CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility

Corporate Social Responsibility

The Body Shop International presents the case of a company whose business model strength initially relied on its Corporate Social Responsibility (CSR), but that afterwards faced problems and challenges, due to mismanagement of internal resources, stakeholder's conflicts, and the unawareness of external changes. The model created advantages but also limited growth, as the organization was not prepared for expansion due to the lack of corporate structure required for a global strategy.

Anita Roddick believes in the power of businesses and in the use of success as a force of social change, therefore Body  initial mission was to make profit with principles, that is, being especially responsible for employees, society, Third World development and the environment. This innovative, radical and daring approach became Body Shop´s competitive advantage (Strategic Corporate Social Responsibility); and according to this strategy defined a unique marketing approach: desirable and environmental products, moderated prices and relaxed shop environment in order to attract and educate customers (humanistic, environmental conscious). CSR “pay offs” to Body Shop were clearly appreciated through the 80´s when it grew 50% yearly; media attention and customer awareness resulted in boost sales, shop openings, increases in stock value, etc. Exhibit 1 shows Body Shop's stakeholders and the strategic outcome or value created by the company´s CSR behavior by means of the centrality, specificity, voluntarism and visibility of its actions. Special emphasis and success were obtained in the Visibility dimension, as Body Shop was not always able to practice its social vision, but always was very good at promoting it. Anita is a great PR (“loud and quotable”) and during her management always made sure the firm gained recognition from internal and external stakeholders(Bansal, 2000, 717).

Other keys for Body Shop's success were Anita's leadership, charisma, influence and management style; very convenient for an Entrepreneurship venture. She created a corporate culture based on communication, informality and “break the rules” mentality that resulted in employee's loyalty, commitment and productivity(Barney, 1986, 656).

Nevertheless, at the beginning of the 90´s Body Shop seemed to have lost its magic growth formula. The main problems faced by the company were its inability to align and prioritize stakeholder's interests, as well as its lack of agility and flexibility to evolve and adapt to external changes. One of the main causes was the company´s low Proactivity. An initial opportunity was pursued by Body Shop due to its leader believes, vision, anecdotic and lucky events, but afterwards the company was never able to plan its behavior in anticipation of emerging trends and threats (competition, globalization, expansion) and therefore leverage its first mover advantage in the CSR field.

Body Shop's principal conflict of interest was with Franchises, one of its main partners and stakeholders. The company adopted this model of expansion which was initially appropriate due to its low risk (“self financing”), but failed in improving and controlling the network (Bebbington, 2001, 128). Headquarters was not capable of implementing a control system over franchises, critical during an expansion stage, although ...