The LEGO Group
CSR & Sustainability Case Study
The LEGO Group
The LEGO Group is a privately held company based in Billund, Denmark. It was founded in 1932 by Ole Kirk Kristiansen, initially a small carpenter’s workshop (Lego Group, 2011). It has since grown into a modern, global enterprise that is now, in terms of sales, the world’s fourth-largest manufacturer of toys (Keynote, 2010). The LEGO Groups core product is a line of plastic, interconnecting building bricks, predominantly targeted at children aged 3-14 years, sold in over 130 Countries (Encyclopaedia of Consumer Brands, 1994). The LEGO Group operate globally in the Toys & Games sector, with the UK market valued at £2.1bn as of 2009(Keynote, 2010b). Whilst the UK market had seen steady growth year upon year, it is currently in decline, with the sales of toys and games falling between 2008 and 2009 (See Appendix 1); however Lego has bucked this trend through innovation and targeting older demographics, posting UK Sales of £1.3bn, up from £1.01bn in 2008 (Keynote, 2010), with Global profits increasing 68% on 2009, as the Eastern European and Great Britain markets see the largest growth in terms of sales (Lego Group, 2010). Whilst toy manufacturing is the LEGO Groups core source of income, they also have a 30% stake in LEGOLAND Theme parks, after selling the majority in 2005 due to financial troubles (BBC, 2005). Lego base their products on the philosophy that children learn and develop through play and “good play enriches a child’s life – and its subsequent adulthood”, with the vision of “inventing the future of play” (LEGO Group, 2009). Rated in the top ten brands amongst families with children, Lego position themselves as being recognised, trusted, respected and loved (LEGO Group, 2002),whilst being associated with high quality and happy memories their products often have the image of being old fashioned and dull (Schultz et al, 2005:169) What is CSR?
Originating from the United States of America (Matten and Moon, 2004), “CSR is the concept whereby companies integrate social and environmental concerns in their business operations and in interaction with stakeholders” (Belz and Peattie, 2009:34). It is a relatively new and dynamic concept, which changes over time in accordance with contemporary issues of importance in a given society (Roome, 2005:320). Traditionally associated with larger companies, it has now become an important issue for any organisation regardless of size, as it focuses on business ethics, sustainability, philanthropy, and environmental responsibility. Examining LEGO Group’s CSR Communication
On the LEGO Groups Company website there is a large section entitled ‘Corporate Responsibility’ (See appendix 2). Through using the internet, the LEGO Group can communicate on a Global scale where any stakeholder who has access online can view their CSR plans. Within this section Lego publish an annual report which addresses areas of CSR they have covered and areas they plan to tackle. Through publishing this report they are acting socially responsible, as they allow stakeholders the opportunity to access key information on the LEGO Groups CSR progress. However it may only be due to legislation that Lego are publishing this report. Being based in Denmark, the LEGO Group are required by Danish law to issue annual reports regarding CSR (CSRgov, 2011). In reference to Carrols pyramid, it becomes apparent that they may only act socially responsible to a ‘required level’ and may only be addressing their legal responsibilities. It could be that they do not have the stakeholder’s interests as their main priority. Another way the LEGO Group communicates its interest in CSR is through the use of corporate philanthropy. Most recently the LEGO Group has united with the BBC to produce a product line, where all profits go to Children in Need (BBC, 2011). The product is a £4.00 Lego Pudsey bear (See...