LEGO: Only the Best is Good Enough
Presentation written by:
Sophie LEMAITRE, email@example.com
Cyrielle LEORAT, firstname.lastname@example.org
Presentation supervised by: Assoc. Prof. Dr. Elena M. BARBU, email@example.com
The reputation of the company and its work are based on the famous little brick to nest to build many things or characters. That’s why LEGO is one of the market leaders in building toys and creating experience through toys. This activity is a global business. It is the activity of LEGO but also its fame, even if later the company decided to bring novelty by creating characters loved by children. Apart from the sale of brick and all other associated objects, the company has strategic activities, investments and the creation of a foundation to inspire and help the builders of tomorrow. We present in the first part several general information about the firm, and in the second part the corporate social responsibility of LEGO.
- General information
The LEGO Group is a private family business specializing in the manufacture of children’s construction toys that was created in 1932 by Ole Kirk Kristiansen. The company’s head office is located in Denmark, more specifically in Billund. The group also has offices around the world, including London, Enfield, Shanghai and Singapore.
The LEGO brand is not just a name or a known logo. It represents both the expectations of consumers but also the responsibility that the group has towards the world around them and the users. Thus, to meet its expectations, LEGO has developed many values. We can therefore quote the 6 following values:
Creativity is the ability to find new ideas and things. Being creative makes it possible to develop new creations by combining logic and imagination to stimulate the younger ones while being fun for them.
The child tries to imagine how his ordinary world can become extraordinary. This is how he begins to dream of another world, and the dream is the first stage of the imagination. These free toys allow children to develop their imagination and become creative.
Fun is the happiness and joy of building together, seeing a project come to fruition, the enthusiasm of children to create and surprising yourself and others by what you can achieve or create.
Children can learn through discovery to build alone, to have ideas, to put gestures on their thinking and imagination.
Benevolence is about making arrangements for the good and happiness of others. For LEGO, this means doing better than others by thinking less about the company and more about customers, especially children.
Despite the fact that LEGO has already won the trust of all, for the company quality means continuous improvement to be the best toy and best match the needs of children.
From a financial point of view, Lego’s turnover in 2017 is not yet known. But as far as 2016 is concerned, the company has greatly increased its sales record with a further 5.5% increase in its worldwide turnover. This raises its turnover for 2016 to 5.1 billion euros.
The company has chosen to make a number of investments aimed at improving the company’s development, quality and results by strengthening production capacity, digital developments, sustainability initiatives and skills of the workforce.
The steady growth of LEGO requires the training and employment of more and more people. In 2016, the group had more than 19 000 employees, a number that has almost doubled since 2011.
The LEGO leadership team is made up of 12 people, including CEO Niels B. Christiansen. The team decided to optimize the values of the group expressed above. They have therefore undertaken to highlight that they do not want to be competitors with the biggest company but rather to be the best on all points. For this, they needed to put in place a strategy of excellence and differentiation by having a structure and hierarchical management a little more flexible.
LEGO has introduced innovative products with LEGO® Ninjago and LEGO Friends, two new series of games with moods, themes and characters that make children happy. The change in small bricks has allowed the company to increase its turnover and thus improve its results but also to grow its global growth.
- Corporate Social Responsibility Actions
In this part, we will present different actions concerning the environmental protection, social responsibility, ethical labour, philanthropy, etc.
- Environmental protection and leadership
As we have been able to present it previously, the LEGO group has many positive values and in particular, some correspond to have a better impact on the company, to have a positive impact. And this goes through the respect of the environment, the goal being to have a lesser impact on the latter when producing products necessary for the activity of the group.
In this desire and ambition to reduce its impact, LEGO plans to reduce its emissions in order to cope with global warming, which is increasingly problematic on Earth. This means improving waste management and using responsible resources that respect the environment. We will develop these two points.
See Picture 1
Reduction of emissions
For a company such as Lego, the first step towards a better impact on the environment and a protection of it by the control and reduction of its emissions because of global warming.
First, the company is committed to being 100% renewable within 2 years. This is why LEGO has invested in wind farms in order to create energy naturally through the wind and thus meet the needs of household premises and factories with renewable energy. More specifically, the ownership of one of these wind farms therefore produces electricity that will be able to cover the needs of more than 100,000 households each year. And the second park will therefore create energy to meet the energy needs of the company.
Then, the company plans to improve its energy efficiency. That is, LEGO has found a way to reduce the amount of energy it used to build the brand’s famous little bricks. The solution was therefore to improve the insulation of buildings in order to limit the energy losses and overheating of these buildings. But also, to improve cooling systems by changing production systems and machines.
Finally, LEGO has improved the energy efficiency of the supply chain. To achieve this, the company has put in place with its suppliers an improvement in the supply chain that consists of delivering by minimizing carbon emissions.
See picture 2
Use of responsible resources
Always in the concern of an environment less impacted by humans, industries and their activities, LEGO has chosen to put in place the use of responsible resources and used responsibly, that is, environmentally friendly. And that means better waste management, and better use of resources, as electricity, raw materials, and so on.
In terms of finished products, LEGO gives tips to users and parents about throwing small bricks when kids do not want to play with them anymore. These bricks are made with durable products, so do not throw a durable product. In addition, Lego are produced so that even if users do not want to play with it, they can be kept for years to come or for future generations. And if, despite this, users want to get rid of it, the brand advice to donate it to knowledge or associations provided for this purpose.
Three words are behind the improvement of Lego waste management: reduce, reuse and recycle. So, the work of improvement is for LEGO to reduce waste until it reaches the zero-waste stage. To reuse the materials as well as the faulty parts so as not to waste them and also to recycle the materials for which this process is possible (paper, sheet, pencil, etc.). The goal of the company is to achieve a 93% recycling percentage.
For these packaging, the brand has chosen since 2014 to make sustainable packaging. Packaging used for sale to customers is now smaller, saving paper and cardboard. They are also certified by the Forest Stewardship Council ™ which is an environmental label that ensures that the production of wood or cardboard meets the sustainable forest management process. This proves that despite the need for boxes to create packaging, the company respects the environment and animal life on the premises where the wood is harvested.
See figure 3
- Employees protection
Quality of life at work, prevention of risks, accidents, motivation at work, etc. are points that the company is committed to improving to ensure the well-being of its employees at work. The objective proposed by the company to its employees is to succeed together, building their work on a relationship of trust and openness that allows everyone to express themselves in their work and feel good about it. It’s why they launched their Responsibility and Human Rights policy, which reflects their commitment to children, employees and workers in their supply chain and in local communities.
The company does not want any discrimination in the choice of its employees, which is why the company has more than 80 different nationalities among its employees. LEGO group has also chosen to welcome 1,700 new employees to its teams in 2016 which increases the number of employees to 19, 000. Recognizing the commitment and hard work of its employees, the company strives to ensure that employees work in the best conditions by promoting safe and respectful work. It is also in its corporate culture that LEGO inserts permission for employees to contribute to the business and develop their skills.
See figure 4
And always in this concern for diversification of profiles, every time the company welcomes new employees the company makes a point of honour to have people with different backgrounds and experiences. This diversification benefits the company because each different profile brings skills and qualities different from those present in the company which allows to address and to take up all types of challenges.
Previously we spoke about the concern that Lego has for the well-being at work of its employees. To ensure this, LEGO conducts an annual survey of its employees about their motivation and job satisfaction. In 2016, 96% of them said they feel motivated and satisfied at work. But the company still wants to improve by taking care of employees so that LEGO is a great place to work. Behind all this lies the well-being of employees but the group also knows that motivated and happy employees at work will be more productive and participate in its success.
For the first time in 2016, LEGO set up a half-day of entertainment and reconnection with small bricks for company employees. This day is called the LEGO play day and allows employees to spend half a day setting up their creativity, their curiosity and so entertain them. The goal of the company is to have fun, collaborate, create and learn together, at the heart of the business.
- Ethical labour practices
Well-being at work is not only taken into account for the employees present in the offices or the factory but also for the suppliers and all the actors of the supply chain. This is why they have the latter sign codes of conduct that respect the important issues related to the labour code, namely relating to human rights, labour, safety and health, corruption, violence, etc.
Last but not least is the safety of employees at work. The goal of the company is that LEGO is a great place to work for motivation and satisfaction but also and above all for the health and safety of its employees. It is this concern that has led the company to improve its working conditions, which has reduced accidents at work by more than 40%. In all companies, stress and therefore mental health is a point not to neglect. To improve these two points, LEGO has implemented two programs that can be beneficial to employees. The first program is reserved for managers to learn how to identify extra stress among employees and to intervene to help them. The second program is a workshop for employees to learn how to manage their stress themselves.
Lego, the company which cares about corporate social responsibility, pay attention to everything. They offer solutions for their business, but pay attention to their supplier and their supply chain. Thus, Lego pays attention to the respect of the code of conduct that they have established with their suppliers, thanks to the dialogue, the auditors and a very important and rigorous follow-up system.
They work with suppliers who respect the good working conditions in the supply chain. Before working with them, they require suppliers to sign this code of conduct.
This code respects human rights, labour rights, health, safety. He also fights against corruption and the working environments of all employees.
This improves performance. They all work in a healthy place, without problems.
As said before, they also reduce CO2 emission in their supply chain. They launched in 2014 the Engage-to-Reduce- partnership program, which encourages their partners or suppliers to reduce their emissions.
Activities against poverty
The local community engagement program was launched in 2014 in countries where the LEGO group is present. The principle of this program is volunteer employees to conduct workshops with local communities. Today, the program has thousands of volunteers who carry out approximately 180 volunteer workshops in more than 20 countries benefiting more than 100,000 children worldwide.
The aim of this program is to benefit children by developing their learning capacity through play, to reinforce the commitment of the employees of the company by making them participate voluntarily in these workshops and also to anchor the image responsible company and concerned about the world around it. These workshops obviously have a cost, but they are funded by donations made by the LEGO group as well as the LEGO Foundation.
Volunteer workshops are held mainly on holiday camps for children around the world. Learning to play with children is not the only challenge, these activities and workshops must be fun to please children and make them want to participate. Behind this desire to teach lies a deeper desire for LEGO and the LEGO Foundation to develop each child’s own strengths and quality and show him that he must believe in his dreams.
As a continuation of this help to children all over the world, Lego has helped 7 schools in the Czech Republic by preparing original projects always with the aim of teaching children to play and developing them.
LEGO shows by its actions that selling is not the only concern of the brand, they take care of children and helps them develop through the game The faculties they want to develop and put forward are creativity, commitment, communication and imagination.
Relation with stakeholders
In a commercial context like LEGO, the stakeholder is the person who has a legitimate interest in a project or entity. For LEGO, the stakeholder is the child. The child is the main person that the company wants to attract and wants to capture. That’s why she wants to have special relationships and take care of them by meeting their needs, their expectations and helping them in their personal development. The goal of LEGO being through their actions to leave a positive impact on the world whose children tomorrow, their children, will inherit.
Beyond this LCE program, LEGO has created “LEGO Build the Change” events that are based on the same program as volunteer workshops. LEGO provides children with brand bricks to inspire and build the future they want to see and not the one we want them to see. They build their school, their neighbourhood, a city, a building according to their desire and their creativity. “Build the Change” is a Lego event, which began in 2007. The goal of this project is to show that the ideas, innovations, creativity of children are the future of Lego. In a fun, social and environmental context, children could interact and find solutions for the company.
According to Lego, this event is linked to other events like “Build your school, city or neighbourhood”. Children have an important place and bring real solutions that an adult would not have thought of.
This project unfolds as children use Lego bricks to communicate, express themselves and create lasting memories.
It is a world event with the collaboration of the local community but also extern partners such as the United States, Russia, Australia, France, China, etc. This event “Build the change” has therefore taken an international scale.
Beyond this relationship with the children who are the stakeholders that LEGO primarily wants to touch, the company has other important relationships. There are 6 stakeholders:
- Customers, children as mentioned earlier
- Employees, such as managers or salespeople, they have interests in LEGO projects because it is through their collaboration that LEGO succeeds or fails
- The suppliers, they are the ones who deliver the companies in raw materials and allow the realization of the small bricks
- The banks, these helped the foundation, the creation and the evolution of the company by making of the small bricks
- Business partners, for example Walmart that LEGO supported in the development of a control system that uses data from the LEGO group for Walmart to tailor local customer demand with orders.
- The society, like the FIRST LEGO LEAGUE action which is an annual international competition for toy robot users
- The investors, they allow LEGO to carry out new projects and to always improve thanks to their funds of departure in exchange for a remuneration.
Innovate for children
Lego’s goal is to offer their main client and stakeholder, children, fun, engaging and high-quality of games to develop their skills. The interest and well-being of the children is their priority. Thus, as we have seen before, Lego meets the safety standards from design to manufacture, up to sale and use.
They want to inspire children to learn through play. Thanks to their Lego’s brick, children can develop intellectual skills and develop their state of mind. This is why they are counting on the responsible side by producing safe and high quality games, with security, hence their participation in the ten principles.
According to Lego, experiences with bricks and characters help children to develop essential skills: social, emotional and cognitive skills.
The LEGO® system in Play is unique and allows children to learn while playing. This system combines logic and creativity. It allows children to solve problems, which will be more beneficial to them later.
They wanted to create a game without discrimination: it encompasses children, given age, gender, culture and ethnicity. This game allows the development of the child by promoting imagination and creativity. Thus, the child can develop critical thinking and allows him to be more curious.
The LEGO Group, LEGO Foundation and LEGO Education are developing their product to help children around the world. LEGO Education also allows students to succeed in their school life by providing children with learning experiences.
Children are his models but also their main speakers. They are their most important stakeholders. That’s why they participate in the partnership with UNICEF and respect the children’s right because they are a model for the firm, they encourage Lego to be the best company.
At the heart of new technologies, Lego wants to promote the benefits of using new information and communication technologies (NICT) and access information while having fun. While having access to information is risky, Lego, through its partners, reduces the risk of online interactions that may occur to children. Their goal is the digital security of their main stakeholder.
- Positive impact through partnerships
Lego believes that by engaging in causes, they can make societal and environmental improvements. Thus, they engage in many stakeholders who have the same vision of things as the company. They support children’s rights through UNICEF, are part of the UN Global Compact and improve energy efficiency with the World Wildlife Fund.
They support the rights of the child. The company sells a product first for children. Thus, by developing a partnership with UNICEF, they show that they care about their main customers and are very responsible. Child protection is thus at the heart of the Lego group.
This is the first company that has established a global partnership with this organization. They want to show their commitment to the right of the child.
United Nations Global Compact
Lego signed the United Nations Global Compact in 2003. Thus, they have incorporated the ten principles of the covenant into their daily lives.
1. Companies promote and respect the protection of human rights
2. Companies are careful to not be complicit in violation
International labour standards
3. Companies respect freedom of association
4. Companies contribute to the elimination of all forms of forced or compulsory labour
5. Companies contribute to the abolition of child labour
6. Companies contribute to the elimination of all discrimination in employment
7. Companies apply the precautionary approach to environmental issues
8. Companies take initiatives to promote greater responsibility for the environment
9. Companies promote the development and diffusion of environmentally friendly technologies
Fight against corruption
10. Companies act against corruption in all its forms (extortion, bribe)
World Wildlife Fund WWF
Lego wants to reduce climate change. Thus, they became partners in 2013 with WWF. They both set targets to reduce carbon emissions in order to build a better planet for children and future generations. The group was the first toy company to join the climate savers program, which encourages organizations to reduce carbon emissions.
- Some other actions
Since 2008, Lego has appointed more than 20 employees to have the best raw materials for the company’s products. In fact, product safety is the priority of the company, they want their products to comply with global standards and that there is no problem on health. Thus, more than 2000 raw materials are checked, to see which are the best. According to Lego, a brick passes through 10 checkpoints.
Lego builds an offshore wind farm. Indeed, they aim to reduce their carbon emissions by producing their own renewable energy. Through participation in the wind farm, they will produce wind energy. Indeed, they aim to use only renewable energies in 2020, to participate in the well-being of the planet.
Through its suppliers and partnerships (including WWF), the group can reduce 10,000 tonnes of carbon emissions. To be concrete, these 10,000 tonnes is equivalent to removing over 2,000 cars off the street.
Lego boxes are made of cardboard or plastic. Thus, the group saves 7,000 tons of carton by and by changing the packaging of its products: smaller and more durable.
These new boxes bear the logo of the Forest Stewardship Council® (FSC®). It’s an international non-profit certification system that ensures that wood packaging comes from sustainable sources.
According to the website www.forbes.com, in 2017, Lego tops this year’s roster of top CSR companies. This group have jumped from its fifth place showing last year.
They have a slogan “Only the best is good enough”. Thus, they want to promote and show the world that they have a positive impact through their actions. This slogan is consistent with the perception that employees as well as stakeholders and customers have of the company.
LEGO has set commitments and values and responds to them every day, keeping in mind that there is always room for improvement. This is why they set sustainability goals, but also increasing goals such as actions with children or environmental impacts to always improve. Thus, LEGO remains a leader company on the market of the game of creativity but also leader with regard to the corporate social responsibility of the company.
PICTURES & FIGURES
Picture 1: Environmental policy of Lego
Source: Lego’s website : https://www.lego.com/fr-fr/
Figure 2: The journey of a LEGO brick CO2 emissions
Source: Lego’s website: https://www.lego.com/fr-fr/
Figure 3: Energy used and intensity of production
Source: Lego’s website: https://www.lego.com/fr-fr/
Figure 4: Evolution of the number of employees
Source: Lego’s website: https://www.lego.com/fr-fr/