Escolar Documentos
Profissional Documentos
Cultura Documentos
I. Introduction
well has been analyzed, concluded, and acted upon in a multitude of ways. Not until
recent times, however, has the answer been so simply apparent. It depends upon who one
asks: the employee or the supplier, the shareholder or the community, and so on. In other
terms, for an organization to perform well it must realize and embrace its relationships
with all stakeholders, the entities which affect or are affected by the company, in order to
achieve long-term success and sustainability. This line of thought can also be recognized
relationships with stakeholders, one of which is the Earth. Economic systems do not
exist in isolation, as they are part of a larger system, and thus cannot be the sole focus of
societies, and societies are basic components of the Earth” (Stead & Stead 45). The
implications of this systems thinking for corporations is to recognize how essential CSR
is from a local to global context. As the Business Roundtable (BRT) stated “business and
society have a symbiotic relationship: The long-term viability of the corporation depends
upon its responsibility to the society of which it is a part. And the well-being of society
A growing trend which parallels the CSR paradigm is the need for social and
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increasingly transparent, accountable, and environmentally and socially responsible,
businesses are slowly adjusting to these pressures. Moreover, “no economic institution in
a capitalistic democracy can survive if it does not properly serve the interests of its
stakeholders…on whom it relies for economic survival” (Stead & Stead 14). Several
companies have undertaken this challenge: to create an audit which assesses the
adopted social audits and is considered a leader in the CSR realm of business is The Body
Shop.
cosmetic retail company emerged on the foundations of social and environmental change.
Since 1991, The Body Shop adopted “to follow the draft EU Eco-Management and Audit
available” to develop several annual statements and finally a full audit in 1995
Although the Body Shop has taken leading and admirable measures in responsibility
auditing, as well as a CSR based business model, much controversy revolves around its
evaluate The Body Shop’s fundamental purpose and beliefs, competition, actions, social
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The Body Shop has evolved from a small, single store in England to a large,
multinational corporation which operates in over 50 countries and 1,900 outlets. This
quality and value driven cosmetic1 company sells over 600 products and 400 accessories,
with one being sold approximately ever 0.4 seconds (thebodyshop.com). It attests its
reason for being, however, towards progressive social and environmental change and
stakeholder interests rather than a product driven emphasis. The Body Shop’s mission
statement pronounces the purpose of its business is based on the following fundamental
beliefs:
“To dedicate our business to the pursuit of social and environmental change; to creatively balance
the financial and human needs of our stakeholders: employees, customers, franchisees, suppliers,
and shareholders; to courageously ensure that our business is ecologically sustainable: meeting the
needs of the present without comprising the future; to meaningfully contribute to local, national,
and international communities in which we trade, by adopting a code of conduct which ensures
care, honesty, fairness, and respect; to passionately campaign for the protection of the
environment, human and civil rights, and against animal testing within the cosmetics and toiletries
industry; to tirelessly work to narrow the gap between principles and practice, whilst making fun,
passion, and care part of our daily lives” (thebodyshop.com).
This company mission parallels itself to CSR thought and sustainability in practice.
Anita Roddick further asserts this by explaining The Body Shop (TBS) believes “that
“body” of stakeholders which TBS identifies are placed in eight critical, or primary,
Anita Roddick is primarily responsible for creating the ideas, style, and image of
TBS. Her beliefs and values are projected into the company, as well as lead it, since
“every act of organizing is the expression of a self that has realized it cannot succeed
alone” (Waddock 83). Even Roddick exclaims that one should “never doubt a group of
1
The use of the word cosmetic here classifies products which are hair, skin, face, and well-being related.
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thoughtful committed citizens can change the world, indeed it is the only thing that ever
Additionally, the values which comprise this identity permeate throughout the
corporation from the decisions made, to the product sold, and to the employees hired.
A major value TBS exhibits is sustainability. Roddick and TBS have already
taken the first step in implementing this ecologically sustainable strategic management
“collectively, comprise an ethical system that allows for positive synergy between the
organization’s ecological concerns and its economic goals” (Stead & Stead 129). The
most important aspect of this value is its emphasis that “economic success and ecosystem
survival are both worthy and necessary goals for individuals, organizations, societies, and
nature” (Stead & Stead 130). These three elements (sustainability, economic success,
disrupted the long-run success of the business will become nonexistent. Such a value
ecologically differentiate their products from their competitors in the marketplace (Stead
& Stead 187). TBS could therefore be labeled as a company with market-driven
sustainable strategies.
The Body Shop led the wave of green business within the toiletries and cosmetics
industry, with several companies following suit in the late 1980s and early 1990s when
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the concept exploded in the marketplace. As of today, TBS has five core competitors:
Lush, Bath and Body Works, Kiehl’s, Origins, and Aveda. Although all do not
necessarily fit the profile of TBS’s niche market, all of the companies compete for market
share in the same general retail industry. These five competitors not only challenge the
Lush is a United Kingdom based company which is growing rapidly around the
world. Although Lush began making products in the 1978, selling their first product to
The Body Shop, it shut down its doors due to disaster in the late 1980s. In 1994,
however, Lush reopened shop under its current name in England and received widespread
acceptance into the market. The company is known for its handmade, high quality, fresh
body and bath products which are made of fresh fruits, vegetables, essential oils, safe
synthetics, and no animal testing. Against animal testing is a passionate cause of Lush
and are on the forefront of campaigns to prevent and stop this. Lush does not buy any
ingredients from any company which currently carries out, funds or commissions animal
testing. TBS also supports a similar campaign. In 2001, Lush was proposing a deal to
bid on TBS in order to merge the two businesses. Ironically, Lush used to be Body
Shop’s main soap and shampoo supplier and was trying to take control of its once
primary customer. TBS, however, rejected any offers made, and the two companies
Bath and Body Works launched in 1990 under Limited Brands. Today this large
US retailer sells a range of natural bath, body, fragrance, and well-being products.
Although it is not known for its environmental policy, it is known to provide low-cost,
quality products with wide-spread appeal. TBS competes much on price and
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convenience (both are located in malls throughout the US) with Bath and Body Works.
(bathandbodyworks.com)
Since 1851, Kiehl’s has been committed to superior quality in its full-body line of
products and to contributing to its customers, community, and one another. This brand is
a favorite among celebrities and is only sold by catalogue, online, and in very select
stores. Bought in 2000 by L’Oreal, Kiehl’s remains to sell based strictly upon word-of-
mouth marketing and the distribution of samples. Customers which buy from Kiehl’s are
most likely interested in top quality and/or product price is not a purchasing issue.
(kiehls.com)
quality products, use of essential oils, and formulas that begin in nature. The company
creates skin, body, and sensory products to enhance the way people look and feel. Many
products are comparable to that of TBS and most packaging is minimal and recyclable.
Quality of Origins products, yet, seems to of higher value than TBS. Conversely, this
Origins, however, is available online and at gloss.com. Most importantly, Origins does
not test on animals but instead uses technology, such as computerized screening systems
and tests on cell cultures, or uses human volunteers. Their products also have a record of
The final and most comparable competitor is Aveda, a company also owned by
Estee Lauder. This international quality and plant-based cosmetic company operating in
stance. Its products range from hair care to make-up in its Environmental Lifestyle
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Stores and also offer these products at their salons and spas. Aveda embraces an
founder Horst M. Rechelbacher notes, the “mission at Aveda is to care for the world we
live in from the products we make to the ways in which we give back to society. At
Aveda, we strive to set an example for environmental leadership and responsibility, not
just in the world of beauty, but around the world” (aveda.com). The vision and beliefs of
Aveda make its commitment to CSR clear, with its actions to aid in further support.
Aveda maintains community trade with native groups and indigenous people of
and publishes annual CERES reports – all which show the company’s dedication to
Stewardship Award from the US Fish and Wildlife Services. The website is largely
dedicated to informing others on Aveda’s CSR vision, what Aveda does, current
environmental and social issues, and what individuals can do. Furthermore, Aveda
positions itself as a “catalyst for awareness and change at individual and collective
levels…[and believes] the microscopic actions of single individuals have the power to
change the course of human civilization. [Aveda] aims to help steer society in a more
sustainable direction for our benefit and the benefit of generations to come” (aveda.com).
Another unique feature of this company is its headquarters. This facility includes an
Organica Restaurant with all organic foods, a corporate wellness center, a stress relieving
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IV. The Body Shop Campaigns
The Body Shop maintains five significant ongoing campaigns which demonstrate
ingredients on animals. Some common tests involve dripping material into rabbits’ eyes,
applying it to shaved backs of rabbits or guinea pigs, and force-feeding or dosing animals
with substances to assess affects. Moreover, some cases result in suffering or death of
the animal. TBS takes a strong stance against these practices, even though it is estimate
over 35,000 animals are used in cosmetic tests each year in the European Union alone.
(thebodyshop.com)
technologies, and campaigning to ban AT. Some of the alternate methods of testing used
include Irrection (a replacement for the rabbit eye test), human volunteer trials, and
computerized programs. The company does now contend that almost all cosmetics have
been tested by animals at one time and cannot therefore claim its ingredients have not
been animal tested; so rather they are against animal testing. (thebodyshop.com)
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According to Anita Roddick, “Community trade is our fair trade principles in
ingredients and accessories from disadvantaged communities around the world at a fair
price while establishing quality relationships between producer and purchaser. Each
supplier is selected on the basis of the Fair Trade Guidelines developed by TBS in 1994.
Five key areas are highlighted within the guidelines: community, community in need,
from 24 countries sell Community Trade products and accessories to TBS, composing
almost 400 of their products. This supplier partnership helps TBS to fulfill its positive
C. Activate Self-Esteem
This campaign, which began in 1996, hits upon the need to respect yourself, look
after your body, and be proud of who you are. In 1998 the company produced “The
Body and Self-Esteem”, the first issue of a series called Full Voice, to raise awareness
and generate debate. Roddick is a strong supporter of this and is the first to say TBS
“make[s] and sell[s] naturally-based products which cleanse, polish, and protect the skin
and hair…[the cosmetic industry]…is run by men who create needs that don’t exist.
There is not one product on the market that will make you look younger. It’s impossible.
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Starting in 1988, in conjunction with Amnesty International and the support of
over 3 million customers, TBS began launching campaigns to defend human rights. TBS
continues to raise awareness within this subject. More recently, in 2002, TBS awarded
the first Human Rights Award. The focus for this year was the right to housing and the
$300,000 award was given to four grassroots organizations which protect and promote
the housing and/or land rights of the marginalized. The prize money was split between
operates and conducts audits of itself and reviews of its suppliers. TBS has even installed
wind turbines to provide renewable energy to power its production processes (Stead &
Stead 220). Sustainability, managing growth, energy and waste, controlling pollution,
operating safely, observing legal requirements, and raising awareness are all key issues of
vision and values” (Waddock 223). Since the mid-1990s TBS has issued social audits of
its company, with two being published in 1995 and 1998. The extensive stakeholder
research and analysis done by the corporation was to provide transparency and insight
into TBS as a whole. The audit covers the company’s approach to ethical auditing,
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analysis of stakeholder groups and responses, and verification statements. In order o
verify the various parts of the audit, TBS had external auditors review the processes and
Institution (BSI), and SGS Yarsley International Certification Services Ltd each assessed
the social audit, environmental section, and management systems supporting the Against
The verification statement New Economics provides states it is “satisfied that the
social elements of The Body Shop Values Report provide a reasonable basis for
understanding the key aspects of the Company’s behavior and social impact in relation to
those stakeholders considered” (Values Report 1997). This is only a basic approval of
however, continues to mention how “several important elements of TBS’s overall ‘social
footprint’ have been omitted”, some by design and others left out altogether. For
on shareholders in relation to the stakeholder approach, and a full survey for all
stakeholder groups were all excluded in this audit. Moreover, some stakeholder groups
were not even covered, such as the ethical investment community, media, and regulators.
Lastly, according to New Economics, the “Values Report intentionally does not provide a
detailed description of the relative importance of each stakeholder group to The Body
Shop, how this prioritization is arrived at, and its implications in practice…[or] sought to
Furthermore, several elements of the social audit are not validated by New
Economics. It pronounces its limitations on evaluating the information and knowing the
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complete accuracy of quantitative data provided by TBS. Some key areas for
explanation also needs greater neutrality in the discussion of the meaning and
implications, especially within the “no opinion” scores which are on the rise. So
simultaneously possesses several major flaws within its research, process, and results.
The lack of key information and research contradicts the initial purpose of the audit.
Moreover, if the audit neglects areas in need of improvement those improvements cannot
As for the environmental section, BSI verified the values report based upon the
EMAS regulation and visitations to three UK manufacturing sites. BSI states TBS gives
an “accurate description of the activities of The Body Shop International at the [three]
sites…and addresses all significant environmental issues related to the sites visited”
(Values Report 1997). SGS’s scope for evaluation focused on the monitoring of raw
materials used in the products which are manufactured by TBS. Here TBS was certified
as meeting the requirements of ISO 9002 in relation to their Against Animal Testing
Overall, many of the inconsistencies which exist within TBS’s social audit arise
from the fact that TBS conducted the audit internally instead of hiring external auditors.
If the company was fully committed to providing the transparency, accountability, and
assessment it originally sought then more complete measures would have been taken –
such as an external auditor. Stakeholders of all types are less apt to be completely honest
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in their responses, even with confidentiality, when the group conducting the interview is
the same which is being questioned. This can also be thought of as interviewer bias, a
type of response bias which occurs because of the presence of the interviewer influences
answers; and auspices bias, a response bias which results because organizations are
influenced by the organization conducting the study (Zickmund). Another issue that
arose in TBS’s marketing research was its item non-response, or the failure by a
increase in ‘no comment’ answers was apparent throughout the 1997 Values Report.
Lastly, non-response error, especially regarding franchisees, was an issue which must be
Since several inconsistencies and problems arise within the Body Shop’s Values
Report and means of carrying out a social audit, it is necessary to develop a new auditing
framework that can accurately asses the company’s social and environmental
based upon four compatible models will guide the assessment of TBS. These four bases
involve the “ethical” product matrix, the role of virtue ethics, the importance of integrity
and global leadership, and a 14 aspect scoring for a CSR audit. Each theory uniquely
evaluates different facets of TBS yet combines to form a solid, comprehensive, and
conclusive audit.
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A. The “Ethical” Product Matrix
The Body Shop encounters as much controversy on the products it sells as it does
praise. Some critics believe that green consumerism is another marketing ploy which
businesses can profit from while appearing environmentally conscience. Others attest
TBS to creating unnecessary desires and products that have little utility to society.
Hence, the ingredients and resources could be more efficiently used otherwise and can
time, TBS products have been marketed with an ethical branding and have harnessed
their company values for commercial success, showing that ethical considerations do play
and distribute an “ethical” product. Andrew Crane explores this topic and its
implications.
Crane asserts that in today’s consumer market there is “little doubt that business
ethics do indeed figure significantly in consumers’ purchase decisions” (Crane). For this
reason, a need arises to understand the “ethical” product and how business ethics
contribute to company success. Moreover, how the Body Shop compares in this
framework can provide insight into its CSR dedication. By “ethical” product it refers to
the set of issues and considerations that may affect the purchasing process. This could
charitable donations, and fair trade. Surveys show that consumers are increasingly
claiming to include ethical criteria such as these in their consumption choices. (Crane)
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A product can be defined as more than its tangible features, but also as a
most likely to be seen as product augmentations (the addition of extra services or benefits
issue is likely to add to or subtract from the overall product benefit describes the
normative or direction of ethical augmentation, whereas the area of the product offering
that the ethical issue relates is the conceptual or content or ethical augmentation (Crane).
In addition, the content of ethical augmentation occurs at four levels (product, marketing,
corporate, and country) with each becoming successively indirect in respect to the
product.
At the product level, ethical augmentation is those issues directly related to that
actual product (Crane). Here consumers may shape decisions based upon product design,
inputs and raw materials, manufacturing process, and disposal components. The Body
Shop would fair more positively at the product level since its products are biodegradable
and containers recyclable, has natural inputs, and some raw materials are from
processes and use less artificial ingredients, coloring, and non-renewable petroleum-
based compounds (Venalainen). The second level, marketing, still pertains to the product
offering yet is not intrinsic to the physical product itself. Cause-related marketing would
be one attempt to gain positive marketing level augmentation, which TBS executes
through its major social and environmental campaigns. Augmentation at the third and
corporate level relates to the firm itself supplying the product. As many believe that
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buying cosmetics is not a circumstance “relevant to ethical purchasing, but if [one] takes
the case of Body Shop cosmetics…it is the ethical stance of these companies that makes
it one” (Crane). Moreover, the reputation of the firm is based upon its history and current
situation, making a positive augmentation even more difficult to sustain. Boycotts, such
as the one held in London against TBS, can negatively augment a product even though
the action may be directed at a firm issue which is completely unrelated to the product.
The country level, also the most indirect level of product augmentation, identifies the
By applying the four product levels and the direction of augmentation to a matrix,
one is able to evaluate the overall ethical make-up of a product. (See Figure 1 below)
TBS would most likely rank as an ethical product perceived of more positive
augmentation than neutral. In actuality, however, its augmentation would rest between
negative to neutral augmentation. This is due to several factors, some being the use of
for the product, this model shows that a product itself is not ethical, but is a bundle of
ethical attributes and augmentations. Great importance for corporations rests in this
theory. First, it implies ethical branding can be problematic since greater claims bring
greater scrutiny. TBS has felt such demands. Second, it demonstrates a need for
transparency throughout the firm and all of its activities, as that will increase the positive
its transparency since its last social audit in 1997, weakening its stated social and
environmental commitments, and hence its product. Lastly, the model realizes the role of
accountability in corporate behavior. Similarly, TBS does not rank well on the matrix
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due to its recent lack of reporting, defensiveness against criticisms, and little change from
identified problems. A perception survey asked if “The Body Shop handles conflicts in a
fair and consistent way” only to receive a response in 40 percent agreement (Values
once identified” (Values Report). All of this data suggests a decrease in TBS’s
A plot more balanced to the left side of the matrix is to be interpreted as a less ethical
product than one which is balanced to the right.
ethical basis can analyze the ethical character of marketing decision makers and their
organizations and strategies (Hartman). Virtues are the composition of who humans are
and the quality of their character. Conversely, values “ arise from what we experience
roles, excellence, integrity, judgment, and holism. In addition, honesty, fairness, trust,
toughness, friendliness, loyalty, honor, shame, caring, compassion, and wittiness are
individual virtues relevant to firms (Hartman). TBS’s mission statement, campaigns, and
ideology on paper embrace virtue ethics ethical framework, applying them not only to its
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marketing strategies but also to its moral character. Virtue ethics provides a means of
corporation.
suggests a company that not only does well but also ‘does good’, something TBS is well-
known for through its campaign initiatives. The company gives millions in charitable
donations each year and runs several fundraising and community events. Integrity, which
other virtues such as honesty, loyalty, and trust. The virtue of judgment means making
the best decision with an information void, under time constraints, and with consideration
of context (Hartman).
organization, become an important part since virtue ethics is “concerned with the context
within which one lives and works” (Hartman). Holism indicates that that action of one
person has an impact on others, supporting the stakeholder theory. Moreover, when one
comes into conflict with a concept his/her vision should be expanded until he/she can see
the whole context (Hartman). The last organizational value, community, targets the need
the ability see themselves without recognition of others whom they are connected.
(Hartman)
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TBS is known for its progressive mission statement focused on changing the
world and caring for all of its stakeholders, including the environment. This virtue sets a
high standard of excellence for the company. It is this base which the virtues of TBS and
its leading role model, Roddick, are evaluated upon. Roddick runs TBS with the belief
that “business should be a force for social good first, and consider bottom line profits
second, after social responsibility…the human race will soar if its basic material needs
are being met in an honorable way” (Hartman). Yet, does TBS truly provide basic
material needs, as it sells fragranced, exotic soaps and lotions, specialty shampoos,
As for the integrity of TBS, it remains in question. What is stated and written by
TBS and Roddick appears to exemplify a company of integrity, yet reality has proven
otherwise. She has argued repeatedly that the products themselves cannot be taken
process, and use of profits (Hartman). If this is true for TBS, then less artificial
ingredients and coloring would be used, no animal testing would take place, and more
profits would be utilized – but this does not occur. Instead, TBS did not contribute to
charity “during its first 11 years and did not increase donations to average corporate
levels until a wave of negative publicity in 1994” (Entine 2002). Furthermore, Roddick
and her husband’s annual income is around GBP 465,000 even though she has stepped
down to a non-executive position (Entine 2002). Quality control also remains a problem,
with several of its products consistently contaminated (pumice foot scrub, banana
shampoo) and in December 2001 Denmark’s Green Guide blasted the company for its
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two best selling cosmetics containing chemicals it labeled ‘poison’ (Entine 2002). Not
only integrity, but also trust, loyalty, and honesty are in jeopardy for TBS.
Roddick also claims to have redefined the cosmetic industry which she
characterizes as exploiting women and creating needs that do not exist. Simultaneously,
however, she could be accused of the same evils. TBS uses its belief that it is unethical
to sell the romance of beauty and youth to further differentiate itself from its competitors
and “prides itself on selling the truth” (Thomas 107). Its online advertisements
surprisingly show young, thin, healthy models full of youth and beauty. Moreover, many
of its products have been criticized as unnecessary (Vanalainen). So, although Roddick
does not see herself or TBS as a member of the established cosmetics industry, her
seems unnecessary for TBS to have segmented into cosmetics specifically, instead of
sticking with bath and body products, if Roddick has such feelings towards cosmetics and
Holism, on the other hand, is evident in TBS’s training programs which “teach its
products are linked to social, political, and environmental causes, employees are not only
selling moisturizers and creams, but also enhancing their own lives and the lives of their
customers and others” (Franssen). Moreover, the company engages in Community Trade
programs, employee donation programs, and local fundraising events (Hartman). TBS
understands the impact of individuals with an outlook that “big businesses now hold
global power – the only power over big businesses is the individual consumer”
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to TBS’s social and environmental commitment, however, the company does not shine so
brightly.
“Virtues required for individuals within firms include honesty, fairness, trust,
(Hartman). TBS promotes a product based on its natural components instead of youthful
considered a vanity product…implying other motivations such as the desire for beauty
underlie their use” (Hartman). Moreover, Roddick even questions the effectiveness of
TBS’s products to improve cleanliness and health and has pronounced this in several
ways: “we make products that cleanse, polish, and protect” (Thomas). It was also
discovered from an internal memo in 1992 that half of TBS’s products were tested by
animals, something the company campaigns and labels products against (Venalainen).
Oppositely, all product ingredients are listed on labels and reference materials are
available in stores. TBS’s commitment to honesty has been so prevalent at times the
company has went as far as labeling a “hair treatment product with the warning that it
The largest blow to TBS honesty in recent times is the use of non-renewable
petrochemicals, ingredients that were at some point tested on animals, and the
insignificant amount of resources used from Third World countries (Entine 1995). The
Roddick’s, instead of accepting their and TBS’s faults, have repeatedly taken a defensive
stance to controversy. In regard to the animal testing, the couple “claimed the public
misunderstood the company’s animal testing policy…and wrote letters claiming that the
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knows this then they should be ready to accept that criticism or make changes so it does
not occur. Reactions such as this do not show signs of shame, another main virtue, and a
full embracement of virtue ethics would point to a more reasoned approach. Shame
allows for condemnation of socially destructive behavior, something TBS must recognize
Trust is a virtue that is gained slowly and lost quickly. It can be defined as the
utmost importance for corporations to live up to by fulfilling their states values and
mission. TBS’s commitment to social and environmental causes has been maintained
over the years. The company continues to advocate its campaigns and create sustainable
partnerships. Some of these NGO partnerships include the World Wildlife Foundation,
for more sustainable uses of wood and FSC certification (thebodyshop.com), and
Greenpeace, for a “Choose Positive Energy” campaign to get renewable energy to the
world’s poorest 2 billion people by 2010 (greenpeace.org). Also, in 1992 the Body Shop
commitment of TBS, however it only takes a few mistakes to question this element.
Roddick has condemned malls and the commercial approach to marketing. When
entering the US market, however, Roddick abandoned her beliefs to remain competitive.
She appeared in American Express spots and TBS stores are widespread throughout the
malls of America. This puts into question what else - what other virtues, values, and
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The final central virtue is friendliness, which is vital to sustaining relationships
and communication within a company. In regard to Roddick, her staff has found her to
be “autocratic and almost impossible to disagree with…By contrast, for those who share
Without an open and equal communication policy, progress (if any) is unbalanced in
perspective. All stakeholders must be accounted for and all of their conflicting ideas
taken into account. Without this virtue an equally satisfying or balanced CSR allegiance
falters, especially in the long-term. Roddick’s zealous yet harsh attitude does not
appreciate the virtue of friendliness and therefore may not fully value TBS’s
relationships.
Several conclusions arise from the role of virtues in relation to CSR dedication.
CSR. When TBS strayed from these virtues is when the company struggled to maintain
its mission. Obstacles between competitiveness and virtue ethics may also arise, and in
the long-run it is more profitable to act ethically rather than tarnish a delicate image.
responsibility, a 14 aspect CSR scoring system, which uses the methodology of quality
prefers the use of a standards ethical approach, the Body Shop mission, values, and
beliefs are shown to follow a virtue ethics model. Stahl and Grigsby define three levels
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These three positions also parallel three forms of ethics evident in organizations:
transaction ethics, recognition ethics, and change ethics. The latter levels of CSR and
ethics are needed in corporate policy, decision making, and all-around CSR (Kok).
Following the general terms for EQA scoring methodology, the fourteen aspects measure
how well CSR is developed within the organization. The scoring, however, is done on
four levels. Level one relates to ad hoc policy, or the fact no policy exists nor ethics
awareness. Level two is standard policy where the organization follows the law in
regards to social issues. In level three the law is followed but attention is also given to
society. Lastly, level four addresses an evaluated and reviewed policy where “there is
broad reflection on the activities and effects of the organization on society at large”
(Kok). This level gives significant attention to the aspect of ethics awareness and uses
CSR practices without the need for a direct relationship of performance and profitability.
(Kok)
External Environment
1. Social responsibility and new opportunities: Contributing to solving or reducing social
problems
2. Community relations: Extent of openness and support to people around the
organization and to (local or national) government, stakeholder groups, action groups,
churches, educational institutes, health care institutes, and others.
3. Consumer relations: Extent of openness towards consumers; recognition of rights of
consumers: safety, information, free choice, and to be listened.
4. Supplier relations: Extent of openness towards suppliers; recognition of rights of
suppliers: information, participation in design.
5. Natural environment (e.g. pollution and packaging) and future generations: Execution
of legal requirements, research into current and future technical and environmental
developments, environmental issues regarding packaging (recycling). Respect for
biodiversity and needs of future generations.
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6. Shareholders relations: Extent of openness regarding social effects of the activities of
the organization (especially with regard to investment decisions).
Internal Environment
7. Physical environment: Safety, health, ergonomic aspects, structure and culture.
8. Working conditions: Demands in relation to recruitment, selection, promotion, part-
time work, working on Sundays, medical aspects, retirement aspects.
9. Minorities/diversity: Extent to which attention is given to minorities, diversity,
multiculturalism.
10. Organizational structure and management style: Empowerment, involvement.
11. Communication and transparency: Top down and bottom up communication, use of
information technology, review of information flows: relevance, timeliness, detail,
accuracy.
12. Industrial Relations: Extent to which communication takes place about expectations,
needs, values and norms in society.
13. Education and training: Needs of employees, current and future knowledge of skills,
review of training budget, personal development, quality assurance of training process,
evaluation of training results.
level four for most of these factors, especially regarding social responsibility and new
opportunities. The extent of openness and fairness with suppliers is not as clear. TBS’s
community trade program is said to recognize rights of suppliers by paying them fair
trade prices. In 1992 TBS began working with the Nahuu Indians in Mexico who make a
living selling scrub mitts from maguey plant. Fair trading organizations worked out a
price of $2.20 per mitt, leaving $0.17 profit for the tribe. Roddick, however, would only
pay $2.05 per mitt, allowing virtually no profit for the Nahuu (Entine 2001).
Furthermore, since the mitts became one of the most profitable products for TBS by
1993, Roddick filmed with the Nahuu a commercial for TBS and American Express. She
further promised the Nahuu a library and a truck with the profits she would receive from
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the commercial, but this never materialized. Years later a suggestion to rise the price of
mitts was presented to Roddick only for her to respond that TBS could get cheaper mitts
in India; not exactly the most caring community trade relationship TBS makes it out to
be. (Entine 2001) Proceeds to the indigenous people represent less than 1 percent of the
final product’s price (Vanalainen). In terms of information with suppliers, TBS has also
exploited the image of the Kayapo Indian chief of Brazil, suggesting these relationships
exist more for public relations than CSR (Vanalainen). A level three rating would be
Secondly, the natural environment, one of its main intents to improve, is cared for
in a CSR manner yet it could be better. It seems as if TBS has retreated in its progress of
this crucial aspect. A reuse, refill, recycle program used to in place through the 1990s to
help take responsibility of the company’s wastes. Apparently, this “approach was taken
initially because of lack of funds to keep adequate stock”, not environmental awareness
Unfortunately, TBS no longer does this as costs became too high – putting the bottom
line ahead of the environment. This reflects a similar situation the ethics of the company
were originally based upon. When first starting out, Roddick offered discounts to
customers who brought their own bottles or reused bottles. The motivations behind this
are not what one would expect: Roddick says “everything that’s individual about the
Body Shop happened because we had no money” (Hartman). This information makes it
seem that environmental interests in relation to pollution, packaging, and so forth have
and packaging minimal and recyclable, showing it does go beyond basic standards. TBS
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does claim to use non-renewable sources, such as petrochemicals, in place of natural ones
in order to prevent more harmful impacts on the environment, animals, and biodiversity
(thebodyshop.com). This demonstrates its respect for biodiversity and future generations.
TBS fairs somewhere between level three and level four in this category.
Internally, TBS’s environment has several areas in which it does not excel. These
problems mostly deal directly with employees and franchisees. First, as discussed earlier,
communication and transparency are not up to par. In 1998, after the release of TBS’s
second internal social audit, The Financial Times ranked TBS the 27th most respected
company in the world and in 1999 the Customers Association voted TBS the second most
trusted brand in the UK (Birchfield). As for 2003, TBS did not even rank among the top
100 most respected companies in the world. It has also been heard that TBS quashed two
of its environmental audits after problems cropped up (Entine 2002). The Values Report
does offer some insightful information but is, as a whole, an inadequate social audit and
Organizational structure, management style, and education and training all have
CSR commitment concerns. First, empowerment and involvement are not essences of
TBS’s structure. Less than 20 percent of franchisees agreed with the clarity of senior
issues. TBS even states that “the Company’s policies regarding internal communications
have not been formalized but are in general based on an informal understanding of best
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as well as community trade relation satisfaction. Several employees have voiced this
Open participation, interaction, and change are necessary to operate at level four, and
several situations suggest this is not occurring. A broader and ongoing reflection on the
activities and effects of the organization and on the society at large involving all
stakeholders in the decision making process is critical (Kok). Therefore, TBS receives a
satisfaction on aspects of personal learning and development for employees did not
qualifications, and development for future job opportunities in the company were seen as
highly inadequate (Values Report). As one employee explains, “I have worked for TBS
for over 2 years, and during that time, I have put countless requests in for further training
within other departments. This seems to be taken in by supervisors, but there is never
any feedback” (Values Report). Aspect thirteen is clearly taken at level two, as a
standard policy.
After analyzing the fourteen aspects of social responsibility in relation to TBS the
company surfaces with an overall score between three and four (closer to level four) yet
with significant issues and problems in need of attention and action. Commitment to
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CSR seems to be diminishing or the lack of becoming more apparent. A limitation of this
audit is it does not account for many virtues and ethical roles corporations must harness
Actions of individuals speak louder than words, as this has been proven true
interconnected and heightened media attention, corporations around the globe face direct
scrutiny of both what they preach and what they practice. At the same time, consumers
are becoming more aware, less trusting, and progressively demanding – especially for
CSR. And when consumers are duped once their trust is gone eternally. Integrity is a
leadership, and without it managers cannot attain the goodwill and trust of the
company;
“employees are bound by company standards only when these standards exceed their own
personal standards. When personal standards are higher than company standards, the employee is
able to act as a leader in changing company policies and norms around ethical issues” (Morrison).
This compliments CSR ideology by providing another component which can aid leaders
areas what is the norm may go against the beliefs of another. Different options are to
avoid doing business in the particular country, maintain standards despite a competitive
disadvantage, or change standards to play the game locals do (Morrison). In the case of
TBS entering the US market, they chose the last option and abandoned previously held
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beliefs, the choice of least integrity. Other aspects of integrity are standards, which
should be adopted at the highest standards and maintained throughout the organization,
and strategy, where the company has impact upon other companies and individuals. The
factor of most importance, though, is integrity within internal interactions. This deals
with employee rights, personal interactions, engendering trust, and the duty of global
The Body Shop attains its integrity through its products, marketing, corporation,
country but primarily through its leaders. Anita Roddick, the founder, continues to lead
the company with her ideas, values, beliefs, mission, and so forth, as she has from the
start. It is estimated that she receives approximately $3.5 million worth of free publicity
each year through various articles and appearances for TBS, with her views on the
environment quoted as frequently as those on TBS (Thomas). For years she has
successfully impacted the actions and beliefs of others on a worldwide basis. This is
evident through the hundreds of stores worldwide and sales and profits during much of
the 1990s growing “on average some 50 percent a year” (Thomas). Unfortunately, this is
profits along with it. Without integrity TBS fails to be seen as a committed CSR
company which is not in the game for profits. In the US and Britain, “60 percent of its
business profits fell nearly 25 percent last year [and TBS] has not had positive net cash
flow for more than five years” (Entine 2002). Consumers are more hesitant to buy into
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loss of credibility. This so-called “Mother Teresa of Capitalism” is losing her touch and
her lies being exposed. From discharges of hazardous waste in water systems, the
falsification of TBS being her original creation, dishonest practices with franchisees, to
the dumping of plastic bottles in landfills, all of Roddick’s free publicity cannot cover up
such a mess (Entine 2002, 2001). Even back in 1997 signs began to show, as Body Shop
was ranked low on the attributes prestigious, ethical, and admirable by consumers
(Values Report). More surprisingly, the Roddicks control “over 50 percent of the voting
stock and control the board with a minority of independent members…typical of public
companies but contradicts CSR standards that Body Shop voices support for” (Entine
2002). TBS and its social and environmental commitment are significantly suffering due
“Integrity plays a critical role in global leadership. It is the lifeblood of authority and essential in
securing the goodwill and best efforts of employees. It cannot be forced on others: integrity and
leadership are inextricably linked. Maintaining and demonstrating integrity requires huge effort
and ongoing attention” (Morrison).
VIII. Conclusion
which continues to maintain this commitment; however it in many ways contradicts its
performance. Furthermore, the strength of this responsibility towards the social and
sign of increase, but instead a multitude of problems which exist and need to be handled
appropriately. The frameworks of an ethical product, virtue ethics, fourteen aspect CSR
scoring, and integrity all exclusively assessed the commitment TBS has to CSR.
company with good intentions gone astray. Moreover, if TBS continues to run its
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business as it currently is (unethically, lacking integrity, unsustainably, etc.), it will likely
Being a leader in CSR does open a company to greater scrutiny and difficult
many ways. The celebrity realizes that by being in such a position of power his/her
actions are multiplied in effect and that he/she will have to continuously show what
he/she is made of. At the same time, the celebrity has the opportunity to reap huge
rewards and create enormous positive impacts upon the world. Numerous celebrities do
just this, showing it can and has been done. TBS has the capacity to negatively impact
future CSR businesses, as it has typically served as a market leader. At this time, it
jeopardizes the success of CSR implementation, as some will believe if TBS cannot do it,
then neither can this company. On the other hand, it may invite others to take the lead in
CSR. Either way, by fully coordinating its preaching with its practices TBS can get back
on track to long-term sustainability and uphold its full commitment to social and
ready to collapse. It needs to tread carefully but clean its mess quickly. TBS can only
stakeholders (Stead & Stead 5); otherwise The Body Shop is unable to do this “body”
good.
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IX. Recommendations
Several recommendations exist for The Body Shop at this time, apart from those
mentioned within the paper. To begin, the company must restore its integrity through
greater transparency, full application of what it preaches, and new leadership. The
Roddick’s and The Body Shop would both greatly benefit from a complete detachment
between them. Roddick herself is a main cause of the lack of integrity and leadership
driving the company away from exemplary CSR. Also, annual social audits should be
conducted by an external auditor to increase not only transparency but validity and
accountability within The Body Shop. Product restructuring may also be of use in regard
to quality, packaging, and ingredients. Complementary to this is the reuse, refill, and
recycle campaign which is no longer in place. This should be immediately restored, not
for bottom-line reasons as before, but to prove TBS does want to reduce its waste and
impact in nature. Internally, the company needs to improve franchisee relations, training
policies, encourage and open communication, and attain greater stakeholder dialogue.
Lastly, the values which TBS decides to maintain should be taken to the highest possible
TBS could also learn a few things from its competitors, Aveda in particular. First,
less public relations and more action can go a long way. Also, the implementation of ISO
14001 could significantly improve the sustainability of the processes used and the safety
of the company’s workers. Aveda also fosters a more caring environment, still
advocating and educating on social and environmental issues, but not shoving them down
consumers’ throats. Also, their CSR strategy seems to be more “matter-of-fact” than
TBS, who seems to want praise and recognition for every green finger it lifts.
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Additionally, Aveda seems to provide more reasonable ways consumers can act and
which they are likely to act upon. Aveda provides some security that there is competition
within the CSR cosmetic/toiletry retail industry to help raise standards. If TBS is going
to play “hard ball” the company must be ready to go up to bat as well. A few more
strikes, however, will put them out of the CSR major leagues.
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Works Cited
Birchfield, D. “Anita Roddick: In Full Flight.” New Zealand Management 49 (May 2002)
41-43.
Entine, Jon. “High St. chain’s idealism masks a harsh reality.” August 2001.
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Entine, Jon. “Exploiting Idealism: Jon Entine on how The Body Shop betrayed its
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Exploiting_idealism_02.htm>
Hartman, Cathy L. & Beck-Dudly, Caryn L. “Marketing strategies and the search for
Virtue: A case analysis of the body shop, international.” Journal of Business
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Stead, W.E., & Stead, J.G. Management for a Small Planet: Strategic Decision Making
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Works Cited (continued)
Stoll, Mary Lyn. “The ethics of marketing good corporate conduct.” Journal of Business
Ethics 41 (Nov/Dec 2002) 121-129.
Thomas, Robert J. New Product Success Stories. New York: John Wiley & Sons, Inc,
1995
Venalainen, Marty & Cunningham, Peggy. “The Body Shop: The Ethics of the Diesel-
Driven ‘Queen of Green’.” March 2002.
<http://www.geopoliticus.com/bodyshop.htm>
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