Can socially responsible firms increase their profits? - The case of 'The Body Shop'

Résumé du document

Corporate Social Responsibility is a topic of prime importance that has been doing the rounds for long. Since the 1960s, social responsibility has become an important argument not only for business but in the context of law, politics and economics. In fact, in the new context of globalization, firms have to face the economical and social environment and they are becoming more aware of the fact that Corporate Social Responsibility (CSR) is a necessary element of their business actions. Nevertheless, there is still a general attitude towards CSR as its implementation requires spending money that could result in an economic loss. The objective of this project is to investigate the role of CSR and demonstrate that CSR is a factor that can, instead, contribute to the competitiveness of the firms and therefore, improve their financial performances. The priority of a company is to generate profit but at the same time, it can contribute to reach social and environmental purposes, by integrating CSR as a strategic investment in its business. In order to answer the research question and to understand the role of CSR in the economic profitability of the firms, we have chosen as a case study of The Body Shop Company. If customers have the choice between a common product and a product created in a responsible way, they will prefer to buy the second one because they know that they are also acting in a good way. So, CSR plays a role in the purchase intentions of customers.

Extraits

[...] A good image and reputation is also essential for create loyalty among its costumers and business partners because of the competitive position the company can reach (Korkchi and Rombaut, 2006) and a solid competitive advantage lead to good financial performance. A satisfactory economic performance is fundamental for every company. This is the reason why earning profit it remains the basic purpose of every firm, and in the case of The Body Shop, being an ethical and responsible company have help them to be a competitive brand. Having a good image and reputation will bring financial corporate return through improved sales (Moir, 2001). [...]

[...] There are two types of single case study: - the intrinsic case study, to learn about a unique phenomenon which the study focuses on, - the instrumental case study, to give a general understanding of a phenomenon using a particular case. On the other hand, we can use several cases studies. This case named: collective case study, provide us a general understanding. Yin (1994) divides case studies into three categories: - exploratory, to develop theories or to test new theories, - descriptive, to illuminate the research study, - explanatory, to explore cause and effect relationships suggested by theory. [...]

[...] We are going now to give an overview of the mentioned terms. Corporate Governance It is referred to the relationship between business and society, particularly between different stakeholders. The Organization for Economic Co-operation and Development (OECD) in their publication ‘OECD Principles of corporate governance' (2004) defines Corporate Governance as rules and practices that govern the relationship between managers and shareholders of corporations, as well as stakeholders like employees and creditors”. Corporate Governance refers to the “relationship between the different stakeholders which is used for controlling the strategic direction and performance of corporations” (van Dongen p.6). [...]

[...] Indeed, we explain if a socially responsible firm can increase its profits in a competitive environment. We not only describe the situation but also we explain it in order to analyze it and understand it Limitation In this paper, we have presented only one case study to know if a socially responsible company can increase its profits in a competitive environment. The case study is about The Body Shop International company, famous in the entire world for its social actions. [...]

[...] There are many types of methods to collect primary data and the main methods include: questionnaires, interviews, focus group interviews, observation, case-studies, diaries and portfolios. The advantages of the primary data are that we can make the research of information by ourselves; it can cover a large number of people or organisations which includes a wide geographic coverage. These data can be relatively cheap, no prior arrangements are needed. The respondent answers can stay anonymous and there is no interviewer bias. On the other hand, we can meet some inconvenient as design problems. [...]