CSR Group Project 2

Summary Report

The Chosen Company and Reasons

Purearth would be chosen in our report since it is a conscious business which fits the new
paradigm of management. There are several reasons why we are choosing this company,
and their social actions being the most important one. In recent years, they have established
several schemes to protect ecology. For example, the recycling program was launched in
order to maintain the health of the environment. For every bottle returned, a tree would be
planted. Despite, their business operating method is related to the awareness of
environment protection. Most of their ingredients are gathered from the Himalayas by
micro-credit and women self-help groups, enabling marginalized producers to engage with
urban markets on fair terms. In light of this, their actions were meaningful and tried to make
a positive sum game, leading the market and environment to be a win-win situation.
Therefore, their awareness of consciousness is the main reason we choose this company.

Further details of their Finding Purpose, Mission, Vision, and Core Value

As a matter of fact, all of their finding purpose, mission, vision, and core value are used to
make our society great. The analysis with the stakeholder management would be developed
as follows.

The finding purpose of Purearth is “Rejuvenate Simplicity”. The reason is just because the
founder of Purearth---Kavita Khosa travelled to the Himalayas when she was young, and she
was attracted and also addicted to the simple life of the village and town. The life in the
remote area just relies on what they have got from the environment. Such as water, coal,
wheat and something else. Kavita was inspired by those travel experiences and understood
there is an inseparable relationship between our society and the environment. Therefore,
“rejuvenate simplicity” was just mentioned in Purearth in order to connect the stakeholder of
society, customer, and the environment.

In terms of vision, Purearth aims to reconnect to the earth. Under the stakeholder
management paradigm, Purearth has understood that both the society and the environment
are the biggest stakeholder to them. Therefore, they are going to reconnect to the earth such
as collect the ingredients from the himalayas by recruiting some small scale groups. Once
they give back to our society and the environment, they can earn the biggest profits from the
world.

For the mission, Purearth aims to provide chemical- and cruelty-free beauty products. All of
the ingredients they use are organic and collected from the himalayas. The founder--- Kavita
Khosa believes that skincare is akin to skin food and can be absorbed into our bloodstream.
Therefore, the stakeholder of the customer is the thing they put effort into.

After that, Equals, Ethical, and Ecological are the core values of Purearth. For equality, they
recruited many small scale groups such as women self-help groups or some micro-credits to
collect the ingredients in order to shut down the monopoly from the big firms and maintain
the interests of their business partners. For ethical reasons, they ensure that every product
is chemical- and cruelty-free and focusing on their customer. Finally, as we have mentioned
in the introduction, they plant a tree when they recycle a bottle in order to develop the
environment. All of the things they did belong to improving society and connecting all the
things together as a whole.

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Q3.
Company’s current strategic management system (stakeholder : society) by conducting
SWOT analysis

Part 1 ： the company’s overall strategic direction

Strength: Pureath is a company which fulfills the corporate social responsibility , values the
importance of being environmentally friendly and always hoped to promote good
stewardship of our earth. By using this as that aim or motto, it helps Pureath to build up a
positive image to attract more customers around the globe as more people tend to put their
attention on the problem of our environment in recent years. Also, they provide a special way
to promote their product by emphasising their cosmetic product is not as usual as their
competitors (their product are make of some natural ingredients from the himalayas by
recruiting some small scale groups )

Weaknesses:
Pureath does not have much promotion around the globe as this may be a limitation for them
to gain their profit or spread their important message (environment protection) more
effectively. By comparing with their competitors, people may tend to choose a more popular
or familiar organisation to show their support instead of Pureath.

Opportunities:
Pureath has provided the recycling program was launched in order to maintain the health of
the environment. For every bottle returned, a tree would be planted. So it would be an
alternative way to help their organisation to gain more supporters and increase the
effectiveness of promoting the message of environment protection.

Threats:
Pureath is a local organisation. It’s production size will be relatively smaller than the
international one. It would be much harder for them to maintain their sustainable profit if they
do not have their fixed customers or sponsor. It may be a serious threat for their organisation
to keep on surviving in this industry.

Part 2 : at the functional strategic level of your group’s stakeholder relations in

particular ( society)

Strength:
People nowadays are becoming more concerned about being environmentally-friendly. At
least 70 percent of the Earth's land has been directly altered by humans, primarily for
growing plants and holding animals. These practices contribute to deforestation, land
destruction, loss of biodiversity and pollution, and have the greatest effect on the habitats of
land and freshwater. People are becoming more mindful of environmental conservation and
are starting to think about whether or not the products are made of natural ingredients.

Weakness:
Society nowadays receives various information via social media. Pureath is a relatively small
business compared to well-known brands, which leads to the problem of lacking promotion
because of the unsustainable profit and large expenditure would spend when promotion is
needed. Thus, society has fewer ways to know about Pureath and could not use the herding
behavior to gain prestige.

Opportunities:
People are able to try other items in an environmentally-friendly setting. In addition, in order
to avoid deforestation and the greenhouse effect, the recycling program is meaningful and
beneficial for the environment. Thus when their acts are good for the world, society would
like to help Pureath.

Threats:
Society is still concerned about brands, as they have a mindset that the product quality of big
brands are more trustable and the ingredients are more safe to use. Local brands are not so
reliable compared to famous companies with large promotions. Also, the use of natural
ingredients.
Creative Stakeholder Management Strategies

1. Promoting employment by hiring people in women self-help groups in the Himalayas to

gather ingredients for cosmetic products. The majority of Purearth’s product are gathered at
soaring altitudes of the Himalayas by micro-credit and women self-help groups. SHGs
(Self-help groups) are composed of the poor village or tribal women who form a financial
savings co-op and are often supported by national, international NGOs, local governments
and social work initiatives. Each member contributes a small monthly or weekly fee set aside
to be used as loans to members when needed. Job opportunities are scarce resources in the
rural areas like villages surrounding the Himalayas. It is extremely difficult for people to be
employed under these circumstances so some people are forced to leave their hometown
and pursue better working opportunities in more advanced cities. This stakeholder
management strategy would help the marginalized workers in rural areas gain jobs and
receive incomes to survive, which achieve the mission of responsible management in terms
of ethical perspectives. Also, women could live a relatively high quality life with reasonable
income and stay in their hometown without the need to pursue job opportunities in other
developed cities. This prevents a large amount of people from rural areas pouring into cities
and exacerbates the intensities of urban resources such as medical and job resources.
Purearth’s stakeholders as a society would be better off because more people in rural areas
are hired and the population structure could be balanced between urban and rural areas.

2. Building partnership with rural banks supported women’s micro-credit finance, and women
self-help groups in the remote Himalayas and rural tribal areas to eliminate gender
inequality. Some men in rural areas might hold a distorted view that women are weaker and
less capable compared to their male counterparts. Women in remote areas are generally
less competitive in the Labour market than men. This strategy that cooperating with self-help
groups could bring more jobs to women and promote gender equality. Moreover,
partnerships with banks could help women have easy access to financial assistance, and the
banks benefit by acquiring new business in the form of individual savings accounts and
loans. It also allows women who could not previously open accounts to do so with the
validation of their group. This stakeholder management strategy fulfills Purearth’s mission of
responsible management in terms of equity to working with marginalized women, resource
poor communities, and producer groups.

3.encourage a healthy spending and beauty value to society. As Purearth is producing

cosmetics without any chemical additives, pay lots of attention for the environment. What’s
more, people care more about whether an enterprise gives back to society. Nowadays,
people pursue to be more beautiful but sometimes in a wrong way. For example, excessive
cosmetic surgery and drug slimming. Purearth promotes a healthy way of beauty care, it
could be a good example to promote a healthy value that people properly pursue beauty.
How to? They can make some public service advertising to criticize what is wrong with
people's thoughts and tell people what is good is having a healthy value with spending
money right and pursuing beauty right. On the one hand, values of the whole society could
be changed or even better. On the other hand, Purearth could promote their product as
healthy cosmetics so that they can attract the potential customers who are willing to protect
the environment.
The biggest challenge of Purearth

Dealing to the conflicts among the shareholders would be the most challenging issue of
Purearth to genuinely practice the new paradigm of management. In order to achieve the
new paradigm management, actually some profits need to be sacrificed. In new paradigm
management, the long term stakeholder value is over the short-term financial. It is why we
should adapt the stakeholder management to achieve the new paradigm.

For the Stakeholder management, several stakeholder aspects should be considered. Such
as the employees, customers, shareholders, and so on, but the shareholder being the most
hardest one. We are caring more to the stakeholder instead of only focusing on the daily
operation of the business. However, most of the shareholders emphasize profit
maximization, putting the profits maximization on the top of the priority, and ignore the
long-term stakeholder value. It is definitely running into the opposite direction if we want to
practice the new paradigm management.

Bring it back to Purearth, Purearth is a conscious business which aims to connect the
environment to our society. As we have mentioned above, the ingredients they use are all
organic and chemical-free. However, higher cost would be consumed in maintaining such a
production. And a conflict between founder and shareholder would definitely happen in their
assembly. As a result, a question of “Profits versus Long-term Stakeholder Value” are
requiring Purearth to solve.

Solution to the issue

To solve such a conflict, the promises from the founder definitely have a big influence on
them. The founder of Purearth should explain the advantage of long-term stakeholder value.
Such as more profits can be earned in the future, better image in the industry. Once the
shareholder understands the pros of new paradigm management, they may agree with the
direction of the founder and thereby solve the problem of conflicts.

Other solutions like attracting the shareholder and investor who have the same value at first
is also a good method to solve the problem. If the shareholder and investor have different
values to the founder, the company is hard to maintain the operation due to insufficient
financial support. Therefore, if the company attracts the same value investor at first, they can
solve the problem once and for all.