Importance of Corporate Social Performance

Topic: Corporate Governance
Words: 932 Pages: 3


Corporate social performance (CSP) is an industry-dependent concept reflecting a company’s commitment to using its resources to promote ethical practices and achieve social goals. Sustainable business strategies and corporate social responsibility (CSR) initiatives can improve consumer loyalty and stakeholder satisfaction by protecting employee rights and supporting local communities, philanthropic activities, and environmental efforts. The following paper will review three organizations representing different forms of a legal business, identify the stakeholders, discuss the CSP of each company, and recommend the strategies for increasing stakeholder engagement.


The food retail industry is led by the world’s largest corporations operating grocery, convenience, and drug stores, along with food service facilities and mass-market discounters. Privately-owned grocery stores are also present in the market but face challenges associated with competition from major retail corporations and workforce or financial shortages (Dumont, 2019). Small companies prefer the sole proprietorship business structure, which means that a single self-employed person who owns a business is responsible for its profits and debts. C corporations are viewed as distinct legal entities taxed on their revenues and overseen by a board of directors (Corelli, 2018). Limited liability companies (LLCs) allow owners to directly control operations, while business assets and tax responsibilities are divided between owners.

California-based Raley’s Supermarkets is an example of a privately-held grocery retail chain belongs to Michael Teel. The supermarket was first opened in 1935, and the chain currently has 126 stores in the US (Rayley’s, 2021). Another organization examined in the paper is Walmart, a multinational corporation operating discount stores and e-commerce websites in 24 countries. As a worldwide largest retailer with about 220 million customers, 10,500 stores, and 2.3 million employees, the organization dedicates substantial efforts to promote corporate philanthropy and sustainability (Walmart, 2021). Lidl US is an LLC and an American division of a German grocery retail chain with headquarters in Arlington, Virginia (Lidl, 2021). The company’s social responsibility is reflected in the principles of environmental sustainability and local community initiatives.


Raley’s primary stakeholders are its customers, employees, and the members of the communities located in the greater Sacramento region where the company operates. Rayley’s CSR strategies focus on providing benefits and competitive wages for the employees, supporting local non-profit initiatives dealing with hunger problems, and donating to community causes, such as health, safety, and education (Rayley’s, 2021). Considering Walmart’s geographic scope of operations and substantial organizational size, its main stakeholders are customers, retail investors, employees, and suppliers. Finally, the stakeholder list of Lidl US, LLC is consistent with its status as a major grocery retailer and includes customers, employees, and suppliers.

Corporate Social Performance (CSP)

An increasing public interest in social issues and environmental concerns stimulates companies to efforts to satisfy diverse expectations of their stakeholders. Berk (2017) claims that all types of businesses, including sole proprietorship companies, are motivated by “a multitude of social, consumer, political and economic forces” (p. 13). Raley’s leader explicitly formulates his contribution to social causes and CSP strategies on the company’s website. Food for Families is an organization founded by Raley’s that collects donations and partners with Feeding America to alleviate hunger (Raley’s, 2021). Raleys’ social responsibility is expressed in support of crisis response, such as active fire relief provisions (bottled water, shelf-stable food, monetary donations) and COVID-19 preventive measures (sanitation, protective barriers, masks, delivery services).

The principal aspects of Walmart’s CSR are opportunity, community, and sustainability. The corporation promotes opportunity through inclusive employment (veterans, ethnic minorities, women), scholarships, and investment in US-made products supporting small businesses. The Walmart Foundation donated $100 for community grants and hunger/disaster relief in 2017 (Harrison, 2019). Additionally, sustainability-driven Project Gigaton was developed to reduce carbon emissions by 2030 via 100 percent renewable energy use. Lidl US adopted a similar CSR policy and expressed commitment to employee diversity and community causes (Lidl, 2021). The company’s Volunteer-Time-Off (VTO) programs assist eligible employees in participating in charity support, while environmental efforts include waste minimization and commuter benefits for employees to decrease the chain’s carbon footprint.

The Impact of CSP on Stakeholders

Raley’s CSP improves the quality of life and satisfaction of its employees by providing them with fair working conditions and competitive wages, while the contribution to social causes supports vulnerable members of local communities. Pulker et al. (2018) report that sustainable and public health initiatives are essential components of CSP due to the power of grocery retailers in the food system. However, the company may increase stakeholder engagement by committing to customers’ health during the COVID-19 pandemic by enforcing social distancing measures in the stores and offering complimentary home delivery services.

Walmart uses similar CSP strategies related to environmental, community (the Walmart Foundation), and local business causes to support its shareholders. The company, guided by the stakeholders’ interests, created an autonomous legal system to regulate its CSR performance based on complaints against its actions/practices (Harrison, 2019). Notably, investor satisfaction is critically important for the corporation, and the system allows Walmart to address shareholders’ interests (revenue, brand image) through feedback-based improvements. Despite its effectiveness in promoting the stakeholders’ interests, the corporation should satisfy the expectations of its employees who report low wages and disrespect from customers creating negative publicity (Pandey et al., 2021). Finally, the CSP policy of Lidl US works towards employee diversity, sustainability, and community engagement, but it does not mention the interests of suppliers, except its Fair Trade Certification (Lidl, 2021). The retailer may improve stakeholder engagement and expand its environmental efforts by collaborating with suppliers on sustainable development goals (Awan et al., 2019). Therefore, the companies’ CSP practices may be improved to effectively manage the stakeholder’s interests, customer loyalty, and brand perception.


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