CSR & Strategy - Why the Cooperative Group changed to survive

A brilliant article here from the excellent UK team at Ernst & Young which features an interview with Peter Marks, the CEO of The Co-operative Group. Perfect for last minute revision for AQA BUSS4 students…

Here is a download to the article: EY-Cooperative.pdf

Students and teachers who attended our BUSS4 workshops and conferences in 2011 will know that we are big fans of the Cooperative Group as an ideal case study for A2 business students. It provides a rich source of evidence on key topics such as CSR, competitive strategy, corporate vision and objectives and much more. And this interview provides much useful information for students to bring into their exam answers as research-based evidence.

I particularly like this part of the interview in which Marks explains why the Coop had to undergo significant strategic change in order to survive:

“They called it the Co-operative Movement,” says Marks, but it didn’t cooperate and it didn’t move much. Bigger competitors ate us alive. The likes of Sainsbury’s and Tesco consolidated and grew, but we stayed where we were. And we got eaten alive.” He recognized that something needed to be done. “I was one of the people who said about five years ago that we needed to change or face going out of business. And we did change.”

The ownership structure of the Coop provides a terrific opportunity for students to use it as a “compare and contrast” example in essays. Marks himself makes a strong comparison between the cooperative membership model with the traditional public limited company organisational structure which, he claims, is only designed to do one thing [increase shareholder value].

Lots in the article too about the role of CSR as a fundamental part of the mission of the Cooperative. But Marks does not dismiss the role of profit: he says;

“Profit is the lifeblood of any business. If we concerned ourselves solely with ethics and values and principles, then we would be the most ethical organization in the corporate graveyard.”

Marks goes on to emphasise the importance of long-term planning and also describes the strategic rationale for the Cooperative’s acquisition of the Somerfield supermarket chain.

Dive in guys! This is a terrific article.