1.
In this case, how does The Body Shop address the four components of
corporate social responsibility? In the Body Shop, what tensions among these
components were at work?
The Body Shop
(TBS) does well with the economic component, as shown by its steady earnings
growth. It seems to regard profit
as a byproduct of its overall success.
One may wonder what effect increased competition will have on this
attitude, especially if the rate of earnings growth decreases.
The firm’s slow entry into the North American market and its reluctance
to employ traditional advertising techniques can be construed as failures to
adequately address the economic component.
The firm deals with the
legal component in a variety of ways.
TBS does not employ any sort of animal testing, so it does not need to
comply with most the testing regulations.
The firm does use lawsuits as a weapon against imitators and
counterfeiters; this is one of the few standard industry practices that TBS
employs.
In terms of the ethical
component, TBS has adopted several practices; notably, recycling throughout all
stores and child day care at corporate headquarters.
TBS probably does better
than most businesses in the discretionary area.
Roddick’s personal championing of various causes is important here.
The “Trade Not Aid” program, in which products are manufactured in the
country where the raw materials are obtained, is another example.
TBS’ use of cruelty-free ingredients and the company’s stand against
animal testing also fall into this category.
The practice of giving employees time off to perform volunteer work can
also fall into this category.
There are
constraints forming because TBS has been unable to open many stores and
alternative methods such as telephone and catalog sales have not been effective.
Further, there are new competitors in the market who are backed by larger chains
and enjoy greater resources for product delivery.
Finally, the environmental issue concerns that won TLC early recognition
seem to be not as important to today's consumers.
These economic pressures create a tension within TBS to perhaps cut or
reduce internal CSR spending.
3.
Does the Body Shop employ any questionable
practices with respect to hiring?
The Body Shop asks potential employees questions about "personal heroes" and
individual beliefs. Is it ethical
to ask such questions of applicants?
Are such questions fair to the applicants?
The Body Shop
does refuse to hire employees on the basis of non-related work factors.
To the extent that these questions are used to make illegal
discriminatory hiring decisions, the Body Shop could face legal problems (at
least in the United States). If TBS
is concerned about maintaining core corporate values, these questions are
probably well-intended and ethical, if one considers the good of the whole
company. The issue of legitimacy
brings the issue of law. In this
sense, the questions are probably illegal as a basis for hiring because one's
personal values do not in and of themselves determine whether an employee would
be able to do the job. These
questions are probably not fair to the applicant as they are being judged on the
basis of things that are not legitimate job factors.
4.
What is your
assessment of Anita Roddick’s philosophy regarding the “purpose of a business”?
Roddick maintains
that businesses exist to make social change.
This purpose has traditionally been accorded to other institutions, most
notably governments, religious organizations, and charities.
One may argue that all businesses serve this purpose in the course of
their operations. However,
Roddick’s definition of “social change” involves her role as an activist, which
is not commonly seen in most businesses.
If Anita Roddick steps aside from her leadership role, management will
need to exercise care in the way it addresses the firm’s activism, so as not to
alienate the firm’s franchises and customers.
5.
What are Anita
Roddick’s strengths and weaknesses as a leader?
Should she stay on in a managing role or step aside and allow a more
experienced person to run the marketing operations?
She was an impassioned
woman who seemed more comfortable as an activist than a manager.
As her business grew, she transferred more of the daily management
responsibilities to other mangers, particularly her husband, Gordon.
While Anita repeatedly stated that she did not want to hire
“professional” marketers, the company will be forced to focus on the marketing
expertise of other individuals in the face of stiff competition.
6.
Anita Roddick claims that her firm does not advertise, yet it receives free
media exposure and publicity through the social causes it champions and her
personal appearances. Is this an
appropriate approach for a business to follow?
This approach is unusual in
the cosmetics industry, which has traditionally relied on heavy advertising and
marketing expenditures to build market share.
Competitors object to TBS’s marketing strategy because it violates the
accepted rules of the cosmetics industry.
It should be noted that many companies have adopted “cause marketing,”
the linkage of a brand or firm with a specific charity in advertising campaigns.
A well-known example of this is Procter & Gamble’s association with the
Special Olympics through an annual series of product coupons.
The Body Shop’s approach is different, as it does not advertise; it
provides donations, a pool of potential volunteers and contributors, and
exposure for a variety of international organizations.
The overall propriety of this approach can easily be questioned.
7.
What is your
opinion of The Body Shop/American Express advertising campaign?
Was it a sound business decision on Roddick’s part? What does the
American Express campaign imply about The Body Shop and its customers?
Is this different from the image of the non-profit organizations that The
Body Shop endorses? Did Roddick commit an ethics transgression by advertising
through the American Express ad that contravened her earlier statements and
policy, or was this different? How should she explain herself?
Some may argue
that Roddick’s role in these ads was inconsistent with prior policies.
However, the ads could be necessary from the standpoint of long-term
economic growth. By endorsing
American Express and only using The Body Shop as an example of a company that
accepted the card, Roddick was promoting her business in an indirect way.
From a purely economic standpoint, this was probably a sound business
decision even though some customers were disappointed.
It is possible that Roddick was conveying more of a mainstream,
conventional image for The Body Shop through her promotion of American Express.
She must have perceived the need to move her company’s image more to the
middle of the spectrum by doing this.
This is slightly different than the kind of image she has previously
projected through the kinds of nonprofit organizations endorsed.
The risk of this strategy is that existing customers may be alienated by
the shifting image. Previously, The
Body Shop had catered to an environmentally conscious anti-corporate clientele.
The additional advertising from the American Express ads may generate
more clientele at the expense of losing some current customers who are alienated
by a perceived switch to corporate marketing strategies.
Roddick probably
did not commit an ethical transgression with the ads, if their purpose was to
gain some much-needed publicity for the firm.
Because the ads were not for TBS, per se, it could be argued that she did
not break her promise never to advertise.