Roles of Organizational Behaviour, Human Resource Practices at the Body Shop - Case Study Example

The Body Shop Name Name of Institution The Body Shop Introduction The Body Shop is a business that operates in the global cosmetic industry. The business has been a leader in a number of areas and continues to be marginally successful in over 60 markets. This paper will analyse the history of the business and evaluate its importance to the Australian and international business landscape. An in-depth discussion on sustainability and the identification of sustainable strategies at The Body Shop will follow. The paper will then move to the roles of organizational behaviour, human resource practices, international business, technology management, and entrepreneurship and innovation. The analysis will conclude with three future strategies that the management should engage in based on the overall analysis of the organization. Background An analysis of The Body Shop should begin with an examination of the motivation behind the founding of the business. The business was founded in 1976 by Anita Roddick with the aim of ensuring financial stability for her family. She had been engaged in running a restaurant, but she needed more income to sustain the family in the absence of her husband. The Body Shop was founded as a small cosmetic shop in Brighton, England, and customers were expected to recycle the packaging for the 25 initial products that the business sold (The Body Shop 2015). The business ensured that its products were made from natural ingredients that were sourced in an ethical manner. Such policies can be attributed to Anita Roddick’s travels around where she noted that women would utilize natural and cheaper beauty products with satisfactory results (“Anita Roddick” 2008). The success of the business can be attributed to timing. The firm’s adoption of recycling and ethical business practices coincided with increased environmental awareness in Europe. For this reason, the firm’s usage of environmentally friendly ingredients and cheap packaging proved to be a marketing success (Jones 2010). The company embraced the franchising approach, and the first new store was opened in Brussels in 1978. According to Jones (2010), the firm opened additional stores in Stockholm and Brussels in 1979, and by 1982, the expansion was occurring at the rate of two new stores per month. The business’ turnover approached $7 million in 1984, and this came from a total of 45 outlets. The Body Shop became a publicly traded firm in 1985, and it continued to expand to the point that it operates more than 2500 stores in 60 markets. It is worth mentioning that the firm has retained its dedication to natural and ethical beauty despite its tremendous growth. A firm that has 2500 stores in over 60 countries is bound to have a considerable impact on the global business landscape. To begin with, the business procures natural products from all corners of the world to meet the global demand. This affects the balance of trade of many nations and provides a steady income to 25,000 people around the world. The firm is also a direct employer of thousands of workers, and it contributes a lot to governments through various forms of taxation. Ethical business practices is the area in which The Body Shop has had the most profound impact. The company ushered the ‘green’ movement and it convinced other business to adopt policies that would be friendly to the environment. A key example is the changes instituted at Shell’s Nigerian businesses where policies that ravaged the environment were abandoned (The Body Shop 2015). When it comes to Australia, The Body Shop began operations in 1983, and it owns 90 stores across the country (The Body Shop Australia 2015a). The firm has had a big impact on the Australian Business Environment owing to policies such as prioritizing ethical and environmental responsibility over profits. Sustainability Practices Sustainability is a broad concept that is often mentioned by businesses with many of them defining it as policies that can be leveraged to eliminate or reduce waste. However, this is an incomplete definition of the concept of sustainability. According to Caroll and Buchholtz (2014, p. 432), a sustainable business is one that meets present needs without compromising the ability of future generations to meet their needs. In this case, sustainability ensures that present and future generations will have good quality of life in terms of social justice, economic prosperity, and a viable ecosystem (Caroll & Buchholtz 2014, p. 432). This broad definition confirms that minimizing waste does not describe sustainability as it does not prevent the processes that create wasteful products. Therefore, a sustainable business is one which adopts the broader definition of sustainability. An evaluation of The Body Shop shows that it is a sustainable business as it meets that broader definition of sustainability. The firm is committed to minimizing the waste that might come from its products. First, it ensures that its cosmetic products have minimal packaging as these packages are likely to pollute the environment. This strategy is backed up by the company’s usage of recycled plastic for a significant portion of the packages. According to The Body Shop, this policy prevents the manufacture of millions of new plastic containers each year. It is evident that millions of plastic containers will still end up in the hand of the consumer despite these policies. The business encourages its consumers to reuse or recycle these plastic containers as reusing or recycling is easy to do. The dedication to reducing waste goes beyond the packaging of the cosmetic products. The business has refitted all its stores in Australia with LED lighting to reduce electricity consumption. This simple program signifies the firm’s overall dedication to eliminating wastage in all aspects of its business to reach the goal of having a viable ecosystem. By definition, social justice is one of the targets of sustainable programs. According to Kamali (2015, p. 11), social justice defines a state of affairs where personal characteristics determine the benefits and burdens given to each individual. This implies that each person gets equal opportunities that can be exploited to realize benefits. The Body Shop’s Community Fair Trade program is an example of the firm’s dedication to social justice. An understanding of fair trade is critical in order to understand how The Body Shop is committed to social justice. Raynolds, Murray, and Wilkinson (2007, p. 15) argue that fair trade is a policy that seeks to challenge the historical inequality in international trade. It is an acceptable fact that international trade has been a tool for the exploitation of some of the world’s poorest communities. For instance, small-scale farmers have had to compete with large industrial farms that benefit from economies of scale, subsidies, and access to technology (Moberg 2010, p. 3). Fair trade seeks to eliminate exploitation in trade by ensuring that farmers across the globe get better prices and secure markets for their products. This improves their livelihoods and ensures that the next generations grow up with a better standard of living. As stated, The Body Shop’s Community Fair Trade program has allowed the business to work towards ensuring social justice. It is worth mentioning that fair trade had been widely applied to the food market, with coffee being one of the prime targets. The Body Shop introduced fair trade into the beauty industry in 1987 when it began working with some marginalized communities. The firm estimates that its fair trade program results in meaningful benefits and economic prosperity for more than 300,000 people (The Body Shop Australia 2015b). The presence of an Ethical Trading Initiative also facilitates the presence of social justice wherever the firm does business. Suppliers have to be thoroughly vetted with a view to ensuring that human rights are respected and that the firm does not source products from suppliers who use child labour (The Body Shop Australia 2015b). It is clear that such policies allow The Body Shop to meet its present needs without affecting the ability of future generations to meet their needs. As much as The Body Shop is committed to sustainable policies, its core focus is on meeting the demands of its shareholders. This limits the amount of sustainability-related programs that the organization can engage in. The firm has solved this challenge by partnering with other organizations whose mandates are solely tied to sustainability. When it comes to Australia, The Body Shop has partnered with the Australian Conservation Foundation, a non-governmental institution that works towards ecological sustainability (ACF 2015). The firm has also recognized that it needs to monitor its impact on the climate. To this end, it has partnered with Climate Friendly, an organization that has the expertise to create carbon management solutions for business that seek a viable ecosystem (The Body Shop Australia 2015b) (Climate Friendly 2015). Role of Organizational Behaviour at the Company Griffin & Moorhead (2011, p. 4) define organizational behaviour as the study of human behaviour in the organizational contexts and the linkage between human behaviour and organizational performance. In the case of The Body Shop, organizational behaviour plays a pivotal role. The firm has employed a team based culture that ensures that growth of the individuals as well as the business (Employment). According to Pettinger (2013), group ideology plays a major role at The Body Shop as individuals are drawn towards the firm’s unique ideology on sustainability. Staff are also motivated by competitive salaries that are 20% higher than industry averages. Private health insurance, staff discounts, and personal development also provide motivation for the firm’s workforce. When it comes to organizational structure, the firm utilizes a divisional structure that is based on geographical regions (Mills et al. 2006, p. 467). For instance, the Australian division is tasked with marketing beauty products to the nation's market that is considerably different to the market in the nearby South East Asia. Finally, the organizational culture of the Body Shop came under significant pressure as a result of L’Oreal’s acquisition of the firm in 2006 (Bones 2006). However, the evaluation of current sustainability practices at The Body Shop indicates that it has managed to retain its unique organizational culture despite reporting to the larger multinational firm. Human Resource Management Practices An evaluation of The Body Shop’s human resource practices shows that the firm is a leader in the area. The firm has always sought to be responsible for well-being of the environment and the people in its supply chain. The organization has taken the same approach in its HR policies as it seeks to ensure the well-being of its workforce. As stated, the business rewards its workforce with competitive salaries and other additional benefits like access to learning and development programs. In addition to these rewards, the firm has adopted innovative HR policies across its history. Deckop (2006, p. 13) notes that the Body Shop was one of the first multinational organizations to implement a program where employees were given the means to volunteer and contribute to community service. The firm also implemented an outplacement HR program that was designed to help 300 employees to cope with the stress that comes with the loss of employment. This program was created as a means of meeting The Body Shop’s social responsibility values (Dwivedi 2009, p. 175). The HR department also participates in the empowering of workers, with an example being The Body Shop’s decision to let employees decide on the staff that will get employed at their branch (Stredwick 2013, p. 291). It is clear that the human resource departments at The Body Shop place special emphasis on being socially responsible in addition to the usual roles of human resource management Role of International Business The Body Shop is a multinational firm that was established in England, and it has retail stores across the globe. The firm is presently owned by the L’Oreal Group, which is a French multinational firm that specializes in beauty products. It is clear that international business plays a key role in the business. The firm sources natural materials from all regions of the world. This implies that The Body Shop has to follow local laws and regulations that are related to exports. As stated, the firm has implemented a fair trade program to satisfy the individuals and small scale businesses in its supply chain. International operations have also had an impact on the way the business markets itself. Demographic and cultural variations across the world mean that the firm caters to diverse need. This has necessitated the production of thousands of products to meet the beauty requirements of a global population. Additionally, the firm has adopted a divisional structure to meet the different marketing needs in the different geographic regions. Doing business on the global stage has also impacted the human resource function in the organization. The business recruits talented individuals regardless of their nationalities, cultures, or religions. The firm has also had to develop a team-based culture that can foster success regardless of the differences in the workforce. Role of Technology Management Technology management concerns the use of management skills to ensure that technology is utilized in a proper manner. Sustainability is at the core of The Body Shop’s values, meaning that the proper use of technology would be in furthering sustainable and ethical business. The firm has utilized technology in order to mitigate the demand it is increasingly placing on the environment. For example, it has employed biomass technology to power a processing plant in Brazil. As stated, the firm has employed a specialized firm to monitor its carbon footprint in Australia (Climate Friendly 2015). Such policies go towards ensuring that the business meets the values that have made it so successful. Entrepreneurship and Innovation Entrepreneurship and innovation are two terms that are widely used in business circles. However, there has been considerable debate on the definitions of the two terms. For instance, entrepreneurs were once described as individuals who purchased goods at certain prices with the aim of selling them at uncertain prices. Another definition holds entrepreneurs as those who create new organizations (Baum, Frese & Baron 2014, p. 6). The current definition of entrepreneurship describes it as the progression that involves the discovery, appraisal, and exploitation of opportunities to arrive at new products or services (Baum, Frese & Baron 2014, p. 6). All of these definitions apply to The Body Shop. Anita Roddick had found herself in a situation where she was touring Europe, Africa, and South America. She had been previously employed by reputable institutions such as the United Nations and the International Herald Tribune, but she had a desire for adventure. She opened a hotel on her return to England in what can be considered as her entry into entrepreneurship (“Anita Roddick” 2008). Roddick realized that the income from the hotel would not be enough to sustain her needs. She opened the first Body Shop store with a view to selling some of the natural cosmetic products that she had witnessed during her travels (“Anita Roddick” 2008). This was the real start of the entrepreneurship at The Body Shop as new products were developed, appraised, and introduced into various European markets. Innovation played a key part during the initial years of the business. Innovation defines the process of turning fresh ideas into new services or products that will satisfy the demands of consumers (Keathley et al. 2013, p. 3). In the case of The Body Shop, encouraging customers to recycle containers and get refills can be considered to be an innovation as it signalled the firm’s dedication to protecting the environment (“Anita Roddick” 2008). The entire firm’s decision to promote sustainability can also be considered as an innovation as it was an idea that created products that customers valued. Additionally, the focus on sustainability is partly responsible for the growth from a single store to a multinational corporation. Further innovation in other areas of the business allowed it to remain relevant to this date. Recommendations The evaluation of The Body Shop has shown that the founder played a vital role in the success of the firm. Her commitment to social justice, a viable ecosystem, and economic prosperity resonated with the 1980’s generation. While the business continues to be successful, the shift in generations means that the company will need to change some of its policies. Marketing is one such area whereby the firm needs to focus on the younger segment of the society that is beginning to use beauty products. Public relations has been the preferred component of the firm’s marketing strategies. It is recommended that social media and the internet be used to market and differentiate The Body Shop brand to ensure that the business remains relevant through the acquisition of a new generation of clients. The Body Shop grew at a tremendous pace in its initial years despite minimal resources. The present ownership structure under L’Oreal means that the firm has access to considerable financial resources. The Body Shop should adopt an expansion strategy in order to gain a competitive advantage over other cosmetic brands that have adopted a similar focus on sustainability and banning animal testing. The focus should be on emerging markets in India, China, and some of the more developed markets in Africa. The firm has confirmed that it can work in multiple markets, and these emerging markets provide a challenge that is likely to provide huge rewards. Additionally, expansion into these markets should allow the business to realize its goals of promoting social justice as the increased demand for products will lead to the expansion of the community fair trade program. For a retail business that targets beauty conscious individuals who are between the ages of 20 and 40, The Body Shop has a small number of stores. This leads to inconvenience for the consumers who have to spend time waiting to be served. Moreover, the use of a franchise system means that the business has limited control of certain aspects of operations. Technology can provide a solution to these issues. The developed markets in the world have embraced online stores and mobile apps are taking a bigger share of trade. It is recommended that The Body Shop expand its online retail presence to better serve its consumers. This can be through partnerships with established firms that have storage space in order to minimize expenses. The strategy will complement the expansion into emerging markets where physical stores will be the preferred option. Conclusion To summarise, The Body Shop was established to give financial security to Anita Roddick’s family. However, the uniqueness of the products and the values adopted by the firm allowed the business to expand beyond the expectations of the owners. This management analysis has shown that the firm has retained its unique identity in the global and Australian business contexts. The firm continues to prioritize sustainability, a policy that is aimed at ensuring social justice, economic prosperity, and a viable ecosystem for current and future generations. The paper has shown that the firm has always embraced innovative practices in areas like human resource management and organizational culture. These practices have helped the firm retain its identity despite the purchase by L’Oreal. The paper has concluded that management needs to embrace marketing programs to attract new clients. It is also recommended that the business opens new stores in emerging markets as they hold considerable promise. Finally, the business is approaching maturity in advanced markets like the one in Australia. The firm should leverage mobile technology to remain competitive in these markets. References About US, 2015a, The Body Shop Australia. 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