Woolworths Australia CSR Factors

Question:

Explain Woolworths Australia CSR Factors.

Answer:

The Woolworths chains of stores in Australia have been committed to retail business since establishment. The organization generates the profits based on the good and services they offer to their customers. The profit created by the company depends on the sales recorded over the specified period in the accounting strategies. It is essential to note that the economic responsibility of the organizations in the corporate sector begins with the process of accumulating profit (Corporate Social Responsibility, 2016; Hopkins, 2006). The Woolworths retail stores in Australia have established their market coverage mechanisms through customer satisfaction measures and promotion of their activities. Corporate enterprises are required to determine their profitability before engaging in the Corporate Social Responsibility activities. The Woolworths’ administration has ensured that the process of buying and selling does not exploit the vulnerability of the customers and suppliers (Woolworths Limited, 2012). The profit generated by the organization is focused on investment, expenditure, and community support. The company has established its financial capacity as a measure of supporting their economic responsibility.

Ethical Factor

Business organizations are obligated to carry out their practices based on the moral standards and the ethical measures. The activities of the enterprises are supposed to be aligned according to the goodwill and the requirements of the community, the business, and the government (Lindgreen, Kotler, and Maon, 2010). The Woolworths’ management has ensured that the activities carried out by their stores are ethical and acceptable by the internal and external stakeholders. The organization deals with the retail activities, which is subjected to more interactions based on the variety of products the company is selling. The company has ensured that the goods are sold at reasonable prices that do not exploit the customers or paralyze the competitors in the industry. The organization has created strategies that ensure the employees are paid well based on the wages regulation standards. Woolworths’ management has provided a high level of compliance to the Consumer Laws and Regulations in Australia (Woolworths Limited, 2012). The retail activities have been based on the need to create profit and the build the capacity of the parties the business is interacting with such as the customers, the suppliers, the employees, and the government.

Discretionary Factor

The Woolworths chains of stores are guided by several philanthropic responsibilities within their locality across Australia. Corporate organizations participate necessary activities that are meant to add value to the surrounding community not because it an obligation but they feel the need to improve the society by sharing the generated profits (Nejatti and Ghasemi, 2012). The Woolworths’ management has been formulating strategies for supporting the community through campaigns, sensitization, and funding processes. The action by the organization has benefited to the members of the public and the respective systems receiving the support. The principle that the company has embraced involves the establishment of the financial capacity, adherence to legal requirements, and carrying activities based on ethical standards before engaging in community support. Several cases have emerged in the corporate sector where firms participate in support community events but fail to adhere to internal and external quality and regulatory measures (Idowu and Louche, 2011). Woolworths’ management has set actions that protect the reputation of the business by adhering to the Australian corporate regulation mechanisms. The participation in the community-based development activities has enabled the company to be part of the structural changes in the society. The companies should add value to the community that forms part of their market niche by sharing part of the profit through social interventions (Jones et al., 2009; Trong, 2012: Rigoberto, 2009).

Overview of the Plan

The Woolworths Sustainability program is a long-term commitment that the company developed to achieve primary objectives over a period of several years related to water usage, carbon emission, packaging, and waste recycling. The strategy is being executed under the Greening Retail plan, which targeted the contribution of retail outlets globally to assist in building a sustainable green environment (Woolworths Limited, 2012). The Greening Retail Plan is an international measure that requires the retail stores to ensure that their operations, market transformation, and the supply chain adhere to creating a sustainable environment irrespective of their capital of exploitation and location (Wendy, 2009). The operational focus ensures that the stores design measures according to their structure that will lead to energy being saved. The approach was mainly designed for the grocery chains as well as the food outlets. The consumer transformation requirement called for the setting up of avenues that will incorporate the customers when creating the market new approaches. Such measures need research and development activities, which is aimed at developing products that are safe for the market and sustainable for the sector (Piacentini et al., 2000; Preston and Bailey, 2003). The supply chain mechanisms called the retail outlets to consider their transportation activities are aligned to environmental conservation measures.

Objectives and Aims

The Woolworths’ Greening Retail was created according to the internal and external structures of the Australian corporate sector. The plan was based on four key areas including the climate change, water, packaging, and waste. The program was started to generate effective change within the community by developing a sustainable environment (Woolworths Limited, 2012). The objectives of the company were scaled down to six major undertakings as outlined below.

  1. To reduce the carbon emissions by 40% by 2016 a level that will be similar to the recorded percentage in the year 2006
  2. To ensure that the carbon emission levels are reduced through the transport mechanisms that will ensure that each carton carried by Woolworths trucks contributes to 25% carbon emission reductions by 2012
  • To ensure that the company fleet contributes to 30% carbon emissions reductions by 2010
  1. To reduce the water the level of water usage by around 200 million liters each year
  2. To contribute to the elimination of food waste to landfill by 2016
  3. To carry out the retail sourcing activities based on ethical and sustainable measures

Strategies and Methods of Implementation

The company used several methods to ensure that the activities are aligned to achieve the Greening Retail objectives under their Sustainable Program. The organizations restructured the internal factors to ensure total compliance to regulation and authority (Wendy, 2009). Whenever agencies comply to set measures, then a safe internal environment for executing other mechanisms is created. The Woolworths administration ensured that the suppliers were appraised based on their production methods and culture. The organization changed the energy methods used within the shop units from carbon-based to more clean forms such as electricity and natural gas. The objective of the company was to ensure that the processes within the store no longer increase carbon emission. The company focused on the transportation patterns across the units. The trucks were to be loaded to ensure that they maximize on each trip. The packaging process shifted to biodegradable materials to reduce the level of carbon in the environment from the production activities. The retail shop encouraged recycling operations whenever non-biodegradable packaging was involved. The standard of water usage was based on the strict management that encouraged safety and efficiency (Woolworths Limited, 2012). The organization has sensitized farmers to use water management measures during production to reduce the level of consumption. The innovated stores have been fitted with air conditioning features and refrigeration mechanisms.

Evaluation and Sustainability

The organization has managed to bring a difference since the start of the implementation of the Sustainability Greening Retail Strategy. The Woolworths administration has been able to control the supply of the products from the manufacturer base on their commitment to the sustainable environment in Australia. The collaboration with farmers has seen a change in the methods of production. Farmers have resorted to techniques that preserve water to produce the sound, which is sold at the Woolworths grocery unit. The controlled transport schedule has seen the business collaborating with companies that offer delivery services to reduce the engagement of trucks. Moreover, the organizations have reduced the number of the fleet for the staff through sharing that has encouraged lower levels of the anticipated carbon emission (Woolworths Limited, 2012). The quality and assurance departments for the chain stores have been committed to ensuring that the company activities are based on the corporate regulations of the government of Australia. The selling of safe and quality products to the customer has created trust for market sustainability. The company has engaged the community in programs that encourage safety. The employees’ satisfaction and motivation has improved over the years. The commitment to developing the expertise of the workers has developed the ethical standards as well as the level of the customer experience (Schrag, 2011; Reilly and Peter, 2000).

Challenges and Possible Improvements

The implementation of the sustainability program has been subjected to several shortcomings. The business cost and expenditure has increased over the years. The process of community engagement involves the provision of essential training and sensitization some of which are expensive to offer especially to farmers. The participation of the organization in the carbon emission reduction processes has affected the efficiency of the organization regarding timely deliveries. The time factor is an essential aspect of the retailing business and it determines the customer experiences and store management ability. The numerous activities that are incorporated into the strategy are a potential source of incompetence for the business since they are to focus on several objectives (Wendy, 2009). However, the Woolworths management can form a separate department that will assist in the administration of the Corporate Social Responsibility affairs. Setting a fixed percentage of the profit generated for CSR projects will help in producing a constant amount to fund the intervention without paralyzing the operations of the shops. The management should consider implementing one strategy at a time to avoid straining their budget and concentrate on quality and sustainability of the programs.

PART 3: Integration and Sustainability of the Woolworths Australia CSR Strategy

The essential part of a CSR strategy in an organization is the sustainability and integration of the program to the plans of the firm. The community may be in need of a special support, but the company may find it difficult to align the intervention to the structure of the organization (Filho, 2009). For example, it is hard for an alcohol manufacturing company to assist the community affected by youthful indulgence in excessive drinking. The Greening Retailing Strategy that is being implemented as a CSR approach for the Woolworths chains of stores is directly linked to the objectives of the organization. Most of the activities being carried out regarding the retailing business contribute to the prevalence of the shortcomings the strategy is geared to solve. The project is essential for the organization both for the short-term and long-term targets in the corporate sector (Wendy, 2009). The program is not limited to Woolworths, but it is global agenda to be embraced by all retail organizations. The decision to incorporate the CSR interventions in the objectives of the business was essential for the competitive advantage in the Australian market. The process of integrating the project into the activities of the firm was consultative and involved the contribution of the stakeholders.

The implementation of the carbon emission standards was based on the Carbon Blueprints. The measures called for a critical analysis of the functions of the business. The hiring of the external consultants assisted in establishing the renovations and changes that the company has to take. The interventions to be carried out depended on the comparison between the owned assets and the indirect assets since they define the supply chain of the retail outlets. The evaluation led to an establishment of the effects from the refrigeration activities. The organization, therefore, found it necessary to alter the cooling activities, transport routine, lighting systems, and air conditioning techniques (Wendy, 2009). The level of water usage through controlled production of the farm outputs was based on the rate of billing costs. The firm also focused on production and selling of good that are safe for consumption as well as environmentally friendly. The focus of the analysis was to set a baseline that will define the process of the achievement of the objectives of the master strategy. The comparison of the annual levels and data assisted in setting the yearly targets for carbon emissions, water preservation, and market and supply sustainability mechanisms.

The viability of the projects was guaranteed by establishing policies that will guide the business culture in the subsequent years. The government of Australia also contributed to the setting of a culture favorable for the implementation of the objectives through the business and competition regulations such as the commercial laws. The interventions were spread over several years to ensure that the goals are attained entirely. Through the websites, publications, workshops, and community events the organizations defined the mechanisms of sensitization. The sustainability of supply and purchasing footprints was created through training and contracts that represent the environmentally friendly production according to the regulations in Australia. Retailers are responsible for the choices they make regarding the products that are sold in their stores (Wendy, 2009). Therefore, the organization ensured that the suppliers adhere to the consumer standards and quality requirements before engaging in supply contracts. The nature of the interventions that were set forth concerned the ingredients of the products, pollution effects during production, and sourcing factors. The funding of each intervention relied on the profit generated in the business since it was necessary to consider the strain on the budget and costs.
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