Case study, Corporate Social responsibility case study, Tesco's Corporate Social Responsibility Initiatives

 

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Tesco and its Competitors Cont...

All said and done, the major issue is their charitable contributions to local and national organisations. Although all the retailers are involved in CSR, Tesco has an edge over others by its vast contributions to community projects and other initiatives. The contribution for community plans and sales revenues are highly correlated. But with the market share, the correlation is not that high. However, compared with its competitors, Tesco's market share has increased significantly, giving it a competitive advantage over others.Among the competitive advantages given by Justin Keeble²¹, Tesco got the following CSRbenefits: Reputationmanagement and financial performance.Hence, Tesco's CSRinitiatives have improved competitiveness, market position and profitability

Tesco's community plans and KPIs are unique to each store and region. In each country,where it operates, Tesco has launched unique community projects, based on local needs but within the company policies. As Mark Palmer put it, "...in international markets and emerging markets in particular, Tesco embarked on a public relation campaign that would attempt to influence important regulatory decisions in their favour. In marked contrast to the early phase of development, Tesco noticeably changed by becoming proactive in enhancing their credibility and reputation in newmarkets with national and local governments as well as providing new opportunities for local suppliers to export produce."22In principle, Tesco believed that a competitive advantage rests more on the outcomes of learning to improve local merchandising methods, systems and processes than simply on cost advantage in the distribution of standardised goods. Philip Clarke, international director, Tesco (2006) says, "We have taken a significant step forward in strengthening our approach to corporate responsibility throughout our international businesses....

Our approach varies by country but there are broad themes, which are important globally. For example, the expectation that we will create jobs, treat our suppliers fairly, reduce our impact on the environment and support good causes. Our international corporate responsibility KPIs demonstrate that we are committed to monitoring our impact and improving our performance – in each of the countries we operate in."²³ In all its locations, Tesco tries positive social impact on Society. Its CSR initiatives are from both local needs and the company's policies.

Conclusion

Through its commitment towards society, Tesco has ensured thatCSR is an integral element of its core business. The underlying argument here is that Tesco believes that long-termeconomic viability is in the interests of all stakeholders and that by integrating CSR into its businesses, it will be better placed to provide long-term growth and financial security for those stakeholders and also to maintain and enhance its market position. Few experts opine that CSR has benefited Tesco significantly. At the operational level also, business imperatives seem to be the drivers of CSR. Thus, while many of the environmental initiatives addressed in the CSR reports are designed to reduce energy use and waste generation. It also reduced costs. In a similar vein, social issues focussing upon good working environment conditions, health and safety at work and training and management development promoted stability, security and efficiency in the workforce.

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21]Justin Keeble, "Capitalizing on the Competitive Advantages Afforded by CSR", Business and the Environment, Aspen Publishers, Vol.15, No.1, 2004
22]Mark Palmer, "Lessons learned from the world's best retailers", International Journal of Retail Distribution Management, Vol. 33 No. 1, pp. 23-48, 2005
23]"Tesco Corporate responsibility review 2006", http://www.investis.com/tesco/ar/pdfs/Tesco_CRR_2006_Full_1.pdf

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