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Consumers today appear to be growing less interested with solely the functionality of products. Details like whether or not a specific company upholds ethical and environmentally friendly business practices are now factored in to the decisions of a distinct group of modern consumers often referred to as cultural creatives. (Nijhof 2009:65) This prevalence of consumer awareness was quickly noticed by transnational corporations. These corporations gradually came to understand the emergence of a powerful new target group that was demanding attention. With the surfacing of this new market came the rise of socially responsible business models.
One company born of this shift in the global competitive market is The Body Shop. Since it was founded in 1976 by Anita Roddick, The Body Shop has projected itself to the world as a company which cares not only for the quality of their product, but the ethics accompanying the creation of products, all workers and trading partners, and the consumers. The Body Shop provided an ethical alternative to the generic drug-store brand without the price of luxury skin and body care. It is for this reason that in May of 2009, I applied to be a Sales Associate at a store in my hometown.
Throughout training, the idea that The Body Shop was a visionary corporation was further reinforced in my mind. Employees of The Body Shop are trained to be familiar with things like the Community Trade program as well as Fair Trade products sold in store in order to inspire the customer. The Body Shop trains employees to pamper the customer, and make them aware of unique details about the product such as specific Community Trade ingredients in the product. (Smith 2011:5) This training inspired me to the point where I found myself constantly selling the idea of The Body Shop to not only customers, but friends and family as well. Upon leaving The Body Shop after just over a year of employment, I slowly began to question the truth behind The Body Shop's wonderful claims of social responsibility.
Despite the apparent positive nature of the business model championed by The Body Shop, the pressure to capitalize in the competitive global market has created pressure which resulted in the abandonment of ethical business practice. This paper will assess the positive as well as the negative impact The Body Shop has in its relations with the Global South. After thorough analysis of these opposing perspectives, this paper will conclude that this business model is deceptive and therefore ultimately detrimental to the advancement of the Global South.
In spite of the criticisms The Body Shop has faced in recent years, this transnational corporation left a remarkable impact on the global competitive market. The Body Shop introduced a new method of doing business, encouraging other transnational corporations to act according to the needs of the globally conscious consumer. The Body Shop championed a business model which concerned itself with the development and improvement of Third World trading partners as well as the maintenance of ethical behaviour in all business relationships. This corporation fought hard for recognition in the global market in a way which had not yet been done. This behaviour thus deserves to be commended.
Popular belief at the time of The Body Shop's commencement held programs like aid through self-help initiatives in underdeveloped communities in low regard. (Sheehy 1999:58) The Body Shop defied this norm in its pursuit of providing aid to trade partners in the Global South by enacting the more effective community based approach. Bringing aid to the Global South via community based initiatives has "prove[n] successful in aiding â€¦ target groups by incorporating the ideology of self-help and by assuming positive relationships with the government and development agencies." (Sheehy 1999:64) Roddick, being a former researcher for the United Nations, recognized the efficacy of this approach and so utilized it in her own company. (Nijhof 2009:59)
This ideology is demonstrated with the launch of The Body Shop's Trade Not Aid program. Roddick saw this program as something which would establish "direct trading links with producer communities in developing countries so that they can â€¦ finance their own social and economic development" in a sustainable manner. (Global 2003:332) Aside from bringing revenue to deprived areas in the Global South, The Body Shop has been known to even further extend its support for development of Third World communities. In the small district of Tirumangalam in Southern India, The Body Shop has established a factory for the production of wood and cotton accessories. Workers and their families are provided with a free daily lunch and health care benefits. Along with providing the people with these resources, The Body Shop attaches a twenty percent premium to the goods produced at this factory which funds "the local primary school, daycare centre, and a clinic that offers family planning and HIV/AIDS awareness education." (Ibid.)
Another instance where The Body Shop exhibits its revolutionary aid program is in the case of the Kayapo tribe in Brazil. The relationship between these two groups began when Roddick proclaimed her support in the Kayapo fight to bring an end to the Brazilian government's project to install a hydroelectric dam on the Xingu river. The Kayapo saw this as something which would disrupt their lives as well as the health of the ecosystem. Roddick decided that the best way to help the Kayapo in their fight was to help them generate revenue in an eco-friendly manner. She offered the Kayapo cheif "an airplane and a project for pressing Brazil nut oil in [the] community, A'ukre." Soon after, The Body Shop provided another Brazil nut oil press at another Kayapo community in Pukanu. The Body Shop also instituted a jewellery making business for the women of four Kayapo communities, providing these women with the opportunity to be relatively economically independent. (Turner 1998:116) In this instance, The Body Shop saw the formation of a relationship with the Kayapo tribe as something which would prove beneficial to the tribe. The project would not disrupt their cultural practices and utilize the Kayapo's abundance of brazil nut oil, a good which The Body Shop believed to be "the only sustainable alternative to the logging and mining that threaten the rainforests." (Dennis 1998:650)
The Body Shop's relationships with the Kayapo as well as the workers in Tirumangalam exhibit the positive implications of this remarkably unique business model. This transnational corporation appears to take on the responsibility of ensuring the happiness and safety of all those affiliated with The Body Shop. This attitude is exemplified in The Body Shop's release of a Code of Conduct to be met by all suppliers in 2005. The document assures all those who find employment in a factory which produces goods for The Body Shop are guaranteed human rights despite other country-specific legislation. (The Body Shop International 2005) For instance, the Code of Conduct assures freedom from discrimination and violence in the workplace as well as supporting the abolition of child labour among suppliers to The Body Shop. (Ibid.)
It is acts like this which portray The Body Shop in the global competitive market as a business which refuses to comply with the unethical ways of the past. Needless to say, The Body Shop received a significant amount of attention from the international business community. Gary Hamel, a professor of strategy and international management at the London Business School in London, England, sees The Body Shop as an integral part of an emerging group of revolutionary corporations. According to Hamel, corporations in this category are "shackled neither by convention nor by respect for precedent â€¦ [and] intent on overturning the industrial order." (Hamel 1996:70) Roddick, for instance, proved revolutionary in her methods to re-define the industry with efforts to evade the popular trend within the cosmetics industry of exploiting female insecurity in order to sell over-priced cosmetics and skincare. Instead, Roddick wished to promote her products in a way which projected an image of empowerment, confidence, inner-beauty, and most importantly, corporate social responsibility. (Hamel 1996:71)
In regards to the previously mentioned instances of The Body Shop's good behaviour, this transnational corporation appears to be an absolute success. The Body Shop has managed to portray itself in the global competitive market as not only a successful corporation, but one which has maintained an ethical approach to business throughout its existence. Though this is certainly what consumers and investors are led to believe, it is not wholly truthful. In other words, those who have critiqued The Body Shop on ethical grounds are not without merit. The advancement of the corporation saw a definite loosening of the values which had been so fiercely protected in the early days of The Body Shop. As The Body Shop fights to hold a place of significance in the global competitive market, the corporation's ethics and fair treatment to trading partners in the Global South are forgotten.
The Body Shop's relationship with the Kayapo tribe, though discussed previously as one which exemplified as positive and valuable, is in actuality rather exploitative and paternalistic. Since The Body Shop forged this union with one of the world's last remaining indigenous communities, they have taken complete control over the Kayapo's economic state. Stephen Corry, director of Survival International, believes that trading programs like the one established between The Body Shop and the Kayapo tribes is a gross violation of economic freedom. Corry believes the issue with this trading relationship arises because "there is no local market whatsoeverâ€¦[therefore] the company is able to set the price unilaterally and [may] dictate how much or how little it will buy."(Turner 1998:114)
A system such as this fails to fully benefit a community of the Global South. The Body Shop's trade relationship with the Kayapo encourages dependence rather than self-sustainability and economic independence. Furthermore, Corry asserts that it is unfortunately more beneficial for groups such as the Kayapo tribe to permit logging and mining of their land than rely off the income from "sustainable production of forest products."(Turner 1998:115) The meagre revenue generated from the Kayapo's part in the production of brazil nut oil is simply insufficient for the economic survival of the community.
Corry's contentions with the ideology of The Body Shop's Community Trade program show this technique to be intrinsically flawed and detrimental to communities in the Global South. The Body Shop's apparent interest in the wellbeing of the Kayapo essentially "arises from the marketing ploy of profit-making companies, not from the real needs of rainforest communities or an intelligent consideration of their rights or environmental concerns."(Turner 1998:116) To further assert this point, one must look no further than the use of the "photographic images, and reportage about projects in the media, which serve as free advertising for the company and for which it pays not a penny to the Kayapo." (Turner 1998:116) In utilizing media attention in this way without affording monetary compensation to the Kayapo people, The Body Shop becomes an exploitative entity without regard for trading partners situated in the Global South.
The Body Shop is overtly contradicting the values and ethics which the corporation rests on in its relationship with the Kayapo. This degradation of The Body Shop's foundational ethics can be observed throughout the course of the company's development. It has been demonstrated that Roddick created The Body Shop with the intention of pursuing corporate change, both socially and environmentally. (Dennis 1998:649) This foundation of ethical business practices helped The Body Shop grow as a corporation with the potential to change the unethical methods of the competitive market. Through this process of growth, however, The Body Shop becomes increasingly less concerned with the maintenance of its ethical nature and more concerned with expansion.
This trend is exemplified with the movement of The Body Shop from its home in the United Kingdom to the American market in 1988. This move proved remarkably difficult for three reasons. Firstly, The Body Shop would have to raise prices to compete with the cheaper drugstore alternative. Next, The Body Shop found opening new shops incredibly challenging due to the well-established cosmetics, skin and body care markets in the United States. Lastly, the company which rejected conventional means of advertising found that in order to establish a place in the United States competitive market, it would have to advertise. (Nijhof 2009:63) The move to the United States was relatively successful due to The Body Shop's new corporate focus of conformity rather than upholding a morally sound, unique business model. (Beck-Dudley 1999:260) Steve McIvor, head of communications at The Body Shop, summarized this new variant of The Body Shop's business model in saying the brand will become "less soap-boxy, patronizing, and lecturing" in order to appeal to a wider consumer base. (Nijhof 2009:64)
In addition to The Body Shop's increased attention towards product marketing specifically, the recent sale of the corporation to cosmetics-giant L'Oréal further exhibits the deterioration of the once ethical nature of The Body Shop. The multi-million dollar takeover in 2006 proved to be especially ethically questionable on the part of The Body Shop. It was only three years before the takeover that Roddick had accused L'Oréal specifically as being part of "a cosmetics industry conspiracy to undermine women's confidence in themselves." (Nijhof 2009:67).
The Body Shop has seen significant change in thirty-five years of business. Not only has The Body Shop survived a corporate takeover, but it has also grown to over 2000 stores world wide. (The Body Shop International 2011) Even through this massive expansion, The Body Shop continuously fought for things like an end to animal testing, domestic violence, and sex trafficking. However, The Body Shop's portrayal of business model with a strong sense of corporate social responsibility is not accurate.
When measured against specific characteristics which make a wholly ethical business model, a study conducted by professors of Utah State University determined The Body Shop fails to meet the standards. The study asserts that the degradation of values with The Body Shop's global expansion shows that in order for The Body Shop "to compete successfully in this market its strategies had to conform to [the] context." (Beck-Dudley 1999:260) The Body Shop's pattern of conformity within the global market in order to compete demonstrates that despite the image The Body Shop projects of itself, its performance as an ethical corporation is unsatisfactory.
The Body Shop deserves merit for encouraging consumers to become aware of the distinction between moral and immoral corporations. Helping consumers understand it is well within their power to make ethics and morality an essential part in the success of any corporations is a remarkably important lesson for global consumers. However, The Body Shop has been deceptive in the sense that it portrayed an image of strong ethics when in reality The Body Shop was utilizing a socially responsible image to compete and succeed in the global market. Unfortunately, this pressure to compete and succeed meant the abandonment of ethical business practices.
Initiatives like the Community Trade program, despite the initial intent of helping communities of the Global South grow, has failed to bring any kind of sustainable change. The Body Shop's relationships with trading partners in the Global South are nothing more than a feeble attempt to enforce a fundamentally Western model of development. The Body Shop did, however, manage to succeed in one very important area. This transnational corporation proved that a business could be a part of the global market while upholding certain values. Though The Body Shop failed to uphold all its values, it helped push the global competitive market towards a future of accountability, honesty, and corporate social responsibility.