The Body Shop - The Ethical Other Side

         On the complete opposite end of the spectrum, The Body Shop can be examined.  The Body Shop was formed in 1976, by the entrepreneur Anita Roddick. Since the company started Anita has maintained a moral and ethical code of values. The Body Shop produces and sells a full line of body care products, including: lotions, shampoos, and facial cleansers. While the products sold may be more expensive than other companies there is one big shining reason why: The Body Shop only uses products that are farmed, gathered, and produced using ethical practices. The Body Shop has the following list of five core values that they abide by as a corporation:

• ·         Against animal testing
• ·         Support of community fair trade products
• ·         Activating self-esteem in at risk populations
• ·         Defending human rights
• ·         Protecting the planet

        Additionally, The Body Shop has its own foundation, established in 1989. It provides funding for “small innovative” charities. For example, they are currently funding the Build India challenge. 30 volunteers are travelling to India to build a local community center in order to support disabled children and their families.

         Anita Roddick however, is not happy with her company abiding by ethical practices she fights for the rules to change, so that other companies must be ethical as well. For example, in the United Kingdom testing cosmetic products on animals was banned in November 1998, this was partly due to the lobbying by The Body Shop corporation. Additionally, The Body Shop has withdrawn from China due to their continuation with animal testing on cosmetic products.The Body Shop was also the first company to be recognized under the Humane Cosmetics Standard for their policies against animal testing on their products.
        The company strives to maintain the highest standards in ethical production, most importantly in their community fair trade practices. The Body Shop creates a sustainable trading partnership for communities in need around the world. The Body Shop purchases raw ingredients from community farms around the globe at fair market value, in order to discourage slave labour, but also to directly help the communities that own the farms. Community fair trade is not just the fair trade and purchase of products, but also it supports small communities that own their own farms to produce their products, not simply large corporations who employ people to work there. Today, The Body Shop works with more than 30 suppliers in more than 20 countries in this fair trade initiative, and is responsible for the creation of over 25,00 fair trade jobs around the globe.

As you can see, every label shows the consumer that the product is made of: “Community Fair Trade virgin coconut oil”

Additionally, every label indicates that the product was not tested on animals in any way, and where the product was farmed/produced. 

     Another core value of The Body Shop is activating self-esteem. The corporation achieves this trough marketing techniques that do not sexualize women, but also through empowering individuals to volunteer and feel good about helping others. It also supports a program where employees have the opportunity to volunteer in the local and global community to support groups in need.

     The Body Shop also defends human rights globally. Since 1994 The Body Shop has raised awareness on domestic abuse, and has also raised over 4 million euros to support and protect abused women and children. Not only that, The Body Shop has been involved in peaceful marches to raise awareness and create government change in order to help support and protect victims of abuse. The Body Shop also raises awareness on HIV and AIDS in order to reduce the stigma attached to the disease. The also provide funding and support for the Staying Alive Foundation, which is a youth target project to raise awareness of safe sex, HIV and AIDS. Additionally, The Body Shop supports campaigns to raise awareness of and reduce human trafficking. 

     The Body Shop is also committed to reducing its carbon footprint, and protecting the planet. The Body Shop has committed to reduce carbon dioxide emissions by 50%, and drastically reduce electricity use in order to achieve the emission reduction standard they have set for themselves. The Body Shop has also committed to reducing the waste produced from various stages in production and sale of products, but also to reduce water usage as well. Finally, The Body Shop has set up wildlife preserves at all corporate sites, as well as fruit trees planted in an attempt to increase biodiversity.

The Body Shop does not only sell quality products, but ethically produced ones at that. The corporation believes in not only producing ethical products but changing the laws in order to change ethical practice for all companies. The Body Shop has gone above and beyond in several facets, including ethical trade of products, and raising awareness of several social issues. The Body Shop has displayed all of the qualities needed to be an ethical company, through their five core values. 

Citations:

www.thebodyshop.ca

www.thebodyshopfoundation.org

http://www.thebodyshop.ca/en/values/EthicalTrade.aspx

https://web.stanford.edu/class/e297c/poverty_prejudice/citypoverty/hedge_poverty.htm

Global – Corporate Social Responsibility at the Body Shop

ENRON - The Unethical Offender

Enron was an energy and service company created in Houston Texas in 1985 that was once the seventh largest corporation in America. The company reached an all-time high of market shares at $90 per share, and held the position as the most innovative company for six consecutive years by Fortune magazine. That number quickly plummeted to below $1 when Chairman, Kenneth Lay, and former CEO, Jeff Skilling were revealed to have conducted what has now come to be known as the “Enron Scandal.” The strategically planned unethical accounting fraud performed by CEOs Kenneth Lay and Jeff Skilling resulted in the reporting of the largest bankruptcy in U.S. history at the time in October 2001.

Through the use of accounting loopholes and poor financial reporting Enron was able to hide billions of dollars in debt in addition to manipulating the sale of energy at higher prices in order to increase their revenue. Kenneth Lay and Jeff Skilling misrepresented earnings and modified their balance sheets to indicate profits when in fact the company was undergoing substantial losses. They pressured employees to find ways of hiding the debt, and witnesses have testified that Enron has undergone numerous schemes to manipulate energy prices by creating artificial capacity shortages. During the June 2000 west coast power outage, injuries and accidents were caused in California by Enron having allegedly directly caused a blackout that they would later cash in on through manipulative energy trading. Over 100,000 residential and business consumers were left without power for roughly two days.

Markets are subject to the ongoing laws of supply and demand. The impact of their success or failure in the face of competition and in the business environment during the businesses cycles are a result of decisions that are made by those businesses. Enron has effectively done what is best to earn profits for its CEOs while destroying the lives of its employees. Additionally, they ignored the rights of citizens by initiating a blackout, cheated shareholders by denying them relevant and fair information, and completely disregarded any concept of a responsibility to the livelihoods of its stakeholders. Enron performed both illegal and unethical activities that resulted in over 29,000 employees losing not only their jobs but also 1.2 billion dollars in retirement funds and pensions. Shareholders did not fare better as they are actively suing the company for over 20 billion dollars. Despite having received limited returns in lawsuits the end result remains the same for the victims of Enron’s greed. When a company like Enron makes decisions that go against the commonly used ethical norms of utility, rights, justice, and caring they effectively earn a competitive advantage that violates even their own code of ethics and falls contrary to their July, 2000 corporate mandate to ”..conduct their business affairs in accordance with the highest of ethical standards.”

Most of the time healthy competition is fine but when a business goes beyond creating a competitive advantage and threatens the lives of others, it then abolishes its moral corporate social responsibility to the commitment of its constituents while simultaneously defacing its long term perceptions in their minds. Perhaps the greatest failing by Enron is in its managerial social responsibility to weed out the moral precursors to its illegal activity that has led to the name Enron being affiliated with perceptions of corporate scandal. A perception that has been spread to known participants that were paid out in bribes; for example The Law Firm of Vincent and Elkins, and the accounting firm of Arthur Anderson who received $1 million a week to hide the company’s affairs. Had Kennith Lay and Jeffrey Skilling conducted their affairs in a manner that demonstrated moral decision making by releasing honest financial reports of the firms performance to shareholders, and provided credible movements towards sustainability they may not of had to resort to the unethical business practices that they conducted.    

In the aftermath of the scandal, over 25 criminal counts of fraud charges were brought before Enron. Jeffrey Skilling was sentenced to 24 years in jail while Kenneth Lay had died before sentencing. The accounting firm of Arthur Anderson was also convicted of obstructing justice when the company was found to have been shredding an undetermined number of Enron accounting documents to cover up the billions of dollars in losses by Enron during the investigation. A Vice President at Enron by the name of John Clifford Baxton is said to have been among the few at Enron to have learned from their distorted ethical judgements. Baxton resigned in May 2001 and agreed to testify before Congress in the Enron case. Baxtons despair on the adverse practices at Enron can be extrapolated from his suicide note he left for his wife, Carol in the following year.

Citations:

Enron Scandal (Emmy Award)

https://www.youtube.com/watch?v=2GdvKh3Gr3E

Enron Scandal

https://www.youtube.com/watch?v=Mi2O1bH8pvw

Enron scandal

https://www.youtube.com/watch?v=BdnbSzXJRok

Enron: We ask why.

http://abusinessday.blogspot.ca/2011/11/enron-we-ask-why.html

Enron

https://en.wikipedia.org/?title=Enron

Enron scandal

https://en.wikipedia.org/wiki/Enron_scandal

Enron linked to California blackouts

http://www.marketwatch.com/story/enron-caused-california-blackouts-traders-say

Forbes

http://www.forbes.com/sites/investopedia/2013/02/05/5-most-publicized-ethics-violations-by-ceos/

Business Ethics - Who makes the cut, and who doesn't?

Poor ethical choices are made on a daily basis, some we have control over and some we don’t. We as individuals need to follow our own morals to determine what is right and wrong. We as people are faced with situation everyday that could challenge our morals and ethics. Let’s say you go and buy a new car. The price of the car says $15,000, the dealer then says well I can offer it to you for $14,500, but that’s the lowest I can go. You then find out a week later that your neighbour has purchased the same car for $13,500, at the same dealership. Is it unethical for the salesman to have lied? What if he needed that extra commission to pay his mortgage that month, does it still make it ethically wrong? Another prime example would be the purchase of funds form financial institutions.  They show you the growth of the fund but fail to tell you that their MER (Management Expense Ratio) fees are grabbing most of your profit. Thanks to new laws that are now in place, financial institutions are now forced to show you exactly what you are buying and the fees that come with the product. Ethics are based on a lot of different factors but we have to ask ourselves before making the decision, do the positives surpass the negatives? If so then we have clearly made the right choice.

Greed and power can alter a person’s morals and ethical decisions. This was the case for Kenneth Lay and Jeff Skilling, CEO's of Enron. According to Forbes magazine Kenneth Lay is one of the top 5 most publicized CEO’s to have violated the code of ethics in this day in age. As we enter the story of Enron we will see that his actions and decisions have not only affected the company, but the lives of several Americans as well. Next we will investigate a very different company, one that prides itself on moral and ethical practices. The Body Shop is an excellent example of a company that puts the moral and ethical values above the bottom line price. They are willing to take the chance that consumers agree with their ethical values, and are willing to pay the price for moral and ethical sustainability.