Strategic Management

Strategic Management Journal

Strat. Mgmt. J., 28: 1351–1357 (2007) Published online 22 August 2007 in Wiley InterScience (www.interscience.wiley.com) DOI: 10.1002/smj.645 Received 18 January 2007; Final revision received 10 July 2007

RESEARCH NOTES AND COMMENTARIES DOING WELL BY DOING GOOD—CASE STUDY: ‘FAIR & LOVELY’ WHITENING CREAM

ANEEL KARNANI*

Stephen M. Ross School of Business, University of Michigan, Ann Arbor, Michigan, U.S.A.

According to the ‘doing well by doing good’ proposition, firms have a corporate social responsibility to achieve some larger social goals, and can do so without a financial sacrifice. This research note empirically examines this proposition by studying in depth the case of ‘Fair & Lovely,’ a skin whitening cream marketed by Unilever in many countries in Asia and Africa, and, in particular, India. Fair & Lovely is indeed doing well; it is a profitable and fast-growing brand. It is, however, not doing good, and I demonstrate its negative implications for public welfare. I conclude with thoughts on how to reconcile this divergence between private profits and public welfare. Copyright  2007 John Wiley & Sons, Ltd.

INTRODUCTION

The idea that companies can do well by doing good has caught the attention of executives, business academics, and public officials. The annual report of virtually every large company claims its mission is to serve some larger social purpose besides making profits. The theme of the Academy of Management conference in 2006 asserted that ‘there is more to corporate success than the financial bottom line,’ and went on to argue that companies can accomplish some positive social goals without

Keywords: corporate social responsibility; bottom of the pyramid

*Correspondence to: Aneel Karnani, Stephen M. Ross School of Business, University of Michigan, 701 Tappan Street, Ann Arbor, MI 48109-1234, U.S.A. E-mail: akarnani@umich.edu

suffering financially. Leading international institutions such as the United Nations...