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CSR Practices and Global Expansion

Executive Summary of CSR Practices and Global Expansion

Woolworths group limited is an Australian Company established in the year 1924. It is one of the leading companies that operate grocery and retail businesses in Australia and New Zealand. This report was done to analyze the corporate social responsibility and ethical practices by Woolworths Company. Furthermore, the aim of this report was to analyze the macro environment of United States of America that have been chosen as a nation to expand the company’s operations. The report consisted of political, legal, economic, and socio-cultural factors affecting the businesses in the USA. Besides, it found that it is dedicated to the protection of human rights, not just with regards to its own workers but also for workforces in its supply chain. Furthermore, it can be inferred that it has a stable political environment due to which it is a great destination of FDI (foreign direct investment).

Contents

Executive Summary.

Introduction.

Company Background.

Discussion of the Company's Ethics and Corporate Social Responsibility (CSR).

3.1. Review of Company Ethics.

3.2. Review of Company CSR..

Macro Environment Analysis.

4.1. Introduction to Chosen Country.

4.2. Political Environment Analysis.

4.3. Legal Environment Analysis.

4.4. Economic Environment Analysis.

4.5. Socio-Cultural Environment Analysis.

Recommendations.

Conclusion.

References.

1. Introduction to CSR Practices and Global Expansion

Today, more and more organizations are of the view that they need to become socially responsible to stay applicable, competitive, and energetic in the rapidly changing corporate scenario. Moreover, businesses are more concerned for adopting CSR (corporate social responsibility) practices to position themselves in the minds of public as a business who act for the welfare of the community at large (Besiou & Van Wassenhove, 2015). It is a fact that there has been a concept of the global value chain that has become dominant for modern companies. It is due to the reason that the divisions of value chains across the nationwide boundaries facilitate a company to get benefits required to maintain a competitive position in the industry (Ravenhill, 2014). This report is going to discuss the practices followed by Woolworths Group Limited in regard to corporate social responsibility and ethical practices. Furthermore, it entails the justification of whether the CSR goals have been attained by the company or not. Additionally, it discusses the macro environment analysis of the country names as the United States of America wherein Woolworths is going to expand its operations and value chains. The US is one of the sturdiest markets over the globe to provide distant businesses. Further, it is the home to numerous bright minds and business links in the world and it operates at the forefront of technical progressions.

2. Company Background of CSR Practices and Global Expansion

Woolworths group limited is an Australian Company established in the year 1924. It is one of the leading companies that operate grocery and retail businesses in Australia and New Zealand. Further, it is a company that is attentive about its environment in which it operates surrounding marketing management. It believes that its people are responsible for making it one of Australia's strongest retail groups by their innovative and efficient ideas. It is having 28 million clients locally for whom it creates a world-class experience while serving them. Woolworths not just focus on the client base and fascinating them to their business but also are engaged in comprehending their internal and external environment to prepare them in regards to ever-changing business requirements. Besides, this company is needed to perform accordingly to such forces to support themselves against the intense competition and improve the notion of value for its clients (Woolworths group, 2020).

3. Discussion of the Company's Ethics and Corporate Social Responsibility (CSR)

3.1. Review of Company Ethics

Business ethics are related to undesirable and good or correct and wrong practices that exist within the corporate scenario. Besides that, these offer standards for decision-making and conduct for the principle of management and stakeholder (Michaelson et al., 2014). They are also known to be corporate ethics and are the form of practical ethics that studies the ethical and right philosophies and difficulties that arise in a business scenario. Business ethics relates to all facets of business behavior on part of both entities and the complete organization (Eisenbeiss, Van Knippenberg & Fahrbach, 2015).

Woolworths Company is dedicated to the protection of human rights, not just with regards to its own workers but also for workforces in its supply chain. Corporate governance is fundamental to the company strategy to create sustained growth and increasing long-run shareholder value. It focuses more on the mental health of its people and aims to develop a culture wherein psychological safety appears as just as essential as physical security. This company believes in getting its client’s trust by performing responsibly and acting the correct thing for its people, its customers, and its society. Furthermore, it has made its separate ethical sourcing policy also that covers inclusive standards on anti-corruption, labor privileges, ecological compliance, and just working conditions. This policy eventually applies to all the suppliers irrespective of where they function over the globe (Woolworths group, 2019).

3.2. Review of Company CSR

Corporate social responsibility has always been about doing the correct things at Woolworths Company (Lins, Servaes & Tamayo, 2017). Moreover, it has made a strategy in regards to CSR practices that recognize corporate responsibility and sustainability objectives and goals that the company aims to implement by year-end 2020. In general, the strategy is built upon a framework of the planet, prosperity, and people that are consisting of following commitments.

People: The goals in this regards are:

  • Remove the salary wage gap between female and male workers of identical positions at all levels of business.
  • Endeavoring for gender fairness by steering a minimum of 40 % of senior management and executive positions to be detained by women.
  • Implementation of diversity by augmenting the number of aboriginal members.

Planet: The goals in this regards are:

  • To work towards nil food waste going to landfill
  • To reduce the company's carbon emission to 10 % below 2015 levels.

Prosperity: The goals in this regards are:

  • To inspire clients to consume all of the company's products in a sustained manner.
  • To invest 1% of three years rolling average of the company's BBIT (earnings before interest and tax) in the social programs and partnerships.
  • To attain a topmost quartile rank in how the company involves justly and rightfully with its suppliers (Woolworths group, 2020).

The past contributions of Woolworths Company in respect of CSR practices suggested that the company in 2019 has implemented numerous initiatives to refine the working environment to retain and appeal high performing women. Furthermore, in 2018, there have been training sessions designed to assist leaders establish positive and inclusive behavior to really influence the diversity in their teams to drive corporate growth via higher engagement, invention, and more efficiency. Also, it attained its commitment to hiring nearly 1600 novel aboriginal community members in 2018. As far as the year 2019 achievements are concerned, Woolworths Company is gender-balanced with 50 percent women. Further, the salary wage gap between the genders at a similar position declined to 0.41 percent. It was rewarded with gold tier employer status in the Australian workplace equality index for LGBTI inclusion. It has reduced its carbon emissions by 18 % below t the 2015 levels (Woolworths group, 2019).

4. Macro Environment Analysis

4.1. Introduction to Chosen Country

The United States of America (USA) has the largest economy in the world that means the companies persistent enough to develop to the US have the potential to reach novel clients, expand risks, leverage assets, and possibly increase profits. The USA is the globe's third-largest country in size and nearly the third largest in regards to population. It contributed immensely to the founding and development of institutions like the World Bank, IMF (international monetary fund), and the United Nations. Further, it is an extremely developed nation with a great status for its infrastructural and technical intelligence (Nye Jr, 2019).

4.2. Political Environment Analysis

The political factors refer to those linked with the rules and guidelines of the government that may positively or negatively influence the operations of a business. They consist of current legislation, taxation, political stability, and so on (Artman & Cherniavska, 2020). The US is the second-largest democracy in the world and has a robust democratic setup. The political environment of the US is stable even though there have been certain challenges recently. It is a great destination for FDI (foreign direct investment) due to the presence of a stable political environment, technicalities, and developed infrastructure (Boxell, 2020). This is an appealing thing for Woolworths Company to expand itself into the United States.

4.3. Legal Environment Analysis

Every state in the US possesses its own government structure and a legal scheme. Moreover, the nation upholds identical treatment of residents and outsiders. It provides a robust legal system to protect the IP (intellectual property) rights. It can be said that pressure from outside legal effects may directly result in monetary losses when courts find Woolworths guilty of offense at a certain point irrespective of whether such incidences emerge accidentally. In the United States, recent legal pressure about the impact of grocery retailer’s influence on deforestation matters may lead to lawsuits and compensation fees, as commercial farming activity is responsible for about 70 percent of tropical deforestation during 21st-century first decade. Therefore, if Woolworths Group does not proactively address developing legal matters, it may face legal action that is also accountable to thrive in undesirable political and communal pressures (Kwapisz, 2019).

4.4. Economic Environment Analysis

In the year, the nation's gross domestic product (GDP) was $ 19012.68 bn, however; due to the ongoing pandemic COVID-19, it is expected to decline by 8 percent and accounted for $ 17491.66 bn in the year 2020. Furthermore, the unemployment rate of the USA was 3.682 percent of the entire workforce in 2019 that is also expected to increase by 64.46 percent in 2020. Moreover, it is noteworthy that the inflation rate in the country as per IMF has been declined to 1.8 percent in 2019. Further, it is expected that the inflation rate will be decreased by 0.6% in 2020 and enhance to 2.2 percent in 2021. Additionally, the nation faces augmenting inequalities and traditional infrastructure that results in a slow down of its GDP rate (Santander, 2020). Further, the US-China trade war also appears to affect investors and the nation as a whole (Hongzhou, 2020). However, there is no doubt to say that the nation is an economic superpower and global leader. The implications of such an economic environment on the grocery retailers relate to pricing deflation tendencies among some kinds of food and its ingredients.

4.5. Socio-Cultural Environment Analysis

The USA is a culturally and ethnically diverse nation as an outcome of large-scale migration from numerous diverse nations, its workforce diversity, its aged population through its past (Ferreira et al., 2019). Furthermore, the education system and the health care system of the US are one of the finest over the globe. There are higher values of the nation’s educational system that can be seen by its outstanding technical schools, and the universities that offer a treasure of educational talent (Warren, 2018). In this nation, people are usually health conscious but in spite of this fact, fast-food culture has contributed to obesity and other diseases in the nation (Rasmussen, 2019). The current population of the USA is 331 million people and that is ever-increasing (Jones, 2020). The social movement groups may also interfere with the Woolworth’s ability to self-direct its brand image and product offerings.

5. Recommendations on CSR Practices and Global Expansion

On the basis of a review of Woolworth's CSR and macro environment analysis of the United States, there are certain recommendations for the company which is illustrated below:

  • In regards to waste management, the company must clearly report food waste surrounding the entire food system in their waste decrease struggles.
  • It must assist healthy and supportable diets by dropping production and consumption of unrestricted foods, meat, and other elements with high social and ecological influences.
  • It must certify a range of negligibly processed nourishing foods is extensively available.
  • It is suggested to the company enhance its partnerships to attain the goal of zero-waste and zero-emission.
  • It must adopt the sustainable packaging policy by reusing and strives for more recyclable packaging.
  • Furthermore, it must expand into the United States of America but taken into consideration the costs and resources needed to enlarge the operations. Since it may a costly thing thus it is necessary for Woolworths to make projections so that to support expansion.
  • It is suggested that it must understand and know properly all the laws and regulations to conduct business in the United States.
  • Further, it is recommended that the company must find the right market in the US to expand as per the competitive landscape, tax environment, targeted clients, and so on.

6. Conclusion on CSR Practices and Global Expansion

 From the above report on the CSR practices of Woolworths and macro environment analysis of the USA for its expansion, it can be concluded that the company has made its separate ethical sourcing policy also that covers inclusive standards on anti-corruption, labor privileges, ecological compliance, and just working conditions. Moreover, it is dedicated to the protection of human rights, not just with regards to its own workers but also for workforces in its supply chain. Furthermore, it can be inferred that it has a stable political environment due to which it is a great destination of FDI (foreign direct investment). Besides, there is no doubt to say that the nation is an economic superpower and global leader. The education system and the health care system of the US are one of the finest over the globe.

References for CSR Practices and Global Expansion

Artman, M., & Cherniavska, T. (2020). The key factors affecting the polish investment attractiveness for foreign investors. VUZF Review5(2), 11-21.

Besiou, M., & Van Wassenhove, L. N. (2015). Addressing the challenge of modeling for decision‐making in socially responsible operations. Production and Operations Management24(9), 1390-1401.

Boxell, L. (2020). Demographic change and political polarization in the United States. Economics Letters, 109187.

Eisenbeiss, S. A., Van Knippenberg, D., & Fahrbach, C. M. (2015). Doing well by doing good? Analyzing the relationship between CEO ethical leadership and firm performance. Journal of Business Ethics128(3), 635-651.

Ferreira, L. M., Carosso, G. A., Duran, N. M., Bohorquez-Massud, S. V., Vaca-Diez, G., Rivera-Betancourt, L. I., ... & Auza, L. G. (2019). Effective participatory science education in a diverse Latin American population. Palgrave Communications5(1), 1-18.

Hongzhou, Z. (2020). The US-China Trade War: Is Food China's Most Powerful Weapon?. Asia Policy27(3), 59-86.

Jones, B. (2020). British and US government and politics compared. In British politics today. Manchester University Press.

Kwapisz, A. (2019). Do government and legal barriers impede entrepreneurship in the US? An exploratory study of perceived vs. actual barriers. Journal of Business Venturing Insights11, e00114.

Lins, K. V., Servaes, H., & Tamayo, A. (2017). Social capital, trust, and firm performance: The value of corporate social responsibility during the financial crisis. The Journal of Finance72(4), 1785-1824.

Michaelson, C., Pratt, M. G., Grant, A. M., & Dunn, C. P. (2014). Meaningful work: Connecting business ethics and organization studies. Journal of Business Ethics121(1), 77-90.

Nye Jr, J. S. (2019). The rise and fall of American hegemony from Wilson to Trump. International Affairs95(1), 63-80.

Rasmussen, N. (2019). Downsizing obesity: On Ancel Keys, the origins of BMI, and the neglect of excess weight as a health hazard in the United States from the 1950s to 1970s. Journal of the History of the Behavioral Sciences55(4), 299-318.

Ravenhill, J. (2014). Global value chains and development. Review of International Political Economy21(1), 264-274.

Santander (2020). United States: Economic and political outline. Retrieved from https://santandertrade.com/en/portal/analyse-markets/united-states/economic-political-outline

Warren, L. L. (2018). The Governance of Public Education in the United States of America. Journal of Power, Politics & Governance6(1), 1-6.

Woolworths group (2019). Sustainability report. Retrieved from https://www.woolworthsgroup.com.au/icms_docs/195583_2019-sustainability-report.pdf

Woolworths group (2020). About us. Retrieved from https://www.woolworthsgroup.com.au/page/about-us/

Woolworths group (2020). Corporate responsibility strategy. Retrieved from http://crs.woolworthsgroup.com.au/

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