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Corporate Social Responsibility (CSR) has been anecdotally considered to provide organizational performance advantages in the contemporary market. However, the majority of the studies conducted on the impact of CSR have been rather focused on organizational performance, with little other mediating effects considered. Fewer studies still have been conducted regarding companies operating in morally and ethically ambiguous industries, such as gambling, alcohol, and gun manufacture, despite companies in these industries being reasonably more invested in CSR strategies. This study, therefore, seeks to investigate the impact of CSR on employee retention in Ladbrokes, a gambling company in the U.K. A literature review approach of grey literature is implemented with the data sourced from the companys website and company-issued documents exclusively. The results show that three tenets ought to be addressed for a company to foster a positive correlation between CSR strategies and employee retention. These tenets include job satisfaction, work meaningfulness, and employee engagement. From the CSR strategy implemented by Ladbrokes, the company effectively fulfills these tenets and reasonably implies that it promotes employee retention.
Introduction
The orthodox understanding of a corporations principal purpose is that of profit maximization. However, due to the advent of Corporate Social Responsibility (CSR), companies are obligated to abide by moral norms, despite competition, or else risk incurring heavy penalties, and disadvantage in the market. This is especially important in instances where the corporation in question deals in products that may be widely regarded as ethically dubious, socially undesirable, or overall problematic (Pratten and Walton, 2008). In such cases, there is often a greater expectation of responsible behavior from the general population and statutory bodies.
While Corporate Social Responsibility has been extensively covered in recent literature, research, and scholarly works, the focus of the review has been primarily on customer management, and compliance with overarching authorities. The social responsibilities of businesses are also quite varied, depending on the industry, and general perception as well. This study, therefore, seeks to explore the intersection between corporate social responsibility (CSR) and employee retention. The focus of this paper is how corporate social responsibility in Ladbrokes impact upon employee retention. The result will ideally inform on CSR as an impact in organization productivity, and further create awareness of the company to the general public.
Corporate Social Responsibility (CSR) is an essential component of organizational culture. CSR can be defined as an implementable business framework that introduces a self-regulating mechanism allowing the company to be socially accountable to its stakeholders, the general public, and itself (Liang and Renneboog, 2017). It comprises the process of incorporating social and environmental concerns into their operations and their interaction with shareholders. The impact of CSR on employees, who are prominent shareholders within a business entity, holds extensive research potential. This is further exacerbated by the industry within which Ladbrokes operates, which is in the ethically ambiguous activity of gambling.
Objectives of the Study
The primary objective of this research is to review the impact of Corporate Social Responsibility (CSR) upon employee retention at Ladbrokes. To fulfill this overarching objective, the following specific objectives will be undertaken:
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To discover the various research works conducted in the area of corporate social responsibility and employee retention.
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To expound on the various factors that affect employee retention initiatives in Ladbrokes.
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To examine the influencing factors on job satisfaction, corporate social responsibility, and employee retention in the company.
Organization of the Study
The current chapter comprises the introduction, covering a succinct overview of corporate social responsibility, and the aims and objectives of this study. The second chapter will feature the literature review, where prevalent literature on the field will be assessed and themes identified. This review will be essential to contextualize the literary gap that this study seeks to feel. The third chapter will comprise the methodology implemented in the data collection and analysis while the fourth chapter will comprise the actual data analysis and interpretation of results. Finally, the fifth and final chapter will include the conclusions derived from the data analysis, as well as the recommendations made, and the implications of the overall study.
Literature Review
Much scholarly attention has been afforded to the concepts of corporate social performance and social responsibility over the decades. Furthermore, academicians and business managers have witnessed the evolution of how corporate social responsibility morphed from an irrelevant and mundane idea to becoming a crucial underpinning of research agendas (Moura-Leite and Padgett, 2011). Business entities have been forced to come to terms with the fact that adopting a socially responsible outlook is essential for busines growth. This is due to the fact that the contemporary market is rife with ethical, legal, and environmental challenges that significantly influence the organizational behavior; and solely focusing on economic management may no longer be feasible. This literature review section will comprise a thorough, yet succinct overview of prevalent literature regarding CSR, employee management, employee retention, and organizational management and performance.
Corporate Social Responsibility (CSR)
Corporate Social Responsibility (CSR) can be addressed in a continuum. On one end the continuum, are philanthropic endeavors that directly contribute to the environmental and social issues identified or received by the company. These issues may also include gaps that have been identified by the higher-tier management as well. These particular activities have little to no impact on the corporations core activities, its business model, or the technologies implemented. On the other extreme of the continuum are the set of practices that are adopted in direct response to the demands placed on the corporation by society, and the activities influencing the organization from various dynamic forces (DAmato and Roome, 2009). The representation of CSR on this continuum leads to a rather popular definition of the practice as the set of practices, policies, and programs that are implemented within a business and its operations, as well as the decision-making process to ensure that the corporation can maximize the positive impacts of its operation within a community (DAmato and Roome, 2009). This, however, requires the fulfilment of certain conditions including the ethical undertaking of business activities, and the provision of quality commodities.
Turcsanyi and Sisaye (2013) further reiterate the definition of CSR, and expound it further. Corporate Social Responsibility is defined as the sustained commitment made by a business entity; whose primary business focus is profit maximization, to act ethically and enhance financial development while guaranteeing the quality of life of its employees, their families, the immediate community, and the society as a whole. The ideology behind CSR is that corporations should strive to achieve a sustainable balance between profit maximization, and the expenses made by promoting the positive influence and minimizing negative influence of its operations in society. Therefore, firms concerned with CSR are economically competitive, while fulfilling the required tasks necessary for their continued existence and survival. These tasks may include responding to their users needs, delivering above the minimum requirements, general observation of ethicality, providing conducive working conditions, environmental considerations and community integration.
A socially responsible business entity can also compete favorably for stakeholder goodwill, and effectively differentiate itself from its economic competitors by integrating social welfare into their business opportunities. However, corporations would not be incentivized to act socially responsible if these corporate responsibility parameters are not integrated into their decision-making and governance structures (Misani, 2010; Lenssen et al., 2009). The significance of this integration is underlined by the fact that over 80 percent of the global 250 firms currently release their CSR information, and a further 75 percent have a formal corporate CSR strategy implemented (Blasco and King, 2017). The implementation of a viable CSR strategy is, therefore, paramount to an institutions organizational success.
An organization can be socially responsible through being mindful of ethical operating procedures, being environmentally friendly, investor friendly, employee friendly, or a patron of the arts, learning institutions, community outreach programs or other avenues. In fact, Bu
iknien and Kazlauskait (2012) posit that a business entity can implement CSR by being mindful of the environment, and the employees, as well as supporting community projects such as schools, medical provision, and cultural programs. This proactive implementation of CSR can significantly minimize stakeholder conflicts, and maximize loyalty across the organization.
Internal Corporate Social Responsibility
Internal CSR is primarily aimed at the internal core operations of a corporation. Cavazotte and Chang (2016) assert that internal CSR is concerned with the actions that can be taken within the organization to enhance the welfare of the employees, their productivity, and lives; consequently, influencing the corporations productivity and profitability. Thus, Internal CSR is defined by Low (2016) as CSR practices that are primarily related with improving the physical and psychological welfare and working conditions of employees. The sole focus with employees is owing to the fact that they are considered a very important stakeholder group within any organization (Thang and Fassin, 2017). Further, according to Mory, Wirtz and Göttel (2016), there exists four groups or value classes of Internal CSR practices, which relate to the development of an employees quality of work, the welfare and satisfaction of the employee, development of skills and social equity, and finally the workers health and safety at work.
Employee Engagement
The contemporary marketplace has proven to business managers that having a high-performing employee workforce is imperative for the survival and continued growth of a company. Resultantly, employee engagement has steadily become a rising concern and priority in many organizations as a highly engaged workforce can increase productivity, profitability, and innovation, while reducing acquisition costs, and maintaining top-tier talent (Harvard Business Review, 2013). It is, therefore, essential that every company adequately engage their employees to maintain a competitive edge in the market.
Employee engagement does not have a particular cohesive, and universally accepted, definition provided in scholarly literature. However, several definitions that are similar to an extent have been provided regarding the concept of employee engagement. Gupta and Sharma (2016) defined employee engagement as the positive outlook elicited in employees towards an organization, its culture, and held values. Engaged employees, from this definition, are intimately familiar with the overall business context, and dedicated to working with colleagues to benefit the corporation. Ariani (2013), on the other hand, defines employee engagement as the workplace approach that is designed to guarantee that employees are wholly committed to the overarching organizational values and goals, contribute to organizational success, while simultaneously enhancing their own sense of welfare. Therefore, employee engagement is the intelligent and emotional commitment of an employee, or a group of employees to a particular organization that ultimately influences organizational performance. Shuck and Wollard (2010) expound on this definition by asserting that employee engagement is the individual employees cognitive and behavioral state, as directed towards a desired organizational outcome. Therefore, employee engagement can be viewed as a construct that outlines the differences between employees, and the conscious dedication and effort they invest towards their jobs.
Developing Employee Engagement
It is imperative for organizations to strive towards an engaged workforce. This is because employers ideally want employees who would do their utmost best to help the company meet its organizational goals, and employees want a fulfilling job that is both challenging yet meaningful (Markos and Sridevi, 2010). Therefore, in order to foster and nurture employee engagement, a two-way relationship between the employer and employee is required. A good relationship can be developed with the employees through adoption of good management philosophies, providing an enriching professional atmosphere, and recognizing employee potentials and talents. Adequately engaged employees will have many positive attributes, including being self-motivated, passionate, high energy levels, and deeply connected with their tasks. Due to these qualities, and overall contentment, engaged employees tend to hold their jobs longer, while working better and smarter, and consequently, leading to improved performance on an individual and organizational level.
Many factors have been accredited to either facilitating or impeding employee engagement. For instance, Ariani (2013) posits that a clear understanding of how all jobs contribute to the overall performance strategy, as well as recognition for high performers and a company-wide communication of performance goals were important drivers of employee engagement. These drivers help create an implementable road map towards organizational excellence. Other prevalent drivers according to Kim, Kolb and Kim (2012) include career growth opportunities, a clear correlation between employee input and organizational performance, nature of the work, pride regarding the corporation, employee development, managerial relationships, and co-workers. Corporations should, therefore, understand and exploit various antecedents to effectively facilitate employee engagement, and sustain this engagement.
According to Ferreira and De Oliveira (2014), there are three widely used facets to determine whether employees of a specific organization are adequately engaged or not. The three facets taken into consideration include dedication, vigor, and absorption. Dedication comprises having a sense of pride towards the work allocated, and being strongly involved in the tasks assigned, while absorption refers to the pleasant immersion of an individual in their allocated duties. Finally, vigor refers to the conscious willingness to exert oneself into the job given, and the ability to not be easily fatigued, and persevere in the face of challenges.
The Gambling Industry in the U.K.
Many human activities are harmful if done in excess. Therefore, society often expects that an adult individual can implement self-restraint to prevent damage to the self. However, some products may be addictive, and ideally, some vulnerable subsets of the population may require further intervention and protection. Gambling is a prevalent example of these products. While for many people, it constitutes a simple hobby that combines the element of risk with the allure of financial reward. For a few people, however, gambling may lead to debilitating problems that may visit harm upon those people who are closest to them and the community at large.
Further, the Church of England Ethical Advisory Group cautions that gambling contributes to social ills that culminate in severe addiction to the activity, and should be reasonably avoided (Young, 2006). The social ills referred to may include financial debt, economic difficulty, family issues, and in more extreme situations, theft, depression and suicide. The British Gambling Preference Survey (2007) further provides that the number of people who are problematic betting may approximately be between 236,500 to 284,000 individuals. The focus of this study, however, is not to argue the morality of gambling, but to investigate the level of socially responsible control that is exerted in the industry, specifically by Landbrokes.
Contextually, the Gambling sector in the U.K. is under consistent scrutiny. Therefore, if it were to not behave responsibly, especially in the matter of problem gambling, there may be more stringent legislative controls implemented. However, the impact of the existing social responsibility measures taken by gambling firms operating within the U.K. is rather ambiguous. This is underlined by Pratten and Walton (2008), who state that the gambling industrys CSR strategies implemented in the U.K. market are more of a public relations smoke show, and their efficacy is doubtful. Furthermore, Leung and Gray (2016) provide that there is remarkably little disclosure done by gambling firms regarding responsible gambling, which is the primary social responsibility of these firms. This study will, therefore, seek to investigate the CSR strategy and reporting of Ladbrokes, and how this influences employee engagement, and ultimately retention.
Methodology
This study will seek to investigate the impact of Corporate Social Responsibility on employee retention. The particular review will be done within a morally ambiguous industry, with specific focus on Ladbrokes in the U.K. To fulfill this overarching objective, the following specific objectives will be executed:
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To discover the various research works conducted in the area of corporate social responsibility and employee retention.
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To expound on the various factors that affect employee retention initiatives in Ladbrokes.
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To examine the influencing factors on job satisfaction, corporate social responsibility, and employee retention in the company
Research Method and Design
This study employs a qualitative research method. This approach is primarily used to address contextual problems involving perspective, experience, or the opinions of the study population, or individuals with intimate knowledge of the research problem (Hammarberg, Kirkman and De Lacey, 2016) Furthermore, the data from this approach does not require implemented measuring metrics, and counting. Instead, the researcher can focus on the exploration of contextual attitudes and concepts from the literature reviewed.
The qualitative approach was deemed appropriate for this study, as understanding the impact of corporate social responsibility on employee retention was the critical concern. This research problem is heavily qualitative, and the parameters used for the analysis would be better reviewed from a qualitative philosophy. Ultimately, this approach also allowed the more extensive review of the interrelationships between corporate social responsibility and employee engagement within the research site, which do not take any numeric forms. The qualitative approach was more preferred over the alternative quantitative method due to its flexibility in capturing perceptions and opinions, which also allowed the easier triangulation of any preliminary findings with more data.
A quantitative approach was excluded from this particular study due to its primary aim of confirming hypotheses using numerical data, or measuring inter-variable relationships as provided by Creswell and Creswell (2017). This approach would have only been appropriate if statistical instruments are implemented to measure data and address the studys research questions. The requirement of numerical data, therefore, renders the quantitative and mixed-methods approaches null for this study.
Owing to the overarching research approach being qualitative, this study will also implement a literature review research design. However, to improve the reliability and validity of the study, the inclusion criterion of the materials used will be limited to grey literature. Grey literature refers to manifold documents that are often procedurally produced on all levels of academia, business, government and industry in many print and electronic formats. This literature is often protected by intellectual property rights, and are of sufficient quality to be curated and preserved by institutional repositories and public libraries, but are not published commercially. Ultimately, the production of grey literature is not done with the primary purpose of publishing with commercial bodies. The examples of grey literature that is implementable in this study includes dissertations and theses, patent information and filings, procedures and policies, conference abstracts, regulatory information, unpublished trial data, reports, and government and statutory publications.
The inclusion of grey literature in this literature review will be essential in minimizing publication bias. This type of bias is exhibited in published scholarly research. It often occurs when the outcome of the research or experimental study directly influences the decision to otherwise publish and distribute it. This can, in the long-run lead to the formulation and testing of hypotheses in future based on inaccurate impressions gleaned from the existing scientific literature. This results in extensive wastage in research opportunities and resources.
Data Collection Methods and Procedures
The data collection criterion for this research will comprise secondary data sourced from online sources wholly. Secondary data is widely defined as any form of data that was already collected through primary sources and availed for other researchers to implement within their own studies and derive their own results (Creswell and Creswell, 2017). Limiting the data collection to solely online sources will significantly reduce the complexity of material acquisition and review, and reduce redundancies in the data, while maintaining the overall quality of the analysis and interpretation of the results.
Furthermore, this research study has been conducted during a rather unique yet trying period with the novel coronavirus (COVID-19) pandemic. As a result, primary data collection has been significantly compromised, as interpersonal contact has been severely limited to curb the spread of COVID-19, which is highly infectious. The initial data collection for this research study had been qualitative interviews, but due to the pandemic, was revised to literature review of grey literature, primarily obtained from the Ladbrokes website and company-issued publications. However, the overall quality of the data analysis and interpretation of results will not be reasonably compromised from the change in overall data collection approach.
Study Limitations and De-limitations
The study does have some inherent limitations stemming from its design. The data source will be primarily the companys website and company-issued publications, which may reduce the generalizability of the study results to other stakeholders, and firms. Furthermore, this issue is exacerbated by the fact that Ladbrokes operates within a unique market, both literally and morally, and therefore the strategies employed may not be generalizable to a large variety of firms and other stakeholders. Finally, the company may provide biased information, in a bid to surpass scrutiny and moral obligations, and gain public favor due to the nature of its business. However, this issue will be addressed by triangulating any collected data with available contextual data from news sources and online journals.
A significant delimitation of the study involves using online sources of grey literature, which significantly reduces the complexity of data collection, and places the researcher in lesser harm in the wake of the COVID-19 pandemic. The utilization of the companys own website and publication data is also a delimitation of the study aimed towards reducing the overall complexity as well. However, despite the delimitations employed, the quality of the data collection and analysis will not be reasonably compromised.
Ethical Considerations
This research study will exclusively use secondary data, comprising grey literature sourced from Ladbrokes website and company publications. Consequently, this study will forego ethical considerations regarding protection of human participants, as no respondents will be involved. However, terms of fair use of intellectual property materials will be followed, and any findings that are not the researchers own will be appropriately cited and referenced according to the Harvard referencing style.
Summary and Transition
This study implements a qualitative approach to the research, characterized by a literature review research design using grey literature. Grey literature refers to documents that were produced by institutions, scholars, or the government, but not for the primary purpose of publication. In this case, the Ladbrokes website will be used, along with any company-issued publications, such as its annual CSR report. The appropriate findings will be outlined and discussed in the next section, which is Chapter 4, along with the interpretation of the data to address the research questions of this study.
Data Analysis and Interpretation
This section will comprise a brief company overview of Ladbrokes to contextualize its prevalent information and ground the research. Furthermore, a literature review of the interrelationships between corporate social responsibility and employee retention will be conducted, with a funnel approach ultimately addressing the gambling industry, and ideally comparable firms, in stature and markets, as Ladbrokes. Finally, the company website, and other company-issued literature will be reviewed to identify its CSR implementation strategy, and correlate these findings contextually with its employee engagement.
Contextual Overview: Ladbrokes
Ladbrokes is currently a constituent brand of GVC Holdings, a British sports betting and gambling company following an acquisition of the company in 2018. In 2016, however, Ladbrokes had merged with Gala Coral to create the resulting company, Ladbrokes Coral, which was the largest high street bookmaker in the U.K. before being acquired by online magnate GVC Holdings (BBC, 2017; GVC Holdings, 2019). GVC holdings now holds 53.5 percent of the combined group, with the constituent brands outlined in Table 1 below.
Table 1: Overview and Sub-brands of GVC Holdings. Source BBC.com
The final worth of the acquisition is, however, subject to statutory review of gaming machines termed the Fixed-Odds Betting Terminals (FOBTs). This underlines the existing scrutiny of gambling as a morally dubious venture, and the need for corporate social responsibility geared to addressing problematic gambling. In the U.K., the Department of Culture, Media, and Sport (DCM) indicated that it would cap the size of gambling stakes that gamblers can reasonably place on FOBTs amid concerns of problematic gambling harming susceptible people.
Ultimately, GVC Holdings, and in extension, Ladbrokes, is a profit maximizing company. Therefore, the FOBTs restrictions, which are proposed to cap the maximum amount per spin from £100 to between £2 and £50, would impact overall profitability (BBC, 2017). This statutory scrutiny also affects stakeholder relations. Under the terms of the acquisition deal, each shareholders of the Ladbrokes Coral group would get 32.7p cash and 0.141 ordinary GVC Holdings shares in addition to a contingent value worth to a maximum of 42.8p. This contingent value would be decided upon the outcome of the DCM review (BBC, 2017).
Corporate Social Responsibility and Employee Retention
There is an overwhelming focus in prevalent literature on CSR at the organizational level, but to impact on external stakeholders such as organizational reputation and branding. However, little recent research looks into the effects of CSR in employee retention, and more so within a morally ambiguous industry such as alcohol production, gambling, and guns and weapons manufacture. In broader literature, CSR has been identified to have an overall positive effect on employee retention (Wong and Leow, 2016; Paruzel, Everding and Maier, 2017; G.W Paulsen, Perera and Kadoura, 2020; Carnahan, Kryscynski and Olson, 2017; Brammer, Millington and Rayton, 2007). It is, therefore, imperative that organizations implement corporate social responsibility strategies in the human resource management as well.
Being a good corporate citizen is an important aspect of overall corporate branding (Waldman, Siegel and Javidan, 2006; Zedeck, 2011). Further empirical evidence provides that CSR has the capacity to create overall positive organizational identification, and improve the welfare of employees, with changes in the relational work dimensions positively altering work meaningfulness and organizational performance. The three tenets outlined in Table 2 below comprise the primary antecedents to employee retention as provided in prevalent literature, and supported by the job characteristics model from Hackman and Oldham (1976).
Table 2: The CSR tenets to Employee Retention
From the prevalent literature reviewed, it would reasonably follow that a firm that effectively integrates its internal corporate social responsi
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