CSR and Sustainability in Business
CSR and Sustainability in Business
CSR and Sustainability in Business
CONTENTS
INTRODUCTION.................................................................................................................................1
TASK – 1..............................................................................................................................................1
TASK – 2..............................................................................................................................................3
Difference between CSR of Micro, SME and corporate business and ways of measuring success....6
CONCLUSION.....................................................................................................................................7
REFERENCES......................................................................................................................................8
INTRODUCTION
The current business scenario requires, sustainability, social responsibility and
exceptional performance of the companies. Now, ethical responsibility is being regarded as
an integrative component of corporate social responsibility which is destined to fulfil the
demands of the customers. Concerning this, there are many ethical problems which might
takes place in the business of the firm (Blowfield, 2013). This significantly decreases the
ethical rating of the firm and thus, lowers down its popularity between potential markets.
Even multinationals and SMEs also have low ratings and thus, are vulnerable to be accused in
unethical behaviour. Pertaining to this, it becomes necessary to examine the sustainability
approaches to business strategy and management in the present research study. The report
will be focused on analysing the ethical and sustainability approaches of the company Nestle
and will highlight different approaches to CSR of micro, SME and corporate business along
with various challenges.
TASK – 1
Sustainable approach to business strategy and management
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adhere to the business ethics and must function morally. Thus, sustainable management has
now become an indispensable part of the Nestlé’s strategy and their routine activities.
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from the year 2007 that motivates persona growth and career development of key
female workers. Besides this, Nestle also gets benefited from greater diversity at
varied levels of leadership (Arora and Richa, 2013). Those female workers who
successfully completes the programme mentors the junior female employees within
the company. The company continue the contribution of female employees in this
cross mentoring scheme ensuing their achievement to-date.
Diverse workforce – As per Nestle, diversity within the workplace helps in bringing
varied ways of thinking, building more competitive as well as innovative teams and
leads to have better decision making within the organization. The firm has a major
objective to have pool of talent which significantly reflects the diversity of the
communities in which the firm carries out its operation. They even want to promote
such culture that helps diversity in all of its forms on the gender balance. Nestle is
also making efforts for executing development plans for women in order to help them
to progress in their upcoming roles and accountabilities (Johnson, Whittington and
Scholes, 2011).
Extinguishing wastewater – Talking in relation with wastewater, in UK the firm
considers it as a bio-digestion. For the purpose of ensuring liquid effluents being
generated by them to be safe prior they get release, municipal wastewater treatment
facilities are being used by the company. Furthermore, if the amenities are not
according to the environmental standards, the firm operates the treatment plant. One
of the confectionery factory of Nestle UK has made an investment of CHF of around
4.9 million in an anaerobic digestion system. This system helps in converting the solid
and liquid sewage waste into clean water & methane gas by making use of natural
biological digestion process. Because of this, 1000 tonnes of CO2 will be saved every
year and will cut solid waste of around 4000 kg every day.
Fairness and honesty – To remain ethical and to show ethical behaviour, Nestle
carries out their business activities by a set of principles founded on fairness, honesty
and concern for people (Shamir, 2005). Moreover, they make sure that all these three
key values should not be negotiated by anyone working within the company and thus,
should be visible all across the firm. The motto of the company “good food, good
life” detents this belief and depicts that irrespective of their power and supremacy in
the F&B industry, Nestle also pays attention on the well-being of the community and
the environment all across the firm.
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TASK – 2
Analysing different approaches to CSR of Nestle
Throwing light in relation with the corporate social responsibility (CSR), it identifies
that the firm is required to take into consideration the social and ethical influence of its
business decision on the environment in which they carry out their operations. For Nestle,
CSR is a commitment of the firm to behave ethically and make maximum contribution
towards the economic development of the nation along with making improvement in the
quality of life of the employees, local communities and society at broader level (The Nestlé
concept of corporate social responsibility, 2018). Regulatory as well as legislative outlines set
only minimum level of operating standards being predictable out of businesses. However, last
corporate failures from years significantly depicts that all these mechanism still offer space
for vital corporate negligence. In addition to this, the concept of CSR for Nestle is based on
the creating shared value model which consists of three levels. The bottom level is related
with compliance i.e. laws, principles and codes of conduct. The middle level is sustainability
which includes protecting the future and the last one is creating shared value through
reducing poverty, improving health and empowering people. Some of the corporate social
responsibility initiatives of Nestle are discussed in the subsequent paragraph:
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For business For society
Nestle focusses on high quality as well Economic and social development of
as reliable sourcing. the whole society with greater level of
The workforce of the firm are skilled stability.
and loyal. Improved level of earnings by the
The products and services of the firm suppliers.
are of superior quality which can Job stability for the employees and
compete successfully in the market. increased stability (Craig-Smith and
Improved level of government Lenssen, 2009).
regulatory functioning. Higher quality of life for the
consumers.
Nowadays, stakeholders are taking interest in the business activities and thus, firms
are making efforts to make sure that their partners behave in the society in a responsible
manner. Like other firms, Nestle has also introduced some code of conducts for their key
stakeholders such as suppliers, customers, government etc. to make sure that the other firm’s
policies and practices does no vanish their reputation. The concept of corporate social
responsibility carries varied sense based on the stakeholder along with certain situation of the
firm’s expectations. Sometimes, it happens that a CSR project initiates in reaction to crisis
that the firm may suffer in the end (Arora and Richa, 2013). Nestle is continuously making
efforts to positively influence the families, societies, planet and individuals as a socially
responsible firm all around the globe. Aligning with this commitment, the company also pays
attention on three main pillars for creating shared value i.e. nutrition, water and rural
development. As discussed above there were many approaches being used by Nestle in
relation with CSR, however they come across with numerous challenges and issues as well.
Explanation of these is being done underneath:
Lack of community participation in CSR activities – Sometimes, local community
does not show interest towards CSR activities as they have little knowledge in regards
with corporate social responsibility. There is lack of communication amid the firm
and the society at the grass level.
Issues of transparency – It is being regarded as one of the key issues brought forth by
the study. Nestle is of the view that there is lack of transparency on the local
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executing agencies because they does not pay suitable attention towards disclosing
data on their programs, use of funds and impact evaluation. Due to this, there is
negative report of transparency which influence the trust amid firm and the local
communities (Perrini, Russo and Tencati, 2007).
Narrow perception about CSR initiatives – There is no agreement between local
agencies in regards with the corporate social responsibility projects. Because of this,
frequently there is duplication of activities by the corporate houses in the field of their
intervention. It gives way to competitive spirits amid the local executing agencies
instead of constructing collaborative approaches on issues.
Difference between CSR of Micro, SME and corporate business and ways of measuring
success
Nestle overview corporate social responsibility as the need of the market and adopts it
as an important marketing tool for achieving an edge over the other competitors in the
market. The approaches of CSR is quite different in micro, small and medium and large
corporates business. This is because of the fact that in micro and SME units, the owner and
manager considers ethics as a crucial issues, discussing the requirement of trust as well as
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openness, selected relation amid supplier, honest transactions with the workers and finally,
religious based orientations to ethics. On contrary to this, in large firms like Nestle, formal
tools are proved more effective such as social and ethical standards, code of conduct, basic
principles etc. These are being used as they need huge investment of time, energy as well as
finance (Spence, 1999).
Underpinning the discussion in regards with the strategies or approaches to corporate
social responsibility of micro, small & medium and corporate business it can be said that the
same level of motivation for attention to CSR is being applied at the roots of all these
business units. These motivations can be intrinsic and instrumental. But, there are some vital
difference in CSR practices of micro and SME and corporate businesses. Firstly, micro and
SMEs are normally managed by their owner and this only lead to modifications in
commitment to corporate purpose. Further, these firms are more personal than in the case of
large companies like Nestle. Thirdly, SMEs have limited resources as big firms (Smith,
2014). They give their focus on CSR activities but these firms are more likely to less focus on
trappings i.e. CSR communication. In sum, while size matters, not at least in the ways things
need to be performed, micro, small and medium enterprise do have numerous similar reasons
for getting engaged in corporate social responsibility that large firms have.
CONCLUSION
Thus, to conclude it can be said that from the last several years, social responsibility
has become an increasingly important factors for the organizations. By complying with the
ethical laws, behaving socially responsibly and sustainable development, all supports in
bolstering the image of the company and build its brand in the market.
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REFERENCES
Arora, B. and Puranik, R., 2004. A review of corporate social responsibility in India.
Development, 47(3), pp.93-100.
Arora, R. and Richa, G.D., 2013. Corporate Social Responsibility– Issues and Challenges in
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Blowfield, M., 2013. Business and Sustainability. Oxford: Oxford University Press.
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Reich, R.B., 2007. Super-capitalism: The Transformation of Business, Democracy, and
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Spence, L.J., 1999. Does Size Matter? The State of the Art in Small Business Ethics',
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Online references
Corporate Watch. 2016. What’s wrong with Corporate Social Responsibility? The arguments
against CSR. [Online]. Available through: <https://corporatewatch.org/content/whats-
wrong-corporate-social-responsibility-arguments-against-csr>. [Accessed on
27thAugust 2019].
Nestle. 2018. [Online]. Available through: <https://www.nestle.in/csv>. [Accessed on
28thAugust 2019].
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<https://www.forbes.com/sites/insead/2013/08/14/when-it-comes-to-csr-size-
matters/#6232593652a2>. [Accessed on 27thAugust 2019].
The Nestlé concept of corporate social responsibility. 2018. [Online]. Available through:
<https://www.sharedvalue.org/sites/default/files/resource-
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