Company Presentation and Justification of Selection

Aldo Bensadoun returned to his hometown of Montreal in 1966 after serving in the French forces. Aldo chose to explore his passion and deep knowledge of the shoe industry after being inspired by his father, a shoe merchant, and grandfather, a renowned cobbler (Aldo Group 2017, Story and Milestone). Aldo had expected a new kind of business with a brand that considers the interests of stakeholders prior to the creation of the footwear concession in 1972. Convincingly, Aldo managed to establish an organization that has remained committed to compassion, business ethics, and understanding of the tastes and preferences of clients over the past 40 years. The company’s ethical theory is “concern for others”. With a philosophy that is customer-based, Aldo Group remains the only company in the footwear and fashion industry that provides the best and high-quality products and services to various groups of customers (Aldo Group 2017, Sustainability). With the current competition in the industry, the company management understands that the only way to fulfil its performance philosophy is by engaging in market research to identify stakeholders’ needs.

Through innovation, Aldo Group has achieved a strong base in the global market. Today, the company is listed among the world’s leading fashion retailers following the incessant business potentials. Aldo operates over 20,000 stores across the world with close to 200 million customers consuming the company’s products and services every year. Through technology developments, the company has improved its business activities, and now engaging in the production of high-quality, fashionable, and easy-to-get-to accessories and footwear. Undoubtedly, the company seems to have unique knowledge of the shoe market and retail business. Aldo’s corporate activities are guided by three original signature brands including “ALDO,” “CALL IT SPRING,” and “GLOBO”. although all these names have unsurpassed traits, they were developed to fulfil the spirit and vision of Aldo Group.

Justification of Selection

The selection of Aldo Group for the case analysis has been prompted by the company’s robust set of values, compassion, ethics, and social responsibility issues. First and foremost, the company has always remained committed to the needs of its stakeholders particularly those who have contributed its growth in one way or the other. Second, the company’s operations depend on the skills and contributions of a diverse workforce. Managing such kind of workforce may be difficult, especially if the company lacks appropriate policy statements. Aldo’s philosophy creates a common thread that managers pursue to improve team coordination, hence the reason behind employees’ motivation, passion, and high productivity.

The company is well-recognized for its pledges to society. Aldo’s operations revolve around the premiums of a good corporation that works to enhance the lives of the surrounding communities. Over the years, the company through its business activities and special programs has engaged in essential philanthropic causes including “War Child (WC),” “Youth Fusion and the Cure Foundation (YFCF),” and “YouthAIDS” among other programs. Finally, the company plays an active role towards environmental protection by advocating for green production. In 2015, for example, Aldo Group conducted a responsibility assessment to identify the specific problems affecting business and stakeholders. Following the evaluation, the company has been working to lower social and environmental effects of carbon footprint through ethical sourcing, better leather, minimum wastage, excellent packaging, and urban agriculture. All these elements make the company ethical and committed to corporate social responsibility issues, hence relevant for this analysis.

Theoretical Analysis of Stakeholders, CSR Issues, and Approach to CSR

Analysis of Stakeholders

There have been vigorous debates as to whether or not a company should bear social responsibility to its stakeholder and society. Forming part of this discussion is the idea that businesses should only focus on the primary goal of making profits. However, most economists and researcher believe that companies are not only accountable for their finances but also bear responsibility towards stakeholders. In addition to making profits and improving market activities, companies must ensure that stakeholders and the society at large are happy with their business operations. Freeman defined stakeholders as people or organizations that have direct impacts on the activities of a company or can be affected by business operations of a firm (Singh and Simões 2016, p. 635). Post, Preston, and Sachs modified Freeman’s idea when they defined stakeholders as persons, entities or components that make both voluntary and involuntary contributions to a company’s wealth creation potentialities and activities, hence becoming the primary beneficiaries or risk bearers (Singh and Simões 2016, p. 635). Just like other companies, Aldo’s operations revolve around stakeholder theory, which captures two fundamental concepts including shareholder and stakeholder value perspectives. Regarding shareholder value concept, it is the responsibility of the company to fulfil the profit objective of owners. As the company makes profits and expands business operations, it is a general expectation that there will be an increase in owners’ equity.

The stakeholder value perspective recognizes the fact that a business consists of a network of individuals working together to fulfil common goals. The parties involved in business functions include employees, suppliers, clients and other interested groups whose cooperation lead to mutually valuable outcomes. Aldo’s business activities take into consideration the value each participant derives from the company. Through the moral philosophy, which is customer-centred, the company ensures that its operations result in greater benefits for both internal and external stakeholders. In other words, the company’s philosophy, though customer-based, appears to be meta-ethics in the sense that it investigates the source of ethical principles and what they mean to the broader group of stakeholders.

The company’s internal and external stakeholders come in different forms and nature. However, the specific individuals whose claims remain significant to the performance of Aldo Group include employees, customers, and shareholders or business owners. The three categories of stakeholders are essential in the sense that they either make both finical and non-financial contributions to the company. For instance, shareholders are known as business owners because they provide the funds required to run business activities. Therefore, their views towards the company remain critical to future operations. Employees contribute skills, knowledge and physical efforts to the company. While production may require practical knowledge about the manufacturing processes, packaging and product delivery require employees’ physical efforts. The company’s operations are customer based, meaning that all strategies are intended to fulfil the needs of consumers of products and services. The management must at every business level ensure production and supply of high quality products.

Upadhaya, Munir, and Blount (2014, p. 857) in their article “Association between Performance Measurement System and Organizational Effectiveness” argue that stakeholders’ views are effective methods that can be followed in evaluating organizational performance. A survey of employees, shareholders, and consumers provides answers that relate to questions regarding the company’s objectives, products and services, business management and processing, sustainability issues, and strategies for business improvement. Overall, stakeholders hold the following views about Aldo Group Company:

(1) Aldo Group has been successful and its current business activities appear to be higher compared to the company’s objectives;

(2) The company’s products and services are being used to meet the needs and expectations of shareholders;

(3) Aldo’s business environment, procedures, and processes are used to fulfil the needs of all stakeholder.

Corporate Social Responsibility (CSR) Strategy Issues

As a socially responsible company, Aldo Group continues to support sustainable development by communities with the primary goal of empowering and contributing towards the establishment of a more vibrant and prosperous society. The company’s CSR strategy focuses on six major areas including reduction of carbon footprints, ethical sourcing, and production of more improved leather products, waste elimination, quality packaging, and urban agriculture. Popoli (2016, p. 25) in the article “CSR Approach for Global Firms” argues that standardization and adaptation are the only two approaches that international firms can use to fulfil their CSR strategies. It is true that the power is business network has increased dramatically over the past years, and as such, the decision to reach customers and other stakeholders by becoming socially responsible can have severe implications for organizational performance particularly when there is inadequate knowledge about the communities’ challenges.

Approach to CSR across Different Countries

Through the establishment of a communication platform between internal and external stakeholders, Aldo Group has succeeded in building CSR perceptions of a brand worldwide. The company management believes that worldwide communication is the best way to focus on community challenges because whatever turns out to be global must have started out locally. It is common knowledge that consumers of global brands such as those produced and marketed by Aldo Group focus more on the social behaviour of the firm, both in the local and geographically distant contexts.

Aldo Group applies the same ethical principles anywhere is functions. According to the company management, consumers’ needs in the footwear industry are universal and can be compared to different markets. Based on this understanding, it goes without saying that the challenges customers and others stakeholders face in relations to business functions must be the same. Furthermore, applying the same ethical principles in different markets means that the company is consistent with its business functions essentially focusing on the social needs of clients, which by no means are universal. This strategy is effective because it focuses on the value stakeholders derive from the company’s operations. Applying the same ethical principles across different markets means that the company recognizes the fact that stakeholders’ value perception is a crucial factor. Without the desire for benefit maximization, stakeholders may not be concerned so much with what the company produces and how it affects the society. Similarly, applying the same ethical principles in CSR strategies means that the company considers all its stakeholders to have similar impacts on the company operations. In other words, no group of stakeholders is regarded superior to the other. Consumers, suppliers, employees, and shareholder, though performing different roles, have equal weights on business functions.

Regarding ethical implication, research shows that integrated or undifferentiated corporate social responsibility is one of the ways through which a company can establish brand loyalty and engagement of stakeholders. According to Karmasin and Apfelthaler (2017, p. 237), business branding is a concept that is understood differently by both small and large companies, and as such has grown to be the latest form of decoration and means of gaining a competitive advantage. For Aldo Company, the business brand is more than a promotional strategy, slogan, or a shiny logo but an accurate representation of the firm’s core values. The company has made successful attempts at transforming its CSR strategy into a marketing tool Karmasin and Apfelthaler (2017, p. 239). The evaluation of branding style from product-based to customer-based means that there are significant attempts to create value for consumers and other stakeholders. Although branding may be an essential process in business, an organization that is committed to its work, initiatives, responsibility to stakeholders, and products or services has a more excellent opportunity of succeeding in its encounters because there is a link between stakeholders’ value perception and business goals.

Critical Assessment of the CSR Strategy of the Company

Aldo group is known for its commitments to service stakeholders and global communities through quality products and services and also by becoming cautious of the challenges societies face as a result of the company’s activities (Aldo Group 2017, Sustainability). Therefore, concerning the three values aspects of love, respect, and integrity, Aldo Group remains socially responsible throughout the various business levels. The company’s CSR strategy focuses on reducing social and environmental effects by focusing on the following six key pillars:

Carbon footprint – Aldo Group works alongside industry specialists to measure and become responsible for its carbon footprints. Since 2013, the company has been following the Greenhouse Gas Protocol Standards (GHGPS) strictly in determining direct and indirect emissions that may result from product sourcing, product shipping, waste generation, and energy storage, and business travel. Through the CSR strategy, Aldo has achieved close to 70% absolute decrease in carbon footprint (Aldo Group 2017, Story and Milestone).

Ethical sourcing – Aldo Group is motivated to establish and deliver long-term and extensive beneficial business collaboration, which is built on transparent encounters and trust, and professionalism (Aldo Group 2017, Story and Milestone). The management believes it is the role of the company to help stakeholders, especially partners, to improve their management practices to drive widespread sustainability issues. In addition to meeting the expectation of consumers, it remains the sole responsibility of the company to engage with its collaborators so as to enhance their business operations through benchmarking.

Better leather – since its establishment in 1972, the company has been using leather as the primary raw material in the manufacture of different footwear brands. The company is, therefore, committed to sourcing leather responsibly and transparently.

Zero waste – the company holds high esteem for waste diversion and reduction across its many stores and business facilities (Aldo Group 2017, Story and Milestone). The company’s long-term goal for zero waste is fulfilled by a team of employees who have the capacity to design smarter and more sustainable packaging methods.

Packaging – Aldo’s approach to eco-friendly packaging revolves around two fundamental principles including the elimination of unnecessary packaging and selection of the right materials with a focus on post-customer reused content.

Urban agriculture – the company has a passion for horticulture hence contributes towards environmental greening. The primary goal of the company founder was to plant the seeds that are symbols to business growth and establish a green environment. The company today contributes to urban biodiversity by improving community access to farm products such as organic vegetables and developing a healthier, happier, and highly stable workstation.

Based on the views of stakeholders regarding Aldo’s operations, it becomes evident that the company is addressing its responsibilities. As a matter of factor, the current success and high growth rate demonstrate that stakeholders place value on the company’s operations. Without positive social contributions, the company would not be able to attract the attention of stakeholders (Aldo Group 2017, Sustainability). The effectiveness of the CSR strategy can be assessed based on the following two premises: (1) whether it involves clients and other stakeholders and (2) whether there is partnership developed between the company and a third party. The involvement of customers in a CSR strategy means that the company takes into consideration factors that have exclusive impacts on consumption patterns. Similarly, forming a partnership with a third party adds credibility to the company’s efforts. Such an alliance may become useful for a company that wants to blend customers and networks.

When it comes to CSR, every company tend to have its unique strategies because the techniques add to competitive business advantage. However, there are specific common areas of focus between Aldo and the group company’s identified for comparison (Aldo Group 2017, Sustainability). For example, H&M, Primark, Gap Inc. and Inditex CSR strategies also focus on reducing the level of greenhouse gases by engaging in clean, green or sustainable business activities. All the companies, for instance, advocate for the use of clean energy sources in the production of goods and services to reduce the amount of air pollution and possibly greenhouse effect (Aldo Group 2017, Sustainability). The organizations share in global climate change actions through strategic business plans. The first program involves providing ideas and support for activities meant to reduce global warming. For these companies, green production is the best way to contribute towards environmental sustainability.

About sustainability goals, there are new opportunities that the company can explore to enhance stakeholder relationship. Such new developments are collectively regarded as social enterprise initiatives (SEI). Aldo Group can invest more in innovative business practices such as establishing managerial disciplines and engaging in partnerships with non-profit and for-profits organizations in order to drive the sustainability agenda. Through mutual partnership, the company will have the chance to distribute and share in the industry resources.

Recommendation for Future Changes

A company that aims at building sustainable business operations and leaving a mark on the society can use social enterprise alternatives. Social entrepreneurs are known to apply their business and creating knowledge in assisting organizations to identify and provide solutions to social problems (Aldo Group 2017). Social enterprise alternatives are beneficial to a company operations based on the following reasons: (1) enhance the implementation of societal changes (2) allows for the establishment of inspiring solutions to social problems (3) create an environment that promotes commitment and self-reliance and (4) improve organizational actions towards the creation of jobs and income streams.

Sustainability growth is a fundamental concept is business operations because it affects how stakeholders view a company. However, a business should strike a balance between sustainability issues and technology growth to allow for efficient coordination of stakeholders. It is possible that the through information technology and development of internet communication platforms, the company can have a more significant impact in the industry because the majority of consumers rely so much on easily accessible information. At the moment, Aldo has not invested enough on the internet and social media sites and seems to focus more on physical interaction with clients. Moreover, being socially responsible means taking into consideration both the financial and non-financial needs of stakeholders. The fact that the company’s philosophy is customer-based means that there is an extensive focus on consumers compared to other groups of stakeholders. In other words, it becomes necessary for the company to consider every stakeholder based on their needs and develop policies that cover their demands. Finally, the needs of consumers are diverse and may change depending on environmental factors (Singh and Simões 2016, p.636). It is wrong for Aldo Group to assume that consumer needs are universal and that what works in one market may also work best in another market. The company should come up with a more differentiated business plan that captures the distinct needs of customers.

Based on the analysis of the CSR issues, ethics and social enterprise, it becomes evident that even though companies may have common social objectives, the policies and actions taken to improve societal welfare may defer significantly. While some corporations attach more importance to clients, other organizations consider employees and shareholders to be at the forefront of business functions. This also means that agencies apply different rules when it comes to the application of ethical principles.

The analysis holds answers to the problems identified. First is the identification of issue of standardization and adaptation to CSR strategies in different countries. Similarly, the analysis reveals that the company operates under similar ethical principles because the management considers stakeholders’ needs to be universal.

To sum up, the selection of Aldo Group for the case analysis has been prompted by the company’s robust set of values, compassion, ethics, and social responsibility issues. First is the idea that the company’s philosophy is customer-based and focuses on the provision of the best and high-quality products and services. Unlike the four groups of companies presented in this analysis, Aldo’s operations revolve around stakeholder theory, which captures two fundamental concepts including shareholder value perspective and stakeholder value perspective. The shareholder value concept identifies profit goal as the sole responsibility of the company. As such, the firm must work towards fulfilling the general expectation of owners. The stakeholder value perspective recognizes the fact that a business consists of a network of individuals working together to fulfil common social goals. The ethical theory guiding Aldo’s operation is “concern for others”. The company not only works towards meeting the tastes and preferences of customers but also focuses on improving the lives of other stakeholders by becoming socially responsible.

References

Aldo Group (2017). Story and Milestone. Available from [24 November 2017].

Aldo Group (2017). Sustainability. Available from [24 November 2017].

Karmasin, M. and Apfelthaler, G. (2017). Integrated Corporate Social Responsibility Communication: A Global and Cross-Cultural Perspective. In Handbook of Integrated CSR Communication (pp. 237-250). Springer International Publishing.

Popoli, P., (2016). CSR Approach for Global Firms: Standardisation versus Adaptation. World Review of Business Research Vol. 6. No. 1. pp.21-31

Singh, J. and Simões, C. (2016). The impact of digital corporate branding on consumer-company identification. In Rediscovering the Essentiality of Marketing (pp. 635-636). Springer International Publishing.

Upadhaya, B., Munir, R. and Blount, Y. (2014). Association between performance measurement systems and organisational effectiveness. International Journal of Operations & Production Management, 34(7), pp.853-875.