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Organizational Communication’s Role in Estée Lauder’s Success

Ashley Ng Jing Ting [50320591]

Fremont Seow [50317645]

Jemima Chloe Chuah [50321580]

Ong Kong Hong [50320587]

University at Buffalo

COM 437: Advanced Organisational Communication

Dr. Reece Darham

November 1, 2020
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Abstract

This paper goes over the role Organizational Communication has played in the success of Estee

Lauder. It draws focus to 4 main elements - Team Building, Identity and Meaningful Membership,

Strategic Ambiguity, and lastly, Organizational Transparency and Openness - and how they played

a part in Estee Lauder’s success in the cosmetics industry. We will be looking at the stages of

socialization in team building, how organizational identity dynamics and identification affect

identity and meaningful membership, strategic ambiguity in company positioning and crisis

management, and lastly, how transparency and openness creates trust between consumers and the

organization.

Keywords​: Organizational communication, team building, identity, meaningful membership,

strategic ambiguity, transparency, openness

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Organisational Communication’s Role in Estée Lauder’s Success

Estee Lauder Companies Inc (here in after we will refer to it as Estee Lauder Companies) is

one of the largest conglomerates and leading manufacturers or high quality skin care, make up,

fragrances and hair products. Founded in 1946, they have a long history of 74 years and the success

in Estee Lauder is undeniable as they have products being sold in over 120 countries such as

Singapore, United States of America, Taiwan and United Kingdom to name a few. Estee Lauder has

also acquired many well-recognized brands such as Clinique, Bobbi Brown, Tommy Hilfiger and Jo

Malone to name a few over the years (EL Companies, 2020). With their extreme success, Estee

Lauder has a net worth of $79.25 Billion USD as of 3rd November 2020 (Macrotrends, 2020) and

according to Forbes 2016, the Lauder family has a personal net worth of $17.90 Billion. The

following themes which we will be touching on: team building, identity and meaningful

membership, strategic ambiguity, and transparency provides a clearer understanding why Estée

Lauder has managed to achieve the success it has today.

Corporation and its Organizational Structure

Estee Lauder is a family owned business where the second and third generation members of

the Lauder family are on the board and are doing their part for their family by being part of the

executive leadership. They are very actively engaged in the leadership of the company and are

focused on the long term growth of the company (EL Companies, 2020). Estee Lauder has a

hierarchical organizational structure as they rely on a vertical chain on command. They have a

company president and chief executive officer who oversees the whole business and has an

Executive Leadership Team (ELT) that works under him and reports directly to him.
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Team Building

The word group and team is always used interchangeably but there is a difference in the

terms. A group is when everyone is accountable for their actions individually and everyone shares

information from his own point of view (Wrench & Punyanunt-Carter 2012 ). Everyone’s role is

very specific and objectives are made by the leader. On the other hand, a team has a common goal

or collective purpose and efforts (Wrench & Punyanunt-Carter, 2012). There is no specific role as

their roles can change for each member, and the focus is often on the team’s goals instead of

individuals. Big organizations like Estee Lauder want to have teams so that they are able to continue

to evolve and generate greater results. In essence, team building is to enroll the help of a group into

planning and implementing change internally, which would make group work more effective than if

they were to do it from the outside (Salas et al, 1999). The members of the team change so that they

will be able to obtain new skills and insights. According to Woodman and Sherwood (1980), team

building was designed to enhance organizational effectiveness by improving team operation through

developing problem solving procedures, skills and increasing role clarity. The ability to work

collaboratively is one of the central competencies of a learning organization in order to do well

(Holton, 2001). There are four current models of team building which are goal setting, interpersonal

relations, problem solving and role clarification (Salas et al, 1999).

Firstly, team members will be gathered together to come up with a way to achieve the goals.

This is seen in Estee Lauder where they have the CEO Global Reverse Mentor Program where

digitally savvy Millennials are partnered up with Gen Z employees so that they can learn from each

other and come up with ways on how they can impact and improve the business. Through this

mentorship, employees of Estee Lauder get to build interpersonal relations which helps to develop

trust in one another which can increase the confidence in the team and increase their work

chemistry. As with every project, there would be disagreements and arguments. However, with the
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problem solving phase, employees of Estee Lauder would be able to brainstorm together and be

involved in finding a solution to their problems and come up with ways to implement as well as

evaluate the solutions. Lastly, when the project is completed the team would go through role

clarification to make sure that everyone is sure of how they have contributed to the project and have

a better understanding of each other’s roles and duties in the team. This is important especially

when they are doing presentations on their ideas so that they know what exactly they have done and

questions can be directed to them for them to be answered. Team building is also shown in the

encounter and metamorphosis of the socialization process which is crucial in making sure that the

employees have a good relationship with one another.

Estee Lauder’s socialization process also contributed to the success of the company.

Assimilation is a twofold process which happens through individualization and socialization.

Individualization could occur when Estee Lauder encourages their talented employees to give

creative recommendations, share their own personal experiences and empower them to think as

entrepreneurs so that they are able to perform to the best of their abilities by harnessing their

strengths (EL Companies, 2020).

According to the models of socialization communication, an individual must go through

three phases before they are accepted into the organization. The three phases are anticipatory

socialization, encounter and metamorphosis (Miller, 2006). Anticipatory socialization is when the

prospective employee learns about the work and their position in general and the particular

organization (Miller, 2006).With advancement of technology and globalization, information is at

the tip of our fingertips where everything is a click away. Anticipatory socialization is made easier

since new employees can do prior research on Estee Lauder from online review websites or articles.

Following that would be the encounter phase which is their first step into the organization. The

employee would have to learn the organization’s culture and forget whatever they have learnt in the
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past. Estee Lauder encourages diversity and individuality which the organization seeks out and

cultivates in their workplace. This culture is guided by the Lauder’s family values which is ‘respect

for the individual and a collective generosity of spirit that infuses everything we do’ (ELcompanies,

2020). While this might seem as a good thing, it might have some problems in the future as

conflicts may arise when working due to a difference in values, work experience and work

ideology. Estee Lauder also has a training and development program for new employees to improve

their capabilities and skills. This training includes orientation to the brand, regular product update

sessions, teamwork and customer service skills, sales techniques and leadership for retail managers.

On top of that, there is also an individualised learning programme which is used to track their

performance at work. In order to make sure that they have assimilated well into the company, their

manager will meet with them twice a year to discuss their strengths and how they can develop and

improve (EL Companies, 2020). The training is done through their own experienced staff so the

new staff can learn from the professionals through observation and hands-on activities. This would

help them learn the organizational culture at a faster pace and at the same time create interpersonal

relationships with their peers and superiors. Following a smooth transition for these new employees,

they can then move on to the metamorphosis phase since they are fully assimilated into the

organization and can now start work as an insider.

Since the new employees have been together since their training period, it will increase

cohesion which would allow them to have more chemistry and work together well. On top of that, it

might also breed some friendly competition where they push each other to do better. Effective

socialization is also a good investment for the company as it can increase organizational loyalty

(Fang, 2011) and with a low turnover rate, the company would not have to spend so much money

retraining their employees time and time again. Having a cohesive team and good socialization
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process where they are formally welcomed into the company is one of the ways which contributed

to the success of Estee Lauder.

Identity and Meaningful Membership

Instead of identifying the specifics of what Estee Lauder’s organizational identity exactly is,

this paper looks into how Estee Lauder facilitates the processes in organizational identity dynamics

to achieve a “healthy” organizational identity. Organizational identity is dynamic in the sense that it

is continuously affected by its organizational culture and image. Organizational identity has been

defined as a set of statements that organization members deem to be central, distinctive, and

enduring to the organization that they belong to. Organizational image is described as the set of

views on an organization held by external stakeholders. Organizational culture is referred to as tacit

organizational understandings, in the form of beliefs and values (Hatch & Schultz, 2002). In

essence, organizational identity is neither entirely based on its culture or its image, organizational

identity is made up of a dynamic set of processes that links organizational culture and image to

identity. According to the organizational identity dynamics model, these processes are categorized

as such: “Identity mirrors the image of others”, “Reflecting embeds identity in organizational

culture”, “Identity expresses cultural understandings”, and “Expressed identity leaves impressions

on others” (Hatch & Schultz, 2002). Estee Lauder has demonstrated that they are aware of these

processes, hence managing to avoid the dysfunctions of organizational identity dynamics known as

“Narcissism” and “Loss of organizational culture”.

Narcissism occurs when organizational identity that is constructed entirely based on the

organization’s culture. This implies that focus is only given to reflecting and expressing processes,

while mirroring and impression processes are ignored. Conversely, loss of culture happens when

organizational identity is based on organizational image, and the underlying processes that are given

more attention to or ignored are in contrast to narcissism (Hatch & Schultz, 2002). The
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commonality between the two dysfunctions is that it occurs when certain processes are either given

too much attention or largely disregarded. Estee Lauder has managed to give importance to the four

processes and managed to strike a balance by enhancing consumer engagement and placing a strong

emphasis on its heritage.

Estee Lauder’s ability to avoid narcissism can be attributed to its increased consumer

engagement, thus giving importance to the mirroring process. The mirroring process is connoted as

a metaphor such that the organizational images held by external stakeholders is the mirror for

members of the organization to see. The establishment of “Estee Lauder’s consumer engagement

centre of excellence” centralizes consumer information, through data collection methods such as

social listening and focus groups, and provides valuable insights to a wide range of consumers.

Social listening refers to monitoring various social media outlets for mentions about anything

related to your organization, ranging from your company itself, or your products, or even your

competitors; after the monitoring phase, an analysis on the information gathered is performed to put

what is learnt into action. A focus group refers to bringing together small groups of people to

provide feedback on the organization’s area of interest. The increased audience engagement

provides Estee Lauder with a “bigger mirror” of what their organizational image is, increasing the

company’s ability to see a “fuller picture” of the notions external stakeholders have about the

company.

In addition to avoiding narcissism, Estee Lauder’s strong emphasis on heritage prevents the

loss of culture. Especially in today’s society, it is very easy for organizations to fall victim to

adopting the culture of the consumer, resulting in the loss of its own culture. But Estee Lauder has

demonstrated its strong emphasis on heritage which can be observed through its “High- touch

approach”. The high- touch approach is what Estee Lauder describes makes their organization truly

distinct, it is the guide to providing highly personalized service and education to their consumers.
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This approach was first conceived by the company’s founder, Estee Lauder, motivated by her belief

that women should experience her products first- hand, she personally introduced her cosmetic

products to consumers knowing that her personal interaction, instruction and connection would

create a lasting bond. Fast forward to today, the high- touch approach has gone high- tech, and the

company still continues to strive to achieve high- touch innovations to meet the consumer’s needs.

For example, the company managed to build a voice application, “Liv”, that can be used through

mobile devices or Google Home. “Liv”, was created to allow consumers to test, learn, and engage

with Estee Lauder’s products, as well as purchasing them. This highlights how Estee Lauder is

continuously adapting to the changing needs and wants of today’s consumers and offering a truly

innovative shopping experience stemming from its heritage.

In sum, Estee Lauder has been able to cultivate a “healthy” organizational identity through

the processes that integrate the perceptions of all relevant stakeholders.

Organizational identity is important as it affects various aspects of an organization, namely,

interpretation and decision making by its members (Dutton & Dukerich, 1991). However, another

important aspect is organizational identification which has been proven to induce higher levels of

work performance, increased likelihood in organizational citizenship behaviors (helping colleagues/

providing constructive suggestions), increased job satisfaction, and lower turnover ratio ​(Hameed et

al., 2016​)​. Organizational identification is a crucial concept which describes the degree to which

members experience a sense of oneness with the organization’s values, brand, ethics. Estee Lauder

recognizes the importance of organizational identification, and has made extensive measures to

boost identification among its employees.

Estee Lauder has been making an effort in increasing organizational identification by

engaging in various Corporate Social Responsibility (CSR) efforts. Various CSR studies have found

a positive relationship between organizational identification and CSR activities (Hameed et al.,
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2016). In order to better understand how CSR influences employees’ identification, CSR has to be

differentiated into internal and external CSR activities and its underlying mechanisms, perceived

internal respect and perceived external prestige, which promotes identification (Hameed et al.,

2016).

With regards to internal CSR activities, perceived internal respect mediates the relationship

between internal CSR and organizational identification (Hameed et al., 2016). Internal CSR

activities are understood as an organization’s operations relating to its members’ physiological and

psychological welfare. While perceived internal respect is members’ assessment of their position in

the organization (Hameed et al., 2016). Members assess perceived internal respect via certain

indicators such as organizations prioritizing its members' well- being, and members’ ability to

partake in decision making. These indicators serve to remind members that they are not only

important to the organization, but are also respected and valued (Hameed et al., 2016). In this

regard, Estee Lauder has been involved in various CSR initiatives ranging from employee health

and safety, to employee training, to equal opportunity, to diversity.

In relation to employees’ health and safety, the company offers a wide range of “benefits

programs” that supports employees’ needs across all stages of life, some of the programs include:

healthcare benefits, insurance and financial schemes, wellness programs, family support and

flexibility, and education programs. Apart from the plethora of programs solely catered to the health

and safety of its employees, the company has also established informal and formal programs that

promote equal employee training and equal opportunity, one of which is “The CEO Global Reverse

Mentor Program”. This reverse mentoring program, as mentioned in the above team building

section, pairs senior executives with younger employees to learn from each other, with the aim of

nurturing a work environment that encourages continuous learning and development. Furthermore,

the company advocates “leadership from every chair”, this is meant to empower all employees,
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regardless of their status in the company, encouraging them to actively lead and participate in

company activities, which espouses the idea of equal opportunity. In addition to its commitment to

employee well- being, employee training and equal opportunity, the company emphasises the

importance of diversity. Especially being a global company with stores located worldwide, diversity

in the workplace should not be neglected. Estee Lauder has excelled in this aspect by endorsing as

many as 30 “Employee Resource Groups (ERGs)”, these resource groups are not only limited to

race and ethnicity, but also spans across gender, sexual orientation, age groups, and even physical

disabilities. The purpose of ERGs is to create an inclusive culture where different perspectives are

not undermined, leading to greater innovation and problem- solving skills for the organization, and

fosters a sense of trust for the employees. All things considered where internal CSR is concerned,

Estee Lauder is engaged in meaningful activities that cover various aspects of an employee which

conveys a message to employees that they are appreciated and not simply treated as “cogs in a

machine”.

Similar to how perceived internal respect mediates the relationship between internal CSR

and organizational identification, perceived external prestige mediates the relationship between

external CSR and organizational identification (Hameed et al., 2016). External CSR activities are

understood as an organization’s operations that serve to solidify its legitimacy and favorable

position amongst external stakeholders. While perceived external prestige refers to employees’

assessment of their organization’s social standing (Hameed et al., 2016). In this aspect, Estee

Lauder has also demonstrated its commitment to boosting organizational identification through

activities such as cause- related marketing which encompasses philanthropy and volunteerism, and

environmental and wildlife protection. Under cause- related marketing, Estee Lauder’s largest CSR

program is its breast cancer campaign: The late Evelyn Lauder, founded the Breast Cancer Research

Foundation (BCRF), partnered with The Estee Lauder Companies, that has grown to be a prominent
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non- profit breast cancer organization. Another notable cause related effort includes “The Estee

Lauder Companies Charitable Foundation Girls’ Education Initiative” and its subsidiary brands’

cause related efforts includes, the “M.A.C VIVA GLAM fund”, “Aveda earth month”, “Jo Malone

London- Shining a light on mental health”, “La Mer blue heart”, “Origins green the planet”. Apart

from cause related efforts, Estee Lauder also created the “ELC Good Works” digital platform where

employees can register personal donations made and volunteer activities that they have participated

in, in turn, the company will match the according funds to non- profit organizations of the

employees’ choice. In sum, Estee Lauder has made significant contributions to create positive

impacts for the health, environment, and education of its external stakeholders. Because of the

extensive contributions the company has made, it is undeniable that Estee Lauder is a highly

respected organization. Furthermore, as a result of its internal CSR activities, Estee Lauder has been

continuously recognised as being a highly reputable and respected company. These recognitions are

showed in being included in the Bloomberg Gender- Equality index for the third consecutive year,

achieving a perfect score for Human Rights Campaign’s (HRC) corporate equality index for the

fourth consecutive year and named as one of the HRC’s “best place to work for LGBTQ equality”,

and being named as a “Top 10 best company for multicultural women” by Working Mother

magazine. All these acknowledgments serve to boost perceived external prestige amongst

organizational members.

The cumulation of CSR activities serves to increase Estee Lauder employees’ perceived

internal respect and external prestige, thus leading to increased organizational identification. An

increase in organizational identification creates committed employees, thus propelling Estee Lauder

towards future successes.

Strategic Ambiguity
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Another contributing factor to Estee Lauder’s success is their use of strategic ambiguity in

marketing to consumers, as well as for crisis management. Strategic ambiguity is a strategy that

enables different groups of people to assign different meanings to any given goal, leaving

interpretation of material put out by organisations up to the audience. It can then be said that the use

of strategic ambiguity is crucial in ambiguous or highly controversial contexts because it enables

the audience to perceive things from their own point of view, even when the organisation holds

different interests (Jarzabkowski, Sillince, & Shaw, 2009).

An example of strategic ambiguity enabling Estee Lauder to express their own interests

while still catering to their audience is in their position on animal testing. It is stated on their

website that “We don’t test our products on animals and we don’t ask others to test for us. We

acknowledge our brands are sold in countries where animal testing on cosmetics or cosmetic

ingredients is required by law.” (Animal Testing, n.d.). This allows Estee Lauder to effectively

avoid responsibility of the animal testing that happens outside of their labs, but still maintaining a

firm position on their fight against animal testing. It is also important to note that many cosmetic

companies – even Estee Lauder – have ties with pharmaceutical, chemical, or petroleum companies.

These companies test their raw materials on animals, which makes the materials safe for human use.

This in turn leads to cosmetic companies not needing to test the final products on animals as the

ingredients have already been deemed safe by the original producers. Because of this, cosmetic

companies are able to declare that the product or brand does not test on animals (Kumar, Massie, &

Dumonceaux, 2006).

With a growing market of ethical consumers, brands like Estee Lauder have to adapt quickly

to ensure that they do not get boycotted by consumers or “cancelled” by the media. Ethical

consumerism has seen a sharp increase in recent years - consumers are becoming more informed

and are educating themselves on the products they buy. It has been reported that consumers today
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have a bigger inclination to buy products from brands that are more “socially responsible,

sustainable, and ethical”, and are less likely to purchase from brands whose values are not aligned

with theirs (Vessio, 2019). In fact, consumers willing to pay more for more ethical products have

increased by 200% between 2011 and 2015. 62% of Gen Z and 73% of Millennials prefer to shop

with ethical brands and are willing to pay more for sustainable products. Estee Lauder’s stance

against animal testing feeds into commodity activism, in which companies align themselves with a

social issue to garner support from consumers with the same values (Jarvis, 2020). Estee Lauder’s

effective use of strategic ambiguity strengthens their position in the market as a leader in the beauty

industry.

Estee Lauder also uses strategic ambiguity to handle crises. Crises can get out of hand

rapidly with social media being the main medium of mass communication. ​An organizational crisis

can be defined as the “perception of an unpredictable event that threatens important expectancies of

stakeholders and can seriously impact an organization’s performance and generate negative

outcomes.” It is crucial for organizations to use social media to mitigate crises as crisis information

released by third-parties will lead to greater public outrage. Organizations need to respond to the

public proactively, and use official social media pages to reach out to consumers when a crisis

happens - it is important for organizations to be “crisis coping facilitators”, in which the public is

pacified to reduce negative feelings. (Jin, Liu, & Austin, 2011).

One such case of an organizational crisis within Estee Lauder would be a recent public

relations nightmare in which 76-year-old board member and descendant of founders, Ronald

Lauder, was exposed for his political donations to President Donald Trump during the “Black Lives

Matter” movement. Estee Lauder received backlash from both consumers and employees for

Lauder’s contributions to “state-sanctioned violence” that conflicted with the company’s stance on

diversity and inclusion. In response to this, Estee Lauder’s internal group, NOBLE (Network of
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Black Leaders and Executives), said that the company was donating $1 million in support of racial

and social justice organizations, without first addressing the problem of Lauder’s personal political

contributions. Following more backlash that the donations did not match up to Lauder’s donations

in support of state-sanctioned violence, the company released a second statement that said that they

would donate $5 million to “support racial and social justice and to continue to support greater

access to education,” as well as an additional $5 million over the next two years (Harmon,

Mandavilli, Maheshwari, Kantor, 2020).

Now, Estee Lauder’s website also has an additional page on diversity and inclusion which

headlines “​We recognize that Inclusion and Diversity are natural extensions of our company values

and must be fully embedded in our culture and our business strategy.” (Inclusion & Diversity, n.d.).

Additionally, Estee Lauder has committed to being more inclusive with their hiring, sourcing more

products from black-owned businesses, as well as increasing the variety of shades in their

foundation line (Brown, 2020). In responding to the consumers’ demands of matching donations

with that of Lauder’s, as well as making company wide commitments to being more inclusive, Estee

Lauder’s successful use of strategic ambiguity mitigated the crisis without having to address the

crux of the issue.

Organizational transparency and openness

According to Schnackenberg & Tomlinson (2016), transparency is the perceived quality of

intentionally shared information from a sender. There are three factors which would point out

whether or not a company is transparent. Firstly, transparency is seen as a vital part of information

sharing to an extent that growing transparency comes with enhanced awareness, consistency, and

understanding to knowledge shared between two parties. In layman terms, it is the amount of

information disclosed between two parties. Secondly, transparency involves deliberately shared

information such that organizations have the capacity to deliberately withhold or release
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information in ways that would increase or decrease transparency. For example, organizations

might choose not to report on news that might negatively affect them, and instead push for news

that would cast them in a positive light. It is sort of like ignoring the bad parts and focusing on the

good parts. Lastly, transparency can also be viewed as a perception of obtained information,

although organizations have the capability to sway that understanding through various means.

Information quality is also an important part of transparency. For example, it can be evaluated as

the appraisal of the quality of information shared by a company or a boss towards their employees.

As with most cosmetics and skin products brands, the topic of animal testing is always

brought up. Most companies in the cosmetics industry are generally not that transparent when posed

with questions or allegations of animal testing. However, Estee Lauder is a brand that claims on

their official website that they do not test their products on animals and that they do not ask others

to test for them. However, in the sentence following that, they also mention that they acknowledge

that they do have brands which are sold in countries where animal testing on cosmetics or cosmetic

ingredients is required by law (Estee Lauder, 2020), which begs the question; how much of what

they tell us is true?

According to ALTEX: Alternatives to Animal Experimentation (2019), Cruelty Free

International announced a partnership with well-known cosmetics firm Estee Lauder to reach a

global goal to end animal testing in the cosmetics industry. However, numerous websites such as

PETA and Cruelty Free Collections, to name a few, have denied this statement. They have stated

that certain brands under The Estee Lauder Companies such as Bobbi Brown and Clinique still do

test their products on animals (Cruelty Free Collection, 2020). As mentioned in the previous

paragraph, on Estee Lauder’s website, they have repeatedly emphasized that they are putting in the

utmost effort to combat animal testing, but they acknowledge that their products may be sold in

country where animal testing on cosmetics are mandatory by law (Estee Lauder, 2020). One such
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country would be China, where numerous quantities of their products are sold due to the huge

market there, which begs the obvious question; why would Estee Lauder choose to continue doing

business in China, even with all the ethical issues that arise and the potential backlash they might

face?

That Estee Lauder’s web page mentions very little on the countries where its products are

required by law to be tested on animals. This could be a case of empty-archive syndrome, whereby

they are shirking from the fact of still doing business in those countries by instead focusing more on

their work with cruelty-free organizations. It would definitely seem as though they are feigning

ignorance, as if to claim that they are not aware of what really goes on there. However, by looking a

little deeper into their partnership with Cruelty Free International, Estee Lauder is actually trying to

bring about change by using their reputation to stop animal testing for cosmetics globally instead of

going completely cruelty-free as most people assume (Rose, 2019). Furthermore, some brands

owned by Estee Lauder are already acknowledged as cruelty-free. These brands are less likely to

operate in countries where animal testing is mandatory and will receive their cruelty-free

certification in due time.

​Animal testing is not the only scandal Estee Lauder has been associated with in recent

years. In 2018, Estee Lauder CEO Fabrizio Freda publicly apologised for false ad claims on some

of their cosmetic products. Freda mentioned in the article that the company recently found out that

some testing related to advertising claims for specific products had been tampered with by some

employees. However, he did not reveal the names of the products affected by the tampering, only

that there would not be any issue with safety. According to the Business Times in 2018, Mr Freda

apologized on behalf of Estee Lauder and assured the public that they would take full responsibility

for this issue. What this meant for the company is that their shares dropped to as much as 6.9

percent to US$135, despite increasing by 14 percent in 2018. However, their willingness to be open
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and transparent could be a move by the Estee Lauder board in a bid to appeal to potential

consumers, stakeholders, and investors. As mentioned by Schnackenberg & Tomlinson (2016),

transparency is the appraisal of the quality of deliberately shared information from a sender.

Another potential reason for this might be that Estee Lauder would have preferred to alleviate their

choices through transparent and truthful interactions with consumers and taking responsibility in the

long term (Whitehouse, 2019). This would certainly put Estee Lauder in the limelight as an

organization whose words and product claims can be trusted to an extent, simply because it is very

rare to see a company openly come out and admit their faults despite still being able to cover it up

as the issue was not known to the mainstream media at the time. Being open itself may also bring

about positive externalities which expand beyond the organization itself (Roper, Vahter, & Love,

2013). All in all, honesty is still the best policy, and a brand known for its transparency would

appeal a lot more to consumers.

Conclusion

The beauty industry is highly competitive, companies are working to meet consumers’

growing demands. In today’s globalized society, the size Estee Lauder has grown into today is not

by sheer luck. Rather, it is applying effective organizational communication strategies that has

played a huge role in its success. This paper has thoroughly explored the following themes: Team

Building, Identity and meaningful membership, Strategic ambiguity, and Transparency and

Openness. In relation to Estee Lauder, these themes provide links as to how Estee Lauder has

positioned themselves towards success. With successful application of teambuilding and

socialization processes, they have been able to assimilate their employees into the company well,

reducing their turnover rate and increasing loyalty to the company. Understanding organizational

identity dynamics and enhancing consumer engagement, focusing on company heritage, and

increasing identification boosts the company’s overall effectiveness. Being able to use strategic
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ambiguity has been proven useful to Estee Lauder as it has helped them avoid scandals and handle

crisis well without losing much in terms of profit and loyalty to the brand. Lastly, being transparent

and open despite being thrust in the spotlight for wrongdoings has also renewed the confidence of

consumers in purchasing products from Estee Lauder.

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