Components of Corporate Social Responsibility practiced by Wesfarmers
Today, being a responsible member of the big community is not an option for the business. In order to place the brand as a forward-looking corporate resident, business should take reliable steps to offer resolutions to general problems of human in the world (Rang, 2011). Respecting CSR or corporate social responsibility will not just provide benefit to the big society, but also provide business with the precise organizational benefits (Cuvilceva, 2012). The purpose of this report is to discuss the components of the corporate social responsibility that are used in the Wesfarmers Company. The analysis will be performed of the CSR reporting and practice motivation with the support of the concept of stakeholder and legitimacy theories. Besides this, evaluation of the CSR components will be done to understand their impact on the local community.
Wesfarmers Limited is the conglomerate of Australia, with headquarter in Perth, Western Australia, with operations mainly in New Zealand and Australian retail, safety, and industrial products, coal mining and fertilizers. In 2016, the company earned around AU$65.98 billion revenue and started considered as the largest company of Australia overtaking BHP Billiton and Woolworths (Wesfarmers, 2018). It is the biggest Australian private employer, with around 220,000 employees (Wesfarmers, 2018).
Corporate social responsibility is one of the self-regulating models of business that support a business be communally responsible to stakeholders, to the public, and to itself. By adopting the model of corporate social responsibility, business could be aware of the type of influence they are having on every element of the community comprising environmental, social, and economic (Gottschalk, 2011).
The company is dedicated towards open and transparent communication of the environment management, with different stakeholders comprising investors, customers, non-government and government organizations, employees (Wesfarmers, 2018). Some of the environment reporting areas of Wesfarmers is:
Carbon Disclosure Project
The company have an enduring engagement program with investors and frequently look for the chances to improve their disclosure. The CDP (Carbon Disclosure Project) is the main tool of investor benchmarking for the climate change performance. Wesfarmers reacts to CDP’s ‘Investor Request’ on temperature change by their yearly voluntary submission, and in 2016, it was scored A (Wesfarmers, 2018).
National Pollutant Inventory
Two businesses of Wesfarmers that is Resources and WesCEF, are mandatory to report in the NPI (National Pollutant Inventory) (Wesfarmers, 2018).
Potential Environmental Non-Conformances
The activities of Wesfarmers’s divisions are focused towards following the regulations of environment developed by different authorities in all the countries they operate their business. Licenses approved to the company’s divisions control the air management, quantity, and quality of water, the carriage, and storage of dangerous resources, the waste disposal, and various environmental matters related with the operations of the entity (Wesfarmers, 2018).
Critical analysis of CSR reporting and practice motivation using legitimacy and stakeholder theories
People
Wesfarmers is a key employer with around 90% of their 30,000 strong personnel placed in Australia and remaining in New Zealand (Wesfarmers, 2016). The company identifies the rights of the hired employees in order to negotiate independently or cooperatively with or without the contribution of third parties. According to the estimation, 68% of their people are covered under some type of contracts (Wesfarmers, 2016). They do not believe in maintaining the trade union membership records.
Wesfarmers do not discriminate between male and female, therefore, they have approx. 43% of women employees and 14% of the senior positions within the organization are covered by them (Wesfarmers, 2016). The company has strategies that are applied in the whole group, which is focused towards ensuring that every individual must have equal rights to avail the employment benefits that are dependent on the merit principle.
Safety
Workplace safety needs to be at the highest priorities within the organization. The company believes that they have a responsibility to do all the possible actions for the safety and positive return from the employee’s job (Wesfarmers, 2016).
Legitimacy theory speculates organizations are repeatedly seeking to confirm that they work with the standards and promises of their relevant societies. Legitimacy could be considered as “a widespread view or guess that the activities of a company are desirable, good, or suitable certain communally created system of standards, morals, opinions, and descriptions.” (Laan, 2009).To this end, the business tries to create a correspondence between the values of the society related with or disguised by their actions and the standards of satisfactory behavior in the superior social system (Zelditch, 2018).
Legitimacy theory followed by Wesfarmers
To get the support of constant compliance company remain updated with the alterations in regulations by subscribing to an alert service and online legislation monitoring along with various professional journals, New Zealand and Australian Standards and news signals from federal and state experts websites (Wesfarmers, 2015). By this company, make changes in its norms and standards as well as strategies operating within the organization for the development of the environment, society, and organization itself. Advice notes related to the influence of new legislation are also expected from the Corporate Solicitors Office and various providers of legal service.
National Pollutant Inventory – Wesfarmers do not utilize any type of materials that are recorded in NPI (Wesfarmers, 2018).
Integrated Management System – Incorporation of OHSE (Occupational Health, Safety and Environment standards has been accomplished in all the units of the Wesfarmers by the establishment of BSAFE strategy (Wesfarmers, 2015).
Impact of social and environmental reporting on the local community
The stakeholder theory is a business ethics and an organizational management theory that talks about the values and morals in handling a business. Ian Mitroff originally detailed it in the book “Stakeholders of the Organizational Mind,” which was published in 1983 (Boucher, and Rendtorff, 2016). In addition to this, it is kind of capitalism that talks about the unified relations between an industry and its suppliers, investors, customers, communities, and employees and other people that possess stake within the business. The theory discussed that a company must make value for every stakeholder and not just for shareholders (Phillips, 2011).
Stakeholder theory in consideration to Wesfarmers
People (Employees, Suppliers)
Training – Wesfarmers claims that it regularly invest in the development and training of its team, to implant the culture and leadership required to provision their environmental and safety goals. In order to support this, they have created a system of online learning as a division of ‘Bunnings Learning Academy’ (Wesfarmers, 2017). The system allows the members of the company’s team to reach applicable safety training and qualifications from ‘i-learning’ stands situated in the stores.
Environmental – In combination with their suppliers, Orica, the training program of Australia called as the ‘Green Thumb Academy’ is planned two times in a year for the training of the team members to offer consumers with guidance on the variety of garden chemicals obtainable in their stores that are harmless to practice and less damaging to the environment (Wesfarmers, 2006).
Health and Safety – Wesfarmers claims that they follow all the norms and standards framed by the administrations for the safety and growth of the employee’s job. However, it has not been successful in attaining this, for example, in 2006, they were guilty of a case presented by Queensland Work Health Standards, which charged a fine of around $30,000 (Wesfarmers, 2006). The matter was associated with an incident took place at the Compton Road Store where a consumer got an injury while handling the stock (Wesfarmers, 2017).
The environmental reporting elaborates all the actions performed by the Wesfarmers for the safety of the environment. This reporting of the company has a major impact on the perception of the society towards organization (Global Reporting Initiate, 2018). The programmes arranged by the company for protecting the environment have managed their relations with the society. For example, as per environment reporting, it does not make use of any harmful material listed in the National pollutant inventory. This information support customer in taking their buying decisions effectively. Moreover, environment reporting increases the awareness of the society related to present environmental issues and different ways used by the organization to deal with it (Global Reporting Initiate, 2018).
Social reporting can influence the local community positively as well as negatively. Since social reporting reflects all the activities performed by the Wesfarmers for the development and growth of the society, it helps society in framing a thought or perception for the organization. Today, customers give importance and consider those organizations that are focused towards the well-being of the society; therefore, this information could influence their buying decision (Dierkes, Meinolf and Antal, 2018). Moreover, investors regularly are in search of the information negative or positive for making their investment decisions, social reporting could change their decision. Wesfarmers offer employment and various incentive policies for its employee, which helps in enhancing the living standard of the community.
Conclusion
From the above analysis, it could be said that Wesfarmers has framed various policies for the benefits of society and environment that are presented by social reporting and environment reporting. The report has discussed the concept of legitimacy theory according to which it has been identified that Wesfarmers is successfully meeting all the legal requirements towards the society. Besides this, stakeholder theory highlights that the company is focusing towards all its stakeholders, however, it has faced some hurdles in past in regards to the safety of its clients. In the end, according to the analysis, it has been identified that the major impact of social reporting and environment reporting is on the purchasing decision of the stakeholders.
References
Boucher, M.B.B., and Rendtorff, J.D. (2016) Stakeholder Theory: A Model for Strategic Management 1st ed. Germany: Springer.
Cuvilceva, M. (2012) The importance and significance of Corporate Social Responsibility Reporting 1st ed. Germany: GRIN Verlag.
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Laan, S.V.D. (2009) The Role of Theory in Explaining Motivation for Corporate Social Disclosures: Voluntary Disclosures vs ‘Solicited’ Disclosures. Australasian Accounting Business and Finance Journal, 3(4), 2-28.
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Wesfarmers (2016) Sustainability Report [online]. Available from https://sustainability.wesfarmers.com.au/media/1835/edited-extract-of-wesfarmers-2016-sustainability-report.pdf [accessed 13 September 2018]
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Wesfarmers (2018) About Wesfarmers [online]. Available from https://sustainability.wesfarmers.com.au/our-report/about-wesfarmers/ [accessed 13 September 2018]
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Zelditch, M. (2018) Status, Power, and Legitimacy 2nd ed. U.S: Routledge.
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