A case study of ethical issue at Gucci in Shenzhen, China

BY- AAMNA MUNAIMA 2401

ABHISHEK SHARMA 2402
ADITYA PANDEY 2403
AMIT SAURAV 2404

TOPICS DISCUSSED ARE AS FOLLOWS :

1. BACKGROUND :

 Gucci is a multinational company.

 In china profit increased around 35.6%
 5 employees complained about the inhumane treatment
and labour conditions in the stores at Shenzen .
 E.g permission to drink or eat snack, limited toilet time even
for a pregnant employee, compensate for products lost or
missing .

HOW WAS GUCCI ABLE TO DO THIS IN CHINA ??

Gucci was able to do this because of dispatch labour system

in china . Where Gucci only had to pay wages to employee
where as other things like social security or rules of
employment or insurance policy was delt by the company
providing these employees.
WHY COULDN’T GUCCI DO THIS WESTERN COUNTRIES BUT
COULD EASILY DO IN CHINA??

1. MORAL RELATIVISM = ADAPTING WITH THE

ENVIRONMENT
Since local firm violated these labour policies or business
ethics , it helped Gucci to use this as an excuse .

2. ECONOMY

Liability on state to meet certain economic level allows

such multinational companies to a) decide these policies
b) violate labour law , increase profit and help in
economic boom .

MORAL EVALUATION OF LABOUR MANAGEMENT

PRACTICES IN GUCCI CASE:

A) CONFUCIANISM :

3 Values:
REN : COMPASSION AND BENEVOLENCE FOR FELLOE
HUMAN BEINGS
Don’t do things to others which you don’t want others
to do you. i.e provide employees with social security ,
adequate salary , good working environment .
YI : MORALITY OF RIGHTEOUSNESS (BASICALLY HELP
OTHERS)
 This was missing in Gucci as the pregnant employee
must be treated with special case .

LI: Respect people and their dignity

In Gucci treated as money marketing mechanism

without apt treatment and not given due respect .

DYADIC RELATIONSHIP : Juniors must serve and obey .

Seniors must teach , lead and look after .
# SQUEEZING rather than nurturing employees may
save economic cost and lead to more profits in short
term but employees morale decreases and under long
term effect complains increases and reputation of
company goes downhill.

B) LABOUR RIGHTS :

In Western countries , moral basis of Human rights

incorporate into legal rights . Govt. laws help in
regulation and enforcement .But in China labour rights
aren’t institutionalized, legal rights not enforced .

STAKEHOLDER

1. COMPANY (GUCCI) AND SHAREHOLDERS :

To rebuilt reputation and make amendment to

prevent it in future .
 Solutions : Gucci must follow worldwide code of
ethics :
Written employment contract with all workers .
Avoid abuse of dispatch system
Equal pay for equal work
Adherence to laws and regulations on working laws .

2. EMPLOYEES : must be given compensation and

apologies .
Solutions : ‘Tolerance’ virtue in china is very high ,
these employees must be made aware of their rights .

3. CHINESE GOVERNMENT : Ensure enforcement of

workers right and HARMONIOUS RIGHTS.
Solutions : Promote NGO’s who can be a voice for
these employees .

4. FOREIGN GOVERNMENT : They are responsible

creating and enforcing laws that apply to all
companies operating in china .
Solutions : enact laws requiring all companies to
apply fair and decent labour standards worldwide .
IMPACT: if a company violates labour standards in
china , it could be prosecuted in home country by
respective western government .