Business Ethics and Corporate Social Responsibility - Case Study Example

Business Ethics and Corporate Social Responsibility Table of Contents A Brief about Alliance Boots 3 CSR Issues Faced by Alliance Boots 4 The Most Relevant Stakeholders of Alliance Boots 4 Analysis of CSR Approach of Alliance Boots 8 Analysis of the CSR Strategies Used by Alliance Boots 9 Recommendations for Future Changes 12 Reflection 14 References 16 A Brief about Alliance Boots Alliance Boots is foremost globally leading pharmacy-led healthcare and beauty-care product manufacturer and retailer group. The company introduces and offers a broad assortment of quality products to the customers worldwide. The company has been strategically focused on enhancing its performance in its two principle business segments, comprising pharmacy-led healthcare as well as beauty-care product retailing and pharmaceutical wholesaling. Observably, the company is much committed towards enhancing the health of the local communities and supporting the customers as well as the patients to feel better through working in close collaborations with pharmacists and manufacturers (Alliance Boots, n.d.). The core values of the company include trust, quality service, partnership, simplicity and entrepreneurship (Alliance Boots, n.d.). The rationale for selecting the Alliance Boots, with the purpose of gaining an insightful understanding regarding the various dimensions of Corporate Social Responsibilities (CSR) activities, is fundamentally owing to its blend of features those can be partially be related with commercial beauty-care sector and the pharmaceutical sector. Hence, the company will present unique characteristics of both the industries, through its applied CSR framework. With this vision, the discussion henceforth focuses on analysing the CSR issues faced by the company, recognising its prime stakeholders, and its corresponding CSR strategies along with assessing the company stance applying an international perspective. CSR Issues Faced by Alliance Boots The unified nature of the CSR programme practiced by Alliance Boots comprise a set of collective priorities that precisely reflect its core values, constituting partnership, simplicity, quality service, trust and entrepreneurship. Based on these standards of CSR framework, the company faces numerous CSR issues while performing its range of operational functions. One of the crucial CSR issues faced by the company in its recent endeavours was its failure to abide by the prerequisite for adopting and implementing a more reliable Group-wide approach, towards measuring, recording along with reporting its CSR performances. This particular CSR issue became apparent in the financial year 2007/2008 causing distortions in the messages that were required to be delivered comprehensively to its stakeholders (Alliance Boots, 2008). Identifiably, applying a generalised point of view, the major CSR risks faced by the company include the impact of operational regulations, transformations in consumer behaviour, increased level of business market competition, health and safety risks of the customers and increased level of costs. Moreover, the other risks faced by the company comprise gaining momentum of acquisition trends and investment risks related with currency exchange along with interest rate among others, which are likely to directly affect the interests of the internal stakeholders’ group (Alliance Boots, 2008). The Most Relevant Stakeholders of Alliance Boots The main stakeholders of Alliance Boots can be identified as shareholders, customers, suppliers, local communities, employees, socially liable investors, media, non-governmental organisations, academics and government, which are further classified as either internal or external stakeholder groups (Alliance Boots, 2008). This can be better understood with the help of the following graphical representation. Source: (Alliance Boots, 2008) In this similar context, one of the claims made by these principle stakeholders of Alliance Boots is that they desire to visualise the quality aspects in a comprehendible manner, creating pressure on the company’s applied strategies to report its CSR activities in a transparent manner. These quality aspects fundamentally include community engagement, stakeholders’ involvement along with confidence and business reputation. The company, in this regard, strongly believes that the claim of its prime stakeholders, primarily those concerning the desire to visualise the quality aspects and the role of the CSR activities, would be addressed and fulfilled through its adoption of cross-business CSR approach towards developing the above stated quality aspects (Alliance Boots, 2008). It can be apparently observed in this regard that throughout the fiscal year 2010/2011, the company continued to remain involved with its prime stakeholders and most vitally, valuing the significance of stakeholder support in correspondence to their feedbacks, in shaping its conduct of various CSR activities. In the circumstance of describing the claims of the main stakeholders belonging to Alliance Boots, observably during the year 2010/2011, the stakeholders requested the company to provide comprehensive information about various subject matters related with its operational aspects, which were supposed to be intertwined rather than being isolated presented in its CSR report. The subject matters were identified to be related with supplier verification, local level evidences on certain particular subjects like forestry stewardship and procedures of lessening CO2 emissions (Alliance Boots, n.d.). Although these claims made by its stakeholders were not disregarded by the company to gain a competitive edge through effective CSR reporting practices, Alliance Boots can be observed as largely inclined towards satisfying customers (as an external stakeholder group), employees (as an internal stakeholder group) and shareholders (also as an internal stakeholder group). In this similar concern, the company reviewed shareholder communications in order to confirm that they reflect its purpose, mission and organisational values. Moreover, relating to the customers, the company worked in close collaborations with leading charity organisations with the purpose of raising awareness amid its customers, concerning their chief health concerns. It is worth mentioning that apart from these, the company introduced a set of effective Codes of Conduct for its employees so that they are offered with their deserved opportunities and treated fairly, based on the equality principles. The company strongly believed that by conducting these activities, it could be able to accomplish its predetermined business targets and impose extensive impacts on developing the health of the individuals at large (Alliance Boots, 2007). It can therefore be affirmed that the operational activities of the company have been favourably affected by working collaboratively with its main stakeholders. This can be justified with reference to the fact that working with the prime stakeholders in a collaborative manner supported the company towards addressing various critical issues and subsequently, influencing its development of CSR activities. In this regard, the critical issues can be apparently observed as youth unemployment, climate change and gaining momentum of pressure, specifically on natural resources (The Boots Company PLC, n.d.). Based upon the nature, claim, roles of the principle stakeholders and their influence on Alliance Boots, various sorts of frameworks or theories related to the dimension of CSR can be found applicable to the context. These theoretical dimensions may include urgency, legitimacy and power approach. Theoretically, legitimacy approach implies the notion that the activities performed by a stakeholder or a group of stakeholders are most appropriate when they reside within the accepted norms and relevant values of the companies. Contextually, power approach denotes the capability of the stakeholders towards producing a desired effect, while urgency approach signifies the extent to which the claim of the stakeholders’ demand instant attention from the company (Cooper, 2004). After acquiring a brief idea about various stakeholder classification approaches or theories, it becomes apparent that the principle stakeholders of Alliance Boots are more suitably included in the category of legitimacy framework. It is fundamentally owing to the reason that the claim or the roles played by the main stakeholders are suitable or necessary within the accepted norms along with the values of the company, resulting in supporting legitimacy approach by a greater level (The Boots Company PLC, n.d.). In this regard, one of the values of the company i.e. trust is relevant with the stakeholders’ claims as they desire to seek for obtaining certain financial reports from the company. Analysis of CSR Approach of Alliance Boots Alliance Boots has been adapting its CSR approach through a multidimensional framework to gain flexibility when reporting to its stakeholders residing in different nations, wherein it has to perform various operational functions. These ways eventually make the CSR approach of the company much more effective as compared to its chief business market competitors, increasing its potentialities to address stakeholder claims with time efficiency. In this similar context, one of the ways based on which the company has adapted its CSR strategy to be practiced in a diverse range of operating nations is the social responsibility scorecard. The introduction of this scorecard often acts as a strategic approach on behalf of the company through which, the company monitors its conduct of several CSR activities. It can be apparently observed that the strategic approach of scorecard, which was introduced by the company, is typically segmented into four major groups comprising environment, community, workplace and marketplace (Alliance Boots, n.d.). Observably, the company is performing various operational functions in developing economies making positive contributions in the advancement of the communities it serves. Moreover, it has also been viewed that the company prioritises much upon addressing various issues like climate change for delivering its environment stakeholders and community stakeholders with quality as well as proper care. In addition, the company strives to deliver effective training to its personnel so that their respective operational performances can be enhanced, resulting in making the company to attain greater profitability along with gaining a superior competitive positioning over its chief competitors. Thus, the company is able to satisfy the claims of its internal stakeholders including employees in the workplace and suppliers as well s other business partners and investors from the marketplace (Scribd Inc., 2014). As was mentioned in the above section, there are certain challenges that the company is facing. These issues majorly encompass risks erupting from safety, environmental as well as health related issues of its customers, currency exchange related problems affective decisions of its shareholders, imposition of business or operational regulations building contraction in its market scope, business market competition and incessant changes in business settings as well as market conditions influencing customers’ behaviour at large. Notably, the adoption of social responsibility scorecard approach has helped the company to avail the opportunity of emerging as the foremost pharmacy-led health along with beauty group throughout the globe. Moreover, with the aid of making substantial investments, the company might reap the benefit of establishing its business in non-operating business segments on a worldwide basis, deriving a higher satisfaction level from its principle stakeholder groups. Alliance Boots possesses excellent and attractive business or operational infrastructure. While on one hand, it offers significant benefits to the company, on the other the company has to deal with various changes in its external business settings. In this regard, the opportunity of the company lays in the developmental aspects through which it can introduce more effective strategic approaches and acquire greater market share as compared to other UK based companies belonging to the similar industry (Scribd Inc., 2014). Analysis of the CSR Strategies Used by Alliance Boots The CSR framework, which has been introduced by Alliance Boots, depicts the strategies used by the company for attracting customers and accomplishing its predetermined business targets. The framework applied in the company has been portrayed hereunder in the form of a graphical illustration. Source: (Alliance Boots, 2008) Based on the above CSR framework, it can be affirmed that Alliance Boots focuses upon four different segments particularly including workplace, environment, marketplace and community as topmost priorities that precisely reflect the core values of the company. The other CSR strategies used by the company to mitigate the above stated CSR issues signify the introduction of a comprehensive and structured CSR database along with the deliverance of effective training to the CSR teams for smoothly accessing the database. This particular CSR strategy of the company can be examined as quite effective, based on the competencies of the company towards fulfilling the requirements of a reliable Group-wide approach for recording, reporting and measuring its CSR performances. It is strongly believed that the company aims at addressing its CSR responsibilities in the form of delivering quality services and care to the individuals focused on working collaboratively with various agencies. In this similar context, the company has been viewed to work with a broad assortment of agencies across the globe, such as the United Nations, Confederation of British Industry, World Health Organisation and other non-governmental agencies like World Wildlife Fund (Alliance Boots, 2008). There are certain areas that require further improvement in relation to the usage of CSR strategy by the company. In this regard, the company can focus more on environmental aspects such as lessening the emissions resulting from any gaseous material used for manufacturing healthcare or beauty products along with emphasising carbon management. The effectiveness of the CSR strategies used by the company can be measured in terms of determining the capability of the company towards raising customer retention rates, developing along with enhancing associations with its major stakeholders and managing risks faced while conducting the business (Scribd Inc., 2014). Taking example from other industries and companies, including those practiced in the current automobile sector, various developmental ways can be suggested to the above-discussed CSR strategies of Alliance Boots. These ways comprise designing a special programme, which would promote equal opportunities along with tolerance of various operational aspects and dynamically support environmental as well as social protection programmes (Ford Motor Company, 2014). Additionally, taking the example from other pharmaceutical based company such as that of GlaxoSmithKline (GSK), the CSR strategies of Alliance Boots can also be developed. It is likewise suggestible that the company can develop its CSR approach by promoting workforce diversity, treating every organisational member equally, offering healthy as well as secured workplace settings, safeguarding human rights, establishing advanced CSR standards, fostering broader community investments and greater involvement with chief stakeholders. In addition, the CSR strategies of Alliance Boots, as per the example of GSK, can be developed in the form of lessening waste generation and promoting innovation among others (Weyzig, 2004). To be noted, as Alliance Boots operates in the partial fields of both pharmaceutical and commercial beauty-care products as well as services, the strategies applied by the profit-centric companies and those practiced by pharmaceutical companies will be applicable in pursuit to develop its CSR approaches. Recommendations for Future Changes Alliance Boots desires to keep transparency in adopting and implementing CSR strategies for which, the company possesses a clear governance structure emphasising the claims of its various stakeholder groups. It can be apparently observed that the company has a few set principles to form its CSR strategies in a uniform and comprehensive manner. Though the CSR strategies adopted by the company have proved quite effective, its overall CSR performance is still observed to remain much limited on the grounds of various significant aspects that comprise employment practices and procedures of internal monitoring on meeting the Codes of Conduct of the company. In this regard, the knowledge and learning (K&L) framework can be applied for further development in the CSR strategies adopted by the company to reap several significant benefits. Conceptually, K&L framework denotes two vital aspects that include knowledge along with learning to be the major determinants for innovation, development and adequate usage of effective strategies. There lay several business organisations that tend to make substantial investments in developing their respective learning as well as knowledge-based functions. In this similar context, the organisations strongly believe that by developing the aforesaid aspects (based on the K&L framework), they can promote innovation and execute required strategies effectively towards the accomplishment of the desired business goals (Strong & et. al., 2007). Thus, based on the above discussion, it can be affirmed that Alliance Boots can largely follow and utilise the K&L framework in order to promote innovation and develop its CSR strategies for attaining its expected business targets by satisfying the claims of its prime stakeholders. The area of further development in the CSR strategies adopted by Alliance Boots can be identified as forming as well as developing advanced and all-inclusive policies relevant to address the needs of its stakeholders. These CSR policies would eventually aid the company in addressing along with mitigating various sorts of risks that emerge while conducting business in diverse market segments. The effective CSR policies entail advancing the standards relating to ethical conduct, ensuring that the products of the company are well tested based on quality, effectiveness along with safety requirements and promoting products aligned with high medical as well as moral standards. From a broader perspective, the other suggestible actions to Alliance Boots can be planning for continuously improving performances along with identifying and addressing the ever changing developmental needs of the employees and other stakeholders and subsequently, seeking towards evading conflicts of interest (Weyzig, 2004). Following certain marketing initiatives of Philip Kotler and Nancy R. Lee, the notion of social marketing can be recommended to Alliance Boots. According to Kotler and Lee, social marketing is regarded as a discipline, which imposes favourable impacts when addressing various social issues that commonly comprise community involvement, public health, prevention of the environment and financial well-being (Lee & Kotler, 2011). In this regard, Alliance Boots can take the idea of social marketing as one of the best approaches to develop its CSR strategies in the form of utilising certain effective techniques towards influencing the behavioural attitudes of its customers, resulting in benefiting the community and the individuals, altogether. Reflection Through the above analysis and discussion, I was able to develop my knowledge as well as learning concerning the importance of practising CSR related activities and adopting strategies to cope up with any sort of CSR issue, balancing both profitability and social concerns. Undoubtedly, the analysis of various CSR issues faced by Alliance Boots, which is recognised as one of the leading manufacturers and distributors of pharmacy-led healthcare and beauty-care products, has undoubtedly helped me to refine my knowledge-base related to the significance and the risks associated with a company’s failure to balance between its profit oriented goals and sustainability goals. Accomplishing a balance is not only important to satisfy the diverse groups of stakeholders of a global company, but it also assists in attaining the long-run competency goals of the organisation. The skills that I have developed throughout this study are the approaches, which have aided me in serving the communities quite well, safeguarding the environment, maintaining the norms of the marketplace along and serving the needs of the employees by offering them with better workplace settings. Most importantly, above all, I learnt about the necessity of having a structured approach for recognising, monitoring as well as assessing various sorts of risks that appear while conducting business and implementing effectual CSR strategies within the global arena. This structured approach can be related with the notion of risk management, which is quite indispensable to form for coping up with such issues or risks. Theoretically, peer review process is regarded as the procedure of involving substantive experts when reading along with commenting on new researches made in different fields for validating and certifying those researches. The major advantages of this process can be apparently observed as making the validity of the researches quite effective, offering valuable feedbacks so that the researchers can make modifications accordingly and proving much acceptable processes for the researchers due to its simplicity in nature. On the other hand, the disadvantages of peer review procedure include causing prolonged delays in dissemination of research findings and its time consuming nature (Elsevier B.V., 2014). Employing the marking criteria, I would assess the work on the basis of presenting the facts with utmost coherence and better structure, critically arguing the aspects relating to the subject matter and appropriately rationalising the findings of the study. In this similar context, the area for future enhancement can be apparently identified as conducting in-depth analysis about revealing the significance of performing CSR related practices and strategies to address and mitigate diverse sorts of CSR related issues that emerge while conducting business. References Alliance Boots, No Date. Our Group at a Glance. About Us. [Online] Available at: http://www.allianceboots.com/about-us.aspx [Accessed February 18, 2014]. Alliance Boots, No Date. Our Mission, Purpose and Values. About Us. [Online] Available at: http://www.allianceboots.com/our-mission.aspx [Accessed February 18, 2014]. Alliance Boots, No Date. Group Strategy and Objectives. About Us. [Online] Available at: http://www.allianceboots.com/group-strategy-and-objectives.aspx [Accessed February 18, 2014]. Alliance Boots, 2008. 2007/08 Corporate Social Responsibility Report. Our Approach to CSR. [Online] Available at: http://www.allianceboots.com/CorporateSocialResponsibilityReport2007-08/library/pdfs/csr.pdf [Accessed February 18, 2014]. Alliance Boots, 2008. 2007/08 Corporate Social Responsibility Report. About This Report. [Online] Available at: http://www.allianceboots.com/CorporateSocialResponsibilityReport2007-08/library/pdfs/full_report.pdf [Accessed February 18, 2014]. Alliance Boots, No Date. Our Stakeholder Dialogue. Our Approach. [Online] Available at: http://www.allianceboots.com/CorporateSocialResponsibilityReport201011/home/our_approach/our_stakeholder_dialogue.htm [Accessed February 18, 2014]. Alliance Boots, 2007. Our Marketplace. A Shared Sense of Responsibility: Corporate Social Responsibility Report 2007. [Online] Available at: http://media.allianceboots.com/App_Media/AllianceBoots/CSR%20Reports/AllianceBootsCSR2007final.pdf [Accessed February 18, 2014]. Alliance Boots, No Date. Strategic Approach. Social Responsibilities. [Online] Available at: http://www.allianceboots.com/social-responsibilities/strategic-approach.aspx [Accessed February 18, 2014]. Cooper, S., 2004. Corporate Social Performance: A Stakeholder Approach. Ashgate Publishing, Ltd. Elsevier B.V., 2014. Peer Review. Publishing Guidelines. [Online] Available at: http://www.elsevier.com/about/publishing-guidelines/peer-review [Accessed February 18, 2014]. Ford Motor Company, 2014. Overview. Corporate Social Responsibility. [Online] Available at: http://www.ford.co.uk/experience-ford/AboutFord/CorporateSocialResponsibility [Accessed February 18, 2014]. Lee, N. R. & Kotler, P., 2011. Social Marketing: Influencing Behaviours for Good. SAGE Publications, Inc. Scribd Inc., 2014. SWOT Analysis of Alliance Boots. Alliance Boots Report. [Online] Available at: http://www.scribd.com/doc/25017737/Alliance-Boots-Report [Accessed February 18, 2014]. Strong, B. & et. al., 2007. A Framework for Organizational Governance of Knowledge and Learning. White Paper, pp. 1-9. The Boots Company PLC, No Date. Our Approach. Corporate Social Responsibility. [Online] Available at: http://www.boots-uk.com/corporate_social_responsibility/our-approach.aspx [Accessed February 18, 2014]. Weyzig, F., 2004. Policies. GlaxoSmithKline Company Profile, pp. 1-50. Read More