An analysis of Responsible Business in Costa Coffee
Introduction
Corporate social responsibility is the thought that has been a mankind concern for decades now. Over the last two or so decades, however, it has become an increasing business concern globally. This has resulted in the increasing interactions amid the businesses, government and the society in general (Guliani, & Rizwan, 2016). In the past, businesses were mainly concerned with financial outcomes based on their decision. However, in the economic world, today businesses are required to be a major reflection of the ethical, legal and social consequences of the corporation’s decisions. Hotels operate in an environment that supports the members of the society (Guliani, & Rizwan, 2016). Therefore, firms in the hospitality sector are required to ensure that they generate benefits rather than harm the society in their quest to maximize profits. The report will provide an analysis regarding corporate social responsibility as an ethical business practice for firms operating in the hospitality sector. The report will then focus on the CSR aspects that are implemented by Costa Coffee. The report aims at analyzing the various aspects of the responsible business at Costa Coffee while paying specific attention to the CSR strategies that have been adopted by the firm.
Literature Review
CSR can longer be described by the much that the company contributes towards charity but the description can best be derived from the general involvement in activities that are aimed at improving individual’s lives quality (Guliani, & Rizwan, 2016). Firms within the hospitality industry can demonstrate their business responsibility and business practice ethics via CSR programs, corporate governance principles adherence and active participation in different voluntary agreements and partnerships with other firms. CSR is objected at enabling firms to make a positive and desirable contribution to all the stakeholders such as the consumers, the community, employees and other groups that might be indirectly or directly impacted by its operations. Corporate governance necessitates that the hospitality companies adheres to a set of management principles. This implies that the hospitality firms can play part in social developments such as environmental conservation (Wilhelm, 2010). The engagement in corporate responsibility can results in significant benefits (Wilhelm, 2010). The benefits may include increasing the consumers segment, sales increase, profit increase, reduce the rate of employees turnover, attract potential investors and increase the general productivity of the firm. The lack of cporporate responsibility can be categorized as unethical practice in business. Business ethics is particularly concerned with the conduct of the business which can either be positive or wrong (Bohdanowicz & Zientara, 2009). Organizational decisions are developed by persons within the firm but they are mainly influenced by the corporation’s culture. Behaving ethically for the corporation is a strategy of maintaining morals (Wilhelm, 2010).
CSR in the Hospitality Industry
According to Holcomb, Upchurch, and Okumus (2007), 80 percent of the successful hospitality companies have engaged in corporate responsibilities activities. This is a major sign that the hospitality industry has widely adopted CSR in the recent based on the involved advantages. Some corporations have even made the efforts of incorporating CSR standards and policies in the visions as well as value statements. Holcomb, Upchurch and Okumus (2007), stated that the most utilized strategies in engaging in CSR by corporations are embracing workplace employees diversity, playing part in environmental conversation through green movement and other environmental friendly operations, implementation of CSR standards and policies, making social donations and developments in areas such as education (Rivera, 2002).
Environmental conservation and the effective utilization of energy have turned to be the primary interesting CSR areas in the hospitality sector. There are also some specific conditions that may necessitate firms to respond in a socially responsible manner (Rivera, 2002). Hotels are involved in activities that are mainly objected at improving individual’s lives quality for their employees and the community that they operate in. In that, employees are the most important resources that the corporation has as they tend to determine productivity and performance. On the other hand, the community offers a surrounding for the company to work and also provide a market for the yields. Some hotels adopt several strategies in ensuring that equality is enhanced in the society through creating employment opportunities to the local community (Holcomb, Upchurch and Okumus, 2007). This helps in creating a more developed social as well as economic state within their operations as their actions are suitable for the development of community’s amenities and social infrastructure. In addition the hotel industry is known to be highly associated with high levels of wastes that may lead to the pollution of the environment. Therefore, the hospitality firms utilize different measures that ensures that their wastes are properly disposed of without affecting the community and the environment which may include soil water or even air (Rivera, 2004).
Consumers prefer to acquire hospitality products and services from hotels that are associated with high levels of CSR involvement. This is because the firms are perceived not to be objected on maximizing profit but rather they are aimed at lifting the status of the society within which they operate (Henderson, 2007). The implementation of CSR policies and standards within every firm in the hospitality sector may, therefore, prove to be a competitive and a sustainable advantaged. The rising pressure from the media, consumers and the government for environmental conservation measures adoption by businesses is forcing firms within the hospitality industry to implement fresh plans, strategies, and policies that are friendly to the environment. Most of the hostels are now utilizing technology in reducing wastes, the use of recycling processes and the conservation of natural energy (Rivera, 2004).
The Importance of CSR
While CSR programs can be categorized as voluntary and unrestricted, the benefits of the engagements are more than the involved costs provided that firms are not objected on the maximization of high financial returns only in all its operations (Logan, Gooden and Simon, 2013). The characteristics and the nature of the servicing sector and particularly the hospitality industry engagement in social initiatives helps in the creation of desirable effects. In that, the involvement can result in the improvement of brand awareness as well as loyal consumers. Based on the fact that services are intangible and they are assessed on the basis quality perception rather than the attributes of tangible products the good will that is resulted by social matters engagement that a firm utilizes transfers the image of the brand which results in the creation of differentiation which may, in turn, lead to the development of competitive advantage. The hospitality industry is characterized by increased competition and the best way of dealing with it is through the provision of unique services that are branded with a positive perception (Bohdanowicz and Zientara, 2008).
Social initiatives additionally results in the creation of reputational benefits and the consumers are always willing to pay for higher prices by considering the firm as responsible which enables the corporation in surviving the seasonal industry that is characterized by undesirable economic cycles. Demographics such as that of millennial is one that is high conscious socially which triggers the need for creating green hotels and this take normally results in the creation of sustainability. In fact, it has been established by several recent studies that consumers are usually willing to acquire premium priced services from hotels that are labeled as green (Kasim, 2006).
Hotel corporations that practices CSR can be able to attract motivate as well as retain employees, consumers and attract potential and willing investors. Employees are always willing to work for corporations that hold a desirable image as well as reputation (Grünewälder, 2008). This is essential and it results in the creation of motivation which lowers the rate of turnover which is a long-standing issue within the industry. In addition, in consideration of the nature of the workforce diversity in the global nature employees, diversity as a form of CSR initiative helps in improving performance through the creation of more skills (Kang, Lee, and Huh, 2010). Thus, CSR initiatives transform to be the important components that result in the integration of high performance (Huimin, and Ryan, 2011). Stewardship of the environment is the primary section that the hospitality sector has invested in and it is linked with several benefits that encourage efficiency, increases the consumer base and improves the general sales. A considerable reputation is additionally acquired from the initiatives as the programs are effective in pursuing high consumer’s attention which then creates a desirable brand image since consumers become more connected to the organization and its conduct in general. It is, however, crucial to leverage the firm’s primary competencies when deciding to adopt actions that are socially responsible which help in creating valuable opportunities (Grünewälder, 2008).
CSR Frameworks
CSR framework refers to the entities to which a corporation holds the obligation to act upon for the benefits of the whole community (Paetzold, 2009). Costa Coffee will be analyzed on the basis of three frameworks which are the community, environment and the workplace. The community framework entails social welfares, education and social development programs. The workplace involves the development of human capital, fair remuneration, staff welfare, health, and safety working place and workplace diversity. On the other hand, the environment entails environmental, certification, environmental social campaigns and activates and environmental management initiatives (Paetzold, 2009).
The three frameworks were chosen based on their ability to show the extent to which the corporation is responsible socially (Crane, 2008). In that, the workplace will be an important framework for the evaluation as it will be based on the efforts made by the corporation in creating safeties, developing human capital through training initiatives, educational assistance, appreciating employees and commitment to productivity through promoting healthiness (Crane, 2008). In relation to the community, the participation of the corporation involuntary activities that are aimed at creating social development will be analyzed. This will assess whether the corporation plays part in the general growth of the education sector in any way. In addition, its participation in social welfare such as the development of amenities and social welfares that are within a certain community will be analyzed (Crane, 2008). In the context of the environment framework, the areas that will be analyzed includes the certification of the environment, participation in environmental campaigns and the management of environmental programs. Through the analysis of various CSR activities, which the company undertakes as well as the impact that these activities have on the community and other stakeholders the key weakness in Costa Coffee’s CSR strategy will also be identified. This could be expected to lead to a better evaluation of the effectiveness of the firm’s CSR strategy. It could also aid in identifying areas that could be modified so as to enhance the effectiveness of its CSR programs (Crane, 2008).
Part B: Practical Evaluation of Responsible Business Practice
Costa Coffee is one of the favorite coffee shops with the fastest and yet the largest growing coffee business chain in the UK. The firm’s vision is to create legendary brands that create a strong consumer feeling with innovation to lead (AMD, 2013). In addition, the company’s teams offer special services that ensure that they come back thus driving the growth of profit. Costa coffee’s CSR slogan is that it cares for the community that it services and operates in (Costa, 2017). The company is socially responsible as it participates in several social initiatives. The company continuously strives in reducing its environmental impact. This is achieved by the use of recycling strategies, the use of sustainable inputs of resources in its operation, the use of technology smart equipments that works in ensuring that less wastes are released to the air and the use of renewable energy (Renolds, 2010).
The company manages its environmental conservation and the promotion of healthy living. All the coffee that the company uses is completely certified by the Rainforest Alliance which ensures that it is of good quality and safeties (Costa, 2017). The company additionally plays part in the development of healthcare by ensuring that it donates to the purchase of healthcare devices and materials annually. This shows that the company is committed to enhancing the wellness of the community that offers it a market as well as offers a favorable surrounding to operate in. The company is also involved in promoting quality and affordable education particularly for the less fortunate children in the community. The company has its own foundation that is referred to as The Costa Foundation (AMD, 2013).
The foundation plays part in the provision of long-term support to the coffee planters and their respective communities. This is achieved through the provision of education access which ensures that the communities are well informed and equipped to deal with economic as well as social issues through securing employment opportunities with adequate income to support the families. Up to date, the company has built schools in the communities where coffee is grown and improved the existing educational facilities in most nations such as Vietnam and Colombia. The company also offers training and sustainable crops to their farmers, employees as well as their respective families which ensure adequate care to the coffee lands and the community in the best practices.
Back in 2013, the company announced a fresh product packaging as the primary part of the corporation in widening sustainable and commitment to social responsibility (AMD, 2013). The packaging has been applied in all its stores and it is structured in a manner that it utilizes lowered resources which lead to the saving of 18 paper tons every year. The initiative is a part of the corporation’s objective in ensuring that its operations leads to zero wastes by the end of this year. The design additionally incorporates the labeling scheme initiated by the government which allows consumers to make healthier options at ease in regard to the food they take (AMD, 2013). Costa was the first coffee retailer to offer products that incorporated a packaging front labeling that is consistent with the one that is utilized across the food and beverages industry that is also supported by the health and foods organizations. The packaging of the corporation that is always consumer and environmental friendly to avoid pollution is parent of the corporation’s wider CSR strategy which is aimed at creating long-term company’s sustainability while still maintaining wellness in the society (AMD, 2013).
Costa coffee has well developed and sets targets in regard to environmental conservation, consumer wellness and the benefiting the community in general. In that, the company wishes to exist in a community that depicts social wellness. In achieving this the company partners with other firms in sponsoring healthcare facilities developments and building of schools in economies that are characterized with lawlessness. The company sells products that are health friendly, affordable and safe (Costa, 2017). It recognizes the growing need of consuming healthy meals and therefore offers more natural, hygiene and non-preserved meals and certified coffee products. In addition, the company provides charity donations in the community for instance during Christmas or other celebrations as a way of thanking the community (Costa, 2017). However, the part that the community should improve on is the recycling and waste. It should pack products in recyclable packaging and those that can decompose faster and stop using plastics.
References
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