Ecostore: Management Analysis

Report

Introduction and importance of company to the Australian and international business

Malcolm Rand, a rock star turned philanthropic businessman, founded ecostore in 1993. Initially
it was a mail order based service which eventually was expanded to supermarkets manufacturing
around 60 body care and cleaning items in Australia. Ecostore further expanded its export to
USA, Asia, Malaysia, Singapore, Taiwan and Hong Kong. The companys head office and
concept store are in Auckland with a $30 million turnover as recorded in the year 2015.
The company is of immense significance to the Australian economy and International Business
as it is a trailblazer of natural and organic products that are sustainable and healthy. The firm
pledges a guarantee that its products are safe and environmental friendly which is endorsed by
the certifications such as ISO14001, Diamond Environment and Carbon Zero and the company is
entirely child labor free.

Entrepreneurship and Innovation at the company

Malcolm with his wife Melanie, utilized organic plant minerals and sustainable gardening
methods to produce safe and healthy skin care and cleaning products from the basement of their
home back in 1993. Their efforts to avoid the possibility of availability of toxicity in the market
products led to the initiation of the entrepreneurship.
Malcolm established schools of organic gardens which support the NGOs working for the
protection of flora and fauna in NZ. Later, eco village based on the idea of urban housing
community in a sustainable green environment was developed.
The spirit of supplying safe, healthy and nontoxic products motivated them to seek assistance
from experts and launch supermarket export in NZ, Australia and the US. Their products were as
efficient as products of the competing brands alongside being prioritized as healthy and
ecofriendly. In case there was a doubt about the ingredient being more or less harmful, a safer
substitute would be taken up for use instead. The customers relied on the products and endorsed
that they helped improve allergies like dermatitis, asthma and eczema.

The products produced by ecostore are made using least concentration of chemicals and Genetic
Engineering (GE) free, minerals and plant based ingredients, healthy and eco-friendly. The
products are packages maintaining standards and using recyclable material. The ingredients are

not tested on animals. Sustainable and innovative techniques are used at ecostore for the
production and assembling of their products.

1) Chemicals Legislation and Precautionary approach:

There are around 85k chemicals that are available and used commercially however
legalization details of many of these chemicals has not been updated with time. Most of
these chemicals cause health problems like asthma, hormone disruption or skin allergies.
Ecostore uses chemicals carefully and avoids chemicals like CAPB, SLS and Triclosan
which have not yet been proven as completely safe. With the help of Environmental
Working Group, ecostore comparatively assesses the safety impact of each ingredient and
uses a safer alternative and excludes the ingredients that are doubted to be unnecessary or
toxic.
The methods of risk assessment that are used to measure the human exposure to toxicity
have chances of uncertainty. It is also evident that most of the allergic and carcinogenic
affects are caused due to variable scientific uncertainties and these can be overcome by
using alternative approach. This is the principle majorly followed by ecostore. [1]

2) Disclosure on Product Labels:

Ecostore discloses the ingredients it uses in manufacturing a product. Even though it is
not compulsory to disclose the ingredients in NZ or Australia, However Ecostore is
committed to provide information to the customers so that they make informed choices

while buying so that they may avoid using a product if they are allergic to any of its
ingredients.
The quality of the business world has remained a mystery since ages. Researchers
question the quality of a product by relating it to the ambiguity with regards to its
ingredients as the abstruseness makes product quality really challenging. The research
suggests interpretive methodology so that customers identify ingredients that fall in their
durability range. [2]

3) Minerals and Plants based Ingredients and performance excellence:

Ecostore undertakes efficacy tests for each of their products unless the ingredients
evidently work effectively. The ingredients used are herbal and minerals instead of the
petrochemicals mostly used by the leading brands. Without compromising on
performance, the ingredients are further tested for sustainability and biodegradability.
Research indicates that plants act as a source of cosmetics and skin care products
preparation. Herbal ingredients have proven to be more effective and have low side
effects as compared to the synthetic chemicals. Herbs like turmeric and sandalwood have
been used since long by the Asian women for skin care and demonstrate sustainability.
[3]
The products for mother and baby care such as lotions, shampoos and oils are made from
natural minerals and herbs and they have evidently been more nourishing and safe to use.

4) Approach of less is more:

Least amount of raw materials is used by ecostore to acquire the best and most effective
results. They dont add bulking agents or fillers to give a misperception of greater value.
This leads to less quantity use of a product, also cutting down purchase cost.
Raw material management has been a recent concern for manufacturing organizations
and studies suggest that the inefficiency in the usage of raw materials can be curbed by
the application of proffered solutions and by the proactive attitude of the manufacturers.
[4]

5) Packaging and Recycling:

Ecostore is committed to reducing waste materials and pollution. Therefore they use
recyclable and sustainable materials for packaging. They make boxes out of wood grown
sustainably at local forests and PEFC tested. They recycle their auto dish bottles which
are made of High Density Polyethylene and pressure resistant polypropylene is used to
make lids. Bottles are made available in multiple sizes and are kept refillable to avoid
wastage. Polypropylene labels are water adhesive and are used to label the recyclable
covers, avoiding the use of chemical inks and dyes. Measuring scoops and trigger sprays
are made from regrind plastic instead of metal and can be recycled. Two portable
recycling stations have been set up by ecostore that collect and recycle the ecostore
bottles directly by moving around to the different sites in Bay of Plenty, Northland and
Auckland.
The Close loop systems have become evidently important with the trends of legalization
of environment, not only for countries but also for firms in order to fulfill the product
responsibilities. Therefore, Supply Chain Management has been updated to Closed Loop

Supply Chain Management and cyclic model systems are proposed to package and
recycle products at hierarchical levels. [5]

6) Low Carbon Packaging:

Ecostore uses a unique renewable plastic made out of sugarcane that is imported from
Brazil, for its product packaging. This plastic is easy to use, more sustainable, and
innovatively recyclable and captures the carbon dioxide from the atmosphere.
Low Carbon Manufacturing can be referred to the manufacturing process that produces
low carbon emissions intensity and uses energy and resources efficiently and effectively
during the process. In the research paper, research is focused on implementation approach
of the LCM which is already being utilized by ecostore. [6]

7) Not Tested on Animals:

Ecostore products carry PETA logos and their ingredients are not tested on any
animals. However, they carry out in house testing and endorse ethical behavior
towards for animals.
Animal testing has provoked a discussion about ethics since its introduction and now
human rights activists have directly taken actions for ceasing the animal
experimentations which has led to the strict security measures and legislative changes

by the government. The main issue as identified by the research article is ethics and it
is for sure endorsed by ecostore and PETA. [7]
8) Genetic Engineering Free:
Ecostore endorses the idea of GE free products. They innovatively propose a sustainable
solution to excessive use of GE suggesting that there should be ethical development and
laboratory controlled procedures should be followed in order to add least quantity of GE
enzymes in detergents but not in edible or skincare products.
Information and Knowledge play a vital role in the acceptance of innovations especially
when they are associated with risk. In an empirical study, researchers assessed the aspects
of GE and concluded that the technology is controversial for consumers and have
skeptical opinions about the GE experts and credibility of the technology to be risk free
and hence the consumers are hesitant when buying the respective products. Ecostore
avoids GE to keep the customers in their comfort zone and also in respect of GE free
New Zealand commitment. [8]

Fairground Foundation and Ecovillage:

A defined percentage of ecostore profit is channeled to the non-profit organization Fairground
Foundation that aims to create a better, healthy and sustainable world through on ground action.
Fairground purposefully provides job opportunities and is based on the idea of commercial and
not for profit organization partnership to curb the funding issues.
Fairground has led to the development of eco village which is an urban style commercial housing
region that is entirely based on eccostores objective of green solutions. Ecovillage is the first of

its kind located in Auckland, NZ that promotes a natural, sustainable and healthy lifestyle in this
era of artificial living and climate change.

The relevant theory, practice and sustainability

A theory based on case study analysis on a universal NGOs practical framework suggests that
introduction of new innovations is directly related to the assurance of the programs long term
sustainability and collaborations with local NGOs can efficiently provide support with regards to
financial, programmatic capacity and institutional assistance. This systematic practice remains
sustainable in long term approach and unharmed even if either of the partner exits. [9] This is
exactly the approach followed by ecostore as it collaborates with local NGOs for environmental
protection and ethical and philanthropic work.

Role of organizational behavior at the company

The research implies that employees have the capability to collectively share perspectives such
that members of an organization are engaged like a single unit leading to the development of a
network for collective organizational behavior triggered by motivation. The notions of the paper
are parallel to the strategy adopted by ecostore that the organizational behavior has to be a
collective engagement of pursuing the objectives of the firm. This ultimately leads to the
increased financial performance of the firm and the success of the entire organization. [10]

Human resource management practices at the company

Sustainable HRM practice is implemented mostly in firms like ecostore. It is a set pattern of
planned as well as emerging strategies incorporated in the business to achieve social and
ecological goals.
SHRM being a component of the best-practice model is directly correlated with the people
management practices and policies at a company. Even though SHRM characteristically
demonstrates its influence on the companys productive outcomes, it also reflects the overall
hierarchical management success of human resource for sustainability relative to financial
success and attainment of company goals. [11]

Role of international business at the company

In International Development Studies, Business strategies, specifically Commercial Diplomacy
is of crucial importance as it envisages an interplay between Global Relations and International
Business. The research indicates that better the commercial diplomacy, better is the international
business to government relationship. The mainstream ideas of International business are based on
commercial diplomacy and provide a multi perspective approach towards international
collaborations and competitions. [12]

Role of technology management at the company

With the rapid growth of Information Technology, technology based systems have become
integral needs of firms like ecostore where research regarding its ingredients is taken as a
responsibility and challenge. Moreover, technology supports the business strategies by the
transformation of import and export into e-business. Research indicates that digital technology
can greatly be used to expand multinational companies. [13]

Future strategies
Ecostore is a multinational company with a very positive impact of serving humanity and
creating a better world by protecting health and environment. Future strategies can further
expand and promote the efforts to greater regions of the world.

Catalyzing Government and Institutions for Innovations:

Innovation is considered to be the integral force driving economic growth and social
development in the era of technology. Institutional innovations are important for contributing to
the magnitude of sustainable technological evolution and economic growth. This is led by factors
including transparency, flexibility, cooperation and efficiency at the workplace and with its
collaborators and stakeholders. Ecostore can continue to play its transformational role by
connecting governments, private enterprises and academic institutions. Furthermore, ecostore has
the potential to involve the government to spearhead the innovative efforts by facilitating the
innovative reforms and adaptation of new policies. [14]

Innovation, sustainable agricultural growth and Poverty Reduction:

Agricultural growth can contribute in curbing poverty alongside adopting technology.
Companies like ecostore can help in the provision of trainings and incentives for local farmers in

adaptation of new innovative ideas and technologies and in return get mutually benefitted by
growing local farms and forests and ultimately naturally grown herbs and plants to use for their
production. [15]

Entrepreneurship and Start-up opportunities:

Entrepreneurship and innovation are new trend setters for employment creation and economic
growth, but few studies have looked at how secondary schools can contribute to create a more
dynamic enterprise culture. A research conducted around 40 countries indicates that
entrepreneurship programs greatly stimulate star ups in youngsters with different backgrounds.
Ecostore should adopt the start-ups funding strategy for high school children and may also
provide employment opportunities for people with special needs alongside promoting their
sustainable and nature based strategies. [16]

Ecostore has been titled as a leader of sustainable development by the Colmar Bruntons Better
Business, Better World survey conducted in 2014. The products manufactures by ecostore
undergo production phases for months under the supervision of experts and are guaranteed to be
natural, non-toxic, safe and healthy for people and the planet both. Ecostore works side by side
with the state policies of GE free and No Child Labor initiatives. The analysis clearly provides
insights to the ecostores history, management policies and strategies taken up for sustainability
and innovation favoring green environment and healthy living thus setting a perfect model of an
ethical business model for the people.

Non Academic References:

1.

Ecostore Website. (2016). Kinder to our planet.

Available at: http://www.ecostore.com.au/pages/kinder-to-our-planet

2.

Pure Advantage Website. (2012). Leading New Zealands Green Growth.

Available at: http://pureadvantage.org/news/2012/03/26/ecostore/

3.

Winter, Chloe. (2016). Ecostore founder Malcolm Rands becomes Member of the
New Zealand Order of Merit. Stuff Business Day.
Available at: http://www.stuff.co.nz/business/better-business/78917139/Ecostorefounder-Malcolm-Rands-becomes-Member-of-the-New-Zealand-Order-of-Merit
Retrieved 07-09-2016.

Academic References:
1) Kodell R. L. (20015). Managing uncertainty in health risk assessment. International
Journal of Risk Assessment and Management. 5(2/3/4), pp.193 205.
Available at:

http://www.inderscience.com/info/inarticletoc.php?
jcode=ijram&year=2005&vol=5&issue=2/3/4
2) Jolhe D. A. and Babu A. S. (2014). A structured approach to prioritise critical-tocustomer-satisfaction attributes of consumer durable products. International Journal
of Business Innovation and Research. 8(6), pp. 634 670.
Available at:
http://www.inderscience.com/info/inarticletoc.php?
jcode=ijbir&year=2014&vol=8&issue=6
3) Singh, N., Pandey, M. K., Sharma, A. and Prakash, J. (2014). Indian medicinal plants:
For hair care and cosmetics. World Journal of Pharmaceutical Sciences. 2(11), pp.
1552-1556.
Available at: http://www.wjpsonline.org/

4) Akindipe, O. S. (2014). Role of Raw Material Management in Production operations.

International Journal of Managing Value and Supply Chains (IJMVSC). 5(3).
Available at: http://airccse.org/journal/mvsc/papers/5314ijmvsc03.pdf
5) Souren R. (2004). Material flow analysis in closed-loop supply chains: modelling of
packaging waste recycling at different hierarchical levels. International Journal of
Integrated Supply. 1(2), pp. 117 138.
Available at:
http://www.inderscience.com/info/inarticletoc.php?
jcode=ijism&year=2004&vol=1&issue=2
6) Tridech, S. and Cheng, K. (2011). Low Carbon Manufacturing: characterisation,
theoretical models and implementation. International Journal of Manufacturing
Research. 6(2), pp. 110 121.
Available at:

http://www.inderscience.com/info/inarticletoc.php?
jcode=ijmr&year=2011&vol=6&issue=2
7) Aaltola, E. (2005). The politics and ethics of animal experimentation. International
Journal of Biotechnology. 7(4), pp. 234 249.
Available at:
http://www.inderscience.com/info/inarticletoc.php?
jcode=ijbt&year=2005&vol=7&issue=4
8) Weisenfeld, U., Nissen, D. and Gassert, K. (2003). The role of knowledge and
information in innovation: the case of genetic engineering. International Journal of
Technology Management. 26(5/6), pp.640 654.
Available at:
http://www.inderscience.com/info/inarticletoc.php?
jcode=ijtm&year=2003&vol=26&issue=5/6
9) Gundry, L. K. (2013). A framework for innovation in a global NGO: building
financial, institutional and programmatic sustainability. International Journal of
Innovation and Regional Development (IJIRD). 5(1), pp. 3 - 25
Available at:
http://www.inderscience.com/info/inarticletoc.php?
jcode=ijird&year=2013&vol=5&issue=1
10) Barrick, M. R., Thugood, G. R., Troy, A. S., and Stephen. H. C. (2015). Collective
Organizational

Engagement:

Linking

Motivational

Antecedents,

Strategic

Implementation, and Firm Performance. Academy of Management Journal, 58(1),

pp. 111-135.
Available at:
http://amj.aom.org/content/58/1/111.full.pdf+html?sid=2cb28af9-8d5f-4b8c-b1522ae4ab20b480

11) Kramar, R., (2014). Beyond strategic human resource management: Is sustainable
human resource management the next approach. The International Journal of Human
Resource Management, 25(8), pp. 1069-1089.
Available

at:

http://www.tandfonline.com/doi/citedby/10.1080/09585192.2013.816863?
scroll=top&needAccess=true
12) Visser, R. and Rul, H. J. M. (2014). Innovation of international business support: a
research agenda for commercial diplomacy. International Journal of Diplomacy and
Economy. 2(3), pp. 238 257.
Available at:
http://www.inderscience.com/info/inarticletoc.php?
jcode=ijdipe&year=2014&vol=2&issue=3
13) Opara, E. U. (2003). The effect of information technology on global business.
Journal for International Business and Entrepreneurship Development. 1(2), pp.45
49.
Available at:
http://www.inderscience.com/info/inarticletoc.php?
jcode=jibed&year=2003&vol=1&issue=2
14) Shang, Y. and Fagan, M. (2006). Catalyzing institutional innovation. International
Journal of Technology and Globalisation. 2(3/4), pp.340 361.
Available at:
http://www.inderscience.com/info/inarticletoc.php?
jcode=ijtg&year=2006&vol=2&issue=3/4
15) Thomas, G. and Slater, R. (2006). Innovation, agricultural growth and poverty
reduction. International Journal of Technology and Globalisation. 2(3/4), pp.279
288.
Available at:

http://www.inderscience.com/info/inarticletoc.php?
jcode=ijtg&year=2006&vol=2&issue=3/4

16) Johansen, V. and Clausen, T. H. (2011). Promoting the entrepreneurs of tomorrow:

entrepreneurship

education

and

start-up

intentions

among

schoolchildren.

International Journal of Entrepreneurship and Small Business. 13(2), pp.208 219.

Available at:
http://www.inderscience.com/info/inarticletoc.php?
jcode=ijesb&year=2011&vol=13&issue=2