The Body Shop (TBS) has developed 2500 stores in 60 countries with a range of over 1,200 products in approximately 30 years, and is the second largest cosmetic franchise in the world. After the first TBS’s outlet founded in 1976, the company has experienced rapid growth and with expanding rate of 50% annually. When its stock first obtained a full listing on the London Stock Exchange, its price increased by more than 500%. In 1999, TBS was even voted as the second most trusted brand in UK by the Consumers Association. The founder, Anita Roddick had received numerous awards including Dame Commander of the British Empire for her contributions. TBS’s success is hard to observe from the extrinsic value but the ethical value which make the success of TBS so legendary and inspiring. Anita Roddick, founder of TBS first entered the industry by using £4,000 to open a small stand-alone Continue reading
Business Ethics Case Studies
Case Study: Fraudulent Accounting and the Downfall of WorldCom
The WorldCom scandal can be called the worst case of accounting fraud in the NSE, and it prompted the initiation of radical reforms that continue to determine how publicly traded companies conduct various transactions. WorldCom was an international telecommunications company with the second largest long-distance telephone connections. WorldCom had the reputation of a telecommunication giant with immense innovation power. However, the company’s CEO Bernard Ebbers could not use WorldCom’s strengths to create a competitive advantage but instead chose to collude with some employees and defrauded the company’s shareholders of over $11 billion. According to the Fraud Diamond and Fraud Triangle theories, four main elements define the thought process of an individual who commits occupational fraud. They include the incentive, opportunity, rationalization, and capability. The incentive presupposes that the person committing the fraud has something to gain from it. Mostly, they have a reason that drives them to commit the fraud. Continue reading
Case Study on Business Ethics: Avon Company Bribery Scandal in China
Avon incorporation is one of the leading door-to-door distributors of cosmetics. After a long period of successive trading in China, the internal audit of the subsidiary company indicated some form of misappropriation. This was attributed to management disregard to ethical management in financial decisions. The company, which engaged in direct sales of cosmetic products, exposed the malpractices of foreign officials. Although China prohibited the direct sale of products in the period prior to 2006, it allowed Avon to begin the direct sales on a limited basis. After February 2006, the act underwent amendment, which allowed for direct sales, but on strict regulations. As a result, it opened up the market for Avon. These subsequent events of the company lack of emphasis on ethical values led to the vulnerability of the company to employee malpractices. After the company realized the poor performance of its subsidiary in China, which was followed by Continue reading
Case Study: Corporate Social Responsibility of Starbucks
Starbucks is the world’s largest and most popular coffee company. Since the beginning, this premier cafe aimed to deliver the world’s finest fresh-roasted coffee. Today the company dominates the industry and has created a brand that is tantamount with loyalty, integrity and proven longevity. Starbucks is not just a name, but a culture. It is obvious that Starbucks and their CEO Howard Shultz are aware of the importance of corporate social responsibility. Every company has problems they can work on and improve in and so does Starbucks. As of recent, Starbucks has done a great job showing their employees how important they are to the company. Along with committing to every employee, they have gone to great lengths to improve the environment for everyone. Ethical and unethical behavior is always a hot topic for the media, and Starbucks has to be careful with the decisions they make and how they Continue reading
Case Study on Ethics: The Google Antitrust Case
Google Inc. started two decades ago as a Silicon Valley startup with an innovative way of accessing the Internet. The company is headquartered in Mountain View, CA, and came into the business world in 1997, one year after it was established with its shares offered to the public in 2004 in the most unusual online way. Currently, Google is one of the search engines that are frequently used around the world, which has enabled the company to further raise its market share. The main product of Google is the search engine, which has enabled it to have global dominance. In addition, the company has other products such as Google Maps., Chrome Browser, Google Drive, YouTube, Play Store, Gmail, and the Android operating system. However, it is worth noting most of the above-named products are offered free of charge to Google users, but customers have to pay to access premium product features. Continue reading
Case Study: Analysis of the Ethical Behavior of Coca Cola
Coca-Cola is the world’s largest beverage company that operates the largest distribution system in the world. This allows Coca-Cola companies to serve more than 1 billion of its products to customers each day. The marketing strategy for Coca-Cola promotes products from four out of the five top selling soft drinks to earn sales such as Coke, Diet Coke, Fanta and Sprite. This process builds strong customer relationships, which gives the opportunity for these businesses to be identified and satisfied. With that being said, customers will be more willing to help Coca-Cola produce and grow. Pepsi and Coca-Cola, between them, hold the dominant share of the world market. Even though Coca-Cola produces and sells big across the United States, in order for the company to expand and grow, they had to build their global soft drink market by selling to customers internationally. For example, both companies continued to target international markets Continue reading