Body Shop International: an exploration of corporate social responsibility

Bryan Dennis Department of Management, Pamplin College of Business, Virginia Tech, Blacksburg, Virginia, USA Christopher P. Neck Department of Management, Pamplin College of Business, Virginia Tech, Blacksburg, Virginia, USA Michael Goldsby Department of Management and Marketing, School of Business, University of Southern Indiana, Evansville, Indiana, USA
Attempts to examine the following question: is Body Shop International a socially responsible organization? This exploration includes a description of the concept of corporate social responsibility and an investigation of some specic actions by Body Shop International to ascertain whether or not these actions are in fact socially responsible in nature.
In 1976, Anita Roddick founded Body Shop International (BSI), a natural soap and lotions company, in Brighton, UK. Since then, the company has expanded to approximately 2,000 stores, with 200 in the USA (Rosenthal, 1994). Anita Roddicks net worth is more than $250 million. With an annual income of $1.1 million, Anita is arguably the most nancially successful self-made business woman in the world (Entine, 1995a). From the beginning, the company focused on being socially responsible. The companys mission statement describes their mission as to dedicate our business to the pursuit of social and environmental change (Body Shop Website, 1997). According to Bryan Weaver, a spokesman from the companys US home office, Early on in forming it, Anita wanted to establish a business that was socially responsible. The cornerstone of the company is that she was able to have a business with ethics (Rosenthal, 1994). She has successfully established herself and her company as leaders in the arena of social responsibility Anita herself has been referred to as . The Mother Theresa of capitalism (Entine, 1996). Mrs Roddick once said, Id rather promote human rights, environmental concerns, indigenous rights, than promote a bubble bath (Entine, 1996). BSIs philosophy of social responsibility has begun to receive increasing attention (e.g. Robbins and DeCenzo, 1998); and this attention has been mostly of a positive nature. In short, it has been suggested that BSI has been held up as a model of social responsibility and ethics in business (Kurschner, 1996). Consequently, the purpose of this paper is to look more closely at this issue and to ascertain whether or not BSI is indeed a solid example of corporate social responsibility We will attempt to achieve this . purpose by: describing the concept of corporate social responsibility (CSR); and exploring some specic actions of BSI to examine if these actions are socially responsible in nature.

What is corporate social responsibility?

In 1960, Davis described social responsibility as businesses decisions and actions taken for reasons at least partially beyond the rms direct economic or technical interest. Similarly in 1971, the Committee for Economic Development made the following statement in regards to corporate social responsibility:
Today it is clear that the terms of the contract between society and business are, in fact, changing in substantial and important ways. Business is being asked to assume broader responsibilities to society than ever before and to serve a wider range of human values. Business enterprises, in effect, are being asked to contribute more to the quality of life than just supplying goods and services.

This topic of corporate social responsibility (CSR), however, has been widely discussed and debated (e.g. Dennis et al., in press; Wartick and Cochran, 1985). There are those such as Friedman (1962), who feel that business should limit its actions to prot maximization:
There is one and only one social responsibility of business to use its resources and engage in activities designed to increase its prots so long as it stays within the rules of the game

On the other hand, there are those such as Frederick (1960), who feel that the resources available to US business should be utilized for broad social ends not and simply for the narrowly circumscribed interests of private persons and rms. Also, in 1991, Freeman and Liedtka presented seven reasons why the concept of social responsibility is often abandoned. One of the reasons given was:
Corporate social responsibility promotes incompetence by leading managers to involve themselves in areas beyond their expertise that is, repairing societys ills.

Management Decision 36/ 10 [ 1998] 649653 MCB University Press [ ISSN 0025-1747]

We address the issue of whether companies are capable of addressing societys ills by

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Br yan Dennis, Christopher P. Neck and Michael Goldsby Body Shop International: an ex ploration of corporate social responsibility Management Decision 36/ 10 [1998] 649653

evaluating the managerial decisions and implications of an organization that has received a great deal of publicity for its alleged social responsibility We argue that . BSI demonstrates the challenges a company faces in attempting to demonstrate socially responsible actions.

Social responsibility in action

Since its inception, the company has exhibited several behaviors reecting CSR. Some of these will be discussed here. First, BSI has a history of charitable donations. For example, in 1994, the company sold 3.5 million shares to organizations that support child abuse prevention, womens issues and an art museum (GG). Also, the company donated 3 per cent of pretax prots to charity in 1994 (Bavaria et al., 1994). In 1995, BSI initiated a campaign against domestic violence. Entitled Blow the Whistle on Violence against Women, the program consisted of training for employees, including sessions with experts in the eld of domestic violence and sexual assault (Edelson, 1995). The company used windows and merchandising space to promote their cause and sent postcards to Speaker of the House Newt Gingrich and then-Senate Majority leader Bob Dole, asking them for full funding of the Violence against Women Act (Edelson, 1995). Also, the company planned to sell whistles and T-shirts to raise money for the YWCA and Outward Bounds Women of Courage program for survivors of violence (Edelson, 1995). Third, the company developed the Trade not Aid program. This program was intended to support developing countries by trading with them, instead of simply giving the money away:
The Body Shop purchases nut oil from the Kayapo Indian villages. The villagers, who collect the nuts from the grounds of the rain forest, are paid above-market prices. The company says the nuts are the only sustainable alternative to the logging and mining that threaten the rainforests (Rosenthal, 1994).

According to Paulette Cleghorn, a spokesperson for the company, Our products offer the consumer an alternative a high quality, naturally based, inspired product from a company that cares about the environment, the developing world and does not test on animals (Wheeler, 1994). Not only did the company claim their product has not been tested on animals, but they also maintain that alternative testing has progressed to the point that animal testing is no longer needed (Entine, 1995b). In public speeches and company brochures, Roddick attacks the monsters in the industry for performing tests that most have long since phased out (Entine, 1995b). Also, the company has a history of taking action to address environmental concerns. For example, the company has been a proponent of green packaging. According to Witold Brzeski, the companys director of packaging development:
Esthetics and better shelf appearance are primary objectives, but its part of our corporate culture to have recyclable packaging. We are committed to four key elements reduce , reuse, rell and recycle (Food & Drug Packaging, 1996).

The company pays the Kayapo well above the market price for Brazil Nut Oil (Bavaria et al., 1994). According to a statement issued by the Kayapo, The chiefs are pleased with the businesses they make with the Body Shop, because it is a way for the community to earn money to buy the things they need without having to work in the city (Bavaria et al., 1994). In addition, the company promotes its product as natural and not tested on animals.

The company encourages customers to reuse product containers and will redeem them for a nickel (Mehegan, 1996). Also, it has dealt with the problem of waste water affluent. By installing a Living Water waste treatment system, they became the rst international skin- and hair-care company to tackle the industrys chief environmental challenges: successfully treating raw factory waste on site with an experimental, ecologically sustainable system (Roderick, 1993). These environmental efforts have paid off for BSI. For the year 1997, the company had the highest ranking in an environment report published by the UK (Boulton, 1997). Our discussion thus far would seem to support the argument that BSI acts in a socially responsible mode. There are further actions however, that this organization has enacted that need to be investigated before this determination can be made.

Social irresponsibility?
When examined under a microscopic lens, corporations, like people, can usually be found to be less than perfect. In terms of CSR, BSI ts this heuristic as well. From the companys inception, there have been allegations of behavior of a socially irresponsible nature. It has been said that Anita Roddick

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Br yan Dennis, Christopher P. Neck and Michael Goldsby Body Shop International: an ex ploration of corporate social responsibility Management Decision 36/ 10 [1998] 649653

stole the name of her company According to . Jon Entine (1996),

The ethical contradictions begin with the very founding of her company According to . Anita Roddicks friends and colleagues, she stole the company name, many of its product ideas, and its marketing tactics from a California company, also called The Body Shop. The California store was founded at the height of the hippie revolution in 1970 six years before Anita started her Body Shop, and the same year that the Roddicks visited the San Francisco bay area where the stores were located.

While it may never be fully proven whether or not these allegations are true, this issue could indeed raise a red ag regarding BSI and its philosophy of CSR. Additionally, while BSI initially claimed that its products contain ingredients that are not tested on animals, there is evidence that this claim is not completely true. Although it may not do the testing itself, Anita Roddicks company uses ingredients in its products that have been tested on animals (Entine, 1995b). The companys purchasing manager, in an internal memo dated May 1992, noted that 46.5 percent of its ingredients have been tested on animals (up from 34 percent the year before) (Entine, 1995b). The West German government did not care for this fact and successfully sued Body Shop/Germany 1989 for misleading advertising. The court ruled that since all cosmetic companies use ingredients tested on animals by third parties, Body Shop claims that its products were not tested on animals and that we test neither our raw materials nor our end products on animals were misleading. Body Shop ended up junking its deceptive label, replacing it with the equally disingenuous against animal testing (Entine, 1997). Some feel that the against animal testing claim is also deceitful. In the summer of 1996, the European Unions Department of Trade and Industry banned the companys against animal testing label, stating that it deceives customers (Entine, 1997). Also, with regard to the companys claim that alternative testing can replace animal testing:
Toxicologists, including those who work for the Food & Drug administration, are almost unanimous in maintaining that only animals provide the integrated, reactive biological system that approaches the complexity of a human. In other words, if consumers really want safe products, rather than just feel good about their moral choices, limited animal testing is a necessity (Entine, 1995b).

with the public on these issues regarding animal testing and its products. Also, the benets of the Trade not Aid program have been questioned. Although the company has publicized this program vigorously, BSI has not disclosed exactly what percentage of its raw materials are obtained from these developing countries and has not responded to requests for this information (Bavaria et al., 1994). It has been calculated that as little as 0.165 per cent of gross sales ended up in the pocket of Trade not Aid producers (Bavari et al., 1994). According to Entine (1995a), the company misrepresents it ethical trading practices (less than 0.16 of turnover). In addition:
[Terence] Turner [anthropologist at the University of Chicago] states that the rms work with the Kayapo is a public relations ploy above all which aids the Body Shop in promoting its image while offering the Kayapo little trade in return. The Body Shop has used images of the Kayapo extensively in its stores and its information broadsheets. According to Turner, the Kayapo have not been compensated for these images, which have furthered the Body Shops corporate image as an environmentally and culturally sensitive company (Bavaria et al., 1994).

According to Pauline Tiffen, who brought BSI and the Mexican Indians together, Anita Roddick is schizophrenic and sociopathic. She took the project and tried to subvert it (Entine, 1996). Clearly, more information is need in order to measure properly whether Trade not Aid has had a positive or negative impact on these developing countries; yet initial evidence does place these benets in question. Also, the companys initial claim that its products are natural may not be completely accurate:
[W]hile the companys products derive their names, if not their fragrance or color, from owers, vegetables or fruits, one is hard pressed to nd Body Shop products without synthetic ingredients. For example, the Aloe Hair Gel label reads Water, Rosewater, SD Alcohol 40-B, Aloe Vera Gel, PVP (setting agent), trethanolamine, PEG-75 Lanoline, Propylene Glycol, Carbomer 940, Phenoxyethanol, Polysorbate 20, Methylparaben, Benzophenone-4, Disodium EDTA, Sodium Dehyoacetate, Proplyparaben, Fragrance, FD& C Yellow No. 5, FD& C Blue No.1 (Bavaria et al., 1994).

As a result, it could be argued that the company may not have been entirely truthful

A few years ago, the company changed its claim of natural to naturally-based (Bavaria et al., 1994). Today, most of these naturally-based cosmetics contain few natural ingredients, some none at all (Entine, 1995b). Also:

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In practice, The Body Shops claims and brochures are more deceptive than many . Geoffrey Brooks (of Brooks Industries), whose company manufacturers an ingredient for Roddicks Blue Corn line, feels the company has passed beyond the gray zone. Shes [Anita Roddick] nothing more than a modern day colonialist, he says, his contention being that the natural claims and the publicized use of indigenous herbs and nuts is mostly puffery In most of their . products they use only the tiniest fraction of a percent of exotic, organic ingredients, not enough to have any effect. Its all for show. Many cosmetic scientists, marketing experts and even Body Shop suppliers concur (Entine, 1995b).

Conclusion
As the issue of corporate social responsibility continues to receive the attention of the world, debates will continue to be heard. As proven by the above examination of BSI, there are no clear-cut answers when it comes to evaluating CSR of a particular company . Based on the information presented, the reader should be in a better position to make an independent judgment of BSI with regard to its corporate social responsibility . On one hand, some individuals may classify BSI as an example of CSR. They may feel that the positive contributions of this company outweigh any negative consequences of its behaviors. Conversely, there may be others who may not be so forgiving and/or understanding of a companys shortcomings. If you fall into this category you might agree with Stephen Corry, director of Survival International, who describes the company as sleazy and no more ethical than heap [sic] of beans (Entine, 1996). In deciding whether the company is representative of corporate social responsibility, we argue that there is no clear answer that everyone would agree on. We do feel, however, that it is safe to suggest that BSI demonstrates the struggle of attempting socially responsible actions in a complex, global market. As the corporate social responsibility debate continues, the only thing that can be reasonably stated with any certainty is that there are no clear-cut answers to the following questions: Can any business be classied as completely socially responsible? If BSI with its reputation of social responsibility, does not quite measure up, who can? Indeed, more research is needed to begin answering these questions. Hopefully, the ideas presented in this article will serve as a catalyst for such an investigation.

These statements may indicate that BSI may have not been entirely forthright with the public with its natural claims. Furthermore, although BSI donated almost 3 percent of its pre-tax prots to charity in 1994, the company donated nothing for its rst nine years of existence (Entine, 1995a). The companys average yearly overall charitable donations (from inception to 1995) came to half the average contribution of all US corporations pre-tax donations (Entine, December 1995). The current 3 percent compares well to the average US corporate giving gure, but falls short of the level of contributions made by such socially responsible corporations as Dayton Hudson (5%), Ben & Jerrys (7.5%) and Patagonia (10%) (Bavaria et al., 1994). While the charitable donations of BSI are adequate, one might expect a company with such a strong reputation of social responsibility to make a larger nancial contribution to repair societys woes. Finally, there have been environmental problems associated with BSI as well. At the companys former New Jersey warehouse, there were three leaks of product into the environment:
According to the records of the company and the local Hanover Sewerage Authority, at least 62 gallons of shampoo and shower gel were released. It also appears that the spills were rst identied by the officials of the Hanover Sewerage Authority and traced back to the Body Shop (Bavaria et al., 1994).

Application questions
1 In your opinion, what does it mean for a company to act in a socially responsible manner? 2 Does Body Shop International serve as a good example of corporate social responsibility? Why or why not?

As argued by Bavaria et al. (1994), the pattern of spills suggests that management at The Body Shops facility was lax in its safeguards and tardy in its reporting. It appears that maybe this company is not so green after all. With this additional information, some may nd it difficult to understand why this company has been called a model of social responsibility and ethics in business (Kurschner, 1996).

References
Bavaria, J., Becker, E. and Billenness, S. (1994), Body Shop scrutinized, Insight, September 15. Body Shop Website (1997). Mission statement, Website: www.the-body-shop.com

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Boulton, L. (1997). Body Shop tops league table of green reports, Financial Times, London Edition, February 2, p. 12. Committee for Economic Development (1971), Social Responsibility of Business Corporations, CED, New York, NY, p. 12. Davis, K. (1960). Can business afford to ignore its social responsibilities?, California Management Review, Vol. 2 No. 3, pp. 70-6. Dennis, B., Neck, C.P., and Goldsby, M. (in press), The scoop on Ben & Jerrys Inc: an examination of corporate social responsibility, Journal of Managerial Psychology. Edelson, S. (1995), Spouse abuse is new target of Body Shop, WWD, Vol. 170 No. 57, September 22, p. 15. Entine, J. (1995a), The messy reality of socially responsible business, December, Website: www.betterworld.com/bwz/9512/ cover2.htm (found October 29, 1997). Entine, J. (1995b), The Body Shop: truth and consequences, Drug & Cosmetic Industry, Vol. 156, February, pp. 54-9. Entine, J. (1996), The queen of bubble bath, December, Website: www.brazil-brasil.com/ p19dec96.htm (found December 9, 1997). Entine, J. (1997), Vivisecting the anti-vivisectionist movement, Drug & Cosmetic Industry, Vol. 160 No. 1, pp. 38-41. Food & Drug Packaging (1996), The Body Shops new packaging targets aesthetic, environmental goals, Food & Drug Packaging, Vol. 60 No. 12, December, p. D4. Frederick, W.C. (1960), The growing concern over business responsibility, California Management Review, Vol. 2 No. 4, p. 60. Freeman, R.E. and Liedtka, J. (1991), Corporate social responsibility: a critical approach, Business Horizons, July-August, pp. 92-8. Friedman, M. (1962), Capitalism and Freedom, University of Chicago, Chicago, IL. Gattuso, G. (1994), Charities benet from sale of Body Shop stock, Direct Marketing, Vol. 57 No. 5, September. Kurschner, D. (1996), Tree press, Website: www.condor.depaul.edu/ethics/biz2. html (found November 31, 1997). Also published in Business Ethics, January/February 1996. Mehegan, S. (1996), Green on green, Brandweek, Vol. 37 No. 27, May 20, p. 43. Robbins, S. and DeCenzo, D. (1998), Fundamentals of Management, 2nd ed.,Prentice-Hall, Upper Saddle River, NJ, p. 74. Roderick, K. (1993), Searching for sustainability: The Body Shop tries Living Water, Omni, Vol. 16, November, p. 26. Rosenthal, T. (1994), Soft soap philosophy, Business First of Buffalo, Vol. 10 No. 42, August 1, pp. 15-17. Wartick, S.L. and Cochran, P.L. (1985), The evolution of the corporate social performance model, Academy of Management Review, October, p. 766.

Wheeler, C.D. (1994), Au naturel, Soap-CosmeticsChemical Specialties, Vol. 70 No. 7, July, pp. 36-42.

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