Corporate Social Responsibility - the Body Shop - Essay Example

Corporate Social Responsibility: The Body Shop “Corporate social responsibility is a hard-edged business decision. Not because it is a nice thing to do or because people are forcing us to do it... because it is good for our business" Niall Fitzerald, Former CEO, Unilever “The business of business should not be just about money, it should be about responsibility. It should be about public good, not private greed". Dame Anita Roddick, (Human Rights Activist and Founder of The Body Shop) Introduction The twenty first century is witness to a rapidly transforming business approach, which has popularized the concepts of ‘triple bottom lines’ and corporate social responsibility, making ‘green business’ an increasingly fashionable trend. The scope and extent of a company’s contribution towards social and environmental causes, almost guarantees successful results, which is why, every other company, today proudly flaunts its commitment towards such causes, in its annual reports. Are the companies today, actually environmentally and socially conscious or is it a desperate bid to gain consumers’ trust through deliberate green-washing? This paper seeks to delve deeper into this aspect of business, and seek answers to the critical issue of social and environmental commitment of multinational companies, their corporate agenda and the impact of the same on their stakeholders. For the purpose of this study, the case of The Body Shop will be explored and analyzed. Corporate Social Responsibility: Fact or Farce? Contemporary multinational organizations today are caught in the middle of a heated debate, surrounding the legitimacy and credibility of their claims regarding their social and environmental commitments. In the process, they are being pushed towards including broader public good will, and beyond their conventional commitment towards their shareholders. However, incorporating environmentally sustainable practices within their corporate agendas and sustaining their competitive positioning in the market, at the same time, is a difficult task. Needless to mention, that not many can claim to have struck a perfect balance, without getting embroiled into controversies and their modus operandi being questioned or challenged. And the few that have managed to come close; continue to defend the righteousness of their actions. The Body Shop exemplifies one such situation, where the company seems to have got it right in the beginning, but over the years, ended up in controversies, putting the company on the pedestal, and forcing its management to justify its actions, with regard to its mission and values, which boasts of environmental and social commitment and broader public good (Rosenthal, 1994, Pp. 15 - 17). This brings up the question, whether corporate social responsibility can go hand in hand with the core corporate motive – that of maximizing profits; whether commitment to social and environmental causes and contribution towards society can co-exist along with commitment to the company’s stakeholders; and whether CSR is a farce or a fact? The same is discussed through the case of The Body Shop International Plc – a UK based multinational cosmetic brand, which boasts of its commitment towards the environment, via its ‘green’ and natural products and its contribution towards social and environmental causes. The Body Shop International Plc. The Body shop is a world renowned British cosmetic retailing firm, founded in the year 1976 by Dame Anita Roddick, and having a strong international presence (The Body Shop, 2011). The company adopted an environmental strategy from the very beginning and showed a strong commitment towards green causes and social issues, thus ideally being an advocate of ‘green’ business and a portraying a model corporate social responsibility agenda (Dennis et al., 1998, Pp. 649-653). The company boasts of an impressive range of environmentally friendly / bio-degradable range of products; endorses recycling and over the years, have shown an active involvement in social and environmental causes. It is an active member of Greenpeace thus, displaying its commitment towards clean and sustainable way of doing business. The founder, had a clear strategy of following the philosophy of profits with a principle which proved to be highly rewarding and managed to garner huge public support, thus helping in building its brand equity in the process (Entine, 1995, Pp. 54-59). The founder, managed to build a brand which was environmentally friendly and showed a commitment towards society, putting ethics ahead of profits. In the words of the founder “Id rather promote human rights, environmental concerns, indigenous rights, than promote a bubble bath” (The Guardian, 2007). The company through its "Trade not Aid" project helped in setting up various micro-level enterprises in a bid to promote fair trade practices. It helped in raising funds for setting up of schools, day care centers, clinics offering treatment for HIV / AIDS and thus displaying its flair and commitment towards social causes. It displayed a strong commitment towards ethics and included the same in its core value statements as well as mission and vision statement (Kitchen and Schultz, 2001). This strategy paid off well, and helped the company in gaining widespread public support and a large and dedicated customer base. The customers, seemed to buying not only the company’s products but also the it portrayed (Varey, 1996 Pp. 2 - 4). However, despite its attempts at establishing its brand as one associated with social and environmental causes, the company, over the years, found itself in the middle of several controversies, jeopardizing its credibility in the process. It faced severe criticism and media backlash for its seemingly ‘green’ initiatives raising serious doubts over its ‘honest cosmetic company’ image (Entine, 1995, Pp. 54-59). This was mainly on account of the company’s acquisition by the cosmetic giant L’Oreal in the year 2006. L’Oreal is known for testing its products on animals, which is against the policy of The Body Shop, however, despite such contradictory ideologies, the company chose to associate itself with L’Oreal. This stirred up a major storm, with charges of hypocrisy being leveled against the company for its apparent double standards. Furthermore, the company was accused by Greenpeace for exploiting people of poorer nations, stating that its Trade not Aid project is a sham and only a meager percentage of the company’s earnings is dedicated for the project. It was also alleged that contrary to its claims and values, the company is involved in animal testing endangering the lives of animals for profits. Cases like these, raises crucial doubts regarding the feasibility of co-existence of CSR and profit motive. Can companies successfully pull off the dual responsibilities – that of social and environmental commitment and at the same time ensuring the commercial viability of its profit oriented business? Is social and environmental commitment a legitimate corporate agenda or just a clever ploy to achieve the basic goal – that of profit maximization? Analysis and Discussion The question surrounding the case discussed above, is crucial albeit complicated at the same time. The legitimacy of the company’s core values, against the background of the strong accusations of hypocrisy, is jeopardized. The integrity of a company and its management policies is central to any company and the society is a vital component of a business, hence, the actions, policies and strategies of a business in the society, has direct bearing on its reputation and credibility in the market. The decisions taken by the management can thus lead to serious consequences, often forcing the public to boycott the products, create distrust regarding the company or its goals and values and thus having a significant impact on its profitability and competitive positioning in the market. As in the case of The Body Shop, the association of the company with L’Oreal which has a reputation of supporting animal testing, might attract strong public opposition, particularly from the animal rights activist, and leading to boycott of the product, at the same time, destroying the company’s clean green image in the process. According to Zsolnai (2002) business is a social activity and Corporate social responsibility must not be assumed as just a part of the company’s corporate agenda and used a tool for attracting customers; but be used and perceived as a powerful instrument which has the potential of improving the brand image and change public perception (Pp. 173 - 190). Conclusion The case of The Body Shop reeks of social irresponsibility, and can be used as a lesson by other companies, with similar social and environmental agendas. For companies to remain true to their ethical and moral values, it is of utmost significance to restructure their corporate agendas and align their social and environmental causes in accordance with the same, to avoid clash of ideologies. The companies must abstain from green washing their products and promoting them as ‘completely natural’, but rather market their products on the basis of their true value. There must be absolute transparency in its activities, since business is done in the public eye, and the public has the power to accept or reject a product. Controversies which bring to light, the company’s ethical and moral misadventures, defies the company’s stance to project itself as a socially and environmentally responsible organization. At the end of the day, the consumers are interested in investing in a company with sound ethical values, and green washing as a corporate agenda, would spell doom for the companies. References: Dennis, B., Neck, Ch. P. and Goldsby, M. (1998). Body Shop International: an exploration of corporate social responsibility, Management Decision Journal, Vol.36, No.10, Pp. 649-653. Entine, J. (1995). The Body Shop: truth and consequences, Drug & Cosmetic Industry, Vol. 156, p54-59. Cited in: Dennis, B., Neck, Ch. P. and Goldsby, M. (1998). Body Shop International: an exploration of corporate social responsibility, Management Decision Journal, Vol.36, No.10, Pp. 649-653. Kitchen, P.J. and Schultz, D.E. (2001). Raising the Corporate Umbrella: Corporate communications in the 21st century, Palgrave Publishers Ltd. Rosenthal, T. (1994). Soft soap philosophy, Business First of Buffalo, Vol. 10, No. 42, Pp 15-17. The Body Shop (2011). Our Company [Online] Available at: http://www.thebodyshop-usa.com/about-us/aboutus_company.aspx [Accessed: March 22, 2011] The Guardian (2007). Anita the trailblazer [Online] Available at: http://www.guardian.co.uk/commentisfree/2007/sep/11/anitathetrailblazer [Accessed: March 22, 2011] Varey, R.J. (1996). The future of marketing, The Business Studies Magazine, Vol.8. No.3, Pp. 2-4. Cited in: Kitchen, P.J. and Schultz, D.E. (2001). Raising the Corporate Umbrella: Corporate communications in the 21st century, London, Palgrave Publishers Ltd Zsolanai, L. (2002). New Agenda for Business Ethics, in: Zsolnai, L. (ed.) Ethics in the Economy, Handbook of Business Ethics, Peter Lang Academic Pushlisher, Oxford and Bern, Pp. 1-7. Cited in: Tencati, A., Perrini, F. and Pogutz, S. (2004). New Tools to Foster Corporate Socially Responsible Behaviour, Journal of Business Ethics, Vol. 53. Read More