Free Corporate Social Responsibility Research Paper Sample
Background of Organization
Lululemon is an international clothing brand that was founded in 1998 to cater to yoga practitioners (Shop.lululemon.com, 2015). The founder of the company, Chip Wilson, began teaching the first commercial yoga class in Vancouver and decided that there was something missing from the scene. As he continued teaching, he realized that there was a niche available for yoga clothing. At the time, much of the yoga clothing that was available was made from cotton blends; Wilson recognized the growing need for yoga clothing that was made from more of a spandex blend, as to avoid wicking up and holding the sweat (shop.lululemon.com. 2015).
Wilson felt that there was a need for a new type of clothing, so he began to make prototypes, giving them out to the yoga instructors in his home city of Vancouver for feedback (shop.lululemon.com. 2015). Each week, Wilson got more feedback on his clothes; he soon opened a design workshop and began selling them to yoga practitioners in the area. In 2000, Lululemon opened its first store, selling to the public in the beach area of Vancouver, At the first, the store was a place for people to congregate and practice community living, learning to live a healthy life. However, the store became too busy (shop.lululemon.com. 2015). Soon, the store had to expand, bringing the brand into higher and higher prominence within the athletic community(shop.lululemon.com. 2015). Today, there are Lululemon stores all over the world. Lululemon also has subsidiaries, including Ivivva Athletica, a dance and gymnastics inspired clothing line for young girls ages 6-14 (shop.lululemon,com, 2015).
The mission statement for the company is, “Creating components for people to live longer, healthier, fun lives” (shop.lululemon,com, 2015). The company had an excellent year in 2014, with a net income of approximately $271.4 million, increasing assets to $734.6 million in the United States alone. It is a company whose global influence has skyrocketed quickly, with little indication that the public interest will die down, despite a number of gaffes committed by the CEO and founder, Chip Wilson.
The shipping and distributing headquarters for the company Lululemon are located in Vancouver, British Columbia, and Canada (shop.lululemon,com, 2015). There are more than 200 locations where Lululemon is sold, but the majority of the locations are in North America (shop.lululemon,com, 2015). Lululemon also operates stores in Australia and New Zealand (shop.lululemon,com, 2015). In addition to these stores, there are also showrooms in Hong Kong and Great Britain. Lululemon clothing is also sold in a number of third-party retailers including those in Physique 57, Equinox, CorePower Yoga, Pure Barre and more fitness studios (shop.lululemon,com, 2015).
Lululemon has a number of strange policies insofar as their employees are concerned, and this is one of the reasons that it has been chosen for examination here. Lululemon is more than a brand, it considers itself to be the corporate example of a healthy ideology; for this reason, it often requires that its employees partake in a healthy lifestyle that is similar to the one that Chip Wilson has long espoused (shop.lululemon,com, 2015). Employee training and healthy living has always been important to the company, and Lululemon suggests that each employee should be able to form a personal connection with each customer that comes through the door (shop.lululemon.com, 2015). Potential employees are often screened by being taken to a fitness class to see if they will fit in to the corporate atmosphere. Lululemon gives employees a number of unusual benefits for being part of the company, however; the company offers to pay all of their employees’ gym memberships and yoga lessons, for example. Part of the lure of the company is that it provides employees with the opportunity to live a healthy lifestyle, and encourages employees to better themselves. The company also tries to encourage its employees to set and reach goals-- employees go through the process of choosing these goals based on their lives and what they want to do with their lives. After a year with the company, Lululemon offers employees an opportunity to go on a trip to experience “Landmark Education Training” session (shop.lululemon.com, 2015).
This discussion will focus on corporate social responsibility, or CSR. Corporate social responsibility is the process by which an individual or a group Critically evaluates the challenges facing the organization based on business ethics and corporate social responsibility. Corporate social responsibility is the process by which companies choose to self-regulate within a certain area of business by building a self-regulatory body or business environment into their business model; this concept will be addressed in more depth in Section II.
Another topic for discussion here will be the issue of the four-part model of corporate social responsibility. This discussion will delve into the four-part model, and how it pertains specifically to Lululemon as a company. Lululemon has a somewhat unique culture and background, which makes it an excellent candidate for analysis.
Corporate Social Responsibility
Corporate social responsibility, or CSR, is the process by which companies self-regulate. It is a process that is designed to protect consumers and companies from corruption by forcing the company to build ethical considerations into their business model. CSR policies are designed when the company is created, and functions as a method of self-regulation. Without this self-regulation and compliance with the spirit rather than the letter of the law, companies can easily become sidetracked in unethical or only barely ethical behaviors (Child and Tallman, 2009).
When a firm has a good CSR policy, that policy will protect the company, the client, and the employees within the company by ensuring that there are ethical standards for behavior in place for employees within the company. Sometimes what is required of companies by law is not necessarily what is best for the company or organization as a whole, or perhaps it is not what is best for the society at large; when the law is not adequate to cover the ethical considerations that a company must have insofar as behavior is concerned, then the company’s CSR policy should do the rest (Child and Tallman, 2009).
The purpose of CSR policies is to encourage a positive working environment, in which everyone is protected from bad and unethical behavior. The other function of these policies is to improve the impression of the company in the public eye; companies that do a lot of philanthropic work, for instance, are commonly held in higher esteem by the public than those that do not (Child and Tallman, 2009).
The market today is unlike anything the world has seen before. There are many opportunities for companies to act poorly in the global marketplace; there are many strategies that these companies can use to maximize profits and minimize losses. Unfortunately, many of these strategies come at an ethical cost that is too high to be paid for many consumers. Multi-national corporations are growing larger and becoming more powerful than they have ever been before, and with that power comes a great abuse of it.
Four Parts Model
However, despite their sometimes poor behavior, multinational corporations are still global citizens, and it is the belief of many that these so-called global citizens should return the goodwill the world gave them by giving back to the rest of the world (Culpan, 2002). Culpan (2002) writes, “Being a global citizen does not only mean having the ability to reach economies of scale and consumers worldwide. It also entails following legal and ethical standards in countries where one operates. Not only do countries have requirements for business conduct; various interest groups, for example non-governmental organizations and investment funds, put pressure on MNCs to act responsibly towards their stakeholders. This pressure has given rise to the concept of Corporate Social Responsibility (CSR), defined as ‘ the economic, legal, ethical, and philanthropic expectations placed on organizations by society at a given point in time’” (Culpan, 2002). In this way, CSR can be split into four specific parts, which are then shaped like a pyramid; the base has the most importance, and importance decreases as there is movement up the triangle.
The base of the model is the company’s economic responsibilities. The economic responsibilities given to the company are important because they are the base functions of the company. Without these functions, the company would cease to exist; the consumer and society demands that the company conform to these particular requirements (Culpan, 2002). The next rung on the ladder is the legal responsibilities rung; society also demands that companies adhere to all their particular legal responsibilities (Culpan, 2002).
After the legal responsibilities that a company has, there are ethical responsibilities. Society expects that companies carry out their ethical responsibilities-- not polluting the environment, for example, or not selling dangerous wares to unsuspecting consumers (Culpan, 2002). The final, top rung of the four-part model is the space for the company’s philanthropic responsibilities. Society desires that the company adhere to these responsibilities, but does not require or demand it of companies (Culpan, 2002).
Application of the Four Parts Model
Lululemon is an interesting company to examine using the four parts model. In terms of economic responsibilities, the company is doing well; it has expanded from a small, local company to a multinational company in a relatively short time, selling a relatively targeted form of clothing (shop.lululemon.com, 2015). Indeed, the company had an excellent year in 2014, with a net income of approximately $271.4 million, increasing assets to $734.6 million in the United States alone. It is a company whose global influence has skyrocketed quickly, with little indication that the public interest will die down, despite a number of gaffes committed by the CEO and founder, Chip Wilson. There are more than 200 locations where Lululemon is sold, but the majority of the locations are in North America-- the United States and Canada. Lululemon also operates stores in Australia and New Zealand (shop.lululemon,com, 2015). In addition to these stores, there are also showrooms in Hong Kong and Great Britain. Lululemon clothing is also sold in a number of third-party retailers including those in Physique 57, Equinox, CorePower Yoga, Pure Barre and more fitness studios (shop.lululemon,com, 2015). In terms of legal requirements, Lululemon is also doing well; it has complied with all health and safety standards in the last few years, and claims to use only legal employees as employees in the company (shop.lululemon.com, 2015).
In terms of ethical standards, this is where the analysis becomes interesting for Lululemon. The company itself was founded on the theory that a healthy lifestyle is best, and that everyone should seek to love themselves; however, the CEO and founder has released a number of questionable statements suggesting that overweight women were not meant to wear his clothing (Mann, 2014). In addition, some employees have even come out and suggested that there is an almost cult-like atmosphere in the place which encourages employees to buy into the Lululemon corporate culture; while Wilson and his board have done an excellent job with creating a corporate culture, some have suggested that the culture itself is too demanding on employees, and is questionably ethical (Mann, 2014).As far as philanthropy is concerned, the company seems to be investing in a number of projects that encourage sustainable business practices, including a use of only reusable bags in all their stores for all their purchases (shop.lululemon.com, 2015). In addition, the company uses only factories that meet strict environmental standards (shop.lululemon.com, 2015).
Business Ethics and CSR
Theories of Business Ethics and CSR
CSR policies are encouraged so that companies are socially, environmentally, economically, and globally responsible in their approach to business. When these companies are building these standards, they are trying to build a better and more sustainable world to live in; their ethics should, according to the CSR philosophy, match up with the philosophies they consider to be most important.
Application of the theories for organization’s challenges
Lululemon has long been a proponent of ethical and healthy living, and the company tries to encourage that kind of behavior in employees. Potential employees are often taken to group exercise classes before they are hired, to see if they will fit in well in the environment; this type of behavior is designed to weed out those who would be unfit to participate in the Lululemon culture. The company has built an intentional structure around the idea of healthy living, and has tried to provide structure for the ability to live a healthy life to its employees. However, in some ways, the company has gone too far in the other direction, and now practically requires employees to live a certain lifestyle. In terms of contribution to environmental concerns, however, the company seems to be doing extremely well. They have sourced a number of ethical factories in Asia which are used to produce Lululemon clothing, and ensure that their business practices do minimal harm to the environment and to the individuals who make their clothing.
Lululemon is a company that has been driven forward by an ideal that is almost a perfect structure for a CSR policy; however, in some ways, the corporate structure that was formed as a result of that ideal is overbearing for employees. The ways in which the company has structured its operations has certainly fallen in line with important CSR policy requirements for the company, however.
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