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BUSM4687 Managing International Business Responsibly Management

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  • Course Code: BUSM4687
  • University: Royal Melbourne Institute Of Technology
  • Country: Australia

Question:

Describe and explain the CSR work of the company you have chosen
 
Use company websites and reports to describe and explain the main CSR work done by your chosen company. You might also find it helpful to explore any evidence you find about the company’s reason for doing CSR work, and the rationale given for the particular approach to CSR taken. For example, the company might tell you why it is addressing the issues that it covers.
 
 

Answer:

Introduction

The Body Shop (TBS) is a London based multinational company. It was established in March 1976 by Dame Anita Roddick in Brighton. With continuously growing it has more than 3, 000 franchise stores in 66 countries. L’Oreal, who owned the company 2006-2017 sold it to Natura, a Brazilian cosmetics brands for £880 million.  Its mission is to develop its brand portfolios known for natural and home-based cosmetics with a basic focus to enrich the products, people and planet not just achievement in financial statements. It has initiated a sustainable business development model by introducing with more than 1000 assorted products made of natural ingredients, no chemical uses, eco-friendly substances, green production and product delivery through the green marketing practices.

It has incorporated ethical value system in its business model since its foundation. Corporate social responsibility (CSR) is its basic philosophy. It has positioned its brand as a product for a good cause. It has formulated sustainable and integrated programs for all its stakeholders like farmers, suppliers, trade partners, etc. It utilises only vegetarian inputs to its cosmetic production system and forever against animal testing.

The body shop is well-known for its stand against animal testing of cosmetic products as they supposed that testing toiletries and cosmetic on the animal are unethical. It believes in producing high quality, innovative products with completely from natural ingredients without harming any animals. Also, refuses to deal with suppliers who test on animals. The Body Shop has shown strong commitment and has set high monitoring standards for its peers around the world.

Human Rights Defense

Over the procedure above 40 years of development, The Body Shop respects local, political and all cultural differences and always ensures that all their business activities adhere to basic human rights provision. By upholding the influence of media through marketing campaigns and in stores across the world. It always conveys the message of equal rights to every individual and strives to persuade their supplier by their influence for the justice in a trade to ensure proper working conditions, protection of privacy and appropriate security for all. The Body shop has worked in the past with the UN (United Nations) to create awareness of violence against children and have regular audits to have a check on this.

Protect Planet Earth

It believes in supporting environmentally responsible materials and promotes technology that harnesses renewable sources of energy and sustainable raw materials. The body shop only using recycled materials for the packaging of all products, decrease energy utilisation in production and seek different renewable sources of energy to meet growing demand. It powerfully supporters for sustainable development that does not incorporate the aptitude of the upcoming generations to meet their requirements. It sets global standards which require all stakeholders to adhere to relevant international legislation or conventions.

The Body Shop Foundation

The body shop foundation works closely as a charitable provision of the body shop. Since 1989, it supports and funds different innovative project worldwide based on social and environmental. It is fundraising over £21 million to thousands of minor projects and charities based on human rights, environmental protection, and animal welfare.

The body shop always encourages self-confidence, self-worth, self-awareness, and self- acceptance. As a powerful cosmetic brand, it creates meaning for a value of an individual such as they always promote socially positive messages of their media campaign. The messages inspire audiences such that everyone has their concept of beauty, to respect themselves, look after their body and soul, being proud of yourself and what they do, not just how they look compared to others.

 

Support for Community Fair Trade

The community fair trade was launched in 1987 to create trading relationships directly with marginalised communities around the world; the body shop aims to prevent injustice to small producers who are often at the unfortunate end in case of global crises. It wants to give a fair living wage, sustainable community development, and a long-term relationship. Through this community trade, the body shop sources high-quality natural ingredients, gifts, and accessories from the four places of the world, whereas serving to bring social adjustment for the smallholders and artisan who create them. Likewise, Community fair trade programmed offers access to a market were out of reach for their communities and people with low-cost raw materials for its products, with a tinge of ethics on it. Nowadays, the body shop has 26 community trade dealers in 21 nations worldwide, as well as benefiting 300,000 people. Moreover, the above 1,200 products, 80% cover at least one Community Fair Trade ingredient.

The community fair trade correspondingly supports the unpaid work of women. The governments and organisations have begun recognising the unpaid work of women; they realised there are economic and social benefits for recognising women’s unpaid work although this recognition is happening on a small scale, it is opening up new ways governments and organisations can measure and think about unpaid labour which they largely ignored before. As a way to acknowledge women’s unpaid work in the country of Nicaragua, the body shop created a fund and gave 70 women money to start their businesses (Butler 2014)

Furthermore, some major campaigns taken up by The Body Shop include:

  1. Spray to change Attitudes Campaign to stop HIV; it worked hard to create the awareness how this deadly disease transmitted among young people. It partners with MTV to launch this campaign. Proceeds from a fragrance were donated to the Stay alive foundation.
  2. Stop Violence in the Home Campaign- Domestic violence is prevalent even today in many societies and 2006 it was estimated that 275 million children were subjected to domestic’s violence. It encouraged the public to speak out against domestic violence. It partnered with Women’s Aid to ensure women and child safety. It wanted everyone to feel safe in their own homes.
 


The Body Shop reveals that it will implement a new global CSR strategy which is “Enrich not exploit” commitment for their 40th birthday outlining 14 targets to help uphold its spot as a leader in ethical business and continue to grow and improve the business, with an emphasis on the three pillars includes enrich people, to enrich products, to enrich planet. The body shop wants to proves that their business is stronger than ever with this commitment and completely about being environmentally sustainable and socially responsible. What is more, their goals are to achieve the world’s most ethical and truthfully sustainable international business by 2020.

Enrich people

First The Body Shop will double the community trade program to 40 ingredients from 19 and enrich communities producing as the community trade help them learn the best sustainability activities, values and methods in their supply chain with different agricultural methods and keener production techniques to positive influences on ecosystems and local groups. So, they can share the positive practices across the broader supply chain. Following, they want to engage 8 millions of men and women in The Body Shop’s enrich not exploit mission as they want to be the voice with 8 millions people of decision making and act now for the long-term positive change to protect the planet. Thirdly, they will spend 250,000 hours of knowledge & skills to enrich biodiversity of local communities, because they believe that employees highly skilled, knowledge and desire will make a positive effect to the societies of place they work. Finally, the body shop will help 40,000 people across the world to access work and job so they can afford basic needs for their families and this can change their future.

Enrich planet

Currently, habitat damage is caused by agricultural expansion and harvests of forest goods, as a business aiming to be environmentally sustainable protecting of habitat are significant to The Body shop. They will help the communities to live sustainably by build bio-bridges, regenerate and protect 75 million square meters of habitat. Secondly, the body shop seeks the use of sustainable packaging innovations to decrease the influence on the environment by using fewer resources throughout manufacture and rise the use of recycling. The body shop will power their stores with 100% carbon balanced or renewable energy to reduce emissions that will lead to climate change and consider that every business should also use renewable energy. Besides, they will reduce the environmental footprint each time the stores are refurbished and redesign, since the unsustainable use of resources will lead to a reduction in natural resources, and the uses of energy associated with fossil fuels will resulting to climate change. They will start off by ensuring that 70% of product packaging does not use fossil fuels and hopefully get rid of plastic created from oil; they support of keeping fossil fuels under the ground. Lastly, they will reduce energy usage by 10 per cent each year to engage employee throughout other environmental creativities.

Enrich products

To enrich products, the body shop will guarantee 100% of ingredients are sustainably sourced and similarly protect 10,000 hectares of forest, and natural habitat as these are vital life-support for the earth, fascinating CO2 to decrease the effect of climate change and holding natural resources for the future generations while also protecting the life of local people. Non-renewable supplies are decreasing day by day, the body shop wishes to be transparent and will issue their use ingredients from green chemistry, ingredients of natural origin, biodegradability and water footprint of products to reduce the impact on the environment. Every product of consumers will arrive at the environment in some way either when it is disposed of or used. The body shop wants to be able to measure the environmental impact and established objective to reduce it in the future. Completely, the body shop will have an innovation pipeline transporting cosmetic ingredients from biodiversity hotspots helping broader ecosystems, certain species and the living of local communities.

According to Carroll’s pyramid, economic, legal, ethical and philanthropic measures must be included in a company’s CSR activities. The body shop’s CSR, they successfully encounter their responsibilities on each level of Carroll’s Pyramid of CSR.

Based on Economic responsibilities, the body shop manufacturing toiletries and cosmetics that are made of natural ingredients without the use of animal testing. The products are packaged in recyclable packages at a reasonable price for customers with respectable, and ethics quality products, as well as firm's staffs,  are coached with low-stress sales strategies on clients which lead their revenue to increase from 379.6 million pounds in 2002 to 485.8 million pounds in 2006 (Purkayastha & Fernando 2007). The body shop success at this stage.

 


In term of legal responsibilities, the body shop was not concerned much about lawsuits as they believe that their product is a natural ingredient and had been used securely for periods, without animal testing, which shows that they complied with all the law included health and safety regulation.

For the ethical responsibilities, the body shop is retailing products that are complete of natural components and packages in recyclable packages, and client bags are 100% recycled paper. The body shop discards animal-based product testing; they have its animal testing declaration. They also requested all of their stakeholders to sign an affirmation of no animal testing on any ingredients. Besides, the company addresses its social responsibility and stakeholders by ensuring proper working conditions for its employees, basic human rights, giving fair wages, supporting community trade and preventing injustice to small producers, participating in sustainable development, etc. Also, the company reduces its environmental impacts by reducing energy usage, using renewable power sources, building bio-degrades, using sustainable packaging, using green ingredients, reducing environmental footprint, etc. By 2013, the body shop completing their petition to the European Union toward banning the sale and import of animal tested ingredients and products. Their campaign also resulted in the ban of products test on animals in Germany and the Netherlands. The body shop is also the first business in raising this campaign in Japan.

Moreover, in 2017, the body shop made 3.8 million signatures in their campaign with Cruelty-Free International and request the United Nations to ban animal testing in cosmetics worldwide (The Body Shop 2017). The body shop also recognises for Prevention of Cruelty to Animals (RSPCA), achieve a ‘Lifetime Achievement Award” by Royal Society, and it is the first international cosmetics brand to be awarded the Humane Cosmetics Standard. It always ensures that the ingredients are suitable for vegetarian and no harm to the animal. In 2004, its foundation fundraising £20,000 to John Hopkins University (The Centre For Alternatives to Animal testing) to support the finding of new testing methods to substitute animal testing. (Purkayasstha & Fernando 2007)

Finally, philanthropic responsibility, the body shop minimises their waste by packing it a product with the recyclable package and engage the society is responsible for the environment. They also paid their employees a half day wage to perform the community service activities every week. The consumer was also requested to take part in the activist team by signing the petitions based on the field of environmental issues, animal and human rights. The body shop has fundraising and contributes enormous portions of its income to charity and social causes. The body shop has ever since been acting and is the voice of positively change (Carroll & Buchholtz 2014).

Core Concepts and Theories in CSR

Companies and business’ core mission is to make as many profits as possible for the owners and creating value for the shareholders. In the process of maximising profits, many businesses will exploit their environment and workers or deposit harmful byproducts unsafely in the environment. Left on their own without regulations, businesses will use the lowest quality ingredients in their products; pay their employees the least or fail to pay; make employees work in inhumane conditions; would spend the least in disposing of their by-products. However, some companies and organisations realise the need for balancing the profit motive with serving and living well with the community through comprehensive Corporate social responsibilities (CSR).

CSR is both a theory and a concept. First, the term refers to any theory of corporations that deals with the behaviour of the businesses to engage in their profit maximisation processes ethically without harming the workers or the community the business interacts with. Secondly, CSR refers to the concept of serving the community while pursuing the profit motive (Frederiksen 2010).

As a theory, CSR deals with four main obligations: Economic responsibility, legal responsibility, ethical responsibility, and Philanthropic responsibility. In the economic obligation, the companies with CSR departments have to make profits otherwise they’ll close down. On its part, the legal obligation encourages the firms to follow the rules and regulations laid down for the industry. Also, businesses need to engage in good practices even when no authorities are watching; a concept referred to as ethical obligation. Finally, in Philanthropic responsibility, firms are expected to fund community projects even though the projects are not in their direct line of operation. From its inception in 1987, The Body Shop set out to prove to the world that businesses can serve a profit motive and still be a force for good in the world. It ensures that its beauty products are manufactured ethically; suppliers (including small-scale suppliers) are well paid; the workers are fairly compensated for their labour, and the company still turns a profit. Also, the company gives financial and human support to advocacy programs aimed at ensuring a safe and sustainable environment.

 

The Triple Bottom Line  

This theoretical concept dealing with the obligation of businesses to count their bottom line or profitability regarding three issues: actual profits, effects on the society and effects on the environment. The theory has some commonality with the CSR theory in the issue of actual profits (a firm calculates its profitability regarding costs versus revenue) and on the issue of effects on the business’ operations on the society. However, in the triple-bottom-line, there is an addition of the issue of ensuring that the company operations are sustainable and does not harm the environment. The conditions for the satisfaction of this theoretical concept include that the tabulation of the three issues is done separately and that the three should be sustainable. (Hussain, Rigoni, & Orij 2018). The Body Shop applies the Triple bottom-line theory in all its operations from the sourcing of the products to the final consumption, ensuring that it takes care of the three Ps in CSR: People Profit, Planet.

On the people’s side, The Body Shop ensures that it sources its materials in ethical companies and pays them promptly. Also, the company supports fair trade by giving individuals and small companies the opportunities to access the international market by engaging them as suppliers. In the same vein, the company ensures a good working environment for all the employees. On the planet side, the company protects the animals from inhumane treatment through anti-animal testing campaigns. Further, it funds environmental activist and advocates to help conserve the environment. On the profit front, the company ensures that it makes a healthy profit and thus provides value for the investors through reduced expenditure and efficient and strategic management and leadership processes.

Stakeholder Theory

The theory has considerable similarities with the CRS theory, with the exception that instead with starting at the business and later looking at the effects, the theory starts at the people who might be affected by a business and its operations and looks at the legitimate claims that the can hold against the firm. In other words, Stakeholder theory is based on the belief that any individual or groups of people that affect or are affected by the business have the right and obligation to direct its operations. For instance, if a business’ operations result in toxic wastes, the people affected by the process, or by the disposal of the wastes are stakeholders in the business and that they have a right in the decision-making processes of the firm even if they do not hold the company’s share. The community affected have the right to be involved in the making of decisions that end up producing and disposal of the products so that the safety of the people can be guaranteed. Such a firm’s stakeholders include the owners, employees, shareholders, anyone living in the neighbourhoods, suppliers, customers, the government, other companies, and credit organisation among others. However, the critical/cardinal stakeholders are the owners, workers, suppliers, customers and the community (Van Der Laan, Van Ees, & Van Witteloostuijn 2008). For The Body Shop, the company ensures that all the stakeholder to the company is well taken care of, including:

  • Profits to company owners
  • Favourable working conditions for the employees including commensurate pay
  • Fair prices for the customers with excellent customer care coupled with the assurance of goods produced using ethical means
  • The company workers spend many hours volunteering in community projects
  • Suppliers get fair prices for their products and are paid on time
 


The Body Shop owner, Roddick, sold the business to L’Oréal, owner of the French company Nestlé which started all manner of rumours and criticisms from NGOs advocating for non-testing of animals during the production of cosmetics such as Naturewatch and Uncaged. The criticisms stemmed from the fact that Nestlé is a company known for its less than favourable record of CSR activities. The company even supports animal testing. The critics argued that Roddick was a sell out as Nestle would use The Body Shop to clean the Company’s image. However, the Roddick argued that by getting into a company with worldwide coverage, The Body Shop would be able to access many more markets and suppliers in faraway areas such as Nicaragua and Ghana, ensuring that they deal with the framers humanely. Roddick was right, and The Body Shop is influencing Nestlé’s CSR policies leading to increased funding for anti-animal testing campaigns including funding the research for alternative methods to animal testing (Jessica 2012).

Recommendations

The Body Shop is one of the exemplary organisations that not only talk the CSR talk but walk it, too. The business integrates CSR activities in all its operations and even funds organisations advocating for principles in line with the firm’s beliefs and practice. For instance, the company ensures that it does not engage in animal testing in its production activities and also, it provides financial support for organisations advocating for the banning of the said practices. The company seems perfect at CSR activities, and the only recommendations that can be made for such an organisation are to keep up the good work and continue serving as a role model in the field.

Conclusion

Through their activities, they have indeed helped the society and also maximised the stakeholder’s interest and profit. It sets the tone for the entire world to abide by the concept of CSR and not neglect it in this ever-changing world. The body shop hits all the relevant CRS points as it integrates the community and environmental considerations in all its activities aimed at making a profit for the company. It not only ensures that its production and disposal processes do not harm the people and the environment, but it also supports community organisations engaged in activities that serve the social needs of the people.

 

Bibliography

Butler, F 2014, ‘Valuing unpaid labor in community Fair Trade products: a Nicaraguan case study from The Body Shop International,’ Gender & Development, vol.22, no.3, pp.533-547

Carroll, AB, Buchholtz, AK 2014, Business and Society: Ethics, Sustainability, and Stakeholder Management, 9th edn, Cengage Learning, pp.579-580.

Frederiksen, C. S. (2010). The Relation Between Policies Concerning Corporate Social Responsibility (CSR) and Philosophical Moral Theories “An Empirical Investigation. JOURNAL OF BUSINESS ETHICS. 93, 357-371.

Hussain, N., Rigoni, U., & Orij, R. P. (2018). Corporate Governance and Sustainability Performance: Analysis of Triple Bottom Line Performance. Journal of Business Ethics. 149, 411-432.

Jessica M 2012; Behind the Label: The Body Shop’s ‘Against Animal Testing’ Campaign. Ecosalon Accessed 18 September 2018 https://ecosalon.com/behind-the-label-the-body-shop-against-animal-testing-campaign/

Purkayastha, D, Fernando, R 2007, ‘The Body Shop: Social Responsibility or Sustained Greenwashing’, Oikos sustainability case collection, viewed 17 September 2018, < https://oikos-international.org/wp-content/uploads/2013/10/oikos_Cases_2007_Body_Shop.pdf>

The Body Shop 2017, Enrich Not Exploit: Sustainability report 2017, viewed 17 September 2018, < https://www.thebodyshop.com/medias/Enrich-Not-Exploit-Report-2017.pdf?context=pdf/h17/h04/27818345005086.pdf>

Van Der Laan, G., Van Ees, H., & Van Witteloostuijn, A. (2008). Corporate social and financial performance: An extended stakeholder theory, and empirical test with accounting measures. Journal of Business Ethics. 79, 299-310.

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