Harmonizing to Archie B. Carroll, The Pyramid of Corporate Social Responsibility focuses on 4 aspects- Economic Responsibilities, Legal Responsibilities, Ethical Responsibilities and Philanthropic Responsibilities. When one thinks of the concern theoretical account of The Body Shop, one would normally get at the impression that The Body Shop is at the head in the promotion for Corporate Social Responsibility ( CSR ) in the Business circle. After all, they are strong advocators of Fair Trade, Environmental Conservation, Fair Practices, among many others. Besides, they are able to maintain the impulse for enlargement and net income maximization amidst all these societal activities. Anita Roddick, the laminitis of The Body Shop, was credited for the promotion of ethical consumerism, a construct that retail merchants of other major trade names shortly followed suit.
It may look like The Body Shop suiting the measure of a Model CSR house, but through careful analysis and rating, it can be seen that The Body Shop is yet to be a true representation of the Pyramid.
First, the really foundation of which the theoretical account is built on is Economic Responsibility. In the words of Archie Carroll and Ann Bucholtz, it is “ the concern constructs focused on maximising the long-run fiscal public presentation of the administration. ” It is the most important portion of the pyramid, whether the company is able to prolong itself and spread out its public presentation. Despite come ining into a drastic inspection and repair of its procedures in the early 1990s, ‘restructuring the company, altering the top direction squad by conveying in other professional directors, put ining tighter stock list and control systems, and streamlining procedures ‘ , the company reported less than leading growing in the late ninetiess. Share monetary values dropped 65 % , from $ 6.55 in 1992 to around $ 2.29 in April 1996. Similarly, gross revenues in the United States fell by 6 per centum in 1997.
Besides, they failed to prosecute cardinal stakeholders like franchisee proprietors, when there were accusals that the company was curtailing the growing of franchisee mercantile establishments. It was reported that in December 2000, eight U.S. Body Shop franchisees who owned 13 locations, were impeaching the parent company of hindering their concern through the withholding of stocks to franchisee-owned concerns. This was seen as hapless contemplation of The Body Shop that negatively affected its repute, worsening the less than satisfactory concern public presentation already observed in the United States during the 1990s.
In the early 1990s, The Body Shop direction was more concern with progressing their eco-friendly undertakings instead than doing alterations to their scope of merchandises. They were unable to run into the new market demands as their rivals like Boots, Superdrug and Lush were able to make, drastically cut downing the market portion. Other rivals like Bath & A ; Body Works started to spread out its concatenation of mercantile establishments countrywide, go forthing The Body Shop fighting to make ‘catch-up ‘ . The all right balance of stressing on concern continuality and societal activism is a important factor which companies have to beguile. The Body Shop seems to be tilted towards the latter.
When the company was portrayed in a bad visible radiation by the Media, the Crisis Management solution undertaken was less to be desired. When the article knocking The Body Shop by Jon Entine was published in the Business Ethics magazine in 1994, Gordon Roddick committed a sedate error when he sent out a 10 page missive rebuting the claims by Jon Entine to the endorsers of the Business Ethics magazine, whose contact inside informations he obtained through a 3rd party. Such an action from a top-management executive was damaging to the repute of The Body Shop, as people began to oppugn the concern ethos of the company. It did non assist the state of affairs when the Body Shop had been in the imperativeness for the incorrect reasons- unfavorable judgments against the company and its laminitiss, studies on hapless net incomes and the guess that things were non traveling good for The Body Shop.
Despite the fact that there were many scruples in the manner The Body Shop fulfilled its economic duty, it did nevertheless undertake several steps which were geared towards net income maximization and concern enlargement. In the US market, The Body Shop started advertisement arrangements in the Media from 1995- 1996, particularly during the Christmas Season to hard currency in on the gift-giving civilization of the US Consumer market. They took up ads to vie against the price reductions and gift-with-purchase publicities offered by Bath & A ; Body Works. Besides, The Body Shop reverted back to the ‘more profitable franchising scheme ‘ . Originally, near to half of the shops in the US were owned straight by the company, the remainder being franchisee-owned. By 1996, all but 12 of its 841 stores outside the US and Britain were franchises. However, because of the inability to solidify their bridgehead in the market before, this resulted in lost in chance for enlargement as rivals started to take a bigger portion of the market.
The following bed of the pyramid is Legal Responsibility. It is without a uncertainty that the merchandises of The Body Shop has systematically kept to the Health and Safety Rules of the U.K and other states. There have been no studies of inauspicious tegument reactions towards The Body Shop merchandises, due chiefly to the fact that most of its formulas are centuries old mixtures from native peoples from different parts of the World. Yet, we can non disregard the fact that The Body Shop failed to supply a flat playing field for the Franchisees in the US. This resulted in the whole episode of 8 franchisees registering a case in 1998 against the company for under cutting the footings for redemption, for “ fraud, deceitful incentive, and unjust intervention of franchisees. ” This state of affairs continued to be an issue boulder clay 2001. This brings the Business Ethics of the company into inquiry. The fact that franchisee-owned concerns was a impulsive force for the public presentation of the company meant that keeping a good relationship with its franchisee spouses was indispensable and necessary. Effective stakeholder direction, like the usage of “ The Clarkson Principles ” , would hold been good to keep a healthy relationship with the franchisee houses. They could hold had “ implemented a stakeholder public presentation measuring system ” , as suggested by Archie Carroll and Ann Buchholtz in their book Business & A ; Society- Ethical motives and Stakeholder Management.
Back to the point of Gordon Roddick obtaining contact information of a magazine ‘s list of endorsers to direct his missive with respects to allegations by Jon Entine. The ethicality of such a pattern comes to oppugn when the information was gathered from a 3rd party, and non from the magazine editors themselves.
This comes to the following bed of the pyramid – Ethical Responsibility. A point of contention is the whole thought of Consumer Exploitation. The Body Shop markets its merchandises as merchandises that support Fair Trade, Against Animal Testing and finally more superior in footings of its far making impacts on the state of beginning. Their merchandises are priced at a higher premium because of these claims. However, from the study by Jon Entine in the Business Ethics magazine in 1994, the marketed ‘benefits to society ‘ is extremely questionable. Other allegations of The Body Shop ‘s failure to present what they promised besides started to come up in other newspapers. This brings us to the point of whether consumers are genuinely paying for the coveted merchandises and results which were communicated to them at the point of purchase. This threatened the really footing that made The Body Shop celebrated in the first place- Ethical Consumerism.
The pinnacle of the pyramid is the Philanthropic Responsibilities. As defined by Archie Carroll and Ann Bucholtz, they are ‘activities that are voluntary, guided merely by concern ‘s desire to prosecute in societal activities that are non mandated, non required by the jurisprudence, and non by and large expected in an ethical sense. Recognition should be accorded to the Body Shop for seting quite a heavy accent on this duty in its operations. ‘The debut of its Social Auditing Programme ( Values Report ) in 1994, helped in maintaining check of their promotion in the assorted “ environmental, societal, and carnal protection enterprises. ” ( Archie Carroll, Ann Buchholtz ) . This ensured that the company placed all its societal ends and outlooks, enterprises and runs through a vigorous analysis to stock take on whether the company was able to make its marks as promised. The fullness of the study was a fresh attack that brought Corporate Social Responsibility to new frontiers. Something to extol about was that the study depended to a great extent on stakeholder interviews- international franchisees, employees, clients, providers, stockholders and local community and candidacy groups. Such an across-the-board attack showed that The Body Shop valued its stakeholders and involved them in its chief concern of “ merely one manner of to be beautiful, nature ‘s manner. ” Besides, the formation of The Body Shop Foundation in 1990 is a testament of the company ‘s committedness to impart a part of their net incomes to the different causes that fit the company ‘s accent of the saving of homo and animate being rights and the environment.
The Body Shop continues to encompass the ethos of its laminitis of utilizing The Body Shop to consequence alteration in society. Yet, more could be done to advertise its engagement in such philanthropic causes and possibly even taking a more active function in beat uping other companies to fall in in the enterprise. The Body Shop could perchance prosecute in more sponsorship activities for environmental causes that have a close nexus with the merchandises they carry. For illustration, they could test advertizements on the benefits of the company ‘s Trade Not Aid strategy on Ghana and its people, where they beginning their soap merchandises from. Alternatively, they could increase their stigmatization exposure by taking it upon themselves to force for better wage compensations for workers in third-World Countries in the concern sphere or even in authoritiess. This could be in the signifier of lobbying for alteration by garnering signatures from the populace, and later raising it up to the Member of Parliament or Country ‘s leaders. The Body Shop could efficaciously back certain environmental groups and their causes and its top direction could function in these groups as leaders of their guidance community. In some sense, shiping in a different signifier of advertising- non of their merchandises, but of their committedness to consequence alteration to society and following the ideals laid out by Anita when she foremost opened her shops in 1975.
Another point that was of hot argument was the sale to L’Oreal in Mid 2006. Some protagonists of The Body Shop felt that the sale could derail the original ideals of traveling against carnal testing, environmental concerns and the usage of just trade patterns. Simply put it that the philanthropic duties that are the strength of The Body Shop may be compromised. Their concerns were non distant as L’Oreal was so involved in carnal testing in the early 1980s. Some people saw the sale has an indicant that Anita Roddick was traveling against her principles.As of today, L’Oreal has maintained that The Body Shop runs as a separate entity within the same company and therefore The Body Shop continues to continue its values and beliefs. However, we are unable to safely state that such a place will be maintained in the hereafter.
It may look that because of it ‘s early entryway into the whole construct of ethical consumerism and corporate people, and the pioneering of a really comprehensive Values Report, done annually, pulls us to that paradigm that The Body Shop is the theoretical account CSR company.
However, as obviously displayed, The Body Shop has had many challenges even seeking to set up the really first degree of the pyramid- Economic Responsibility. Interesting as it may look, The Body Shop is in a really alone state of affairs of being able to accomplish the top degree of the pyramid rather expeditiously, but non the first few degrees. The contrary is true for many other companies. As the post-Anita Roddick leading squad under L’Oreal works at edifice this base, of charting new way and public presentation marks of The Body Shop, merely clip will state if the company can finally be a function theoretical account for other companies to emulate- a theoretical account company with strong focal point on CSR and yet non compromising on the bottom line.