The Body Shop approach to stakeholder auditing
A Body Shop case study

Page 1: Introduction

This case study focuses on how The Body Shop assesses its own business performance whilst taking into account its different stakeholder groups and their various aims and objectives.In 1976, Anita Roddick opened the first The Body Shop in Brighton, selling 25 naturally-based skin and hair care products. The Body Shop International Plc now has over 1,500 stores in 47 countries selling over 400...
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Page 2: Stakeholders

Traditional economic theory suggests that the primary reason for a company’s existence is to expand its profitable business. Assessing the company’s performance becomes simply a question of comparing profit levels with forecasts and targets. The owners’ prime objective is to maximise their wealth. The Body Shop, however, has been at the forefront of a growing number of...
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Page 3: Customers

In the 52 weeks to 28th February 1997, The Body Shop recorded 87 million customer transactions. This means that every 0.4 seconds, someone, somewhere buys something from The Body Shop. Customer care therefore has become a crucial part of the trading policy. The Body Shop customers demand not only high quality, value for money products, but also recognise the need for environmental...
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Page 4: Shareholders

The Body Shop is a Public Limited Company and its shareholders are the legal owners. Individuals and institutions buy shares in order to make a return on their investment. Although shareholders may recognise the importance of social and environmental issues, the share price remains important. A falling share price can wipe millions of pounds off the value of a company. In theory, if the...
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Page 5: Stakeholder auditing

The Body Shop published its first Values Report in January 1996. Inevitably, the report contained both good and bad news: Employees 75% of the employees said they were proud to be part of The Body Shop. 71% said they enjoyed their job. Nearly one in four felt they would have to change companies to develop their careers. Franchisees All the international franchisees sampled agreed that the...
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Page 6: Conclusion

The Body Shop sets itself very tough standards and has an exceptionally ambitious mission - to dedicate its business to the pursuit of social and environmental change. Measuring how well the company matches up to its ideals has been a huge challenge. Auditing of all forms is a new science and the principles and pitfalls need to be understood. When it comes to such open disclosure, the company...
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