Introduction Operations And People


A code of conduct is defined as a set of rules outlining the responsibilities of or proper practices for an individual or organization when it operates in a competitive business environment. For most organizations, this document is the primary tool which covers all governing principles pertaining to how the said organization would conduct its business practices and the issue of ethically handling the brand entity is more or less covered as part of the Code of Conduct. For this analysis, the chosen company is the prolific UK Retailer Asda that has owned a renowned place in the grocery store market for several decades. Asda prides itself for having a comprehensive code of conduct which regulates not just its internal business practices but also governs the external stakeholders including the suppliers and customers.

The Asda website states that Asda stores are Stores of the Community and have been playing a positive part in all aspects of local life. It proudly boasts of its 'company investment in Britain over the past five years… creating over 25,000 new jobs' with every new store that it has opened. Putting it all in perspective, it is indeed a sensible conclusion since every new store brings with it a fresh batch of job opportunities ranging from supply chain related tasks to internal store management among others. Moreover, training the staff to cater well to the customers also requires hiring executives for the job which further results in employment generation. However, in the process of hiring competitive individuals at "minimal wages" to save up on costs, most organizations resort to underhand methods that are in stark contrast to the code of conduct manual which clearly specifies, as it does in the case of Asda, on the recruitment and training of the workforce.

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In 2000, Asda was exposed in a Panorama documentary as a buyer of produce from a supplier using illegal and exploitative labor. Fenmarc is Asda's main potato supplier. Due to 'Just-in-Time' production methods, labor requirements tend to fluctuate depending on demand and for that reason many retailers today are in the habit of using agency labor - in Asda's case, an agency called FP Personnel was contacted to arrange for the illegal immigrants who were to be cheaply hired as the work force personnel. In most situations, when presented with forged documents the suppliers, with deadlines to meet, do not ask too many questions. The program investigated and looked in depth at the lives of immigrants, many from Eastern Europe, who are unable to enter the country legally, pay gang-masters large amounts of money for forged documents, and are then paid well below the minimum wage for unreliable irregular work and left with almost nothing to live on.

When challenged on its relations with gang-masters, Asda spokeswoman Christina Watts said:

"Bear in mind that we're talking here about workers being employed by employment agencies, casual workers being supplied to a supplier of ASDA. These aren't ASDA colleagues. We are three steps down the chain here."

Many felt that this was a convenient escape route for Asda and went against their image as the provider of "Community Stores" as well as the family friendly image of the retail giant.

Asda's final comment on the matter was:

"We can play a part, we are playing a part, with an ethical trading policy that's robust and demanding, but we cannot do the job of the government, the police, the immigration service, all the other people who are involved. We're pulling our weight, we're playing our part but its complex and other people need to do the same."

This goes on to establish the ground realities of the dynamic economy we live in today where all the entities, be they public or privately held, are somehow connected and each relies on the other for support in implementing the codes and principles for which they may individually believe in. Asda applied a similar understanding as they looked at the government and other pillars of society to upheld the morals and adopt stricter measures to put the menace of illegal human trafficking to a stop. In this regard, they have their own conduct and measures which prohibit and slam such practices as wrong but the agencies which they are doing a liaison with have to adhere to a similar philosophy.

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Another criticism for Asda's code of conduct comes from its stance on the relations which the organization has with the local farmers. On the official website, Asda states that 'Our support for British farmers is steadfast'. Simply put, this implies a favorable position in an overall policy of the organization towards this particular stakeholder. In reality however, supermarkets have generally been blamed for destroying the farming sector in UK with Asda being a part of the group which has contributed towards that destruction. A survey carried out by the National Farmers Union in 2002 revealed that for a basket of food costing £37 in a supermarket, farmers would receive an average of just £11. It should be noted that when contacted for details, farmers often shy away from getting into the specifics for fear of retaliation by these corporate giants. A part of the duty of such corporations is their responsibility towards these local farmers and it is encumbent upon them to support their own farmers before relying on importing the cost effective goods from elsewhere. Keeping this viewpoint in mind, Asda signed up to the supermarkets' Code of Practice, a voluntary code set up in March 2002, to ensure that farmers supplying supermarkets were treated fairly. However, simply signing the code without adhering to its policies and integrating it as part of the code of conduct for the organization itself was more of a diversion tactic on Asda's part as the reality on its dealings with the farmers soon came out two years later when, in 2004, Farmers for Action were considering blockading Asda depots around the country in response to the increasing difference between prices they were being paid for milk and the high prices the supermarkets in effect charged for it. As a response to that, during the same year, Asda moved to sourcing all its milk from one supplier, Arla.

Asda's code of conduct also extends to the way it packages and promotes its products. According to a recent publication in Marketing Weekly, Asda was forced to change the wrapping on one of its locally produced alcoholic ciders since the packaging was "glamorizing" the Alcohol Strength of the drink. The dominant theme of the label on Asda's Premium Strong Cider was the drink's alcoholic strength and the word "STRONG", which was written in bold capital letters across the label, glamorized the drink's alcoholic strength. In response to the issue, Asda has been quick to address it directly and has taken steps to change the labeling. Asda has been keen to stress its credentials as a responsible retailer of alcohol. In July of 2010, it claimed to be the first supermarket to introduce a minimum price for alcohol sold in its stores. All these steps are aimed to making the store present a more positive image of Brand Asda to the customer base it hopes to attract and simultaneously, develop a strong code of conduct for its employees and other stakeholders to adhere to.

The Organization's Corporate Social Responsibility

According to the literature available on the concept, corporate social responsibility is explained as a form of corporate self-regulation integrated into a business model. Often abbreviated to CSR, this policy functions as a built-in, self-regulating mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms. The goal of CSR is to embrace responsibility for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere. Asda too has taken up several significant ventures as part of its CSR activities and through these initiatives, it not only aims to widen the scope of good causes in society, it also aims to associate its own brand image to the ongoing efforts to portray itself in appositive limelight. As part of its "Doing the Right Thing" stance, Asda has focused on taking up efforts to improve the sustainability of our environment while making the products more affordable for the customers. Their approach, as depicted on the official website is summed up in the following expressions:

People: we listen to our customers and colleagues to make it easier for them to act on the things that matter - whether it's promoting Fairtrade, reducing packaging or supporting local farmers.

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Prices: we're supporting our growers and producers to create a range of naturally affordable products, offering healthier choices that care for the environment too.

Planet: we only have one Earth and we need to take care of it through initiatives like increasing energy efficiency, cutting road miles, and sending zero waste to landfill.

As part of its ethical trading cause, Asda has signed up to the Ethical Trading Initiative (ETI) which respects workers' rights for freedom of association and a living wage. This however, has been difficult to implement as the wage standards of different countries vary according to their own regulations and within UK, as mentioned previously, the farmers association has blamed Asda for not providing them with a significant chunk of the profits despite charging extensively high markups for the products that are sold off the Asda shelves. These allegations have been addressed by the management but not adequately enough and tensions continue to persist suggesting that more has to be done in this regard as the farmers association is an important external stakeholder of the organization in this scenario.

For its community work and supporting causes related to sports, Asda has been significantly prominent as the following examples illustrate:

Asda sponsored English football team Sheffield Wednesday during the early 1990s. Also Asda sponsored Accrington Stanley in the 1998-1999 season

Asda currently sponsor a stand in Prenton Park, home of English football team Tranmere Rovers.

Asda sponsors Kwik cricket for Kids.

Sports is an integral part of community building and associating the name of the organization with sponsorship packages like the ones mentioned show a caring side of Asda as well its stance to establish healthy and physically fit communities.

A very recent example of Asda's attempt to be a socially responsible corporate entity whilst indulging in a more contemporary activity to bolster that effort was when in 2008, the supermarket decided to sell its Valentine's Roses for just £2 for a dozen and in the process provided a stellar competition to the likes of Tesco and Safeway which were charging almost 50 to 75 percent over the prices that were being offered at Asda. It was recognized that Asda's promotional prices were ethically sourced by the supermarket so there was no hint of any illegal import of the flowers through underhand means. Such measures make the supermarket not just fulfill its socially responsible role but also endear it to the customers and prove a viable promotional gimmick that adds to the reputation and marketing efforts of the chain.

In addition to the activities mentioned above, Asda also takes up the responsibility to support the small business ventures that may support the community around and enhance the purchasing power of its consumers in the surrounding regions. One such support cause was adopted when Asda opted to buy the reusable bags made by two working mums; these bags were eco friendly and hence in line with the organization's code of supporting sustainable measures which improve the environment. Hence, for its active support in such healthy causes, Asda was recognized for leading in the fight to stop used fats, oils and grease blocking sewers by becoming the first winners of a new Green Ladle Environmental Champions Award, developed by Anglian Water with support from the Chartered Institute of Environmental Health. Recognitions like these help further promote the retail outlet in a positive light.

On the recently held International Women's Day, Asda took up a number of initiatives to promote and help women progress at work and develop their careers. In this regard, the store created a new Mum2Mum mentoring scheme to support women returning to work and help counteract the dips in confidence and motivation mothers go through while on maternity leave. The program included mentoring sessions, a 12-month program of support, and an online network to keep in touch for these women who are fresh coming off of a yearlong leave in some of the cases. Such causes are a great way to get in a favorable light for the women. Equal opportunity measures and providing a work environment where women figure it is safe to come to work and participate equally in the workforce not just help the superstore but, in the larger scheme of things, helps the entire country to grow and prosper as more people step out to work and increase the growth for the economy.

In addition to that, as part of their corporate social responsibility, Asda has an operating policy that provide a range of flexible working policies to help both women and men achieve a healthy work-life balance, including flexible working and specially designed career breaks for those who believe that such measures would help them get their productivity back by taking some time off.

Finally, Asda also run a "Women in Leadership" program supporting women in leadership at all levels. Such managerial ventures help women establish themselves and bring them up to par with the men who they work alongside with.

Asda also contributes to put its customers first and the CSR activities are designed to ensure that they serve to mutually benefit the society, environment, company and the customers. Keeping that in mind, to save more for its customers, Asda has chosen to incentivize customers who choose a re-usable bag instead of supporting the Governments proposal to charge for carrier bags. The store has promoted the removal of single use carriers from all of its checkouts by encouraging customers to opt for its range of 'bags for life' and reusable bags as a sustainable and affordable alternative. Despite 92% of Asda's packaging products being made of recyclable material, the store is aware that very few local authorities are able to collect it all, which means measures have to be taken to ensure that the collected items for recycle are in fact put to the appropriate use.

ASDA takes Corporate Social Responsibility as part of its survival technique in the extensively cut throat world of fierce competition. The company believes that supporting sustainability can help to make products more affordable for customers and is hence involved in coming up with measures that can simultaneously benefit both the environment and the customer base while keeping the costs to a minimal to keep the profits intact.