According to one source, over one thousand company codes of conduct are in existence today (Heard, 2005). As a leading provider of cosmetics for women and men worldwide, the company code of conduct for ethical standards in international business becomes critical to the successful, continued growth of the company and its expansion plans, legal regulations, ethic standards for employees and vendors, and guidelines to EEOC, ADA and civil rights laws. Additionally, setting guidelines on proper ethical behavior is important, as well as properly identifying true intent behind illegal and/or improper business operations. As L’Oreal is a very large company, potential issues with how a company that enjoys monopoly and/or oligopoly have to be explored in the development of any company code of conduct that governs international business ethics.
Legal Regulations
Conducting business overseas can be a complicated endeavor, as regulations will vary from country to country. As other international companies such as Nortel will attest in their business ethics core values, there is some level of agreement worldwide on what constitutes ethical, honest business practices, there can also be differences of opinion on this subject (Schurenberg, 2000).
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"Ethical Code of Conduct in International Business: L’Oreal".
Ethical Code of Conduct
L’Oreal’s ethical code of conduct plan is flexible enough to apply both domestically and internationally, and applies equally well for the various stakeholders such as employees, vendors, board of directors, and all of the various business functions. L’Oreal will comply with all necessary regulations that ensure the safety of products and services while also respecting any governance that relate to worker wages. The company will also respect the existing environmental regulations to prevent unwanted adverse effects. In order to maintain the high ethical standards of L’Oreal, the company will not do business in any country where the corporate standards for ethics would be compromised.
Ethical Code of Conduct for L’Oreal Employees
In order to preserve the integrity and reputation of L’Oreal, it is critical that employees and vendors alike show proper respect to the principles of the organization. For individuals that are employee and/or who do business with the company, the following common and basic values must be incorporated into each individuals work ethic. Each employee or vendor must adhere to honesty and not say things that are false. When commitments are made in good faith, every effort must be made to adhere to that commitment. Each individual should strive for outcomes that are fair. It is important that each individual show proper respect for others. Employees and vendors have an obligation to show compassion while they conduct business, with an effort to avoid harm to others while also making effort to meet needs that are not detrimental to the organization. Integrity in all work and personal situations are encouraged, as our employees and vendors are urged to lead by example as for the mutual benefit of all parties. Many of the ethical principles can be found in a variety of forms among many different organizations, though the specific ones described for L’Oreal are unique to our company (Schurenberg, 2000).
Adherence to Laws
As an international company, L’Oreal needs to ensure that proper adherence to laws that apply to those with special needs and consideration are always a priority. To this end, many companies have opted to follow the lead of different standard setting organizations that offer accepted international guidelines that govern a diverse array of business practices. For examples, the International Federation of Accountants have established an international code of ethics that more than one hundred countries have adopted. This code facilitates agreement on the value of unified auditing and accounting standards that enables more robust global trade that is also more trusted (Allen, 2008). By adhering to universally accepted standards that do not conflict with the L’Oreal ethical code of conduct, credibility and assistance is established that facilitates the effort to maintain high standards for EEOC, ADA and civil rights law compliance.
There are over one hundred sets of international standards and guidelines that come from a variety of multilateral, governmental, non-governmental and industry-interest groups. L’Oreal respects and adheres to those international standards that support EEOC, ADA and civil rights law that also align with domestic and international corporate principles that guide our governance of these important considerations.
Incorporation of Legal & Ethical Principles into Business Practices
One of the main challenges of international businesses is determining actions that are illegal or unethical, as people may perceive these actions differently. To illustrate the challenges involved in the nuances of international business expansion, one need not look further than China. On a positive note, China has adopted many standards to govern the treatment of workers. These include conventions on the rights of a child, against torture, discrimination, cultural rights, political rights, minimum wage and child labor (Mills, 2012). Conversely, many companies have struggled with censorship and protection of private data from the government, which views companies such as Google, Yahoo and Cisco Systems as a significant threat to their interests (Dean, 2010).
For L’Oreal, guiding principles must be applied that govern the discretion the employees and vendors as they seek clarity on right and wrong business dealings. Adhering to those international guidelines as set by different, accepted standard setting organizations that are recognized by L’Oreal is an important first step. Beyond this, employees and vendors have responsibilities to L’Oreal and society to follow several basic precepts. They must make efforts to ensure the safety of products and services. They must encourage transparency in transactions and follow accepted standard procedures of the company in how they are conducted. They must not cause harm to the societies in which the company belongs, whether it is economic, environmental, or cultural. Ultimately, if there is any question about the legality or correctness of a given action, employees and vendors are required to be cautious and not follow through on a questionable outcome. It is also encouraged for the employee or vendor to seek additional guidance if there is any question to a course of action that they may wish to take.
Identification of Issues Surrounding the Motivation Behind Unethical or Illegal Actions
The ability to distinguish between right and wrong can be a challenging task. The company and managerial personnel need to take multiple factor into consideration.
If a specific action is taken that is documented to be either illegal or unethical, the employee or vendor is obligated to report this activity to the company and provide any available documentation. To preserve the integrity and reputation of L’Oreal, the company is required to take action and will need to be alerted and informed immediately of any illicit behavior that is witnessed by and employee or vendor of the company. As it relates to international business expansion, L’Oreal cannot conduct business in a country where the corporate ethical code of conduct cannot be implemented, or by being present in the country L’Oreal is not able to abide by the standard setting organization’s guidelines that are adopted by the company.
Ethical Responsibilities
With greater market presence comes greater responsibility. Due to the size and global presence of L’Oreal, there may be situations where the company could be akin to a monopoly or oligopoly. In such situations society must be protected through proper corporate stewardship. As employees and vendors are required to demonstrate fairness in their business dealings, fairness must also be established in situations where L’Oreal has a dominant market position. To that end, healthy competition to offer diverse products will not be discouraged, as it is to the benefit of the communities and societies L’Oreal services to have a diversity of products and options. L’Oreal will not use a dominant market position in a way that leads to improper or illegal activity, and will show proper respect in the countries where the company is present.
