Title Page: Identification of the corporate social responsibility in business environmentCase study: The Body Shop
OUTLINE
Overview and background of "The body shop"
- Entrepreneur Anita Roddick founded The Body Shop in 1976, by opening a small shop in Brighton where she established a position in the market for nature-based beauty products with minimum packing.
- The business rapidly grew from one small shop in Brighton on the South Coast of England with only approximately 25 hand-mixed products on sale to a universal network of more than 1,500 shops. Franchising allowed for quick growth and expansion of the enterprise on an international level as hundreds of industrialists from all over the world were inspired by Anita Roddick'sidea.
- According to her a business should not be all about making profits, rather it should be environmental friendly. According to these principles she established a position in the market for beauty products which were environment friendly in nature and required minimal packing.
CSR - Today- Definition
Companies in today's competitive world are profit making organizations, and in order to be make large amounts of profit they employ antisocial practices which adversely affect the environment. Employment of social, economic and legal practices employed by an operating business which negatively affect the nature, people and animals. For e.g.exploiting labor to work extra hours and pay less, testing beauty products on animals, wasting natural resources, cutting trees which leads to deforestation.
CSR incorporates the legal, economic, ethical and humanitarian expectations from a company by the society.
Developments in CSR include movements which give people power to collectively protest against the unethical and antisocial practices by the company. These include civil rights movement and labor movement.
CSR strategies employed by "The Body Shop"i) Corporate philosophy (Values and issues)
-Defending human rights and protecting the planet.
-For instance the company is strictly againstanimal testing
- Supporting human rights organizations like the Red Cross
-Fair trade
-Selecting natural ingredients and minimal packaging for the products
ii) Products and processesCommunity trade: people of poor regions can trade their products and in this manner they will be utilized and the people can make money out of the trade and meet their basic needs and requirements. This way The Body Shop supports environmental groups, gets involved in socially responsible actions so people living in poor regions can make their living.
Legal responsibility: It is an essential policy of The Body Shop that all workers conform to the laws and regulations pertinent to the business in all they countries they run in, and that every worker in the company works with values and morals of honesty in business.
Supporting environmental and social organizations like GREEPEACE, UNICEF, UNEP (the United Nations Environmental Program.
The Body Shop follows the rules provided by the European Union Eco-Management and Audit Scheme, the ecological arm of the EU. Locally, the company has engrossed much of its environmental strategies in using green energy sources and controlling water usage.
iii) Advertisements are unique and promote socially positive messages-"Fight for a better world"
-"Love your body"
-Advertising products through web and store based surveys
OverviewIn Chapter 1 an overview of the topic will briefly demonstrate the background of the corporate social responsibility in business environment in general and the body shop in particular and its overall impact on the business industry and the body shop. The research aims and objectives and ethical concern will also be discussed at the end of this Chapter.
Chapter 2 will contain different scenarios of the corporate social responsibility in business environment and studies of experts related to the body shop. In addition to this, print and electronic media coverage on CSR linking it with the body shop and their point of view from different angles will also come under discussion.
Chapters 3 will discuss the adopted research methodologies in this study. Simultaneously, there will be further discussion on these methods, designs and progress. Apart from these, the difficulties that faced arise in the study will also be described.
Chapter 4 of this study examines the influence of this CSR and their aftermath business environment and identifies the extent of this impact on consumers.
Chapter 5 of this study brings together the important points of discussions and draft recommendation followed by conclusion.
Research Aims and ObjectivesThe aim of this research study is to identify the corporate social responsibility in the business environment as well as its importance and influence in the cosmetic or the beauty industry, including its journey in the past few decades.
The study will also aim to evaluate corporate social responsibility with the customers observation, analyze company's environmental policies, investigate the impact of the company's policies on the customers and their clients retention through corporate social responsibility measures being taken, delinquencies, observe the difference in the purchasing pattern of the customers with the environmental policies, the role of business and the body shop and the future positioning of the corporate social responsibility as a whole and what measures can be taken to mitigate the overall risk.
This research aims also to find out the risk and issues faced by the customers while purchasing the products and other factors that are interlinked. Additionally,
different strategies which are currently utilized to retain customers by different organizations and what policies are being adopted to improve the overall corporate social responsibility among the companies in the cosmetic industry.
Table of ContentsIntroduction 8
2.3 Strategic Corporate Social Responsibility 19
2.4 Criticism of Corporate Social Responsibility 20
2.5 The Shareholder Approach 21
2.6 Benefits of implementation of CSR to companies 22
2.7 CSR initiatives undertaken by The Body Shop: 25
2.8 Methodology 28
2.9 Conclusion 28
3. Methodology 30
3.0.1 Interviews 33
3.0.2 Questionnaires 33
3.0.3 Observation 34
3.0.4 Sampling 34
3.1 Aims and Objectives 35
3.2 Research Questions 36
3.3 Ethical Concerns 37
How to Measure CSR 38
3.4 Limitations 39
Chapter 4: A discussion on the Identification of the corporate social responsibility 41
4.1 Findings of the questionnaire: 41
4.2 Research Ethics: 45
4.3 Triangulation: 46
4.4 Limitations of the study 49
4.5 Findings of the interview: 50
Chapter 5. Conclusion 55
Recommendations: 58
ReferencesIntroductionCorporate Social Responsibility is a concept that applies to all operating organizations through which the companies take into consideration the impact on the environment caused by their businessoperations. CSR is basically a way through which the company integrates social and moral responsibility in its economic goals. Economic goals refer to making profits andmeeting the expectations of shareholders and stakeholders. Corporate social responsibility (CSR) can be considered a plannedconcept of business management and on the other hand a concept of charitable companies which merely serve the purpose of making positive contributions to society socially and economically such as poverty reduction. For many companies CDR might be a planned business strategy for increasing the purchasing power for their product and improving the reputation of the company in the market(Freeman and Hasnaoui, 2010).
Primary issues CSR deals with areenvironmental problems, maintaining labor standards, ensuring proper work conditions, maintaining relations with stakeholders, employee and community relations, ensuring that the company uses anti-corruption measures and does not in any way undermine thehuman rights. A well planned CSR concept will not only benefit the society but also bring many advantages to the company as compared to its competitors. It can easily lead to greater access to capital and markets, increased sales and profits, operational cost savings, greater productivity, better quality, efficient and loyal work force, improved company reputation, greater customer loyalty, better decision making and risk management processes(nibusinessinfo.co.uk, 2015).
1. Research questionThis paper aims to identify the concepts of corporate social responsibility applied in business environment. The research question is directed to The Body shop and the paper aims to identify CSR implemented by The Body Shop inlegal, social and political arenas. Moreover the paper discusses the ideas of known researchers on the topic of CSR and serves to answer the reason for its increasing popularity and implementation by companies. Much of the force of The Body Shop stems from the moral values and beliefs of the owner. She believes that a business is not just a profit making but should also contribute positively towards the environment. The company considers it has a responsibility to be ethical and honest in its business operations.
1.1 The Body Shop: BackgroundEntrepreneur Anita Roddick founded The Body Shop in 1976, by opening a small shop in Brighton where she established a position in the market for nature-based beauty products with minimum packing. The business rapidly grew from one small shop in Brighton on the South Coast of England with only approximately 25 hand-mixed products on sale to a universal network of more than 1,500 shops. Franchising allowed for quick growth and expansion of the enterprise on an international level as hundreds of industrialists from all over the world were inspired by Anita Roddick's idea. Roddick's ideaembraces various aspects of the world community. It assures that The Body Shop's achievementis contributed to the harmonious relationship it maintains with its stakeholders and staff, franchisees all over the world, customers, suppliers, shareholders and NGOs. The company has actively led many movements and protests for social purposes for e.g. Protest against testing cosmetic products on animals(Roddick, 2000).
1.2 CSR strategies implemented by The Body ShopThe Body Shop is widely known and appreciated for its environment friendly nature and is considered as an epitome of social and environmental responsibility. The corporate social responsibility strategies adopted by the business affirms that it is extremely socially responsible in its operations. The Body Shop strongly supports environmental organizations and enthusiastically participates in movements and drives against human right abuses. Moreover by supporting and actively participating in community trade it allows the disadvantaged communities in the poor regions to utilize their resources so they can fulfill their basic needs.
1.3 Values report of The Body ShopThe values are briefly mentioned in the Values Report of the company. The In the Values report of the company all the roles it plays in the legal, social and political arenas are mentioned, in addition it also mentions thepotential actions for the future. This report is issued by the company twice or thrice in a year, the last report it published was in 2011. This report was commended as innovative and revolutionary in nature by UNEP (the United Nations Environmental Programme), and it received the organization'shighest decree award for social and environmental reporting. The Values Report is has three sections, which summarize the elementarystance of the company on the three areas; the environmental audit, the animal protection audit and the social audit. The following are the most important values mentioned in the report which are integral to the company, defending human rights, encouraging community trade andbanning cosmetic testing on animals.The report briefs how the company incorporates these values in the daily operations of the company to serve good to society, proving to be a business with ethics.
1.4 Social campaigning by The Body ShopThe Body Shop was regarded as an innovator and developer in in modern corporate social responsibility (CSR) actions. The company was also intensely linked with Roddick's social engagement. The Body Shop is surely not a typical profit making beauty brand, rather it promotes social responsibility by going past the traditional ideas of corporate social responsibility and pioneering a path for natural and ethical beauty brands. This is done by being actively involved in trailblazingdrives,which are revolutionary in nature and have long term effects. One of the campaigns is the "Stop Sex Trafficking campaign". Another program launched by the company is we invented Community Fair Trade programme, the company works directly with the poor farmers through this program and the program serves to benefit the poor and marginalized community in the long run. The idea is to generate some income through community trade; this will help people from poor regions to utilize their resources by trading so they can earna decent livelihood. Since the program is launched it is successful in providing benefits to more than 300,000 poor people. Cactus Mitts from Mexico, cocoa and shea butter from Ghana, honey from Ethopia and Brazil nut oil is traded in accordance with the policy of community trade initiated by The Body shop.Another integral value of the company is that it does not test its beauty products on animals and is dedicated to animal welfare.
The company holds are very strong stance against animal testing on products. It claims to be continuously setting targets for them in order to improve their environmental performance.Partially as a result of The Body Shop's efforts; the UK banned cosmetic testing on animals. In 1986, the company already contributed in the "Save the Whales" movementwhich was associated with Greenpeace. (Quarter, 2000)In the last few years The Body Shop planted over 17,000 trees to offset their local use of paper products, working in partnership with NGOs and their staff. Another scheme is called 'Bring Back Our Bottles', encouraging customers to bring back their empty bottles for recycling, by offering them a bag for life for every 25 bottles they return to our stores. The company claims that all the funds it generates are donated to the Tzu Chi Foundation, a humanitarian NGO that provides scholarships for children in need and disaster relief.
1.5 The Body Shop: CSR implementation in the social arenaThe Body Shop's most remarkable efforts are prominent in the social sector. The company is involved in working with numerous different types of programs. Some of them merely generate monetary aid while other programs work towards setting up production provisions in poor regions. The Body Shop also operated the aid programs in various localities. It donated great amounts of money as contributions and undertook many diverse initiatives such as conservation work. It also rendered social services for aid victims such as providing massages and counseling and therapy for the aid victims. The actions and initiatives undertaken by the Body Shop are diverse on an international level. It has supported drives in almost every arena, be it human rights, women rights or animal rights. The campaigns it has participated include the banning of nuclear tests and strongly discouraging the pollution caused by the industrial operations of large oil companies. On a relatively smaller scale, The Body Shop has initiated many education and health programs in societies all over the world. One example is the Brazilian Healthcare Project, in which the company provides funded generously for organizing immunization methods, medical checks, construction for restoration of hospitals, and health education for over 4,000 Indians in 18 Amazon villages (Mallin, 2009).
1.6 The Body Shop: CSR implementation through Innovation and ResearchThe Body Shop claims to be actively involved in research and development to generate new ideas to improve and work towards producing environmentally friendly products. Through innovation and research they cater to the demands of the customers and at the same time learn about the right ingredients and packaging for their products. The company claims to have a responsible sourcing and production department. According to the report the ingredients that go into the products and the processes involved in the production are very important for the company, like they are to the customers. Moreover the company in its Value report claims to be very particular about the distribution and packaging of its products, for e.g. one thing the department is trying to control is the carbon footprint. The company actively oversees the supply process, and ensures that its manufacturers follow the rules and that the supply chain is correctly set up to ensure it delivers the right specification. The company is actively involved in researching g about the ingredients that go into the products and in search of the alternative of any risky or unwanted chemical so the product can be as natural as possible. Any new suppliers are appointed after following a rigorous procedure to assure that they operate in accordance with the values held by the company. Additionally, The Body Shop fully endorses and follows guidelines provided by the European Union Eco-Management and Audit Scheme, the ecological arm of the EU. Locally, the company has focused much of its environmental policies in using green energy sources as well as limiting water use and reusing wastewater.
The Body Shop prefers to work with suppliers or gets associated with organizations which promote the interests of all social groups. Organizations which do not undermine human rights, be it the rights of oppressed women, animals or underrepresented communities in developed areas. In this way the purchasing power helps to support organizations that represent shared interests. Moreover the Body Shop works with deprived groups which lack access to education and healthcare. The Body shop targets underprivileged groups in hope to improve their economic and social situation. According to the value system of the company, the workers who are part of producing the good directly or indirectly should benefit socially and economically. They should be included in operations and their opinions must be regarded. Thus it encourages leadership and active participation amongst the workers. According to the standards of the company the products must be reasonably priced considering their quality and demand. It claims that all commercial activities undertaken by the company should be in accordance of the ethics of the companywhich promote environmental and animal protection.
Although a company has many economic goals and objectives it is still part of the community it operates in. There are some examples where the Body shop has not only shown concern towards the community but has helped create employment in the local economy, for e.g. in The Body Shop is the second largest employer in Little hampton, a town with unemployment above the national average. Thus the company helps reduce unemployment in the town and holds great importance to the community. Moreover The Body Shop also gives its workers paid time to do volunteer work for the community. This is a good example of the societal approach of corporate social responsibility.
Chapter 2: Literature ReviewAccording to the United Nations Industrial Development Organization Corporate social responsibility is basically a way through which the company integrates social and moral responsibility in its economic goals. UNIDO has also initiated a program in order to promote the concept and implementation of CSR in developing countries. The programme works on building a platform that can deliver practical services associated with the application of CSR concepts in small and medium sized enterprises so they can conform to the increasingly strict monitoring and reporting requirements (UNITED NATIONS GLOBAL COMPACT). The UN Global Compact along with other UN agencies, labor, civil society and governments to launches the ten general and internationally recognized ideologies in the arena of human rights, labor, environment and anti-corruption. It aims to highlight and promote these ten principles so they can be integrated in business operations internationally. It is one of the efforts to assemble and organize actions in accordance of the wider goals if United Nation, actions in support of broader UN goals. More than 4000 companies from over more than 100 countries are participating. It is the world's largest voluntary business social responsibility initiative (Csrwire, 2015)
The European Commission defines corporate social responsibility (CSR) as the social accountability of businesses for the impacts their business operations cause to the environment. The idea is to incorporate social, environmental, moral human rights and consumer concerns into their business operations and main strategy in close relationship with their stakeholders". The Commission's CSR plan for implementation is increasing the visibility of CSR and promoting the use of healthy practices, increasing the access and availability of the social and environmental information shared by the companies of company. It aims to integrate the concept of CSR into education, training and research. It aims to stress the value of national wide and sub-national implementation of CSR policies and aims to align European and international methods of CSR in a better way.
2.1 Recent Development of CSRCorporate Social Responsibility (CSR) is not a very recent concept; it was first invented in the scientific literature by Bowen in 1953. He defined CSR as follows: "it refers to the bond of the businessmen to pursue those politics, to make those decisions, or to follow those lines of actions which are desirable in terms of the objectives and values of society" (Bowen, 1953). Though the concept had been devised it was only applicable to companies in 1967. This was a major development which permitted companies to integrate social concerns in their business operation(Falck&Heblich, 2007). Another reason for the increased popularity of CSR is globalization which has led to increased competition; therefore companies use CSR as strategies so they have competitive advantage over the other companies by being more ethically responsible and concerned. This way they can attract the attention of customers and increase their market value and purchasing power.
Many customers and especially shareholders want to be associated with the companies which have a good reputation and are known to be environmentally friendly and socially concerned. The trends are changing and in today's world the companies can just not thrive by producing the best products or providing the best services. They need to develop strong marketing strategies and build a strong and socially accepted reputation for its product to compete in the market. Moral values and responsibility are becoming significant fundamentals of competition; this implies that it has become important as well as trendy for companies to work with CSR (Burke & Hodgson, 1996). Different stakeholders have different requirements and expectations from the companies, many want the company to be associated with doing social and work with corporate social responsibility, this has assisted companies in being more socially aware of the affects they have on the society.
John Mackey, founder of Whole Foods, even asserts that CSR signifies a new form of capitalism, a capitalism that encourages well (Sprinkle &Maines, 2010). Kofi Annan, the UN's former Secretary General, stated the following about corporate citizenship, "We have to choose between a global market driven by calculations of short-term gain and a market that is humane. From a market, this condemns a quarter of people to starvation and squalor, and one, which offers everyone the chance for prosperity in a healthy environment. Between a selfish market that ignores the fate of the vanquished, and one in which the strong and successful accept their responsibilities and show the world the wisdom and leadership" (T. Nilsson, 2009, p. 35). Lately the argument on CSR has come to emphasis on its relationship to profitability. Today, CSR is a widely accepted and popular concept but the argument remains about whether it is profitable or not (T. Nilsson, 2009).
It is an essential policy of The Body Shop that all workers conform to the laws and regulations pertinent to the business in all they countries they run in, and that every worker in the company works with values and morals of honesty in business.Supporting environmental and social organizations like GREEPEACE, UNICEF, UNEP (the United Nations Environmental Program.The Body Shop follows the rules provided by the European Union Eco-Management and Audit Scheme, the ecological arm of the EU. Locally, the company has engrossed much of its environmental strategies in using green energy sources and controlling water usage. According to many researchers, a part of practically applying corporate social responsibility is the legal aspect which means the company strictly follows the legal laws concerning human rights and adhering to social responsibility. This according to some researchers helps the company to grow, as when it adheres to laws it builds a reputable image in front of the state. Moreover the company will gain pubic appreciation when people learn that the company cares about its social surroundings and works to improve the society through helping the deprived community by social works.
2.2 Carroll's Pyramid model of Corporate Social ResponsibilityCarroll (1991) has also tried to classify those areas whichdepictCSR in a model called the Pyramid of Corporate Social Responsibility. He proposes that CSRencompasses of four diverse types of responsibility: economic, legal, ethical and philanthropic. These four areas are illustrated in apyramid where their contribution to the overall corporate social responsibility is depicted. The financial responsibility has been located at the bottom of the pyramid because the main purpose of the business is making profits and undertaking financial responsibility. The second component essential for a company after financial responsibility is to be legally acceptable in the society where it is operating. Therefore it is important to run the business in accordance to the laws. This is essential as the law of a respective society distinguishes socially accepted and unaccepted actions. The third level of the pyramid is ethical responsibility. This is the responsibility of the company to be fair in its dealings and be socially right. The last level denotes philanthropic responsibility which implies that the company is expected to contribute positively towards the community, basically helping the people improve their quality of living for e.g. creating employment. These 4 levels illustrate differing types of responsibility which indirectly influenceeach other. Carroll's pyramid of CSRhas been used and mentioned by many empirical and theoretical researchers (Zu, 2009).
Van Marrewijk (2003) regards this as the widely acknowledged view on CSR, but not necessarily the most prevalent one. This approach of CSR implies that "companies are responsible to society as a whole, of which they are an integral part" (Van Marrewijk, 2003, p. 97). It means enterprises should operate in socially and environmentally friendly ways and should benefit the society. The Body Shop wants its customers to have an active say in matters of social belief. The company is a driven to create a difference and alter the traditional business ideas. The Body Shop has gone way ahead in making legal changes and affecting business practices in a positive way for the humanity. Through the various programs launched by the company, it has provided the people with hope by giving them work and self-respect. These values and actions should be the basis of every business so it doesn't exploit anyone, instead benefits the community.
2.3 Strategic Corporate Social ResponsibilityMoir asserts that CSR's hugeinfluence in business is dependent on two varying causes. The first reason is relatedto the kind of obligatoryprinciples and morality. Companies have abundant resources and therefore they should have a proper role in reducing or eliminating social problems. Holmes studied the nature of this role and concluded that "in addition to making profits, business should help to solve social problems whether or not business helps to create those problems ... even if there is probably no short-run or long-run profit potential " (Holmes, 1976, p. 36). Another important reason of the influence of CSR on companies is that companies have found their personal interest in applying CSR. They have realized that CSR can be used as a strategy to build a strong reputation in the market and gain loyalty among employees and customers (Katamba, 2012). Martin maintains that due to globalization and increased competition the company has to cater to the increasing demands of customers and stakeholders of implementing CSR and contributing socially. Smith (2003) furtherclaims that many corporate scandals such as Enron and WorldCom have decreasedthe confidence of public in the economy. Lastly a reason for implementation of CSRis the realization that many often the government fails to solve social problems and thus there is pressure on business executives and their companies to provide social values.
2.4 Criticism of Corporate Social ResponsibilityAs the concept of CSR has become increasingly popular, it has also faced major criticism by some scholars and researchers. Friedman believes that companies should not implement CSRas it is not related to the main goal of the business of making profits, "... the social responsibility of business is to increase its profit" (Friedman, 1970, p. 1). CSR critics also claim that the drive to make profithelp instigate long term businesses thinking and naturally makes a business care about their reputation in the market. According to Falck and Heblich the popularity of the concept of CSR is a reaction to the social and environmental needs that are prevalent in the society. The debate on CSR is both apt and challenging but there is no general agreement in research (Weber, 2008). Companies are wavering between social alertness and profit demands of shareholders and other stakeholders.
The most dominant argument against CSR is "the classical economic doctrine of profit maximization" (Davis, 1975, p. 317). According to this perspective, business has solely an economic purpose and therefore the progress and success of a business can only be measured in financial terms. "The manager is the agent of the stockholders, and all of his decisions are controlled by his desire to maximize profits for them" (Davis, 1973, p. 317). Jones (1980) even defines it as 'theft' when social responsibility leads to a reduction in the profits of the business.Another argument stresses the costs to the business of being social active (Davis, 1975). He maintains that social programs are very costly and the limited resources available by the business should not be spent on these programs, but should be spent wisely to generate profits. "If business is pushed into social obligations, these additional costs will drive out marginal firms in various industries" (Davis, 1975).According to those who believe that CSR reduces company profits, companies implementing CSR get a relative disadvantage because they bear higher costs because of being socially friendly. Thus the profits are reduced and the value of the share of the company also falls. Many researchers including Hill, Kelley and Agle (1990) have found a negative correlation between company profits and CSR.
2.5 The Shareholder ApproachThe corporate social responsibility of the company has differing effects on the customers, the shareholders, the employees, the business and the community. The Body shop is a public limited company and its shareholders have legal rights over the company. The shareholders are the legal owners of the company who have great rights over the company and thus a say in its operations because they seek a return for their investment and that depends on the profits being made by the company. Shareholders investments are either expected for day to day operations or when initiating a new business. In the most companies at the end of a financial year shareholders can enjoy part of the profits made by the company depending on the percentage of shares they own in it. If the company goes into a loss the shareholders will experience a decrease in its stake of values of shares in the event of a loss. As the shareholders have many rights they can also remove the board of directors at the annual meeting if they are not pleased with the performance of the company.Van Marrewijk (2003) quotes Friedman (1962), who says that according to the shareholder approach "the social responsibility of business is to increase its profits" (p. 96). This approach starts from profit maximization as an ultimate goal and believes that "socially responsible activities don't belong to the domain of organizations but are a major task of governments" (Van Marrewijk, 2003, p. 96). Stakeholders are people who have an interest in the company, mainly the financial status of the company. They might be the suppliers or the employees of the company who will obviously desire the company to make huge profits as their incomes depend on the company's financial standing.
2.6 Benefits of implementation of CSR to companiesOn the other hand, those who believe that CSR and profitability have a positive correlationfrequently base their opinion on the company's stakeholders. CSR supporters also believe that the costs of implementing CSR are marginal and the benefits potentially large (Waddock& Graves, 1997). Falck&Heblich (2007) assert that the implementation of CSR can also lead to higher profitability of the business, according to them CSR is a way for both companies and society to prosper especially when the company has long term plans of working with CSR. Orlitzky, Schmidt & Rynes revised 52 previous studies that had inspected the link between profitability and CSR. They concluded that CSR and profitability are positively correlated. Moreover, they established that the costs of CSR are less relative to its benefits and thus it islucrative to implement CSR. Finally, advocates of the neutral relationship between CSR and profitability claim that there are many factors between the two, therefore it cannot be concluded that they have a positive or negative relationship, except that it might be a coincidence. According to the Value Report of The company since October 2011 their new and newly refitted stores utilize LED lighting which is affectedly improving the energy efficiency of the company.
The risingtrend of CSR in business has been driven by various factors including the fear of government and the community reactions and fear of negative brand reputation. One factor is the augmented pressure from trade unions and NGO's non-governmental organizations to protect the environment and indulge in socially good practices to respect human rights and adopt good practices. Particularly since the beginning of the 21st century, the concept of corporate social responsibility hasbeen widely accepted n applauded (Carroll, 2008). Although it's a universal concept there is a lot of difference of dedication and organization practices in companies. Carroll also points out that "some initiatives are more voluntary than others as some companies have been under legal and regulatory pressure to adopt them" (p. 41).
Corporate social responsibility is a celebrated and widely accepted topic currently. "The remarkableincrease in the popularity of CSR during the 1990s and 2000s suggests that it is a comparatively a new field of academic research" (Crane, McWilliams, Matten, Moon, & Siegel). According to the BBC in today's world the concept of CSR is mainstream and is integrated in the policies of all businesses. It is part of the strategies used by the companiesexpress their longing to invest in organizationswhich are environmentally and socially friendly. According to this article the authenticity and claims of companies CSR strategies should be checked. Many companies are using the CSR strategy play card to increase their market shares and seem socially friendly to attract customers. According to Mark Wakefield, corporate citizenship manager for IBM UKclaims that IBM has been directly and indirectly implementing the CSR values in its operations, even before the term was theorized and used in businesses policies. According to him IBM has always been implementing these strategies from the perspective of the staff workers. This results in increasing confidence and interaction amongst the employees. Moreover this was done from the point of view of the customers who are increasingly inspecting and checking their suppliers (BBC News, 2015).
Mr. Wakefield argues that "You have to be authentic otherwise people become very doubtful about who you are and why you're doing it, and that can be very damaging." He gave example of Enron Company, which used to be renowned for its CSR, and issued social and environmental reports on all the social work they have been doing. At the same time they were lying about the huge profits they were making and when this information was released it led to the breakdown of the company in 2001. The top executives of this company were charged for fraud and sent to prison. After this Enron became known for the social and corporate irresponsibility is displayed for corporate irresponsibility, all the social practices done were discounted by the fact that came into mainstream that it was carried out by a company with unfairand deceitful business practices.He affirmed that IBM annually runs the Smarter Cities initiative where cities apply for a grant and in return they get the services of a devoted team of IBM consultants for three weeks to focus on the challenges that city faces.Last year the company initiated a project in Glasgow, which addressed the grave issue of poverty and looked at ways to reduce it (Corporate social responsibility: Measuring its value).
Weber (2008) contends that CSR leads to more profit making as it creates more efficiency as a result of investing in effectual technologies that decrease emissions and therefore cost. It is both economically effective and environmentally better for companies to efficiently use their resources and avoid excessive waste. "Basicallythe adverse environmental impacts can be reduced by decreasing the consumption of resources and emissions and waste. It can also be beneficial for the businesses to reduce their bills for energy and waste disposal, and lowering input and decontamination. Individual companies have found that less use can lead to increased profitability and competitiveness "(European Commission, 2001, p. 10). Scientists claim that if companies are concerned about the environment they will also benefit by saving production costs, as they will save on many costs, such as oil, water and various materials. This concern for the environment can also result in less legal fees because the risk of litigation is reduced. By working with CSR, companies can reduce the risk of disasters and scandals which adversely affects the company reputation. CSR efforts can lead to healthier relationships with shareholders and stakeholders, consequently leading to more people ready to invest in the company (Weber, 2008). Time and again researchers also argue that CSR increases revenues indirectlyby stronger reputation of the company in the market and satisfied customers leading to greater purchasing power of the company products.
2.7 CSR initiatives undertaken by The Body Shop:The Body Shop considers that every business has a responsibility to protect the environment in which it operates, both locally and globally. The Body Shop claims in its Value report that they use environmentally sustainable resources wherever technically possible and economically feasible. The Body Shop carefully examines its supply chain and works to improve it simultaneously. The company ensures the monitoring process so it is provided with an accurate picture of the conditions of the supply chain. Moreover the company wants to ensure that the workers have a say in the company, by developing participatory methods for collecting information. The company also goes beyond monitoring the supply chain process, developing capacity-building programs to address employment issues that suppliers are struggling to resolve.
100% of the unmodified palm oil used in The Body Shop products has been certified sustainable by the Roundtable on Sustainable Palm Oil (RSPO). By supportingothers to only use sustainable palm oil The Body Shop claims to help address severe environmental emergencies around the world. This includes deforestation, climate change and the survival of endangered species for example the Borneo Orangutan. The Body Shop claims that all its beauty products are 100% vegetarian and all of their wood products and shop fit cabinetry are from a Forest Stewardship Council (FSC) approved source. They claim to reuse old cabinetry where possible.The Wood Positive initiative will see all products made from paper and card carry the Wood Positive logo, which signifies the obligation of The Body Shop International of taking a step ahead and making a positive impact on the environment. The Body Shop believes in minimal packaging of its products and use of recycled materials. Some of their new PET bottles contain 100% recycled plastic. This way the companystops the production of millions of new plastic bottles every year.
The following is an example of The Body Shop maintaining ethical trade standards. The Body Shop began working with Daabon, a Colombian group in 2007. Daabon was not certified by the RSPO, as a national standard for Colombia didn't exist at the time; however it had passed an independent audit using the Roundtable's criteria. The company carried out visits to their plantations but in late 2009 a problem suddenly emerged with Daabon involving a piece of land that had been purchased by a consortium that included Daabon. Christian Aid, an international development charity and its local partner in Colombia claimed people living on the land protected by the consortium were being evicted to make way for a new palm oil plantation.For its part, the consortium asserted they had bought the land in good faith, and there were no signs of the land being previously occupied. The Body Shop did not have a trading relationship with the consortium, but as soon as the company heard about this new problem it decided to inspect the matter. It commissioned an independent study in partnership with Christian Aid, which exposed how intricate the underlying legal and property questions really were. The Body Shop concluded that an acceptable long-term solution was unlikely to be found, and as a result stopped trading with Daabon.
PAMS Foundation is a not for profit conservation organization based in Tanzania, Africa. It aims to sustain and conserve their local habitats and biodiversity through projects and initiatives. Their definitive goal being Tanzania's value of its natural resources and benefits are understood and upheld by all, conserving natural resources in an ethical way. With funding from The Body Shop Foundation, PAMS has employed ground breaking methods in union with Tanzania law enforcement to run a prosperous wildlife protection trial campaign.This has helped secure more funding to the tune of around $85,000 of intelligence-led operations being directed in Tanzania each month. The Body Shop reports that this project is now by far the most effective anti-poaching and ivory trafficking initiative in Tanzania. The rangers in the National Parks benefit by having less armed poachers to have to risk encountering in the bush whilst on patrol. The reason for reduced risk to human life is because of the arrests made being done through the informant and special intelligence-led operations of the project that arrests them when they are off guard and not armed and alert to possible encounters with law enforcers or wildlife protectors.Due to the project's success and the additional donor funding, the operation is being able to expand in to two other major ecosystems in the country. PAMS believe this will be a game changer for the three ecosystems chosen and will hopefully bring control to the massive scale of poaching that has been devastating the elephant population for years.Tanzania National Parks statistics for the Ruaha National Park indicated a substantial (56%) decrease of ivory poaching incidences for the part of the Ruaha-Rungwa Ecosystem the pilot project was directly protecting. Tanzania's head of the National & Trans-National Serious Crimes Investigation Unit, regards the special operations supported by PAMS Foundation in this ecosystem as the primary reason for this reduction of poaching.
2.8 MethodologyThe methodology undertaken for this research paper was based on both, primary and secondary research. The relevant research concerning the topic was collected through interviews and from credible websites and books such as Google books and governmental and international organizations websites such as United Nations Global Compact and BBC News website. Moreover the Value System report of The Body shop mentioned many of the social projects they are working on and how they assure the use of natural ingredients in their products.
2.9 ConclusionAfter intensive research I can safely conclude that The Body Shop applies the concept of corporate social responsibility in the social, legal and political arenas. The research shows both sides of the argument, one is against CSR and mentions the ideas of researchers who criticized the concept and believed that the businesses should only be associated with making profits. Moreover according to some researchers CSR strategies are only implemented by companies to gain customers' attraction and to increase their brand reputation in market. Many researchers contend that CSR is not only beneficial for the community but also for the business as it makes itemploy more efficient methods and in return lowers the production costs.
In conclusion, it must be stated that companies who indulge in corporate social responsibility behaviors do so on its own free will. In other words, CSR is not a law that organizations' need to follow. In recent times however, government had to step in as foreign companies operational in India were exploiting all principles of CSR. As a result, the government of India was forced to intervene and have introduced voluntary guidelines for such organizations; also proper legislations are most likely to be introduced to prevent fraud and unfairness from occurring.
Overall, companies' that behaves in a corporate socially responsible manner enjoys higher levels of overall performances of the company. There are seven best practices to CSR in which an organization must follow in achieving its objectives, they are: setting measurable goals, stakeholder engagement, sustainability issues mapping, sustainability management systems, lifecycle assessments, sustainability reporting and sustainability branding. Some of the best practicing companies are GlaxoSmithKline, Johnson and Johnson, Walmart, Ikea and The Body Shop to name a few. The student determines that the key to these named companies successes and its sustainability are not wholly based on the goal of increasing profits, but also of the moral policies of being truly committed to the social welfare both within and outer of the organization.
Chapter 3: MethodologyThis chapter would contain the specifications regarding the research methodology and study design. The research approach will be identified and the rational will be presented. Issues pertaining to sampling, data collection, data analysis and rigour would further be discussed in this chapter. The focus of this chapter is based on the description of the methodology that has been employed for conducting the research. The chapter will focus on the research strategy and the manner in which the research framework will be obtained. The chapter will then list and elucidate the aims and objectives of the research questions. Following, the techniques used, the methods utilized and their rationale will be mentioned. Lastly, the chapter will also provide the limitations of the study and the ethical concerns and approvals involved. The methodological issues and considerations with regards to the research design of the CSR strategies along with its comparison with the past few years/decades,with special emphasis on The Body Shop and a comparison of its competitors will also be included.
Quantitative methods are usually favored by researchers; surveys and questionnaires are often the most oft used tools owing to their ability to depict accurate measurements of stable perceptions and behaviors. This allows researchers to generate theories which can be generalized and tested through the collection and analysis of data. Further advantages provided by such methods include the inexpensive collection and effective processing of data as well as providing a timely and economical method in terms of man-power employed.
The history of CSR strategies implemented by The Body Shop and its present standing, especially with regards to its competitors will be covered in this study. Since the majority of the papers findings will be abstract as opposed to specifics in nature, it would be optimal if the research is primarily qualitative in nature and is backed by quantitative methods where needed. This would ensure that data from multiple sources is collected and an analysis based on the data collected over the course of this dissertation is used to provide an overall conclusion. One of the main differences between quantitative and qualitative studies is that quantitative studies propose conclusions which are based on the interpretation of the data collected from the research participants whereas qualitative methods allow the author to rely on individual thinking capabilities. In this paper, the author will utilize her own analytical skills in order to interpret data as opposed to a mere representation of data from quantitative methods.
Furthermore, the author is also going to utilize her personal contacts in the local retail sector of The Body Shop and take on-board theopinions regarding the subject matter, briefs and judgments of the real time clients and current employees would also be documented. Specific questions with regards to the topic will be asked, and their responses will be recorded. These individuals will also be informed about the authors' recommendations, listed in a latter chapter, and their views with regards to the practicality of the recommendations will also be entertained. Utilization of these contacts will provide multiple benefits; first-hand knowledge from industry insiders will be gained and the recommendations will be peer-reviewed as well.
Major section of the secondary research was conducted through books which shared the arguments of many leading researchers on corporate social responsibility. Numerous researchers have been against the idea of a business incorporating CSR strategies as its purpose is to solely make money and not take other factors into account. While other researchers applauded the notion of CSR and concluded that it also helps companies to build a strong market reputation and improve their value in the market (Van Marrewijk, 2003, p. 97). Relevant research concerning the topic was collected from credible websites and books such as Global development groups and international organizations websites, United Nations Global Compact, BBC World News and the Journal of business ethics. Moreover, the Value System report of The Body shop mentioned many of the social projects they are working on and how they assure the use of natural ingredients in their products. This report gives a detailed description of how it incorporates CSR into every process of its products. It covers all the social campaigns its running and how every department is working towards adopting CSR strategies. The initial research makes a comparison of two leading corporate companies in today's world. The selected leading companies are Nike and McDonald's, and the policies and strategies adopted by them were examined through secondary research. The policies were later compared with those of The Body Shop.
Internet research was conducted to get access to more recent developments of CSR as the information was more recent and relevant to the current companies operations. Books focused more on theoretical research and did not allow any comparison between corporate social responsibility strategies adopted by different leading companies. Author focused on international business newspapers, journals, articles, and International news websites and on information taken from international Groups while conducting secondary research. This helped understand the recent notion of CSR according to these organizations and how steps towards promotion of CSR strategies are essential and are being demanded by the upcoming generation.
Questionnaires was utilised due to the nature of the research. (Mixed method) comprises of both qualitative and quantitative survey method. Some aspects of the questionnaire were compiled for the purpose of training programme evaluation of staff on challenging behaviour in clients. Sometimes is devoted to setting out the ethical considerations addressed during the research process. The limitations posed by the selected research design are explored. Hence the selection of the questionnaire for data collection was chosen. Both qualitative and quantitative methods were adopted to address the generated and adapted questions using data produced through structured questionnaires. The methodology utilised for the management and analysis of data of the research are also discussed in this section.
3.0.1 InterviewsUnstructured interviews of selective participants were taken for the research. The purpose was to get first hand opinions and knowledge of what regular women think of the products and to identify if their CSR policies have any role to play in consumer's choice preference for their products and for The Body Shop as a whole. Interviews conducted were both structured and unstructured interviews, allowing the conversation to continue with the flow and casual behavior. The participant feels less pressurized and you can alter the questions according to the replies he/she is giving. Unstructured interview was conducted of two sales girls of the company and fortunately one ex-employee of the company who was approached by utilizing the researcher's personal contacts to gain firsthand knowledge of the policies, strategies and goals of the company. The interview was unstructured thus qualitative data was obtained and it was coded to be entered into the SPSS software which was employed to evaluate the data. The qualitative data was coded and transformed into numeric data to be compared and evaluated.
3.0.2 QuestionnairesThe questionnaire was designed in a way that it gathered both quantitative and qualitative information from the respondents. The initial questions were objective but the last three questions were subjective and served to inquire about the reasons and detailed responses of the reasons which products they prefer to buy and why. The purpose to add qualitative questions was to get a complete understanding of the reasons they prefer shopping from his company and so they could freely express and no detail would be concealed. On the other hand it offered an advantage as the data could be compared to the information collected from the interviews as the data would be same in nature. The objective questions inquired the name, age, gender, status of the respondent and the category or type of products he preferredbuying from this particular company for e.g. Makeup or creams. On the other hand the qualitative questions required the respondent to list down their most preferred and regularly bought products along with thereason behind their preferences in detail. Moreover the questions inquired about how does the corporate social responsibility strategies affect the reputation of the company and their preference to shop from it.
3.0.3 ObservationThe approach of observation is also a systematic data collection approach which was adopted for this research study as the researcher wanted to examine the behavior of the customers in a natural setting such as the outlet of The Body shop. The behavior of the customers was merely observed along with their preferences and purchasing habits. Customers were observed and popular and common trends were identified, moreover observation permitted to evaluate whether customers are loyal to the company or just buy the products which they think suits them regardless of the socially friendly reputation the company holds. The shopping preferences of customers on a particular day was noted and observed and trends were established.
3.0.4 SamplingThe process of sampling refers to the selection of a subset of individuals which are selected as subjects of study for primary research. The process is undertaken to ensure that the selected sample is relevant to the particular research and will be representative of the whole population. For this particular research random sampling could not be done as the target research subjects were females who are the target customers of The Body Shop. For convenience snowball sampling was employed and it was a cost effective and efficient method. One female respondent introduced her female friends who were interested in makeup and regularly shopped from this place. Moreover expert sampling was employed too as a certain portion of the sample was supposed to have adequate knowledge of the products and The Body Shop company, for this purpose two sales girl of The Body Shop were interviewed as well as an ex-employee of the company. They have expert knowledge of the particular company and information of their strategies and plans regarding corporate social responsibility.
3.1 Aims and ObjectivesThe aim of this research study is to identify the corporate social responsibility in the business environment as well as its importance and influence in the cosmetic or the beauty industry, including its journey in the past few decades.
The study will also aim to evaluate corporate social responsibility with the customers observation, analyze company's environmental policies, investigate the impact of the company's policies on the customers and their clients retention through corporate social responsibility measures being taken, delinquencies, observe the difference in the purchasing pattern of the customers with the environmental policies, the role of business and the body shop and the future positioning of the corporate social responsibility as a whole and what measures can be taken to mitigate the overall risk.
This research aims also to find out the risk and issues faced by the customers while purchasing the products and other factors that are interlinked. Additionally, different strategies which are currently utilized to retain customers by different organizations and what policies are being adopted to improve the overall corporate social responsibility among the companies in the cosmetic industry.
3.2 Research QuestionsThis paper aims to identify the concepts of corporate social responsibility applied in business environment. The research question is directed to The Body shop and the paper aims to identify CSR implemented by The Body Shop in legal, social and political arenas. Moreover, the paper discusses the ideas of known researchers on the topic of CSR and serves to answer the reason for its increasing popularity and implementation by companies. Much of the force of The Body Shop stems from the moral values and beliefs of the owner. She believes that a business is not just a profit making but should also contribute positively towards the environment. The company considers it has a responsibility to be ethical and honest in its business operations.
Due to the sheer scale of the business industry, and more specifically, the cosmetic sector of the business industry, it would be unwise to even try and attempt to discuss the entirety of the sector in a singular research paper, and therefore it would be wise to restrict our focus to a specific organization. This will provide multiple benefits; the author will be able to divert her attention towards a specific cause which will result in a more comprehensive discussion of the factor, it will also enable him to be able to drill down and find the root cause of a specific problem as opposed to providing generic descriptions. Such an approach allows the author to discuss the sector in brief and then narrow down the focus to specifics and attempt to provide recommendations against issues prevalent in the industry.
Following the ideas discussed earlier, the following are going to be the research questions based on which this paper will be written. In order to provide a reasonable description of the issues highlighted, research will be conducted. Additionally, the questions which will be raised in this paper as well as the recommendations which will follow will be of high relevance to the CSR industry and the ideas will be easily replicated in the industry as well. The research questions are as follows:
- What are the strengths and weaknesses of the CSR in terms of The Body Shop's current scenario, product offering and competitive dynamics?
- What are the real threats to CSR presently in relevance to The Body Shop?
- How to improve the CSR activities of The Body Shop and of the cosmetic business industry?
- How can and how has the measures of the Government help CSR?
3.3 Ethical ConcernsThroughout the course of this paper, the author has ensured that all ethical considerations have been followed. Data was collected in a manner which ensured that integrity, honor and honesty was given the highest priority. The research questions which were asked from the members of the cosmetic/fashion industry were such that logical conclusions could be withdrawn from them. It was ensured that questions were not loaded and that the answers were recorded accurately and then used in the exact same context throughout the study. The opinions were collected on the basis of a surety of confidentiality and the identities of these individuals have not been revealed or their positions or affiliations.
Interviews were conducted from candidates who were willing to be interviewed and at a time which they considered to be feasible. Confidentiality has also been maintained throughout the paper owing to the fact that most respondents are under strict compliance policies from their employers.