Executive Summary
Breakthrough innovators use technology to smooth out the inconveniences that arise in the customer during the purchase process, change the rules of the game and the boundaries of the market. In addition, organizations having solid corporate social responsibility are more likely to have an increase in profits and sales. One of such companies is Associated British Foods plc which focuses on promoting and implementing more sustainable technologies to ensure their revenue and sales growth, not to mention customer satisfaction. The company widely uses recycling, cost reduction, packaging, and other innovations, which double their income and reputation.
Introduction
Innovations are a necessary condition for the development of production, improving the quality and increasing the number of new goods and services. In a market economy, they are the driving force of competition; thanks to them, it is possible to use modern technology and production organization to ensure the enterprise’s success and efficiency (Morrison, 2020). Competent investments in IT can improve business management efficiency, as they not only serve to optimize costs but also give the business flexibility and open up additional opportunities for its development.
Information technologies allow one to expand your business indefinitely and allow for automating the management process. They significantly reduce the time for conducting transactions, collecting and processing information, and introducing IT into the company enables the most rational use of production resources (Boddy, 2016; Morrison, 2020). Today, thanks to IT systems, familiar products are becoming interactive. As for new technologies, they can simplify life in almost all spheres of human activity.
The ability to buy new technologies can become a factor of rapid economic growth and modernization of the economy, even for those states that are unable to create their national mechanism of modern production due to the small size of the economy and low quality of human capital and a shortage of national engineering personnel (Boddy. 2016; Needle, 2015). The acquisition of modern equipment that does not require a large number of unskilled workers for its work, with a small number of foreign engineers and qualified middle-level specialists, can provide the necessary product in the acquiring country.
Technologies at ABF
Divided into five divisions – sugar, agriculture, retail, ingredients, and grocery – Associated British Foods strives to take a sustainable and robust leading position in markets. These markets offer the potential for profitable growth, as well as to provide quality products and services that play a central role in people’s lives. Among its most popular brands are Twinings (owner of the world’s oldest continuously used company logo), Kingsmill, Blue Dragon, Jordans, and Patak’s (Living our values, 2019). They strive to grow by providing excellent customer service, backed by a high level of investment in technology, innovation, research, and development.
The major innovation the company uses is offset printing since it allows more sustainable packaging production. To change the situation for the better, a large manufacturer has commissioned specialists from its new research institute to develop new types of packaging for food. Quality, consistency, and reliability are essential for brands like Twinings, which are based on the reputation of premium products and require packaging that reflects this (Living our values, 2019). The group uses many offset printing, especially in packaging for its “Silver Spoon” sugar line (Living our values, 2019). The corporation sees a lot of innovations in the field of flexible packaging, in particular, the packages that are easily opened or easily torn. These are fantastic innovations that many may not appreciate, but which make life easier for customers, as well as help to extend the quality and expiration date of products.
Organic growth is achieved through investments in marketing, development of existing and new products and technologies, as well as targeted capital expenditures to increase efficiency and expand production capacities. ABF’s products, data analysis, and technological innovations throughout the agricultural supply chain enable its customers to responsibly produce and process high-yielding, safe and nutritious food. The company using few chemicals and antibiotics in order to provide customers with high-quality organic products, preserving natural resources, creating less waste, as well as reducing emissions.
There are apparent advantages of testing new technologies, such as the possibility of shorter runs or a high level of personalization. This allows ABF to produce small product batches with packaging specific to the region or retailer, containing details, images, or text that differ from the standard version. Adjusted operating profit and margin increased at George Weston Foods in Australia. Don KRC’s meat business has made a profit thanks to a return to more normal prices for purchased raw materials, good volume growth, and increased production efficiency.
The technologies allowed ABF to increase its annual revenue and sales. However, according to the source, “revenue for the group was ÂŁ13.9bn, 12% lower than last year on a reported basis” (Living our values, 2020, p. 5). Such a statement is conditioned by the pandemic that had caused global changes. Nevertheless, the company’s overall growth within the past years has been notable. Despite the fact that the company’s profit fluctuates, it remains relatively stable due to ABF’s financial operations, including multiple investments, which are supposed to impact revenue years later.
New and innovative waste reduction or recycling technologies, such as the development of anaerobic digestion, can also provide an opportunity to generate additional income on the farm and provide a sustainable, profitable income flow. The company has an excellent track record of actively participating in productivity improvement programs that build capacity, increase plant productivity, and ensure cost savings while maintaining our well-invested assets. For example, “Azucarera’s solar irrigation partnership with AIMCRA, a Spanish research association, aimed to reduce energy and water use among beet growers” (Living our values, 2020, p. 51). Reducing the negative impact on the environment is not just saving energy and water resources. This also includes opening more efficient stores and industrial facilities, finding new solutions in the field of recycling and waste reduction, investing in renewable energy sources, and working together with farmers and other companies and organizations in climate change prevention.
The pace of development of ABF’s international operations has also enlarged for the past few years. For instance, AB Vista, the company’s animal nutrition and technology business, has managed to grow in volume and market share due to the active sales of its two enzyme products – Quantum Blue and Econase XT (Living our values, 2019). It proves that high-quality nutritious products are of great importance for the company.
What is more, the company is developing a blockchain platform which aims to help food industry enterprises avoid illegal, environmentally disrupting, or unethical products from supply chains. For instance, the consumers can now scan the QR code of the product in the department store in order to check where the ingredients were obtained and trace their supply chain (Living our values, 2020). This technology helps ABF to meet customers’ needs and establish trustful relationships.
Providing nutritious foods that support and maintain health demands constant, thorough research. Associated British Foods provides evidence-based practice and its solutions in numerous areas, including nutrition, health, metabolism, mental health, and others. The company also studies the technologies related to personalization. It implies that the manufacturer personalizes food products implementing a particular design for individuals and groups of people based on their age, gender, or other criteria.
The company is greatly concerned with reducing salt and sugar consumption which significantly impacts their organic food sales. It is noted that healthy food sales have doubled since the announcement of salt and sugar-free products (Living our values, 2019). Thus, ABF’s innovations include a new baker’s yeast extract, SAV-R-SEL, which flavors while cutting salt (Living our values, 2019). ABF now offers a choice of products with natural, organic ingredients that help people lead a healthier lifestyle.
Summary
In general, the innovations in the company affect the growth of its revenue, sales, reputation, and popularity of its brands and businesses. The primary spheres of innovative technologies implementation are food production, agriculture, and programs to fight climate change. Besides, ABF uses the most recent communicative technologies to achieve the highest level of communication with its employees, partners, and other stakeholders.
Corporate Social Responsibility Impact
Corporate social responsibility goes beyond the framework of ordinary legislation. It involves the voluntary adoption of measures to improve the quality of life of employees, their families, and society as a whole (Morrison, 2020). In addition to a positive impact on society, the statement of social responsibility creates an additional reputation of the company as an enterprise that exists for profit and sets other goals related to public issues.
Associated British Foods plc has a well-developed approach to their corporate social responsibility. The company’s purpose is to provide people with safe and nutritious food and affordable and comfortable clothing. Its multiple businesses aim to make a contribution to society, especially in this challenging time when the pandemic causes drastic changes in every sphere of human life. According to the report, “during this most difficult time, we have endeavored more than ever to make a positive impact where we can” (2020, p. 4). ABF preserves its values and supports people in numerous ways. For instance, last year, the company hired 133,425 employees, invested ÂŁ46 million into safety risk management, provided its workers with multi-hour pieces of training and monetary benefits (Living our values, 2020). All these were the contributions made within the corporation, not to mention the ones made to society.
The company respects people’s rights and multicultural diversity and tries to sustain relations with its partners abroad. Hence, it delivered multi-hour training to the foreign employees at Primark, provided 2.6 million surplus meals to the food bank, and conducted more than 3000 audits (Living our values, 2020). Aiming to strengthen the communities where its suppliers and employees work and live, ABF does everything possible to provide them with miscellaneous opportunities and bonuses.
In addition, ABF has strong positions regarding the environment and attempt to reduce greenhouse emissions. For example, 55% of the energy ABF used came from renewables, 84% of the waste it generated was sent for recycling, recovery, or other beneficial use ÂŁ25m invested in the environment (Living our values, 2020). ABF uses natural resources, promotes ecosystems, and funds biodiversity preservation in order to keep the planet safe and population healthy.
Carrol’s Model and CSR
Archie Carroll’s Pyramid of corporate social responsibility (CSR) can be applied in terms of viewing CSR of Associated British Foods. Economic burden defines the primary function of the company as a manufacturer of goods and services, which allows you to maximize profits, maintain a solid competitive position and a high level of productivity (Morrison, 2020). It can be stated that at the most basic level, the company makes a profit by selling products and services to the customers. In 2020 the company’s revenue was ÂŁ13,937 million; hence, it is logical that ABF is a profitable organization (Annual report and accounts, 2020). Besides, if a company’s income is higher than its expenses, it can invest money in different initiatives. Therefore, ABF broadly invests in multiple programs regarding safety risk management, employee training, environment preservation, and others.
Legal responsibility implies obedience or enforcement of the law as the basic concepts of justice established by law. In the Western world, the company’s reputation is of paramount importance. If it is caught and fined for illegal activities, most of its clients will turn away from it (Needle, 2015). The company recognizes “the importance of complying fully with all applicable tax laws as well as paying and collecting the right amount of tax in every country in which the group operates” (Annual report and accounts, 2020, p. 67). Last year tax deductions for an adjusted profit before tax amounted to ÂŁ263 million at an effective rate of 28.8% (Annual report and accounts, 2020, p. 67). In addition, at the legitimate level, ABF is responsible for the products sold and their quality. Finally, within the legitimate level, the company is in charge of its employees’ safety. This is proven by secure working conditions, healthcare insurance, and other safety packages provision.
Ethical responsibility requires business practices to meet the expectations of society based on adherence to a number of ethical standards or moral principles. The need to take into account the ethical aspects of the company’s activities is due to the problems of ecology, trust, confidentiality generated by new technologies, and the development of society (Needle, 2015). ABF respects cultural diversity and aims to provide as many foreigners with job opportunities as they can. In addition, the standards of the modern business world demonstrate that there is great respect to the companies respecting gender equality. As a result, 53% of ABF’s total workforce is women, which significantly contributes to gender equity (Living our values, 2020). Sustaining and promoting cultural and gender diversity is among the primary aims of the company.
ABF pays more attention to the training and development of the competencies of its employees. This is due to the fact that the company operates in a relatively competitive technology industry, which requires experience and professionalism in working with clients. The company’s employees should be well equipped with the necessary skills that will help in providing services. Efficiency is an integral aspect of service delivery, so there is a need for training and development. In addition, ABF is expanding the capabilities of its employees, seeking to increase their satisfaction. In turn, employees ensure an excellent attitude to customers, which contributes to the brand’s reputation.
Furthermore, ethical responsibility includes an eco-friendly approach which implies that the organization should not damage nature but rather invest in its preservation. Being environmentally aware, ABF has had an extraordinary impact on the environment. In numerous departments, “each individual business and division is empowered to consider and implement its own mitigation and adaptation strategies” (Living our values, 2020, p. 42). To address weather conditions and other issues related to natural phenomena, the company’s businesses either invest in initiatives or collaborate to develop resilience.
In order to avoid risks caused by climate change, the businesses carry out annual risk assessment programs aimed at developing hazard reduction strategies. Waste disposal was included in the company’s corporate social responsibility plan. In almost every country in which the company operates, there are various projects that provide for the recycling of waste. ABF aims to use natural resources to prevent greenhouse emissions and sustain biodiversity worldwide.
Philanthropic or discretionary responsibility encourages the company to take charitable actions aimed at helping those in need, including in the implementation of social programs. CSR principles should be based on compliance with subordination in relation to religion, politics, sports, and musical trends. Based on these principles, companies include the task of protecting human rights in their strategy and, assessing the impact of their company’s activities on the conflict, develop and take measures aimed at preventing or resolving the conflict.
Regarding the philanthropic level, ABF stepped out to help local communities in the countries it operates in. For instance, “Primark employees have made a positive contribution in areas that align with its brand and charity values, such as women’s and children’s services, education, physical and mental health, and social development” (Living our values, 2020, p. 38). What is more, ABF uses food donations to help local communities sustain a decent level of life. The representatives donate products to the food banks where the vulnerable groups can receive them.
Conclusion
In summary, ABF’s corporate social responsibility has powerful potential and proves that the company operates competently. He has proper economic, legal, ethical, and philanthropic responsibilities, which are strengthened even more every year. All these aspects are demonstrated by exact numbers indicating the changes made by ABF. As a result, the company improves itself by contributing to internal development, innovative technologies, environmental, social, and other issues.
Reference List
Annual report and accounts 2020. Web.
Boddy. D. (2016) Management: An introduction. 7th edn. London, UK: Pearson Press.
Living our values (2019) Web.
Living our values (2020) Web.
Morrison, J. (2020) The global business environment. 5th edn. London, UK: Palgrave.
Needle, D. (2015) Business in context, an introduction to business and its environment. 6th edn. London, UK: Cengage Learning.