Corporate Social Responsibility On The Retail Business Commerce Essay

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The research is on 'The impact of corporate social responsibility on the retail business to meet the performance objectives- a case study on UK's top three retail supermarket Tesco, Sainsbury & Morrisons' is to identify the impact of corporate social responsibility and the business performances.

Every business on this time has to compete with very hard time to be successful. The business should aim to be competitive and globalisation with following rules and regulations. Almost all business follow the compulsory rules and regulations of the country where they operates but some guidelines to run the business are only mandatory where regulatory body does not force to follow. But these guidelines is watched unknowly by the society and other competitor to take chance to take the competitive advantages. Like that one of the guidelines is corporate social responsibility. The research project will be based on this topic on which the UK's largest supermarket such as Tesco, Sainsbury and Morrisons will be taken into account.

As the three supermarkets business is financially successful with the top share on the retail supermarket. Tesco is the leading while the Sainsbury and Morrisons the competitor. So any activities toward the society and environment will highly influence on their performance. So they follow the every compulsory and mandatory guideline to attract the customers. But it is still unclear whether the customers really care about the corporate social responsibility they follow before going to shopping in one of this supermarket.

As the many research on this main three companies found and also the independent annual report also found that they are competing financially as well as competing to follow the most of the guidelines by corporate social responsibilities. They think while they take so many benefits from the society and environment, it is their responsibilities to return something to the society and environment as well. So they try to fulfil their responsibilities through different channels such as employing people, getting awareness about green environment, maintaining balancing between benefit and rewards toward the society.

1.2 Significant of study

The corporate social responsibility is the most important part to the business as there are many issues arising to the business to its environment and the society. As businesses survive with the society many raise voice to the business they should also need to contribute towards society and environment, not only took from them. This mean the research will examine the contribution of business towards society and environment to get its research aim and to meet its research objectives

The corporate social responsibility is one of the non financial performance indicators of any businesses to measure performance. But in retail business such as supermarket it is the most important even corporate social report is not the compulsory to be publish in the annual final accounts. As corporate social responsibility even seems to be the easy as it sounds but it is very difficult to measure and compare as there is not exact way and method to evaluate this. Many businesses feel they are fulfilling their responsibility by giving jobs to certain number of people and cleaning just the surrounding their business premises but there is not exact what and how much they fulfil their responsibility by performing such tasks. The government and the regulator body should provide certain guidelines and create certain barrier line up to which the business should minimum fulfil to achieve the target corporate social responsibility.

The research is based on the corporate social responsibility of the United Kingdom's top retail business such as Tesco, Sainsbury and Morrisons. As most of its business situated at the capital city London, the researcher will take different parts of London to get the sample data while collecting primary data with different size of its business. The secondary data will be collected from the different source.

1.3 Limitation of Research

The research have time limit to make it worth and to maintain certain standards. There are some limitations which are discussed below:

Time Factor:

For any research project, the researcher need to make a target to finish that task on certain time period and make a routine and follow that accordingly to accomplish that task on specific given time period.

As the research project is the long and time consuming process the researcher need to make routine and time plan given sufficient time period for specific task so the researcher do not get stuck on last hour and make the research a good work to present.


The scope of study is another factor which limits the research. As this research is based on the corporate social responsibility on business performance but there are many other financial and non-financial matter on business performance.

Sample size:

It is the most difficult part of research as there is not any particular method to make certain sample size for any relevant research. Also the sample participant may also impact on the result.

Survey Location:

It is very hard for academic research to be complete with the full survey of every location as it is time consuming and not economical for student. So the place of any survey taken may not be representative. The researcher should make certain scale of research program which will be the representative.

1.4 Research aims, questions, Hypothesis and objectives

A. Research aims

The research aim is to find the exact situation of corporate social responsibility on the retail business. It also aims to get the result and impact of the corporate social responsibility on their performance objectives. While doing this research it also aims to find out the cost and benefit of implying corporate social responsibility on the business.

B. Research question

R.Q. 1.How does the retail business cope with the corporate social responsibility guidelines?

R.Q.2. Does the corporate social responsibility add value to meet the target performance objective of retail industry?

C. Hypothesis

a. Business follows the corporate social responsibility to attract the customer

b. Corporate social responsibility add value to gain the success on their performance

D. Objectives

To get the clear view between the theoretical and practical implication of corporate social responsibility

To trace how the business implying the corporate social responsibility

To review cost and benefit for the business on implying corporate social responsibility

To get the analysed result on the performance target with the help of corporate social responsibility.

1.5 Research structure

The research paper is mainly divided into five major chapters which includes the following chapters and structure:

Chapter 1: Introduction

The chapter mainly focus on the background of study, significant for study, research aims, questions, hypothesis and research objectives. It also includes general idea about limitation of research.

Chapter 2: Literature review

The previous researcher literature will be reviewed and analysed. It will cover some theoretical overview on research topic and literature gap.

Chapter 3: Research Methodology

The chapter gives the idea about the different method of research and discuss about the appropriate method of research method for the topic chosen.

Chapter 4: Data presentations and analysis

The chapter will include the relevant data, calculation and analysis of data.

Chapter 5: Conclusion and recommendation

The chapter give the conclusion overview on the research topic and also give some recommendation to the relevant user of the research paper.

Chapter 2

Literature review

1. Introduction

The first step of any research is to analyse the previous researcher literature and theories. The literature review gives the researcher the idea and gap on the research as well as the understanding of the research topic which help the researcher to familiarise with the topic. It also helps to guide the researcher to choose the research proper research methodology so that it helps to reach on the conclusion.

This research also takes accounts of many books, journals, and scholars' article of related topic to get the overview of topic and to make clear understanding about the previous research findings and gaps on the previous research. The literature review is mainly divided into two parts: Theoretical review where history, theories behind corporate social responsibility, importance and effectiveness of corporate social responsibility are discussed and the other part is empirical review where the literatures of previous researcher are discussed.

2. Theoretical review

2.1 History of corporate social responsibility

The corporate social responsibility has a very old history. As there is not exact date of time of its development, it is assumed that the late 1800s, or the industrial revolution consider as its purpose of discussion. Its first just refer as the social responsibility but after the development of business into the corporation it became the corporate social responsibility. The corporate social responsibility has its history from the 1950s to today with different stages of development of its scope in the corporate world. According to the study conducted by Archie B, Carroll (1999) found the history, evolution of concept and the definition of corporate social responsibility. As their study result the corporate social responsibility first guideline of modern era start at 1950s and expand the defination1960s, 1970s. According to them there some new definition created in 1980s due to some research and understanding. The new themes began to mature at that time which includes corporate social performance and stakeholder theory. As this way the corporate social responsibility gradually develop and many firms, businesses try to follow even though it is not compulsory to make good connection between society and environment.

2.2 Definitions and theories

2.2.1 Definitions

As a general view, corporate social responsibility means the responsibility of the business corporation towards the society. This definition only gives the general idea but not the exact meaning of the corporate social responsibility. The corporate social responsibility definitions also develop from social responsibility as its history develops. So firstly the social responsibility definition should be understood. According to Carroll (1979) defines the social responsibility as the legal, economic, ethical and discretionary expectations of the society where the organisations belong. From this definition the responsibility is clear that the business need to fulfil toward the society.

From the above definition social responsibility, the corporate social responsibility definition also develop as fulfilment of the legal, economic, ethical and other needs of society by corporation from where corporation get benefit. In simple word the corporation and society have give and take relationship. Such as corporate get it financial and other objectives such as employee, place from the society so it should also returns something to the society to sustain long-term. Even this definition seem to be easy to understand but it very hard to fulfil those responsibility as there is not the exact measure for this responsibility. Also different people in the society have different perceptions and definition of corporate social responsibility.

2.2.2 Theories

There is some difficulty on identifying the theories behind corporate social responsibility as there are different approaches about it. Every organisations and businesses have their own definition and approach toward this topic. Different study suggest different types of theories related to corporate social responsibility but they all have some common features such as they include human and society in their theories.

Among all the theories, the theory of Garriga and Mele (2004) seems most suitable as it included all the factors related with corporation. They cover four group of the society considering the representative of society and link them with economics, politics, social integration and ethics. The four group of corporate social responsibility are discussing below:

A. Corporate Social Performance

The corporate social performance theory is mainly focus on maintaining the businesses responsibility toward the society even there is not legal and economical requirement. Every business first aim is to maximise the wealth but they should not only focus on that. According to Wood (1991) the definition of corporate social performance is understood as 'the configuration in the business organisation of principles of social responsibility, processes of response to social requirements, and policies, programs and tangible results that reflect the company's relations with society'. Corporate social performance hence likes a bridge between the society and corporation to keep the relation. So corporation should always performs the task and behaviour in such way that produce less harm and more beneficial to society and people around them.

For every corporations and businesses, society is the most important aspect to satisfy as the society gives the licence to operate. From the corporate social performance measure the corporation somehow contribute and make its existence beneficial to both parties. Sometime the corporation fail to fulfil the society needs in that case, the society may consider but if it largely affects the society then the business may get out of the society which creates loss to both parties. The loss for business is mostly financial and reputations but for society it more than financial such as development loss, employment loss.

Even the topic of corporate social performance is important on corporate social responsibility it has some weaknesses due to its unclear concepts and definitions. The weakness due to lack of connection between ethical and business activity is most important weakness as there is not such moral motivation to overcome this weakness. Also the theory does not connect the company performance with the duty of social responsibility which creates controversy between corporation and society. Even this weakness the business should comply with their standard corporate social performance measures and fulfil the needs of society.

B. Shareholder value theory

The shareholder value theory of corporate social responsibility is similar to the corporate supreme objectives to increase the shareholder wealth. But this theory suggest that only fulfilling the social responsibility the corporation able to creates the profits and maximise company wealth. But this seems to be little bit controversy as fulfilling the corporate social responsibility costs the corporation in the short run. So shareholders may not be happy with this decision at this point as the many corporations are struggling to survive in the current economic recession. So in these situations the management of the corporation should manage to create such activity which will fulfil the responsibility of society and cost them low.

This theory is basically shareholder based so it is difficult to make profit from corporate social responsibility. In this situations corporation should maximise shareholder wealth by following legal and ethical guidelines of the government. This will not create any controversy and society also does not interfere the corporation business. Mainly society creates the some issues toward the corporation if there is some legal and ethical issues raised by the government and it come to the public attention. So by accepting the facts that satisfying the needs of society help to maximise the wealth of corporation.

This theory creates long term profit but in short term it will cost them. So some start up corporation may not able to manage between shareholders and society. To be a successful business they should have more self interest and focus on the profit numbers at the so they can build strong relation with shareholders. In this situation the society may be lack of responsibility may interfere the corporation operations. So management of corporation should always manage to keep balance between the shareholders and society to make the corporation successful.

C. Stakeholder theory

As stakeholder is any party affected by the activity of the corporation it includes shareholders and society both with all other stakeholders. Stakeholders may get benefit or harm from the operation of corporations. So stakeholder theory is seems to be relative on the corporate social responsibility. The stakeholder mainly comprises suppliers, customers, employee, financiers which all are from the society. So if the corporation able to satisfy the needs and fulfil the responsibility of all stakeholders then there is not any matter of conflict with society. As it ultimately fulfil the responsibility of the society. So stakeholder theory also consider as corporate social responsibility theory.

The stakeholder of corporation has long history as the corporation come into existence. But stakeholder term was used in first time in 1963 in the internal memorandum at the Stanford Research Institute (Freeman, 1984). The stakeholder theory used different ethical theories to make different approach to the stakeholder. As there is not any key indicator to measure as return to shareholders wealth for this theory but the satisfaction of customers and society can give certain idea about the performance. Corporation should imply the rule of do not affect the others right while implementing their own right. This is the best way to make relation with each and every stakeholder.

The stakeholder theory have many strength as discuss above so it is superior theory because it takes accounts of interest of each and every parts of society which are connected with corporations. But this theory also has some drawback as it can be taken as tools of getting opportunity. Manager can justify some corporate social responsibility by taking account to the happy stakeholder only. The another weakness of stakeholder theory is it concern to the outer party rather than the real investors. This is real problematic as the people who invest have their money so they should be more benefited by the corporation and other parties should take accounts after shareholders. So stakeholder theory has some weaknesses but still have strong strength on corporate social responsibility theory.

D. Corporate citizenship

This is the last theory on corporate social responsibility. From many years companies are involving on different activities of society and provide donation to society from different means of source. From these activities companies are proofing the idea of good corporate citizenship. By building a good corporate citizenship company can fulfil the social responsibility as well. There is the long history of this corporate citizenship but the company introduce this term in 1980s into business and society relationship mainly through practitioners (Altman and Vidaver-Cohen, 2000). As it concept have positive impact many businesses like this and imply on their businesses to fulfil the social responsibility.

Even the corporate citizenship introduce more than thirty years there is not full theory available yet. Different scholar articles about this available which try to describe this theory on partly way but still no one produce the whole theory. This theory relates to the another theory of corporate social responsibility that is stakeholder theory as being good corporate citizenship will help to build good relationship with different stakeholders. From the name as well the corporate citizenship has good impact on the businesses. This theory helps the corporation to fulfil the responsibility towards society in ethical and legal ways.

The theory also has some criticism about its concept of corporate citizenship. The corporate citizenship includes different topics about corporation such as public, private, partnership, corporate contributions and some more which make this theory as diffuse concept (Windsor, 2001a). The other criticism about this theory is about who is responsible for this standards corporate citizenship (Munshi, 2004). Because the corporate citizenship is going global and there should be someone to guide this standard. So even the corporation citizenship is the important theory of corporate social responsibility this theory needs to develop further more according to the current global corporate and social needs.

2.3 Driver of corporate social responsibility

There are many driving factors which compel the certain mandatory factors to adopt by the corporation. So the corporate social responsibility also influences by those driving factors so many corporations trying to get benefit from that. On this topic we mainly discuss three drivers: managers and shareholders, consumers, and government and civil society.

A. Managers and shareholders

For the implementation of any activities the manager plays a key role as the decisions of them are highly accepted in any corporation. With the manager decision the shareholders mostly are happy because managers always act in the best interest of shareholders. So there is very rare chance of rejection of any proposal of manager decision. Managers imply certain action of company to get long term goals so that company will benefit in long run. So it is their responsibility to give shareholders enough knowledge about those actions because shareholders may not understand why managers investing on social activities even there is not direct reruns. The potential managers always act in the responsible way towards the corporate social responsibility. But sometimes the managers are ignoring the social concerns due to certain contract which influence them to value oriented activities only. So the shareholders should play vital role in that case to make managers get involved in such activities. So with the co-ordination of both shareholders and managers corporations and society will be benefited.

B. Consumers

Consumers play another important driving role in implementing any external activities of corporations. According to the Starbucks reports on corporate social responsibility (2001) they emphasise that consumers wants more than a product from their favourite brand. This statement can easily give clue about the consumers' behaviour on their shopping store. This may be due to the high understanding power of consumers about corporate social responsibility or the competitor forcing to implement such activity towards society. According to the study of Vogel (2005) finds little supporting evidence on the corporation who are more responsible for more social are more profitable. He does not agree with that and suggest that evidence against social responsible as nuanced. In another the survey conducted on large volume by Environics (1999) on 23 different countries with 25,000 consumers respond in different ways. Around 40% suggest that to punish the company who are not socially responsible, half of them 1in 5 worldwide like to avoid the product of such company and other suggest rewarding the company who are socially responsible.

From this survey the corporation should understand how important driving factor are consumers in social responsible activities. The evidence clearly shows that the purchasing and consumptions decision of consumers depends on the corporation ethical and social responsibility.

C. Government and Civil society

If there is not any government policy about corporate social responsibility then the other driving factor may not influence the company to implement them. The government is made by the civil society and government always act in the best interest of civil society. So other driving factors for the corporation to implement the social responsibility are government and civil society. Even though there is not such strict rules and regulation to implement corporate social responsibility, the UK government has created a ministerial portfolio of corporate social responsibility. The UK government's society and business website states that:

The government can also provide a policy and institutional framework that stimulates companies to raise their performance beyond minimum legal standards. Our approach is to encourage and incentivise the adoption of CSR, through best practice guidance where appropriate, intelligent (i.e. soft) regulation and fiscal incentives.

From the above statement it is clear that government can only give guidance and motivate corporation but not able to force them to imply corporate social responsibility. So the corporate social responsibility is highly influence by the country government policy and civil society who take accounts of the society. Therefore the governments should always act in the best interest of corporation and the society and make certain guidelines to encourage the corporation to be responsible towards society. This will finally benefit government as well by getting more tax from the companies due to their high profit.

2.4 Classifying Investment opportunities

The classification of investment opportunity in the company according to its corporate social responsibility is shown in the diagram and discussed below:

Low CSR/High Profit


High CSR/ High Profit


Low CSR/ Low Profit

Never Invest

High CSR/ Low Profit


Fig 1: Classifying investing opportunities according to CSR

From the figure as suggested the company which have high profit and also perform high corporate social responsibility is the main attraction for the investors. Also the financial advisors suggest investing on such companies because they have strong relationship with the society which helps them to sustain long term. Even the shareholders are happy with the performance of the company so new investor also would not mind to invest on such companies.

The other box in the figure which contain low profit and low corporate social responsibility suggest not to invest on such companies as they are in very danger situation of closing down. Those companies do not have any profit so no new investors are interest to invest and the society also ignore those company because they are not fulfil the need of society. So this is the situation of high risk with low returns so nobody will be interested on this company.

The upper left box which contains high profit and low corporate social responsibility has dual effect in investing. The shareholder which think profit as their motive are going to invest and also who are going to utilise the profit to some social activity and move from that box to upper right side box are possible way to invest. Some investors who look both profit and corporate social responsibility may not interest on investing on such company. The company belonging in this box try to make sure they will invest the profit in social responsibility before any other willing investors so they will invest in the company.

The last box with the low profit and high corporate social responsibility is also with question mark by the investors as there is not any profit. The only thing in such companies is their strong social connections but that does not assure the investors they will get their investment return. The investment decision in such companies will be difficult and risky as there is not any such thing to make sure the company will sustain long.

From the above figure discussion not only the company sustain also to attract the new investors the corporate social responsibility play a vital role. So the company should always try to invest some of its investment and profit to fulfil the social responsibility so that it will get benefit from the society as well. The main point is even the company does not have so much profit to invest in social activities it can perform those activities at minimum cost by appealing social volunteer so the society themselves get involve. This will encourage people to have more knowledge about the company and get involve in their societal work.

3. Empirical Literature review

The first step of any research is to analyse the previous researcher literature and theories. The literature review gives the researcher the idea and gap on the research as well as the understanding of the research topic which help the researcher to focus towards the conclusion. As a part of this research various research on corporate social responsibility are reviewed and analyse to get the gap on the previous research and try to fill that gap on this research project.

As the McWilliams and Siegel (2001) study and defines the corporate social responsibility. They define the corporate social responsibility as the actions by the firm for the further some social goods beyond the requirement of laws and regulations. From this study it is revel that the corporate social responsibility is not the compulsory but if the businesses follow these it will have positive impact on their success. As the business always short term objective is to make profit but as it expand and establish it has to stand as a one of the member of the society. So it has to deal with the every problem because it also hampers it business sooner or later. So even the problem seems to be only for society and environment the business should help the society to cope with that problems. So that it can sustain in the society for the long term.

The study journal written by Ye Cai (2012) examines the empirical association between the firm values and the corporate social responsibility on the sinful industries which produces tobacco, gambling and alcohol as well as some industries which produce weapons, oil. To overcome these issues they develop three hypothesis: window dressing hypothesis, the value -enhancement hypothesis and the value-irrelevance hypothesis. By taking US sample from 1995-2009, they found after controlling for various characteristics even this controversial industries have positive impact on the society. Even they did different study to overcome some problems but they found positive relation between those industries and the corporate social responsibility. From this study the society is concern about the company behaviour toward the society rather than what they do within their business unless it does not affect the outside society.

The study conducted by Guler Aras, Asli Aybars, Ozlem Kutlu, (2010), found that the companies' social responsibility activity can improve their financial performances of the current year, have significant effects on their financial performances of the next year, and vice versa. The variation of CSR and financial performance can also significantly influence each other.

Another study done in Brazil conducted by Vicente Lima Crisostomo, Fatima de Souza Freire, Felipe Cortes de Vasconcellos, (2011), found that corporate social responsibility in Brazil had negative correlation with firm value as it is destroying CSR value. On the other side they also found that there is a neutral relationship between CSR and financial performance as there is mutual effect.

According to the study in Indonesia conducted by Juanita Oeyono, Martin Samy, Roberta Bampton, (2011), the corporation on the developing country such as Indonesia where the economy is just emerging are aware of the corporate social responsibility and follow their guidelines as they result on the financial performance of the company.

According to the study conducted by Ali Quazi, Alice Richardson, (2012), found that sample size and methodology are significant sources of variation in measuring the link between CSR and CFP.

According to the study of Holmes (1976) on corporate social responsibility he found the strongest response that business should help to solve the social problems in addition to making a profit even though those problems are not created by the business. This study also focus for the long term aim of business should not be only focus on profitability but also response accordingly in need of society.

According to the Department for Business Innovation and skills defines corporate social responsibility as how the companies address the social environmental and economic impacts of their operations and get able to meet their sustainable long term goal. According to them the government will make the minimum rules to make sure for health and safety and environmental but the business has their own responsibility to make sure they take their own responsibility toward society and environment beyond minimum. The UK government is encouraging the business to follow the corporate social responsibility to sustain long term.

The study conducted by Philip and Robert (1984) on corporate social responsibility and financial performance revel that average age of corporate assets is found to be highly correlated with social responsibility ranking. So even after controlling this factor there is also correlation between corporate social responsibility and financial performance. This study gives the clear view that on any business there is the influence of corporate social responsibility on its financial performance.

Another study by McWilliams and Siegel (2000) on corporate social responsibility and financial performance give positive, negative and neutral effect. They found this inconsistency due to the flawed empirical analysis. So they try to prove imperfection on the econometric studies which creates such inconsistent result between corporate social responsibility and financial performance. After the study they found the model used in research as misspecific as CSR which does not have control on research and development which is the main important part of business success. So they specified the model and found that corporate social responsibility has the neutral affect on the financial performance of the business.

According to the study of Jean B. McGuire et. al. (1988) on corporate social responsibility and firm financial performance they found that the firm's prior performance measure on stock market returns and accounting based measure are also linked with the corporate social responsibility. But corporate social responsibility is more closely related with the risk measure. From this study the corporate social responsibility does not have direct impact on financial performance but while the risk grows higher there is cost will be higher. As the cost rises in any business the profitability will be lower. So even the corporate social responsibility cannot be measure directly with financial loss in short term but if in long term it will impact on the sustainability of the business. So every business should focus their responsibility toward society and environment.

The international organisation for standardisation on its ISO 26000, gives the voluntary guidance about corporate responsibility and aimed to follow by the public and private sector businesses from the worldwide. The ISO will inform and give guide to the participant organisation. The standards are being developed with other relevant declarations and conventions from United Nations and International Labour Organisation. These standards cover definitions, social responsibility, guidance on social responsibility and its implementation. This standard is mostly followed by UK's businesses.

From the above literature review the different researcher found the different result but one thing is sure that the corporate social responsibility has the impact on its performance. But still there is not exact result whether it gives positive or neutral effect as some research says it has positive effect and some say it has neutral. But one thing is sure if the businesses follow the corporate social responsibility it does not have any negative effect. Also it is the best and only way for any business to fulfil their responsibility towards the society as they receive many more benefit from the society and environment.

While studying the corporate social responsibility of business the researcher also have to study the customer behaviour. Without the study of customer behaviour the research will be only one sided. Therefore the research will not give the perfect result. So some literature reviews on customer behaviour are also reviewed for this research.

The study of Andrew J. Newman, Gordon R. Foxall, (2003) found that most of the customers are attracted by the store layout and the presentation of the product. From their study the different model used to analyse the customer behaviour but the customer mostly attracted by the store marketing and store layout. This study gives the conclusion that customer does not read the business annual report before they come for shopping unless and until the business corporate issue are out to the public.

Another study by Amy Wong, Amrik Sohal, (2003) about customer relationship management is retail chain focus on the customer perception on shopping on retail chain. On this study customer were asked to recall their positive and negative incident while shopping in retail chain. The result shows that the positive incident increases the customer satisfaction, loyalty and the regularity on the shopping. While the negative incident increases the customer complaints which make them to change the shopping destination.

3.1Literature gaps

As the many research done on the corporate social responsibility to fulfil many gaps on this topic. They even compare with the corporate social responsibility with the financial performance to be able to make sure there are links on their positive performance target. But still there are gaps on the corporate social responsibility and the businesses. To fill the gaps between these two this research may not sufficient but add one more stone.

The previous research mainly focused on the corporate social responsibility definitions and some research focus on comparing its performance by financial performance indicator. But much research still not done under which performance indicator the corporate social responsibility will be measure. The other gap is the corporate social responsibility and the customer behaviour. There are still unanswered question whether the customer really care about the shop or business they visit will follow the corporate social responsibility or not.

This research project tries to cover the customer behaviour on the business corporate social responsibility with taking account its impact on the financial performance. This research is also trying to find out the other measurement indicator for the corporate social responsibility so that business can compare it with their prior year and also with the competitor.

Chapter 3

Research Methodology

1. Introduction

While doing any research work, the research methodology plays a vital role on its result and conclusion. So to make the research work worth full to its reader in future the research process should be on appropriate way without any bias.

Re means again and Search means to examine closely and carefully, to test and try, to probe. The two words form a noun to describe a careful and systematic study in some field of knowledge, undertaken to establish facts or principles. Research is an organized and systematic way of finding answers to questions (SamHui/081105).

Methodology is the process in which way the task is perform. So the research methodology give the clear track to finalised the research project within the time period.

The research approach indicates whether the use of ''...theory is explicit within the research design'' (Saunders, et. al., 2000)

1.1 Research philosophy

The research consist different philosophy to be adopted according to their nature. According to Saunders, et. al., (2003) the research outer layer is research philosophy. For this research we adopt the 'positivism' philosophy as this assumption is determinism, empiricism, parsimony, and generality (Conen et al 2000). Also most of the researches are based on this philosophy even it is criticised by most of the people due to the research limitations.

1.2 Research strategy

As Saunders, (2003) the layer next to research philosophy the next layer for research is research strategy. For this research 'quantitative research strategy' as it analyse the data and give the suitable result.

The quantitative research strategy will analyse the some financial performance indicator and make the critical analysis with corporate social responsibility cost. The quantitative research strategy give the researcher easy way to compare any result and make decision on that basis. The limitation on this research strategy may impact the result given by researcher as the data used are from past and it may not reflect the clear view of future.

Research approach

Research approach is another important aspect as it will tell how to deal with all those research methodology. As this research used the already proved theory to creates the hypothesis and get data and observe the result and confirm which the 'top-down' approach also called the 'Deductive approach' of research. Deductive approach works for the more general to the more specific and conclusion follows logically from premises (B. Aqil, 2008).

Fig: Deductive approach


2. Method of collecting data

For research, the researcher has to collect the data from different sources but the appropriate data collection method only give the research result. Sometime the wrong and inappropriate way on collecting data give the opposite result than the actual. There are mainly two ways of collecting data: primary data and secondary data collection.

2.1 Primary data

The data which are collected by the researcher by interviewing, conducting survey etc and presented in the way without proceeding to manipulate are the primary data. For this research the researcher will follow some survey and interview to collect primary data to get the exact view of customer and the management of retailer on the corporate social responsibility. For this the researcher conducts certain study to make sure the sample we took represent the entire group and produce the result without any discrepancy.

2.2 Secondary data

The data which are already taken for any other purpose by other researcher but are also useful and play important role to get the actual result for this research and are used in this research are secondary data. Mainly on this process the validity of data play important role so the researcher mainly took data from the independent recognised body. The secondary data are collected via different sources such as:

2.2.1 Library visit:

The British library and the London Business library collect the financial and management report of all listed company in United Kingdom and Ireland from the recognised independent source in the software such as financial analysis made easy (FAME). These data are most reliable source as secondary source than their own website data which may be presented to attract the shareholders.

2.2.2 Books and Journals:

Different books and journals written on the corporate social responsibility are taken as text books. This books and journals give different guideline on collecting data and used in the proper way on research to produce the result.

2.2.3 Newspaper:

Newspaper is also the secondary source of data collection as because different news and share price information are published on the daily newspaper. The main newspapers such as City AM, Evening Standard, Metro, Financial time will be used as required to collect the data.

2.2.4 Website:

The website play vital role on searching different secondary source data. Even the previously produced data are found on different website so different website will be used to get the relevant data.

3. Reason for Research location, business and topic

The research is based on the corporate social responsibility of the United Kingdom's top retail business such as Tesco and Sainsbury. As most of its business situated at the capital city London, the researcher will take different parts of London to get the sample data while collecting primary data with different size of its business.

The corporate social responsibility is the most important part to the business as there are many issues arising to the business to its environment and the society. As businesses survive with the society many raise voice to the business they should also need to contribute towards society and environment, not only took from them. This mean the research will examine the contribution of business towards society and environment to get its research aim and to meet its research objectives.