Even The Most Ethical Businesses Can Sell Out

A lot of people have been talking about The Body Shop in their research.  Not only are people using it as an example of how a company can be ethical and profitable, and in fact why those profits are often driven by ethics, some people have been talking about how it was sold because shareholders wanted to make more profit and not be so ethical anymore.  Consider the following articles:

http://news.bbc.co.uk/1/hi/business/4817814.stm

http://www.independent.co.uk/news/uk/this-britain/body-shops-popularity-plunges-after-loreal-sale-473599.html

http://www.cosmeticsdesign-europe.com/Business-Financial/Body-Shop-owner-defends-selling-to-L-Oreal

What's the point of these articles?

Basically, it's to illustrate that in 2006 The Body Shop was merged with the French cosmetics firm L'Oreal. Why would this be a problem?  Because L'Oreal conducted animal testing at the time, something that the Body Shop was always against.  Also, L'Oreal was part-owned by the Swiss food conglomorate Nestle.  Would The Body Shop be able to retain its core values now that it had been merged with less 'ethical' companies?

Even though it's not said directly, we can infer from this that the shareholders in The Body Shop collectively decided to 'cash in' on the success of their business and sell to a bigger company.  Nevermind that the bigger companies were not quite as ethical as The Body Shop: it was an opportunity to make a return on the investment.  This could possibly link to Bullet Point 1, because owners of the business ultimately want returns for their shares and profit, not ethics.  Milton Friedman would have been proud.

Example of a Government which has implemented regulation for companies to have CSR

Check out the link to this website for the Danish government:

http://www.csrgov.dk/sw51190.asp

This could be the kind of information which would be good for the beginnig of a bullet point 6 essay to explain how different governments are makign CSR mandatory.  In this case, the Danish government is making CSR reporting mandatory for 1100 of the largest businesses in the country.

Homework: Unit 3 Take-home examination

During study leave, you will have the opportunity to complete a Unit 3 take-home examination.  The paper I would like you to consider is:

BUSS3 January 2010: "Out and About PLC"

You can find this in your Unit 3 examination pack or at the following website:

http://store.aqa.org.uk/qual/gce/pdf/AQA-BUSS3-W-QP-JAN10.PDF

Due to Mr. Hughes: Friday 20 May, 5:00 PM (both groups)

Clearly, it may be the case that people are not in on that day due to other committments.  For those people who manage to complete the examination by the above date, I will mark your script and have comments for it early next week.

Please email me directly with any questions: rdh@cokethorpe.org.

Good luck.

Mr. Hughes

Bullet Point 4 Essay Plan

As discussed in lesson on 18 May (B Group)

"The factors that determine the extent to which a business is socially responsible."

What is this bullet point requiring us to research?  What is the premise?

Premise: Some businesses will be more socially responsible than others.  Why is this the case?  What are the reasons for the firm taking the responsibility?
Which factors increase the extent to which a business is socially responsible, which factors reduce the extent?

Begin with some definitions:

Interdependence: When two or more things depend on each other (e.g. business and society)
Enlightened self interest: acting in a way that is costly or inconvenient at present, but which is believed to be in one's interest in the long term.  e.g. Firms accepting some short term costs (lower profits) in return for long-term gains.

Explaining factors which increase social responsibility:

Bullet Point 5 Essay Plan

As discussed in lesson on 18 May 2011 (D Group)

Question: "The value and limitations to businesses and stakeholders of social reporting."

What are the arguments for having social reporting?  What are the arguments against?  How do we weigh these things up?

Start with some possible definitions:
Corporate Social Responsibility: The responsibility of a business or organisation to its primary stakeholders (shareholders) and also stakeholders that are affected by indirect and direct activities of the organisation (e.g. suppliers, customers, local community, environment)
Social Reporting/Accounting: Documenting how a business is meeting its social responsibilities.  Formally reporting the social and environmental impacts of a firm's actions to all relevant stakeholders.

Argument for:
Improved public relations.  Argument is that if a firm reports on its social committments, people will trust it more.  Because it helps stakeholders make informed decisions.
e.g.:

• In-depth social reporting provides greater assurance and transparency about the business.  e.g. Marks and Specner plan A.  See link: http://plana.marksandspencer.com/

Value of Social Reporting

Check out this document which has a lot of information about the value of social reporting:

http://hausercenter.org/iri/wp-content/uploads/2010/05/Value-of-Social-Reporting.pdf

This is a long document, but it has some useful info as well as links to real-life companies and how social reporting is of value to them.

Links about Mandatory CSR Reporting

Here are some links which are worth investigating about whether CSR reporting should be mandatory:

http://www.sustainabilityforum.com/blog/mandatory-csr-reporting-2011

http://articles.economictimes.indiatimes.com/2011-02-19/news/28615607_1_csr-new-companies-law-corporate-social-responsibility

http://www.greenbiz.com/news/2009/01/07/mandatory-csr-reporting-denmarks-largest-companies

CSR Case Studies: Nike

The following case study is a great, succint case study of the problem that Nike has as it faces problems of Corporate Social Responsibility.  It's from the mallenbaker.net site, so we should assume that it comes from the angle of being fairly sympathetic to the idea of businesses being serious about CSR.

http://www.mallenbaker.net/csr/CSRfiles/nike.html

What is most interesting about this article is the links it then provides.  If you follow some of the references, you can get some interesting points.  For example, by clicking on the reference to the criticism you find yourself at sourcewatch:

http://www.sourcewatch.org/index.php?title=Nike

Following the links on this site (which looks like a Wiki, therefore probably not too dependable as a source) we get to this:

http://www.corporatecrimereporter.com/ballinger052407.htm

I don't know anything about The Corporate Crime Reporter, but just from the name I'm assuming that they're probably not too sympathetic with to the corporate arguments against Social Responsibility.  They appear to be a pressure group.  Nonetheless, we get some interesting facts from this site, like the fact that it supposedly costs Nike $10 million to $12 million per year in CSR costs.  That is exactly the figure we were trying to find when we were looking up arguments for bullet point 1 and bullet point 4.

Cases For/Against Social Responsibility

Often it can be helpful to look at arguments from two extreme sides of the point.  Even though they might not be particularly balanced, they do provide arguments which you could use as a starting point in an essay.  You could then pick up evaluation points by providing that all-important balance.

For the extreme side of the case against CSR, check out the libertarian think-tank The Adam Smith Institute:

http://www.adamsmith.org/

This website is where I found this quote from a proponent against CSR, Milton Friedman:

http://www.adamsmith.org/blog/tax-and-economy/friedman-on-corporate-responsibility/

This has a nice contrast with the following website.  It appears to be a CSR consultant who has lots of good info (and case studies) about why CSR is so good:

http://www.mallenbaker.net/

The following is something I pulled of his site, where he goes through the arguments against CSR and then gives his own rebuttal to each one.  This would be great stuff to pull up if you wanted to think about how to qualify your essay points in a response:

http://www.mallenbaker.net/csr/against.php

Value and Limitations of Social Reporting: A few threads

Listed below are a few threads which might help kick-start your research for Bullet Point 5:

Supporting the benefits of social reporting:

http://www.businessgreen.com/bg/analysis/1801847/how-value-csr-report

http://www.environmentalleader.com/2008/02/12/finding-value-in-csr-reporting/

http://www.triplepundit.com/2009/12/the-true-value-of-csr-reports/

http://blogs.forbes.com/csr/2010/05/11/what-do-we-make-of-csr-reporting/
(this one might also be good for bullet point number 6)

Finally, an report which focuses on the question at hand directly: whether readers value what is said in a CSR report:

http://www.futerra.co.uk/downloads/Reporting_Change.pdf

Additionally, there is a blog on the Guardian website which runs through a lot of CSR issues (this is the source of the above report).  This can be accessed here:

http://www.guardian.co.uk/profile/solitaire-townsend

The author of the blog, Solitaire Townsend, also runs a sustainability communications company.  This might be an interesting place to look when considering the cost of writing a CSR report (e.g. how much would it cost to have such a company produce this report for you?)

http://www.futerra.co.uk/home

Good luck!