Henkel Ethical Practices

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Case study is about corporate sustainability, corporate social responsibility, following ethical practices and proper code of conduct.
It is about how Henkel (Chile) started producing toluene free products to prevent health issues.
It also talks about how Henkel has adopted marketing techniques to promote the toluene free products to the customers.
Henkel always followed ethical practices which helped it establish a wide customer base and brand loyalty.

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Henkel Ethical Practices

  1. 1. HENKEL Case Study• Keshav Mohan (138)• Neha Shrimali (145)• Sipra Tekriwal (168)• Tirup Patel (171)• Vivek Jhala (175)
  2. 2. HISTORY• Founded in 1876 as Henkel & Cie by Fritz Henkel and two more partners.• First product marketed – "Universalwaschmittel", a universal detergent based on silicate.• In 1878 first German brand-name detergent appeared: Henkels Bleich-Soda .• Affordably-priced product supplied in sturdy paper bags. Made from water-glass and soda, it was the result of Fritz Henkels own research.• In 1879 Fritz Henkel was entered as the sole owner in the register of companies.
  3. 3. • In 1883 to improve liquidity and make better use of the Companys travelling sales staff, Fritz Henkel decided to sell merchandise in addition to his detergents.• Range included the colorant ultramarine [laundry bluing agent], gloss starch, a liquid cleaning agent, a pomade for cleaning, beef extract, and a hair pomade.• Persil came in 1907 as the first “self-acting laundry detergent” which accounted for 40 % of its income .• Gradually new products were launched and Henkel went international .
  4. 4. MISSIONHenkel – Leading Aerospace in innovativesolutions and world class service throughour people & products . VISION A global leader in brands and technologies.
  5. 5. GENERAL INFORMATION• Type – Kommanditgesellschaft auf Aktien with Aktiengesellschaft as partner with unlimited liability .• Industry – Chemicals, consumer products .• Founded – 1876 .• Headquarters – Düsseldorf, Germany .• Key people – Kasper Rorsted (CEO and Chairman of the executive board), Simone Bagel-Trah (Chairman of the supervisory board)
  6. 6. • Products – Personal care, laundry and cleaning products, adhesives and sealants (brands...)• Revenue – €15.09 billion (2010)• Operating income – €1.723 billion (2010)• Profit – €1.118 billion (2010)• Total assets – €17.53 billion (end 2010)• Total equity – €7.950 billion (end 2010)• Employees – 48,140 (average, 2010)• Subsidiaries – Dial Corporation
  7. 7. BRANDS
  8. 8. COMPETITORSCLEANING DIVISION – CHEMICAL DIVISION – BEAUTY DIVISION –
  9. 9. Introduction to the Case• Case study is about corporate sustainability, corporate social responsibility, following ethical practices and proper code of conduct.• It is about how Henkel (Chile) started producing toluene free products to prevent health issues.• It also talks about how Henkel has adopted marketing techniques to promote the toluene free products to the customers.• Henkel always followed ethical practices which helped it establish a wide customer base and brand loyalty.
  10. 10. Diamond Model
  11. 11. Diamond Model in relation to the Henkel Case• Purpose : The purpose of the firm is to produce and sell household cleaners and body care products. The other main purpose of the case is to stop the production of toluene containing adhesives.• Strategies :1. To use cyclohexane and acetone,2. Follow ethical practices to broaden customer base3. Promote ethical products4. Consult the recognized laboratories
  12. 12. Standards andRegulations :• Rejects corruption an bribery.• Success throughout sustainability.• Open communication.
  13. 13. 5 corporate values• We put our customers at the center of what we do.• We value, challenge and reward our people.• We drive excellent sustainable financial performance.• We are committed to leadership in sustainability.• We build our future on our family business foundation.
  14. 14. Core Values• Customer Driven• Excellence in quality• Strive for innovation• Promote change• Sustainability• Corporate Social Responsibility• Teamwork and Leadership• Develop superior brands and technologies
  15. 15. Social commitmentWe have grouped all of our social involvement programs – internationalcorporate citizenship activities that go beyond our business undertakings –under the Henkel Smile umbrella. With this program, we promote and supportsocial, educational, scientific, cultural, leisure, sports, health andenvironmental projects. Alongside material contributions, an important role isplayed by our employees and pensioners who also devote their enthusiasm,understanding, willingness to help, and personal commitment to their projectideas.
  16. 16. Code of ethics• Henkel strictly rejects all sorts of corruption.• They underline the strict ban on all forms of bribery and other undesirable business practices.• Economic success through sustainability.• Individual responsibility and motivation.• Safe and environmentally compatible products and technologies.• Safe and efficient plants and production processes.• Treatment of business partners and market behavior.• Sustainable business processes.• Technology and knowledge transfer.• Management systems for continuous responsibility and continuous improvement.• Open dialogue.
  17. 17. Stakeholders’ model• Business organizations have responsibility to various groups in society and not just the owners/ shareholder.• It includes a responsibility for the natural environment.• Thus, decisions should be taken in the wider interest.
  18. 18. Classification of StakeholdersInternal Stakeholder’s• The owners• The employeesExternal Stakeholder’s• The government• The local community organization• The competitors• The media• The environmentalistsConnected Stakeholder’s• The customers
  19. 19. The Government• The health ministry was convinced by the toxicological and safety advantages of the new formulation.• Henkel Chile was visited by the Health Secretary of Chile and received public support for the initiative.• The Health Ministry prepared a national law to prohibit the production and marketing of adhesives containing toluene.• The Chilean Minister of Health awarded the company with the national health award in recognition of its pioneering role in banning toluene.
  20. 20. The Owners Owner’s objectives:• Alternative product-Same productive performance-Lesser health problems• Provide product information and education regarding product hazards.• Eliminate sniffing as a social problem, especially for children who are likely to be addicts.• Improve health and safety properties of products for it’s clients in general• Secure and develop the market share and customer satisfaction through sustainable product improvements and public eco-leadership recognition
  21. 21. The Competitors• Henkel Chile worked to convince the competitors of the advantages of using the safer cyclohexane.• The Chemical Industry Association investigated the matter and finally all the other competitors switched over to cyclohexane and completely banned toluene.• They supported and actively participated in the cause too.
  22. 22. The Media The Environmentalists• The comparative advantages of • Eco-Leadership and Sustainable ‘toluene’ free adhesives were very Development. beneficial.• A press conference to promote the • Henkel’s market success and its innovation of toluene free adhesives ability to strengthen cooperation was organized. between various stakeholders lead to• The initiative was well received by multiple environmental and social the media. benefits.• It was very well covered by newspapers, television and specialized scientific magazines.
  23. 23. Local community organizations• University of Chile: Scientific research of product properties.• CITUC: Research on health aspects and scientific promotion of the Henkel improvements.• Chemical Industry Association of Chile: Promotion of the increased use and production of toluene-free adhesives through industry wide discussions.• Chilean Ministry of Health (Departments of Mental, Environmental and Public Health): Close observation of the scientific and commercial progress made with regard to most effective spreading the social and health benefits of the new products.
  24. 24. The Customers• The previous adhesives were the market leaders in Chile.• PROBLEM: To convince the customers that the new innovated product was at par with the previous product as far as the quality was concerned.
  25. 25. How to counter the problem? The Result• Personal mailing to main customers • Initial phase: Some customers and distributors (summary complained that they were not information and technical details). familiar with the new product• Visits of customers. properties.• Advertisement (and image) • However, the information campaigns campaigns for the public at large in were effective in regaining the clients newspapers, at bus stops, etc. that had been temporarily lost and even led to higher overall customer• Point of sale information. satisfaction.
  26. 26. Mendelow’s Stakeholder Mapping Matrix:INTRODUCTION:Mendelow’s stakeholder mapping matrix is a tool to classify stakeholders according totheir importance to the organization.It provides a tool that organizations can use to classify their various stakeholders.Depending on their interest in the organization and their power over the organization,stakeholders can be ranked as mentioned below. Stakeholder group with --------------- Level of importance: 1. High interest and High power --------------- High importance 2. Low interest and High power --------------- Medium importance 3. Low interest and Low power --------------- Low importance 4. High interest and Low power --------------- Medium importance
  27. 27. Mendelow’s Matrix: HIGH Observers Key players Informing/ empowering Involving LEVEL OFINTEREST Crowd Bystanders Ignoring Encouraging LOW LOW POWER OF INFLUENCE HIGH
  28. 28. Application Of Mendelow’s Matrix In Henkel HIGH Chile Case: Observers: Key players: 1. Shareholders. 1. Consumers (Poor 2. Employees. Children). 3. Chemical Industry 2. C.I.T.U.C. LEVEL Association of Chile. OFINTEREST 4. Competitors. Crowd: Bystanders: 1. Consumers. 1. University of Chile. 2. Academic 2. Chilean Minister of Health. Communities. 3. Government. LOW LOW POWER OF INFLUENCE HIGH
  29. 29. Conclusion• Henkel enjoys high goodwill.• It was committed to Eco-Leadership and sustainable development.• Henkel’s market success and it’s ability to strengthen co-operation between stakeholders led to multiple environmental and social benefits.• Henkel had wide customer base and customer loyalty.• False practices like bribery and corruption were strictly rejected.• They adopted the best marketing techniques to promote their products.• The balance between product improvements and performance aspects could be successfully communicated to their customers.• Henkel always believed in attaining their goals by following ethical practices and maintaining the product quality and standards.
  30. 30. THANK YOU!

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