Corporate Social Responsibility at Olive Garden Essay

Introduction

Gone are the days when business was all about creating value for the stockholders or the business owners. In the new wave, a business is obligated to run the affairs of the firm and maintain workable and equitable balance among the claims of the many directly or indirectly interested groups including the stockholders, customers, employees and the society at large (Fredrick, 2006). The business is obliged to follow policies and make decisions that yield desirable values for the society. This means that the power of business and society should be balanced. Although corporate social responsibility (CSR) is a contested subject with most people disagreeing over what it should be, ISO 2600 offered a definition that guides businesses on what it should entail; organizational governance, community involvement and development, human rights, labor rights, the environment, fair operating practices and consumer issues. Smith (2011) further argued that CSR should encompass five dimensions including environmental (environmental stewardship), social dimension (contributing to a better society), economic dimension (contributing to economic development), stakeholder dimension (interactions with employees, customers, stockholders, suppliers and communities) and the voluntariness dimension (beyond legal obligations into ethical values and social accountability). Based on these five dimensions, the paper analyzes CSR at Olive Garden to determine the extent to which businesses today are balancing their needs and those of the society.

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About Olive Garden

Olive Garden is the largest full-service dining Italian restaurant operating in the United States. It is an internally developed brand from the Darden Restaurants Inc. Olive Garden is headquartered at the 1000 Darden Centre Drive Orlando, Florida, USA. It offers a variety of Italian foods featuring fresh ingredients presented mainly focusing on quality and flavors. It also serves imported Italian wines. Olive Gardens began operating in the United States in 1982 when it opened its first restaurant at Orlando (2017 Annual Report on Form 10-K, 2017). Over the years, Olive Gardens has expanded and grown its restaurants to a total of 892 locations operating globally and generating about $3.8 billion revenue annually (Darden Restaurants, Inc., 2016). Olive Garden restaurant has employed 175, 000 people to run the business. The business responds to unique customer preferences by maintaining different lunch and dinner menus in different geographic areas as well as varying prices according to the customers' incomes (2017 Annual Report on Form 10-K, 2017).

Environmental Dimension of CSR

Currently, the world is experiencing climate change as the deadly monster that can potentially interfere with human lives if not controlled and mitigated. Businesses have been identified as key players that have contributed to the problem and mitigation begins with them. CSR implies that firms should integrate environmental concerns in their operations (Patil, 2014)

As a blueprint to environmental conservation, Darden Inc., under which Olive Garden operates, declared its commitment to the planet, people, and the plate. Under this framework, the restaurant focused on energy and water conservation as well as the waste reduction as being key areas to enhance environmental conservation through a reduction in carbon emission and waste disposal. In 2009, Darden established targets to reduce pre-restaurant water and energy use by 15% by 2015 and work towards nil landfill waste (Citizenship, n.d.). Darden claims that it had successfully exceeded the water and energy conservation goals since t has reduced water use by 22.5% whereas energy consumption has dropped by 17% per restaurant Olive Gardens included. This was achieved by implementing new energy management systems and efficient bulbs as well as installing irrigation optimization systems (Citizenship, n.d.).

However, although Olive Garden has declared its commitment to environmental conservation, they have been criticized for not doing enough in this regard. In 2016, more than 130,000 people signed a petition prepared by the Good Food Now (members of this initiative include friends of the earth, the Food Chain Workers Alliance, Restaurant Opportunities Center United, Center for Biological Diversity, Green America, Unitarian Universalist Service Committee and the Animal Welfare Institute) campaign that raised several environmental complaints and labor issues against Olive Garden (Wheeler, 2016). In the petition, Olive Garden and other restaurants under Darden were accused of not focusing on their menu items especially dairy and meat products when aligning environmental impact actions, yet these were the key areas that consumed a lot of energy, water, and possibly emitted much carbon. Olive Garden was cited as using large portion sizes of meat and dairy products instead of considering plant protein options that would possibly reduce environmental impact (Wheeler, 2016). The petitioners urged the restaurant to source organic food which are better for people and the planet. Organic food would go a long way in promoting organic farming and protect soil, water, pollinators and reduce carbon emission and energy use. It was the petitioners' view that focusing on their menus when aligning environmental conservation with their operations would eventually help them promote health and wellness, reduce food wastes and save on costs (Wheeler, 2016). Moreover, Olive Garden was advised to consider animal welfare by sourcing at least 20% of their animal products from certified humane livestock producers and attract customers who are concerned about fair treatment of animals (Wheeler, 2016).

Social Dimension of CSR

The social dimension arm of the CSR focuses on the firm's commitment to contribute to a better society (Smith, 2011). According to Ismail (2009), a common role CSR role for companies in community development should be to establish closer ties with communities to increase their impact beyond merely producing goods and services and offering employment opportunities for the communities. Reasoning along this line, Olive Garden has indicated a tendency to make a difference in the communities they serve by eliminating hunger. Since 2003, the Darden established Darden Harvest program for its restaurants to donate unserved food safely to food banks and other nonprofit organizations so that it can reach to underprivileged people in the society and change their lives. In 2017, the program achieved higher targets by donating a total of 100 million pounds of food which was equivalent to 83.3 million meals served to people in need across the communities served by the firm (2017 Annual Report on Form 10-K, 2017). Still in a bid to fighting food insecurity, Darden, Olive Garden included, donated $1.7 million to Feeding America through Darden Foundation which would benefit more about 200 food banks that serve about 18.7 million families and individuals in need (2017 Annual Report on Form 10-K, 2017).

Economic Dimension of CSR

Part of the CSR should be a commitment of an organization to ethically contribute to the economic development of the society in which it operates (Smith, 2011). Darden has ensured that all its restaurants are making progress towards enhancing economic development in the local areas it operates in through capital investments, creating jobs and providing income for local governments. Darden and its brands including Olive Garden are committed to 30-year investment plan in the community through which it establishes new restaurants at an average cost of $3.5 million capital investment and 200 construction jobs created for local people (2012 Report Darden Restaurants, 2012). Building materials are also sourced locally. Also, the company creates 100 permanent jobs for the local people when a new restaurant is established and aimed to create more than 50,000 jobs annually by 2016. On the other hand, the organization commits to paying property and sales taxes to the local governments totaling to $107 million in 2011(2012 Report Darden Restaurants, 2012). It also ensured that 10% of its suppliers constitute minority and women to improve their economic welfares (2012 Report Darden Restaurants, 2012).

Nonetheless, Good for Now campaign accused Olive Gardens of not supporting the local economies when they source much of its food from Italy instead of the local companies. The petitioners argued that Olive should source at least 20% of its food from local companies and promote small-scale producers and strengthen local economic growth (Wheeler, 2016).

Stakeholder Dimension of CSR

According to Smith (2011), a company, as part of its CSR, should commit to ethical interactions with employees, customers, shareholders, suppliers, and communities. Olive Garden employs a significant number of employees from diverse backgrounds to encourage diversity in thought. Everyone is treated with respect and provided with the right tools to develop and succeed in their careers (2017 Annual Report on Form 10-K, 2017). Concerning the customers, the restaurant commits to providing exceptional quality food for the guests to build loyalty with them. Olive Garden aims at a flawless execution of orders and culinary innovation to better the services for the customers. Similarly, the restaurant commits to creating shareholder value by ensuring steady and continuous growth in sales which can convert to higher profits (2017 Annual Report on Form 10-K, 2017). Suppliers are also not left out as the Olive Garden offers long-term competitive contracts as well as building strategic relationships with them.

Nonetheless, it emerged from the petition by the Good for Now that Olive Garden does not do enough to ensure that employees and customers achieve the best. The restaurant was accused of low wages for the employees which make it hard for them to meet basic family needs including healthy food and healthy living (Wheeler, 2016). Similarly, the restaurant was accused of not introducing generous portions of vegetables, fruits, whole grains and legumes which would promote healthy nutrition for consumers. This complaint prompts one to check the menu offer only to realize that the food is salty, fatty and sugary which does not promote good health for consumers. Thus, Olive Garden has failed to consider employees and consumers' health and well-being as being critical areas of CSR.

Voluntariness Dimension

Voluntariness dimension entails a part of the CSR where an organization voluntarily acts ethically and socially without being compelled by the law. For instance, Olive Garden deems it a social and ethical responsibility to donate food to hunger-stricken people. This is an indication that the restaurant acts voluntarily to assist those in need.

Conclusion

Olive Garden can be said to have committed itself to CSR; however, it has not taken sufficient actions to ensure that CSR is fully evident. The restaurant can be commended for demonstrating higher responsibility regarding social dimension, economic and voluntariness dimensions where it has improved the societies it serves through hunger reduction initiatives and building local economies through construction and creation of jobs. However, the restaurant needs to pay more attention to environmental conservation and health and well-being of the consumers and employees through revising its menus and wages.

References

2012 Report Darden Restaurants. (2012). Available at https://www.darden.com/downloads/Darden-2012-gri-full.pdf

2017 Annual Report on Form 10-K. (2017). Darden Restaurants Inc. available at https://s2.q4cdn.com/...financials/.../Darden-2017-Annual-Report-on-Form-10-K.pdf

Citizenship. (n.d.). Darden Restaurants. Retrieved from https://www.darden.com/citiz...