Corporate Performance of UK Retail Firms - Research Proposal Example

Corporate Social Responsibility Proposed “Importance of corporate social responsibility strategies in developing corporate performance of UKretail firms” In the current research study, an in depth analysis on corporate social responsibility strategies will be done on the UK based retail industry. Moreover, this study will be highlighting the importance of the CSR strategies in improving financial performance of “Big Four” firms like Tesco, ASDA, Sainsbury and Morrisons. This study will be leading to a comparative report where the CSR policies of such firms are contrasted with financial performance. 2. Background or Rationale of the Project Bowrin (2013) stated that in the globalised world, firms are facing intense challenge in terms of achieving expected growth and sustainability. Such challenges are also affecting the UK based retail firms. Retailers like the Tesco, ASDA, Sainsbury, Morrisons, Walmart and many other firms are controlling the retail industry of the UK. Such firms are operating globally and having vast range of the stakeholders. Firms are responsible for the welfare of the customers, employees, investors, society members, unions and governments. Retailers are influencing the UK economy highly as they are offering huge employment, revenue generation, foreign direct investment and export of the products. Therefore, organisations are using innovative strategies in order to maintain their responsibility towards their global stakeholders (Cassells and Lewis, 2011). Corporate Social Responsibility (CSR) is one of the most emerging strategies that are adopted by the organisations in order to achieve growth and sustainability. These strategies are incorporating operational and organisational activities along with the environmental, social, economic and ethical factors. It has been observed that the global firms are concerned for developing corporate citizenship image. Mainly, CSR can be referred as the value added service that increases welfare of stakeholders. Firms are developing strategies for increasing welfare of their stakeholders (BubnaLitic, 2009). UK retail market is composed of “big four” firms named Tesco, ASDA, Sainsbury and Morrisons. Tesco is one of the leading retailers in the world and UK based retail industry having almost 28% of the market share. On the other hand, other are having ASDA (17%), Sainsbury (16.4%), Morrisons (10.9%), The Co-operative (6%), Waitrose (5.1%), ALDI (5.3%), LIDL (3.7%), and Iceland (2.1%). All the firm are also operating globally and having diversified stakeholders. The industry faces huge challenge from Tesco, ASDA, Sainsbury, Morrison and many other national and international retail firms, as they are limiting its growth and sustainability (Tesco plc, 2015). Thus, CSR strategies are helping them in gaining stakeholders attraction and satisfaction. Tesco is using various corporate social strategies like local infrastructural development, set up educational system, training and development of employees, empowering local workforce, green environment empowering and use of renewable energy (Tesco plc, 2015). The project is going to highlight the importance of CSR strategies in developing corporate performance of the UK based retail industry. In addition, it will shed on the CSER strategies like reasonably priced and quality food products selling, trustworthy behaviour of the employees, conversion waste with proper recycle policies, use of clean technologies and women empowerment as leaders. 3. Preliminary Review of the Literature Wuellrich (2010) opined that corporate social responsibility is gaining popularity among the global businesses. These policies are helping firms in gaining more reliability and image among the stakeholders. In the current segment of the study, three major dimension of the corporate social responsibility will be shaded so that roles and responsibilities of various stakeholders and management level contrasted. Current section will be developing a critical analysis of different CSR related theories and models. 3.1. Corporate social and environmental responsibility Crane (2008) argued that global firms are having huge number of stakeholder like the equity or financial investors, management level, employees, consumers, external environment, society, government and the suppliers. Firms are facing challenges in respect of growth and sustainability. Thus, organisational management level employees are using CSR strategies in increasing welfare of stakeholders. Edoho (2008) has been observed that organisations are using strategies like carbon footprint, carbon credit, green issues, gray import, plantation and many other environmental strategies. Moreover, retailers are planning to reduce the waste from their operations and increase output level. CSER strategies of the major UK based retailers are aiming to reduce CO2 emissions from operations, logistics and marketing actions. Green house gas and CO2 are affecting the societal and cultural factors (Gill, 2012). On the other hand, Hunnicutt (2009) argued that sustainable environment development requires optimal resource utilisation. Firm have to use their internal and external resources very well so that they are able to increase their profitability and environmental welfare strategies. Many researchers stated that firms must develop strategies to safeguard future of the next generation. Heikkurinen (2010) opined that major firms are using renewable energy sources. It has been observed that socially responsible companies are using alternative and renewable energy sources like solar and wind energy, in order to increase social and environmental sustainability. Charity and community development are another social welfare strategies which helps in attracting stakeholders. Gill (2012) stated that development of schools and colleges are one of the major CSR strategies of global firms. Providing education, learning and increase of knowledge of the stakeholders and their relatives is a vital part of CSER. Such theories and concepts are leading to CSR reporting for gaining the market sustainability and profitability. Such reports are having certain difference with the conventional reports. It has been observed that firms are using the CSER reporting in order to gain more importance among the social set up. 3.2. Corporate Social Reporting: According to Kabir and Akinnusi (2012), corporate social responsibility reports deals with the typical value added strategies that are adopted in terms of increasing the welfare and conventional corporate reporting, on the other hand, it deals with the sustainability in terms of market share and profitability. Recently, it has been observed that the globalised organisations are using both the reports so that they are able to increase stakeholder’s attraction and market growth. These two reports help firms in developing the image. However, these two reporting techniques are having certain difference. Vision: Corporate Social Responsibility strategies are mainly outlining the historical data or actions. CSR reports provide insights on contribution of the firms for their society during last 1 year or 6-10 months. On the contrary, connectional corporate reporting outlines profitability and sustainability. Management outlines future oriented strategies and planning for increasing profitability. They are using strategies like waste reduction, developing supply chains, developing new markets and increasing the brand value (May, Cheney and Roper, 2007). Targets: CSR reports are outlining many opinions and beliefs of the stakeholders. Such reports are used to attract local politicians, pressure groups and media. It will help the organisation in developing business attraction among the stakeholders. However, conventional corporate reports are meeting interest entire value chain. Such report will be provided to the suppliers, operational employees, investors and end-consumers (Mamic, 2004). Business: CSR reporting is concentrated on the welfare of various stakeholders of global business. On the other hand, conventional corporate reports aim to increase sustainability and profitability of business (Milian, 2008). Management: Panwar et al. (2014) observed that CSR reports are controlled and recorded by the communications teams of various organisations. On the other hand, conventional corporate reports are developed by the operations and marketing managers of global firms. Reward: Politicians, NGO and environmental sustainability organisations are rewarding firms for the social and environmental responsibilities. CSR reports outline such remarks in terms of attracting customers (May, Cheney and Roper, 2007). On the other hand, conventional corporate reports record the rewards of various financial and government bodies. Mainly, the stock exchanges, financial analysts, banking institutions and other institutions are rewarding firms as per liquidity, dividend payout capacity and profitability. Thus, investors use the conventional information in order to make an investment (Misztal and JasiulewiczKaczmarek, 2014). Drive: CSR reports are driving safeguards for the stakeholders and other factors involved with the operational policies. In order to develop, markets firms are deriving their past CSR responsibility. Conventional corporate reports on the other hand, are driven by profitability, market share and growth (Panwar et al., 2014). 3.3. Relationship between CFP and CSR May, Cheney and Roper (2007) stated that recently globalised firms are using the CSR (corporate social responsibility) strategies in terms of developing corporate financial performance (CFP). CSR strategies are composed with various attributes like the sustainability of the firms in a competitive market, corporate accountability, societal performance, and triple bottom line impacts of such firms. There is strong relationship exists between CSP and CSR. Relation can be outlined with two different theories like slack resource theory and good management theory. According to slack resource theories, firms are responsible to maintain proper relationship with the members of society and neighbourhood. Effective employee relation and environmental sustainability strategies helps in maintaining high performance. In the long run, CSR helps in developing goodwill, reputation and marketing attractions (Misztal and JasiulewiczKaczmarek, 2014). On the other good management theory suggests that the firms must develop certain strategies for increasing the welfare of stakeholders involved. Mainly such theory will improve the financial performance of firms by developing higher relationship with stakeholders. According to Wuellrich (2010), effective relationship with stakeholders increases competitive power of the firms in globalised competitive market. Gradually rate of the revenue generation or profitability will increase. 3.4. Importance of CSR Reporting in Improving Firms Financial and Nonfinancial Performance CSER reporting strategies are proving to be one of the most advantageous policies for the global organisations. Such strategies are increasing financial and nonfinancial benefits for the firms. CSER reports are having the advantages like: Reputation organization: CSER reports are increasing the image of the organisations. People or stakeholders get the assurance of various welfare policies and impacts of the organisation on community or society (Wuellrich, 2010). Risk profile and management: Socially responsible companies are able to increase their risk taking capacities. Management of risk is easy for such CSR report profiles (Zu, 2009). Employee recruitment, motivation and retention: Socially responsible companies offer excellent workplace ambience to the employees. CSR reports outline the organisational responsibilities for the welfare of employees. Therefore, such reports are helpful enough in recruitment of skilled people is easy and motivating employees to retaining experienced one (Wuellrich, 2010). Apart from these, firms will be enjoying strong investor relations, easy capital access, integrative learning and innovation strategies, competitiveness and market location, functioning effectiveness and working license. CSR reports are used by the firms to attract global stakeholders. 4. Research Questions (Aims) and Objectives Current research will be aimed to highlight the importance of the corporate social responsibilities. The current research will be outlining the impacts of CSR on the organisational performance, profitability, revenue generation, brand image and assets value generation. In addition, the study will be outlining the capability of firms for using strategies like innovation, competitive and market positioning. Moreover, current study will stretch the out operational strategies contrasting with the role, responsibility and welfare of investors, management, natural environment, customers, employees, society and government. Moreover, the study will cite the process that outlines the positive relation with the contractors or suppliers will help the organisation in gaining more equity values. (a) Research Questions 1. How does firm’s CSR reporting policies affect their financial performance? 2. How CSR strategies are impacting the corporate performance of UK retail firms? 3. What are the major limitations of CSP or CSR and reporting adopted by UK retailers? (b) Research Objectives 1. To evaluate the corporate social reporting strategies of UK retailers. 2. To critically investigating the CSER strategies of major UK retailers in developing financial performance. 3. To recommend some innovative social and environmental strategies to attract more stakeholders and gain financial advantages. 5. Research Plan This section of the study is the most important part that signifies the planning and process of conducting the research. Research methodology or plan section explains and elucidates different educational research theories, tactics and concepts. The researcher can adopt the options in terms of outlining the importance of corporate social responsibility in developing growth and sustainability of “Big four” firms like Tesco, ASDA, Sainsbury and Morrison of the UK retail market. Research methodology section will be helping the researcher in increasing the in-depth knowledge on the research topic. Moreover, effective analysis of the collected data can be done (Panwar et al., 2014). (a) Research Design According to Sandvik (2010), research design can be defined as the process that selects relevant research structure for obtaining importance of CSR in the UK based ‘big four” retailers. Effective designing will help in collecting and selecting resources of the collection of data. The researcher will be having the options of exploratory, descriptive and explanatory research designs. In the current research, descriptive research design will be used so that best possible insight can be collected on the CSER policies of UK retail firms. Moreover, researcher can evaluate and describe the importance of such policies in increasing the profitability of the “big four” UK retailers Tesco, ASDA, Sainsbury and Morrisons. (b) Data Collection Fetaji et al. (2015) stated that data gathering methods are most crucial part of the research. Selection of the source for gathering information and facts is essential to gain an insight on the Tesco CSER policies and its importance in developing competitive advantage and growth. Data sources: Data sources can be defined as the research topic related resources, which will help in citing results and evidence for the topic. Mainly, the researcher will be having the option of primary and secondary data sources. The researcher can collect primary sources by interacting with the respondents directly. It will enable the researcher to gain most recent and non manipulated information and knowledge on the study topic. On the contrary, secondary sources are the information, which is published in books, journals, blogs, articles and websites (Sandvik, 2010). In the current study, the researcher will be selecting surveys for collecting relevant data resources. It will be providing most contemporary and relevant data rather than experiments, case studies, content analysis and historical research. In the current research, both primary and secondary data will be selected in terms of gathering best possible evidence on the impacts of the CSER policies of “big four” UK retailers. In the current study, data on CSR and financial performance are collected from the Bloomberg portal and financial reports of the companies available in their corporate websites. Data technique: The researcher can use various types of data techniques like qualitative or quantitative. In the current research, quantitative techniques will be used so that high quality can be achieved in the research. Quantitative data will outline fluctuation or change of profitability of the firms like the Tesco, ASDA, Sainsbury and Morrisons after using the CSR strategies (Fetaji et al., 2015). Sample: In the current research, sample will be six years financial data taken from the annual reports of Tesco, ASDA, Sainsbury and Morrisons. Their corporate websites are used to obtain the statistics like profitability or revenue, financial data, assets values and CSR investment. The sample is effective enough in citing relationship between CSR strategies and financial performance of the firms. (c) Data Analysis From the Bloomberg data and annual reports of Big Four firms various information like the financial accounts and ratios, revenue generation, CSR investment, management frameworks, other financial analysts reports and their recommendations, financial news of the companies, price history of stocks, equity indices, rate of bonds, foreign exchange rates and commodity exchange rates. Graphs and tables will be used to outline the details of the CSER policies of “big four” and how such policies are helping the organisation in developing financial performance statistics. Microsoft excel software will be used to frame the facts and data. Profitability test will be used with the help of correlation technique to shed the relationship between CSR investment and financial performance of the firm (Fetaji et al., 2015). (d) Limitations According to DeLuca (2011), research limitations are mainly restricting the research quality and evidence provided. In the current research, there will be certain limitations too: Budget limitations: “big four” is the leader of the UK retail sector and they are having vast numbers of stores, so, the limited educational budget will be the major restriction. Some data collection websites are requiring membership and payment which can exceed the budget of the student (Sandvik, 2010). Reliability of collected data: Respondents sometime remain casual and their untailored answers many at times prove to be irrelevant. Researcher need to collect relevant data for the justifying CSR in terms of performance of the Big four firms (Fetaji et al., 2015). Time constraints: The educational research is restricted to a limited time period limits data collection quality and quantity. Such limitations will be hampering the data collection and analysis as many potential areas can be missed out. All the companies have many branches in the UK, so, limited time will be restricting in reaching out to those areas (DeLuca, 2011). 6. Ethical Considerations Data application principles: In the current research, use or application of the data needs to follow the ethical consideration. Researcher must use data and materials collected from the retail sectors in educational purpose only. Mainly, collected resources enhance the quality of research on the CSER policies of the Tesco. The respondents must be provided with the assurance that collected response will not be used in promotional or commercial purpose. Such ethical assurance will increase the rate of response from Tesco based samples (Sandvik, 2010). The respondent’s participation in the survey: The research needs to maintain a proper participation policy. Such ethical policies emphasises more beneficiary for the participants or respondents of the CSER related survey. Respondents must be approached with a frequent recording of data response. Moreover, researcher should not make any sort of influence on them in order to collect data. Free participation will increase rate of the response (DeLuca, 2011). Respondent data Selection: Selection of the response must be done in a concealed manner. It can be done through maintaining respondent’s anonymity. Such policy helps in maintaining proper consideration for the respondents. 7. Timetable and any special resources required The following timetable will be helping in designing and conducting the research very well. Following Gantt chart will be helping in managing research activities in a synchronised manner. Research on the CSER policies will gain more quality with the help of following synchronised steps (DeLuca, 2011). Main activities of the research/ execution time in weeks First week Second week Third week Fourth week Fifth week Sixth week Seventh week Selecting the topic of the research Selection of data collection sources for the research like primary and secondary Creating one layout plan of the research Preparing the literature review Arranging the research plan aiming highest quality research data Appropriate research techniques need to be selected Collecting data like primary and secondary sources Analysis and evaluate collected data from the various predetermined sources Creating the findings statement with the help of the collected data evaluation Conclusion of study must be drawn A rough draft need to be formulated for the project Final work submission 8. 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