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Classie LEGO plastic bricks have been fixtures in homes around the world for more than 70 years. Just 15 years ago, The LEGO Group (TLG) was near bankruptey, spiraling downward and losing money at a rate of $1 million a day. But after a mas- sive restructuring and implementation of a new strategic plan. TLG has been on the rise ever since. In fact. TLG is now the world's largest toy company. besting powerhouses Matnel and Hasbro. Last year, The LEGO Group (TLG) produced 3,700 different types of LEGO bricks and a record 75 billion total bricks, enough to construct a continuous line stretching around the world more than 27 times. All those bricks went into more than 100 million LEGO sets that found their way into the eager hands of customers in 140 countries, putting over $5.6 billion into TLG's coffers. Perhaps more notable than becoming the global toy market leader is the fact that TLG has achieved this feat while also establishing an unsurpassed commitment to so- cial responsibility Ia fact, in an annual stady published by Forbes, based on ratings of social responsibility from con- sumers in 15 countries, LEG0 came out on top last year. moving up from its fifth-place showing the year before, In the study conducted by the Reputation Institute, LEG0 topped all other companies in perceptions that it behaves ethically. operates transparently, conducts business fairly, protects the environment, and supports worthy causes. These consumer perceptions reflect TLG's actions. According to Stephen Hahn-Griffiths, Chief Rescarch Officer for the Reputation Institute, TLG "has embraced corporate social responsibility from top to bottom." play by facilitating a child's natural approach to learning. The idea is to enable children to build valuable life skills while hav- ing fun. This supports TLG's vision"to inspire and develop the builders of tomorrow." In addition, one of the driving pillars of TLG's responsibility strategy is "leaving the best possible world for children to inherit. TLGS very ownership structure demonstrates its commitment to children. The LEGO Foundation owns 25 percent of the company. Dedicated to carrying out TLG's vision, the LEGO Foundation acts as an intermal watchdog. cosuring that the profits from every LEGO product sold help bring learning through play to children. To this end, the LEGO Foundation conducts research and carries out Local Community Engagement activities all over the world. Such activities include working with partners to execute early chikdhood programs, launch Play Labs, and establish early childhood centers. Recognizing play" as a child's right, TLG worked with the LEGO Fouindation and partner UNICEF to give children a voice during World Children's Day, bringing kids in to take over key soles at TLG. Additionally, TLG motivated employ- ces to volunteer to work with children around the world in a program to engage them in environmental and social issues as well as help them build ideas to make the world a better place. Through these and other activities, the LEGO Foundation en- gaged 13 million children last year. When TLG developed its plan to bounce back from the Caring for People: A Company Value brink of bankruptey, it also took the opportunity to reevaluate its company values. As a result, a social responsibility strat- egy became a key component of TLC's turnanound plan, driv- en by a desire to have a more positive impact on the world. To demonstrate its commitment, TLG became the first toy company to join the United Nations Global Compact--the world's largest social responsibility initiative-and commit- ted to support the 17 United Nations Sustainable Develop- ment Goals. The initiatives mentioeed above aren't only about children- they focas on TLG's responsibility toward people as well. For such initiatives, TLG engages employees as well as local com- munity members to take part. For example. TLG encourages employees to become "Play Agents," training and educating them to understand the role and significance of play and pro- viding them with the tools needed to inspire children through Local Community Engagement activities. Last year, the LEGO Foundation trained almost 1,200 Play Agents, bringing the total to 3.000. TLG believes that engaging employees in the com- pany mission and vision is an important part of creating "the best place to work." But when it comes to caring for people, TLG goes much deeper than mixing work and play. TLG has high standards for treating employees with respect, paying fair wages, maintaining a safe work environment, and ensuring reasonable working hours. These standards do not stop at the walls of the company's Own facilities. Under the LEGO Code of Conduct, all suppliers must comply with strict guidelines for child labor, forced labor, discrimination, wages and benefits, health and safety, and other aspects of ethical treatment of employees. During the past year, TLG udited 100 percent of suppliers with respect to the LEGO Code of Conduact, including suppliers in high-risk countries. What's more, TLG requires that each supplier provide written as- surance that their own suppliers comply with the same standards. It's for the Children TLG's social responsibility goals are organized into three key areas children, people, and the environment. According to Thomas Kirk Kristiansen, great-grandson of company TLG founder Ole Kirk Kristiansen, "Children are our role models." TLG has always sought to inspire children through the power of 556 Appendix 1: Company Cases Leaving the Planet Better for Tomorrow's Children materials forward to 2025. Already, 75 percent of the cardboard used in its packaging comes from recycled material. Addition- ally, the company is focused on other environmental benefits The final component of TLG's social responsibility strategy is that can be achieved through innovations in packaging. For ex- caring for the environment. Although setting goals to reduce a company's environmental footprint is pretty much mandatory these days, TLG sees it as an extension of its mission. That is, eliminating the need for 3,000 truckloads. TLG's work to inspire children and help them achieve their full potential through play applies to the children of tomorrow as much as to the children of today. And TLG recognizes that for children of future generations to enjoy the fruits of its mission, impacts through small improvements. Can you imagine the they must inherit a planet with a healthy environment. As with the other components of its social responsibility code, TLG has high standards for both itself and its suppliers when it comes to minimizing CO, emissions, waste, and pollution. It has also established goals for developing renewable energy and sustain- able materials. Recently, TLG achieved a major environmental mile- stone when it announced that the first LEGO pieces made from sustainable plant-based plastic will go on sale this year. Specifically, polyethylene-a soft, durable, and flexible plastic made with ethanol extracted from sugar cane material-will be the sole plastic used to make botanical elements such as leaves, bushes, and trees included in LEGO building sets. Asa bioplastic, these pieces will also be recyclable and biodegradable. Until now, LEGO elements have always been made entirely from petroleum-based plastic. The first bioplastic LEGO pieces to hit the shelves will comprise only about two percent of all LEGO elements produced. However, according to Tim Brooks, vice president of environmental responsibility at TLG, "This is a great first step in our ambitious commitment of making all LEGO bricks using sustainable materials." To move toward this goal, TLG has joined forces with the World Wide Fund for Nature and the Bioplastic Feedstock Alliance to support and build demand for sustainably sourced plastic and ensure fully sustainable sourcing of raw materials for the bioplastics industry. Just a few years ago, TLG set a goal to achieve 100 percent sustainable materials in its bricks and packaging by 2030. How- ever, it recently moved its deadline for its goal for packaging en-us/aboutus/responsibility/story/report, accessed October 2018. ample, reducing the average size of a LEGO box by 14 percent over the past four years saved 7,000 tons of cardboard, in turn When a major global corporation makes even a small social or environmental improvement, the scale of the company magnifies the impact. But TLG is not satisfied to achieve big impact of 700 million LEGO tires being made from bioplastic instead of oil-based plastic? TLG can. And TLG expects that the impact of such actions will not only result in direct benefits, they will be felt throughout the toy industry and beyond. Questions for Discussion 1. Give as many examples as you can for how TLG defies the common social criticisms of marketing. 2. Of the five sustainable marketing principles discussed in the text, which one best describes TLG's approach? 3. Analyze TLG's business using the Societal Classification of Products (Figure 16.4). 4. Would TLG be more financially successful if it were not so focused on social responsibility? Explain. I on Sources: "First Sustainable LEG0 Pieces to Go on Sale," The Guardian, March 2, 2018, www.theguardian.com/lifeandstyle/2018/ mar/02/first-sustainable-lego-pieces-to-go-on-sale; Karsten Strauss, "The Companies with the Best CSR Reputations in 2017," Forbes, February 8, 2018, www.forbes.com/sites/karstenstrauss/2018/02/08/the- companies-with-the-best-esr-reputations-in-2017/788c20333873; Simon Mainwaring, "How LEGO Rebuilt Itself as a Purposeful and Sustainable Brand," Forbes. August 11. 2016, www.forbes.com/ sites/simonmainwaring/2016/08/11/how-lego-rebuilt-itself-as-a- purposeful-and-sustainable-brand/2bbd44e46f3c; and additional in- formation from www.lego.com/en-us/aboutus/news-room, www.lego. com/en-us/aboutus/lego-group/code-of-conduct, and www.lego.com/ Classie LEGO plastic bricks have been fixtures in homes around the world for more than 70 years. Just 15 years ago, The LEGO Group (TLG) was near bankruptey, spiraling downward and losing money at a rate of $1 million a day. But after a mas- sive restructuring and implementation of a new strategic plan. TLG has been on the rise ever since. In fact. TLG is now the world's largest toy company. besting powerhouses Matnel and Hasbro. Last year, The LEGO Group (TLG) produced 3,700 different types of LEGO bricks and a record 75 billion total bricks, enough to construct a continuous line stretching around the world more than 27 times. All those bricks went into more than 100 million LEGO sets that found their way into the eager hands of customers in 140 countries, putting over $5.6 billion into TLG's coffers. Perhaps more notable than becoming the global toy market leader is the fact that TLG has achieved this feat while also establishing an unsurpassed commitment to so- cial responsibility Ia fact, in an annual stady published by Forbes, based on ratings of social responsibility from con- sumers in 15 countries, LEG0 came out on top last year. moving up from its fifth-place showing the year before, In the study conducted by the Reputation Institute, LEG0 topped all other companies in perceptions that it behaves ethically. operates transparently, conducts business fairly, protects the environment, and supports worthy causes. These consumer perceptions reflect TLG's actions. According to Stephen Hahn-Griffiths, Chief Rescarch Officer for the Reputation Institute, TLG "has embraced corporate social responsibility from top to bottom." play by facilitating a child's natural approach to learning. The idea is to enable children to build valuable life skills while hav- ing fun. This supports TLG's vision"to inspire and develop the builders of tomorrow." In addition, one of the driving pillars of TLG's responsibility strategy is "leaving the best possible world for children to inherit. TLGS very ownership structure demonstrates its commitment to children. The LEGO Foundation owns 25 percent of the company. Dedicated to carrying out TLG's vision, the LEGO Foundation acts as an intermal watchdog. cosuring that the profits from every LEGO product sold help bring learning through play to children. To this end, the LEGO Foundation conducts research and carries out Local Community Engagement activities all over the world. Such activities include working with partners to execute early chikdhood programs, launch Play Labs, and establish early childhood centers. Recognizing play" as a child's right, TLG worked with the LEGO Fouindation and partner UNICEF to give children a voice during World Children's Day, bringing kids in to take over key soles at TLG. Additionally, TLG motivated employ- ces to volunteer to work with children around the world in a program to engage them in environmental and social issues as well as help them build ideas to make the world a better place. Through these and other activities, the LEGO Foundation en- gaged 13 million children last year. When TLG developed its plan to bounce back from the Caring for People: A Company Value brink of bankruptey, it also took the opportunity to reevaluate its company values. As a result, a social responsibility strat- egy became a key component of TLC's turnanound plan, driv- en by a desire to have a more positive impact on the world. To demonstrate its commitment, TLG became the first toy company to join the United Nations Global Compact--the world's largest social responsibility initiative-and commit- ted to support the 17 United Nations Sustainable Develop- ment Goals. The initiatives mentioeed above aren't only about children- they focas on TLG's responsibility toward people as well. For such initiatives, TLG engages employees as well as local com- munity members to take part. For example. TLG encourages employees to become "Play Agents," training and educating them to understand the role and significance of play and pro- viding them with the tools needed to inspire children through Local Community Engagement activities. Last year, the LEGO Foundation trained almost 1,200 Play Agents, bringing the total to 3.000. TLG believes that engaging employees in the com- pany mission and vision is an important part of creating "the best place to work." But when it comes to caring for people, TLG goes much deeper than mixing work and play. TLG has high standards for treating employees with respect, paying fair wages, maintaining a safe work environment, and ensuring reasonable working hours. These standards do not stop at the walls of the company's Own facilities. Under the LEGO Code of Conduct, all suppliers must comply with strict guidelines for child labor, forced labor, discrimination, wages and benefits, health and safety, and other aspects of ethical treatment of employees. During the past year, TLG udited 100 percent of suppliers with respect to the LEGO Code of Conduact, including suppliers in high-risk countries. What's more, TLG requires that each supplier provide written as- surance that their own suppliers comply with the same standards. It's for the Children TLG's social responsibility goals are organized into three key areas children, people, and the environment. According to Thomas Kirk Kristiansen, great-grandson of company TLG founder Ole Kirk Kristiansen, "Children are our role models." TLG has always sought to inspire children through the power of 556 Appendix 1: Company Cases Leaving the Planet Better for Tomorrow's Children materials forward to 2025. Already, 75 percent of the cardboard used in its packaging comes from recycled material. Addition- ally, the company is focused on other environmental benefits The final component of TLG's social responsibility strategy is that can be achieved through innovations in packaging. For ex- caring for the environment. Although setting goals to reduce a company's environmental footprint is pretty much mandatory these days, TLG sees it as an extension of its mission. That is, eliminating the need for 3,000 truckloads. TLG's work to inspire children and help them achieve their full potential through play applies to the children of tomorrow as much as to the children of today. And TLG recognizes that for children of future generations to enjoy the fruits of its mission, impacts through small improvements. Can you imagine the they must inherit a planet with a healthy environment. As with the other components of its social responsibility code, TLG has high standards for both itself and its suppliers when it comes to minimizing CO, emissions, waste, and pollution. It has also established goals for developing renewable energy and sustain- able materials. Recently, TLG achieved a major environmental mile- stone when it announced that the first LEGO pieces made from sustainable plant-based plastic will go on sale this year. Specifically, polyethylene-a soft, durable, and flexible plastic made with ethanol extracted from sugar cane material-will be the sole plastic used to make botanical elements such as leaves, bushes, and trees included in LEGO building sets. Asa bioplastic, these pieces will also be recyclable and biodegradable. Until now, LEGO elements have always been made entirely from petroleum-based plastic. The first bioplastic LEGO pieces to hit the shelves will comprise only about two percent of all LEGO elements produced. However, according to Tim Brooks, vice president of environmental responsibility at TLG, "This is a great first step in our ambitious commitment of making all LEGO bricks using sustainable materials." To move toward this goal, TLG has joined forces with the World Wide Fund for Nature and the Bioplastic Feedstock Alliance to support and build demand for sustainably sourced plastic and ensure fully sustainable sourcing of raw materials for the bioplastics industry. Just a few years ago, TLG set a goal to achieve 100 percent sustainable materials in its bricks and packaging by 2030. How- ever, it recently moved its deadline for its goal for packaging en-us/aboutus/responsibility/story/report, accessed October 2018. ample, reducing the average size of a LEGO box by 14 percent over the past four years saved 7,000 tons of cardboard, in turn When a major global corporation makes even a small social or environmental improvement, the scale of the company magnifies the impact. But TLG is not satisfied to achieve big impact of 700 million LEGO tires being made from bioplastic instead of oil-based plastic? TLG can. And TLG expects that the impact of such actions will not only result in direct benefits, they will be felt throughout the toy industry and beyond. Questions for Discussion 1. Give as many examples as you can for how TLG defies the common social criticisms of marketing. 2. Of the five sustainable marketing principles discussed in the text, which one best describes TLG's approach? 3. Analyze TLG's business using the Societal Classification of Products (Figure 16.4). 4. Would TLG be more financially successful if it were not so focused on social responsibility? Explain. I on Sources: "First Sustainable LEG0 Pieces to Go on Sale," The Guardian, March 2, 2018, www.theguardian.com/lifeandstyle/2018/ mar/02/first-sustainable-lego-pieces-to-go-on-sale; Karsten Strauss, "The Companies with the Best CSR Reputations in 2017," Forbes, February 8, 2018, www.forbes.com/sites/karstenstrauss/2018/02/08/the- companies-with-the-best-esr-reputations-in-2017/788c20333873; Simon Mainwaring, "How LEGO Rebuilt Itself as a Purposeful and Sustainable Brand," Forbes. August 11. 2016, www.forbes.com/ sites/simonmainwaring/2016/08/11/how-lego-rebuilt-itself-as-a- purposeful-and-sustainable-brand/2bbd44e46f3c; and additional in- formation from www.lego.com/en-us/aboutus/news-room, www.lego. com/en-us/aboutus/lego-group/code-of-conduct, and www.lego.com/ Classie LEGO plastic bricks have been fixtures in homes around the world for more than 70 years. Just 15 years ago, The LEGO Group (TLG) was near bankruptey, spiraling downward and losing money at a rate of $1 million a day. But after a mas- sive restructuring and implementation of a new strategic plan. TLG has been on the rise ever since. In fact. TLG is now the world's largest toy company. besting powerhouses Matnel and Hasbro. Last year, The LEGO Group (TLG) produced 3,700 different types of LEGO bricks and a record 75 billion total bricks, enough to construct a continuous line stretching around the world more than 27 times. All those bricks went into more than 100 million LEGO sets that found their way into the eager hands of customers in 140 countries, putting over $5.6 billion into TLG's coffers. Perhaps more notable than becoming the global toy market leader is the fact that TLG has achieved this feat while also establishing an unsurpassed commitment to so- cial responsibility Ia fact, in an annual stady published by Forbes, based on ratings of social responsibility from con- sumers in 15 countries, LEG0 came out on top last year. moving up from its fifth-place showing the year before, In the study conducted by the Reputation Institute, LEG0 topped all other companies in perceptions that it behaves ethically. operates transparently, conducts business fairly, protects the environment, and supports worthy causes. These consumer perceptions reflect TLG's actions. According to Stephen Hahn-Griffiths, Chief Rescarch Officer for the Reputation Institute, TLG "has embraced corporate social responsibility from top to bottom." play by facilitating a child's natural approach to learning. The idea is to enable children to build valuable life skills while hav- ing fun. This supports TLG's vision"to inspire and develop the builders of tomorrow." In addition, one of the driving pillars of TLG's responsibility strategy is "leaving the best possible world for children to inherit. TLGS very ownership structure demonstrates its commitment to children. The LEGO Foundation owns 25 percent of the company. Dedicated to carrying out TLG's vision, the LEGO Foundation acts as an intermal watchdog. cosuring that the profits from every LEGO product sold help bring learning through play to children. To this end, the LEGO Foundation conducts research and carries out Local Community Engagement activities all over the world. Such activities include working with partners to execute early chikdhood programs, launch Play Labs, and establish early childhood centers. Recognizing play" as a child's right, TLG worked with the LEGO Fouindation and partner UNICEF to give children a voice during World Children's Day, bringing kids in to take over key soles at TLG. Additionally, TLG motivated employ- ces to volunteer to work with children around the world in a program to engage them in environmental and social issues as well as help them build ideas to make the world a better place. Through these and other activities, the LEGO Foundation en- gaged 13 million children last year. When TLG developed its plan to bounce back from the Caring for People: A Company Value brink of bankruptey, it also took the opportunity to reevaluate its company values. As a result, a social responsibility strat- egy became a key component of TLC's turnanound plan, driv- en by a desire to have a more positive impact on the world. To demonstrate its commitment, TLG became the first toy company to join the United Nations Global Compact--the world's largest social responsibility initiative-and commit- ted to support the 17 United Nations Sustainable Develop- ment Goals. The initiatives mentioeed above aren't only about children- they focas on TLG's responsibility toward people as well. For such initiatives, TLG engages employees as well as local com- munity members to take part. For example. TLG encourages employees to become "Play Agents," training and educating them to understand the role and significance of play and pro- viding them with the tools needed to inspire children through Local Community Engagement activities. Last year, the LEGO Foundation trained almost 1,200 Play Agents, bringing the total to 3.000. TLG believes that engaging employees in the com- pany mission and vision is an important part of creating "the best place to work." But when it comes to caring for people, TLG goes much deeper than mixing work and play. TLG has high standards for treating employees with respect, paying fair wages, maintaining a safe work environment, and ensuring reasonable working hours. These standards do not stop at the walls of the company's Own facilities. Under the LEGO Code of Conduct, all suppliers must comply with strict guidelines for child labor, forced labor, discrimination, wages and benefits, health and safety, and other aspects of ethical treatment of employees. During the past year, TLG udited 100 percent of suppliers with respect to the LEGO Code of Conduact, including suppliers in high-risk countries. What's more, TLG requires that each supplier provide written as- surance that their own suppliers comply with the same standards. It's for the Children TLG's social responsibility goals are organized into three key areas children, people, and the environment. According to Thomas Kirk Kristiansen, great-grandson of company TLG founder Ole Kirk Kristiansen, "Children are our role models." TLG has always sought to inspire children through the power of 556 Appendix 1: Company Cases Leaving the Planet Better for Tomorrow's Children materials forward to 2025. Already, 75 percent of the cardboard used in its packaging comes from recycled material. Addition- ally, the company is focused on other environmental benefits The final component of TLG's social responsibility strategy is that can be achieved through innovations in packaging. For ex- caring for the environment. Although setting goals to reduce a company's environmental footprint is pretty much mandatory these days, TLG sees it as an extension of its mission. That is, eliminating the need for 3,000 truckloads. TLG's work to inspire children and help them achieve their full potential through play applies to the children of tomorrow as much as to the children of today. And TLG recognizes that for children of future generations to enjoy the fruits of its mission, impacts through small improvements. Can you imagine the they must inherit a planet with a healthy environment. As with the other components of its social responsibility code, TLG has high standards for both itself and its suppliers when it comes to minimizing CO, emissions, waste, and pollution. It has also established goals for developing renewable energy and sustain- able materials. Recently, TLG achieved a major environmental mile- stone when it announced that the first LEGO pieces made from sustainable plant-based plastic will go on sale this year. Specifically, polyethylene-a soft, durable, and flexible plastic made with ethanol extracted from sugar cane material-will be the sole plastic used to make botanical elements such as leaves, bushes, and trees included in LEGO building sets. Asa bioplastic, these pieces will also be recyclable and biodegradable. Until now, LEGO elements have always been made entirely from petroleum-based plastic. The first bioplastic LEGO pieces to hit the shelves will comprise only about two percent of all LEGO elements produced. However, according to Tim Brooks, vice president of environmental responsibility at TLG, "This is a great first step in our ambitious commitment of making all LEGO bricks using sustainable materials." To move toward this goal, TLG has joined forces with the World Wide Fund for Nature and the Bioplastic Feedstock Alliance to support and build demand for sustainably sourced plastic and ensure fully sustainable sourcing of raw materials for the bioplastics industry. Just a few years ago, TLG set a goal to achieve 100 percent sustainable materials in its bricks and packaging by 2030. How- ever, it recently moved its deadline for its goal for packaging en-us/aboutus/responsibility/story/report, accessed October 2018. ample, reducing the average size of a LEGO box by 14 percent over the past four years saved 7,000 tons of cardboard, in turn When a major global corporation makes even a small social or environmental improvement, the scale of the company magnifies the impact. But TLG is not satisfied to achieve big impact of 700 million LEGO tires being made from bioplastic instead of oil-based plastic? TLG can. And TLG expects that the impact of such actions will not only result in direct benefits, they will be felt throughout the toy industry and beyond. Questions for Discussion 1. Give as many examples as you can for how TLG defies the common social criticisms of marketing. 2. Of the five sustainable marketing principles discussed in the text, which one best describes TLG's approach? 3. Analyze TLG's business using the Societal Classification of Products (Figure 16.4). 4. Would TLG be more financially successful if it were not so focused on social responsibility? Explain. I on Sources: "First Sustainable LEG0 Pieces to Go on Sale," The Guardian, March 2, 2018, www.theguardian.com/lifeandstyle/2018/ mar/02/first-sustainable-lego-pieces-to-go-on-sale; Karsten Strauss, "The Companies with the Best CSR Reputations in 2017," Forbes, February 8, 2018, www.forbes.com/sites/karstenstrauss/2018/02/08/the- companies-with-the-best-esr-reputations-in-2017/788c20333873; Simon Mainwaring, "How LEGO Rebuilt Itself as a Purposeful and Sustainable Brand," Forbes. August 11. 2016, www.forbes.com/ sites/simonmainwaring/2016/08/11/how-lego-rebuilt-itself-as-a- purposeful-and-sustainable-brand/2bbd44e46f3c; and additional in- formation from www.lego.com/en-us/aboutus/news-room, www.lego. com/en-us/aboutus/lego-group/code-of-conduct, and www.lego.com/ Classie LEGO plastic bricks have been fixtures in homes around the world for more than 70 years. Just 15 years ago, The LEGO Group (TLG) was near bankruptey, spiraling downward and losing money at a rate of $1 million a day. But after a mas- sive restructuring and implementation of a new strategic plan. TLG has been on the rise ever since. In fact. TLG is now the world's largest toy company. besting powerhouses Matnel and Hasbro. Last year, The LEGO Group (TLG) produced 3,700 different types of LEGO bricks and a record 75 billion total bricks, enough to construct a continuous line stretching around the world more than 27 times. All those bricks went into more than 100 million LEGO sets that found their way into the eager hands of customers in 140 countries, putting over $5.6 billion into TLG's coffers. Perhaps more notable than becoming the global toy market leader is the fact that TLG has achieved this feat while also establishing an unsurpassed commitment to so- cial responsibility Ia fact, in an annual stady published by Forbes, based on ratings of social responsibility from con- sumers in 15 countries, LEG0 came out on top last year. moving up from its fifth-place showing the year before, In the study conducted by the Reputation Institute, LEG0 topped all other companies in perceptions that it behaves ethically. operates transparently, conducts business fairly, protects the environment, and supports worthy causes. These consumer perceptions reflect TLG's actions. According to Stephen Hahn-Griffiths, Chief Rescarch Officer for the Reputation Institute, TLG "has embraced corporate social responsibility from top to bottom." play by facilitating a child's natural approach to learning. The idea is to enable children to build valuable life skills while hav- ing fun. This supports TLG's vision"to inspire and develop the builders of tomorrow." In addition, one of the driving pillars of TLG's responsibility strategy is "leaving the best possible world for children to inherit. TLGS very ownership structure demonstrates its commitment to children. The LEGO Foundation owns 25 percent of the company. Dedicated to carrying out TLG's vision, the LEGO Foundation acts as an intermal watchdog. cosuring that the profits from every LEGO product sold help bring learning through play to children. To this end, the LEGO Foundation conducts research and carries out Local Community Engagement activities all over the world. Such activities include working with partners to execute early chikdhood programs, launch Play Labs, and establish early childhood centers. Recognizing play" as a child's right, TLG worked with the LEGO Fouindation and partner UNICEF to give children a voice during World Children's Day, bringing kids in to take over key soles at TLG. Additionally, TLG motivated employ- ces to volunteer to work with children around the world in a program to engage them in environmental and social issues as well as help them build ideas to make the world a better place. Through these and other activities, the LEGO Foundation en- gaged 13 million children last year. When TLG developed its plan to bounce back from the Caring for People: A Company Value brink of bankruptey, it also took the opportunity to reevaluate its company values. As a result, a social responsibility strat- egy became a key component of TLC's turnanound plan, driv- en by a desire to have a more positive impact on the world. To demonstrate its commitment, TLG became the first toy company to join the United Nations Global Compact--the world's largest social responsibility initiative-and commit- ted to support the 17 United Nations Sustainable Develop- ment Goals. The initiatives mentioeed above aren't only about children- they focas on TLG's responsibility toward people as well. For such initiatives, TLG engages employees as well as local com- munity members to take part. For example. TLG encourages employees to become "Play Agents," training and educating them to understand the role and significance of play and pro- viding them with the tools needed to inspire children through Local Community Engagement activities. Last year, the LEGO Foundation trained almost 1,200 Play Agents, bringing the total to 3.000. TLG believes that engaging employees in the com- pany mission and vision is an important part of creating "the best place to work." But when it comes to caring for people, TLG goes much deeper than mixing work and play. TLG has high standards for treating employees with respect, paying fair wages, maintaining a safe work environment, and ensuring reasonable working hours. These standards do not stop at the walls of the company's Own facilities. Under the LEGO Code of Conduct, all suppliers must comply with strict guidelines for child labor, forced labor, discrimination, wages and benefits, health and safety, and other aspects of ethical treatment of employees. During the past year, TLG udited 100 percent of suppliers with respect to the LEGO Code of Conduact, including suppliers in high-risk countries. What's more, TLG requires that each supplier provide written as- surance that their own suppliers comply with the same standards. It's for the Children TLG's social responsibility goals are organized into three key areas children, people, and the environment. According to Thomas Kirk Kristiansen, great-grandson of company TLG founder Ole Kirk Kristiansen, "Children are our role models." TLG has always sought to inspire children through the power of 556 Appendix 1: Company Cases Leaving the Planet Better for Tomorrow's Children materials forward to 2025. Already, 75 percent of the cardboard used in its packaging comes from recycled material. Addition- ally, the company is focused on other environmental benefits The final component of TLG's social responsibility strategy is that can be achieved through innovations in packaging. For ex- caring for the environment. Although setting goals to reduce a company's environmental footprint is pretty much mandatory these days, TLG sees it as an extension of its mission. That is, eliminating the need for 3,000 truckloads. TLG's work to inspire children and help them achieve their full potential through play applies to the children of tomorrow as much as to the children of today. And TLG recognizes that for children of future generations to enjoy the fruits of its mission, impacts through small improvements. Can you imagine the they must inherit a planet with a healthy environment. As with the other components of its social responsibility code, TLG has high standards for both itself and its suppliers when it comes to minimizing CO, emissions, waste, and pollution. It has also established goals for developing renewable energy and sustain- able materials. Recently, TLG achieved a major environmental mile- stone when it announced that the first LEGO pieces made from sustainable plant-based plastic will go on sale this year. Specifically, polyethylene-a soft, durable, and flexible plastic made with ethanol extracted from sugar cane material-will be the sole plastic used to make botanical elements such as leaves, bushes, and trees included in LEGO building sets. Asa bioplastic, these pieces will also be recyclable and biodegradable. Until now, LEGO elements have always been made entirely from petroleum-based plastic. The first bioplastic LEGO pieces to hit the shelves will comprise only about two percent of all LEGO elements produced. However, according to Tim Brooks, vice president of environmental responsibility at TLG, "This is a great first step in our ambitious commitment of making all LEGO bricks using sustainable materials." To move toward this goal, TLG has joined forces with the World Wide Fund for Nature and the Bioplastic Feedstock Alliance to support and build demand for sustainably sourced plastic and ensure fully sustainable sourcing of raw materials for the bioplastics industry. Just a few years ago, TLG set a goal to achieve 100 percent sustainable materials in its bricks and packaging by 2030. How- ever, it recently moved its deadline for its goal for packaging en-us/aboutus/responsibility/story/report, accessed October 2018. ample, reducing the average size of a LEGO box by 14 percent over the past four years saved 7,000 tons of cardboard, in turn When a major global corporation makes even a small social or environmental improvement, the scale of the company magnifies the impact. But TLG is not satisfied to achieve big impact of 700 million LEGO tires being made from bioplastic instead of oil-based plastic? TLG can. And TLG expects that the impact of such actions will not only result in direct benefits, they will be felt throughout the toy industry and beyond. Questions for Discussion 1. Give as many examples as you can for how TLG defies the common social criticisms of marketing. 2. Of the five sustainable marketing principles discussed in the text, which one best describes TLG's approach? 3. Analyze TLG's business using the Societal Classification of Products (Figure 16.4). 4. Would TLG be more financially successful if it were not so focused on social responsibility? Explain. I on Sources: "First Sustainable LEG0 Pieces to Go on Sale," The Guardian, March 2, 2018, www.theguardian.com/lifeandstyle/2018/ mar/02/first-sustainable-lego-pieces-to-go-on-sale; Karsten Strauss, "The Companies with the Best CSR Reputations in 2017," Forbes, February 8, 2018, www.forbes.com/sites/karstenstrauss/2018/02/08/the- companies-with-the-best-esr-reputations-in-2017/788c20333873; Simon Mainwaring, "How LEGO Rebuilt Itself as a Purposeful and Sustainable Brand," Forbes. August 11. 2016, www.forbes.com/ sites/simonmainwaring/2016/08/11/how-lego-rebuilt-itself-as-a- purposeful-and-sustainable-brand/2bbd44e46f3c; and additional in- formation from www.lego.com/en-us/aboutus/news-room, www.lego. com/en-us/aboutus/lego-group/code-of-conduct, and www.lego.com/
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1 First Classic LEGO plastic bricks have been fixtures in homes around the world for more than 70 years Just l5 years ago The LEGO Group lTLGl was near bankruptcy Spiraling downward and losing money a... View the full answer
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