The UK supermarket industry: an analysis of corporate social and financial performance.

Moore, Geoff and Robson, Andrew (2002) The UK supermarket industry: an analysis of corporate social and financial performance. Business Ethics: A European Review, 11 (1). pp. 25-39. ISSN 0962-8770

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In a previous paper (Moore, 2001), the headline findings from a study of social and financial performance over three years of eight firms in the UK supermarket industry were reported. These were based on the derivation of a 16-measure social performance index and a 4-measure financial performance index. This paper discusses the formulation of the indices and then reports on: discussions with two supermarket firms concerning the overall results; inter-relationships between individual financial performance measures; inter-relationships between individual social performance measures; stakeholder group analysis; and inter-relationships between turnover, age and gearing with social performance measures. The paper discusses these inter-relationships, incorporating comments from the interviews with the two supermarket firms, and reports on both factor and cluster analysis.

The interviews lend support for Preston and O’Bannon’s (1997) Available Funding Hypothesis in both its positive and negative form. The findings show that there are individual or combinations of related measures that could be used as surrogate measures for social and financial performance, instead of deriving a full index. However, the recommendation is that a full index continues to be used until there is further corroboration of these results. The findings also provide statistically significant support for the Negative Synergy Hypothesis (Preston and O’Bannon, 1997), show a statistically significant association between pre-tax profits (both lagged and contemporaneous) with community contributions, and show that all statistically significant associations between individual social performance measures are positive – suggesting that they are mutually reinforcing. The association of size with social performance, noted in the previous paper, is also reinforced.

Findings in relation to the proportion of women managers and the number of women on the Board and positive associations with other social and environmental performance measures raise interesting gender issues for business ethics. Factor analysis leads to no clear conclusions but cluster does show two or three clear clusters of firms, where size would seem to be the main but not sole factor. Further areas of research are noted.

Item Type: Article
Uncontrolled Keywords: Social responsibility of business, Supermarkets, Finance
Subjects: N100 Business studies
Department: Faculties > Business and Law > Newcastle Business School
Depositing User: EPrint Services
Date Deposited: 11 Aug 2008 15:48
Last Modified: 19 Nov 2019 10:05

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