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Case Analysis for B Corp Certification

Essay by   •  November 14, 2018  •  Case Study  •  2,338 Words (10 Pages)  •  82 Views

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CASE ANALYSIS FOR B CORP CERTIFICATION

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Ariana Huffington once stated, “We think, mistakenly that success is the result of the amount of time we put in at work, instead of the quality of time we put in”. Most companies in the world have attained success because they have focused more on the quality time spent on the execution of tasks rather than the quantity of that duration[1]. An excellent example of a corporation that has capitalized on the time that the personnel spend working to improve service provision is the B Corp Certification, which consists of several certified companies. B Corp Corporations are said to be among the most preferred options for workers, communities, and the environment due to the manner in which these companies conduct their business activities[2]. B Corp Certification is a private establishment with offices in the U.S., Europe, Canada, Australia, and New Zealand. The firm is a profitable organization that seeks to employ various business forces to enhance its social and environmental obligations. However, the corporation must begin by performing an online assessment on the said roles to improve the overall quality of the services that it offers. Being an international corporation, B Corp Certification has a large capital base as it operates in various countries around the world[3]. A company’s performance is measured through a detailed analysis of the SWOT, Decision Matrix, as well as the SMAT and financial status. The process requires in-depth knowledge on how the firm operates by determining the critical issues in the establishments’ operations, situation analysis, decision criteria, and option analysis. After collecting the findings, the researcher should give relevant recommendations to improve on the required areas.

Critical Issues

The B Corp Certification aims at increasing its overall net profit for the current year to at least $5M in order to resolve various issues that may cause drawbacks and hinder the business operations. The matters, as revealed below, are critical to the firm and they must be resolved appropriately to establish the company’s sustainable financial position. The critical issues include:

  • How to increase the percentage of the total profits donated to non-profitable activities such contributions to charitable organizations, and at the same time, maintain a low rate of the total expenses.
  • How to reduce the expenses for certain activities undertaken by the Corporation and increase the profits realized by the activities.
  • How to expand the services of the companies to various geographical locations with an aim of expanding the market for services delivered by the business.

Situation Analysis

One of the firms under the B Corp certification is West Paw Design (WPD), which is a certified corporation as it is an establishment that operates under the guidance of the parent company’s provisions, mission, and vision. The West Paw Design’s affiliation with the B Corp Certification enables it to attain its goals while defining the firm’s future success. Notably, the company is a manufacturer of eco-friendly and high-quality products for dogs and cats. The firm was established to manufacture environmentally-friendly pet products as outlined in the B Corp Certification’s general terms and conditions. Last year, the corporation registered a gross profit of $3.8M and total expense of $40,000 but this year, the profit has increased to $3.95M while expenses remained at $ 40, 000[4]. Since the West Paw Design company recycles used materials, the management benefits from a considerable reduction of expenses. The materials are sourced both locally and regionally and they range from items such as paper, plastic, metal, and cardboard. Besides, there are recycle bins situated at each work station as well as banana boxes to store finished products. Besides, the company also implemented the latest developments in energy efficient designs by building its facility in the year 2001.

 During the construction period, the West Paw Design’s stakeholders decided to establish the building on piers to avoid pumping underground water that would have affected the water table and led to overflow. The idea has demonstrated to be quite useful as far maintaining and preserving water sources are concerned. Consequently, the corporation accesses constant water supply that facilitates production processes, and in turn, increases the profit margin.  

A major challenge for West Paw Designs is being socially responsible while also keeping its profit margins on an increasing rate. As a B Corp certified organization, WPD is essentially committed to healthier communities and a cleaner planet. As such, it must have an expanded social stewardship where it embraces its responsibilities towards all shareholders including employees, investors, customers, and the communities. Strategic socially responsible activities can increase WPD’s sales to $4.0 million by end of 2018.

Decision Criteria

The requirements for the B Corp Certification are that firms must:

  • Have a net profit of at least $5M in the current year.
  • Have an increased percentage profit donated to charitable organizations.
  • Have a plan to develop the market structure through the establishment of various branches or registration of more companies with similar missions to those of the corporation.
  • Maintain the current quality and standards of products offered to customers.
  • Increase the demand to keep the consumers’ list bigger than that of the producers.
  • Have sufficient and well defined necessities and benefits in order to convince the shareholders of the need for change.

Option Analysis

Option 1: Implement a CSR Strategy for Profitability

Even though the fundamental motivation of a company’s CSR should be to make better communities, the same can also be used as a strategy to increase profitability. The strategy can improve operational effectiveness within the value chain in both the upstream supply and downstream distribution chains. Thus, the strategy would improve the company’s bottom line while simultaneously creating social value. With improved efficiency, WPD can increase its productivity to a tune of 2%. In addition, the strategy improves the company’s reputation in the face of the public, which potentially translates to wider profit margins.

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