Case 3: The Body Shop: Poster Child of Early CSR Movement
1. As this case begins, how does The Body Shop address the four components of corporate social
responsibility (CSR)? What tensions among these components are at work?
The Body Shop (TBS) does well with the economic component, as shown by its steady earnings
growth. It seems to regard profit as a byproduct of its overall success. One may wonder what
effect increased competition will have on this attitude, especially if the rate of earnings growth
decreases. The firm’s slow entry into the North American market and its reluctance to employ
traditional advertising techniques can be construed as failures to adequately address the
economic component.
In terms of the ethical component, TBS has adopted several practices—notably, recycling
throughout all stores and child day care at corporate headquarters.
There are constraints forming because TBS has been unable to open a large number of stores and
alternative methods such as telephone and catalog sales have not been effective. Further, there
are new competitors in the market who are backed by larger chains and enjoy greater resources
for product delivery. Finally, the environmental issue concerns that won TLC early recognition
seem to be not as important to today’s consumers. These economic pressures create a tension
within TBS to perhaps cut or reduce internal CSR spending.
2. Does The Body Shop employ any questionable practices with regard to its hiring practices?
The Body Shop does refuse to hire employees on the basis of non-related work factors. The
Body Shop asks potential employees questions about “personal heroes” and individual beliefs.
To the extent that these questions are used to make illegal discriminatory hiring decisions, the
3. What is your assessment of Anita Roddick’s philosophy regarding the “purpose of a
business”?
Roddick maintains that businesses exist to make social change. This purpose has traditionally
been accorded to other institutions, most notably governments, religious organizations, and
charities. One may argue that all businesses serve this purpose in the course of their operations.
4. Can a company such as The Body Shop succeed in trying to balance profitability with an
obsession with social causes?
Certainly, there is statistical evidence that indicates that firms who act ethically and pursue
philanthropic activities can succeed financially. In the case of The Body Shop, its own history is
the best indicator as to whether it can be profitable while zealously pursuing social causes. While
5. During Part B, how does The Body Shop continue to address the four components of CSR?
The Body Shop has struggled with its economic responsibilities. The company needs to keep its
economic success in focus and ask whether its social involvement is helping or hurting the firm’s
profitability. The company appears to be obeying the law. However, many of Entine’s charges
6. What is your assessment of Jon Entine’s allegations? What is your assessment of The Body
Shop’s response? Was The Body Shop misrepresenting itself to its stakeholders?
Entine’s sources were checked by Business Ethics editor and publisher Marjorie Kelly, and she
was satisfied that the charges were sound. At a minimum, Entine raised some issues that required
a response from The Body Shop’s management. Gordon Roddick’s attempt to explain The Body
7. Has The Body Shop’s reputation been damaged by the incidents in Part B of the case? What
are the most serious of the allegations?
It does appear that The Body Shop’s image has been sullied by the incidents described in the
case. The most serious allegations surround the claim that the concept for The Body Shop was
8. In Part C, has the firm snapped back from any damage done to its reputation? Did The Body
Shop’s social auditing program help the firm?
The social audit program was a step in the right direction. However, it did not seem to
9. Do the low buyback prices offered to U.S. franchisees reflect poorly on The Body Shop’s
ethics, or are these just the economic realities of risk investments such as franchises?
If the low buyback prices in the U.S. are simply reflective of the dive in Body Shop stock values,
then this may be seen as an economic reality associated with risky investments.
10. By the end of the case, what is your assessment of Anita Roddick? Was she a good
businessperson and leader? Was the sale to L’Oreal an indication that Roddick’s philosophy
had finally failed?
This question is rather open-ended and requires the student’s opinion based on a reading of all
the cases. It certainly is difficult to balance socially responsible enterprise with global economic
competition. Anita should at least be commended for holding to her core values when it might
have been more convenient to abandon them. While many may view the sale to L’Orėal as an
11. Based on your own research, is The Body Shop still a vital part of L’Oreal’s portfolios of
businesses? Has The Body Shop been able to continue its values and priorities under L’Oreal’s
ownership?
L’Oréal was unable to turn The Body Shop around and announced in June of 2017 that it was
selling to the cosmetics company, Natura.
12. Do you think the new CEO’s social theme will invigorate shoppers and turn the company’s
sales around? What is the future of The Body Shop?