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CSR - The Body Shop

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Hsiao Jun See

on 25 April 2013

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Transcript of CSR - The Body Shop

1. Economic responsibilities 3. Ethical responsibilities 4. Philanthropic responsibilities Relationship between CSR and performance 2. Legal responsibilities Corporate Social Responsibility •products packaged with recyclable packages to minimize waste and encourage the society in sustaining the environment.

•community service activities are performed every week by its store employees - paid a half-day’s wage

•committed to communicate human rights and environmental issues
- customers are requested to sign petitions and take part in activist groups

•contributes significant portions of its earnings to social causes. Case Study: "The Body Shop" Overview Corporate Social Responsibility (CSR)
- Definition of CSR
- Components of CSR
Overview of The Body Shop
Relationship between performance & Corporate Social Responsibility Presenters: Iman Majeed
See Hsiao Jun CSR ……taking into account the impact of a company’s action on a society.

OR

…….requires individuals to take into account their acts in the entire social system and at the same time be held responsible for any effects of their acts within that system. Components of CSR Economic responsibilities
Legal responsibilities
Ethical responsibilities
Philanthropic responsibilities Economic responsibilities Responsibilities that society has of corporations.
Produce goods and services that are needed by the society at reasonable prices.
Be profitable to ensure long term survival and provide adequate returns to investors. Legal responsibilities Comply with the established ground rules laws.
Obey the regulations under which the business is expected to operate. Ethical responsibilities Values and standards that public expects businesses to meet.
Do what is considers right, just and fair.
Avoid any practices that are deemed to be questionable.
Operate beyond the minimum requirement of the current codified law to pursue long term goals that are good for society. Philanthropic responsibilities Activities that are discretionary or voluntary on business’s part.
Not mandatory required under law or society expect of business to meet in an ethical sense, it’s just purely voluntary.
Voluntary involvement with the community using organisation’s resources and its employees.
Promote business to be a good corporate citizen Overview of The Body Shop Founded by Anita Roddick in England, 1976.
Anita Roddick, founder and director.
Cosmetic retail company emerged on the foundation of social and environmental change
400 natural products : Honeyed Beeswax, Almond, and Jojoba Oil Cleanser and Carrot Facial Oil.
Products without animal testing and packed in recyclable packages. Overview of The Body Shop Early strategy- no marketing
- Roddick believes a business can still be successful without the advertising strategy.

- Monetary donations to various social causes and employees voluntary performing community activities services.

Growing at rate of 50 percent annually.

1984 - it became listed on London Stock Exchange.

March 2006 - more than 2085 branches in Europe, Asia, Australia and north America.

17 march 2006 - acquired my L ‘Oreal or US$ 1.14 Billion. The Body Shop Mission statement
“ to dedicate our business to the pursuit of social and environmental change”
And
“we use our stores and our products to help communicate human rights and environmental issues”

- Specifies that social and environmental values are the fund
- Fundamental bases of exchange with its constituents. CSR in The Body Shop •producing cosmetics that are made of natural ingredients without the use of animal testing

•products are packaged in plain-looking and recyclable packages

•company’s employees are trained with low pressure sales tactics on customers

•net income figures increased from 1985 to 1990

•industry analysts believe that the company would continue to be profitable even in an economic downturn

•does not rely on advertising
- results in a lack of products awareness that eventually will leads to a decrease in its earnings growth •complying with the product safety and health regulations

-companies voluntary adapted it to guard against product liability lawsuits.

-The body shop was not worried about such lawsuits as the products of the company are made of ingredients that had been used safely for decades, without animal testing. •selling products that are made of natural ingredients and packaged in recyclable packages.
-recycled plastic, known as ‘post consumer recyclate’ or PCR.
-customer paper bags - 100% recycled paper

•rejects animal-based product testing.
-insist that every single ingredient used by suppliers for
The Body Shop has its own animal testing declaration.
Recognition:
-Prevention of Cruelty to Animals (RSPCA)
‘Lifetime Achievement Award’ recognised by the Royal Society.
-first international cosmetics brand to be awarded the Humane Cosmetics Standard. Relationship between CSR and performance Relationship between CSR and performance (cont'd) Recommendation: 1. Tensions among the CSR components (economic responsibilities)

•It is claimed that the environmental concerns that the company was committed might not attract its customers permanently.
- Ethical had gone main-stream in the company and the luxurious nature of the products was not enough to attract customers (The Body Shop Design 2007).

•New entrants and existing competitors that are well financed and experienced in marketing cosmetics.
- The company’s market share was limited in the United States due to significantly higher prices (Carroll and Buchholtz 2012).

•Roddick promised to sell environmental friendly products only.
- The sustainability of the company was questioned (Carroll and Buchholtz 2012).

The Body Shop should promote CSR, and at the same time, create competitive advantage to ensure its long-term survival. Recommendation (cont'd): 2. Anita Roddick’s philosophy on the “purpose of a business” prioritizes on making societal change instead of focusing merely on maximizing profit for business growth. • encapsulates economic, social, and environmental values which promote corporate sustainability in the long run (Dutta 2012).

•communicates the commitment of the business in corporate social responsibility
- companies are incorporating corporate social responsibility into their strategies in order to improve the financial performance and reputation to gain competitive advantage (Teimouri et al. 2011).
- CSR dilutes the business’ primary purpose – maximize profit (Carroll and Buchholtz 2012).
- Roddick has been noted for exploiting the core of The Body Shop’s brand identity for her own personal, environmental and social values (Hartman and Beck-Dudley 1999)

The degree to which Roddick promotes CSR practices through her business should be monitored - be accountable to its shareholders in terms of profit and shareholder’s value maximization. Conclusion The Body Shop played a pivotal role in the growth of CSR movement.

However, the environmental concerns that attracted customers to The Body Shop might not have permanent drawing power.

Actions should be taken to ensure the company's sustainability. (Carroll and Buchholtz 2012, p.30 ) (Carroll and Buchholtz 2012 ) (Carroll and Buchholtz 2012 ) (Carroll and Buchholtz 2012 ) (Carroll and Buchholtz 2012 ) (Carroll and Buchholtz 2012 ) (Carroll and Buchholtz 2012) (Teimouri et al. 2011) (Carroll and Buchholtz 2012) (Carroll and Buchholtz 2012) (Carroll and Buchholtz 2012) (Carroll and Buchholtz 2012; Environmental Principles 2013; The Body Shop International Plc 2011) ( Carroll and Buchholtz 2012; Values and campaigns 2013) (The Body Shop Ltd 2002) (Carroll and Buchholtz 2012) References: Carroll, A. B. and A. K. Buchholtz. 2012. Business and Society: Ethics, Sustainability and Stakeholder Management. 8th edition. Australia: Cengage Publishing.
Community Fair Trade Principles. 2013. The Body Shop. http://thebodyshop.com/content/pdf/community-fair-trade-principles.pdf
Dutta, S. 2012. “Triple Bottom Line Reporting: An Indian Perspective”. Interdisciplinary Journal of Contemporary Research In Business 3 (12): 652-659.
Environmental Principles. 2013. The Body Shop. http://thebodyshop.com/content/pdf/environmental-principles.pdf
Hartman, C. L. and C. L. Beck-Dudley. 1999. “Marketing Strategies and the Search for Virtue: A Case Analysis of The Body Shop, International”. Journal of Business Ethics 20: 249-263.
Jonsson, P. O. 2011. “On utilitarianism versus virtue ethics as foundations of economic choice theory.” Humanomics 27 (1): 24-40. doi: 10.1108/08288661111110150.
Values and campaigns. 2013. The Body Shop. http://www.thebodyshop.com.au/ValuesAndCampaigns.aspx#.UXeNC8rLtLY
Teimouri, M. E., B. G. Jamehshooran, and A. R. Heydari. 2011. Relationship between CSR and SCA (Case study Body Shop). Interdisciplinary journal of contemporary research in business 3 (22).
The Body Shop International Plc. 2011. Values Report 2010-2011. http://www.thebodyshop-usa.com/pdfs/values-campaigns/values_report_2011.pdf
"The Body Shop Design: An evolving retail branding identity". 2007. Strategic Direction 23 (11): 9-11.
The Body Shop Ltd. 2002. Annual Report February 2002. http://www.melafrit.com/education/Finance/FinanceConventionnelle/FinanceDeMarche/CERAM/1st%20Semester/Corporate%20Finance/Class2/The_Body_Shop.pdf 3. Ethical responsibilities (cont'd) •Community Fair Trade (CFT)
- launched "Community Fair Trade" to create trading relationships directly with marginalised communities around the world
- to bring benefits to smallholders, artisans and their communities.
- more than 1,200 products, 80% of which contain at least one Community Fair Trade ingredient. •Ethical Trading Initiative
- mandatory that all primary suppliers be assessed against this Code
- only work with suppliers that comply
- ensures human rights are upheld and child labour is outlawed from supply chain. •promotes utilitarianism in which all actions are directed toward achieving the greatest good for the greatest number of people – the society (Jonsson 2011). (Community Fair Trade Principles 2013; Values and campaigns 2013) THE END Questions?
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