$pagename = “body-shop-testing-responsibility”;
= “Body Shop Testing Responsibility Essay | Business”;
$description =”Business Essay – Socially Responsible Action- The Body Shop”;
$subject = “Business”;
Corporate Social responsibility has been a hot topic for business for the last 15 years. The initial revolution started in the 1960’s with the protesting of corporations taking advantage of 3rd world nations as well as the actions to stop the testing of chemicals on animals. This was fairly ineffective until the world’s population entered the information age of the early 1990’s and organisations could no longer hide their actions from the populace. The result of this has been a world outcry for socially responsible actions within corporations as the world’s consumer body is now concerned. This makes being socially responsible not only moral but profitable as well. Few companies have acted as responsibly in the global market as the Body Shop. Since 1976, Anita Roddick has built her entire organisation around socially responsible business and is considered a movement leader. Her company has made many ground breaking policy changes over the last thirty years in which other companies continue to try and emulate.
Corporate Social Responsibility Stakeholder Theory
The most widely accepted theory called the Stakeholder Theory that takes the concept of social responsibility to the masses. Phillips (2003) believes that an organisation needs to map whoever their actions affect from employees, stockholders, consumers, suppliers, local community and the environment and it is only at this point where being truly socially responsible can be found. Conceptually you want to use a Rawlsian theory for development in that you place yourself in everyone’s shoes that you come in contact with and determine from their view point if you could act better on their behalf.
A more practical approach to this theory is the concept of triple bottom line accounting and social reporting. This takes all the stakeholders, divides them into sub groups and then analyses their impact to a measurable indicator. Although many impacts cannot be given a quantitative figure, it can still show weaknesses in current policies so amendments can be made.
Triple bottom line accounting is the reporting method where the basis of a company’s profits is no longer measured by its economic performance but also its environmental and social performance as well. Environmental impacts can normally be given a number far easier then social impacts so many organisation world wide are trying to develop a form of social reporting which can be used to standardise the way a company measures their social responsibility (Hacket, 2001).
As many of these concepts are still being developed, reporting a socially responsible business portfolio for The Body Shop will require using a widely accepted stakeholder list. The World Council for Sustainable Development’s 2004 report has given one of the most comprehensive guides to reporting on these standards, which will be used in this report. The following is a generalised list to measure performance standards that will be described and explained in more detail from a wide range of experts during the analysis to ensure a uniform ideal of social responsibility is used.
- Human Rights
- Employee Rights
- Environmental Protection
- Community Involvement
- Supplier Relations
After compiling the performance indicators, the final critique will use a basic triple bottom line accounting audit as socially responsible business performance is best judged when placed beside economic performance. The reasons for this is a company who continues to under perform from over involvement in being socially responsible is only temporarily doing good as eventually their employees and local community will suffer from their failure.
Social Responsibility Portfolio for The Body Shop inc.
Human Rights
“All companies have a direct responsibility to respect human rights in their own operations. Their employees and other people with whom they work are entitled to rights such as freedom from discrimination, the right to life and security, freedom from slavery, freedom of association, including the right to form trade unions, and fair working conditions” (Haven, pg17, 1998)
Considering what Haven has said in regards to this, it is important for all organisations to check their operations to ensure any business being done outside their actual market should be audited to ensure the high standards are being upheld for humanity. Any company actions that encourages exploitation of developing nations including sweat shops, child labour, unfair trade practices or even the backing of governments of foreign nations who promote exploitation can be seen as a large negative to the movement.
Company Actions
A long-standing advocate of human rights The Body Shop has consistently used their influence to promote a better world culture. Their initial campaign in the late 1980’s was a joint effort with Amnesty international where they advocated for corporation involvement to use their purchasing power for protecting developing nations peoples. Within this Body Shop has enabled many actions to occur over the years.
1990- started an awareness and support program to protect the lifestyles of the Brazilian tribesmen whose forests and livelihoods have been stripped by logging.
1991- Body Shop conceptualised and financed a newspaper that was written by and sold by homeless people in New York. Called the Big Issue, it continues to this day as a way that homeless people in many North American cities to make money to get off of government aid.
1992-Current- Body Shop is an advocate against the exploitation of people in developing countries. On several occasions over the years they have made public the actions of large corporations who were using struggling economies for gain. In 1992 Body Shop publicly condemned the actions of the Nigerian government for exploiting its people and brought to light the Shell’s corporations involvement in this from using cheap labour for oil production. This battle with the Nigerian government has continued against their military regime and during 1995 even managed with the help of Amnesty International to free democratic promoters called the Ogoni 19.
1992- Current- A busy year for Body Shop, Anita Roddick started the Children on the Edge foundation (COTE) which is used to support orphanages in 3rd world nations or nations in war. Initial focus on Romania, it currently has worldwide support and along with Body Shop funding it is almost self sufficient as foreign aid recognises their efforts. Current actions (1999-current) in Kosovo include the funding of local builders to help rebuild schools and housing after the Serbian war.
2000- Body Shop instituted the human’s right award that focuses on people who help eliminate child labour.
Self Esteem Movement–
1996- Anita Roddick along with Body Shop started a campaign to boost self-esteem in women around the world by promoting regular sized women and healthy living over weight loss.
Employee Rights
Developing good human resource practises is positive for the performance of any company. To be socially responsible you need to try and increase the quality of life for each and every member of your team (Newell, H and Scarbrough, H. 2004).
Company Actions
1980-1990- The body shop offers wages that are above the industry average by 5-7% depending on nation (Body Shop Investors Report, 1993). Body Shop also offers full medical and dental plans to their employees as regulated by local legislation. Overall earnings is still near poverty levels as retail is low income employment.
1990-Current- Body Shop promotes internal promotion from within the organisation and the ability to feel a large amount of self worth from being with an organisation that strives to increase the world’s standard of living
2001- In an interview with BBC1 Anita Roddick said “The Company does not formally recognise any Trade Union as representing any of our employees, and has no plans to do so”. This enforces a prior argument that Body Shop has not been socially responsible internally and actually has many human resources problems (Newell and Scarbrough, 2004).
Environmental Protection
Conceptually, the idea for promoting environmental protection through social responsibility today is we are ensuring that the future will have the ability to live in an environment that can support our social needs (Hackett, 2001) tomorrow.
Company Actions
1986-Current- Save the World Campaign- Starting in 1986 when The Body Shop developed an oil which replaced Sperm Whale oil usage in beauty products, it has now become the centre of attention for many of their actions.
1992- The Body Shop managed to produce an environmental policy book called the “Green Book” which outlined actions that all companies could do to support sustainability.
1993- The Body Shop invested in the wind energy firm Bryn Titli wind farm to support eco friendly energy.
1995- Started the “Would they Do it in Paris” campaign which protested the French testing of nuclear weapons in coral reefs.
2000- The Body Shop started one of the largest environmental actions by a company by changing 100 of their UK stores to renewable energy sources supplied by Ecotricity.
1986- Current- The Body Shop ensures that none of their products are tested on animals and has been an advocate against animal testing since 1986. Actions they have supported have been the ban of testing in the UK which succeeded in 1998 and the recent success in 2002 where Europe banned animal testing of cosmetics.
Community Involvement
A firms takes much from it’s surroundings and rarely gives back. Consumers pump money into a corporation who ships their money to a head quarters halfway across the world never to be seen again. Being social responsible requires a company not just to support developing nations but also to actively invest in the surrounding community through local charities, youth programs or educational awareness (Hackett, 2001). Companies who support their consumers will establish strong brand loyalty and experience increase sales on the future as people appreciate companies giving back.
Company Actions
1976-Current- The Body Shops homepage states that “We are proud of our employees’ enthusiastic involvement in their local communities and actively encourage their participation at the same time as considering the changing expectations of society and the growing environmental and ethical concerns” (http://www.thebodyshopinternational.com/web/tbsgl/values_com.jsp, 2004)
With this it is hard to say if as an international organisation with multiple shop owners that it is even possible to determine if Body Shop owners actually support local communities any more then other organisation. Even with this it is still positive to see a company openly stating their expectations for franchise owners around the world.
Supplier Relations
The concept of supplier relations is used to create a support structure in which a company encourages others to adopt their socially responsible actions. A company who practices this social responsibility theory will only do business with suppliers who operate responsibly. Within this, the acting company also is required to offer fair trade prices to the supplier and to never use their buying power to take advantage of the partner organisation. This is established to protect developing nation organisation by promoting economic growth.
Company Actions
Late 1980’s Community Trade Program- This program is used to institute policies in which as much raw materials as possible for The Body Shop are purchased at fair prices from suppliers who are in small underdeveloped communities around the world. The idea is to invest money into these communities to help them develop in the long run. Communities helped include African tribesmen in Zambia, Nicaraguan sesame farmers, and even Guatamalen craftsmen.
Major Supplier Relations- The Body Shop will hault business with any organisation who exploits a developing nation, breaks any environmental law or acts in any unethical business practice. Within this The Body Shop will also give extra business to suppliers which are more socially responsible or take actions to increase their socially responsibility policies. Brooks Pharmaceuticals for example, who is a major supplier in the US has lost contracts with the Body Shop for failing to maintain supplier standards in concern to fair trade prices in Brazil (Yahoo Financial, 2001).
Critical Analysis
Many would argue that the very existence of a profit orientated company cannot result in them being Socially Responsible. It very well could be that the actions that The Body Shop takes actually is a marketing ploy to gain market share in the increasingly socially concerned consumer market. The end argument then is does the results justify the motivation.
A Triple Bottom Line analysis of The Body Shop shows that on economic side sales were down 4% in 2004 but profits rose almost 40% from £20.4 million to £28.5 million (Body Shop investor relations report, 2004). This coupled with their social and environmental policies would show that The Body Shop operated as a successful socially responsible company last year. Does showing a gain in shareholder value and the implementation of social and environmental policies really mean that a company is socially responsible?
A corporation is just an entity who needs to give value to the shareholders. Knowing this, then the faceless shareholders are the very people who are gaining from being socially responsible. It is all just a matter of education to properly frame value they are receiving. Acting socially responsible protects the environment that ensures the shareholders can continue to maintain their current standard of living. The developing of foreign economies encourages global economic growth in the long run which will also result in shareholder gain from increase revenue from the new consumer who no doubt will be very brand loyal to Body Shop. The end result is no matter the motivation; The Body Shop is being socially responsible and improving society on a whole.
Minor critiques against Body Shop are that they do not offer good enough employment packages or deal properly with labour unions. They also use chemicals in their products which the suppliers may not break any environmental laws yet still cause harm to the environment (Hacket, 2001. The development of these policies is ongoing and comparatively Body Shop performs far better then the majority of the world organisations.
As Body Shop is a corporation, they need to and do act as responsibly as they can while maintaining competitive advantage. An organisation who commits fully to being socially responsible but also loses money is of little use to anyone and could be replaced by a company who is far worse. As with the world on a whole, this is a new process that is going to have situations where it is near impossible to be completely socially responsible but as long as companies continue to move in the direction that the Body Shop has then eventually the global corporate body will be regulated into socially responsible business.
Bibliography
- Haven, M 1998. Human Rights Principles For Companies. Amnesty International. January 1998 (AI Index: ACT 70/01/98)
- Phillips R. 2003. Stakeholder Theory and Organizational Ethics. San Francisco: Berrett-Koehler.
- Newell, H and Scarbrough, H. 2004. Understanding Human Resource Management- Corporate Analysis. New York. Palgrave Macmillan
- Hacket, Steven. 2001 2nd edition. Environmental and Natural Resources Economics: Theory, Policy, and the Sustainable Society. New York; Bendall Books
- 2004 Investor Relations Report http://www.thebodyshopinternational.com/epages/wizard/images/CLIENT81083219594137_lg.pdf March 30 2004, Accessed 27 March 2005
- Body Shop Homepage http://www.thebodyshopinternational.com/web/tbsgl/index.jsp 27 March 2005, Accessed 27 March 2005
- Yahoo Financial -Body Shop http://finance.yahoo.com/search?type=&s=body+shop&r= 28 March 2005, Accessed 28 March 2005