BA Strike Timeline

A great place to get started if you're looking for a history of the BA HR problems between 2009 and 2011.  It's great because it also has some links to other news articles that explain the strike in full.

http://www.telegraph.co.uk/travel/travelnews/7760081/BA-strike-timeline.html

30 November General Strike

Here are some articles that are of interest with regard to the strike which is to take place on 30 November:

http://m.guardian.co.uk/politics/2011/nov/16/unions-public-sector-strikes?cat=politics&type=article

http://www.teachers.org.uk/

http://www.telegraph.co.uk/education/educationnews/8879660/Head-teachers-back-national-strike-action-over-pensions.html

http://www.independent.co.uk/news/education/education-news/schools-to-be-shut-by-head-teachers-strike-6259187.html

http://www.bbc.co.uk/news/education-15655434

http://www.teachers.org.uk/files/pension-facts-a4-7459.pdf

http://m.guardian.co.uk/ms/p/gnm/op/s3qKM-zLeY8cgWKFgkSmeIA/view.m?id=15&gid=commentisfree/2011/nov/18/30-november-strike-ballots&cat=society

http://m.guardian.co.uk/ms/p/gnm/op/s3qKM-zLeY8cgWKFgkSmeIA/view.m?id=15&gid=commentisfree/2011/nov/21/striking-teacher-30-november&cat=society

http://menmedia.co.uk/manchestereveningnews/news/politics/s/1465796_public-sector-strike-on-november-30-to-wipe-3m-from-greater-manchester-economy

Decentralisation Within Johnson and Johnson

This is an interesting interview I found with the CEO of Johnson and Johnson talking about what it's like to run a decentralised workforce.

http://knowledge.wharton.upenn.edu/article.cfm?articleid=2003

in conclusion , gives good reasons for the use of decentralisation such as the ability to specialise and deal with change , but also talks about managing many of the disadvantages such as lack of control by making sure the right people are employed to perform the job.

Hard vs. Soft Human Resource Management

Many companies have a big decision when choosing Hard of Soft Human Resource Management, both have big benefits and drawbacks. A soft HRM strategy involves taking care of employees and viewing them as an asset. This could involve extra bonuses, time off, or free time to go to the gym at work etc.
A Hard HRM approach involves treating employees as just part of a businees, and seeing them as easily replaceable.

This website shows the benefits and drawbacks in a clear table.

http://tutor2u.net/business/people/hrm_hard_soft.asp

Archie.

Headteachers Strike Over Pension Pay

For the first time in 114 years the Headteachers of the NAHT have decided to take strike action with a ballot of 24,000 members and a 53.6% turnout on that. The result was a 75.8% vote in favour of strike action.

While the absence of a headteacher for a day would not necessarily lead to a school closure, the vote is likely to affect millions of children over the country as Headteachers are co-ordinating strike action.

Here is the best article I was able to find.

http://www.guardian.co.uk/education/2011/nov/09/headteachers-vote-strike-action-pensions

Archie.

Decentralisation

Quite possibly the most concise and easy-to-understand explanation you could hope for:

http://www.economist.com/node/14298890

The Rise and Fall of Groupon

Groupon- have you heard of it?  The first time I did was in Christmas 2010 when some friends of mine in the US told me about these 'amazing' deals you could get. 

Here's how it works: Groupon finds a business, say a restaurant, which wants to increase its demand on a certain night of the week when it's capacity utilisation is really low, say a Tuesday.  Groupon approahces the restaurant telling them that they will be able to find enough customers to fill the restaurant up on a Tuesday night so long as the restaurant offers a significant discount, say 50% off.  Then groupon sends an email to all its subscribers saying there's an incredible deal for such and such a restaurant on Tuesday if they get 50 people to sign up.  50 people sign up and pay Groupon, Groupon gives them a voucher and this voucher buys them a meal at the restaurant.  Groupon takes a cut, customers get a good deal, and businesses fill up their excess capacity.  Everybody's a winner, right?

(As a persnoal aside: I was signed up for Groupon in the first half of 2011.  I got a deal on dog racing at Oxford Dog Track for £10 admission plus a free burger.  Of course I ended up spending about £30 on bets, so of course the Dog Track is happy even if they have to offer a big discount.  Think of it as a loss leader).

As it turns out, everybody's a winner, and that includes lots of copycat web businesses that are copying the Groupon model.  As the article says, you can't patent a way of selling coupons.  And with this model there is no clear advantage of being the first to market.  So in the past few months there have been lots of copycat websites (have you seen that annoying Wowcher! advertisement lately?) which means that it's going to be a tough year for Groupon.

It goes to show that if you can't protect your idea, you don't really have much of a business.

Here's the link:

http://www.economist.com/node/21533425

Happy reading!

Well take me back to ol' Missouri

This article was too good to miss:


http://www.economist.com/node/21534817


What does this have anything to do with Business Studies?


Well, take what we've been learning about with economies of scale.  Here's a quote from the article:


"Like both Las Vegas and Silicon Valley, Branson is a cluster. The concentration of theatres attracts skilled labour and allows specialist knowledge to spread. People quit one business to start a similar one, creating an entrepreneurial cycle, and, in the case of Branson, a lot of high-quality bluegrass music as well."


I'm loving that quote- it's external economies of scale in action!  No more using silicon valley in my lessons, I'll be explaining the joys of operating a theater business in Branson.


The first student who posts a meaningful comment to this post gets a ping!

Worlds Biggest R&D Spenders

Companies around the world spend billions of dollars every year on Research and Development (RandD) and pour thousands of man hours into finding the next biggest break in their sector of the global market. Is it all worth it?

This link shows the top selected RandD spenders in the world in 2008, is it what you expected?

http://www.economist.com/node/14926081

Toyota: Toyota motor company spends more than $1million every hour on R&D and in 2009 spent more than $9 billion on RandD. This putting them number 1 in the world.

L6 Business Studies Review Surveys

The Lower Sixth progress review surveys are up and running!  Please click the following links to access the survey.

For L6 Business Studies:

http://www.surveymonkey.com/s/ZHSPQDS

For L6 Economics:

http://www.surveymonkey.com/s/ZHZCY8V

For those students who do both subjects: please fill in one of each.

The most important thing is that you be honest when answering these!

Mr. Hughes

Business Studies 12D Half Term Work

Business Studies 12D: Half Term Work

Assignment: You are to make a handout on Breakeven which explains the following situations:

1. Increase in Price
2. Decrease in Price
3. Increase in VC per Unit
4. Decrease in VC per Unit
5. Increase in Fixed Costs
6. Decrease in Fixed Costs

Make Column Names:
Output    Price    Variable    Cost Per Unit      Fixed Cost     Variable Cost      Total Cost       Revenue

Formulas:

Variable Cost: “=C2*A2”

Total Cost: “=D2+E2”

Revenue: “=A2*B2”

 

You can then use these values to make a table.

Using this table, you can make breakeven graphs for your handout.

Due Date: Monday 31 October 2011

 

If you have any questions, email me.  I will be able to provide help, but not for people trying to get it done last minute.

 

Mr. Hughes

With rising inflation and sinking intrest rates is Britain entering another recession, businesses are finding it increasingly hard to borrow money from banks and money invested in banks gives little return. This along with government cuts and rising costs of the everyday essentials like food, petrol and heating prices shows that Britain could easily be on the steep slippery slope to a recession. There is still hope, with Christmas round the corner, as people will be spending more and the multiplier effect will kick in and the economy should pick up. But this might not be enough to prevent a reseccion so Britains businesses will have to cost minimise if they want to survive other wise many business will be finding them selves with liquidity problems due to the rise in costs and the lack of sales.
Hugo
http://www.economist.com/blogs/blighty/2011/01/british_economy_0

China

Is China becoming the worlds next big economic country !!!! This article by the economist outlines the huge surge in Chinas economic power as it fights with Amarica to become the next big economic superpower.

http://www.economist.com/node/21528987

Student Blogger Challenge

It's official!  The first ten A2 students who post articles after this points will be awarded pings.  Here are the rules:

1) Articles must be relevant.  Your post must include a summary with a comment to explain why this article is interesting (see some previous articles for examples).
2) Maximum of two pings per person.
3) When you see my comment on the article, you will know that the ping has been counted and added to your tutor file.

Long live the MIGHTY PING!!!

-Mr. Hughes

In The Wake of Steve Jobs

STEVE Jobs and Apple might have taken centre stage not only in the last week or so, but also in the last few years and it appears that they have left other companies behind. However, Microsoft is still a really innovative, creative and forward thinking company.

http://www.youtube.com/watch?v=_WB7P4jVktU
This is an example of a really interesting product that has the potential to over shadow any of Apple's recent developments. In fact this product, coupled with the new "Cloud" concept, could become integral parts of all our lives in the next ten years.

Apple may be the company of now, but I think if microsoft keep going with this product and this line of development we could see some truly amazing pieces of technology.

Only one problem, Bill Gates is not the inspirational figure head that Steve Jobs was and still is posthumously.

Jack

Steve Jobs Interactive Story and Photos

If you're looking for a great way to get an introduction to Mr. Job's life and career, check out this link:

http://www.guardian.co.uk/technology/interactive/2011/oct/06/steve-jobs-life-career-interactive

Be sure to click on the 'play audio' so you get the full story.

Steve Jobs in The Economist

This was the cover article from The Economist this week.  You may soon discover it is my favourite news publication.

I think this is the best commentary on his death that I have seen so far:

http://www.economist.com/node/21531529

From this article, the two passages I think have the most relevance are these:

"As a technologist, Mr Jobs was different because he was not an engineer—and that was his great strength. Instead he was obsessed with product design and aesthetics, and with making advanced technology simple to use."

This is so clearly true.  The more I look at Apple, the more I realise that its products are designed from the outside in, rather than engineers working from the inside out focusing on functionality rather than design.  This has strong links to Jack's article, where people were describing how he would often throw away their idea if it didn't have the right look.

And:

"The gap between Apple and other tech firms is now likely to narrow. This week’s announcement of a new iPhone by a management team led by Tim Cook, who replaced Mr Jobs as chief executive in August, was generally regarded as competent but uninspiring. Without Mr Jobs to sprinkle his star dust on the event, it felt like just another product launch from just another technology firm."

This just made me a bit sad.  I don't think that I'm one of thsoe over-sentimental Jobs mourners who would light a candle outside the nearest Apple store, but I know that I like their products and I think they are valuable.  Without Mr. Jobs, will there be such value?  Will the next thing the company comes out with be so inspiring?  Has it lost some of its magic?  It's impossible to say at this point, but I don't like to think about it becoming just "another technology firm."

Steve Jobs' micro-management and Apple's flat structure

THE world is still shocked by the death of Apple's figure head Steve Jobs and its no surprise that there has a been a media storm around the enigmatic man's life and death.
This is a link to an article from The Guardian, which has statements from people that worked in all parts of the world's most famous company, and shows that Jobs' management style could make a huge corporation into a flat structure. It also features a video that further highlights this, and other eye opening facts.

http://www.guardian.co.uk/technology/2011/oct/06/apple-insiders-remember-steve-jobs

Jack.

Manufacturing Decisions: Location Decisions for Dyson

James Dyson is an icon of British Industry.  The self-proclaimed "Inventor of cyclone vacuum technology" set up manufacturing in the UK after failing to get the big vacum manufacturers to buy teh patents for his inventions.  In retrospect, this wasn't such a bad thing.  Through the 1990s and early 2000s his product was the fastest-selling vacuum cleaner ever made in the UK.

In 2002 his company attracted controversy when it announced that its UK production facility in England woudl be closed down and moved to Malaysia.  This left 800 workers reduntant and attracted national attention, as shown in the next two news articles:

http://news.bbc.co.uk/1/hi/england/1805050.stm

http://www.swindonadvertiser.co.uk/news/3750364.Job_losses_shock_for_Dyson_staff/

We've seen that locating manufacturing abroad can be a disaster for certain industries, e.g. Doc Martens or the fictional HiSonic.  To what extent does it matter for a company like Dyson?  Why is his company different from these others?

Steve Jobs Retrospective

What I love about this video is how you can go through the technology and see how it's changed.  Even the first generation iPhone looks like a brick today.  Do we create the illusion for ourselves, or is there something there which is truly valuable?

Tributes Pour in for Steve Jobs

Wanna know what people are saying about it?  Check it out:

http://www.dailymail.co.uk/news/article-2046056/Steve-Jobs-dead-Tributes-Barack-Obama-Mark-Zuckerberg-Bill-Gates.html?ito=feeds-newsxml

How do Americans Do Their Shopping?

In U6 Business Studies on Friday we were talking about the differences between shopping in the UK and the USA and why Tesco is having such a hard time with their new venture, Fresh and Easy.

To get an idea of why Americans might not be used to shopping at their corner shop, check out this view from Google Street View:

http://maps.google.co.uk

That big box "Nordstrom" you see is a department store, similar to what you British folk would find in Debenhams.  But have a scroll around the street view, or look at it in map view.  You'll notice that Nordstrom is simply one branch of a much larger shopping complex, the Park Meadows Mall.  This is the largest shopping centre in the state of Colorado, and as you can see there is plenty of parking.  But don't worry about walking too far from your car to the food court- they even have a valet parking service!

For more info about Park Meadows check out the link:

http://www.parkmeadows.com/

So is it any small surprise that Tesco had a big challenge trying to open their corner shops?

The Hits and Misses of Steve Jobs

There will be a lot of testimonials going out to Steve Jobs this weekend given the news of his death on Thursday.  People will have lots of different reactions to it.  Personally I find it sad to think that a person who has done so much to change the world will not be around to leave his stamp on the future, and my heart goes out to his family and those who were close to him.

I will be using my spare time over the weekend to find out as much as I can about this man to see what it teaches me about how he has done business for the past 35 years, and I would encourage you to do the same.  For Upper and Lower Sixth, this is your homework for the weekend.

To kick-start things off, here is a nice little article that goes through some of his greatest success stories and failures:

http://www.cbc.ca/news/technology/story/2011/10/06/f-steve-jobs-misses-and-hits.html

Good luck finding things and I'll look forward to hearing all about it on Monday.

Mr. H

Upper Sixth Monitoring Questionnaire

Upper Sixth Students:  Please click the following link to access the U6 Business Studies questionnaire:

http://www.surveymonkey.com/s/5K6GFC6

BUSS3 June 2011 Q2 Answers

Here's what I've got for Q2 on the most recent BUSS3 paper:

Payback: 2 years 3 months

NPV: 29.6m

I was happy to hear that there was broad agreement that these were the right answers.

Keep working hard and good luck on BUSS4.

Micheal O'Leary on Global Warming

Bullet Point 4 has to do with the factors which determine the extent to which a business is socially responsible.

We know that Anita Roddick was influential in her company and influenced The Body Shop's overall stance on corporate responsibility.

Here's a counter-example: Michael O'Leary of RyanAir giving his opinion about climate change.  Will this have an effect on how resonsible RyanAir is to the environment?

http://www.guardian.co.uk/environment/blog/2010/sep/10/michael-o-leary-ryanair-global-warming

How Socially Responsible is Nike?

Has Nike's effort since the mid 1990s made the company more socially responsible?  Certainly Nike would like you to believe so.

For Jeffrey Ballinger, he's a bit more skeptical.  Check out his article:

http://www.counterpunch.org/ballinger02082006.html

Now a few words of caution: The source is Counterpunch, which appears to be a pretty left-leaning newspaper.  This is from their internet site.  I found this link after I saw Jeffrey Ballinger's name linked to some other high-profile criticism of Nike.  So this argument is probably a bit one-sided, to put it mildly.

But it does have an interesting point: why has the CSR world suddenly done a U-turn on Nike and accepted the company as a leader in social responsibility, especially after so many years of criticising the company for its unfair practices.  Mr. Ballinger would argue it's because Nike is an expert in branding, both of its shoes and its corporate image.

Why do we care?  Because this links with Bullet Point 2: the importance of social responsibility relative to other objectives.  If we assume that Nike is a company that has CSR as an objective but actually has other objectives which are more important, some of the arguments in this article could well be rolled into why Nike includes CSR as an objective, even if other objectives are clearly more important for the company.

Even Primark Drops Companies that Don't Have CSR Standards

Check out this case from the Daily Telegraph:

http://www.telegraph.co.uk/news/uknews/2176170/Primark-drops-three-suppliers-over-child-labour-revelations.html

Summary: One of the businesses in India that Primark uses as a supplier was found to be using child labour in its production process.  When Primark found out about this, they dropped them as a supplier and pulled from the store all the clothes supplied by that supplier.

Why do we care?

This links to Bullet Point 1.  An advantage of being socially responsible means that you will have good relationships with your customers, your suppliers, and your stakeholders.  So if a company is found to be irresponsible, as the Indian supplier was, even customers like Primark are going to put you at distance.  And it's not like we're even talking about the most high-minded of companies making their distance: it's Primark.  Even Primark is not going to be associated with a factory that uses 11 year olds.

Perhaps we could extend this research to other bullet points.  When Primark made this decision, was it because of a moral stance or because of their need to not tarnish their image any further?  Clearly, this decision was in their self-interest.

Even The Most Ethical Businesses Can Sell Out

A lot of people have been talking about The Body Shop in their research.  Not only are people using it as an example of how a company can be ethical and profitable, and in fact why those profits are often driven by ethics, some people have been talking about how it was sold because shareholders wanted to make more profit and not be so ethical anymore.  Consider the following articles:

http://news.bbc.co.uk/1/hi/business/4817814.stm

http://www.independent.co.uk/news/uk/this-britain/body-shops-popularity-plunges-after-loreal-sale-473599.html

http://www.cosmeticsdesign-europe.com/Business-Financial/Body-Shop-owner-defends-selling-to-L-Oreal

What's the point of these articles?

Basically, it's to illustrate that in 2006 The Body Shop was merged with the French cosmetics firm L'Oreal. Why would this be a problem?  Because L'Oreal conducted animal testing at the time, something that the Body Shop was always against.  Also, L'Oreal was part-owned by the Swiss food conglomorate Nestle.  Would The Body Shop be able to retain its core values now that it had been merged with less 'ethical' companies?

Even though it's not said directly, we can infer from this that the shareholders in The Body Shop collectively decided to 'cash in' on the success of their business and sell to a bigger company.  Nevermind that the bigger companies were not quite as ethical as The Body Shop: it was an opportunity to make a return on the investment.  This could possibly link to Bullet Point 1, because owners of the business ultimately want returns for their shares and profit, not ethics.  Milton Friedman would have been proud.

Example of a Government which has implemented regulation for companies to have CSR

Check out the link to this website for the Danish government:

http://www.csrgov.dk/sw51190.asp

This could be the kind of information which would be good for the beginnig of a bullet point 6 essay to explain how different governments are makign CSR mandatory.  In this case, the Danish government is making CSR reporting mandatory for 1100 of the largest businesses in the country.

Homework: Unit 3 Take-home examination

During study leave, you will have the opportunity to complete a Unit 3 take-home examination.  The paper I would like you to consider is:

BUSS3 January 2010: "Out and About PLC"

You can find this in your Unit 3 examination pack or at the following website:

http://store.aqa.org.uk/qual/gce/pdf/AQA-BUSS3-W-QP-JAN10.PDF

Due to Mr. Hughes: Friday 20 May, 5:00 PM (both groups)

Clearly, it may be the case that people are not in on that day due to other committments.  For those people who manage to complete the examination by the above date, I will mark your script and have comments for it early next week.

Please email me directly with any questions: rdh@cokethorpe.org.

Good luck.

Mr. Hughes

Bullet Point 4 Essay Plan

As discussed in lesson on 18 May (B Group)

"The factors that determine the extent to which a business is socially responsible."

What is this bullet point requiring us to research?  What is the premise?

Premise: Some businesses will be more socially responsible than others.  Why is this the case?  What are the reasons for the firm taking the responsibility?
Which factors increase the extent to which a business is socially responsible, which factors reduce the extent?

Begin with some definitions:

Interdependence: When two or more things depend on each other (e.g. business and society)
Enlightened self interest: acting in a way that is costly or inconvenient at present, but which is believed to be in one's interest in the long term.  e.g. Firms accepting some short term costs (lower profits) in return for long-term gains.

Explaining factors which increase social responsibility:

Bullet Point 5 Essay Plan

As discussed in lesson on 18 May 2011 (D Group)

Question: "The value and limitations to businesses and stakeholders of social reporting."

What are the arguments for having social reporting?  What are the arguments against?  How do we weigh these things up?

Start with some possible definitions:
Corporate Social Responsibility: The responsibility of a business or organisation to its primary stakeholders (shareholders) and also stakeholders that are affected by indirect and direct activities of the organisation (e.g. suppliers, customers, local community, environment)
Social Reporting/Accounting: Documenting how a business is meeting its social responsibilities.  Formally reporting the social and environmental impacts of a firm's actions to all relevant stakeholders.

Argument for:
Improved public relations.  Argument is that if a firm reports on its social committments, people will trust it more.  Because it helps stakeholders make informed decisions.
e.g.:

• In-depth social reporting provides greater assurance and transparency about the business.  e.g. Marks and Specner plan A.  See link: http://plana.marksandspencer.com/

Value of Social Reporting

Check out this document which has a lot of information about the value of social reporting:

http://hausercenter.org/iri/wp-content/uploads/2010/05/Value-of-Social-Reporting.pdf

This is a long document, but it has some useful info as well as links to real-life companies and how social reporting is of value to them.

Links about Mandatory CSR Reporting

Here are some links which are worth investigating about whether CSR reporting should be mandatory:

http://www.sustainabilityforum.com/blog/mandatory-csr-reporting-2011

http://articles.economictimes.indiatimes.com/2011-02-19/news/28615607_1_csr-new-companies-law-corporate-social-responsibility

http://www.greenbiz.com/news/2009/01/07/mandatory-csr-reporting-denmarks-largest-companies

CSR Case Studies: Nike

The following case study is a great, succint case study of the problem that Nike has as it faces problems of Corporate Social Responsibility.  It's from the mallenbaker.net site, so we should assume that it comes from the angle of being fairly sympathetic to the idea of businesses being serious about CSR.

http://www.mallenbaker.net/csr/CSRfiles/nike.html

What is most interesting about this article is the links it then provides.  If you follow some of the references, you can get some interesting points.  For example, by clicking on the reference to the criticism you find yourself at sourcewatch:

http://www.sourcewatch.org/index.php?title=Nike

Following the links on this site (which looks like a Wiki, therefore probably not too dependable as a source) we get to this:

http://www.corporatecrimereporter.com/ballinger052407.htm

I don't know anything about The Corporate Crime Reporter, but just from the name I'm assuming that they're probably not too sympathetic with to the corporate arguments against Social Responsibility.  They appear to be a pressure group.  Nonetheless, we get some interesting facts from this site, like the fact that it supposedly costs Nike $10 million to $12 million per year in CSR costs.  That is exactly the figure we were trying to find when we were looking up arguments for bullet point 1 and bullet point 4.

Cases For/Against Social Responsibility

Often it can be helpful to look at arguments from two extreme sides of the point.  Even though they might not be particularly balanced, they do provide arguments which you could use as a starting point in an essay.  You could then pick up evaluation points by providing that all-important balance.

For the extreme side of the case against CSR, check out the libertarian think-tank The Adam Smith Institute:

http://www.adamsmith.org/

This website is where I found this quote from a proponent against CSR, Milton Friedman:

http://www.adamsmith.org/blog/tax-and-economy/friedman-on-corporate-responsibility/

This has a nice contrast with the following website.  It appears to be a CSR consultant who has lots of good info (and case studies) about why CSR is so good:

http://www.mallenbaker.net/

The following is something I pulled of his site, where he goes through the arguments against CSR and then gives his own rebuttal to each one.  This would be great stuff to pull up if you wanted to think about how to qualify your essay points in a response:

http://www.mallenbaker.net/csr/against.php

Value and Limitations of Social Reporting: A few threads

Listed below are a few threads which might help kick-start your research for Bullet Point 5:

Supporting the benefits of social reporting:

http://www.businessgreen.com/bg/analysis/1801847/how-value-csr-report

http://www.environmentalleader.com/2008/02/12/finding-value-in-csr-reporting/

http://www.triplepundit.com/2009/12/the-true-value-of-csr-reports/

http://blogs.forbes.com/csr/2010/05/11/what-do-we-make-of-csr-reporting/
(this one might also be good for bullet point number 6)

Finally, an report which focuses on the question at hand directly: whether readers value what is said in a CSR report:

http://www.futerra.co.uk/downloads/Reporting_Change.pdf

Additionally, there is a blog on the Guardian website which runs through a lot of CSR issues (this is the source of the above report).  This can be accessed here:

http://www.guardian.co.uk/profile/solitaire-townsend

The author of the blog, Solitaire Townsend, also runs a sustainability communications company.  This might be an interesting place to look when considering the cost of writing a CSR report (e.g. how much would it cost to have such a company produce this report for you?)

http://www.futerra.co.uk/home

Good luck!

A small personal summary for bullet point 2

Bullet 2 – The importance of CSR relative to the company’s corporate objectives

- In discussing the importance of CSR relative to corporate objectives, a tobacco company has an interesting situation. For a business like Altria who are a leading global tobacco company that own the Marlboro brand, they will find it extremely difficult to be socially responsible due to the fact that it is a demerit product.

"The Cigarette is the only legally available product that when 'used as directed' will kill the user and injure others"

(Clete Snell 2005)

This has significance because being responsible is acting for the greater public good, making helpful and positive impact on the economy.

So in the process of selling cigarettes they are going against all of these already. For a company like this CSR towards the public community stakeholders is not as important a concern as the company’s aims and objectives and other CSR areas to more powerful stakeholders. They would place much more importance in their other corporate aims like investing in leadership, making good returns for their shareholders (a little CSR here, not for the community stakeholders though) and purely satisfying the adult consumers. (poor CSR here as this is not for the overall benefit of the community is it?)

The benefits of Altria investing and trying to improve their image as a user friendly, green company are miniscule compared to if they focused the funds towards new PR activities and expansion solely due to the product they sell. So hence they don’t place a lot of importance on this kind of CSR. It’s not a worthy responsibility for the business to accept to any kind of extent.

- However one example of a business in which places CSR fairly above corporate objectives or even sometimes mingles the two together is GSK (Glaxo Smith Klein).

“Thus, corporate responsibility

is an integral and embedded part of the way GSK does business.”

GSK have a large well-organised document prepared on responsibility for this year and many years previously. It states everything from the way they engage with all stakeholder groups via meetings, sales representatives, employee surveys and consultation, to the way they are helping to make drugs more widely available in less developed countries. ie. More flexible pricing strategies and refocused R&D to suit the local needs of these places.

http://www.gsk.com/responsibility/

- New sustainability targets set with long-term goal to become carbon neutral by 2050
- Details on new initiatives to increase access to medicines in LDCs
- Charitable support increased to £222m

these are the corporate objectives of GSK and as you can see they are all extremely responsible aims.

- On a different note, some companies will find it difficult to place importance on one or the other more strongly. Companies like BHP Biliton and BP are always going to come up against problems. For example, BHP can’t possibly choose not to accept responsibility for the environmental impact they have as one of their corporate objectives is to:

• Make optimal use of the development and conversion of natural resources.

Now to complete that goal, although worded well, this means they need to dig up a lot of land area, cut down a lot of trees or drill into rocks and mines, they are going to have to (legally) place importance on making best efforts to sustain the environment and not creating too much of a negative impact at any one time.

For BP as well, if they were to go straight into their drilling over the world without a care about marine life and even human life risks of their actions, the cost of the bad PR and company image would be catastrophical and would outweigh any advantage they may have gained by refusing acceptance. So for these companies, CSR is essentially imperative relative to their corporate objectives.

A small personal summary of bullet 1

Bullet point 1 – Benefits and costs to a business for being socially responsible

A quick idea of some benefits followed by examples:

- Whilst other businesses are not selling or making their products in a way that lets them use socially responsible methods, The businesses that do gain a competitive advantage (a USP?) which consumers are willing to pay a premium for.

- Internally, being socially responsible can increase motivation hence the productivity and welfare of business employees.

- Good CSR is a long term investment for avoiding the very damaging impacts of poor CSR. So it is valuable to a company in the long term.

- With a label of being a ‘green’ company, finance can be a lot easier to raise and maybe even more available from upfront payments for doing more green activities.

• The WINFA, Windward islands farmer’s association have been trading bananas all over the world including to the UK under the fair trade premium. By doing this, it is evident that due to them being socially responsible, they can now sell their bananas at a higher price as people are willing to pay an extra cost for a fair trade banana.
• In terms of CSR helping internally, John Lewis have strongly succeeded in this and now have a workforce of around 76500 motivated employees. They are incredibly socially responsible towards their partners by sharing a huge amount of company profits with them as well as treating them with mutual respect and like shareholders.

http://www.johnlewispartnership.co.uk/Display.aspx?MasterId=81f00253-1639-4749-a590-d2cd32540b62&NavigationId=613

• Ben & Jerry’s would be a prime example of a company known for their green and friendly approach to business. So in essence, they have found it a fairly simple procedure to raise capital whenever they need it as they will have gained huge amounts of support by taking part in many events and trying to solve environmental issues. For example the contribution in the competition for the largest ice-cream in the world along with the many other activities they contribute to will gain them more recognition and support.

Some negative points (costs):

- For a business to bother with the CSR approach, it costs money. So in turn a business may lose on company profits and hence competitiveness and in price competitiveness against competition.

- An obvious cost being the great possibility that shareholders may disagree with the way their money is being spent. Internally the disputes and uproar could be harmful to the companies flexibility and performance.

- Very importantly, if the product is price elastic, the rise in costs due to CSR expenditure will be most damaging to such businesses.

- Sometimes favouring towards ‘higher quality’ or ‘responible suppliers’ can be a disadvantage to maybe some of the poorer supply chains that cant afford to look after their employees as much?

Bhp Biliton spend approximately 1% of after tax profits on CSR

Hello! Mr Hughes, Just wondering how will CPA come up in the exam? Will the diagram already been drawn out and we just fill in the numbers? or do we have to interupt it?
Thanks! :)

Possible Section A Essay

Here is the section A essay prompt, the same we did in class as a Written Assessment on 31 March (Group D) or 1 April (Group B).

Consider the link to the Green and Black news article- could be a good place to reference in your own research for costs of CSR.

Green & Black's meets Fairtrade pledge


The organic chocolate manufacturer has met its target for full Fairtrade certification in the UK by the end of 2011.

Organic chocolate manufacturer Green & Black's has already met its key target for Fairtrade certification across all chocolate bars and drinks in the UK by the end of this year, it said on Tuesday.

The chocolate company also confirmed it is making progress to meet this pledge globally – in the 30-odd countries where it trades – by the end of 2011. At the same time it detailed its investment in Fairtrade for the longer term, agreeing to spend £400,000 a year for the next eight years to support the sustainability of cocoa-growing communities in the Dominican Republic. It pointed to the findings of a new report, due to be published next month, carried out by the University of Manchester, to identify the key issues faced by such communities of farmers, which said that increased investment should deliver significant and positive impact.

But the Fairtrade movement has attracted scepticism, notably from the free market thinktank Institute of Economic Affairs. Its spokeswoman, Ruth Porter, said: "Fairtrade tends to help producers in better-off countries when there are many in poorer countries who deserve to be helped, but who cannot afford to meet the many conditions required for certification. Big brands (such as Green & Black's) have much so much power and sway and we think they could be doing more to ease the plight of the poorest farmers. We should be talking about free trade, not Fairtrade"

http://www.guardian.co.uk/environment/2011/mar/08/green-blacks-fairtrade-pledge

Question: With reference to the article above and your own research, to what extent do the benefits of Corporate Social Responsibility outweigh the costs for a business? (40 marks)

The value of social a social network

Ever see a comment by a troll?

Better start by asking what a troll is. Apparently it's tech speak for a person who leaves a really stupid or rude comment in an online forum to get laughs from everyone else. Check it out:

http://www.economist.com/node/18483765?story_id=18483765

Yea, we've all seen the type.

But if you ever wondered why Facebook has a $50 billion value then think of what it's doing: leveraging it's network of real people to provide a service to help websites keep the posts clean. It's that network of real people that makes it so valuable.

What do you think about it? Will this idea work?

A2 Revision Quizzes

A great way to revise for some of your PESTLE Analysis topics:

http://www.tutor2u.net/blog/index.php/business-studies/comments/aqa-a2-business-buss4-revision-quizzes/

A Level Revision Guides

If you would like to purchase an A Level revision guide then this is what Mr. Hughes recommends:

Unit 1 Revision Guide

Unit 2 Revision Guide

Unit 3 Revision Guide

Unit 4 Revision Guide

Happy Revising!

The future of music and television?

Check out how new ideas on technology are changing the way big businesses distribute media:

http://www.economist.com/node/18486163

So many good links here. Intellectual property management (specifically, copyrights), Place in the marketing mix, and technology in operations. What do you think about it? Would you be more willing to go to Amazon or Apple if they had a 'Digital Locker?' Do you agree that television firms should be upset with Time Warner Cable for coming up with a new iPad app?

Supply Chains and the Disadvantages of Just In Time Production

The Japanese are always given credit for developing the types of efficient operations management, e.g. Just in Time or Kaizen. But what happens when something goes wrong, as has happened with the recent tsunami disaster? Check it out:

http://www.economist.com/node/18486015

Probably the most interesting idea: companies might have to give up efficiency for robustness, i.e. hold more stock as an insurance for those times when supply chains are not functioning.

Also, consider this to PPQCRF- the importance of reliability in the supply chain.

Extension Strategies in Tobacco Industry

http://www.economist.com/node/18486173

Ever wonder how companies use extension strategies in real life? Check out this article. Basically, the developed world is a market in the decline part of the product life cycle. So what does big tobacco want to do to keep revenues high? Find new markets.

Advantages of CSR- The Link to Happy Workers

Check out this guy talking about the need for bigger companies to have CSR for the effect it has on their workers. Powerful stuff for talking about bullet point no. 1.

Rugby in USA

Absolutely not related to CSR but thought it was interesting: http://www.economist.com/node/18070557

Discussion of Bullet Points No 1 and 2

Business Studies U6 Group B

Discussion: Bullet Point 1 and 2
28 March 2011

Bullet Point 1:


Jackson:
Benefit:
Being socially responsible will enhance a company’s brand image. Take Nike: For years they have had difficulty with criticism due to poor working conditions for those workers in their supplier’s factories. By reporting on CSR issues, the public will be more critical of businesses which fail to adopt fair labour practices. Therefore, Nike will change any poor practices to comply with the public’s desire for good CSR. This will lead to benefits for those workers in Nike supplier’s factories. e.g. a benefit to a stakeholder group: namely their workers.

Discussion of Bulllet Point 1

Discussion of bullet point 1 as put forward in the lesson on 25 March from U6 Business Studies group.


Bullet Point 1:

List of top 100 CSR Companies

Check out this list:

http://www.thecro.com/files/100Best2011_List-Revised.pdf

Incredibe CSR Resource

Check this out:

http://buss4csr.blogspot.com/

This guy has really done some impressive work with the CSR theme. I would guess that anybody who used a lot of this research would put themselves in a good position.

Now available on the school network!

CSR- Benefits and Costs

Many thanks to Alex Grout who pointed us to the following article which discusses the benefits and costs of CSR. From The Economist:

http://www.economist.com/node/3555212

Perhaps this article could be summed up in the following way (using a quote from the article itself:

"The human face that CSR applies to capitalism goes on each morning, gets increasingly smeared by day and washes off at night."

Essentially, this article argues that capitalism does not need CSR reporting because capitalism, at its heart, will help society. CSR approaches business activity with the premise that capitalism is bad. Therefore it does not understand capitalism and the way business operate. At worst, it may distract those people who are interested from the things which are really important to consider as far as business ethics.

This article, given its political leanings, will most likely be a source of information about the costs of CSR for businesses (this would relate to bullet point 1).

Tesco CSR

From Joe Ferrara:

Tescos

ENVIRONMENT
As a global business they have an important role in helping to minimise climate change. To achieve this, in 2009 they committed to:
• becoming a zero-carbon business by 2050
• reducing the emissions of the products we sell by 30% by 2020
• helping our customers to reduce their carbon footprint by 50% by 2020
• halve emissions from our 2006/7 baseline portfolio of buildings by 2020
• new stores built between 2007 and 2020 to emit half the CO2 of a 2006 new store
• reduce emissions per case delivered by 50% by 2012

Corporate Social Responsibilities:



Kellogg has a good history of corporate social responsibility which is growing to meet the expectations of todays business world. This includes:



> Investing money into people



> Investing in and enriching our communities.



> Encouraging employee volunteerism.



> Protecting our environment.
> Selling nutritious products and advocating healthy lifestyles.
> Acting with integrity and adhering to the highest ethical standards.
> Promoting diversity in our work force and partnering with diverse suppliers.
> Ensuring a safe, healthy workplace.

CSR report for Aga

http://www.agarangemaster.com/SiteImages/Site_301/Pdf/2009_CSR_Report.pdf

CSR Report for Aga

In this annual CSR report, we highlight some of the areas of innovation and product stewardship which will help ensure we continue to enhance the sustainability of our business and our products. We also summarise our key CSR policies, describe our management processes and quantify our performance.

Each year we consider and, where appropriate, set new targets and strategies to reflect the risks and opportunities of our premium brand consumer goods focussed business.

We are emphasising quality management systems and engaging further with customers, prospective customers and other stakeholders as we improve our customer

relationship management programmes.

Product sustainability

AGA Rangemaster has a number of world leading product positions. As we anticipate and respond to changing consumer demand and regulatory requirements we work to harness the latest technologies to enhance the sustainability of our products - in manufacture, in use and at the end of their life.

In summary our product sustainability strategy is as follows:

• In manufacture, we design our products to minimise the amount of energy, materials and other resources required for production.

• In use we design for maximum product utility and service life whilst minimising the amount of energy and other resources consumed whilst the product is in use.

• When the product reaches the end of its useful life our designers seek to maximise the proportion of the product and its components which can be reused, recycled or recovered.

Many of our products have a life of over 25 years and with the introduction of programmability into most of our range of cast iron models, we aim to offer options

to improve energy management within the home and to further extend product life.

Since Autumn 2009 we have been offering retrofits and upgrades which will help customers enhance the sustainability of our products in service. This could further extend life in the field and help reduce energy consumption and carbon emissions.

CSR management structure

William McGrath, Chief Executive, is responsible for CSR and reports to the Board on all CSR related matters. He is supported by Paul Tonks, Group HR Director and

CSR Coordinator and by the executive management committee. The management of each operation has responsibility for CSR and is accountable to the Chief Executive for all CSR matters. In addition, there are designated health, safety and environmental and human resources personnel at our operating units who assist in ensuring the Group’s policies and practices are implemented locally and that performance is monitored

Paul Tonks Group HR Director and CSR coordinator commented “During the year we have undertaken CSR/compliance audits at all production sites and we are developing a continuous improvement system – planning, monitoring and improving our performance. This is valued by employees and management alike and we would not be able to deliver continuous improvement without their hard work and commitment. During 2010, we plan to create and introduce a bespoke audit programme for our retail operations”.

Buger King PLC

Burger king has social responsibilities in terms of its food, employees, the environment and in relation to the government.
The ways in which it takes responsibility for the food it produces include the following objectives the company places importance on:

1. 
   We provide detailed nutrition information to our guests so they can make informed choices.
   
2. Our HAVE IT YOUR WAY® brand promise lets our consumers customize their menu choices to meet their individual diets and lifestyles.
   
3. Nutrition, quality, value and taste are all important attributes that can help our guests and their children make choices that promote healthy living. Our product innovation teams are constantly working with our trained chefs and nutritionist to develop new menu options that provide a choice of great tasting food while meeting our guests’ nutritional needs.

In terms of its employees, they claim they keep a culture that is Bold, Accountable, Empowering and Fun. These aspects have their own objectives set against them as such:

1. 
   Bold represents our determination to approach every situation with dynamic, innovative thinking.
   
2. Accountable means that we embrace the responsibility we have as a public company to deliver value for our shareholders and for our franchisees and to provide great service and products to our restaurant guests.
   
3. Empowered says that we vest individuals with the power and control to achieve their goals whether that person is our colleague, our franchisee, our supplier or our restaurant guest.
   
4. And Fun exclaims that we work as a team and strive to make every BURGER KING® worldwide – more than 11,800 restaurants, our field teams and our Restaurant Support Centers – a place where people love coming to work every day.

Burger King are continually researching and developing ways to make changes that will be positive on the environment. They are researching ways to deliver consistent policies and practices across all of our operations globally. Some of their current actions are as follows.

1. 
   We have begun holding BURGER KING® Green Sessions for employees, members of our supply chain and key third-party partners who understand BKC operations best and who are passionate about making a difference.
   
2. We know that recycling and waste management are two of our biggest environmental challenges. We are continually working with suppliers to find ways we can reduce, reuse and recycle.
   
3. Globally, BKC has committed to purchase beef from suppliers that source only beef that has been raised in environmentally responsible ways. As a result, none of our beef comes from recently deforested tropical rainforests.

The link to this site is http://www.bk.com/en/us/company-info/corporate-responsibility/environment.html

Ross McKee

Shell CSR Report

From Alex Isidro:

Shell’s Role:
Populations are growing and economies are developing. The global demand for energy will continue to increase. And finding responsible ways to meet that demand will be the defining challenge of the 21st century.
We’re continuing to invest in the development of alternative sources of energy – but also in finding the most efficient and responsible ways of obtaining energy from fossil fuels, which still account for the vast majority of the world’s energy supply.

Marks and Spencer CSR Report

From Danny Burford:

Marks and Spencer’s CSR report highlights
Plan A
Climate Change:
• Marks and Spencer have committed to make their operations in the UK and the Republic of Ireland Carbon neutral.
• They Advise customers and suppliers to be more Carbon Neutral.
• The Clothes that are bought at Marks and Spencer’s can now be washed at 30 degrees, this way it saves CO2 emissions.
• Delivery Vehicles now include a teardrop trailer as well as electrical and diesel hybrid vehicles.

Tesco CSR Report

From Justine Morris:

Tesco - Corporate responsibility Report
1. Environment
• Aim to become a zero carbon company by 2050
• Reduce emissions in our supply chain by 30% by 2020

2. Communities
• We want our community programmes to feel local in the different cultures and countries where we operate, while benefiting from our international experience


3. Buying and selling our products responsibly
• We need to find ways to help our suppliers deliver progress on difficult issues, such as labour standards, which may be outside our direct control

4. Healthy choices
• to find the right messages which encourages customers to eat more healthily and drive sustained behaviour change, especially in difficult economic times

5. Our people
• Continue to make great progress, we can still do more to ensure women are better represented at senior levels wherever we operate
• Developing more local leaders in each country remains a key priority, and we need to make sure we build on our work and success to date

http://cr2010.tescoplc.com/

L'Oreal CSR Report

From Sunny Ricketts:

L’Oreal– CSR Report (2007/08)
Facts and Figures

- 25 Global Brands (Including: Redken, Garniier, Maybelline, Lancome, Giorgio Armani, Diesel, Ralph Lauren, and They Body Shop).
- 63,358 employees
- In over 130 countries
- 17,063 million in consolidated Euros
- 4.7 billion units manufactured annually
- 560 million Euros in ‘Research and Development’

QUOTE: “At the dawn of the 21st century, the world’s leading beauty company needs to be an authentic example in terms of sustainable development.”

L’Oreal’s Progress…

• They were rated as one of the 100 most sustainable companies in the world by Innovest and Corporate Knights in January 2008.
• They were named as one of the world’s most ethical companies by Ethisphere Magazine.
• They appointed a worldwide Director of Ethics and launched their new Code of Business Ethics.
• They signed up to the French Union of Advertisers’ (UDA) Charter on Responsible Communication to promote the positive impact of responsible corporate communication on society.
• They continued to reduce the amount of waste, CO2 emissions and water used, despite our growth.They also joined the Carbon Disclosure Project’s Supply Chain Leadership programme to work with suppliers on measuring their carbon emissions.
• They committed to action on climate change by Signing up to the Bali Communiqué, which called for a United Nations framework to tackle climate change.
• They got a step closer to eliminating animal testing with the approval by the EU of the skin irritation test on our Episkin model, and by the creation of a complete reconstructed living skin model (RealSkin).
• Working together with their suppliers, they assessed 10% of our raw materials using our raw material Sustainability Assessment Framework.
• They set up a Natural and Organic Centre of Excellence to develop products, and integrated six raw materials resulting from fair trade into our portfolio.
• Over 1,400 managers attended a two-day trainingcourse on diversity during 2007.
• CSR Europe, the leading European business network for CSR, identified our Observatories of Diversity and Social Cohesion as good practice.



L’Oreal’s Targets…
In 2008, they plan to continue their progress, with targetsincluding:
• Reducing our total CO2 emissions by 2%, and reducing waste by 5%,
• Sourcing all paper and board used in packaging from sustainably managed forests, ideally FSC-certified.
Recognition
L’Oréal’s sustainable development initiatives were widely recognised during 2007:

• Innovest and Corporate Knights rated L’Oréal as one of the 100 most sustainable companies in the world (January 2008).
• They were named as one of the world’s most ethical companies by Ethisphere Magazine.
• They were ranked by Merrill Lynch as a carbon leader.
• They continue to be members of the FTSE4Good, ASPI Eurozone and Ethibelsustainability indices.

Between 2003 and 2007 L’Oreal cut their energy use by -17%.

Carlsberg CSR Report

From Ed Hall:

Carlsberg CSR Report

http://www.carlsberggroup.com/csr/Pages/default.aspx

A Global Strategy:

A diverse company, operating in more than 150 countries. The Carlsberg Group takes a Global approach: working together on a global level develops our strategic approach but acknowledges the local diversity within our operations. Our local CSR champions ensure that our strategy is suited to local circumstances. Our local companies operate their own initiatives, for example Safety, Health and Environment (SHE) days in the UK.

The Organisation:

At the heart of the implementation our CSR approach are our CSR champions. They fall into two broad categories:

Country CSR champions feed into Group policy development and report to the CSR Unit on performance and progress within their operating country. They identify issues that are relevant locally and to implement the Group CSR framework in a way that suits local CSR needs and priorities.

Group CSR champions are linked to business functions rather than operating countries and feed back to the CSR unit on function-level CSR issues. Group champions feed in to the Group strategy and are responsible for awareness and communication within their functions.

Employees:

Engaging with our employees helps us to identify areas for improvement and improves our overall performance in CSR. Also dependent on our employees drive to meet our CSR objectives over time. We have experience huge growth in recent years, and are committed to creating and consolidating safe workplaces. We are convinced that every employee has a part to play in continuously reducing our H&S level of risks and we know that involvement of everyone is a key to succeed. We implement our Health and Safety policy for our employees.

Partnerships:

We joined Refrigerants, which is an initiative is recognized as a "Partnership for Sustainable Development" by the UN Commission on Sustainable Development. W joined this as we are committed to combat climate change and ozone layer depletion by substituting point-of-sale coolers that contain harmful fluorinated refrigerant gases, such as CFCs, HCFCs and HFCs, with ones that contain natural refrigerants.

Ed Hall

Morrisons CSR Report

our vision is to be the food specialist for everyone and our 134,000 colleagues work hard to deliver freshness, value and service to over 10 million weekly customers. with 425 stores, we are the uk's fourth largest retailer, as well as a top five uk food proucer.
Targets

• reduce emmisions by 30% by 2020
• zero landfill waste by 2013
• deliver sector leading training
• surpport the developmentof fresh food
• to be the leading suporter of british farming

Staff

• 100,000 colleagues will be trained with a national qualidication by 2011
• 30% of senior managers to have startedon the shop floor
• 1 million training days for staff

Society

• raised 1.8 million for cancer research
• 22,500 registered for lets grow
• donate a minimum of 1million to there charity of the year

The Produce

• 100% free range eggs on there own brand
• 100% british beef pork and chicken

Audi CSR Report

website for the full report can be found below: http://www.audi.com/etc/medialib/ngw/company/investor_relations/pdf/finanzberichte/annual_report_2009.Par.0017.File.pdf/audi_gb_2009_en.pdf

focussing very much on the product quality as the market they are in has high competition from other car makers such as Mercedes and BMW so they have to offer a USP differentiating them

they created an Audi Environmental Foundation which planted over 36000 oak trees to mark the occasion in a forest that had been destroyed, and works closely with environmental scientists to see which plants are the most beneficial in terms of absorbing carbon (thus reducing more emissions) becoming a more economical company and world. to do this they have gone with 6 strategies to work by so it is most effective - diversification such as the teams having special individual qualities, seeing the crisis as an opportunity - people are having to do things about the situation - with need comes progress, partnerships - working together gives more strength to tackle the problem financially and socially, the courage to fill a niche - to invent new processes and designs through innovation to 'fill' the gap, success through adaptation - by changing their products to suit the current environment that we live in so not only we are benefited but so is the area around us, and the sustainable use of materials - effective production and the notion of ordering only what you will use thus becoming more environmental and economical saving money for everyone. or as they put it, evolution to adapt to the circumstances we are in.

investing in newer technology - all electric car (the concept Audi E-Tron has been made) but it is unlikely to be coming soon however, it wont be the only project audi is undertaking.

it is involved in other community functions - the Audi Youth Choir has been created and offer opportunities to people such as education and training and even sponsors.

to improve efficiency, the company opened new processing plants and new production targets and new services for the employees to use.

McDonald's CSR Report:

Information and the full report can be found at: http://www.aboutmcdonalds.com/mcd/csr/report/overview.-RightParaContentTout-43872-ReportsLinkList-28982-File1.tmp/mcd052_2009report_v6.pdf

CEO: Jim skinner.

Living our values – Actions speak louder than words

We place the customer at the core of everything we do

We are committed to our people

We believe in the McDonald’s System

We operate our business ethically

We are committed to communities

We grow our business profitably

We strive to continually improve

How McDonald’s brings values to the table

THE THREE-LEGGED STOOL: MCDONALD’S BUSINESS MODEL

• Franchisees – own and operate the majority of our restaurants
• Suppliers – provide food and packaging
• Company employees – support and deliver restaurant operations around the world

MCDONALD’S FRANCHISEES - IN PURSUIT OF CONTINUOUS CUSTOMER SATISFACTION

RESTAURANT OPERATIONS IMPROVEMENT PROCESS (ROIP)

“Our customers expect value and quality every time they visit us. By constantly working to make sure every aspect of a visit is a good one, we can increase customer loyalty.”

To help keep the business running smoothly on a day to day basis, McDonald's seeks help from many governing bodies:

Worldwide Corporate Relations Council – Guides and aligns on issue positions, approaches and communications across McDonald’s System related to social & environmental issues

Corporate Social Responsibility Department –Provides corporate staff leadership, coordination and support for our global corporate social responsibility policies, programs and reporting

Quality Systems Board – QA directors in each of our major geographic sectors and senior-level supply chain and food safety specialists lead the development and execution of worldwide food quality strategies, including food safety.

Sustainable Supply Steering Committee – Guides the development of the strategies and tools necessary to accomplish McDonald’s vision of a sustainable supply system

Global Environmental Council – Identifies global strategic environmental priorities and acts as a forum for best practice sharing on local environmental initiatives and programs

MCDONALD’S VALUES

We place the customer experience at the core of all we do

We are committed to our people

We believe in the McDonald’s System

We operate our business ethically

We give back to our communities

We grow our business profitably

We strive continually to improve

Environmental responsibility

Energy conservation

Sustainable packaging and waste management

Green building design

McDonalds Key Goals:

SUSTAINABLE SUPPLY CHAIN

1. Educate and communicate with our supply system about sustainability
2. Develop a comprehensive global forestry policy that will apply to all products we purchase
3. Measure environmental impacts in our supply chain
4. Further rollout our global forestry standards for consumer packaging, exanding into other Areas of the World, specifically the U.S. and Asia Pacific, Middle East and Africa (APMEA)).
5. Continue to integrate environmental considerations into our packaging design through rollout of our global packaging scorecard into our nine largest markets.

NUTRITION & WELL-BEING

1. Accelerate and expand food and beverage choices for kids
2. Continue to enhance children’s well-being through programs and initiatives that provide “fun with a purpose”
3. Continue to provide useful nutrition information in ways most relevant to today’s consumers

ENVIRONMENTAL RESPONSIBILITY

1. Continue to find ways to maximize energy efficiency in our restaurants
2. Increase best practice sharing within our system to enhance the transfer and scaling of the most efficient and innovative initiatives

EMPLOYMENT EXPERIENCE

1. Increase number of Hamburger University certified restaurant managers
2. Continue to enhance our employment value proposition to drive employee engagement
3. Continue to integrate McDonald’s values into key people programs, from hiring, to training, to career development

COMMUNITY

1. Facilitate and encourage volunteer activities through an online management tool
2. Increase financial and volunteer support to Ronald McDonald House Charities (RMHC) through communication outreach
3. Continue to increase awareness of RMHC and its core programs