Strategic corporate analysis (Essay Sample)

STRATEGIC CORPORATE ANALYSIS
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Contents
TOC \o "1-3" \h \z \u Introduction PAGEREF _Toc391823382 \h 2
Background Information PAGEREF _Toc391823383 \h 2
CSR Approach PAGEREF _Toc391823384 \h 3
GKN’s CSR Initiatives PAGEREF _Toc391823385 \h 3
Tesco’s CSR Initiatives PAGEREF _Toc391823386 \h 5
Analysis of the CSR Strategies by the two Companies PAGEREF _Toc391823387 \h 6
Conclusion PAGEREF _Toc391823388 \h 8
References PAGEREF _Toc391823389 \h 9
Introduction
Corporate social responsibility is currently considered as one of the major pillars that define competitiveness and sustainability of business organizations (Blowfield & Murray, 2010). The speedy growth of CSR as a major business strategy has in fact placed a good number of multinational companies in a crisis. Specifically, issues such as disconnection between economic and financial activities, deregulation, disrespect regarding basic values, unacceptable salaries for management, fraudulent activities in accounting, questionable purchases, fraudulent bankruptcies, and irresponsible practices are common in the current business environment.
Background Information
GKN is a major global supplier for aerospace, off-highway, and automotive manufacturers (GKN PLC, 2014a). GKN supplies innovative engineering products to manufacturers of automotive, agricultural, construction, and aircraft implements. The company employs over 40,000 employees with its operations spread in over 30 countries globally (GKN PLC, 2013). The company is one of the oldest companies in the United Kingdom dating back to 1759 (GKN PLC, 2014a). The many years of operations by the company has been driven by its recognition of the interests of the communities, shareholders, employees, and customers in its strategic operations (GKN PLC, 2014b).
Tesco company was founded in 1919 (Tesco PLC, 2014b). The company initial capital was contributed by the owner Cohen who sourced the revenue from WW1 army service bonuses. The fast store by Tesco was operational by 1929 in London. Tesco is among major international grocery retail chains with operations in over 14 countries (Tesco PLC, 2014b). It is currently ranked in the third position behind Carrefour and Wal-Mart. The company opened its first supermarket in 1956 in Essex. In 1968, the company opened a superstore in West Sussex. The initial strategy by the company was to keep high inventory and sell cheap. As much as this strategy allowed the company to attract more customers, it was also a major branding instrument for the company. However, the company underwent several changes to meet the changing needs of the British customers who were now more focused on quality rather than price (Tesco PLC, 2014a). The company opted to reduce the number of stores and concentrated on its major stores that had better facilities. The company also introduced various CSR initiatives in an approach to build on its competitiveness and sustainability.
CSR Approach
The two companies have CSR initiatives that share similarities but also exhibit some divergences. The CSR approach by GKN is founded on the company’s values that have remained constant despite the numerous changes the company has faced over the many years of its operations (GKN PLC, 2014b). The company values are the major drivers of the CSR initiatives by the organization. The Approach to CSR by Tesco is rather recent as the company established a CSR committee at the onset of the 21 century as CSR become a major aspect of businesses around the world (Blowfield & Murray, 2010). Tesco’s CSR strategy is founded on the Tesco steering wheel framework that ensures CSR is part of the day-to-day activities in the organization (Tesco PLC, 2014a).
GKN’s CSR Initiatives
The CSR activities by GKN can be traced back to as early as 1820 when the company opened up a school for its employees children (GKN PLC, 2014b). This initiative was expanded in 1855 by development of more schools that provided educational services to more than 100 children. In the mid 19th century, the company was involved in offering sanitation facilities and clean water in Merthyr Tydfil and Dowlais (Bondy et al., 2008).
The company has undergone several changes in its core businesses that have resulted to its CSR initiatives expanding over the years. The company has also invested heavily in ensuring high quality is maintained in all its products, services, processes, innovations, technology, employees, and the general reputation of the firm (GKN PLC, 2013). The company believes that CSR is an important aspect of its ability to maintain high quality and meet its main objective of providing the consumers with the best products and services, protecting the investments by the shareholders, taking good care of its human capital, and maintaining the long standing values of the company (Carrigan & De Pelsmacker, 2009).
GKN has in the recent past increased its efforts in promoting community involvement in its operations. The company promotes accommodation of diversity among its workforce in all its subsidiaries around the globe. In this case, the CSR strategy by GKN is not rigid as the subsidiaries are allowed to develop CSR programs that are specific and relevant to the local communities where the operations are located (White, 2005). For instance, in the UK, GKN is majorly focused on education as its CSR initiative in the community. The company has invested heavily in promoting education through provision of business support, engineering support, placement opportunities, educational projects, and general sponsorship of educational programs. GKN India provides informal education to the underprivileged in the society. The company caters for the cost of stationary, refreshments and teaching for several projects by Pranab Kanya. In addition, GKN Mexico CSR initiatives are focused on social participation programs that target the family of its employees (Campbell & Slack, 2008). The company organizes initiatives such as beauty care, cooking, sporting, ceramics, painting, weaving, music, and drawing that are attended by the families of its staff. This program is aimed at minimising skills disparity between the company employees and their families. The company also offers the community support through donations and support for the elderly, the disabled, and homeless children (Kaenzig et al., 2011)
Tesco’s CSR Initiatives
The CSR initiatives by Tesco cover the entire supply chain of the organization and hence it is incorporated in the company’s governance framework. Specifically, the CSR initiatives cover KPIs, people, customers, suppliers, community, and the environment (Tesco PLC, 2014a). Education is a key component of Tesco’s CSR initiative. The company has formed various partnership programs that are focussed on providing education for less fortunate in the community such as "I CAN”. The company has also several programs such as computers for schools that ensure technology penetration into the society (Jones et al., 2007).
The company is also involved in various charity programs. The Tesco Charity Trust was established in 1987 that offers support for communities in the UK (Tesco PLC, 2012). The company also supports the "race for life" charity event that raises funds for cancer research. The company has developed a process that ensures it has a well thought charity event on an annual base that deals with an issue that affects both its employees and customers. For instance, in 2005, the company’s charity was focussed on providing support for the elderly in the UK through provision of services such as day care for the old people (Jones et al., 2005b). This are important initiatives that allows the company to meet its social obligation to the community by dealing with neighbourhood, disabilities, health, finance, and care issues in the community (Draper, 2006).
The environmental sustainability programs by the company are focused on environmental management processes affecting its products, wastes, resources, and emissions (Tesco PLC, 2012). The company also promotes the production and use of organic foods that have low impact on the environment. Other environmental issues that the company is involved in are green transport, transport efficiency, and animal welfare (Hughes et al., 2007). The company has also invested in water and energy projects with focus on promoting efficiency and minimal environmental impact from the operations affecting its supply chain (Jones et al., 2005b). For instance, the "wildlife choice" promotes wildlife consideration among the farmers that are suppliers of its products. The company promotes wildlife protection among its suppliers. This company believes that processes and policies that harm the environment negatively project the company in the eyes of the customer. This is root to destruction of the company, its customer base and the general sustainability of the society. Thus, environmental protection is among major concerns by the company that are aligned to its economic goals.
Analysis of the CSR Strategies by the two Companies
From the above description, it is evident that the two companies share several similarities in their CSR initiatives. Specifically, the both the companies have heavily invested in community sustainability projects such as education, charities, sponsorship, and taking care of the disadvantaged in the community. However, the approach adopted by GKN is unique with regard to community sustainability initiatives as the company employs differentiation in the initiatives to ensure the best projects that meets the needs of diverse communities are adopted by its subsidiaries.
There are also some differences in the CSR initiatives as it is evident that GKN...