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QB3004: Business Ethics And Corporate Social Responsibility

Carrefour

Haya Abdulaziz Al-Mannai

50079954

05-Nov-2022
Word count: 2026
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Table of Contents
Carrefour..............................................................................................................................3

CSR of Carrefour.............................................................................................................3

The objective of essay.................................................................................................3

Critical Analysis of the CSR strategy of Carrefour.............................................................4

The ethical value of Carrefour's strategy.........................................................................4

Business reasons, moral arguments, and different arguments for implementing CSR. . .5

Recommendation.................................................................................................................7

Conclusion...........................................................................................................................8

References............................................................................................................................8
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Carrefour
Carrefour is a multinational wholesaling and retail corporation in France. It was founded
in January 1958, and the company's headquarters is located in Massy, France. It has a chain of
grocery stores, convenience stores, and hypermarkets, and it is the 8th largest retailer by revenue
worldwide. Carrefour has 230 hypermarkets, more than 2000 convenience stores and small
supermarkets, and 1020 Carrefour supermarkets in France that are operating under its name. It
has both a physical and online presence for the convenience of its customers (GURI, 2019).
The products of Carrefour are Eggs and Dairy, Vegetables and fruits, Bakery products,
snacks, rice, frozen food, etc. It has a chain of Promocash Cash and Carries. It also performs
internationally in Asia, Europe, Africa, the Middle East, and South America. The revenue of
Carrefour was €1.25 billion in 2021 and the net income was €1.07 billion. More than 322,170
employees are currently working in the Carrefour chain (GURI, 2019).

CSR of Carrefour
Carrefour highly contributes and ensures SDGs goals to create value for society and
stakeholders. The mission of Carrefour is to offer quality products and services through its
distribution channels. Primarily carrefour integrates 10 UN SDGs practices. These 10 CSR
practices include Zero hunger, well-being, and good health, gender equality, climate action,
economic growth, life below water, responsible production and consumption, and life on land.
Through its sustainable practices and CSR initiatives company facilitates its 13,000 stores in 30
different countries. In 2018 Carrefour leader Alexandra Bompard launched Carrefour's 2022
five-year transformation plan (Puiu and Florea, 2022). This sustainability strategy aims to
respond to the current global challenges and become the leader in food transition. This
transformation model aims to promote accessible and healthier food for the consumer through
agricultural transition and preserve planet resources. So, the CSR strategy of Carrefour focuses
on environmental protection, economic and social responsibility, and safety and quality
standards for employees and customers.
Objective of essay
CSR strategy will deeply analyze in this essay, focusing on the ethics, moral arguments,
and business reasons for implementing the CSR strategy. Arguments through scholarly articles
will draw to improve the Carrefour CSR strategy, which is highly focused on company specifics.
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Critical Analysis of the CSR strategy of Carrefour

ISO 26000 (2007) provides the CSR definition that it is referred to as social responsibility
and its impact on the environment and society activities that can ensure ethical and transparent
behaviour while exercising sustainable practices in society (Castka and Balzarova, 2007).
According to Dowling (2004), there are two corporate images of any company, including
financial performance and ability, and the second is an emotional drive through the company's
unique personality and social responsibility (Dowling, 2004).
Carrefour builds a convincing and strong goods image that attracts the customer's
attention to meet their psychological needs and, in this way, Carrefour achieves customer
satisfaction. Carroll's (2000) proposed in his CSR pyramid that enterprises mainly emphasize
social, environmental, and legal responsibilities (Fatma et al., 2014). Carrefour's strategy showed
that to create value for society and stakeholders, it introduces 10 UN SDGs goals, including Zero
hunger, well-being, good health, gender equality, climate action, economic growth, life below
water, responsible production and consumption, and life on land. Justifying the Carrefour
strategy effectiveness through Carroll's, we conceptualize that under SDS goals, Carrefour meets
all four responsibilities discussed in Carroll's model.
The sustainability report of 2022 showed that it achieved the Consumer Goods Forum
(GCF) goals by about 50% because its target is to reduce food waste by 2025. It is the best social
practice of Carrefour because it focuses on three main areas to cut food waste, including
consumer education, cooperation with suppliers, and in-store measures. Moreover, Carrefour
takes partnerships and joint initiatives with digital operators, trade organizations, NGOs, retail,
and industries to fight food waste. Carrefour also set climate change targets in its CSR strategy
and used KPIs to reduce the Group's greenhouse gas emissions by 30% and 55% in 2030 and
2040, respectively (Puiu and Florea, 2022). The in-depth assessment of Carrefour's CSR showed
that it meets all the required, expected, and desired responsibilities by society.
The ethical value of Carrefour's strategy
Business ethics referred a set of such policies and practices that companies use to decide
the CSR, negotiation, employee's rights and finances along with social practices to enable
sustainability. In 2015 Carrefour renewed the UN global compact, OECD, international
agreement, and international labor organization with UNI. Through this agreement, Carrefour
promises to follow some ethical principles, including refusing discrimination and harassment,
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ensuring transparent business relation, ensuring commitment with partners, respecting diversity,
contributing to a healthy and safe environment, and avoiding unethical practices. These practices
reflect the faithful, conflict-free, and reliable reporting of Carrefour. Moreover, in 2010
Carrefour arise corruption awareness among partners and employees and enabled them to fight
against corruption.
According to Santoro, (2009) in China, Carrefour was involved in unethical practices
because of fake discounts and misleading product price tags (Doh et al., 2010). In 1995
Carrefour entered and grabbed a high market share in the Chinese market, but in 2011, according
to the National development and reform commission, about 11 stores of Carrefour involves in
overcharging customers. These practices of Carrefour showed that Carrefour operations violate
the standardization and weight issue in the Chinese market, which is considered unethical.
According to Singh et al., (2012) if a customer perceived a product ethically it leads toward
positive customer relations but if an organization does not disclose and aware customer about
product attributes with integrity and honesty the product organization's perception negatively
affects (Iglesias et al., 2020). Novak, (1996) argued that customers must be satisfied with a
product's real value. This argument justifies that Carrefour creates misconceptions and
misleading, which is considered unethical (Novak, 2021).
Business reasons, moral arguments, and different arguments for implementing CSR
Carrefour's CSR strategy integrates different types of CSR including environmental
activities, workforce planning, stakeholder engagement, and marketplace activities. If we analyze
these CSR practices while using Carroll's CSR model, we systematically ensure that the
company meets all four (legal, economic, ethical, and philanthropic responsibilities). Novak
(2002) argued that the purpose of CSR in the private sector is to ensure the well-being of society,
but these CSR responsibilities are not only practiced through law there are other considerable
social, ethical, and economic factors that are crucial (Novak, 2021).
Carrefour set different goals behind implementing the CSR strategy. Carrefour integrate
10 SDGs and as an outcome in 2019 Carrefour got an A1+ rating by Vigeo Eiris among 4921
companies and tanked as the world's 2nd supermarket in the retail sector. Carrefour ESG rating
is 20 is low (Bance, and Bouchard, 2022). So, we can easily draw an analysis based on the
current CSR strategy Carrefour takes advantage of and overcome the governance, social and
economic risks. Through CSR practices Carrefour retains a huge market share and consistently
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faces growth in the retail sector. The current strategy of Carrefour showed that strategy
considered all of Carroll's responsibilities that directly and indirectly influence the company and
its stakeholders. According to stakeholder theory businesses must account for the primary and
secondary stakeholders and deliver value to all. Carrefour's strategy of CSR integrates and
applies the stakeholder theory and promotes the best and most sustainable agricultural transition
with the supplier through fair contractual conditions. The sustainable offering of Carrefour also
promotes accessible and healthier food, preserving the resources on the planet. These clues
provide clear evidence of the fact through implementing the CSR strategy Carrefour meets its
business reasons (cost reduction, revenue retention, social sustainability, manage risk).
French retailer of Carrefour face challenges and bear huge penalty when its employees
are directly paid by suppliers through providing bargaining agreements and payroll benefits
(Anita Awbi, 2008). These loopholes and employees switching toward the better opportunity
showed that Carrefour broke employment regulations of the need to design payroll or benefit
schemes for employees to gain their trust and loyalty with retail. This is considered an illegal
labor practice due to employees' poor retention and reward strategies. This unethical and illegal
practice of Carrefour employees showed that the CSR strategy of Carrefour fail to meet the
ethical and level responsibilities of Carroll's model.
Different arguments favor and are against the CSR strategy. Three main arguments
(power, externality, and dependency) were studied during lecture nine. According to power
arguments if the organization has resources and power, then morally it should be responsible for
ensuring sustainable social practices. Carrefour has the labor expertise and capital to tackle social
problems. Moreover, organizations are socially responsible to grab more customers and feel
proud of employees at the workplace. Carrefour is not fully committed to the power argument
because it involves social work and boosts social responsibilities but the same side does not
compensate and facilitate employees. The main reason for ethical and legal issues is that
Carrefour operates in different global destinations and according to an institutional perspective,
different cultures, values, policies, laws, and codes of behavior create challenges for Carrefour.
The moral arguments showed that Carrefour integrates sustainable social practices by
integrating offensive CSR instead of defensive. This is because Carrefour uses key resources and
agreements with partners to enhance its reputation. Friedman, (1962) argument supports the
Carrefour strategy because the company maximizes profit while meeting the basic social rules
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and standards (Ferrero et al., 2014). Overall, it is observed that Carrefour violates ethical and
legal standards to some extent. Jones, (1996) argument supports this finding that CSR activities
do not always ensure and guarantee ethical behavior (Barakat et al., 2016). Moreover, using
Sharp, (2006) argument about smokescreens, I observe that companies use PR stunts rather than
Smokescreen (Spencer, 2018). This is because Carrefour takes initiatives to facilitate social and
maximize profit rather than taking customers' and employees' intentions while hiding the truth.

Recommendation
The above evidence through analyzing the moral, ethical, economic, social, and legal
responsibilities of Carrefour CSR showed that some loopholes are identified in legal and ethical
responsibilities that need to be realigned and improved.
1. According to Nejati et al., (2016) CSR and company reputation are directly linked
(Ramayah et al., 2022). We observed that Carrefour is involved in unethical practices
because of fake discounts and misleading price tags on products in China. It negatively
affects customer loyalty and business reputation. According to stakeholder theory,
businesses must consider primary and secondary stakeholders to grab customers'
attention and feel employees be proud members of the company. Friedman also argued
that if the business meets the basic rules of society, it can maximize its reputation and
profit. So, to mitigate such unethical practices, the company must provide training and be
aware of the basic code of conduct. Penalties and rewards also need to design for
employees to avoid such unethical practices.
2. To ensure the successful implementation of each strategy each business need to
compensate and engage employees. These factors reduce resistance and show motivation
to adopt the change. In Carrefour, it is observed that suppliers directly pay employees
through providing bargaining agreements and payroll benefits. In this way, the company
broke the employment regulation. To reduce such illegal practices which impact the
business reputation, there is a need to design payroll or benefit schemes for employees to
gain their trust and loyalty with retail. This is because illegal labor practices and a lack of
reward strategy fail to meet the targeted goals of Carrefour.
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Conclusion
To sum it up, the findings showed that Carrefour highly focuses on environmental, social,
ethical, and economic responsibilities. Carrefour contracts with the supplier and ensures
sustainable practices on the social level while incorporating climate change, reducing emissions,
ensuring zero carbon emissions, delivering health facilities to employees, and gender equality.
However, still retail face ethical and legal issues due to a lack of employee reward and
compensation policies. Carrefour needs to redefine its employee behaviour and build policies
that train, retain, and serve the well-being of employees. When stakeholders' values are focused,
loyalty and retention ultimately increase, which avoids such unethical and illegal practices and
ensures high productivity for the long term.

References
Anita Awbi, 2008. Carrefour guilty of illegal labour practices. Retrieved 11 05, 2022, from Food
Navigator: Carrfour.https://www.foodnavigator.com/Article/2006/06/29/Carrefour-
guilty-of-illegal-labour-practices
Barakat, S.R., Isabella, G., Boaventura, J.M.G. and Mazzon, J.A., 2016. The influence of
corporate social responsibility on employee satisfaction. Management decision.
BANCE, P. and BOUCHARD, M.J., 2022. BIG BUSINESS IN THE SOCIAL COMMONS:
THE EXAMPLE OF THE CARREFOUR VĂRĂŞTI AGRICULTURAL
COOPERATIVE IN ROMANIA.
Castka, P. and Balzarova, M.A., 2007. A critical look on quality through CSR lenses: Key
challenges stemming from the development of ISO 26000. International Journal of
Quality & Reliability Management.
Doh, J., Husted, B.W., Matten, D. and Santoro, M., 2010. Ahoy there! Toward greater
congruence and synergy between international business and business ethics theory and
research. Business Ethics Quarterly, 20(3), pp.481-502.
Dowling, G.R., 2004. Corporate reputations: should you compete on yours? California
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Ferrero, I., Michael Hoffman, W. and McNulty, R.E., 2014. Must Milton Friedman embrace
stakeholder theory?. Business and Society Review, 119(1), pp.37-59.
Fatma, M., Rahman, Z. and Khan, I., 2014. Multi-item stakeholder based scale to measure CSR
in the banking industry. International Strategic Management Review, 2(1), pp.9-20.
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GURI, K., 2019. The Carrefour case study shows retail evolution and response based on new
consumption patterns.
Iglesias, O., Markovic, S., Bagherzadeh, M. and Singh, J.J., 2020. Co-creation: A key link
between corporate social responsibility, customer trust, and customer loyalty. Journal of
Business Ethics, 163(1), pp.151-166.
Novak, P., 2021. For-Profit Involvement in Humanitarian Affairs (Doctoral dissertation,
Fordham University).
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Ramayah, T., Falahat, M. and Soto‐Acosta, P., 2022. Effects of corporate social responsibility on
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Spencer, R., 2018. CSR for sustainable development and poverty reduction? Critical perspectives
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