Week 10

1. In  your own words and using referenced quotes describe what it meant in strategy by "organizational purpose " and describe what is meant by "corporate social responsibility "

Organizational purpose defines the reason for the existence of any organization . Organizational purpose is developed by 3 points 

• organizational beliefs :- what are the ideas and beliefs that the organization follows.
• business definition :- where they operate 
• organizational values :- what is of fundamental importance (e.g. serving the society before profit) 

 When a firm defines those 3 points it will be able to define its purpose, hence the existence of the firm will be    clear

 Lord Holme and Richard Watts has defined corporate social responsibility (CSR) as

" Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large "

In short CSR is how the firm runs and manages its business to produce an positive impact on the society. The firm can do it by running its activities ethically, contributing to the improvement of quality of life of the society by contribution overall economic development of the society .

2. Should organization focus on more on profit and shareholder satisfaction or responsibility and stakeholder satisfaction? Discuss your own thoughts but try to support your ideas with theory and examples .

The issue on whether the firm should be shareholder oriented by making profit or it should be be stakeholder oriented by being more socially responsible always generate a huge debate.  Personally although i feel that all the organization should be at first profit oriented . They should be socially responsible only if the social activities they run do not serverly affect their overall activities of the firm especially if the firm is at infant stage.

However if the firm has already outgrown its infant stage can bear other responsibilities ,  they should balance their profit motive with social responsibility . As there are various different stakeholders and shareholders who wants different focus on the organization goals it will be necessary to balance all their interest while doing CSR.

The reason a firm should embrace CSR

• Innovation :- A firm while running a CSR by chance may come with some innovative ideas For example Unilever while running its "Sustainability living" campaign it was able to innovate new product in which the hair conditioner requires less water . Without CSR Unilever might miss out on this great product.
• Brand differentiation :- Now due to existence of many firms , the huge competition has increased a lot. Now it is also very difficult for the firm to differentiation themselves among their competition 
• Long term thinking :- As customers are starting to be more aware , it is difficult and necessary   the firm to keep a sustainable relationship with them without CSR.



Unilever making a world a better place to live in through CSR

• Customer engagement :-  Involving in CSR means a chance to get to engage with their valued customers to create a better relationship. For example Walmart started an environment campaign to care about the earth. It ran various advertisements to create awareness among the customers that the choices that they make can save the earth. Since the message was for a good cause there was a noticeable changes in the relationship between the customers and the way they view walmart was better than before  

Case Study 
 What are the Pepsico's strategic objective?why does firm exist?

The strategic objective of Pepsico is to achieve a sustainable growth. They plan to do it by investing in a healthier lifestyle for all. Pepsico are doing this by increasing range of product line, previously most of their product were unhealthy. However nowadays most people are starting to switch to a healthier alternatives. They now have main 3 product lines of fun for you,  better for you and good for you product line.

This objective of the firm goes hand in hand with the people aspirations. Thus the firm is existing today as Pepsico is trying to improve overall environment , society and economy of the community.

Q) What are the possible strength and benefits of the strategy ?

The possible strength and benefits of the strategy are as follows
➢ The different range of brand portfolio has a good positive impact on its image and sales
➢ Option for healthier product came at the right time, as more people are more health conscious then ever before.
➢ Customers who are mostly generally to the Pepsi brand now has more options
➢ This new strategy has created a better brand image and as Pepsico are now focusing more on CSR
➢ The target market range now caters to more group , from “ fun for you” who wants snacks while watching games etc to “good for you” who wants to have a healthy meal before starting work.





Q) What are the possible weakness and disadvantages of the strategy?

The possible weakness and disadvantages of the strategy are as follows
➢ As the similar product strategy has failed before, the new  product Pepsi Next may face similar failure as well.
➢ While Pespico was able to achieve the secondary aim of helping homeless shelters and orphanages by super bowl advertisement. It did not met its sales target which was it primary goal
➢ The strategy is more stakeholder oriented than shareholder oriented , as it is now focusing more on social cause than profits

Q) Do you think the organization has the right balance profitability and responsibility?

While Pepsico has been able to make a difference in the society it  came a cost in its profit margin. Ultimately the main objective of Pepsi is to earn profit for its shareholder instead of being responsible to its stakeholder.
Their humanitarian project like helping the homeless and orphanages has no doubt manage to increase the image on global stage. But it came at a heavy price and the firm has not been able to achieve its sales target that it has wanted. Although now Pepsico is a example in CSR, it has not been able to balance between profitability and reasonability. As Pepsico is a profit organization it also has duty to its shareholder to increase their wealth


Refernces

Dr Gurutej . 2012. Strategies Choices and Impacts. [ONLINE] Available at: http://fserver.islingtoncollege.edu.np/. [Accessed 13 January 13]

Mallen Baker. 2004. Corporate social responsibility - What does it mean? . [ONLINE] Available at: http://www.mallenbaker.net/csr/definition.php. [Accessed 12 January 13] 

World Academy Online . 2012. DEFINING THE ORGANIZATION`S PURPOSE . [ONLINE] Available at: http://worldacademyonline.com/article/34/475/defining_the_organization___s_purpose.html. 
[Accessed 12 January 13].