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Corporate Social Responsibility or CSRs have become a very important part of the business landscape in todays day an age. CSRs are basically an ever ‘evolving business practice that incorporates sustainable development into a company’s business model’ (Schooley 2019).  Basically they are processes that help an organisation be socially accountable to not only itself but the stakeholders and the general public. The presence of a good CSR ‘has a positive impact on the [the] social, economic and environmental factors’ (Schooley 2019) tied to the business.

 

According to Katie Schmidt who is the founder of Passion Lilie, a clothing brand priding themselves on being ‘ethical fashion’ ie. being an ethical business, a good ‘CSR can positively impact [a] business by improving [the] company[’s] image, building [the] band and motivating [an individual] as a business owner’ (Schooley 2019). This is because like in most cases public opinion is critical to an organisations success. If that particular organisation has a positive image in the public eye it can definitely help them to build a name and reputation with their customers which can be extremely beneficial in both the short and long term success of the business.

 

In this day and age an organisations reputation is more important that ever as ‘consumers, employees and stakeholders are beginning to prioritise CSR when choosing a brand or company’ (Schooley 2019) to invest in or support. On top of that these same individuals have begun to start ‘holding corporations accountable for effecting social change with their business beliefs, practices and profits’ (Schooley 2019). Failure to operate at an acceptable level will definitely lead to some form of negative repercussions for the organisation in question.

 

JeyBoyton who is the CEO of B Targeted Marketing Co. is of the opinion that ‘CSR is an opportunity for companies to demonstrate their good corporate citizenship..and protect the company from outsized risk by looking at the whole social and environmental sphere that surrounds the company’ (Schooley 2019). In essence used correctly CSR can help an organisation stand out from the crowd and protect it from any judgement or negative repercussions from the various parties involved in the companies operations.

 

The importance of a good CSR can be seen through the various levels of research and observations done over the years either in the form of reviewing an organisations success or simply by determining through surveys and questionnaires the importance that these CSRs are held at. One such research that back this up is the one done by Cone Communications who in a study determined that ‘more than 60% of Americans hope businesses will drive social and environmental change in the absence of government regulations’ (Schooley 2019). On top of this ‘nearly 90% of the consumers surveyed said [that] they would purchase a product because a company supported an issue they care about’ (Schooley 2019) and up to ’75% will refuse to buy from a company if they learn it supports an issue contrary to their own belief’ (Schooley 2019).

 

Last but not least, according to Susan Cooney who is the head of global diversity, equity and inclusion at the company Symantec, an organisations ‘sustainability strategy is a big factor in where todays top talent chooses to work’ (Schooley 2019) due to the fact that the ‘next generation of employees is seeking out employers that are focused on the triple bottom line: people, planet and revenue’ (Schooley 2019).

Sustainable Development Goals:

Sustainable Development Goals or SDGs basically are ‘new, universal set of goals, targets and indicators’ (Ford 2015) created by the United Nations (UN) that is expected to ‘frame their agendas and political polices over the next 15 years’ (Ford 2015). The SDGs are in theory a ‘blueprint to achieve a better and more sustainable future for all’ (United Nations). These SDGs were put in place to ‘address the global challenges [the world faces] including [ones] related to poverty, inequality, climate change, environmental degradation, peace and justice’ (United Nations).

 

SDGs are in theory an expansion of the MDGs or the millennium development goals which was an agreement between the different governments in 2001 due to the fact that this original agreement was due to expire at the end of 2015. The MDGs in itself were considered to be inadequate as it ‘failed to consider the root cause of poverty and overlooked gender inequality as well as the holistic nature of development’ as well as the fact that it ‘made no mention of human rights and did not specifically address economic development’ (Ford 2015).

 

SDGs consist of 17 different goals which are all interconnected with one another in the hopes that none of these goals are left behind as they are all deemed of equal importance. These goals consist of (1) no poverty, (2) zero hunger, (3) good health and wellbeing, (4) quality education, (5) gender equality, (6) clean water and sanitation, (7) affordable and clean energy, (8) decent work and economic growth, (9) industry, innovation, and infrastructure, (10) reduced inequalities, (11) sustainable cities and communities, (12) responsible consumption and production, (13) climate action, (14) life below water, (15) life on land, (16) peace, justice and strong institutions and (17) partnerships. The United Nation hopes that by 2030 all these goals will be achieved.

 

These goals were published in July 2014 after deliberation of an open working group made up of the representatives from 70 different countries. On top of this when creating these goals the UN conducted a series of ‘global conversations’ which ‘included 11 thematic and 83 national consultations, and door-to-door surveys’ as well as an online My World survey which asked people to ‘prioritise the areas they’d like to see addressed in the goals’ and all this was fed to the group who came up with these 17 SDGs.

 

The need for companies to assume social responsibility is a long-standing issue. There are two main points of opposition to corporate social responsibility: First, it is believed that an enterprise is a profit-oriented production and operation unit, and profit maximization is the eternal theme of its pursuit. It has no responsibility and obligation to complete the responsibility of the government or the work has to be done by society; second is that the corporate social responsibility will change the direction of capital utilization, resulting in increased costs and lower profits, weaken the competitiveness of the enterprise, dilute the main goals of the enterprise, thereby damaging the interests of shareholders, employees and customers. Therefore, enterprises cannot bear a lot of social responsibilities (Emmert, 2014). However, unlike this view, more scholars believe that it is necessary for enterprises to undertake corporate social responsibility (Robert Newbury, 2020).

 

A well-known Chinese economist believes that the fulfillment of corporate social responsibilities by large-scale enterprises is conducive to enhancing their competitiveness and financial performance. The research proves that the improvement of financial performance has a positive correlation with the fulfillment of corporate social responsibility. The implementation of corporate social responsibility helps companies reduce operating costs, because a good corporate image can not only save publicity and marketing costs, but also attract talent to save management costs and training costs (Jingwen Mi, 2018).

 

Walt Disney is a world-renowned cartoon entertainment company. It is their mission to bring happiness to people all over the world. Walt Disney Senior Executive Vice President and Finance Officer said: “2018 is a very meaningful year. Walt Disney manufactures products in an ethical manner by reducing its impact on the environment; Walt Disney is also in March 2019 Expand community charity services and commit to invest US $ 100 million over the next five years to encourage and support children ’s hospital patients and families around the world (DISNEY, 2019).”

 

Consumers attach great importance to the contribution of large enterprises to society, and companies can enhance their international reputation through corporate social responsibility. Walt Disney adheres to its obligations and promises to reduce its damage to the world while expanding its business. For example, Walt Disney completely eliminated disposable plastic straws and replaced 80% of the plastic products on hotels and cruise ships. Walt Disney has increased the importance of corporate social responsibility to build its own corporate image. A good corporate image and brand image can enhance consumers’ trust in the company and bring a large number of loyal customers (DISNEY, 2019).”

 

Brand image is the intangible wealth of an enterprise. Today’s competition is not limited to the competition of tangible products. The brand and image of an enterprise are also part of the competition (Gong Ke, 2011). Tmall is an online shopping company under Alibaba. November 11, 2018 is the tenth year of Tmall’s establishment. Traders from 200 countries and hundreds of millions of consumers all joined the Tmall offline carnival to celebrate. The transaction volume reached 213.5 billion yuan on the same day. Then, the executive director of Alibaba stated that what Alibaba values is not how much profit Tmall can bring to them, but that it can help society upgrade the business model while improving the life quality of people when creating a business platform (Soo, 2019).

 

For China, Alibaba has improved the quality of life of rural people. Chinese farmers are accelerating their integration into the Internet era, attracting many young people to return to rural development, benefiting rural people, and changing the world ’s view of China. For the whole world, Alibaba has driven the international market, established multiple electronic platforms to promote economic growth, helped developing and underdeveloped countries, especially helped young people integrate into global trade, and benefited people all over the world (Group, 2018).

 

Enterprises can obtain resources, capabilities and social capital in the process of assuming social responsibility. It’s brought many benefits to the enterprise, such as: customer loyalty, absorption and retention of excellent employees, establishment of corporate image, social network and trust, and reduction of transaction costs,reduce resource consumption, improve innovation capabilities, etc (Low, 2016). According to the research of Brown and Dacin (1997), corporate social responsibility behaviour affects consumers’ perception of product quality. Corporate social responsibility associations can indirectly influence consumer evaluation of products by influencing company evaluations. Corporate social responsibility associations also have an important impact on new products (Guido Berens, 2005).

 

Employees are the supporting force for enterprise development. Safeguarding the legitimate rights and interests of employees is one of the main contents of corporate social responsibility. Empirical research by Peterson (2004) shows that there is a significant relationship between corporate social responsibility behavior and employees. Corporate social responsibility practices, such as fair pay, clean and safe working environment, training opportunities, child care facilities, flexible working hours and work sharing, can both increase employee morale and productivity, and reduce absenteeism and personnel flow (PATRICK AGESA MUGESANI, 2016). In addition, Fulmer and Ballou (2003) used “Fortune” magazine’s “100 Best Work Companies in America” as an example to analyze the relationship between employees’ attitudes to workplace quality and corporate performance. Have a positive attitude towards the quality of the workplace, which can enhance the financial performance of the company (Goenner).

The corporate’s internal social responsibility can obtain the accumulation of internal social capital. The reason is that the company provides employees with a safe and comfortable working environment, improves the quality of employees through training, signs fair labor contracts with employees, and provides employees with minimum wages and compensations. It is the specific performance of the company to fulfill its internal social responsibilities. Corporate internal social capital is a useful resource, it can not only enhance the trust within the organization, mobilize the initiative, enthusiasm and creativity of employees, reduce and avoid employee opportunistic behavior and arbitrary behavior, save the internal management costs of the enterprise, increase the enterprise profit (Flávia Cavazotte, 2016).

 

When an enterprise assumes external social responsibilities, it will establish a good corporate image among consumers, creditors, suppliers, governments, communities and other stakeholders, gain more attention and support from them, and increase the company’s visibility and reputation. The influence among the public, so as to better build their own social relationship network. The external social capital of the enterprise is conducive to cooperation and mutual trust among members, saving time, energy and costs for negotiation, formulation and execution of agreements, thereby reducing the enterprise Between the transaction costs, increase the profit of the enterprise (Lantos, 2001). Corporate social responsibility is an investment that brings many benefits to the company. There is no need for companies to use corporate social responsibility to seek benefits. Corporate social responsibility is the accumulated capital that companies get through giving back to society. Modern companies do not blind their interests through corporate social responsibility,but social responsibility brings many benefits to the enterprise (Worldwide, 2015).

 

References:

 

Ford L. 2015, ‘What are the sustainable development goals?’ Retrieved on 14 April 2020 from https://www.theguardian.com/global-development/2015/jan/19/sustainable-development-goals-united-nations

 

United Nations, ‘About the Sustainable Development Goals’ Retrieved on 14 April 2020 from https://www.un.org/sustainabledevelopment/sustainable-development-goals/

 

Schooley S. 2019, ‘What is Corporate Social Responsibility’, Retrieved 14 April 2020 from https://www.businessnewsdaily.com/4679-corporate-social-responsibility.html

Passion Lilie, ‘FAQS’, Retrieved 14 April 2020 from https://passionlilie.com/pages/faqs

Emmert, P. D. (2014). Corporate Social Responsibility in Comparative Perspective, 8.

Robert Newbury, D. D. (2020, April 15). The Business Case for Corporate Social Responsibility. Retrieved from The Business Case for Corporate Social Responsibility: https://corpgov.law.harvard.edu/

 

Jingwen Mi, S. J. (2018). Journal of Management and Sustainability. The Relevance of Social Responsibility and Financial Performance of Listed Companies , 41.

 

DISNEY, W. (2019). 2019 CORPORATE SOCIAL RESPONSIBILITY UPDATE. The Walt Disney Company.

 

Gong Ke, Z. Z. (2011). Engineering Education and Management. In C. Z. Liangchi Zhang, In JiLin Province Native Brand Design Thinking (pp. 437-439). Berlin: Springer.

 

Soo, Z. (2019, November 11). South China Morning Post . Retrieved from Consumers from China’s smaller cities lift Alibaba to new Singles’ Day record as buyers shrug off trade war: https://www.scmp.com/tech/e-commerce/article/3037137/chinese-consumers-spend-us1-billion-first-minute-alibabas-singles

 

Group, A. (2018). Social Responsibility Report. Alibaba Group.

 

Low, M. P. (2016). Asian Journal of Social Sciences and Management Studies. Corporate Social Responsibility and the Evolution of Internal Corporate Social Responsibility in 21st Century.

 

Guido Berens, C. B. (2005). Corporate Associations andConsumer Product Responses. TheModerating Role of Corporate BrandDominance, 35-48.

 

PATRICK AGESA MUGESANI, D. A. (2016). ROLE OF INTERNAL CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES ON EMPLOYEES’ COMMITMENT IN FIRMS LISTED IN THE NAIROBI STOCK EXCHANGE.

 

Goenner, C. F. (n.d.). Investing in Fortune’s 100 Best Companies to Work for in America .

 

Flávia Cavazotte, N. C. (2016). A Study of Publicly Traded Companies. Internal Corporate Social Responsibility and Performance.

 

Lantos, G. P. (2001). The Boundaries of Strategic Corporate Social Responsibility.

 

Worldwide, F. (2015, November). Financier. Retrieved from The importance of corporate social responsibility: https://www.financierworldwide.com/the-importance-of-corporate-social-responsibility

 

 

 

 

 

 

 

 

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Business Ethics: Case of Gucci

Executive summary

Project management in any company needs effective planning and execution. Gucci is managing rapid expansion in the global market under effective managerial techniques and business planning. The company is involved in key managerial processes and implemented a labor model under which employment and recruitment has become easy. Effective workplace requirements involve employees into better working conditions while focusing on mutual cooperation with stakeholders. Company is using responsible workers to accomplish its targets. For example, labor dispatch arrangement service is aligned on managing costs and contractual responsibilities by Gucci in Chinese city Shanghai. This research report focuses on key business considerations by Gucci in China. Company analysis explores its background, history, core values and ethical culture.

This report also includes major stakeholders of Gucci that are involved in project completion process. A stakeholder map is created to know about the action plan and engagement of employees. Gucci has economic, legal, ethical corporate social responsibilities. CSR serves the company in ethical way because it has a specific place to monitor corporate affairs. The report is divided into five main parts, first is about company analysis, its background and history. The second part is about stakeholders’ analysis that has shown stakeholders map. The third part discusses CSR analysis like responsibilities to shareholders. The fourth part is about issues and problems, for instance ethical problems in Gucci, causes and its symptoms, key stakeholders involved and consequences. In the last part, evaluation of company is carried out by specific actions that managers can take.

Part one-Company Analysis

1.1.Company History

Guccio Gucci was a fashion designer and businessman from Italy; he founded The Fashion House of Gucci in 1921. The House of Gucci, also known as Gucci is a luxury fashion and leather products brand in Italy, and as well as around the world, it is a branch of Gucci Group, Kerning, a French investment company, owns it. In 2008 Gucci generated revenue of 4.2 billion Euros worldwide. Also, Gucci was ranked at 41st position in the Top 100 Brands worldwide in 2009. Gucci is still the most significant fashion brand in Italy (Annual Report, M. 2019).

Gucci has presented high quality, leading designer goods to its consumers successfully, unlike several other brands in the market. Throughout these years, the brand has attained overwhelming success levels with each new product released. By 2005, it has started 207 outlets around the globe(Czerniachowicz, 2017). Further to this, Gucci derived 278 company-operated outlets by the end of 2009, with wholesale its merchandizes through large superstores and franchisees. Gucci was valued at 12.1 billion US dollars in 2013. In May 2015, Gucci was ranked 38th in the Most Valuable Brands list of the world by Forbes with a worth of 12.4 billion USD.

Gucci is an international organization with more than 270 company-operated outlets around the world, providing consumers of the best products, and making revenue of billions of dollars every year. It has even noble, luxury, and iconic brand figures in the china region, where its sales are boosted by 35% at the beginning of 2011. Gucci has shown its aim to speed up its process of establishing new outlets in China. Lately, though, the organization came under colossal criticism when five of its ex-employees from its Shenzhen store disclosed online information about the cruel working environment and mistreatment of labor in the organization(Zanda, 2016).

 1.2 Company Core values

The organization aims to turn into the leading brand in the luxury market at the global level. Gucci expresses their company as responsible and cool, and signify them on their fashion and styles. All of these concepts are inter-related; being responsible can also be cool. For Gucci, social responsibly is an integral part of their international strategy. They do business with a comprehensive, yet sensible approach. It is their fundamental responsibility to maintain their position of a luxury brand to promote and pioneer sustainability(Czerniachowicz, 2017).

The Gucci standards are profoundly rooted within moral values, and literally, the organization started to effort on sustainability policy in 2004. Quality should be the supreme priority; also, sustainability for the environment and the society developed as a part of quality policy. Gucci’s stakeholders support the sustainability policy for the betterment of the company.

Gucci introduced 100% eco-friendly packaging in June 2010. And within a short time, Gucci launched a collection of environment-friendly goggles which were made by recycled metal and biodegradable plastic. They also used biodegradable material in their shoe collection with new designs and eco-friendly packaging(Annual Report, M. 2019).

Gucci is focusing on improved performance in the quality on which most demanding consumers put the most significance. The performance compares to the situation where Gucci needs to look for superior quality and needs to continue giving such designs that are worthy to customers with sound knowledge as this brands’ consumers, including film stars and elite families from Europe. It further focuses on the smartest consumers, who are happy to pay for the supreme quality in the most important markets. This relates to the situation where Gucci’s target buyers, including the wealthy European new-born and the developing U. S. rich people(Księżak, 2017).

1.3 Company ethical culture

Good sustainability and behavior are the basis for a business group to work. Trust is an essential element of business sustainability. And the capability to express the everyday commitment to a responsible organization administration is an integral part of such trust (Demir, M. A., &Sepli, A. 2017). Since 1996, when the Gucci developed its first ethics rules and regulations, it made a significant improvement in persistently reinforcing the ethical promise of Gucci management. Landmark including printing Code of Ethics and circulation to every employee of the group in 2005 and then again in 2009, and establishment of Sustainability Department(Księżak, 2017).

Each time the business operates, the Ethics code presents the chance to reaffirm the faith, and the ethical rules and regulations should be precedent. Designed by the categories of stakeholders, the ethics code provides the reference points that can guide every person’s actions. The laws include respect for workers, gender equality in all the professional life aspects, dealing with all kinds of fraud and corruption. Also fighting child labor, compliance of the basic rules and regulations of the International Labour Organization, the safety of the environment, understanding to all stakeholders, and organizing the employees with other societies.

Following the ethical behavior guarantees permanence in business under any circumstances. Sustainable and prosperous progress in the global market depends on the level of trust of the buyers, workers, stakeholders, and social and commercial partners. But, these variations can be designed by some powerful but straightforward shared principles, which should guide our work in the spirit of common sense and responsibility(Yasin, Chan, Reidpath&Allotey, 2012). The ethics code provided to all employees includes performing with trust and integrity, compliance of the applicable regulations and law, respecting the rights and dignity of every person, work with care for the environment, using the organization’s resources and goods with the concern of the business and its stakeholders (Lee, H., Leeminyoung, & Bae, E.-K. 2019).

Part Two- Stakeholders Analysis

2.1 Company stakeholders

Gucci has four main stakeholders. Freeman discussed that stakeholders are the particular group or individuals who can affect by the firm’s achievement of objectives. This provides that it is important to find out the groups that are affected by any abuses etc.key stakeholders of Gucci are individuals who stake its expansion plans in China, employees, no matter if they are resigned or not, and existing employees(Annual Report, M. 2019). Chinese government is also stakeholder of Gucci and it is the responsibility of government to ensure that rights of workers are enforced in its territory. Fourth stakeholder is a foreign government that is likely to be headquartered in the similar territory. Foreign governments have stake and they can also take actions to reduce labor abuse in China because laws are formulated regarding abuse and anti-bribery treaties.

Stakeholders of a company are very significant for its performance and completion of objectives. The stakeholders can either positively or negatively influence the project performance. The stakeholders are involved in project scope statement, plan development and identify constraints that can hinder the development process. They also approve changes or modifications in projects under change control board(O’Kane & Cunningham, 2014). The identification of requirements is carried out by stakeholders and they participate to manage risk. It is also possible that stakeholders can become risk response owners.

  • Stakeholders for company Gucci can manage abusive practices as employees because they can harm the objective of company.
  • China’s capitalism is increasing so human resource management can involve institutional arrangements regarding this abusive act in company.
  • Employees can vice the grievances of victim so get more attention and investigate issues. They can also express the opinions to help enhance bargaining power through employers.
  • Chinese government as the stakeholder can revise its approach to monitor the labor force. In China, workers are under-protected due to organizational work, while trade unions are working to stand up for the rights of employees (Mclaughlin, S. 2018).

2.2. Stakeholders Map

The stakeholders map is created below to describe relationships with the organization. The first step in this regard is the engagement of strategy. This process will set a vision and ambition to engage in future direction(Borodai, 2017). The second step is about stakeholders mapping and it works defining a criteria that can identify and prioritize stakeholders for the better mechanisms of stakeholders. In the third step, a focus on long term goals will be made which is called preparation that will determine the logistics according to rules(Annual Report, M. 2019). The fourth step is engagement that ensures stakeholders and contributors to mitigate any kind of tension and then set the priorities for solution(Yasin, Chan, Reidpath&Allotey, 2012). The last step is action plan. In this figure it can be seen that under action plan the opportunities are identified that can determine goals, actions and strategies that will help in follow up process and enhance engagement for future.

Figure 1 Stakeholders Map

The current process presents a structure of stakeholder mapping. It is a unique approach to settle down the key issues and conflicts. With this process, any central relationships or immediate processing can be considered in the organization. The stakeholder map is a key approach to devise an action plan that will work in the future(O’Kane & Cunningham, 2014). For Gucci, this action plan will determine what Gucci is trying to achieve and how in different stakeholders, it is working to acquire competency (Parker, J. 2017). The stakeholders are also significant to infecund the interest of company but they will work in collaboration because all the objective of company are also linked with these stakeholders. The creation of a map is considerable to learn new dimension of workplace projects.

Part Three- Gucci’s Corporate Social Responsibility (CSR) Analysis

            Corporate social responsibility (CSR) is a self-adjusting business in which an organization is responsible for social accountability. All stakeholders are also involved in this accountability. CSR business follows all traditions and moralities of the society and implements such methods that are beneficial for social rules. CSR is also named Corporate Citizenship. This type of company has to follow all social, economic, and environmental solutions. The primary purpose of CSR is to construct such methods that support the ethical, philanthropy, economic, and lawful aspects of society(Yasin, Chan, Reidpath&Allotey, 2012).

  • CSR is a comprehensive thought which can be adapted to different companies and organizations in various ways as the CSR business is beneficial for society as it is essential for social aspects.
  • As the CSR progress increases gradually, and the world-famous brand whose name is Gucci is becoming more accountable because of its unethical behavior which it conducted towards its employees.
  • CSR policy is a bit difficult to meet Gucci because it enjoys a secure social value, and the bulk of tags, in this condition difficult for Gucci to fulfill all requirements of CSR.
  • Gucci sub-brands present CSR practices in front of its domestic and international stakeholders.

Gucci was facing the scandal of unethical practices that prove a setback for its reputation after that Gucci assigned some business driving methods by following the rules and regulations of CSR and laid a foundation of its company on true and fair dealing toward its employees in which it promises to provide a legal working environment, by giving promotion resources, protection of human rights mentioned and strictly implemented into the company running affairs through its managers and stakeholders. Gucci also made a promise to provide the facility of promotion, proving working rights to workers, and make a trade union contract by following the safeguard rules of the workers into the administrative system of Gucci. Gucci denies on the conduction of child labor. All employees will get equal career development opportunities and similar treatment facilities. Gucci strictly develops a health and safety standard by preventing epidemics and some industrial disease. Gucci also takes the initiative to promote the growth of craftsmanship and steps for the development of regional, federal, and other global communities. Philanthropic acts are also being introduced in these efforts. Non-profitable initiatives conducted by adopting this policy(Yasin, Chan, Reidpath&Allotey, 2012).

This company also committed to reducing environmental pollution and protecting the ecosystem and made the promise on the prevention of waste materials of the company. The organization introduces a communicative method between workers and managers and other stakeholders. True and transportation dealings with the stakeholders in which any decision conducted on the collaboration of all partners and stakeholders, all dealing with public and other organization’s being enforced by the agreement of the stakeholders(Wymeersch, 2003). Gucci also put steps to monitor economic growth by creating an economically viable supply chain. Gucci legalizes all promotion elements, which are helpful in the growth of the workers and assure the workers every possible cooperative deal for their betterment and development. These above steps prove helpful for economic growth and company progress. Gucci has its contribution to the growth of China’s economy. The basic purpose of CSR is not to create luxury consumers, whereas its priority to increase consumers in the future. CSR policies impact the company’s reputation to obtain the capital. The world’s reputed MNC also follows the CSR policy. To contribute its part to economic growth.

After the ethical scandal, Gucci’s has a fluctuating reputation. It is unethical to behave under discussion in the business world. The company has lost its trust; at this time, the stakeholders and managers were making different variations in the company policy. The company decided to follow the CSR policy to stand its repute against the ethical standard. The CSR protects the workers and provides them rights.

Management is responsible for the enforcement of Corporate Sustainability Responsibilities and has a right to apply on all sub-branches of the parent company. Gucci directly running different stores were also inhuman activities are taking practices after that company enforced different policies under CSR strategy to protect the workers from the salivary behavior of the owner and manager. The managers should enforce these methods in such a manner that they are involved in the internal and external managerial functions and other corporation committees. The managers should integrate this policy into the strategic ambitions of the company. The CSR strategy will be implemented in all sectors of Gucci, whether they belong to leather or jewelry or concern with different other products of the company. Special training conducted to the managers, stakeholders to follow the rules of CSR. In 2007 the implementation responsibility pushed to the HR department, at the start one person is performing all CSR functions and reporting to the HR department, after that when management realize about the comprehensive involvement of CSR into the managerial functions then the company establishes a bench who will perform CSR activities and make decisions according to it. Gucci hired CSR managers; this condition proves a cause of the unwillingness of the stakeholders because they are used to unethical behavior, and that is totally against their habits; after that, they accept it only on this condition that the company establishes its worth around the global environment. Gucci establishes a training program for middle management. This remarkable change causes change to internal managerial functions, employee’s behavior, and external suppliers(Wymeersch, 2003). The CSR policy proved helpful to maintain the Gucci standard; the reputation of the Gucci had become worse due to the unethical Sandal and inhuman behavior to the workers when the company followed the rules of CSR the organization became successful in regaining its level. Now the workers are starting to show their interest, and in purchasing their products, workers are the real asset of any company without workers it is not possible to manufacture the goods and appreciatively run of the company. Initially, the managers and stakeholders go against the CSR strategy, but afterward, when the company meets its priority goals, the trust of stakeholders satisfies the managers.

 

Part Four- Problems/issues Analysis

4.1 Gucci ethical issues toward its employees

Gucci Shenzhen in China is a multicultural organization around the world. This organization serves its customers by contributing to elite products. This company operates 270 stores to whom the company is running directly. This company forms billions of dollars in revenue in a year. Its superior brand created its unbeatable image, which caused a 35.6% increment in its revenue; thus, it takes intent to increase the process of stores opening into the land of China(Rakhmanov, 2019). Currently, this company suffers a loss due to fire mishaps which occurred in its most familiar store. The company has to face too much damage. This incident occurred due to the miss of treating the employees. This company was practicing unethical behave to its workers by implementing some strict instructions(Borodai, 2017). All instructions are performed for the workforce; pregnant women cannot be applied for management. If any product is missing or stolen by anyone who has to pay the employees, even these products are protected by insurance.

Gucci constituted a bill on 8 October 2011 from the top management team(Yasin, Chan, Reidpath&Allotey, 2012). According to this letter, if any employee conducted any epidemic disease, it will not be tolerated during working hours. The lunch timing and in the situation of thirst and toilet timing entirely restricted, working hours, which was usually mentioned incorrectly, and forcefully conducted overtime which is unpaid after that. Gucci introduced a system of working that full day of working and the next day off officially. By the rules, workers can perform the duty of 10 hours in a day, after complaining to the workers, the company manufactured a false electronic record that counts the working hours in a less quantity. These rules are against humanity and called ethical problems.

Gucci specified such persons who mostly spend their time on the internet during working hours and consider all of them a sweatshop for the company besides this, and some MCN, s owners who failed to meet the organizational tasks they all fired. Later, Gucci’s headquarter, situated in China, and stated that Gucci would not tolerate such persons on conducting any negligence and carelessness(Wymeersch, 2003). The company will be carried on inquiry and replacement of store managers and assistant store managers.

Gucci also introduced a labor dispatch system for the newly appointed employees. Different rules and regulations have been represented. In this method, the leasing company made a contract with the workforce, and these leasing organizations send the workers to different other companies to work. According to this system, this contract exits the leasing company and dispatched workers. However, the agreement is conducted between the workers and the companies where they have to perform the work(Setiyaningrum, A. 2015).

Whatever company is hiring this workforce will pay their wages, whereas the social protection allowances and dismissals compensation bill will handle by the leasing company.

  • On account of this policy, the workers will get payments that are mentioned in the agreement, and this employment method is included in China’s cultural system.
  • The Gucci stores assume this method and around three leasing companies established in Shanghai are involved in an unethical issue.
  • According to law, the dispatch method creates a temporary situation for the workers.
  • Gucci arranges this system for longer than two years.
  • Pregnant females will enjoy the labor protections, and the exhaustive physical work not allowed to such ladies under the Labor Contract Law and rest sessions also will be provided(Borodai, 2017).

This ethical issue was entirely based on the destruction of the worker’s rights and constrained work without payment, inhuman confinements, and other unbearable policies that were part of this strategy. Gucci is not the first MNC who occupied workforce rights; Nike is also involved in such practices in Indonesia.

Local employee most involves factors in ethical issues in respect of factory workers.

Unethical problems are mentioned in the Gucci labor abuses policies like excessive work without payment, unlawful organizational methods around the local companies. This trend of working flourishing day by day in China, when other multinational companies and different foreign brands precede to China, this cultural environment emphasizes them to establish a business in such a condition(Christensen, Kent & Stewart, 2010). But these international firms provide some means to cut down this unethical behavior towards the workers and excuse for this abusive behavior. The fundamental reason behind this unethical practice is the abundance of multinational companies is working in China and does not pay attention to the worker’s rights. In an unfair situation, the company only focuses on earning the economic interest; the rights of workers are killed by management to get the organizational goals. Most miscarriages occur in this abusive environment where the pregnant female mistreated along this has to follow long duty hours into the entirely restricted atmosphere. There were unbearable restrictions exist only to make money under the human’s honor. In western economies, human virtues are included at the priority. Marable laws enforced to save the rights of workers. NGO’s are organized for the wellbeing of the workforce.

This unethical behavior affected the Gucci reputation badly. At this time, all stakeholders trying to control this abusive behavior, stakeholders not only managed these practices, but different variations required in often groups of the company because of the inhuman act also proves a hurdle to develop the expansion of Gucci in China. The management included stakeholders who adopted a justifying and apologize for behavior in front of current and resigned workers. The administration agreed to compensate by providing a systematic administrative system that will improve the working environment, and proves the government of China is also responsible for the rights of the workforce.

Mostly abusive behavior is used in MNCs manufacturing sites and almost not reported in developed countries. Gucci labor dispatch system which is against the Chinese characteristics. MCN can manage ethical problems conveniently. Comprehensive explanations are critically viewed as labor rights. China’s culture also prefers labor rights. The Chinese government, and foreign governments, all MNCs and its stakeholders are responsible for securing the rights of its workforce. Soon, different implementations and steps are making progress in the sense of labor abusive practices(Christensen, Kent & Stewart, 2010).

Part Five-Evaluation of company

Gucci is a multinational company and making progress gradually. The essential priority to maximize profit and minimize the cost of labor. In the maximizing process, it establishes a bill which grasps all the basic rules of the workers. According to this bill, the organization introduces a new working trend for the workers. The workers who caught some epidemic disease will not be spared from work, pregnant women will also not spare they have to perform duty like other followers the rest session also not provided to females at the time of delivery along with this the pregnant females cannot apply for managerial positions, no allowances provided to the workforce, and they are enforced to work without payment. In the form of loss conducting the workers have to compensate for this loss. The law allows the workers for 10 hours working in a day, and Gucci introduced a full working day, and the follower day remains off in which no work and time limitations are mentioned. The admin and managers found themselves involved in these unethical issues because they are crushing the employees by underlying those stricken and inhuman rules. In other words, Gucci and its managers introduced a slavery system for the workers.

Workers dispatch system also introduced by Gucci management in which the workers are forcefully pushed to another company to work. A leasing company is performing the role of a middle man. The contract is created between the leasing company and workers. But the hiring company is responsible for paying this workforce. This system provides a low-cost working environment.

Moreover, the managers of this organization and its Human Resources department kill the worker’s rights by using different means and constituting different policies for the followers and in the promotion of profit of the company. When foreign companies and other familiar brands come to China and object to these unethical issues and introduce some human rights laws which are not pushing back human dignity and provide protection to the workers on its rights, in this situation, Gucci feels the standard of reputation is decreasing day by day on account of its unethical practices which it is conducting to its managers. Then the managers and some store holders adopted apologies for behavior to maintain its progress because, without the workforce, they are helpless to manufacture the products.

At this time, all current workers and newly hired make assurance from the managers to save the rights by providing reasonable wages, fixed working hours, medical and different allowances, facilitate the pregnant females by providing them a sustainable working environment and rest period after their delivery. Gucci and its management try hard to get the release from this scandal. They got a bit of success in this matter, but this organization makes its popularity on slavery behave to its workforce. The worldwide workers’ rights and different NGOs are trying to lawsuits different laws to protect the rights of the workforce and taking steps ahead MNC and other brands find in consuming the fundamental rights of workers through its strict and abusive instructions(Christensen, Kent & Stewart, 2010).

When the Gucci reputation decreased due to the ethical scandal, then Gucci and its management established some policies which are enforced in the whole world to save the rights of workers and fulfill the entire requirement of worker’s laws. The administration decides to implement these sets of laws into all branches and stores may it in developed or developing countries. These ethical rules strongly performed in the Gucci industries. Numerous efforts were made to provide the improving standard to the workers(Czerniachowicz, 2017). These rules will be enforced to all branches and stores, and all laws strictly installed into the management systems. If the workforce belongs to any local area or has a concern for foreign labor will enjoy these rules equally. A written employment contract conducted for the workforce and workers dispatches the system prohibited. Unpaid work also discouraged by the managers, working hours mentioned, wages also term not be minimized, which will work against the law. The managers assure the workers to provide a safe and respective working environment that will be free from harassment, discrimination, and abusive practices.

The addition of some codes is not adequate to get freedom from these slavery scandals. Thus Gucci headquarters in Italy also constitutes some necessary methods to protect labor rights. Entire Gucci’s host countries, especially China, emphasize meeting the world’s ethical standards. The Chinese nation has a reliable power of tolerance. That’s why the Chinese workers were bearing this inhuman treated behavior even near to get harm in different ways. The workforce has less awareness of their rights. At this time, the economic power of China is becoming stronger gradually, although the workers’ dispatch system is becoming complicated to run. It is an important task to provide awareness to the Chinese workers on account of their rights.

  • Gucci made some analytical and administrative assumptions; the first is to control all ethical issues which are practicing in China.
  • Second, to implement this ethical culture into China needs to provide institutional strength, legalization, and a network to enforce who has the authority to protect the worker’s rights.
  • Companies that can communicate as a self-governing trade union put some steps in this matter.
  • Gucci and its managers made different practical steps regarding these abusive practices, the managers should provide lawful working hours, and overtime work must be payable, not enforced work conducted from the workers, medical care must be provided to them (Czerniachowicz, 2017).

The national and provincial governments in People Republic China (PRC) should contribute to the implementation of these rules. Foreign brands and companies should support these ethical issues to give more protection to the slavery environment of China.Competition environment should be created from the managers and granted them equal opportunities to be successful, promotions facilities should be provided to the workers, and the effective, cooperative and communicative system should be provided to the workers. Gucci and its managers should implement rules and codes that contain a safeguard environment for the followers. It must be strictly enforced as Gucci applied the salivary trend into China’s nation to make its reputation around the world.

Part Six- Conclusion

Gucci as a luxury brand holds all the necessary managerial practices as well as corporate social responsibility framework that help it acquire obligatory business performance. The association plans of Gucci are to transform into the main brand in the extravagance showcase at the worldwide level. Gucci communicates their organization as dependable and proactive, and imply them on their design and styles. These ideas are inter-related; being capable can likewise be sophisticated to acquire long term growth. For Gucci, social mindfully is a fundamental piece of their global technique. They work with a far reaching, yet reasonable methodology. It is their crucial obligation to keep up their situation of an extravagance brand to advance and pioneer supportability. The report presents a comprehensive structure of leadership and values, yet a need to focus on ethical grounds is clear.

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Managing Corporate Social Responsibility

Debate on Corporate Social Responsibility Summary

Innovative management approach towards improvement of employees’ performance at work

 

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