distribution on the firm’s performance. For instance, lowering the carbon footprint of a firm’s distribution network or engaging in fair trade are potential differentiators to lower costs and increase profits. In this scenario, customers can observe the company’s commitment to CSR while increasing company sales. Whole Foods ’ marketing and promotion of organic foods have had a positive effect on the supermarket industry. Proponents assert that Whole Foods has been able to work with its suppliers to improve animal treatment and quality of meat offered in their stores. They also promote local agricultures in over 2,400 independent farms to maintain their line of sustainable organic produce. As a result, Whole Foods’ high prices do not turn customers away from shopping. In fact, they are pleased buying organic products that come from sustainable practices. According to a Harvard Business Review article, there are three theaters of practice in which CSR can be divided. Theater one focuses on philanthropy, which includes donations of money or equipment to non-profit organizations, engagement with communities’ initiatives and employee volunteering. This is characterized as the “soul” of a company, expressing the social and environmental priorities of the founders. The authors assert that companies engage in CSR because they are an integral part of the society. For instance, the Coca-Cola Company contributes with
25 $88.1 million annually to a variety of environmental educational and humanitarian organization. Another example is PNC Financial Services ' “Grow Up Great” childhood education program. This program provides critical school readiness resources to underserved communities where PNC operates. On the other hand, theater two focuses on improving operational effectiveness in the workplace. The researchers assert that programs in this theater strive to deliver social or environmental benefits to support a company’s operation across the value chain by improving efficiency. Some of the examples mentioned include sustainability initiatives to reduce resource use, waste, and emission that could potentially reduce costs. It also calls for investing in employee work conditions such as health care and education which may enhance productivity and retention. Unlike philanthropic giving, which is evaluated by its social and environmental return, initiatives in the second theater are predicted to improve the corporate bottom line with social value. Bimbo , the largest bakery in Mexico , is an excellent example of this theater. The company strives to meet social welfare needs. It offers free educational service to help employees complete high school. Bimbo also provides supplementary medical care and financial assistance to close gaps in the government health coverage. Moreover, the third theater program aims to transform the business model.
- Fall '14