Advance Professional Practices case study of cosmetics companies

1. S U B M I T T E D B Y -
P R I Y A L M A H E S H W A R I
P O U L O M I M A N D A L
D E E K S H A S H U K L A
T O S H I M A H T O
D I V Y A U P A D H Y A Y
Corporate Social Responsibilities
(Cosmetics)

2. What is ethics
 ethics involves learning what is right or wrong, and then doing
the right thing -- but "the right thing" is not nearly as
straightforward as conveyed in a great deal of business ethics
literature.
Values, which guide how we ought to behave, are considered
moral values,
e.g., values such as respect, honesty, fairness, responsibility, etc.
Statements around how these values are applied are sometimes
called moral or ethical principles.

3. What is "Business Ethics"?
 The concept has come to mean various things to various people, but
generally it's coming to know what it right or wrong in the workplace
and doing what's right -- this is in regard to effects of products/services
and in relationships with stakeholders.
 Business ethics is now a management discipline. Business ethics has
come to be considered a management discipline, especially since the
birth of the social responsibility movement in the 1960s.
 In that decade, social awareness movements raised expectations of
businesses to use their massive financial and social influence to address
social problems such as poverty, crime, environmental protection,
equal rights, public health and improving education.

4.  An increasing number of people asserted that because businesses were
making a profit from using our country's resources, these businesses
owed it to our country to work to improve society.
 Many researchers, business schools and managers have recognized this
broader constituency, and in their planning and operations have
replaced the word "stockholder" with "stakeholder," meaning to include
employees, customers, suppliers and the wider community.
 The emergence of business ethics is similar to other management
disciplines. For example, organizations realized that they needed to
manage a more positive image to the public and so the recent discipline
of public relations was born.

5.  Organizations realized they needed to better manage their human
resources and so the recent discipline of human resources was born. As
commerce became more complicated and dynamic, organizations
realized they needed more guidance to ensure their dealings supported
the common good and did not harm others -- and so business ethics
was born.
 90% of business schools now provide some form of training in business
ethics. Today, ethics in the workplace can be managed through use of
codes of ethics, codes of conduct, roles of ethicists and ethics
committees, policies and procedures, procedures to resolve ethical
dilemmas, ethics training, etc.

6. Golden Rule in Ethical management
 Everything you want others to do to you, you shall do to others.
 Do not do to others that which you do not wish them to do to you.
 Do not do anything to others that if done to you, would cause harm to
you.

7. Benefits of corporate social responsibility
 The Unilever success story is well publicised, but it can be hard to identify with a business
of such size. However, the great news is that even the smallest of organisations benefit
when putting Corporate Social Responsibility (CSR) at the heart of their business,
starting with small changes on a simple environmental policy list.
 Whilst profit may be the end goal for any business, responsible businesses have managed
to attract more investors, reduced their risks and addressed stakeholder concerns. With
there barely being a day in the news where a business hasn’t made an embarrassing error
of judgement, more interest is being shown in businesses demonstrating Corporate Social
Responsibility (CSR).
 The benefits from adopting CSR can be less obvious than say, helping the environment.
For example, a survey from Net Impact found that 53% of workers said that “a job where
I can make an impact” was important to their happiness. Interestingly, 35% would take a
pay cut to work for a company committed to CSR.

8. AJMAL Perfumes(UAE)
HEALTHCARE
 At its heart Ajmal is driven by a humanitarian and benevolent spirit. This
commitment has seen the establishment and elevation of medical welfare
through the HAMM Public Trust. Operating two medical establishments - the
Haji Abdul Majid Memorial Charitable Dispensary and the Haji Abdul Majid
Memorial Hospital, the HAMM Public Trust is an Ajmal initiative that affects
the lives of hundreds of patients everyday.
 The dispensary provides free medical treatment, including medicines to
approximately 300 patients daily. Other areas include child healthcare and
basic healthcare education. The state-of-the-art Hospital and Research Centre
is one of the largest charity hospitals in the country. In addition, the Trust
organizes short-term 'Medico-Educative’ camps in backward areas to promote
awareness of primary health care, family planning, AIDS and other diseases
amongst the rural populace.

9. EDUCATION
 To boost the level of literacy in the country, AJMAL established
Markazul Ma'arif that runs a group of schools under the name of
Markaz Academy. Another centre of education is the Markazul Ma-arif
Education and Research Centre (MMERC), which was established in
Delhi and subsequently moved to Mumbai in 2000. The centre aims at
providing basic education to the needy. The HAMM Public Trust even
grants scholarships and subsidized assistance to deserving students
who wish to pursue advanced medical studies.
VOCATIONAL TRAINING
 In order to alleviate the problem of unemployment in the country, both
the HAMM Public Trust and the Markazul Ma'arif provide counseling
and training to the unemployed youth.

10. ORPHANAGE
 The Markazul Ma'arif manages the Markaz Darul Yatama Goalpara - an
orphanage in Assam, which houses over 700 orphans and destitute
children. The Trust provides them with basic amenities like food,
clothing and shelter, free of cost. Qualified teachers including trained
physical instructors provide elementary education to the residents.

11. VI-JOHN

12. T-shirts

14. M·A·C
M·A·C has five social initiative programs currently in place.
 M·A·C Cruelty-Free Beauty: principle that prohibits animal testing and
the policy is extended to ingredient suppliers as well (M.A.C. no longer
guarantees its products are cruelty free. Current policy is that "Our
products are not tested on animals except when absolutely mandated
by law" .
 M·A·C Kids Helping Kids: started in 1994 where kids living with
HIV/AIDS create images that are reproduced as greeting cards. 100%
of selling price goes back to participating organizations

15.  M·A·C Viva Glam: 100% of the purchase price of any Viva Glam product
(lipsticks, lipglasses and holiday sets) goes to the M·A·C Aids Fund.
Multiple Celebrities have endorsed the MAC Viva Glam products. Such
celebrities include: Lady Gaga, Cyndi Lauper, Elton John, Nicki Minaj,
and More.
 Back 2 M·A·C Recycling: offers free lipglass, eyeshadow, or lipstick at
any M·A·C location (lipsticks only at M·A·C counters in department
stores) with the return of six empty M·A·C containers. Viva Glam
products, Pro Longwear gloss, Plushglass, Luster Glass and Pro palette
Shadow and sheen supreme lipsticks are excluded.

16.  The M·A·C AIDS Fund: supports community organizations providing
direct services to people living with AIDS. To date the foundation has
raised over $240,000,000 usd since its inception in 1994.

17. The Body Shop: Social Responsibility or
Sustained Greenwashing?
 Case Details:
Case Code : BECG067
Case Length : 25 Pages
Period : 2002-2006
Organization : The Body Shop International Plc.
Pub Date : 2006
Teaching Note : Available
Countries : UK, Europe, USA
Industry : Beauty care / Cosmetics
 On March 17, 2006, The Body Shop International Plc. (Body Shop), a retailer of
natural-based and ethically-sourced beauty products, announced that it had
agreed to be acquired by the beauty care giant L'Oréal SA5(L'Oréal) in a cash
deal worth £652 million (US$ 1.14 billion). The deal valued the shares of Body
Shop at a premium of 34.2 percent to their price before the acquisition. It was
also a major windfall for its founder Dame Anita Roddick (Roddick).

18.  Following this announcement, Body Shop and Roddick came under severe
criticism. Body Shop was regarded by many as one of the pioneers of modern
corporate social responsibility (CSR).
The company was also strongly associated with the social activism of Roddick.
 Since its inception, the company had endorsed and championed various social
issues that complemented its core values - opposition to animal testing,
developing community trade, building self-esteem, campaigning for human
rights, and protection of the planet.
Body Shop was one of the first companies to publish a 'Values Report' in 1996
(Refer to Exhibit I for Body Shop's mission statement and Exhibit II for its
values).
Through these initiatives, the company had cultivated a loyal customer base
who shared these values of the company.

19.  On the other hand, L'Oreal was viewed by activists as the face of modern
consumerism - a company that tested its cosmetics on animals, exploited
the sexuality of women, and sold their products by making women feel
insecure. Moreover, Nestlé owned 26 percent of L'Oreal. Nestle was one of
the most boycotted companies in the world for its alleged unethical
business practices and aggressive promotion of baby milk in developing
countries.
Body Shop's critics said that they felt betrayed by the deal as Roddick had
previously been quite vocal in her criticism of companies like L'Oreal. They
called for a boycott of Body Shop's products as they felt that the company
had sold out its values and principles.

Body Shop and Roddick defended the deal by saying that L'Oreal would not
compromise Body Shop's ethics and that the merger would give Body Shop
a chance to spread its values to L'Oreal. L'Oreal also announced that Body
Shop's values would not be compromised and that it would continue to
operate as an independent unit.

20.  Many analysts were concerned that Body Shop's image would be affected by
the acquisition. Some activists felt that Body Shop would not be able to
function independently and that an important partner in CSR had been
lost. However, they were a few who felt that Body Shop's values would rub
in on L'Oreal and believed that the deal had some positives.
There were also questions raised about whether L'Oreal was trying to
improve its image and buy CSR through this deal. But for Body Shop's
staunchest critics, the acquisition by L'Oreal was vindication of their view
that Body Shop was nothing more than a greenwasher.
 In 1970, Roddick (then Anita Perella) and Gordon Roddick (Gordon) were
inspired to set up a beauty products store after seeing a store called 'The
Body Shop' in Berkeley, California, USA, that sold cosmetics like shampoos,
lotions, body creams, etc. The California store was run by two
entrepreneurs, Jane Saunders and Peggy Short, who sold cosmetics on the
'care for the environment' plank.

21.  The Pioneer in Modern CSR
Body Shop was regarded as one among the first firms in the world to publish a
proper report on its social responsibility initiatives. In addition to social
activism, internal audit programs were conducted at Body Shop for
environmental protection, health and safety at work, and the monitoring of
'Against Animal Testing Policy'. In 1991, it drafted the EU Eco-Management
and Audit Regulation (EMAS), and in 1992, Body Shop published its first
environmental statement called 'The Green Book'...
 Body Shop's CSR Initiatives
Against Animal Testing
Body Shop did not test its cosmetic products on animals and did not
commission others to do it on its behalf, as it considered this practice unethical.
Along with customers and animal protection groups, Body Shop campaigned
for a change in the law on the testing of animals for cosmetics purposes in the
UK, Europe, the Netherlands, Germany, and Japan. Its campaigns had some
major successes. In 1996, Body Shop presented the European Union with a
petition signed by over 4,000,000 people, which at the time was the largest
petition against animal testing. Body Shop was also instrumental in the UK
government's decision in 1998 to ban animal testing for cosmetic products and
ingredients.

22. 
In addition to this, the company's campaigns also resulted in finished
product test bans in Germany and the Netherlands. In Japan, Body
Shop organized the first major campaign on this issue...
 Criticisms
Though the company had a distinguished record as a pioneer of
corporate responsibility, it had its fair share of critics. From the 1990s,
Body Shop faced increased scrutiny regarding its activities and claims.
Business ethics expert Jon Entine (Entine) was one of Body Shop's
fiercest critics. Entine accused Body Shop and its founders of being
hypocrites, as in his opinion, they were preying on the idealism of
consumers, while not being any different from other companies in their
pursuit of profit.

23. LAKME’S POSITIONING IN TERMS OF
PERSONALITY AND SELF CONCEPT
Lakme is a product range that caters to the beautification needs of not only women in their
adultage but in today's context teenagers also. It has a brand personality of someone who takes
care of you and your beauty needs. It tries to position itself amongst its consumers as a product
rangethat will help them look beautiful as is evident from its catchphrases:1.On top of the
world!
2.
Source of radiant beauty
1
!Lakme has a range of beauty products to offer to its consumers. Some of the ways in which ittries
to position itself:1.Lakme Hair Color: magic of colors (collage).2.Lakme (versatile eye shadow
collection): rich, long lasting and healthy make up.3.Lakme fair perfect: For flawlessly fair
skin!4.Lakme face magic: daily wear soufflé.5.Lakme (skin vitalizer): radiant skin, now and
forever.6.Lakme (moisturizer): radiant skin, now and forever.
7.
Lakme nail polish and lipstick: electric brilliance/sensual brilliance/freespirit/peppermint/9 to 5
2
.8.Lakme sun expert (sunscreen): sun safe hamesha! (face the sun with a smile)9.Lakme pure
defense: anti-pollution system.10.Lakme Tropical Island (cosmetics): defining the future of
fashion.
11.
Lakme hair care (international): natural hair care, a source of pleasure and well being.

24. 12.Lakme hair next: exclusive range of hairstyle products that give you that salon look instantly.On
the basis of above mentioned positioning strategies Lakme can have the followingcharacteristics
that determine its personality:
•
Someone who takes care of your beauty needs.
•
A long lasting beautification product range.
•
Something that is not harsh on your body or harmful for your beauty.
•
A product that provides you with an option of getting beautiful hair.
•
A product that helps you get a beautiful skin.
•
A cosmetic product that you can wear for the entire day and not a special occasion.
•
Someone who tells you right things about looking good.
•
It's an Indian cosmetic brand.
•

25. It covers all facets of beauty care for women.The following factors of
Lakme's personality help in differentiation of its products from
thecompetition:
•
It covers all facets of beauty care.
•
It helps arm the consumer with products to pamper her from head to
toe i.e. a complete product range.
•
The quality of its products which can be only gauged by the consumer
perception of the brand.
•
India's first beauty brand and is there for a long time in the market
(since independence).However, most of the other foreign brands
have come only lately.

26. HOW LAKME IS INFLUENCING ITS CONSUMERS:THE CONCEPT OF
EGO:
•
According to Freudian Psychoanalytic theory Lakme tries to position itself on the basis
of its appeal to the consumers which have an ego. This means that the consumers of
Lakmehave an impulsive drive for which they seek immediate satisfaction without
concern for means of satisfaction
3
.
•
Women all over the world are always expected to look good and Indian women are
noexception; More so because of the fact that Indian women in general do not have
a fair skin like that of their western counterparts. Thus it becomes but natural for
Indian womento try and look good and use beauty products that help enhance their
looks and style. Withglobalization and liberalization of Indian economy and the
changing demographics andincome levels there is more and more concern to look
good as today's Indian woman is nolonger confined to her home but is a big
contributor to the growth of Indian economy.

27. THE CONCEPT OF PERSONALITY GROUPS:
•
Lakme tries to woo the compliant consumers according to Karen Horney's
classification
4
of personality groups i.e. people who move towards others. Those who have
desire to beloved, wanted and appreciated. As is earlier stated women are
supposed to look good notonly in western countries but also in India.
•
Women always appreciate if someone calls them beautiful and it has become
the customof the society to see women in such a context. So it would be
prudent to say thataccording to the societal norms a women has to look
good at all times and which has a bearing on the psychology of female
consumers towards cosmetic products which helpthem achieve that desired
look. Needless to say that Lakme plays on the concept of women wanting
themselves to be appreciated for their beauty and being loved for that.

28. CHANEL―activities in Madagascar and
the Himalayas
 CHANEL has a close relationship with plants; it created fragrance
“N°5” in 1921 and has its own fields for jasmine and Rose de Mai in
Grasse, in the South of France.
 When they produced Sublimage Essential Revitalizing Concentrate in
2010, they distributed to the media a public booklet about their
approach to conservation of nature.
 Having observed the cosmetic industry for twenty years as a beauty
editor, I believe this was the first time they mentioned their
engagement in the conservation of nature.
 According to the booklet FROM GRASSE TO THE HIMALAYAS…,
CHANEL “started to walk on the road to conservation of nature” when
they developed Sublimage in 2006, now their first-class skin-care
series.

29. Fig. CHANEL/Sublimage (source: CHANEL press release)

30.  Sublimage is a skin-care series compounded with an active ingredient
extracted from vanilla planifolia of Madagascar by an original process.
 As they used golden champa grown in the Himalayas for the Sublimage
Essential Revitalizing Concentrate, launched in 2010, the company
entered into a partnership with LSTM (Ladakh Society for Traditional
Medicines), an NGO there, and began a new project to protect natural
resources and traditional knowledge by constructing a network for
communication among the Amchi and supporting women and children
in the whole area.

31.  Furthermore, at the press conference for Sublimage la Crème in 2011,
they mentioned the establishment of “Shader, a special plant which
recreates the most appropriate environment for cultivation of vanilla
planifolia.”
 As the booklet argues, “we cannot say that we take the environment
into consideration without taking all things concerning the natural
environment into consideration and thinking of their future.”
 The CSR activity, which CHANEL finally exhibits, is a large-scale
conservation effort that aims to protect not only nature but also the
people who should protect it.

32.  The press conferences for new skin-care products, the company tends
to strongly emphasize the innovativeness of the materials and
technology, and their effects on the skin.
 This applied at the press conference for the first product of the series in
2006.
 Meanwhile, however, they had launched the project.
 After it became firmly established, they announced it in their press
release, and they placed the special content on the website to inform
the public about it.
 These facts indicate that, for CHANEL, Green Action is an important
brand strategy today.

33. Case analysis of GUERLAIN―Establishment
of World-Wide Platform for Research
 Orchidée Impérialen is a first-class skin-care series of GUERLAIN that
extracts its essence from the orchid, a flower associated with long life,
and compounds the original active ingredient.
 When releasing Orchidée Impériale Cream in 2006, they started an
unprecedented project: establishing their own research platform, called
the Orchidarium.

34. Fig. 2 GUERLAIN/Orchidée Impériale (source: GUERLAIN press release)

35.  The aim of this platform is to analyze and illuminate the vital energies
of the orchid.
 Under the direction of GUERLAIN’s institute, it consists of three
complementary research centers: the Agrobiology Center, an
experimental garden near the border between France and Switzerland;
 the Phytochemistry Center, an institution for basic study at the
University of Strasbourg in France;
 and the Biodiversity Center, a natural conservation area for research in
Yunnan in China.
 Each center has a specific mission, and specialists for each field pursue
that mission.

36.  From this platform, they succeed in both the protection and harvest of
orchids, operating a program for natural conservation based on the
Rainforestation Jungle Farming System;
 they secure a stable supply of active ingredients extracted from the
orchid, and then activate the economy around this area by sharing the
profit.
 In addition to Orchidalium, GUERLAIN established the Abeille Royale
Research Platform when it produced a new skin-care series in 2010,
Abeille Royale, whose chief ingredient comes from honey.

37. Fig. 3 GUERLAIN/Abeille Royale (source:
GUERLAIN press release)

38.  GUERLAIN uses the honey of the black bee, which lives only on
Ouessant Island in France, as the chief ingredient for Abeille Royale.
 The reason for their use of this honey is that, since the island has a
good natural environment, there are 30 districts for apiculture, and
they are able to gather honey of the highest purity.
 Through researchers from outside, GUERLAIN continues to conduct
research on the island on the bee and ingredients that stem from
honey.
 In addition, backing up the activity of L'Association Conservatoire de
l'Abeille Noire Bretonne (ACANB), they save the supply route of the
material by conserving the black bee and supporting honey production
on Ouessant Island.

39.  After the establishment of these two platforms, the style of
GUERLAIN’s press conference concerning the two series changed.
 At the conferences for both series, the managers of the skin-care
products started by explaining the platform before the products.
 About half of the conference was devoted to the presentation of this
platform, and they showed video letters from agriculturists and
professors of pharmacy.
 Thus, they evidenced their pride: Other companies have not started
such advanced activities.
 GUERLAIN is a brand that has produced various products of fragrance,
make-up, and skin-care in the course of its history of over 180 years,
spurred by a policy of innovation.
 It is assumed that Green Action has recently become one of its brand
policies.

40. BIBLIOGRAPHY
 http://www.ripublication.com/gjmbs_spl/gjmbsv3n10_20
.pdf
 www.oracle.com
 www.ethisphere.com
 www.dba-
oracle.com/oracle_news/news_oracle_research_developm
ent_2006.htm
 www.sify.com/news/internet/fullstory.php?id=13349698
 http://www.icmrindia.org/casestudies/catalogue/Business
%20Ethics/Body%20Shop-Social%20Responsibility-
Business%20Strategy%20Case%20Study.htm

41. THANK YOU