ACC706 Report: Analysis of Blackmores CSR Issue and Recommendations

This report analyzes the corporate social responsibility (CSR) issue faced by Blackmores, an Australian health company, focusing on the unethical practice of selling health supplements alongside prescription drugs through pharmacies. The report identifies this as a significant CSR issue, negatively impacting the company's social reputation. It examines the sustainability model of Blackmores and how its actions contradict its CSR policies, particularly in promoting supplements with limited evidence to address side effects of prescribed drugs. The analysis incorporates agency, stakeholder, and legitimacy theories to underscore the need for improved CSR practices, transparency, and accountability. Recommendations include enhancing CSR disclosures at both regulatory and corporate levels, prioritizing consumer protection, implementing robust internal control management, and ensuring compliance with Therapeutic Goods Regulation. The report emphasizes the importance of legitimizing actions and demonstrating the efficacy of supplements in addressing prescription drug side effects, ultimately aiming to rebuild social image and maintain stakeholder trust. The report also references various sources, including academic journals and online resources, to support its analysis and recommendations.

CSR Issue in Blackmores

Introduction
Blackmores is a health company of Australia
It provides health supplements such as vitamins,
minerals and other nutritional products
The company CSR Disclosures have provided its
effective approaches adopted for promoting its
social responsibility
The CSR issue identified is of selling illegally its
health supplements with the prescription drugs by
the pharmacists
This has negatively impacted its social reputation
due to not meeting the customer’s interest of safety

Sustainability Model of Blackmores

CSR (Corporate Social Responsibility) Issue in Blackmores
It has acted against its social responsibility policies
by the use of unethical practices
This involves promoting its supplements along with
the prescribed drug to the patients which has little
evidence of overcoming the side-effects of the
prescribed drugs
Developed an agreement with the Pharmacy Guild
of Australia for promoting its health products
Australian Medical Association (AMA) has regarded
this practice of the company as highly unethical

IMPACT OF THE CSR FIRMS’ DISCLOSURE IN
CONTEXT OF THEORETICAL FRAMEWORK
The CSR Disclosures provided in context of its social
responsibility have not addressed its approach for
addressing the CSR issue identified
The use of agency, stakeholder and legitimacy theories
have inferred that it needs to improve its CSR practices
This is necessary to maintain integrity and accountability
on business operations
Need to provide detailed information about the selling of
its health supplements across various retail channels of
pharmacies
This type of information is necessary to protect the
interests of the consumers and achieving trust of its
diverse stakeholder groups

Recommendations on CSR Reporting
CSR disclosures of the company need to be improved at both
the regulatory and corporate level to re-build its social image
Company needs to depict itself to be more focused on ensuring
the protection of its consumers
It should place emphasis on developing a robust internal
control management framework that proactively identify any
such illegal practices
should also disclose the compliance of its medicinal products as
per the Therapeutic Good Regulation
Legitimizing its actions of selling its health supplements along
with prescribed medicines by ensuring that they are able to
overcome the side-effects of prescription drugs
Disclose its compliance with Therapeutic Good Regulation to ensure
quality and safety of its health supplements

References
APCO. 2016. Case Study: Blackmores Ltd — 2016 Signatory of the Year. [Online]. Available at:
https://www.packagingcovenant.org.au/documents/item/1087 [Accessed on: 01 May 2019].
Archelr, P. 2009. Social disclosure, legitimacy theory and the role of the state. Accounting, Auditing & Accountability
Journal, 22 (8), pp. 1284-1307.
Blackmores: About us. 2017. [Online]. Available at: https://www.blackmores.com.au/about-us [Accessed on: 7 May
2019].
Blackmores: Sustainability Report. 2018. [Online]. Available at:
http://www.blackmoressustainability.com.au/wp-content/uploads/2018/10/Blackmores-Sustainability-Report-18.pdf
[Accessed on: 7 May 2019].
Collett, M. 2011. Controversial Blackmores pharmacy deal withdrawn. [Online]. Available at:
https://www.abc.net.au/news/2011-10-06/controversial-blackmores-pharmacy-deal-withdrawn/3317960 [Accessed on:
7 May 2019].
Deegan, C. and Soltys, S. 2007. Social accounting research: An Australian perspective'. Accounting Forum 31 (1), pp.
73-89.
Freeman, E. 2010. Strategic Management: A Stakeholder Approach. UK: Cambridge University Press.
Gal, G. 2017. Sustainability and Social Responsibility: Regulation and Reporting. USA: Springer.
Hattingh, H. and Forrester, K. 2013. Australian Pharmacy Law and Practice. Australia: Elsevier Health Sciences.
Miller, B. 2011. Doctors hit out at pharmacists' deal with Blackmores. [Online]. Available at:
https://www.abc.net.au/news/2011-09-26/ama-accuses-guild-of-putting-commerical-interests-first/2942126 [Accessed
on: 01 May 2019].
Russo, A. and Perrini, F. 2010. Investigating stakeholder theory and social capital: CSR in large firms and SMEs'.
Journal of Business Ethics, 91 (2), pp. 207-221.
Villiers, C. and Van Staden, C. J. 2006. Can less environmental disclosure have a legitimizing effect? Evidence from
Africa. Accounting, Organizations and Society, 31 (8), pp. 763-781.
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