Corporate Social Responsibilities

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ABSTRACT

1. INTRODUCTION

Corporate social responsibility (CSR) involves with differentiating right from wrong and doing right (Scott, 2007). CSR is the compulsion to make choice and take actions that will contribute toward the wellbeing, interest, and benefits of the society as well as the company.

1.1 Problem of CSR

CRS does not act like law which require people to follow. In contrast, it covers wide range of issues and many of which are unclear with respect to right and wrong (Frankental, 2001). As CSR is a self-interest practice, thus it is difficult to control the use of CSR because different companies which have different beliefs about which actions improve the welfare and benefits of the society (Luck, 2006). Companies can find themselves in difficult situations where they do not know how to act or what to do.

In recent years, CRS is the key issue in all business sectors, including retailing industry. It is rather controversial to discuss whether supermarkets like Waitrose and Tesco should focus on driving toward or go beyond the field of strategic management. In countries with a dynamic market economy like the UK and the US, it is widely agreed that firms should not only concentrate on pursuing strategies that make economic profitability, but they must also have certain social responsibilities that must be fulfilled as well (Enquist et al., 2006). However, the agreement for firms to pursue both profitability and social responsibility and this should be the end of the discussion. Opinion about the issue, however, differs more or less with regard to the importance of profitability and social responsibility (Downey, 2004). Some people in a society look at the view of profitability as the most important purpose for economic organisations and that only social responsibility of companies is to achieve and pursue profitability within the boundary of law.

Tesco is the UK leading supermarket with largest market share in retailing industry. As a face of capitalism, Tesco has been accused, criticised and involved in many social responsibility issues. According to the British Broadcasting Corporation (BBC, 2007), with substantial evidences, Tesco was revealed to make huge profits at the expense of farmers, communities and the environment. It is also abusing the power that results from its huge market share.

In Tesco’s CSR report (BBC, 2007), Tesco was exposed to fail in supporting the UK farmers. In 2002, at the height of the UK apple season it was disclosed that less than half of apples on Tesco shelves were UK sourced. This practice is obviously contrasted with the Supermarket Code of Practice, which was meant to redress the balance between the biggest supermarkets and their suppliers. The big four supermarkets, including Tesco, were still using the same unfair trading practices that the Code was meant to stop.

In response to such claim, Tesco states: “We have a long-standing commitment to source as much UK produce as possible” (Tesco, 2007).

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