To
investigate the impact of Corporate Social Responsibility (CSR) on the
financial position of a company: Evidence from Unilever
Executive
Summary
Title of it
is “To investigate the
impact of Corporate Social Responsibility (CSR) on the financial position of a
company: Evidence from Unilever UK” The purpose of the research is to
analyze the influence of corporate social responsibility on commercial or economic
performance (Profit, asset, stock
dividend. The paper has examined
the impacts of corporate social responsibility practices on commercial or economic performance and the study has been
conducted on Unilever, one of the largest global firms. Currently CSR is a very
crucial issue since success of a firm in the competitive market largely depends
on it. CSR practicing has vast impacts on brand building, profitability, asset
maximization. Using positive research philosophy the study has been conducted
to generate measurable outcomes. To conduct the study within a theoretical
boundary deductive approach has been used. Both primary and secondary data have
been used. Mixed method has been used to gather qualitative as well as
quantitative data. Using survey
questionnaire data has been collected from both employees and customers of
Unilever. Unilever is a good corporate citizen. The company has increased its
CSR activities with the passing of time. This study finds that, there is strong
positive correlation between CSR practicing and profit, divided of share and
net asset. As Unilever has increased its CSR activities over the year
(2010-2014) its profit, dividend and net assets have been increased
simultaneously. The firm should make a proper balance to protect wider
stakeholder interest. Findings on analysis, the study recommends that Unilever
should continue its CSR activities as they practices in the past (i.e. 2010-2014)
Table of Contents
Figure
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Page
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1. CSR functions
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5
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2. Carrols model of corporate social responsibility
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8
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3. Sustainability model of corporate social responsibility
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10
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4.
Unilever profit 2010-2014
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31
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5.
Unilever dividend per share 2010-2014
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31
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6.
Unilever net assets 2010-2014
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32
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Chapter One: Introduction
1.1 Study background
The purpose of the research is to analyze the impact of
corporate social responsibility on financial activity (Profit, asset, stock
dividend),
it also investigates the way of more efficient and involved management of corporate
social responsibility can be constructive for Unilever. According to Day (2008)
corporate social responsibility refers to responsibility of the firm towards
the society. However, this definition has been developed from the narrow point
of view. In the broad point of view, corporate social obligation alludes to
securing enthusiasm of more extensive partners (owners, customers, government,
society, suppliers, and environment).
According to Simms (2008) stakeholders mean the parties who are related
to the business operation. These parties can be affected by the business
decisions and they have power to manipulate the business operation.
Success of an organization is largely dependent on the good
relationship with the wider stakeholders. To build and uphold better connection
with the wider stakeholders, the main reason is the practice of corporate
social responsibility in a good manner. According to Trott (2012) there is a
solid relationship between honing corporate social obligation and budgetary
execution of a firm. Kotler and Keller (2012) mentioned that, if the firm can
practice corporate social responsibility properly, then none are affected
negatively by the firm cooperation hands to the firm. As a result, the firm can
operate its business smoothly. Due to the good perception about the firm, brand
values increases and improves financial performance. When a firm can ensure its
strong financial position in the market, its stock value also increases. Thus, there
is a solid relationship between corporate social obligation rehearsing and
budgetary execution of the firm. The current study is going to measure the influences
of corporate social responsibility practices on economic activity of Unilever,
UK.
1.2 Business context of the problem
Unilever is
a UK based multinational organization that has operation in more than 90
nations all around the globe (Jones, 2014). Unilever UK is one of the vital
organizations in the UK economy and the monetary wellbeing of the organization
is moderately great (Unilever, 2015). There have been numerous former studies
which examine the money related position of Unilever UK. The current study is
going to analyze the influences of corporate social responsibility on economic enactment
(Profit, asset, stock
dividend) of Unilever UK. In this research a
relationship has been developed between financial performance and corporate
social responsibility. Expenditure on corporate social responsibility and profit
as well as stock value was presented by a comparative analysis using
statistical tools. The study has also analyzed
the ways in which the efficient management of corporate social responsibility practicing
is possible.
1.3 Research aim
The aim of the research is to
understand how CSR practices can contribute to the financial position (Profit, asset, stock divided) of Unilever, UK.
1.4 Research question and objectives
1.5 Rationale of the study
This specific research project is essentially imperative in
light of the fact that it has dissected the effect of corporate social
obligation hones on the money related execution of the organization and it
additionally has explored the significance of proficient administration of
corporate social obligation hones in the organization. It is significantly essential
because it has analyzed the importance corporate social
responsibility practicing in
the company. It is also essential for maintaining same types of companies. The
study also encourages the firm to realize the importance of managing the wider
stakeholders by practicing corporate social
responsibility. The business would be able to realize the connection between economic
enactment and corporate social responsibility practicing.
Thus, the study is helpful for Unilever as well as other global firms in
realizing the importance of corporate social
responsibility practices to their financial position in the market.
Chapter Two: Literature review
2.1 Introduction
The part of literature review of it has been critically
present and analysis prior studies. Literature review is useful for the analyst
to comprehend the past writing on the particular issues. Examination of these sources
offers the scientist to see how the exploration ought to some assistance with
being directed.
2.2 Corporate social responsibility
According to Trott (2012) corporate social responsibility
refers to the corporate citizenship which generally embedded in the business
model of the company. It is the self
regulating mechanism in which the firm complies with its legal, social,
economic, environmental and ethical rules and regulations of the society within
which the firm operates. To practice the corporate social responsibility in a
true sense the firm needs to go beyond the legal obligations. The firm needs to engage itself with the
society and economic activities that can ensure mutual development of the
society, employees, customers, owners and other stakeholders (Jobber, 2007).
Thus, corporate social responsibility practicing is not just following some
legal rules and regulations within the legal framework rather to work to for
mutual development to ensure interest of the wider stakeholders.
Corporate social responsibility which is mostly known as CSR
is a burning issue now. According to Simms (2008), CSR is being considered one
of the mostly vital issues that play very significant roles of the financial
performance of the firm. To ensure
better financial performance the firm needs to build and manage the wider
stakeholders properly. These wider stakeholders have vast impacts on
performance of the firm. If the firm can manage these wider stakeholders
properly, then they extend their helping hands to the firm. As a result, the
firm can ensure better performance. Customers, owners, suppliers, employees,
society, and government all the parties have influence on the decision making
of the firm. These wider stakeholders can vastly affects operation of the
firm. According to Trott (2012) ignoring
the wider stakeholders the firm cannot sustain in the competitive market. In
the competitive market the firm needs to run with the help of many
stakeholders. Thus, it is very important for the firm to protect interest of
these wider stakeholders. If the firm can protect interest of these wider
stakeholders, then they are satisfied and cooperative to the firm. Basic
principle of the corporate social responsibility has to protect interest of the
wider stakeholders. Thus, it is very much crucial job for the firm to practice
corporate social responsibility in a good and effective manner.
2.3 Functions of Corporate social responsibility
From four perspectives the firm needs to be responsible and
these are ethical, societal, legal and environmental. A firm should maintain
legal and ethical obligations. The firm needs to be responsible to the society
within which it operates (Kotler and Keller, 2012). It should work for the
development of the society. Another perspective is environmental. The firm must
be environment friendly. It should follow rules and regulations so that the
environment goes not get harm. Thus, corporate social responsibility functions are
four types: societal, ethical, environmental perspective and legal functions.
Figure:
Functions of CSR; source: Trott (2012)
Ethical functions
Ethics is the base of practicing corporate social
responsibility. This is the main principle of the firm. The firm to be practice
CSR properly must be ethical in its activities. The firm should be ethical both
in internal and external actions. Each activity should be done with ethical
perspective. Firm ought to acquaint
preparing and improvement programs with make the workers ethical (Trott, 20120.
To develop morality of the employees the firm should make them clear about the
basic principle of CSR. The firm should build a corporate culture where the
employees are encouraged to be ethical automatically. Ethics should be
practiced in every stage of the management. However, the top management should
be more responsible in this regard. They need to aware about to practice corporate
social responsibility and make the other employees inspired to be ethical in
every action. There is relationship between employee’s ethical standards and
firm’s financial performance (Kania, 2001). If the employees are morally
strong, then it is very much possible for the firm to eliminate corruption from
their operations. Ethical employees are loyal and accountable to the firm. They
do not do anything for personal gain that can make the firm loser.
Legal functions
Kotler and Keller (2012) mentioned that, legal functions are
mostly related to the transparency of the business practice and financial
disclosure. Legal obligations make the firm to be transparent to the wider
stakeholders. Firm needs to follow legal obligations in each action. The
workplace should be saving so that the employees can work without any
hesitation. Firm needs to disclose financial information to the wider
stakeholders so that they can be benefited. For the investors financial
information is very much crucial to take decision whether to invest or not. Thus,
it is the responsibility of the firm to disclose necessary information for the
seekers (Kotler et al, 2008). Firms should provide reliable goods and service
to the customers. The price also needs to be reasonable. To operate the
business, the firm needs to maintain domestic as well as international laws. The rules and regulations set by the authority
should be maintained. The firm should be loyal to the government to provide
tax.
Societal functions
A firm operates within a society and it needs to work for
the development of that society. The firm should be respectful to the customs
and rules regulations of that society. They should not ignore cultural and
religious values and beliefs of that society (Kotler and Keller, 2012). The
firm should avoid doing anything that can be harmful for the society. Quality
goods and services should be provided to the society members so that they get
benefited. The firm can work for the development of that society. They can
create employment opportunity, school, college and other non-profit
organization that will be helpful for the society members. Fill (2005) suggested the firm to work for
the infrastructure development.
Environmental functions
According to Simms (2008) environment protection is great
concern for the global citizen. People are aware about this issue. No firm will
be able to sustain in long run which is responsible for environment destruction.
The environmentalists are very much active now. Not only that, it is a ethical
and legal obligation for the firm to maintain the rules and regulations to
protect the environment. The firm should be operating their business in such a
way that can manipulate the environment. The firm must have proper waste
management. Day (2008) suggested the firm to practice green concept in this
regard.
2.4 Corporate social responsibility models
Carrols model of corporate social responsibility
This model has four dimensions and these are; economic,
legal, ethical and philanthropic. That means the firm has responsibilities from
four perspectives. The first and foremost duty of the firm is to execute
economic responsibility. According to Kotler (2003) firm should be concern only
about its economic responsibility. It should be profitable. If the firm can
make profit, then business operation is smooth. On the other hand, if the firm
cannot make profit, it cannot run the business smoothly and cannot support the
society as well as other stakeholders.
Figure:
Carrols model of corporate social responsibility: source: (Kotler and Keller,
2012)
Second dimension is legal responsibility. The firm should be
aware about the rules and regulations. They need to operate within the legal
obligations. Firm needs to maintain the rules and regulations set by the
government as well as other empowered authority. If the firm goes on
international business, then it should maintain international rules and
regulations (Kotler and Keller, 2012). In fact, firm cannot violate rules and
regulations. If the firm breaks the rules and regulations, then it has to pay
for that. That is why, to build and maintain a good image in the market, it is
better for the firm to maintain rules and regulations. Then the ethics and
morality come in front. The firm needs to be ethical and moral in their action.
They should be honest to the wider stakeholders. If the firm practices ethical
and morality then is performance will increase (Day, 2008). When the employees
are ethical and moral they are loyal to their duties and responsibilities. If
the firm can build a corporate culture based on ethics and morality, then
corruption will be reduced. As a result, profitability of the firm will be
increased. Brand value of the firm will increase in the market. Final dimension
is philanthropic job. The firm needs to be philanthropic to the society. They
need to extend their helping hands to the poor (Kotler and Keller, 2012). They
can establish hospital so that the poor can take treatment at minimum cost. They
can donate to other nonprofit organization which works for the humanity.
In fact, there is a relationship among these dimensions
(Simms, 2008). If the firm is ethical and maintain rules and regulations, then
its performance will increase. If the performance increase firm can make profit
which refers to executing financial responsibility. If the firm can make profit
then it can do philanthropic jobs. Thus, all the dimensions are interrelated.
Constituency model of CSR
Wider groups are related to the business and their interest
in different from each other. The customer wants to have goods and service with
lower price but high quality. On the other hand, the owner wants to get more
profit (Fill, 2005). Thus, to make more profit the firm needs to set higher
price or sacrifice quality. If the firm does that then the customers will be
dissatisfied. The management wants the firm to be expanded. The employees want
to get more salary and benefits from the firm. If the firm extends its business
or increase employee salary and other benefits then owner’s profit will
decline. The society believes that the business has been beneficial for society
and organizes for society (Kania, 2001). The government believes that the business
will follow the rule and regulation and pay tax regularly. Thus, it is very
dilemma for the firm to protect interest of the wider stakeholders.
According to this model the wider stakeholders are in two
group; stockholders and non-stockholder.
As interest of these two groups is not same thus a zero sum game can
take place. If the firm protects interest of one party then another party will
be loser (Jobber, 2007). However, it will be harmful for the firm. To dissolve
this problem constituency model has been developed. According to this model the
firm should make a well balance to protect interest of the wider stakeholders.
Sustainability model of corporate social responsibility
According to this theory firm should
be long term oriented. The firm should be environment friendly. This model has
three elements |
Figure: Sustainability model of corporate social responsibility:
source (Day, 2008)
This theory suggests that the
firm needs to work for the betterment of people and planet. Profit is the
consequence of their activities (Day, 2008). They should follow rules and
regulations regarding environment protection. The customers should be served
with quality goods and services. The firm should be green in their practices.
2.5 Financial positions
Money related position of an organization alludes to the
monetary quality of an organization. On the off chance that the rate of return,
offer worth in the share trading system, deals development and so on is great
then it can be called that the money related position is great (Besley and
Brigham, 2011). Making such budgetary position requires persevering endeavors
from the organization.
Money alludes to the component that is expected to work the
business and to buy the crude materials for the business (Saunders, Cornett and
McGraw, 2006). Consequently fund is the most basic component of a business. In
this manner, how an organization deals with the money related assets decide the
level of accomplishment of an organization (Saunders, 2000). In the event that
an organization productively deals with the money related assets, then it is
normal that the association will create higher rate of profits for its speculators
(Heaton, 2000). Be that as it may, a huge issue emerges when the organization
neglects to make productive administration of the money related assets.
A few components influence the money related position of an
organization. The truth of the matter is that, how the organization contributes
the sum is the first determinant of the budgetary position (Hinchey and
Goodloe, 2015).
The money related assets of an organization must be
productively overseen in light of the fact that effective administration of the
assets will figure out whether the organization will have the capacity to
create adequate returns and to make the speculators fulfilled (Gitman, Juchau
and Flanagan, 2010).
Step by step instructions to make successful administration
of money related assets: An organization ought to make appropriate speculation
of the assets and the organization ought to analyze the venture choices in
light of the fact that venture ought to be made in reasonably productive
business (Yescombe,
2011).
Literature review of Sub-Research Question-1 (related to objective 1)
Objective
one
To analyze the influence
of corporate social responsibility practicing of the monetary position of
Unilever, UK
The below
literature of objective 1 leads to the hypotheses that:
H1: Corporate social
responsibility practicing has impacts on the financial position (Profit, asset,
stock divided)
According to
Kotler and Keller (2012) the connection of financial performance and corporate
social responsibilities practicing has been existed in company. To make profit
or to increase asset firm need to run their business smoothly. To run business
smoothly, firm needs to build and maintain good relationship with the wider
stakeholders. To maintain good relationship with the wider stakeholders firm
needs to protect interest of the wider stakeholders. If the firm can protect
interest of the wider shareholders and continue good connection with the wider
stakeholders then the wider stakeholders cooperate the firm.
Trott (2012)
mentioned that if the firm can provide the customer quality products at
reasonable price, the employees are satisfied with work environment and benefits,
owners are satisfied with profit, society gets benefits and the environment
does not get harm, then all the wider stakeholders are satisfied. This job can
be done by practicing corporate social responsibility properly. CSR practicing
can generate a good perception in customer minds about the firm. As a result,
the customers become attached with the firm emotionally. The customers as well
as other parties become engaged with the firm. According to Jobber (2007) to
ensure good performance firm needs to engage the customers as well as other
parties. Engagement of the customers and other employees prompt the success of
the firm. Kotler et al (2008) mentioned that, practicing CSR firm can generate
positive perception in customers’ mind by practicing corporate social
responsibility properly. Thus, a strong brand image can be built in the market.
In the competitive
market, strong brand image is very much essential to hold the old customers and
to capture new ones. Due to strong brand image firm can make the customer
emotional for the particular brand. As a result, these customers stay with the
firm. They purchase products repeatedly. Not only that, these satisfied
customers turn to loyal. Trott (2012) mentioned that in the competitive market,
loyal customer is the key to success. The loyal customers also help the firm to
establish brand image. Loyal customers convince others to purchase products
from the particular brand. Thus, the firm can enjoy customer lifetime values by
making them loyal.
From the above
discussion it has been proved that there is strong connection between corporate
social responsibility practicing & brand image and sales performance. Thus,
practicing corporate social responsibility properly leads to good financial
position. Strong brand image leads to maximum sales volume. If the firm can
reduce operation cost with the help of its satisfied employees and sales volume
is at maximum level then profit also at maximum level. Firm can maximize its
share dividend for the shareholders. Finally the firm can maximize its assets
in the long term. Thus, corporate social responsibility affects financial
performance.
Literature review of Sub-Research Question-2 (related to objective-2)
Objective 2: To investigate the
ways Unilever practices corporate social responsibility
The below
literature of objective 2 lead to the hypotheses that:
H2: Unilever is practicing corporate
social responsibility efficiently.
Unilever is a good corporate citizen. The firm has vast plan
for the welfare of people and the planet. The firm is operating in a
sustainable way. From the last few years the firm has been trying to be green
in its operation. In 2010 it planned to source over 30% palm oil from the
sustainable source. With the passes of time this plan has been implemented at
large scale. It is donating for the understanding sustainability (Unilever
company website, 2015).
It purchases more that 20% tea from the rainforest alliance
Certified TM farms. Millions of people are being aware about their health with
the health related program conducted by Unilever. Its lifebuoy hand wash
program made millions of people accustomed to hand washing and living a healthy
life. The firm sources more than 55% of agricultural raw materials from the sustainable
sources. It has a Plan to develop for assuring 25 million people getting access
for toilet in the end of 2020. Its 75%
manufacturing sites ensures proper waste management. 65000 Shakti entrepreneurs
were recruited by Unilever. It has been selected as Sector leader in CDP’s program. 240
factories in 67 countries gained zero non-hazardous waste to landfill. 70000
women micro-entrepreneurs are trained by Unilever. It encouraged the New York
Declaration on Forest at the UN atmosphere summit. Presently it is the pioneer
of the nourishment, drink and tobacco industry and joint area pioneer in CDP's
Global Forest Report (Unilever company website, 2015).
Literature review of Sub-Research Question-3 (related to objective 3)
Objective 3: To find out possible ways in which
Unilever can ensure effectiveness in practicing corporate social responsibility
to ensure better financial performance
The below
literature of objective 3 leads to the hypotheses that:
H3: It is possible to find out ways in which Unilever can
ensure more effectiveness in practicing corporate social responsibility to
ensure better financial performance
According to Carroll’s CSR model theory to be a good
corporate citizen a firm must be responsible by ethically, morally. It should
execute its economic responsibility firs. The ethical responsibility, then
societal and finally philanthropic responsibility should be executed by the
firm to be a good corporate citizen. According to Kotler and Keller (2012) firm
must not ignore any one of the four. Howver, the first and foremost
responsibility is to make profit. If the firm cannot make profit it cannot do anything
for the society.
According to
sustainability CSR model theory firm must consider people and planet first to
be a good corporate citizen (Trott, 2012). There is conflict to protect wider
stakeholder interest. Constituency model of CSR suggest making a proper balance
to protect wider stakeholder interest so that no party is dissatisfied.
Chapter three: Methodology
3.1Research philosophy
According to Dewberry (2004) philosophy of research means
to perception of the scholar towers the study issues. It also refers to the
knowledge and the ways to develop it.
Creswell and Clark (2007) said that there are three sorts of examination
methods of insight and these are; positivism, authenticity and interpretive. In
positivism research reasoning quantifiable and noticeable information is
considered. That is why; the outcomes are also become measurable and
observable. Gill and Johnson (2010) said that the audiences expect to get
measurable and observable data. Moreover, this philosophy is useful to conduct
the study within a theoretical boundary. As a result, the researcher can
establish control over the study easily. On the other hand, realism and
interpretive philosophy cannot generate precious result like what can be
generated using positivism. That is why, in this study, positivism research
philosophy has been considered. As positive philosophy has been used the
outcomes are more precise. The study has been conducted within a theoretical
framework.
3.2Research approach
There are two widely used research approaches;
inductive and deductive. Inductive research approach is used in the study where
the study starts with a title and finally a generalized perception is developed
(Franklin, 2012). That means to generate a new theory inductive approach is
used. Then again, deductive methodology is utilized to inspect the fittingness
of the current hypotheses. To test the fittingness of existing speculations,
theories are set at the beginning of the study. Moreover, in deductive approach
study, data should be collected within a theoretical boundary. As a result,
outcomes become precious as there is no chance to collect irrelevant data.
Positivism research philosophy and deductive approach are helpful to generate
precious result. In this study, hypotheses have been set to test existing
theories of CSR and data has been gathered from specific sources. Thus, in this
study, deductive approach has been used.
3.3. Research method
According to research method refers to data type and
collection approach. Variation of research there we find 3 kinds of research
methods which are known as quantitative, qualitative and mixed or hybrid (Best
and Kahn, 2005). Quantitative method is used to collect quantitative data. To
collect qualitative data, qualitative method is used. On the other hand, mixed
or hybrid consists with the help of qualitative and quantitative methods. In
the time of using qualitative and quantitative data, hybrid method has been
used for solvation. In research project, quantitative and qualitative has been found.
So mixed or hybrid method has been considered is this study.
3.4 Data type
According to Bell (2010) data types can be used for
research into quantitative and qualitative. Quantitative can be expressed arithmetically
where qualitative cannot be conveyed arithmetically. However, Davies (2007)
mentioned that, to generate a comprehensive result, both types of data should
be used. Using only qualitative or quantitative data, whole scenario cannot be analyzed.
That is why, in this study, both types of data have been used.
Based on collection there are primary and secondary.
The basic data or original data known as Primary data refers to raw data that
is collected from the respondent using survey, interview or any other methods.
On the other hand, secondary data is already used in previous studies.
Secondary data can be found from books, journals, articles, newspaper.
Secondary data has some limitations like historical limitation, data may be
less relevant. According to Creswell (2012) secondary data should be used as it
enhances acceptance of primary data. Moreover, secondary data can be collected
easily. That is why; to generate an effective outcome both primary and
secondary data has been used in this study.
3.5 Data collection technique
Here, primary and secondary data has included. Primary
data has been collected using survey questionnaire. Major advantage of spending survey
questionnaire is which knows as useful to collect the data within a limited
time with limited resources. That is why, in this study, survey questionnaire
has been used. The question of here would be open and close ended. In the close
ended questions the respondent did not have much freedom to provide data. On
the other hand, in open ended questions, they enjoy much freedom. In the close
ended questions has been defined as those measure scales;
a. Strongly
agreed (1)
b. Somewhat
agreed (2)
c. Neutral
(3)
d. Somewhat
disagreed (4)
e. Strongly
disagreed (5)
Secondary data has been collected from several sources
like: Unilever company website, related journals, books, articles and
newspaper.
3.6 Data analysis and presentation
To analyze data SPSS and theoretical models of CSR
have been considered. To present data analysis, pie chart, bar chart and
several types of graphs have been used.
3.7 Population and Sampling
The wide shareholders of Unilever are considering as
total number of population of this study. However, it is impossible to collect
data from total population rather a small portion has been picked up which is
called sampling. Using random sampling 50 customers and another 50 employees of
Unilever, UK have been picked up. Reason behind using random sampling is that
it is helpful to generate an overall perception.
3.8 Ethical and access issues
Davies (2007) mentioned that to ensure acceptance of
the study, ethical issues have to be confirmed in all phase of the study. Here,
ethical and moral issues have been followed strictly. No falsification has been
allowed. Plagiarism has been avoided. Data has been collected and stored
properly. Personal biasness has been avoided. To get access into the company
academic letter has been used. It has been ensured that the study was only for
academic purpose. Personal inform of the respondents has not been disclosed as
a combined result has been published. No secret information about the company
has been disclosed. In fact, with the permission of the company no information
has been published.
Chapter Four: Findings
The main target of study is to analyze influence of
Corporate Social Responsibility (CSR) on the economic position (Profit,
asset, stock divided). To achieve that aim, several objectives have
been developed. Research questions have been developed against these
objectives. Objectives of the study are;
To analyze the influence of corporate social
responsibility practicing on the monetary position of Unilever,
UK, To investigate the ways Unilever practices corporate social responsibility,
To find out possible ways in which
Unilever can ensure effectiveness in practicing corporate social responsibility
assuring better financial routine. To meet the objectives, qualitative and
quantitative data has been analyzed. Data has been collected from primary and
secondary sources.
Demographic information
Gender
N
|
Valid
|
100
|
Missing
|
0
|
|
Percentiles
|
1
|
1.0000
|
2
|
1.0000
|
In this study both male and female have been
considered as respondents. Here, 120% are male while 80% are female.
Educational background
Perception can vary based on education level. That is
why, in this study, respondents have been selected from several education
levels. Here, 25% are up to higher secondary, 50% are graduates and the
remaining are post graduates. Thus most of the respondents are higher educated.
Question
1:
Corporate social responsibility is considered the vital factor for good
financial position in the competitive market. Do you agree with that statement?
Corporate social responsibility is a vital issue for
the firm to perform in the competitive market. Firm cannot sustain ignoring
this issue in the competitive market. To ensure financial position CSR
practicing is an essential job. In the study it has been found that most of the
respondents believe that CSR has vast impacts on financial performance.
Question
2:
Why do you think that corporate social responsibility is a vital issue for good
financial position?
Most of the respondents are very much aware about the
significance of corporate social responsibility practicing. They have mentioned
several reasons for what a firm should practice CSR. The summery is that, it needs
as an essential for a business to build good connection with the wider shareholders.
To do that, firm must protect their interest. Practicing CSR firm can do that.
It helps the firm to bring a positive change in customer minds. Strong brand
image is possible only through practicing CSR. When it has strong brand image
it can maximize sales as well as profit level. Thus, its value increases in the
market. Firm can attain desired goals and objectives.
Question
3:
Do you think that Unilever is protecting your interest properly? (Only for
employees)
Employees run a firm and that is why, their interest
should be protected. In this study, it has been found that, most of the
employees of Unilever are satisfied with their firm. They think that their
interest is being protected. Here, 70% respondents think that, Unilever is
protecting its employees’ interest properly. However, 30% employees do not
believe that and the remaining do not have any comment in this regard.
Question
4:
Do you think that Unilever is protecting your interest properly (only for
customers)
Customers are key factor to success. Firm must build
and maintain good understanding with the customers to be success. In the
current study, it has been found that, most of the customers think that
Unilever is protecting customer interest. Here, 70% customers believe that
their firm is aware in protecting its customer interest. On the other, 30%
customers think that Unilever is not protecting its customer interest and the
remaining does not have any comment on this issue.
Question
5:
Do you think that Unilever is working for socio-economic development properly?
Firm should contribute in socio-economic
development. They need to work for social and as well as national economic
development. In the current study, it has been found that, Unilever is
contributing on socio-economic development.
Most of the respondents have positive perceptions in this regard. However,
20% respondents do not have positive perception. They do not think that
Unilever is contributing in socio-economic development.
Question
6:
Do you think that Unilever is executing its economic responsibility (owner’s
interest properly?
Making profit is the main responsibility of a firm. To
earn money a business organization is established and run. To make the owner
satisfied and attract new investors firm needs to execute economic
responsibility properly. In this study it has found that Unilever in protecting
its owner interest properly.
Question
7:
How Unilever can maximize effectiveness of its CSR practicing?
The respondents have mentioned several ways through
which the firm can practice CSR properly. Main point is that, the firm should
be careful about all the parties related to the firm. No party should be
ignored. There is problem in protecting wider stakeholders’ interest as they don’t
have same interest. In this regard, they have suggested that, the firm should
make a proper balance to protect interest of the wider stakeholders. They also
mentioned that the firm should be careful about sustainable development. They
also need to green in their operations.
Chapter Five: Analysis and Discussion
According to Kotler and Keller (2012) showed the
relationship between corporate social responsibility practicing and financial
performance. The authors additionally mentioned that, CSR practicing creates a
positive image in the minds of customer as well as those of other stakeholders.
In fact, CSR is the way to build and maintain good understanding with the wider
stakeholders. Practicing CSR firm can protect interest of the wider
stakeholders which is very much essential to build and maintain relationship
with them. As the firm can protect its wider stakeholders’ interest, brand
image increases. CSR encourages all the parties related to the firm to be
loyal. For example, when the firm practices ethics, a principle of CSR,
employees are loyal to their job. They have accountability and transparency and
level of corruption declines and performance increases. Thus organizational
performance gets speed. Sales volume also increases. Firm can make higher
profit. Its stock values also increases. The findings support this theory.
Most of the respondents believe that, CSR practicing
enhances financial performance. When a firm works based on ethics and morality,
its brand image increases. Employees work attentively. Sales performance
increases. All stakeholders extend their cooperative hands. Thus firm can
maximize its profit in short time and in long term it maximizes assets.
Jobber (2007) mentioned that, without employees a firm
is nothing. Growth of a firm depends on the loyalty of the employees. If the
employees are loyal and skilled then t they can perform well. Employee
performance accelerates organizational performance. That is why company needs
to be careful in protecting employees’ interest. In the current study, it has
been found that, most of the employees of Unilever are satisfied as their firm
is careful about their interest.
According to Kania (2001) customer is the key factor
of success in the competitive market. Firm cannot servive in the competitive
market ignoring its customers. That is why, they need to build and maintain
good relationship with the customer. To do that, they need to give emphasizes
on customer expectation. Organization needs to be respectful to its customer.
Firm should provide quality product. It should charge reasonable price. In the
current study, it also has been revealed that, 60% customers of Unilever have
positive perception towards their firm. However, 35% customers do not have
positive perception in this regard. Thus, Unilever should count this portion.
The firm should be aware to make them satisfied as 35% is not an ignoring
portion.
According to (Peter and Olson, 2005) firm
should work for the socio-economic development of the society within which it
operates. It should work for humanity. They should develop infrastructure of
the locality. They should create employment opportunity for the locality.
School, college, hospital should be established. They should donate in charity
firm. In the current study it has been found that, Unilever is working for the
socio-economic development as a part of corporate social responsibility
practicing. According to Trott (2012)
economic responsibility is a vital part of CSR practicing. In fact, if the firm
cannot make profit then it cannot do anything for anyone. That is why; the
first and foremost responsibility of a firm is to make profit. In the current
study, it has been found that, Unilever is executing its economic
responsibility efficiently. Its profitability is increasing day by day.
In the below Unilever CSR practices and its financial
performance has been analyzed. Data are related to financial year (2010-2014)
CSR
activities of Unilever in
|
CSR
activities of Unilever in 2011
|
CSR
activities of Unilever in 2012
|
CSR
activities of Unilever in
|
CSR
activities of Unilever in 2014
|
Profit
2010
|
2011
|
2012
|
2013
|
2014
|
$4598bn
|
$4623bn
|
$4948bn
|
$5263bn
|
$5515bn
|
Dividend
per share (€ million)
2010
|
2011
|
2012
|
2013
|
2014
|
€1.01
|
€1.10
|
€1.12
|
€1.29
|
€1.28
|
Net
asset (€ million)
2010
|
2011
|
2012
|
2013
|
2014
|
€41,167.00
|
€47,512.00
|
€46,189.00
|
€45,513.00
|
€48,027.00
|
Interpretation:
CSR & financial performance
It has been found positive relationship between CSR
practicing and economic performance of the company. In this study, data has
been collected of 201-2014. CSR activities of Unilever have been increased with
the passes of time. Due to the positive relationship financial performance has
also been increased. It has been revealed that, profit, divided and net assets
have been increased year by year as CSR activities have been increased.
Thus, the final decision is that, the relationship is
strong between CSR practicing and economic performance of a firm.
Chapter Six: Conclusion and Recommendations
6.1 Conclusion
Main objective of the study was to analyze the impacts
of corporate social responsibility on the economic performance. There were
three objectives to support to attain that objective. All the objectives have
been achieved. It has found that Unilever is in good financial position due to
its good CSR practicing. The relationship is strong between CSR practicing and
economic performance of a firm. Higher sacrifice for CSR leads to higher
financial performance. Wider stakeholders are satisfied with the CSR activities
of Unilever. The owners, employees, customers, society and other stakeholders
are satisfied as Unilever is very much conscious about CSR activities. The firm
is contributing in socio-economic development. It has created job opportunity
for millions of people. Thousands of women have become successful entrepreneurs
with the training and development programs of Unilever. Every year millions of
people are being benefited with the health training of Unilever. People are
being aware about their health and safety. The company is sourcing raw materials
from sustainable sources. It has been contributing in sustainable environment.
As a result the company has gained recognition in this regard. To save the forest throughout the work the
company is working with lots of nonprofit organization.
CSR activities of Unilever have been increasing day by
day. The firm is getting its benefit. As the firm practicing CSR efficiently,
its brand value is also increasing. All stakeholders are happy with the firm
and they are cooperating. As a result Unilever is performing well. From 2010-2014,
CSR activities and financial performance have been increased simultaneously. Profit,
dividend per share and net assets has been increased with the passes of time.
6.2 Recommendation
Unilever is on the right track now. The firm should
continue their CSR activities like what they did in the previous years with. They
should increase their activities with the passes of time. They should maintain
their thinking to protect planet and people.
Chapter Seven: Evaluation
Major learning from this study is that the relationship
is strong between CSR practicing and economic performance. Firm should be aware
about CSR practicing. In the competitive market success of the firm is very
much dependent on CSR practicing. CSR practicing is essential to develop good
understating with the wider stakeholders. CSR practicing helps the firm to develop
a strong brand image which finally leads to good financial position. Firm can
ensure strong brand image, large profit, and maximum dividend for the share and
maximum assets. To conduct the study, several types of problems have been
faced. That is why the study has some lacking. Major limitation is that, CSR
activities of Unilever have been found. However, the cost for those activities
was not available. As a result, correlation between CSR and financial
performance has not been analyzed statistically. In future, if CSR costs are
available then a statistical correlation between CSR cost and financial
performance can be developed.
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Appendix 1
Sample questionnaire
Demographic information
Question
1: Corporate
social responsibility is considered the vital factor for good financial position in the competitive market. Do you agree
with that statement?
Strongly
agree
|
Somewhat
agree
|
Neutral
|
Somewhat
disagree
|
Strongly
disagree
|
Question 2: Why do you think that corporate social
responsibility is a vital issue for good financial position?
Question
3: Do you think that Unilever is protecting your interest properly? (Only for
employees)
Strongly
agree
|
Somewhat
agree
|
Neutral
|
Somewhat
disagree
|
Strongly
disagree
|
Question 4: Do you think that Unilever is
protecting your interest properly. (only for customers)
Strongly
agree
|
Somewhat
agree
|
Neutral
|
Somewhat
disagree
|
Strongly
disagree
|
Question
5: Do you think that Unilever is working for socio-economic development
properly?
Strongly
agree
|
Somewhat
agree
|
Neutral
|
Somewhat
disagree
|
Strongly
disagree
|
Question
6: Do you think that Unilever is executing its economic responsibility (owner’s
interest properly?
Strongly
agree
|
Somewhat
agree
|
Neutral
|
Somewhat
disagree
|
Strongly
disagree
|
Question
7: How Unilever can maximize effectiveness of its CSR practicing?