies the same high standards and expects the highest quality of products from its numerous suppliers. The company has invested in sourcing for experts from different parts of the world who assist the company to verify that the products purchased meet the high standards that customers expect from it. Tesco observes that complicated promotions and frequent changes in the pricing of its products can be confusing to customers. The company also works towards eliminating accidental price discrepancies between shelf and counter prices in order to ensure that the company’s prices are both accurate and simple. Tesco has initiated a plan to improve its information technology systems in order to simply promotions and have an accurate pricing system. Tesco has a loyalty scheme that rewards its more than 40 million reward card holders for shopping in the company’s stores. Even as the company expands its reward scheme to attract even more clients to shop in Tesco, the company recognizes that the only way they are going to convince more clients to subscribe to the company’s loyalty scheme is to protect the data and privacy of its clients. As parts of its CSR to its clients, Tesco has outlined four commitments to its clients the first of which is to continue listening to the suggestions and complaints of customers and thereafter act appropriately to address the customers’ concerns. Tesco is also committed to providing honest and clear labelling in order to boost customer confidence that what they read on the label is precisely what is contained in the pack. Tesco is committed to ensuring that the promotions in its branches are genuine and that the promotional prices on the shelves are accurate and finally, the company is dedicated to ensuring that it applies the same strict standards of protecting customer’s data in all its branches. Tesco’s Working Conditions and Remunerations Tesco’s human rights policy outlines some of the working conditions that an employee can expect to find in the organization. For instance, the company states that it is committed to treating all employees fairly, paying fair wages that reflect local conditions and markets, always considering the national minimum wage when determining wages, giving their employees the freedom of association, and ensuring that employees never have to work for excessive hours. Despite these commitments, several reports have emerged of Tesco exploiting small scale traders and women workers particularly in their branches that operate in poor countries. The women have not only complained of working under poor and hazardous conditions but have also reported being paid as low as £32 per fortnight, which is barely sufficient to take care of basic needs. As observed by Uni Global (2009) investigations into Tesco’s operations in the US have also revealed that the company’s part-time policy and low wages make the organization an undesirable employer. Tesco has also been accused to not providing health insurance to all its employees, and rejecting employees request to join unions in certain countries. Tesco’s Green Campaign Tesco cares for the environment by adopting operational measures that increase the company’s resource efficiency while reducing carbon emissions. Tesco has set challenging targets for itself with regards to reducing its carbon emissions in its operations, in the company’s products, and by assisting its customers to also cut back on carbon emissions. Apart from reducing carbon emissions, the company also protects the environment by adopting better resource management procedures. Tesco measures its water consumption in order to look for ways to cut down on water consumption and has reformed its packaging design in order to avoid using more packaging material than is required. The company has also invested in recycling and has programs that encourage the communities in which they operate to embrace the culture of reusing and recycling. Since 2006, Tesco has been measuring its carbon emissions in order to know the areas of its operations that emit the most direct emissions (Tesco 2014). Some of the areas that are responsible for Tesco’s carbon footprint include its refrigeration system, electricity usage, and transport network. Tesco has increased its investment in energy saving devices as its way or reducing electric consumption and therefore reducing its carbon footprint from grid electricity production. Tesco also continues in its plans to reduce refrigerant emissions in all its stores by increasing its use of natural refrigeration methods. In order to reduce Tesco’s carbon emissions from its distribution network, the company has adjusted its loading formula by using fuller pallets and cages, fuller containers and trucks. The company also tries to reduce the distance that it has to transport its goods. Tesco’s green campaign engages is several beneficial charitable activities such as the Together-for-Tress charitable activity that aims to save rainforests located in different parts of the world. Logging and conversion of forest land to agricultural activities has been attributed to the disappearance of the natural habitat of several animals such as the Sumatran tiger, clouded leopard, chimpanzees, rhinoceros hornbills and sun bears. Tesco encourages its clients to join it in this campaign by donating green club-card points which the company in turn donates to the company as finances. Despite the numerous challenges facing Tesco’s CSR agenda, the company appears to have scored considerable success in its efforts to make its CSR initiatives to work at different levels within the organization and in a range of markets where Tesco operates. Tesco has community champions in a number of countries who work in conjunction with local services, charities and schools to support the causes that are important to the Tesco’s local clients. As a way of increasing customers’ awareness of Tesco’s environmental tasks, the company has appointed green energy champions in a number of markets where its stores operate. As has been discussed in the paper, Tesco has initiated several programs that enable it to efficiently serve the needs of both its employees and customers. Tesco releases regular CSR reports which comprehensively outline Tesco’s record and performance in its efforts to satisfy its CSR community targets. Even with the numerous gains that Tesco has achieved with regards to its CSR goals, more still needs to be done to improve Tesco’s CRS performance. References Uni Global, 2009, Tesco’s Employment Practices in the USA: a Uni Global Union Country Report, accessed 9 April 2014, < http://laborcenter.berkeley.edu/laborlaw/tesco09.pdf> Purcell, J. 2003, Understanding the People and Performance Link: Unlocking the Black Box, CIPD Publishing, London. Tesco 2003 Tesco for Thais Foundation, accessed 9 April 2014, Tesco 2011, Corporate Social Responsibility 2011 accessed 9 April 2014, Tesco 2014, Corporate Social Responsibility: Climate Change, accessed 9 April 2014 < http://www.tesco.ie/corporate-responsibility/environment/> Tesco 2014, Creating Opportunities, accessed 8 April 2014 Williams, O. 2013, Corporate Social Responsibility; the role of Business in Sustainable Development Routledge, New York Read More