With globalization, technical changes, monetary drivers, and interpersonal and environmental mandates, the global business environment is less predictable and more challenging than it was a good decade earlier. Customers, stakeholders, and culture expect and demand superior products, services, and operations with less throw away, reduced effects on health, safety, and the environment, and enhanced corporate and business responsibilities for the decisions, solutions, products, functions, and activities of each facet of the business enterprise.
In the words of Rainey (2006) 'Today, businesses must extensively evaluate the global business environment to get a firm understanding of the opportunities and issues it reveals, and develop intense strategies for improving every aspect of their enterprises. To do this, corporations will need to have in place a comprehensive and integrated strategic management framework for formulating and implementing business strategies, programs, and actions based on factors that include the whole business environment. '
Such a construction requires the ability to integrate both inside systems and processes and those of external business entities, including customers, stakeholders, and offer networks.
According to Siemens Corporate Social Responsibility Statement 2002, Berlin and Munich: "Siemens AG, 2002 Ecological success is our number 1 main concern. Our activities focus on get together the needs of customers and creating value for our shareholders and employees. Our improvements - made through our very own laboratories and in cooperation with customers, business lovers and colleges - are our greatest strengths. "
Woolworths Limited can be an Australian public corporation with total annual sales of over 38 billion. The business is recognized as one of the most notable five retail companies on the planet. The business is committed to wards improvement of its environment footprint through an effective sustainability strategy. The sustainability strategy of the company addresses lots of the significant issues related to environment, public, personnel, and economic duties of business. This sustainability strategy of Woolworths has been talked about at length along using its benefits and restrictions in the article.
The retail industry attaches with everyone in some way. To stay competitive and profitable the industry is constantly required to adjust to changing aspect of local as well as that of global marketplace. Sustainability is not a fairly easy task as it entails a great deal of complexity related with the issues engaged. It is important to have a powerful management system for taking care of environmental, cultural and monetary performance as it is important for a ecological development of any company or industry all together.
Further, identifying, calculating, and reporting cultural and environmental impacts cannot begin before board of directors and CEO are focused on improved upon sustainability management. Often it is through a mission assertion or the development and articulation of the corporate sustainability strategy that the mother board and CEO arranged the tone at the top. It is then essential to drive this commitment through the organization by implementing the various systems for discovering and measuring impacts, stakeholder proposal, product design, product costing, capital budgeting, information management, and performance analysis.
Epstein, Draw J. (2008) argued that effective and steady leadership provides an alignment between environmentally and socially reactive activities and corporate goals and internal credibility to promote progress toward improved upon sociable and environmental management within sections and organizational functions.
Woolworths CEO Simon Susman says, "We realize that sustainable progress can only be performed through paying greater attention to the planet all around us than has been the case before. The links between economical growth, transformation, communal development, the environment and local climate change must create a better world for everybody. "
The report aims at making a crucial analysis of Woolworths Sustainability Strategy. The strategy is analyzed based on business responsibility towards public, economical and environmental issues. The statement will show a view of Woolworth's sustainability combined with the key introductions in company's new plan of sustainability which was released just lately. Woolworth was praised because of its sustainability strategy but just lately it has also been criticized of working against its own strategy. This aspect is also mentioned in the survey.
The research study analysis is undertaken to create an thoughts and opinions about the problem. Secondary source of information is mainly used to investigate the sustainability strategy of Woolworths' and its effect of modern culture, environment and monetary areas. The data has been gathered from various journals, papers and website of Woolworths'. Various concepts and ideas will be employed to the available data to be able to present a specific picture of the company's strategy.
Woolworths Limited stretches across food and food, liquor, petrol, standard merchandise and consumer electronics. The business is a major investor in Australia and New Zealand communities. Woolsworth is listed on the Australian STOCK MARKET and utilize more than 191, 000 people with approximately 380, 000 shareholders. The business claims to be conscious of its duties towards it stakeholders as its procedures impact its people, customers, areas, shareholders, supply chain and the environment.
Woolworths is well known as the 'fresh food people' in Australia and was proven in 1924. It was the second major workplace in Australia and Corporate Sociable Responsibility (CSR) was an integral part of its corporate agenda. Recently Woolworths' declared its new sustainability strategy. Under such strategy Woolsworth also opened up its first Green Store in 2007 in Sydney. In this store innovative technology are used to minimize the utilization of energy and water, and reduce waste material technology. Through these stores Woolsworth aims at reducing environmentally friendly impact induced by the company's retail functions.
According to Simon Susman (LEADER, Woolworths) "We've used the term the 'Good business voyage' because this truly is a voyage and there are no easy solutions. We are focused on interacting with the 5 12 months targets we've set and also to do this, we will be exploring new ways of doing things in many areas. Reaching these destinations will require significant behavioural and ethnical change. If we may take our customers and suppliers along with us, this quest will have an even more meaningful impact on the wide selection of transformational, cultural and environmental obstacles that face South Africa, "
The target of 'sustainability' is the maintenance or recovery of any desired declare that has already been around. The promotion of sustainability is an active process of engaging society. Companies need to become involved in this technique because, collectively, they are actually so powerful that areas and governments often do not take action sufficiently strongly to accomplish sustainability when there is active or identified opposition from the private sector. So sustainability-promoting firms need to go beyond simply lowering their own negative environmental, communal or economic effects. They have to produce products that help world to become sustainable and they also have to use their influence to encourage society-wide action to accomplish sustainability. This process will be studied as the basis of our evaluation of Woolworths' sustainability strategy.
According to Turner and Crawford (1998) 'To optimize organizational success, in both short and the future, companies need the functions to provide results effectively. In addition they need to be in a position to identify viable and desired future guidelines. And in the face of the eagerness for the new, they still need to sustain valuable traits and resources (within the firm and in society/ the environment). To achieve these three goals businesses need special features.
Turner and Crawford gave a construction of such features which is depicted in Shape 1 and will be considered while talking about the strategy of Woolswoths.
Another construction to be utilized in the study is the Sustainability Implementation Framework suggested by Diesendorf (1998) that consists of following three levels:
The above two models will be used to investigate the sustainability strategy of Woolworths.
Woolworths is aware of its responsibility towards stakeholders and thus employed corporate social responsibility at the core of its business strategy. Business of the company has social, monetary and environmental influences and thus Woolworths made a decision to take a selection of initiatives to give a quality of life to its customers, the labor force and the world most importantly. Along with such communal initiatives Woolworths took up several initiatives to be a responsible shop as well. Woolworths made sure that its effort related with Corporate Sociable Responsibility (CSR) must include initiates to the betterment of environment, employees, shareholders, source systems and customers. Some important components with regards to sustainability strategy of Woolworths are talked about as follows:
Woolworths aims at accelerating transformation of its products, stores and functions. The company is committed to transformation over the business and has embarked after a company-wide program in order to make sure that change becomes an entrenched way of doing business all around the company. Under this approach company will enhance the way of doing business across all aspects and will work together with its suppliers, open public sector, and franchise associates. Woolworths will speed up its retail skills and for achieving this target various straining initiatives have been performed by the company. These initiatives include accreditation of Woolworths lessons and the establishment of provincial Woolworths learning centers. Such training initiatives will prepare a pipeline of skilled employees that can be harnesses in case there is any shortage at senior control levels in the organization. Under the sustainability strategy Woolworths is also targeted at meeting employment equity targets. Also Woolworths purpose at concentrating at groupings such as madumbi farmers of KwaZulu-Natal and the Beaufort Western world Hydroponics Job to increase the number of main products sourced from BEE supplier partners.
According to the web site of company "In addition to our own broad BEE Employee Talk about Ownership Scheme, we will focus on evolving skills development and pushing our 'South Africa first' strategy even harder. "
Woolworths also identified its economical responsibility and have taken initiatives to refine its brand position with significant investment in cost, merchandise range, and quality. This investment will continue steadily to deliver benefits to shareholders of the company.
Under its lasting strategy Woolworths is devoted towards sociable development and its first target is on South Africa in this framework.
As mentioned on company's website-"We'll work harder to operate a vehicle communal development by extending the existing initiatives of the Woolworths Trust such as EduPlant and MySchool, and by presenting a programme through our stores to improve the plight of orphans and other vulnerable children. "
Woolworths also packages a highly effective role in providing career and giving the city opportunities to expand and grow. The company employs almost 191, 000 people in its retail business. The business claims of hiring people based upon their skills, skills and aptitude with regardless of gender, race, faith, marital position or ethnic origins. Also, it employs women in business and them flexible working habits and training opportunities. Health insurance and Safety insurance policy is also performed and is well communicated to professionals in the business along with an efficient system of managing and reporting of such a health and basic safety culture.
Woolworths is continuously making a difference in Southern African Schools. Based on the financial results of the company for a period of July 2007 to June 2008, Woolworths has released a R18 million contribution to MySchool, including MyPlanet and MyVillage in South Africa. The company aims at increasing it sociable efforts to more than R300m per yr.
Woolworths also moved into into partnerships with charity organizations and undertook franchising programs. It recognized charities like Foodbank, Salvation Army, Canteen, Beyond Blue, Juvenile Diabetes Research Groundwork, etc. Woolworths also started many initiatives to raise understanding about the plight of farming families hit by drought of Australia.
The advantages of reusable carriers by the business supported new companies that were required to produce fabric bags for the business.
Another key component of Woolworths' Sustainability Strategy is giving full importance to environmental issues. Environmental sustainability was a key facet of Woolworths' CSR approach. Woolworths' is at retail business and its own operations affect the surroundings in lots of ways such as waste products creation, high energy and gasoline utilization and greenhouse gas emissions. Woolworths implemented a long-term strategy to beat issues concerning the impact of the business's operations on the surroundings.
Woolworths concentrated on refrigeration, lighting and temp control to lessen the amount of energy consumption in its procedures. Installation of programmed after-hours blinds on open refrigeration cabinets, lighting and air-con made procedures more energy conserving. Woolworths have decided to make most of its new stores Green Stores and take up energy efficient guidelines in every such stores. Through these initiatives company will be able to decrease the emission of Carbon-di-oxide.
In the strategy company aims at reducing the use of hazardous pesticides and chemicals and increasing organic and natural food and material offering. Also, company released a new product packaging scheme to build up reusable carriers which an attempt towards saving scarce natural resources. The business targets at lowering the quantity of clear plastic and cardboard in the overall waste to less than 1 percent by weight by season 2010.
Susman said "Drinking water is one of South Africa's scarcest natural resources and Woolworths is targeting a 30% decrease in water consumption and will develop a program to encourage our suppliers to do the same. "
Woolworths also needed several initiatives to save drinking water in it stores. It plans to save lots of at least 200 million liters of normal water by yr 2010. Also, as a energy saving effort, Woolworths discarded vehicles that consumed more energy. It outsourced the disposal of worn-out tires and batteries to third party experts and used grease traps at its pick up truck cleaning centers to avoid oil and petrol waste from coming into waste water system.
Woolworths planned to make use of B20 (20 percent bio fuel mix) bio-diesel for its entire fleet of vehicles. This move was likely to reduce carbon emission by 11, 500 tones per time. Also, company made a decision to use large numbers of small automobiles with LPG petrol across its car fleet. The carbon emission from the company's fleet of 3100 vehicles is usually to be reduced by thirty percent by 2010 and that of vehicles by 25 percent by the end of 2012 as compared to 2006. Furthermore initiative the company aims at cutting its electricity usage by 30% and taking away conventional lights from its cabinets.
Chief Professional, Woolworths, Simon Susman stated "Woolworths will support carbon offsetting in around greening reduces carbon extra. We'll do this by planting more trees at our MySchool classes, our Eduplant classes and our extensive Midrand campus grounds.
The initial component which formed the bottom of sustainability strategy was 'advancement'. Woolworths aims at providing development in products, services and facilities provided by the business. The company views advancement as the base to expose any service or product in market, finding better and cheaper resources of resource, new store formats and process improvement to get a decrease in cost. On this context while considering environment responsibility Woolworths concentrated on implementing a 'Green Stores' strategy where all the new stores of company's would adopt energy efficient guidelines. At exactly the same time Woolworths integrated several water conserving initiatives at its stores. While choosing new sites for stores the business special account have been given to investigate how a store will fit in the state and local government area. Sufficient general market trends has been done before checking any store. A good example of impressive practice is a number of alterations being manufactured in store design to handle the community curiosity about Mullumbimby in New South Wales. Company has migrated the launching dock from the car auto parking area to improve safety for shoppers and making changes to the faade so the store will easily fit into better with the streetscape.
Woolworths launched a health kids program called 'Fresh Food Kids'. This program helps in increasing the intake of fresh fruits and vegetables in kids. An interactive and educational website in addition has been launched under this step. There are various successful applicants to the program who have considered it a success in growing and pushing eating health insurance and fresh food among kids.
Woolworths is aimed at undertaking technology through efficiency and enhancing quality in its business operations. It offers made a substantial determination to its Project Refresh which identifies a framework to be able to boost business performance and business restructuring programs through end-to end supply chain improvement.
Now we will apply the models discussed in section 2 to investigate the performance Woolworths sustainability strategy.
Path-finding identifies growing, crystallizing and articulating new directions, strategies, purposes and values for the organization. Woolworths studied the environment in which the company is functioning. It gave due importance to the areas and people damaged by its operations and business. Through a continuous study the company realized that it's important to do something responsibly to the stakeholders of the company. So, it designed and developed a strategy committed towards good thing about customers, shareholders, environment, weather and neighborhoods. Then company put the Corporate Social Responsibility at the base of the task so that there is no divergence out of this basic aim through the implementation of the strategy of sustainable growth. The directions decided to achieve the aims of this strategy was led by the rules of advancement, quality, transformation, environment and weather focus and communal improvement.
Getting people throughout the organization informed, dedicated and motivated to do something to attain the organization's goal and future course identifies engagement. Woolworths' strategy engaged people of the organization to achieve the desired concentrate on. The strategy at each step emphasizes on training of employees and workforce of the business so as to understand the necessity of new initiatives and learn to perform under new aims. Woolworths has launched a worker Matching Award (EMA) to aid conditions that are of particular, personal matter to its workers and encourage the labor force of the business to help make an optimistic contribution to valuable causes.
However, there is absolutely no involvement of customers and other stakeholders in strategy making process. No responses or recommendations are considered while designing an insurance plan which can impact the lives of public.
Woolworths have been employed in producing its resources whether physical, scientific or personnel. Redesigning of stores has been initiated as a proper proceed to reduce misuse and make them energy efficient. Workers by any means levels are being provided training to perform well in improved conditions and with new specifications. Also, company has modified its fleet of trucks and cars to lessen emission and fuel consumption.
There is no set more developed management system to examine the performance at each step of implementation of the strategy. In such a strategy where so many changes and new procedures have been presented there is a need of a detailed and reliable performance management system also.
Woolworths strategy does not provide a clear view of which of the organization's or society's current capabilities, strategies will be maintained and which will be changed under the plan of sustainability.
Marketing and Selling
The sustainability strategy of Woolworths lacks an in depth marketing plan. Although, understanding the market and innovating products according to the needs and anticipations of customers is surely within the plan but the strategy to enter into new markets and tap existing untapped market segments will not find any place in the sustainability of the business.
Applying the Sustainability Implementation Frameworks as recommended by Diesendorf the strategy of Woolworths is now explained. There are three levels discussed in this construction of sustainability development. These levels along with their existence in the sustainability strategy of Woolworths are talked about the following:
In this level the broad principles considered are generally honest requirements. By ethics, we indicate regarding questions of right or wrong, or good or bad. Before, consideration of beliefs and ethics had not been popular in the business world. The honest principles detailed under this framework are respect character, respect humans and become generous inside our respect.
According to Diesendorf (2000) 'Those who are uncomfortable with beginning with an ethical position might consider that the above mentioned ethical principles are essential for the permanent viability of the market and culture. Therefore, they may be seen as enlightened self-interest on the part of individuals and companies planning for a long term future. '
In the strategy of Woolworths all the three principles are incredibly well taken care and attention off. There is perfect consideration for nature in the strategy and also humans whether employees, customers or shareholders each is respected and given credited account while taking any step towards achievement of strategic goals.
At Level 1, the wide-ranging goals to conserve or improve inter- and intragenerational collateral, human being well-being, biodiversity and ecological integrity are greatly supported.
Diesendorf added the 'conservation of social variety' here as a public analogue to the 'conservation of biodiversity'.
According to Diesendorf 'The goal of inter-generational collateral is the basic thrust of the Brundtland description of lasting development. ' If we agree to this goal, then it could be argued that we must also recognize the need for intra-generational (that is, communal) equity. It should be recalled that, in this chapter, 'collateral' does not mean 'equality', but instead 'equal opportunity'. This goal is perfectly looked after in Woolworths strategy. The business ensures of employing people in the business regardless of their cast, competition, gender, cultural record and strictly on the basis of their educational certification and experience.
The 'conservation of natural capital', trusted in some types of sustainability, has been substituted here by the 'conservation of critical capital', because the past overlaps highly with 'conservation of biodiversity and ecological integrity' and, even where it generally does not, there are huge levels of some kinds of natural capital (for example, sand) that are not in urgent need of conservation. 'Critical' capital facilitates a give attention to those varieties of natural and human-made capital which can be threatened with damage, damage or dispersion (for example, phosphorus, archaeological sites). This feature does lack in the strategy of Woolworths.
Conservation of atmosphere and weather is not normally included as a sustainability goal. However, in view of the seriousness of the present threat and the fact that the potential effects of weather change impact on biodiversity, ecological integrity and individual health, it's been shown explicitly here alongside critical capital. This goal have been given an important devote sustainability strategy of Woolworths as the retail large aims at lowering the emission of carbon from its fleet of trucks and autos. Also, release of reusable luggage in place of plastic bags proves that the company is committed to environmental and climate safeness.
This stage defines the standard standards for sustainability indications. This stage points out that such standards should be measurable, relevant, simple to use and understand, reliable, reproducible, and timely for decision making. Hart (1998) says 'Several authors claim that sustainability signals should, in addition, indicate something fundamental to the environmental, economic and social/cultural health of your community over generations. '
The sustainability strategy of Woolworths will include set targets that happen to be represents in characters but there is no set measurable expectations to guage and measure the accomplishments of the strategy.
From the research of sustainability strategy of Woolworths it is obvious that despite of being a successful strategy with corporate social responsibility as the basis of its functions there are certain key areas where in fact the process is missing.
For the improvement of the tactical program certain tips have been mentioned the following:
In what of Simon Susman "The 'Good business trip' is a business imperative for Woolworths. Many areas of it are linked together to generate a multiplier impact: reducing product miles by pushing higher local sourcing we will start opportunities for enterprise development and preferential procurement; reducing packaging will result in energy and paper savings thereby minimizing the Woolworths carbon footprint. "
'Corporate responsibility' or 'Sustainability' is fundamental to any company's tasks. At the same time it is also a chance for the company to establish its good image in front of its customers and shareholders. Thus, an integrated sustainability program as that of Woolworths can be an important and successful method of managing environmental, monetary as well as interpersonal risks. Additionally, such a strategy helps in id of new opportunities, services, new products and new marketplaces for extension of business.
Woolworths program of sustainability is firmly influenced by the strategies of international vendors such as Wal-Mart, and Marks & Spencer. However unique to the strategy is the keeping South African point of view on the issues related with Public responsibility along with a strong concentrate on transformation initiatives and environmental safeguard.