From crisis management to corporate social responsibility: the case study of EHI

Abstract

From the very outset, the EHI Retail Institute had to deal with crisis management. The roots of the EHI go back to 1951 when it was founded by retailers/wholesalers to help solving the distribution disaster in post-war Germany, and since 1957 it faced the challenge to transform ‘Mum and Papa’ service-stores into modern supermarkets. The institute is committed to the idea of Applied Science: its central method is based on the screening of problems along the total supply chain, to create round-tables or focus groups to elicit the reasons for these problems, to structure the input of the operative staff of companies by academic competence, to support solutions by field-studies, to discuss the results first in the workshops of the “round table” and then in public seminars, before, finally, penetrating those ideas via essays of sector-magazines or in special brochures of EHI. EHI follows the inductive way of case-studies, never the deductive approach to International Scientific and Practical Conference survey academic literature to build some enlargement of theory. Nevertheless, EHI’s findings have been quoted often in academic papers as a source of knowledge. Within this paper, the EHI activities with regard to coping with a food scandal are mirrored. Twenty-five years ago, food-scandals like manipulated wine from Austria or, fifteen years ago, the British Cow Disease (BSE), led in retail to heightened operative crisis-management to limit the slowdown of sales in the specific food-sector affected by the occurring problems. Within the total supply chain the players of each level, from agriculture to processing, packaging, wholesale distribution, logistics, and retail accepted their responsibility only in their respective field of competence rather than taking a supply chain wide perspective. The frame of business-operations was benchmarked only by legal demands or business-success/failure. In cases of misbehaviours punishment followed by government or by bankruptcy. The EHI food-security-contributions since the first BSE-scandal in 1994 referred to: aa) Creating in 1994 a round table for the Total Supply Chain of Cows/Beef. ab) Briefing all stakeholders in 1995 on the new concept/philosophy of “responsibility of the total chain”, which obliged every member of the chain to exchange control data with all members of the chain. ac) Establishing in 1996 Orgainvent (www.orgainvent.de) for the facultative tracing and tracking of cows and beef as a counter-action to the second BSE-scandal. By forming this joint venture with 50 percent shares for the agricultural and processing side and 50 percent shares for retail institutionalized tracing and tracking in this sector in Germany. ad) Enforcing the facultative system by contracts accepting financial sanctions of a “sanction committee”. Based on this pioneering work focussing on a system solution and its dialogue with international partners, the EU, later, formed the obligatory EU-tracking and tracing regulations. ba) Confronting in 1995/96 the EHI round table for fruit and vegetables with food-security- problems in agriculture. bb) Transforming the national fruit and vegetable round table to a European one: EUREPGAP, today GlobalGAP (www.globalgap.org), is a proactive measure to create “Good Agricultural Practice” for European Retail Produce. bc) Transforming that round table to a non-profit oriented company in its own right. bd) To penetrate the standards of EUREGAP worldwide to more than 100 countries which is mirrored by the change of the name form EUREPGAP to GlobalGAP. While the case-studies of Orgainvent and GlobalGAP are very sector pecific, EHI is now working on a “roof-brand” for those activities, which are much more complex and interdisciplinary. In 2008, the EHI Retail Institute initiated via its international academic network the European Retail Academy, an environmental virtualportal www.european-retail-academy.org/ERM, to publish in the internet best practice cases of retail in co-operation with its suppliers and to benchmark the activities in an Environmental Flow Chart, which can be used as well for the vertical flow from agriculture up to retail-communication for a live-style of health in sustainability (LOHAS) and horizontally to compare competitors of each level. It is an open and innovative system applying a systematic approach, which is derived from theOrgainvent and GlobalGAP experience. The aim is to place an environmental retail management (ERM-approach) as one potential benchmark to measure Corporate Social Responsibility (CSR) in retail in the future.