Corporate social responsibility of the body shop
According to the European Commission, CSR is defined as a concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment. It is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis. Lord Holme and Richard Watts described CSR as the continuing commitment by businesses to behave ethically and contribute to economic development while improving the quality of the workforce and their families as well as of the local community and society at large. In more recent times, The World Business Council explains CSR as the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large. These various definitions displays that every organization that practices CSR, though it may be very similar, would have its own definition of CSR. The student’s view of CSR is when an organization’s aims and objectives not only emphasize on the advancement of and profitability levels of the organization, but when it includes being humanitarian or giving back to society, suppliers, customers, the environment and even employees, it is about incorporating business ethics of social responsibility within a business’s culture and policies, CSR is about being environmentally friendly. Walmart, for example, has made a promise to provide meals to 70 million deprived families in communities, also from another perspective; GlaxoSmithKline (GSK) allows its top performing employees to participate in their PULSE program, where they are given the opportunity to take six months to volunteer in various NGO’s either around the world or locally. This program has really proven to be successful in its objectives of providing expertise information and physical aid to all the underserved NGO’s.
When there is an organization which integrates corporate social responsibility in its policies and objectives, it becomes necessary to outline the differentiation between shareholders and stakeholders of an organization and their individual objectives. Shareholders are the individuals who invest into an organization, which alternately makes them actual part owners of the organization. Shareholders investments are either assumed for day to day operations or in starting new business endeavours. Usually at the end of a financial year shareholders can either enjoy bonuses and dividends through generated profits, or a decrease in its stake of values of shares in the event of a loss. Stakeholders on the other hand, can be anyone who has an interest in the company, whether it is a direct interest or an indirect interest. Thus stakeholders can be known as the company’s suppliers, its customers, the local community, employees and any other individual who has any sort of interest in the organization. Even shareholders are known to be stakeholders of a company; their main interest though would be of the financial status of the firm which as a result may induce a conflict between shareholders and stakeholders. Milton Friedman believed that stakeholders had nothing to do with business and its achievement of high profit levels. He believed that injection of monies into maintaining corporate social responsibility was a waste, shareholders believed in Friedman’s views on CSR and stakeholders which triggered the initial uproar between the two groups. On contrary, R. Edward Freeman’s idea of a business being successful in its goals would be to create value to the organization’s suppliers, its customers, communities, employees and all other interested individuals. Freeman believes that if a company achieves corporate stakeholder responsibility, stakeholder and shareholders conflicts would be no more. Managers therefore has an enormous responsibility in figuring out how to get all stakeholders to come together and co-orporate in an action of being responsible together, socially responsible that is. In accomplishing this factor, each stakeholder group would need to act with levels of responsibility, business ethics would also have to be embedded within the organization. Management has to really think, analyze and mange actively in order to not endure a decline in business.
The student’s own view of stakeholders is that they are the groups of individuals who characterize an organization which in turn, the organization has a responsibility toward these groups. Companies are socially responsible because it acts as a moral mechanism, it can increase motivation within staff, it also acts as a tool to attract investors through improved public image of the organization, and aids in the improvement of communities. There are many benefits to acts of being corporate socially responsible companies, some of which are discussed onward.
An organization’s customers are its most dominant factor when it comes to maximizing profit levels and gaining long term business success. Therefore social responsibilities towards customers must be met with, through moral values and ethics being incorporated in business policies. Companies need to be open, distinctive and honest about its products and services to avoid any misunderstandings that may hamper the social relationship between them and customers. Also in the event of a defective product, management must acknowledge the issue and deal with it accordingly in the best interest of the customer of course, which results in achieving customer loyalty. Additionally, CSR behaviours attract ethically sensible consumers who may also throw out resourceful ideas of enhancing the company’s products and services. It is important to listen to consumers since they are the ones to set the business on its path to long term success and further securing a sustainable competitive advantage in the market. A good example of this would be through Toshiba Group, their rules and policies are inclusive of customer support. Their aim is to be committed to responding to requests and inquiries from customers sincerely, rapidly and appropriately, their basic approach is to serve all customers with care. According to Better Business Journey, UK Small Business Consortium, 88% of consumers said that they were more likely to purchase from a company that supports and engages in activities to improve society.
The thought about being a part of an organization that gives back to society and are known for many good deeds locally or internationally, a company that acts socially responsible, is very motivating to employees of the company as well as potential employees. Social responsibility is of building a positive work environment where all employees can develop and excel. Companies have to maintain ethical policies toward employees and provide appropriate training ensuring they are performing with high principles of integrity and expectation. Hewitt Associates, the global human resources consulting and outsourcing company, in one of their studies of Best Employers in Canada, shows that the more employees are aware of their company’s proactively pursuing of worthy environmental and social activities, the more they become engaged. The study also discovered that if a company reduces its efforts on its CSR programs, employees’ commitment tends to be hindered. Therefore, it is recommended that companies’ responsiveness to their CSR initiatives be consistent as to maintain and constantly improve employees’ commitment thus, strengthening the pathway to better business results. A good example of social responsibility and employees comes from the policies of SOFTBANK CORP and the three telecommunications companies of the group. This group allows employees to select training subjects of a range of over thirty courses for group training and over sixty courses for e-learning from which employees can individually select according to their personal career path, goals and capabilities, as oppose to a standard training session. Moreover, an employee satisfaction survey is done each year as a way for the group to understand its employees’ needs and concerns on current conditions or issues that needs to be addressed to allow for improved business performance and higher levels of employee motivation.
A supplier’s role in corporate social responsibility is very essential since it associates ethical supply to the brand value of products available to consume. An organization would always pursue on maintaining good reputation and continued success; therefore it is very critical that an organization seek ethical suppliers especially since more consumers are also becoming socially responsible. This means that the relationship between an organization and its suppliers must be honorable; in essence of providing quality products to consumers, an organization must ensure its suppliers are reliable, fair and consistent. In the modern day, to ensure ethical suppliers, companies are selecting suppliers who maintain a commitment through codes of ethics which are usually provided by management. A situation of supplier’s responsibility is highlighted through the very comprehensive supplier code of conduct by Apple. According to Apple’s code of ethics, it states that its suppliers must provide safe working conditions, treat workers with dignity and respect and use environmentally responsible manufacturing processes. Moreover, in its suppliers’ code of ethics, Apple further sheds light on its expectations for compliance. These includes labour and human rights of workers which addresses matters of antidiscrimination, fair treatment, prevention of involuntary labour, prevention of underage labour, juvenile worker protections, working hours, wages and benefits, and freedom of association. Apple also highlights the need of health and safety in the working environment which includes occupational injury prevention, prevention of chemical exposure, emergency prevention, preparedness and response, and occupational safety procedures and systems. As a result to the ethics code and its extension which outlines Apple’s expectations from its affiliated suppliers, they then evaluate compliances via an auditing process which would result in pro-active working with suppliers in an effort to drive change. Another moral illustration of suppliers would be of PepsiCo, a company that integrates a supplier CSR assurance in its policies by means of a risk evaluation and management program which is offered in order to educate its suppliers, validate compliance and facilitate for continuous developments within its supply chain.
THE LOCAL COMMUNITY
Companies who are socially responsibly involved with local communities and its activities are usually rewarded an array of advantages. These are the companies who involve itself in sponsorship of local activities and events, support in local charities, operative toward improvement in education and skills training within the community; these are the types of functions which make organizations be beneficial. Through these actions and good status, it would assist companies in winning local customers through loyalty resulting in high sales level which is equivalent to high earnings. Being socially responsible would also improve relationships with local authorities and furthermore make it more laid-back in recruitment of employees. Additionally, some local employees may be influenced into volunteering in community activities, thus improving local relations and simultaneously motivating employees. Similarly, Dole Food Company is committed to providing various medical programs, education programs, housing and community facilities programs, schools, sports facilities, roads, hospitals and safe drinking water to communities in which the company is operational. The company’s goal is to help the next generation of adults prevent many diseases by teaching them the value of good nutrition through improved and interactive teaching curriculums for schools.
THE BODY SHOP
A company which truly honours the actions and principles of corporate social responsibility is The Body Shop. Anita Roddick, Human Rights Activists Founder of The Body Shop, opened her first store in March, 1976 in Brighton, on the south coast of England. The business became very successful over the years in that not long after its inaugural an overseas operating franchise in Brussels was established, and by 1982 the establishment was able to launch new shops at the rate of two per month. The company produces beautifying products through natural ingredients which they seek out globally, they do it not for fashion purposes but because they really want to enhance natural beauty and express unique personalities. The company became a public company in 1985, which followed its creation of an environmental projects department with its first major window campaign being “Save the Whale” with Greenpeace in 1986. The Body Shop Foundation however, was established in 1990 with three main focuses: Animal protection, Human rights and Environmental protection which strive to protect animals, the planet and its people.
The Body Shop’s main objectives is to support organizations at the forefront of social and environmental change, to support groups with little hope of conventional funding and to support projects working to increase public awareness. In achieving these aims, the organization is funded through various fundraisers activities and by an annual donation from the company. It is noted that approximately over 65% of the grants which is funded, comes from nominations from employees, consultants or franchises attached to the company globally.
In ensuring that products are responsibly sourced, The Body Shop launched Community Fair Trade. Other than giving a fair price in trading affiliations, management also offers suppliers an additional income for their families and the sense of security and confidence in developing their own businesses, resulting in some of the best ingredients being provided by local farmers. Farmers and all other suppliers’ must sign the company’s code of conduct which supports its ethical trade program which focuses on improving conditions throughout the supply chain and safeguarding its human rights. The Body Shop is very passionate on animal protection and believes that cosmetic testing should not be tested on animals. As a result, Loral, the parent company has founded research and development of EpiSkin, a synthetically grown human skin which would be used for testing of cosmetics throughout all shops.
Employees are motivated here through a variety of training courses, events and health treatments that are provided by the firm in essence of improving employees’ welfare. The company also offers a global volunteering policy for staff in which a minimum of three days are paid per year for voluntary services.
The company is continuously seeking to reduce its impact on the environment, especially being a global business. Efforts are being made to improve energy efficiency throughout all shops by providing energy awareness training for all staff members thus; employees’ are transforming their car fleet to lower carbon emission models. Moreover, in an attempt of reduction of wastes, the organization now uses plastic bottles and carrier bags that are 100% made from recycled materials.
Of the numerous traits, just a few behavioural aspects were highlighted of The Body Shop being corporate socially responsible. The organization really cares for society and the environment; their values are based on moral sympathy and honourable codes of behaviours. In appendix 1, it shows the company’s statement of spending per programme for the year ending 28th February, 2010, the figures which were calculated for a total of 144 grants that were awarded globally, followed by the company’s financial statements in appendix 2 and 3.
Through globalization, when operational in developing nations, The Body Shop amongst many other globally operating firms, impose ethics of its business environment within the business and throughout existing local environs. Globalization in this sense allows local communities in question, to be benefited from employment opportunities, enhancement of communities, it allows local suppliers to feel worthy when producing raw materials through the suppliers code of conduct which they would have to comply to. The student’s views of globalization in essence is about building and maintaining ethical relationships. A corporate socially responsible company, with regards to globalization, also addresses the matter of the health and safety conditions when operative. This means that all environmental factors and employee elements are considered, as in the case of The Body Shop who focuses on protection of environment and human rights. It has been critiqued though that globalization leads to exploitation of workers and evolving nations and cities, destruction of the environment and cruelties toward human rights; however with more and more organizations morally evolving and becoming socially responsible, the more and more these critics are being faded out. Besides with the rapid advancement stirring in the communication and information technology sector, no established organization would want to consider falling into the critiqued bracket of disregarding social issues and problems, as it would ultimately collapse. On the subject of globalization, the issue of the global financial crisis arises. Even though it happened in the year of 2008, the crisis is still adversely affecting businesses. Operations of businesses have slowed down significantly since, some mired so much that it eventually became non-operational. The establishments that are corporate socially responsible however are more of the larger organizations’ which were affected by the crisis eventually, but not as significantly as other organizations’. The organizations’ were affected in that some aspects of CSR had to be reduced; however were still capable to maintain some levels of social responsibilities.
In conclusion, it must be stated that companies who indulge in corporate social responsibility behaviours do so on its own free will. In other words, CSR is not a law that organizations’ need to follow. In recent times however, government had to step in as foreign companies operational in India were exploiting all principles of CSR. As a result, the government of India was forced to intervene and have introduced voluntary guidelines for such organizations; also proper legislations are most likely to be introduced to prevent fraud and unfairness from occurring.
Overall, companies’ that behaves in a corporate socially responsible manner enjoys higher levels of overall performances of the company. There are seven best practices to CSR in which an organization must follow in achieving its objectives, they are: setting measurable goals, stakeholder engagement, sustainability issues mapping, sustainability management systems, lifecycle assessments, sustainability reporting and sustainability branding. Some of the best practicing companies are GlaxoSmithKline, Johnson and Johnson, Walmart, Ikea and The Body Shop to name a few. The student determines that the key to these named companies successes and its sustainability are not wholly based on the goal of increasing profits, but also of the moral policies of being truly committed to the social welfare both within and outer of the organization.
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