Belk and CSR | 1

Running Head: Belk and CSR

Success Mirrored with Struggles: The Corporate Social Responsibility Case of Belk Department Stores, the Belk Family, and the Belk Foundation

Leah Beth Parsons Queens University of Charlotte

Belk and CSR | 2 Success Mirrored with Struggles: The Corporate Social Responsibility Case of Belk Department Stores, the Belk Family, and the Belk Foundation Just recently I heard a commercial state, the planet was not given to us by our parents, but was loaned to us by our children. What a shocking and openminded thought. Our planet and our planets inhabitants, can only exist if we stop abusing and destroying it and them. Every person and organization uses the planets resources; therefore, every person is responsible for his/her actions. This responsibility extends to not only individual people, but all organizations and corporations as well. Many, if not all, corporations take some type of ownership over their actions, especially if the results better the community. However, if the results are negative, some companies tend to shy away from their responsibilities. Companies that act responsibly are performing Corporate Social Responsibility better known as CSR. Though there are many ideas of what CSR should look like and what it means, this paper will include Jeremy Riffkins ideal idea of CSR, which he calls the European Dream. In his opinion, and mine, CSR: Emphasizes community relationships over individual autonomy, cultural diversity over assimilation, quality of life over the accumulation of wealth sustainable development over unlimited material growth, deep play over unrelenting toil, universal human rights over property rights, and global corporation over the unilateral exercise of power (May, 2007, p. 418). While this ideal life does not exist for most corporations, I think it is a wonderful definition for us, as a global society to strive to achieve. Imagine how much better

Belk and CSR | 3 the world and our communities would be if this was the way corporations and individuals chose to act. While my belief of CSR is extreme, I do believe that many corporations understand and try to achieve some of these things. Companies have even used CSR for their benefit. Cheney, Roper and May state that, in some cases the concept became a strategy by which companies attempted to turn public relations problems into public relations assets (2007, p. 5). Corporations have figured out that if the public observe acting in a way that betters the community and environment, then their reputation as a responsible organization will grow. This is good, because environmentally and socially responsible actions show that the company has more than just their stakeholders interest in mind. Companies who only consider their stakeholders can often find themselves in trouble. Enron was one of those companies. Their actions, illustrate the consequences of attending to a very narrow set of values and stakeholders concerns to the exclusion of all else they created a powerfully distorted organizational culture unable to see outside a set of very narrow interpretations (May, 2007, p. 20). If an organization wants to be responsible and show the community they are responsible, then they must add the community to the list of those who have an opinion while creating a tie to their actions. Though corporations have been given the role of societys social provider, this was not why they were created. McMillian believes that, business suddenly found itself as the chief repository of social capital (May, 2007, p. 15) partly because the global corporation is the most powerful human organization (p. 17). Societies are influenced by the corporation because the corporate sector has

Belk and CSR | 4 become the primary institution in modern society, overshadowing the state in controlling the direction of individual lives and influencing social development according to Deetz (May, 2007, p. 16). With this influential power, organizations have the opportunity and ability to transform the way we think and act. Many wonderful things could and have been accomplished that individuals and small organizations could never imagine. Corporations could do these things to better the community while promoting their company. The actions and statements made by organizations, according to McMillian, are what create each organizations identity. If an organization has a positive identity, people will be more willing to work, buy, and/or promote that particular company (May, 2007). Even though a lot of good can derive from corporations, society needs to understand that the primary goal of a corporation is to increase production in hopes of increasing profits, and bettering the community comes second. Milton Friedman stated it best when he said the sole responsibility of business is to make a profit and to do so within the bounds of the law (May, 2007, p. 19). It is easy to put everything in the hands of the corporation, walk away from our problems, and then blame corporate America if something goes wrong. Society cannot blame corporations for our problems, especially if we as individuals are not willing to take a stand and do something to fix the problems. The modern corporations stepped into a vacuum created when citizens and informal groups vacated the social space previously devoted to caring for each other and for the society in some fairly routinized and systemic ways (May, 2007, p.18). Americans walked away from social issues and left everything up to the corporations, which in turn put corporate America in a bind because a societal provider is not why organizations were created.

Belk and CSR | 5 Leaving society in the hands of the corporation was not the best plan because the modern corporation has failed to act in ways that qualify it as a provider of social responsibility; its voice has been inconsistent with the task, as well (May, 2007, p. 22). In the working world today, a corporation does not answer to society first - it answers to its stakeholders. If the corporation is not concerned with profit and production, they will start to lose market shares. I do believe that there should be a balance between stakeholder concerns, employee concerns, and societal concerns. Many organizations have begun to think in this manner and have created what is called the Triple Bottom Line or TBL. Sandra Maddox addresses this issue by stating that good corporate citizenship is about businesses meeting their social responsibilities and being proactive or interactive about engaging with societys numerous stakeholders and social needs (May, 2007, pp. 74 -86). One such organization that has been dedicated to the community is Belk Department Stores. Belk Department Stores is an organization that has been involved with its communities for many years. It all began on May 29th, 1988 when a twenty-six-year old man named William Henry Belk decided to open his very own bargain store in Monroe, North Carolina. He called his store The New York Racket and began what is now the nations largest privately owned mainline department store. The store has been passed down three generations and the current CEO is Thomas M. Belk Jr. Each member of the Belk family is able to have a part in the business or foundation, if they chose to do so (Covington, 2002). Belk was founded on retail tactics that were unique to its time. There were no haggling of prices, and costumers were allowed to return goods for exchange if they

Belk and CSR | 6 were not satisfied. These principles, which were costumer friendly, are the principles that have allowed Belk to grow and maintain success. Today there are more than 300 stores in 16 southern states. Their sales totaled 3.5 billion dollars in the past fiscal year and they employ approximately 20,000 associates (www.belk.com). Belk is making its mark on the nation. Belk is not only dedicated to increasing profits but also assisting its communities. Today Belk is headquartered in Charlotte, NC and is extremely involved in promoting and bettering the community. Belks mission and vision is to be the leader in its markets in selling merchandise that meets customers needs for fashion, quality value and selection: to offer superior customer service; and to make a reasonable profit (www.belk.com). This is an organization dedicated to providing honest and fair customer treatment. They also believe that it is important to maintain relationships of integrity, honesty, and fairness with costumers, associates, business partners and stockholders in every community (www.belk.com). I personally find it comforting to hear that Belk has stuck to their tradition. The first ad that went out in Charlotte stated In a word, we know no competition mean to be second to none. Kind attention shown everybody. Call for anything and shall have it. Folks will hear from Belk Bros. 19-12 E. Trade St. Backed by years of experience, untiring energy and the mighty dollar, have just returned from the markets with the largest stock of goods ever shipped to North Carolina. We simply announce to the trading public that we intend doing the business of Charlotte and the surrounding country. Watch us and see the dizzy pinnacle of success reached in this statement (Covington, 2002, pp. 17 18) .

Belk and CSR | 7 The messages behind this ad and the mission of Belk have stayed true throughout time. This is what I believe has attributed to the companys success. Belk has always been dedicated to giving back, mainly because the owners have understood the importance of helping others. Part of the reason Belk is able to give back to the community is that it is privately owned and it does not have to go through board members approval. As I stated earlier, one of the obstacles that corporations are required to face are the, stakeholders (May, 2007). Belk does not have to jump through this hoop; instead, they can give as they chose. The Belk family has done many things throughout the years: They helped organize the Presbyterian assembly grounds at Montreat, NC, sat as member on the home missions board, donated millions of dollars to Davidson College in Davidson, NC and Queens University of Charlotte in Charlotte, NC for scholarships, international programs and buildings (such as residence halls and chapels), raised monies for hospitals throughout the global community, and so forth. If and when there is a need within the community, the Belk family is a group that can be counted on (Covington, 2002). The Belk family has been very understanding and gracious to the community, which has allowed the store to have the opportunity to be generous with donations. One of the greatest challenges for companies today, according to Patricia Werhane is, the moral responsibility to create economic, environmental, social, and moral added value in an age of distrust and disillusionment about business (May, 2007, p. 459). Belk has tried to conquer these challenges by serving as role models throughout the community and have done so by creating The Belk Foundation. The belief of this foundation is that education is a basis for successful society and that

Belk and CSR | 8 a quality education is the right of all children and youth (www.belk.com). Its mission is to invest in schools and organizations that work aggressively to ensure all students graduate from high school and continue on an intentional path toward college, career, and life (www.belk.com). One of the goals a company should have as a socially responsible entity is to contribute to society. One way Belk has chosen to give back in through education. The foundation seeks organizations that are doing the following: increasing the number of children and youth who are above grade level in core subjects, are graduating high school in four years, and have the desire to move forward after high school into a college of technical program (www.belk.com). They touch individuals in all sixteen states in which the Belk Department Store is located. Currently, the Belk Foundation has over fifty five million dollars in assets and delivers five percent to organizations each year. Belk has given more the thirty five million dollars to over five hundred organizations today. The Belk Foundation is known throughout the company and symbolizes the organizations desire to grow, while helping others. They are socially responsible in this manner because they give without hopes of reward. Belk is known for giving back to its communities through the Belk Foundation and through individual family contributions. When I think of the name Belk I think of southern hospitality, generosity, and respect. This, however, is not the case for all people, especially those affiliated with the company. Belk has over 20,000 associates in 16 states. These associates work in all levels, from on the floor sales to upper management. The company states that it embraces diversity among

Belk and CSR | 9 associates, customers, and vendors and is committed to maintaining relationships of integrity, honesty and fairness with associates (www.belk.com). While some employees feel as though Belk is a wonderful company to work for, other employees disagree. One woman who worked for Belk in Florence, South Carolina states, I enjoyed working for Belk but it had too many strict rules that just didnt make sense. A student made the argument that while Belk pays its sales associates well, he did not like the way management treats employees. Another associate out of Gaffney, South Carolina stated, Management has a horrible habit for talking about associates like they are dirt; Ive even had customers witness a manager yelling at me for nothing. (www.complaints board.com/complaints/belkdepartment-store.com) These are just a few of the complaints made by Belk employees. Though there is a foundation that represents the wonderful things Belk can and will do for the community, their employee message is at risk. These employees, most working in lower levels, feel undervalued and underappreciated. The message to the community is strong; however, the message within the organization is weak. The definition of CSR states, Universal human rights over property rights and emphasizes community relationships over individual autonomy (May, 2007, p. 418). If these employees feel isolated and feel as though they are treated wrongly or unfairly, then Belk is not operating in a responsible manner. All people, no matter who you are, have the right to be respected and treated equally. If a company is doing one thing responsibly but another poorly, then is that company truly bettering the community, or are they placing a band-aid on the true problems? While the Belk Foundation is a wonderful organization that has changed many lives, Belk

Belk and CSR | 10 Department Stores need to focus on employee relations, especially those who work in lower level positions. I personally believe that CSR is something that all people, not just organizations, should be aware of and willing to partake in. Although corporations are considered individuals they are still run and operated by people. If an organization is going to be truly responsible then most employees, at all levels need to have buy in of the message. One person can make a difference; however that difference will not be as large as it could have been if everyone was willing to think and act in a different more responsible manner. Peter Senge states, the first thing that needs to be done is take a step back (2008, p. 21). We all need to look at our own actions and our own lives to see what we can do to change. Belk should step back and recognize how they are treating their employees at lower levels, while those employees need to look at their own actions to examine whether or not they were truly representing the companys message. Though profit and production should be a companys number one focus, they should also remember their community when making decisions. Everyone needs to take ownership and accountability for the outcome of our actions. As Senge states, the time for shifting responsibility to others, or covering up deep problems with simplistic solutions that only make the problem go away for a short time, is running out (2008, p. 24). Society needs to take a step back, look at the outcomes of our actions, open our minds to new ideas, and remember that more than profit is at stake our communities are also being affected.

Belk and CSR | 11

Recommendations Foundation: While the Belk Foundation is a wonderful organization that has transformed many lives due to its dedication to education, I believe they could do more. Many students who are dedicated to graduating from high school and going on to college are not students who are at risk. The students at risk are the individuals who do not understand the value of an education. Therefore, they are less likely to graduate and enroll in a college. Within Charlotte (where Belk is headquartered) there is a population of students who do not have the resources and do not understand the value of an education. If the Belk Foundation sponsored an at risk program, focusing on the importance of graduation and college, they would have a great impact on the community. They could even focus more specifically on first generation students in hopes of eliminating that bracket of children. Another concern I have with the foundation is that they only spend five percent on programs each year. Why that amount? If this number was doubled, then more children and individuals would benefit. I understand that investment is what allows the money within the organization to grow, however that growth is pointless if it is not being used. I would like to know the operating cost of the foundation as well as employee pay-out. These are two things pertaining to the foundation that I was not able to find. If that cost exceeds more than five percent, I do not believe the foundation is acting in a responsible manner.

Belk and CSR | 12 Employee Relations: One of the attributes of CSR is quality of life over accumulation of wealth (May, 2007). These employees do not feel as though they are being treated with respect and dignity, however the pay is good. Increasing individuals incomes will only put a band-aid on the problem. Belk has created a diversity council to ensure they receive feedback from their employees within their minority population. This council focuses on all levels of employment throughout all of Belks regions and states (www.belk.com). While a diversity council is a good idea, I also think Belk should take a look at what all their employees are stating not just minorities. My advice would be to allow their employees, including part time employees, to create feedback groups. This would be done at all levels, with a mix of levels. It is important for middle management to understand what lower level employees think and say, as much as it is for the VPs to understand middle management. Mixing employment levels will allow all voices to be heard. The fear is that the information gathered from these groups will be put to the side; however, a responsible CEO will listen. Another issue facing lower level employees is that they do not feel valued. Belk could do small things to help with this. One thing Belk could initiate is an appreciation day. A luncheon could be thrown for all employees with a focus on sale associates. The Chairman of the Board should be present and they should recognize associates who have gone above and beyond - those who have the most sales, those who give back to the community, and so forth. These small efforts give employees motivation and allow people to feel good about what they have helped

Belk and CSR | 13 accomplish. If an employee feels as though the company has invested in them, then that employee is more willing to invest in the company. My last piece of advice would be to open communication throughout all levels. This can be accomplished by sending out a bi-weekly newsletter that states the companys mission and goals for that quarter, recognizing areas that are succeeding and offer professional development tools as well. They should highlight the foundations successes, so that associates outside of the foundation can see the good their work has done. A successful organization is similar to a family and a living organism, not a machine. People need to feel valued and wanted. They must be accountable for their actions and willing to take blame for wrong doings. References Covington, H. (2002). Belk inc: A company and the family that built it. Library of Congress Control May, S., Cheney, G., & Roper, J. (Eds.). (2007). The debate over corporate social responsibility. New York: Oxford University Press. Senge, P., Smith, B., Kruschwitz, N., Laur, J., & Schley, S. (2008). The necessary revolution: How individuals and organizations are working together to create a sustainable world. New York: Doubleday. Websites:

Belk and CSR | 14 Chat room on Belk: www.complaints board.com/complaints/belk-departmentstore.com Belk overview: http://www.belk.com/AST/Misc/Belk_Stores/About_Us.jsp