According to the 25 April 2000 Directors’ Report, the Body Shop encourages the involvement of all its employees and do not discriminate against groups of people for example Disabled employees. This is achieved by “an in house technical team who audit quality standards and ensure strict compliance with the company’s safety, ethical and environmental standards.”
The Body Shop also has a large involvement in the protection of Human Rights; they emphasize this to their community in a number of ways. “These include encouraging employees and franchises to involve themselves in community projects, as well as campaigns to increase public awareness of human rights, environmental and animal protection issue
Economical Environment:
In this section I will look at some of the economic factors that affect the Body shop financially.
The Body Shop is an internationally recognised company. With 2,039 stores in 50 countries and 12 time zones the Body Shop does have trouble with the interest rates across the world. Currently according to [the Body Shop interim report 2004] the exchange rate is hitting the Body Shop hard. In the first half of the year the Body Shop lost 2.4 million pounds. Principally the U.S. Dollar.
Below shows the percentage of sales throughout the world this year compared to last year.
This table below shows the amount of money the body shop has taken in each of their operating continents and the difference between operating profits.
£MILLIONS RETAIL SALES OPERATING PROFIT 2003 OPERATING PROFIT 2003
Americas £71.1 £5.8 £6.1
Asia and Pacific £86.1 £9.8 £9.6
EMEA £93.2 £6.7 £5.8
UK AND ROI £67.9 £1.1 £2.5
[Body Shop interim report 2004]
The current share price for the Body shop is 183.500p per share as at 12-Nov-2004 17:39:40 (London Stock Exchange 2004) the share price has risen sharply from 1 January 2004 which was 132.5p per share. This rise is due to the body shops current revitalisation including new shop layouts. “The Body Shop is launching a hundred million pound global expansion following a strong increase in group profits last year.” (The Guardian 2004) Also the body shop at home producing a massive 51% increase in profit to £21.5 million in the first half year. [Body Shop 2004 interim report]
The body shop has very distinguished way of approaching unemployment. They go to the areas of unemployment in the U.K and create work. For example is the Soapworks factory in Easterhouse, Glasgow. In 1988 the factory was bought in Easterhouse which was an area of high unemployment then. Anita Roddick opened the factory with staff that had no experience and worked on a trail and error ethic.
The Soapworks in the beginning 1988. The Soapworks after refurbishment.
Anita Roddick invested a million pounds into an eight month project to create the Soapworks ltd. Now they now employ 104 full time employees and in busy periods they employ extra auxiliary staff to deal with extra demand. (Soapworks web site 2004)
Ecological Environment:
According to their web site, The Body Shop Ltd is a hair, skin and beauty products company which promotes fair trade and sustainable development. It is common knowledge that they are trying to stop cruelty to animals with their now world-famous “Against Animal Testing” slogan. However, it is not as well-known that they also support many different projects such as “Protect our Planet”, “Defend Human Rights”, “Support Community Trade” and “Activate Self Esteem”. All of these topics shall be covered later.
The body shop has many objectives they hope to reach in the next few years. Some of these are:
• To ensure that 40% of electricity is received from renewable energy sources by 2005
• Identify ways of improving the use of energy, concentrating particularly on the Service and Distribution Centres
• Research how they can viably incorporate a percentage of used material in most of our bottles
• Identify opportunities to increase the amount of waste material recycled from the Regional facilities, Service centres and Soapworks ltd
As part of their “Protect our Planet” campaign, The Body Shop are conscious of the energy they use and the waste produced from their production process. The tables below illustrate the total Electricity used and the Waste disposed and recycled in the past few years.
(Body Shop web page 2004)
TOTAL ELECTRICITY USE
2002/03 2001/02
Electricity used by Company (MWh) 30,049 30,738
Renewable Electricity used by Company (MWh) 9,914 10,718
CO2 emissions from Electricity (Tonnes) 9,906 9,825
% Electricty from Renewable Sources 33% 35%
WASTE DISPOSED AND RECYCLED: UK
Service Centre, Distribution Centre and UK/ROI and EMEA offices (includes COSi) 2002/03 2001/02
General Waste Disposed to Landfill (tonnes) 531 536
Product Disposed to Landfill (excludes COSi) (tonnes) 501 108
Plastic Recycled 38 69
Cardboard Recycled 353 614
Paper Recycled (included in above) 33
Recycling to Landfill Ratio 27% vs 73% 53% vs 47%
The Body Shop also concentrates on 5 main principles. (Body shop web page 2004)
“The Body Shop has been a leader in the trend to greater corporate transparency, and has been a force for positive social and environmental change through its many campaigning programmes, based around 5 core principles: Protect our Planet, Defend Human Rights, Support Community Trade, Activate Self-Esteem and Against Animal Testing…These principles form the basis of our campaigns and community programmes”
Protect our Planet
In 2002, along with the Greenpeace International, The Body Shop ran a campaign to try and persuade businesses and consumers to ‘Choose positive energy’, which faced the issue of global warming and the need for leaders of large companies to find a renewable energy source and invest in it. The signed petition, which had gathered 1.6 million signatures, was then presented ant the World Summit for Sustainable Development in Johannesburg.
Defend Human Rights
The Body Shop presents annual awards to community-based groups working to protect rights to housing. This year, they will be awarding the third The Body Shop Human Rights Award.
Support Community Trade
The objective of this is to make a positive difference, both economically and socially, within communities in return for goods such as ingredients for products and handcrafted goods. There are currently 36 community based suppliers of goods and ingredients in 23 countries. In 2002, over 190 products launched contained ingredients sourced through this programme.
Activate Self Esteem
During 2003, the company placed a long-term emphasis on issues directly relating to their main consumers - women. They aimed to ‘Stop Violence in the Home’ with leading organisations. This programme has a strong reputation in many countries such s Canada, US, UK, West Malaysia and the Philippines.
Against Animal Testing
The Body Shop was the first company to be certified against the Humane Cosmetics Standard, which attests to the effectiveness of our Against Animal Testing Policy and the monitoring processes that underpin this. During 2003 they renewed their certification following independent evaluation of their systems against the Standard.
Socio-cultural Environment:
The Body Shop’s “Trade, Not Aid” project to help Third World Countries’ primary producers by not just giving them contributions but by making a deal with them continually was the ‘green’ businesses way of trying to give the natives in Brazil a constant income for the raw materials, brazil nuts which they grow and gather for the firm, which in turn allowed them to manufacture one of their best selling products, ‘Rainforest Hair Conditioner’. (The Body Shop website 2004).
The Body Shop has cultivated a reputation as a ‘green’ company that has pioneered trading links with indigenous cultures. However, at the height of promoting this only 0.16% of its turnover was with the third world (Saulo Perean 2004).
The Kayapo Indian villagers have been a very effective marketing tool for The Body Shop in recent years but they now run the risk of being discarded when their usefulness runs its course (Entine 1996). Problems with the Kayapo people have been simmering for years as the Kayapo leaders don’t consider that they’ve conceded rights of use of the image to The Body Shop (Entine 1996). This highlights that The Body Shop appear to be misrepresenting the Natives in order to benefit from marketing value of the project and have in fact, in my opinion, gone against their objective of trying improve income distribution within third world countries, by sacrificing the natives and one of the firms “five value pillars” of supporting community trade (The Body Shop website 2004).
The Body Shop customers have also been let down by the apparently ‘socially responsible’ business. In 1989 The Body Shop changed the labels on their products from, “Not Tested on Animals” to reading, “Against Animal Testing” (Kaufman-Rosen 1997). As they had been advertising falsely to the consumers, as it’s basically impossible to ensure all ingredients have never been tested on animals. For example, in 1991 the Vitamin E acetate for use in their sunscreen line was confessed to contain ingredients that had been tested on animal (Entine 1996).
The Body Shop have to be aware of the changing family structures in society today and this is because they are said to be a socially responsible firm and pride themselves in being involved and valued within the community (The Body Shop website 2004). Domestic violence affects one in four women in their lifetime, regardless of their ethnic origin or social status and this figure has increased over the past ten years (BBC website 2004). Therefore The Body Shop have initiated a campaign against domestic violence, it is entitled, “Blow the Whistle on Violence against Women.” The programme involves educating and training employees with sessions with experts in this field of domestic violence and sexual assault. To promote awareness of the problem of domestic violence in the home. The Body Shop has used their shop windows and merchandising space to promote this cause (Edelson 1995).
SWOT ANALYSIS:
STRENGTHS:
Supports Local, National and Global fair trade
o Against Animal Testing – Appeals to customers
o Protects the Environment by recycling and only using natural resources in their products
o Shops in 50 countries giving them a wide range of consumers and possible suppliers (body shop international web page 2004)
o Promotes many organisations such as:
• Protect our Planet (Greenpeace international)
• Defend Human Rights (The Body Shop Human Rights Award
• Support Community Trade (based on fair trade principles)
• Activate Self Esteem (leading organisations to “Stop Violence in the Home”)
• Against Animal Testing (Humane Cosmetic Standards)
Supports recycling and reusing of products (tree felling, bottle refills) which saves natural resources and encourages others to do so (if a bottle returned, customer gets a refill for half original price)
Uses other methods of testing to ensure products are safe (consumers are paid to donate nails for the testing of nail varnish, etc)
WEAKNESSES:
Because The Body Shop is an international company with over 2,039 shops in 50 countries (web page 2004) they will soon have trouble to expand further. For example in New York they have 15 stores. [The body shop annual report 2004] They are now running out of space to expand in major cities and will have to cut back in the future and fewer stores will mean less revenue.
The way the company tests their products. Because The Body Shop does not test their products on animals the new products will take longer to reach shelves this in turn will affect consumer consumption due to consumer tastes thus reducing profits.
Currently The Body Shop is in debt. They are £45.5 million pounds in debt [Body Shop 2004 interim report] this restricts their capacity to make plans and if sales decline they have restricted funds to counter bankruptcy.
OPPORTUNITIES:
There are many opportunities available to the Body Shop these include expanding, appealing to a niche market and encouraging the ban on animal testing.
According to (company monster 2004), “The Body Shop is a value driven, high quality skin and body retailer operating in 50 countries with over 1,900 outlets.” This shows that The Body Shop has been very successful in expanding in the past based on their current marketing strategy. With more and more interest in the environment, ecology of the planet and animal rights. The existing strategy of The Body Shop should provide them with the opportunity to continue expanding in the future.
The Body Shop took the opportunity of “creating a niche market sector for naturally inspired skin and hair products”. This has been beneficial to them as it has helped towards their brand name ranking The Body Shop the 28th top brand in the world and the 27th most respected company according to the Financial Times.
The Body Shops main aim is to put a ban on animal testing and campaign to do so, there has already been a ban put on animal testing in the UK and the Netherlands. There has been an ongoing debate for a number of years to ban it in the EU. The ban is to be introduced in 2009. By continuing to campaign in this reflects The Body Shop brand in a positive way which has been a contributing factor to the brand awareness.
THREATS:
The first major threat to The Body Shop is competition. This is present in many forms from high street pharmacies such as Boots and Superdrug to make-up companies for example Virgin. Competition may now also be extended to include department stores such as Debenhams and House of Frazer as they now offer health and beauty products. The above companies have diversified and their product ranges have extended. Many of products are cheaper alternatives to that of The Body Shop and are of a high quality. Perhaps a competitive edge of these firms may also be their availability and easy access.
Media coverage especially negative publicity in the recent years has been another threat to The Body Shop. This negative press surrounds their ‘socially responsible’ business ethics and their company stance on the “five value pillars” on which the business is founded. These five value pillars include, being against animal testing, active self-esteem, defending human rights, protecting the planet and supporting community trade (The Body Shop website 2004). From these value pillars several flaws have been identified by the media and have therefore become an external threat to the firm. One revelation which was a threat to the business was that it was uncovered that the Body Shop’s name, package design and product line, even its recycling philosophy was copied from another cosmetic company – the Body Shop of Berkeley in California. The Roddick’s had visited Berkeley in 1971, five years before Anita opened her first shop in the United Kingdom (Entine 1996).
Pressure groups are another very present threat to any business but especially to The Body Shop as they are operating as “a business dedicated to the pursuit of social and environmental change” (The Body Shop website 2004).
Lack of resources or availability of resources is another prominent threat to The Body Shop. As we have learned The Body Shop obtains many of their raw materials from various countries across the world. For example, The Body Shop purchases nut oil from the Kayapo villages in Brazil, South America (Rosentinal 2004). Therefore a threat to the business could be that if for some reason they are unable to obtain these resources then they’d be unable to produce some products. This would lead to unsatisfied customers and reduced sales.
Conclusion
In this report we have illustrated the ways in which the external environment affects The Body Shop. We have included in this analysis how the company responds to these pressures. In the PEST analysis section we left out the technological area of the analysis as we discovered after in-depth research that it was extremely difficult to gather information regarding this aspect of the business as the firm doesn’t seem to make this data available to the public and it doesn’t play an important role in the business concerned. Therefore we extended the PEST analysis to include Ecological influences on the business in order to give the broadest view of the external pressures on The Body Shop. Apart from the issues discussed in this report, there are many other external pressures which affect the business such as the workers strike at the Soapworks factory in Easterhouse, Glasgow where workers have made an impassioned plea to the company's founder, Anita Roddick, to raise their wages. The average wage at the Soapworks factory - where the workforce is around 60% female is six pounds an hour. Employees at the plant have dismissed the management's 3% offer as a "pittance" (Fotheringham 2004). Another external factor affecting The Body Shop is that consumer tastes will change and what’s in fashion will influence this. It also depends on the consumers disposable income. To survive in this complicated environment an effective internal and external management is needed of this company.
REFERENCES
The Body Shop International, 2004, website: http://www.thebodyshopinternational.com/web/tbsgl/about.jsp [accessed 10 November 2004]
The Body Shop-against animal testing, 2004, website: http://www.thebodyshop.com/values/against_animal_testing [accessed 07 November 2004]
The Body Shop-support community trade, 2004, website: http://www.thebodyshop.com/bodyshop/values/support_community_trade [accessed 07 November 2004]
The Body Shop International, 2004, website: www.thebodyshopinternational.com [accessed 12 November 2004]
London Stock Exchange, 2004, website: www.londonstockexchange.com [accessed 12 November 2004]
The Guardian, 2004, The Guardian. Manchester (UK): Apr 30, 2004. pg. 24
The Soapworks, 2004, website: www.soapworksltd.co.uk/ [accessed 12 November 2004]
The Body Shop-values, 2004, website: www.uk.thebodyshop.com/web/tbsuk/values.jsp [accessed 10 November 2004]
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Edelson, S, 1995, “Spouse abuse is new target of Body Shop”, WWD, 170, 57, 15.
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Individual Contribution:
Andrew Park- Economical environment and Weaknesses, Finisher.
Clare Shire- Background of the Company, Ecological environment and Strengths.
Jennifer Thomas- Introduction, Political environment, Opportunities.
Nicola Speers- Executive summary, Socio-cultural en
The Debate: Do men and women have different leadership styles?
THE CASE FOR
By Susan Vinnicombe, Director of the Centre for Developing Women Business Leaders
Women do have different leadership styles from men. As Bodyshop founder Anita Roddick says: ‘I run my company according to feminine principles – principles of caring, making intuitive decisions, not getting hung up on hierarchy, having a sense of work as being part of your life, not separate from it; putting your labour where your love is, being responsible to the world in how you use your profits; recognising the bottom line should stay at the bottom’.
The problem with actually mapping these differences is that the successful male managerial stereotype is so strongly embedded in organisational life that female managers are pressured to conform to it, thereby confusing research results.
Interest in the impact of gender on leadership is relatively new. The first studies were conducted in the US in the early 1970s when male managers at nine insurance companies were asked to characterise ‘women in general’, ‘men in general’ and ‘successful managers’. Successful managers were overwhelmingly identified exclusively with male traits. Many similar studies have been carried out since that time and all have demonstrated that the successful managerial stereotype remains male.
Women managers’ perceptions of the successful manager are only slightly less conclusive. Unlike the women managers in the 1970s and 1980s not all female managers today sextype the successful manager as male; however, no one, male or female, ever identifies the successful manager as feminine. Male, and only to a slightly lesser extent, female, managers continue to describe successful managers as possessing masculine traits, such as self-confidence, competitiveness, decisiveness, aggressiveness and independence.
Positive differences
Many managers, both male and female, agree that sex differences in management style do exist. Interestingly both describe women’s differences in positive terms. Yet when researchers ask managers to describe their own management styles they usually find no significant differences between genders. Does this mean no difference exists? No. What these findings reveal is the extent to which individuals characterise themselves in terms of dominant managerial values, in this case masculine behaviour. At the same time managers describe themselves in terms that fit with the prevailing rhetoric of good management practice, now strongly associated with a consultative style and a high level of interpersonal skills.
Our research shows that many female managers are uncomfortable with the imposed leadership style and this, in turn, can lead to severe stress. Most senior female managers have no children, believing that the combination of a career and a family is untenable. This is in stark contrast to the majority of senior male managers who have children and a wife at home to support them. Today’s culture of long working hours is exacerbating the problem. Many senior women managers are simply voting with their feet, as Brenda Barnes, president and CEO of Pepsi Cola North America, did to spend more time with her children. This is not an isolated example. A few years ago the management of Deloitte & Touche in the US realised that 90% of the women had gone by partnership time.
Style matters
Time after time in management development programmes at Cranfield, women managers demonstrate their different working styles. Using the Myers Briggs Type Indicator male managers consistently come out predominantly as Traditionalists (a mix of ‘sensing’ and ‘judgmental’). In contrast, female managers emerge as significantly more ‘intuitive’, combined with either ‘thinking’ as visionaries or ‘feeling’ as catalysts. The natural strength of the visionary is being strategic, while that of the catalyst is fostering higher productivity by personally motivating people. The problem with letting males dominate organisations, as we do, is that leadership style is narrowly defined.
Whilst women constitute 41% of the European workforce, they occupy only 10% of mangement positions and represent a mere 1% of executive board members. Yet a recent survey on the most admired boards of Britain’s top 100 companies showed that they have larger boards, more women, more executive directors, their directors have more international experience and are better educated. This is a powerful business argument for greater diversity in leadership.
THE CASE AGAINST
by Andrew Kakabadse, Professor of International Management Development
There is a myth about gender and leadership capabilities. This holds that women are better team players than men; more open and mature in the way they handle sensitive issues; and more conscious of their impact on others and hence better people managers than men.
But the myth is false. An international survey by Cranfield comparing top male and female managers in the private and public sector clearly showed that women are no better or worse than men in the practice of management and leadership. It all depends on the man or woman in question, and the organisation for which they work.
Factors affecting performance
Gender is a red herring. The factors that do significantly influence people’s performance, however, are the length of tenure in the job and organisation, the age of the manager and their attitude. In essence, the longer the manager has been in the job and been held to account for their performance, the more positive, outward-looking and mature they are both in attitude and years; and the more responsive they are to the demands of customers, the better they are as a manager.
Countless studies of men and women at work have highlighted the differences they display. The question remains, what is the relevance of such differences to managerial and leadership performance? Gender is but one demographic and, according to our survey, not a significant differentiator of performance.
However, context - the culture of the company, the leadership style of the boss and the attitudes in the office – does play a powerful role. Men and women occupying comparable jobs but in different organisations are likely to react differently, not because of differences of personality, or gender, but because of contextual pressures.
Special case
Women are now regarded as a special case, requiring particular attention in order to be treated on merit, with the recognition that ‘feminine qualities and styles’ neither hinder nor help performance. However, differentiating women from men in order to appoint the most promising candidate, does not mean that, once appointed, similar attention will enhance performance. The peculiarities of the job and the organisation require individuals to fit in and yet contribute. The capacity to balance these paradoxical demands rests with each individual, irrespective of their gender. Both women and men can act as ‘bulls in china shops’, as well as sophisticated managers.
Lobby groups have been a powerful force in promoting the cause of women, both at work and socially, particularly in the US. Undoubtedly, these groups have gone a long way to redress the balance. However, one negative effect has emerged, namely that of political correctness. Fear of the backlash that can arise if being critical of any woman, or challenging the current wisdom of how ‘femininity’ can add to the boardroom, maintains the myth of gender differences influencing work related performance.
The way forward
Today’s economic reality is oversupply. Too many products and services are chasing too few consumers. In order to get that, ‘extra 2%’ which will make the difference, each organisation has to look to itself. Helping people to become more motivated to sell or to provide a higher level of service, requires that staff and management improve dialogue and their internal communications. In effect, internal diversities need to be turned into unique strengths, which give the organisation that extra push. What is the value of sending men and women on separate courses or being given different treatment (unless a special case exists), when aim is to ‘pull together’ in order to survive and prosper?
Managing diverse groups to achieve a cohesive philosophy and consistency of performance is what is required of today’s corporate leader. Evidence shows that women and men are as adept, or as bad, as each other at responding to this challenge.
