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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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PQUESTION 1

1.1.1

Social Responsibility ' According to Erasmus, Strydom and Rudansky-Kloppers (2015:9), social responsibility is the limiting of malpractice through regulation. It is measured by the contribution of a business towards the economy and the employment opportunities.  

Employment Equity ' Erasmus, Strydom and Rudansky-Kloppers (2015:9) states that employment equity strives to produce equal employment opportunities for all members of the community. In 1998, the Employment Equity Act became law in South Africa and was designed to eradicate unfair discrimination and create a diverse workplace that represents all of South Africa's population groups.

Business Ethics ' Business ethics are linked to social responsibility, however, it focuses on the 'ethical behaviour of managers and executives in the business world' (Erasmus, Strydom and Rudansky-Kloppers, 2015: 11). Erasmus, Strydom and Rudansky-Kloppers (2015:11) also explain that many businesses have implemented a 'code of business conduct' to ensure that all executive members and managers have a precise outline of what is considered to be ethical in the business environment.

Consumerism ' 'Consumerism is a social force that protects consumers against unsafe products and malpractice by exerting moral and economic pressure on businesses' (Erasmus, Strydom and Rudansky-Kloppers, 2015: 11).

Environmental Sustainability ' According to Erasmus, Strydom and Rudansky-Kloppers (2015: 11) environmental sustainability is the pressure placed on businesses to protect the environment from all types off pollution.

1.1.2

In my opinion, I believe that Mondi is applying all five themes of sustainability. Social responsibility is evident in Mondi engaging with communities in and around their plantation forests and mills. Mondi has also been included in the FTSE4Good Index Series since 2008 and the JSE's Socially Responsible Investment Index since 2007. Mondi's social investments also help drive development by focusing on health, education and local enterprise.

There is evidence of employment equity as Mondi has created a small business division of Mondi South Africa which encourages job creation and develops sustainable empowerment contractors in their forestry value chain. The company has also implemented a broad-based black economic empowerment strategy which promotes B-BBEE within the forestry industry. Mondi also promotes employment equity to that their management and workforce profiles both closely resemble the racial and gender demographics of South Africa.

Business ethics is apparent as Mondi states that the safety of their employees and their contractors remains their top priority which indicates that the company (and its executives) is concerned with the well-being of their staff. Mondi also engages with their stakeholders and communities around their operation in order to manage their impact and to build trusting relationships. The company also ensures that their staff are properly trained in order to run their businesses at the highest international standards.

Consumerism can be seen in how the company has created 'Green Range' products in response to customer demands for environmentally preferable purchasing. Mondi has also partnered with WWF International to further enhance the environmental performance of their products by means of credible certification and the efficient life-cycle use of materials in their paper and packaging products. They also offer over 100 packaging and paper products, customised into more than 100 000 different solutions for customers and end consumers. Mondi's innovative technologies and products can be found in various applications and industries.

Regarding environmental responsibility, Mondi has made a huge effort regarding the sustainability of the environment and the impact they have on it as a company. Firstly, they have partnered with WWF International to sustain ecosystems through responsible business practices. Mondi has made an effort to reduce the water and climate footprint of their operations and promote resource efficiency, recycling and the longevity pf products. At their mill in Richards Bay, Mondi is committed to addressing the challenge of their odour reduction. The company also protects high conservation ecosystems, including wetlands.

1.2

South Africa can be considered to be a mixed economic system as most of the factors of production are privately owned, however, they are regulated by the government. It is evident in the case study as Mondi is a public company, however, the government is still responsible for monitoring and regulating the B-BBEE Codes of Good Practice. As Mondi is empowering those who were previously disadvantaged, it is evident that the government implements affirmative action and regulates it to ensure that large companies, such as Mondi, are redressing the past issues of employment equity. South Africa is a mixed economy as is it clear that the government gets involved in the social aspect of business in order to ensure fair living for all.

1.3.1

Mondi is assisting potential entrepreneurs through business development support and available funding. Mondi is also providing potential entrepreneurs with valuable resources such as business tools and structured processes in order to guide them to establish appropriate control in their businesses. By helping entrepreneurs identify key success factors, the right business management practices, as well as market strategies, Mondi is providing entrepreneurs with the opportunity to build and grow not only their businesses but their community and the economy. By using sub-contractors, Mondi is sharing business opportunities with SMME companies and therefore sharing the wealth and empowering entrepreneurs.

1.3.2

Van Aardt et al (2014:4) defines entrepreneurship as 'the act of initiating, creating, building, expanding and sustaining a venture, building an entrepreneurial team, and gathering the necessary resources to exploit an opportunity in the marketplace for long-term wealth and capital gain.'

According to an article by Sanlam (Sanlam, 2012), 'South Africa's entrepreneurial activity, over the past eight years, has shown vast improvement, however the economy lags behind comparable economies and has not fully utilised the economic potential that is available in entrepreneurial opportunities. According to Nimo Naidoo, project manager of the Sanlam / Business Partners Entrepreneur of the Year'' competition, South Africa has the ability and the resources available to support entrepreneurs, but believes that the country has yet to develop a strong entrepreneurial culture to drive it.'

'South Africa ranks 75th globally in the 2015 Prosperity Index, having risen by six places since last year' (Entrepreneurship in South Africa, 2015).

The website continued by saying that 'The Global Entrepreneurship Monitor described South Africa as having an alarmingly low level of entrepreneurial activity in spite of high unemployment' (Ineng, 2015).

According to The Global Entrepreneurship Monitor (2014) 'South Africa's rate of entrepreneurial activity is very low for a developing nation ' a mere quarter of that seen in other sub-Saharan African countries. Unemployment is around 40% of the adult population; despite this, the number of people starting businesses due to having no other option for work (necessity entrepreneurship) is low.'

Although entrepreneurial activity in South Africa is considered very low, it has increased slightly over the last 10 years. However, in 2014 it dropped by a staggering 34% (from 10.6% to 7%). Due to government support, there has been an increase in women's entrepreneurship. Unfortunately due to the perception of opportunities to create a business, and self-assurance in one's own abilities to do so, the state of entrepreneurship remains distressingly low compared to other sub-Saharan African countries (The Global Entrepreneurship Monitor, 2014).

According to The Global Entrepreneurship Monitor (2012), 'the typical South African entrepreneur is male, 25 ' 44 years of age, lives in an urban area, is involved in the retail and wholesale sector and has a secondary or tertiary level of education.'

The main reason why many entrepreneurs close down their businesses is due to lack of finance and poor profitability. Other challenges that make it difficult for people to start a business are regulatory requirements, burdensome labour laws and the low productivity of the labour force (The Global Entrepreneurship Monitor, 2014). Crime and corruption in the South African government also create a challenge for many hopeful entrepreneurs (The Global Entrepreneurship Monitor, 2014).

In conclusion, the state of entrepreneurship in South Africa will only improve if the challenges such as corruption, crime and lack of opportunities are addressed.

1.4.1

Mondi's form of ownership is a public company as it is listed on the JSE and on the London Stock Exchange. This means that Mondi has made shares available to the public for purchase and is therefore a public company.

1.4.2

One of the main reasons as to why Mondi might have chosen to be a public company is to raise their capital. By listing their shares on the stock exchange, the public is allowed to buy shares and therefore increasing the capital of the business. Another reason why Mondi might have decided to be a public company is that as a public company can exist over a long period of time.

In South Africa, as a public company, Mondi has the opportunity to allow people from the community to share in the profits by buying shares and therefore empowering people in the community. By acting as a public company, Mondi has higher accountability and transparency and is able to enhance the liquidity of shares. As a public company Mondi will be able to building their image as a respectable company that the public, and other companies, can trust. This will result in more sales and contracts as well as more members of the public purchasing shares, all resulting in more capital. Mondi will also be able to use the fact that they are a public company for marketing purposes.

1.5

'The physical environment refers to the physical resources that people (and businesses) need to support life and development, such as water, air, precipitation, the oceans, rivers, forests and so on' (Erasmus, Strydom and Rudansky-Kloppers, 2015: 128).

The physical environment could have an impact on Mondi as a company as with the ever increasing population more land will be required for living space. This could impact the company as Mondi requires land (forests and mills) to operate as a business. As Mondi owns and manages approximately 0.3 million hectares of land in South Africa, Mondi might be confronted with the challenge of competition for land.

Another physical environmental impact that Mondi could face is lack of scarce resources. As humans beings damage and live off the earth Mondi might be faced with lack of the resources it requires to function (trees, water etc.). At the moment Mondi has their own wood supply which helps counteract the threat of lack of resources.

Power is another factor which could have an impact on Mondi regarding the physical environment as Mondi uses power to run their factories and mills.

Over time all companies will face stricter regulations due to global warming and the lack of resources. Mondi is, however, contributing to sustainable resource use and nature conservation therefore trying to ensure their long-term viability.

QUESTION 2

The Corporate Social Responsibility Program for Pick 'n Pay

'We need business to understand its social responsibility that the main task and objective for a business is not to generate extra income and to become rich and transfer the money abroad, but to look and evaluate what a businessman has done for the country, for the people, on whose account he or she has become so rich.' -  Vladimir Putin

'Corporate social responsibility (CSR) refers to business practices involving initiatives that benefit society. A business's CSR can encompass a wide variety of tactics, from giving away a portion of a company's proceeds to charity, to implementing 'greener' business operations' (Caramela, 2016).

Erasmus, Strydom and Rudansky-Kloppers (2015:140) further explains that CSR is considered an umbrella concept that recognises that companies are responsible for their effect on society and the environment and that 'this responsibility may extend beyond legal compliance and the liability of individuals' (Erasmus, Strydom and Rudansky-Kloppers, 2015:140).

Erasmus, Strydom and Rudansky-Kloppers (2015:140) also states that companies are also responsible for their relationships with other companies that they do business with and that companies also need to maintain their relationship with communities and the society as a whole.

By researching Pick 'n Pay and their CSR, I discovered that the company was one of the first to make a commitment to Corporate Social Responsibility and that their CSR has been one of the pillars of their company philosophy.  

As a company, Pick 'n Pay has the following CSR activities:

Money Boxes

The Money Box program was created in Pick 'n Pay stores in order to raise money for a number of charities (Pick 'n Pay, 2016). 'The overall campaign message is 'Your Change can Change Lives' and serves to encourage customers to drop their spare change into the money boxes fitted at the till points in store. The spare change is then collected regularly by the store manager and deposited into the money box fund which in turn pays out the funds raised to the charity organisations' (Pick 'n Pay, 2016).

QuadPara Association of South Africa

'The QuadPara Association strives to prevent spinal cord injury, as well as protect and promote the interests of people with mobility impairments by formulating a national policy and strategy, to develop and ensure the full potential and quality of their lives' (Pick 'n Pay, 2016).

Sunflower fund

The Sunflower Fund was created in 1999 by the parents whose children had been diagnosed with leukaemia. The fund is in support of the South African Bone Marrow Registry and was motivated by Chris Corlett and Darren Serebro. The purpose of the fund is to provide financial support to families in order to raise the number of bone marrow stem donors in South Africa. (Pick 'n Pay, 2016)

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