Essay: Explain ‘responsible businesses’, using ‘Corporate Social Responsibility’

Businesses show responsibility through corporate social responsibility (CSR) or corporate responsibility (CR) (Brookes, Altinay and Ringham, 2014; Carroll, 1999). As these terms can be considered the same impression as a responsible business, in this report, responsible business will be explained by using CSR.
In recent years, consumers have been developing their understanding of the environmental problem as well as the ethical action of hospitality institutes. Therefore, it is becoming significantly important that a company deals with consumers’ attention by announcing CSR and in short, utilises CSR to improve relations pertaining to consumers (Albus and Ro, 2016; Barnett 2017).
Scherer and Palazzo (2007) state that the purpose of CSR is to increase profit within the business. Moreover, CSR also copes with social and environmental effects caused by company actions which lead to sustainability within the business. Thus, CSR has been a significant role of business strategy as well (Hawkins, 2006; Frynas, 2010). Foundations of CSR are environmental, human resources, products and consumers and community involvement (Giannarakis, Konteos and Sariannidis, 2014; Eden, 1996). Regarding connections between CSR and firms’ financial presentations, McWilliams and Siegel (2001) state that there are unclear relationships between them. Some researchers are arguing negative aspects. Meanwhile, the others claim that there are positive aspects. By considering some fast food restaurants such as McDonalds’ and Subway, there is financial return from CSR. Namely, it is true that there are relationships that benefit from this. However, as investment differs depending on the various companies, it is not necessarily appropriate to assume CSR leads to a financial benefit (Barnett, 2017).

1.2. Business Ethnics

According to Joyner and Payne (2002), business ethics and CSR integrate culture and management into organisations. It is necessary to take into account the business ethics as it one of the vital elements of CSR. Furthermore, a moral initiative of firms’ performance affected by considering CSR and business ethics at the same time. In order to maintain and or improve the organisations’ performance, they must take into account the long-term effect. For example, the Sanyuan Group, a Chinese dairy producer based in Beijing, gained 87.2% growth of its net profit owing to kept ethical behaviour and considered long-term influence. Meanwhile, firms which obtained immediate benefits imply they were focusing on short-term effects. As a result, they lost the trust of consumers which led to the firms’ presentation to decrease dramatically. (Zheng, Q., Luo, Y. and Wang, S, 2013).
These days, within the hospitality and tourism industry, environmental problems which includes waste, pollution and noise are dramatically increased. As an example, the amount of the waste which the European Union creates each year is 1.3 billion tonnes. Food wastes makes up almost a third of this statistic. Also, in hospitality and tourism industry, consumption of non-renewable resources is significantly high compared to others. For example, in order to produce a cotton T-shirt and one quarter-pound hamburger 7000L and 11,000L of water are required respectably. Organisations need to have the responsibility for these issues (Boella and Goss-Turner 2013; Sloan, Legrand and Chen, 2013).

1.3. Frameworks presentation with provide a framework for evaluation

The UN Global Compact (UNGC) which play an important role in CSR as it turns into a major universal self-regulatory initiative (Voegtlin and Pless, 2014). According to United Nations Global Compact. (2018), currently, the UNGC spread 161 countries, and 9,678 companies have listed as active business participants. There are ten key principles within the UNGC. Those principles have been divided into four sections which are Human Rights, Labour, Environment and Anti-Corruption (see Appendix1) and participants are operating their organisations based on those ten principles which help them to make superior decisions (Orzes et al., 2018; Ortas, Álvarez and Garayar, 2015). On one hand the UNGC seems aimed ‘improvement in productivity’ as human rights imply workforce right and employee satisfaction improve connected with anti-corruption. On the other hand, the UNGC’s value have several limitations. Firstly, it is difficult to specify principles. Therefore even though it has CSR policy as a basis, the UNGC is not encourage enough to participants. As for the addressed problems, the framework that indirectly privilege initiatives and prove compliance through examinations have high attentive (Orzes et al., 2018; Rasche and Waddock, 2014; Sethi and Schepers, 2013).
The Triple Bottom Line (TBL) was founded in 1994 by John Elkington. He stated that organisations should have three foundations based on CSR. Those three elements are social, economic and environmental performance (Milne and Gray, 2012; The Economist, 2009). In order to achieve sustainability of the business organization, TBL is one of the most important process. Gimenez, Sierra and Rodon (2012) claim that owing to adopting the TBL theory, not only those performances but also organisations can obtain financial benefits. A study indicate an environmental action programme for both internal and external which have positive effects to each of the three foundation of TBL. This implies importance of carrying out initiative environmental action such as take into consideration the environmental impact which includes transportation. Furthermore, methods which are related to create less pollution as result of improvement in both the working circumstances for labour and quality of life such as communication are utilised (Gimenez, Sierra and Rodon, 2012). However, there are limitations to this framework. Researchers found it to be focused on environment and social performances bus does not encourage the organisations’ behaviour accountability and stakeholder participation as well as less improvement in baseness report (Milne and Gray, 2012). Additionally, TBL tends to emphasize on the environmental aspect. As a result, in terms of responsibility of a company, the areas which covered with TBL might not enough to verify their responsibility.
Frameworks on both the UN Global Compact (UNGC) and Triple Bottom Line (TBL) have reflected upon CSR. However, as TBL lack of some section that UNGC have such as human rights, UNGC appears to be more appropriate in order to evaluate the company which is Pret A Manger. In addition, as some authors pointed out, TBL also does not have specific liability for the stakeholder. As stakeholders are an important component in terms of discussing the organisations’ responsibility especially in the hospitality and tourism industry which directly deals with stakeholder such including customers and workers. Consequently, in this paper, the UNGC will be use as a framework.

2. Part B- practical Evaluation of a Responsible Business Practice

In this section, by using the UNGC as a framework, it will evaluate an organisations’, Pret A Manger and Corporate Social Responsibility (CSR) in terms of their policies and management of the company. Finally, it will present potential improvement and recommendation for the company.

2.1. Human right policy

In terns of human right policy, it owns its policy which is ‘People and Ethics’. This means that everyone – which include that the consumer, supplier and team member are treated equally. As principle1 of the UNGC is about respecting people and treating people fairly, it seems an effort is put into principle1 (United Nations Global Compact, 2018a). Pret A Manger raised their revenue by 15% to £776.2 million in 2016 as well as opening 50 new branches which includes overseas branches in countries such as the USA, Hong Kong and Dubai. It implies that they are aware of globalisation which is part of principle2 of the UNGC. However, building new shops overseas is not viable enough to prove they have human rights in their countries. On the other hand, by considering the ingredients that the company uses for products, part of their human right policy might be verified. For example, duck from Thailand, tea from Sri Lanka and crayfish from China. Pret A Manger is one of the cafes where fair trade is available. Although it is not qualified by Fairtrade, it is said that they have fair trade coffee due to their coffee from fair trade NGO Twin (Fairtrade London, 2018; Pret A Manger Ltd, 2018b). Therefore, though the company have a Human right policy, there is still room for improvement.

2.2. Labour policy

As for Labour policy, the company appears to reflect as a responsible business. The UNGC principle4 is mention free from the established rule but not only about forced labour, but also it implies the opportunity to progress ability and educate children and prepare for the labour market. Pret A Manger has some programmes which help people go back to the working environment. One of them is called The Rising stars Programme which takes 8-months. This purpose to help workforce to progress their career. Furthermore, they have Pret Academy which also aimed to develop individual skills. In fact 80% of Prets A Manger’ managers started as Team Members which is the lowest position. In 2017, they ran more than 600 courses as well as 50 different events for learners in the UK (Pretjobs.co.uk, 2018). The company reports gender pay gap with their values. It states less than 5% of mean pay gap which is relatively low compared to 17.4% which is all the UK business average (Pret A Manger Ltd, 2017b). This applies to principle 6 ‘the elimination of discrimination in respect of employment and occupation’. This principle aimed avoiding discriminations which include colour, sex and religion. In 2016, it recorded 82% of employee job satisfaction rate (Pret A Manger Ltd, 2017a). The same year, they uploaded terms and conditions which to make sure child labours are not involved in their businesses. This implies that they have achieved principal5 which have banned under 15-year-old regular workers and as for hazardous workers need to be at least 18-year-old as work tends to damage their health both physical and mental aspects (United Nations Global Compact, 2018b; Pret A Manger Ltd, 2017c).

2.3. Environmental policy

In addition to this, Pret A Manger found Pret Foundation Trust (PFT) which aims ‘to alleviate poverty, particularly amongst the homeless’. The company delivers more than 12,000 meals to homeless shelters every week (Datamonitor, 2008). In 2016, donation values of PFT to grass-roots charities were grater than £800,000 which aided 53 people who have homeless backgrounds through Rising Star Programme which helped them to have a job. PFT support more than 40 Charites such as the Genesis Trust, the Clock Tower Sanctuary and the Wild Goose. PFT is not only giving money but also provides a number of things which include showers and sleeping bag (Pret A Manger Ltd, 2017c; Pret A Manger Ltd, 2017a). Recently, Pret A Manger starts a campaign which offers a 50p coffee discount if customers bring their own cup as Starbucks had adapted in 2016. In terms of the number of take-away cups in the UK, it is expected at least 2.5 billion coffee cups are thrown away a year. Coffee shops have suggested customers to recycle disposable cups. In fact, as paper sides and inner waterproof plastic layer needs to be separate, there is only a small rate of recycling (BBC News, 2018; Chapman, 2018). Regarding ethnical business strategy, recyclable cardboard sandwich boxes are used. As for delivery, electric delivery vans are used as well as green energy supplies. Moreover, compared to other competitors, they seem to have a higher level of ethical business practices. For example, Pret A Manger use 100 % organic milk as well as organic coffee beans whereas Starbucks does not (Datamonitor, 2008). These ethical businesses apply to principal 8 and 9. Therefore, although Pret A Manger falling behind compared to other coffee shops in terms of a promotion campaign, they seem to have taken responsibility for the environmental issue.

2.4. Potential improvement and recommendations

Although Pret A Manger is known as healthy fast food café and famous sandwich, tin terms of allergy they rarely have things such as gluten-free sandwiches and or wraps (Pret A Manger Ltd, 2018a). Since 2016, Veggie Pret which is for vegetarian and vegan has been a success. As therefore costumers requirement will be higher. In order to meet their needs, the company needs to produce new flavour as well as approach new customer. Compared to other competitors such as Starbucks and Costa coffee, as the company does not have an application, it seems to be the company itself has weakness in the advertisement. In order to develop their advertising sector, it leads to potential customers as the company become more familiar with them. In addition, it is necessary for them to have more workers, especially in the UK. Due to Brexit, they are facing lack of worker. According to Butler (2017), British applicants for the company were only one in 50 in March in 2017. Therefore, the company needs to advertise company itself as well as job descriptions.

Conclusion

The aim of this paper was to provide a theoretical analysis of ‘responsible businesses as well as present an evaluation of Pret A Manger from a responsible business point of view. As part A shows, CSR has a significant role in order to describe a responsible business. Although there is no such clear description of CSR, it requires the ability to deal with the obdurate environmental problem as well as take into account of business ethics. By considering frameworks which demonstrate within the same part, organisations need to pay attention to social and economics aspect as well as the working environment such as human rights. As Pret A Manger has been supporting the homeless, announcing the own cup discount and dealing with the gender pay gap, it appears that the company proceeds to be a responsible business. However, the human right aspect needs to be improve as it is not as clear.

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