Reference no: EM133296948

Case Study:- ABC is the largest retailer in Malaysia, Indonesia, Singapore and Brunei with RM1.5 billion in sales. The company employs 50,000 employees in the four countries and serves about 20 million customers per week. ABC carries an extensive range of products from groceries and household items to home improvement and leisure products. The company has a core of loyal customers who love the fast, friendly service and high quality products with lower prices. The CEO who is also the grandson of ABC's founder always ensures the company lives up to its credo of supplying consumers with low cost quality goods. Business Week reported that ABC was one of the most profitable companies in South East Asia.

Employees receive good training in customer service. Customers are assured of a pleasant shopping experience where ABC's employees are friendly and ready to assist whenever they need help. However, this good image is tainted with complaints against the way ABC treats its employees. In Indonesia, for example, employees complained that they were forced to work round the clock without or with only little overtime pay. The backroom employees receive low pay and few or low benefits, mainly because they are immigrant workers. Employees are often asked to sacrifice their rest and meal breaks. In Malaysia, ABC was accused of hiring illegal immigrants with low pay to do menial jobs. These employment practices are clearly against the law, but ABC got away due to weak enforcement of laws.

While customers love ABC, small local sundry shops and merchants complain of unfair competition. Many went out of business because ABC sells similar products, but at lower prices. ABC could afford to offer lower prices due to hefty discounts given by its suppliers for large orders. In addition, in Malaysia, many local suppliers complained that ABC gives priority to foreign products such as those from China and Bangladesh. Some even had to close their business. ABC buys its products from these two countries due to cheaper prices.

In Indonesia, ABC has embarked on an aggressive expansion strategy due to the great market potential. ABC plans to open 20 stores each in East Java and Northern Sumatra next year. Ten new stores are due to be opened in Sulawesi this year. ABC receives severe resistance from local communities in some of the new locations. Their main grouses are traffic congestion, noise and other forms of pollution during and after the construction of the new stores. They do not want ABC's presence disturbing their daily lives. In Malaysia, ABC gets the same resistance but at a lower scale. The main grievance is the employment of illegal immigrants to construct new stores, which raises security concerns among locals due to a sudden influx of foreign workers in their area.

In spite of its critics, ABC receives wide support and many consider the company to be socially responsible in addition to being a provider of thousands of jobs, low prices and high value and service. ABC also undertakes some initiatives to give back to the society. E.g., ABC awards annual scholarships to secondary school children from poor and underprivileged families in Indonesia and Malaysia. The company is also active in promoting good environmental practices such as recycling and using paper bags. Moreover, it also sponsors educational programmes organised by local environmental groups to educate the public about recycling and other environmental topics.

Question 1:- Assess ABC's corporate social responsibility using Carroll's four part CSR model.
Question 2:- Has ABC, balanced its economics and social responsibilities through its various programmes? How would you improve ABC's CSR performance?
Question 3:- What should ABC do with regard to the issues raised by its various stakeholders?