37). Indeed, the company's emphasis on so-called "social clauses" (discussed further below) has been at the forefront of its corporate philosophy: "Socially, ecologically, and ethically produced products were key aspects of Migros' product offering. Riedener knows that Migros benefited from a unique position -- and he wants to make sure that Migros defends it from both new and old competitors" (Reinhardt et al., p. 37).
Current and past issues.
The company faces some profound challenges in its efforts to grow its business in the future but has continued its corporate philosophy of socially responsible corporate citizenship (Reinhardt, Dessain, & Sjoman, 2005). The company's management has been examining ways to assist emerging economies in the countries where it competes or intends to expand to facilitate it future growth while helping improve the quality of life for the residents in these regions. In this regard, Sternquist and Kacker note that, "Many Eastern European countries today are in dire need of basic down-to-earth retailing know-how, not necessarily the sophistication offered by world class chains of specialty stores like IKEA and Benetton. Migros, for example, was involved in 1990 in a project that sought to improve the potato storage capabilities in Sosnogorsk in Russia. With simple measures and little investment, the coop played a significant role in this part of the world. It helped reduce the storage losses to the extent of 30%, something that benefited people immediately and directly" (p. 187). It is reasonable to suggest that these types of corporate initiatives will go a long way in establishing good will among current and potential future customers.
Not all of the company's social improvement initiatives have experienced this level of success, though. As Brysk (2002) points out, "A prime example of a relatively successful 'social clause' experiment, begun in 1987, is between the Swiss supermarket chain Migros and Del Monte pineapple farms in the Philippines" (p. 108). The clause in question stipulated that, "The [Filipino] supplier hereby guarantees Migros that the production methods for the workers, in terms of social as well as economic conditions, are above average" (quoted in Brysk at p. 108). In support of this initiative, Migros maintained that "prices have to tell the truth and reflect the ecological and social costs incurred in production, otherwise someone else has to pay later, usually the innocent public through the insurance system, the public welfare system, and the international community" (quoted in Brysk at p. 108). As a direct consequence of this social clause initiative, though, the price of pineapples grown in the Philippines increased 15-20% beyond those being grown in Thailand, Malaysia, or South African and Thailand's exports of pineapples increased 250% as a result (Brysk). This author adds that, "More significantly, Migros itself had to offer a second, discounted line of pineapples without the favorable 'social label' to cater to buyers who did not really care. Happily, Migros reported, shoppers continued to purchase the more expensive 'labeled' goods" (Brysk, p. 108).
Conclusion and Lessons Learned
The research showed that in its 85-year history, Migros has been transformed from its modest beginnings selling basic food and non-food products from the back of Model T. trucks to become the largest employer in Switzerland and one of the largest companies in the world. Retail managers of all types could learn much from this company and its focus on shortening the supply chain as much as possible to bring the products it offers to its customers as quickly and efficiently as possible. Likewise, other retailers could probably stand a healthy dose of the type of corporate citizenship that has fueled Migros' growth over the years as well. It is unclear, though, whether such a socially responsible approach to doing business is viable in an increasingly competitive globalized marketplace for retailers competing in other countries, but it is clear that Migros has made it work to its advantage and it is reasonable to conclude that this company will maintain this course in the future.
About Migros. (2009). Migros. [Online]. Available: http://www.migros.ch/DE/.
Brysk, a. (2002). Globalization and human rights. Berkeley, CA: University of California Press.
Reinhardt, F.L., Dessain, V. & Sjoman, a. (2005, December 14). Migros case study. Harvard Business Publishing.