Chapter 1: Introduction
In this chapter, background information of the importance of CSR, especially for the cosmetics industry is revealed. In addition, the purpose and the scope of this paper are to be described too. Lastly, an overview of this paper structure is shown.
1.1 Background of the study
Nowadays, CSR has become the basis on what organization do well in the rapidly changing global world. Cosmetic companies have been seen as unethical and non-environmentally friendly business practices because of unsustainable sources of products, testing on animals and chemical pollution and so on. In recent years, CSR is usually implemented into cosmetic companies’ policies and practices so that the CSR activities can bring them positive social, legal, environment and economic impact (Organic Monitor, 2010). Those cosmetic companies try to lower the environmental impact of their cosmetic products by using greener formulations, such as using natural and organic ingredients (Article 13, 2002). It is because the cosmetic products will bring direct impact to the users.
Therefore, cosmetics are closely linked with people who are more careful to choose and concern about the skincare that they are purchasing. Health-conscious consumers grow more aware of the implication of what they apply on their skin. Therefore, cosmetic companies intend to become more responsible about the products that they are producing, supplying and selling. It is important that the production of each product of every company comply with the law and specific health requirements. Cosmetic companies not only implement CSR to meet the legal requirement, but also consider it as a way to achieve extra growth and increase profitability of business.
However, because of the industry’s fast growing nature, it is important for cosmetic companies to differentiate from the competitors in order to be successful to achieve growth and profit. Cosmetic companies regard CSR as a strategy to create competitive advantage and as an innovative way so that they can be seen as unique in the market. ‘Natural ingredients’ has now become a great mass fervor in cosmetic industry to attract customers. However, a brand of shampoo that applies herbal essences to give customers healthy life style has recently been found containing carcinogenic ingredients (Serinah, 2010). According to Paul E. (2011), 26 cosmetic companies faced a lawsuit that was filed by an environmental group. The products from such companies such as shampoo, facial washes and soaps labeled as organic but in fact it seemed not the truth. Cosmetic users criticize that products labeled as organic or natural which only a tiny percentage of their ingredients were certifiably organic, sometime mixed with ingredients seen by some as potentially carcinogenic. Consumers do not know and uncertain what companies have done to satisfy their anticipation for social responsibility of cosmetic companies.
1.1.1 Target Reader
The target readers of this study are those cosmetic users in Hong Kong who are health- conscious consumers. They are longing to know whether cosmetic companies have done their best to implement and practice CSR truly. They can be benefited from this study by knowing more about the control environment in cosmetic industry and CSR policies of selected companies. Thus, they can assess those companies’ CSR policy whether the policy is sufficient to satisfy their expectation of CSR.
1.2 Overall Research Aim
To examine whether the CSR policy of the cosmetic industry is sufficient to meet customers’ expectation in Hong Kong.
1.3 Research Objectives
1. To study the concept of CSR.
2. To study the cosmetic industry current control environment in Hong Kong and other countries such as USA, the U.K and Japan. 3. To gather and analyze responses on CSR done by cosmetic companies from public especially cosmetic users through questionnaires. 4. To examine the CSR strategies and policies...
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