Managing Company Ethics and Social Responsibility

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Managing Company Ethics and Social Responsibility

By | June 2013
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Introduction
L’Oreal is the world’s top cosmetic products manufacturer. In 1907, it was founded by Eugène Schueller, a young chemist who developed a hair dye formula which was safe for people. He named the products as “Aurelióne” and offered to the hair salons in Paris. Within 2 years, he registered his own company as “La Societe Franeaise des Teintures inoffensives pour Cheveux”, which soon became L’Oreal.

In 1920, the company employed 3 chemists in the laboratory. At the end of the year, there were 40000 hair salons in France and L’Oreal new products which are O'Cap, Imédia Liquide, and Coloral gained the most market share. In 1928, L’Oreal developed its diversification strategy by purchasing the soap company Monsavon.

L’Oreal started its business with hair dye products. In 1954, L’Oreal expanded its market into skin care field by entering into technological agreements with company Vichy. In 1960s, there was a rapid growing interest in simulating youthful looks. Therefore the company opened new cosmetological and bacteriological facilities to gain a significant entry into skin care, makeup and perfume markets. Companies such as Garnier and André Courrèges were added into the group.

In 1993, L’Oreal was facing some ethics problems. The animal right activists were about to protest about the use of animal testing that was doing by L’Oreal. As a top manufacturer of cosmetic products, L’Oreal intended to maintain its good reputation and image by ending the activity of animal testing. In 2006, L’Oreal purchased the Body Shop and the consumers were making calls to boycott The Body Shop since the rumour of using animal testing of L’Oreal were stated. In 2011, L’Oreal will have the largest factory in Indonesia by investing US$50 million.

Nowadays, the company markets over 500 brands and has more than 2,000 products in every category in the beauty business. From hair colour products, the company expanded its product lines to permanents, styling aids, cleaners,...

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