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The Body Shop: Does A “Body” Good?

A Social and Environmental Responsibility Audit


Janell Nicholas

I. Introduction

Throughout history the question of what it means for an organization to perform

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

as corporate social responsibility (CSR). Here corporations exist in a web of

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

business. Here “individuals are basic components of business organizations, business

organizations are basic components of economies, economies are basic components 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

depends upon profitable and responsible business enterprises” (Waddock 13).

A growing trend which parallels the CSR paradigm is the need for social and

environmental responsibility audits. As society demands corporations to become

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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

corporation’s social and environmental commitment, illustrates values, provides

transparency, and demonstrates accountability. One international corporation that has

adopted social audits and is considered a leader in the CSR realm of business is The Body

Shop.

Founded by Anita Roddick in 1976 in Brighton, England, this toiletries and

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

Regulation (EMAS) as the most rigorous, comprehensive and rational framework

available” to develop several annual statements and finally a full audit in 1995

(thebodyshop.com). In 1998 a second social audit, or “values report”, was published.

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

core social and environmental commitment and credibility. It is therefore necessary to

evaluate The Body Shop’s fundamental purpose and beliefs, competition, actions, social

audits, performance, criticisms, and overall commitment.

II. The Body Shop Mission and Beliefs

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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

business is primarily about human relationships”, a true stakeholder perspective. The

“body” of stakeholders which TBS identifies are placed in eight critical, or primary,

stakeholder groups and consist of customers, employees, suppliers, franchisees,

shareholders, local communities, campaign partners, and home consultants. Furthermore,

the environment and animals are considered to be separate stakeholder entities.

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
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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

does” (thebodyshop.com). More importantly, however, is the realization of identity

within an organization, as “identity is the source of organization” (Waddock 83).

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

process by identifying the organizational values in the mission statement, which

“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,

and environmental/social responsibility) work hand-in-hand and when this balance is

disrupted the long-run success of the business will become nonexistent. Such a value

strategy also “provides a firm with competitive advantages by allowing them to

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.

III. Core Competitors

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

profitability of TBS but also push TBS to raise the bar.

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

continue to compete. (lush.co.uk)

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)

Origins, owned by Estee Lauder, is based on a foundation of no animal testing,

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

company is not as widespread as TBS, making it less convenient to shop at in stores.

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

having a very low allergy rate. (origins.com)

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

19 countries connects beauty, environment, and well-being to form a unique corporate

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

environmental sustainability policy, which mainly aims to protect biodiversity. As

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

Brazil. It also is in partnership with Conservation International, is ISO 14001 certified,

and publishes annual CERES reports – all which show the company’s dedication to

environmental leadership. Also, in 2002 Aveda received the Corporate Wildlife

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

experience, direct sunlight in any area of work (including warehouses and

manufacturing), on-site daycare, an environmental lifestyle store, and a building

surrounded by 65 acres of wetlands. (aveda.com)

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IV. The Body Shop Campaigns

The Body Shop maintains five significant ongoing campaigns which demonstrate

the company’s commitment to social and environmental responsibility.

A. Against Animal Testing (AAT)

TBS considers it “morally and scientifically indefensible” to test products or

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)

TBS makes sure not to test on animals or commission others to do so by

monitoring suppliers, using ingredient purchasing rules, implementing alternative

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)

B. Support Community Trade

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According to Anita Roddick, “Community trade is our fair trade principles in

practice” (thebodyshop.com). This purchasing program targets buying natural

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,

benefits, commercial viability, and environmental sustainability. Currently 37 suppliers

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

contributions to local, national, and global communities. (thebodyshop.com)

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.

If you want to look younger, live in space” (Thomas). (thebodyshop.com)

D. Defend Human Rights

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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

the four groups in Israel, Kenya, Honduras, and Bulgaria. (thebodyshop.com)

E. Protect Our Planet

The company realizes its responsibility to protect the environment in which it

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

this principal campaign. (thebodyshop.com)

V. The Body Shop Values Report – An Analysis

A social audit “involves assessing internal corporate practices and/or stakeholder

perceptions of corporate practices to determine how well a company is living up to its

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

findings of their Values Report. New Economics Foundation, British Standards

Institution (BSI), and SGS Yarsley International Certification Services Ltd each assessed

the social audit, environmental section, and management systems supporting the Against

Animal Testing policy, respectively.

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

validity which demonstrates the information collected is accurate. New Economics,

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

instance, TBS’s operations in the USA, activities of international franchisees, information

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

understand the linkages between stakeholder groups” (Values Report 1997).

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

improvement are noted as well, including community involvement, franchisee relations,

and effectiveness of dialogue (especially with Community Trade suppliers). Data

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

although this social audit is verified to be reasonable and a forefront activity it

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

be fully recognized and solved. (Values Report 1997)

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

policy. (Values Report 1997)

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

respondent to answer a question on a questionnaire (Zickmund). As mentioned, an

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

corrected for more credible and representative results.

VI. Auditing Framework

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

responsibility commitment. In order to closely portray this commitment, a framework

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.

VII. Social and Environmental Responsibility Audit Analysis

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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

therefore be seen as a misallocation of the world’s resources (Venalainen). At the same

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

a role in purchase decisions. The question, however, remains if it is possible to create

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

involve product safety, environmental impacts, employee welfare, community action,

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

“complex bundle of attribute and perceived benefits…[and] ethical considerations are

most likely to be seen as product augmentations (the addition of extra services or benefits

to the consumer in order to prompt purchase)” (Crane). Two dimensions of ethical

augmentation exist: normative (direction) and conceptual (content). Whether an ethical

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

sustainable sources. Negatively reflected, TBS could have better manufacturing

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

product with its country or manufacturer of origin. (Crane)

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

non-renewable chemicals, poor franchisee relations, and diminishing sustainability. As

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

augmentation of a product’s ethical attributes. TBS, however, seems to have digressed in

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

Report). As employees testify, “there is a certain slowness about addressing problems

once identified” (Values Report). All of this data suggests a decrease in TBS’s

commitment to social and environmental responsibilities.

Figure 1: The “Ethical” Product Matrix (Crane)

Direction of Ethical Augmentation


Negative Neutral Positive
Content of Product A B C
Ethical Marketing D E F
Augmentation Corporation G H I
Company J K L

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.

B. The Role of Virtue Ethics

The theory of virtue ethics focuses on an individual’s moral character. This

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

and appear to shape our behavior…[moreover,] while corporate performance is certainly

business organizations should possess the following virtues: community, membership or

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

analyzing the social and environmental responsibilities and commitments of a

corporation.

The various organizational virtues will be measured against TBS. Excellence

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

will later be discussed in-depth, is a key virtue to organizations, as it also encompasses

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).

The next grouping of organizational virtues is membership or roles, holism, and

community. Membership or roles, individuals’ identities as members of a business

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

to for multidimensional thinking and connectedness, while excluding any

internal/external dichotomy. Collectively, the factors of community suggest when

business individuals see themselves as members of communities these individuals lose

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,

aromatherapy products, cosmetics, and exclusive face products.

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

seriously themselves; rather the importance rests in their ingredients, manufacturing

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

membership or role as a marketer of cosmetics is still questionable in its virtuousness. It

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

is now capitalizing on what she detests.

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”

(thebodyshop.com). When it comes down to individual virtues being assessed in relation

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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,

toughness, friendliness, loyalty, honor, shame, caring, compassion, and wittiness”

(Hartman). TBS promotes a product based on its natural components instead of youthful

benefits. Still, it creates an “interesting paradox for this virtue as [cosmetics] is

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

contains henna which is smelly and resembles manure” (Stoll).

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

social responsibility role of TBS makes it vulnerable to attacks” (Hartman). If TBS

21
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

they have partaken in.

Trust is a virtue that is gained slowly and lost quickly. It can be defined as the

individual virtue involving “dependability, fulfillment of publicly stated values and

commitments in an equitable, honest manner” (Hartman). This fragile state makes it of

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

opened a store in Harlem where 5 percent of its daily purchases go to a range of

community programs (thebodyshop.com). Actions such as these reinforce the CSR

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

commitments - she is willing to sacrifice in the name of profit.

22
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

her environmental and social concerns, she is engaging to be around” (Hartman).

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.

By closely following virtue ethics a company would be able to continuously commit to

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.

C. Fourteen Aspect Social Audit Scoring

To fully “audit” the Body Shop’s commitment to social and environmental

responsibility, a 14 aspect CSR scoring system, which uses the methodology of quality

award/excellence models, will be utilized. Although quality management framework

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

of CSR: minimum legal compliance, enlightened self-interest, and proactive change.

23
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)

The fourteen aspects of social responsibility to be assessed are in represented in


the figure below.

Figure 2: Aspects of Social Responsibility (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.

24
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.

Internally and Externally


14. Ethics awareness: Attention within development and training and communication
for ethical subjects and aspects in relation to work and the business; involvement of
employees in developing codes of behavior, values, ethical codes, and the way employees
are addressed to those aspects; stimulation of broad ethical discussion with all parties.

The Body Shop’s external environment easily demonstrates its policy to be on

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

25
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

given for supplier relations.

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

(Thomas). An incentive to customers was a small discount on their purchase.

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

been more of a byproduct of the bottom-line. Nevertheless, products are biodegradable

and packaging minimal and recyclable, showing it does go beyond basic standards. TBS

26
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

minimum form of transparency beyond what is required.

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

management accountability for decision-making and 32 percent want to see franchisee

input and consultation in decision-making the major improvement (Values Report).

Involvement, in the sense of communication, is one of the largest internal environment

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

practice” (Values Report). In 1997, communication on environmental issues had dropped

27
as well as community trade relation satisfaction. Several employees have voiced this

disconnect in communications within the company:

“I think communication from managers to employees needs to be greatly improved upon as it


seems we are sometimes left in the dark”
“I’d like to see more communication between senior management and shop floor staff. Visits tend
to be few and far between and only between visitors and the manager of the shop”
“TBS has some very good values and sound awareness. However, I feel a divide between the
various divisions of the Company. Better interaction of the departments is required”
(Values Report)

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

score between a two or three regarding aspects ten and eleven.

Finally, education and training are in desperate need of improvement. Levels of

satisfaction on aspects of personal learning and development for employees did not

exceed 60 percent agreement on any survey question (Values Report). Moreover,

training on HR practices and policies, training on business issues, obtaining

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

28
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

to be CSR leaders, nor does it emphasize a critical CSR characteristic: integrity.

D. Integrity and Global Leadership

Actions of individuals speak louder than words, as this has been proven true

repeatedly throughout history. With a global community becoming increasingly

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

critical competency as it forms the foundations of character, is essential to global

leadership, and without it managers cannot attain the goodwill and trust of the

organization (Morrison). More importantly, in addressing the roles of those in 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

in maintaining this role.

Demonstrating integrity is difficult, especially in a global context where in some

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

29
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

leaders. Furthermore, “effective global leaders maintain their integrity by confronting

ethical dilemmas frequently and quickly” (Morrison).

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

no longer the situation at TBS.

Roddick’s integrity in internal interactions has plummeted, bringing sales and

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

ideas, besides products. A loss of integrity, as demonstrated by Roddick, equates in a

30
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

to this lack of integrity and global leadership. As Allen Morrison summarizes,

“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

The Body Shop is a leading socially and environmentally responsible corporation

which continues to maintain this commitment; however it in many ways contradicts its

performance. Furthermore, the strength of this responsibility towards the social and

environmental good is diminishing more than it excels. Value to stakeholders shows no

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.

Conclusively, TBS is a case of an environmentally and socially responsible model

company with good intentions gone astray. Moreover, if TBS continues to run its

31
business as it currently is (unethically, lacking integrity, unsustainably, etc.), it will likely

suffer further losses in corporate accountability, transparency, and finances. Immediate

change in not an option – it is a necessity.

Being a leader in CSR does open a company to greater scrutiny and difficult

challenges, this ongoing need to “prove” themselves. This is similar to a celebrity in

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

environmental responsibility. TBS is close to a bifurcation point where its system is

ready to collapse. It needs to tread carefully but clean its mess quickly. TBS can only

survive “by achieving a sustainable balance within its various subsystems” or

stakeholders (Stead & Stead 5); otherwise The Body Shop is unable to do this “body”

good.

32
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

standards. This may involve new technologies and research.

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.

33
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.

34
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Works Cited (continued)

Stoll, Mary Lyn. “The ethics of marketing good corporate conduct.” Journal of Business
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