PGDM BATCH 2021-2023 BUSINESS ETHICS GROUP

ASSIGNMENT

“CORRELATING ETHICAL CODE OF CONDUCT AND ITS IDEOLOGICAL SOURCE -

COMPLIANCE AND ABERRATIONS”

COMPANIES ANALYZED –

AVON
FACEBOOK
REVLON
RELIANCE RETAIL
VICTORIAS SECRET

SUBMITTED BY-
SECTION-B GROUP-1
DHWANI DANGARWALA- 202131015
NICKHILL PANT- 202131011 SHAKIB SHEIKH - 202131020 SHUBHANGI YASHASWI - 202131002
SUBHAM MALANI – 202131004
AVON

About: Avon is The 14th largest beauty company and a leading name in the cosmetic industry. It’s a
London based multinational skincare, cosmetic, personal care and fragrance company. The annual sales
of Avon is around $6.57 according to its latest data.
The company has now been acquired by a Brazilian company ‘Natura & Co’. The deal was closed in
January 2020. After the merger, Natura shareholders have a 76% share in the combined company while
Avon shareholders have a ownership of 24%.
Vision Statement: Avon – The Company for Women To be the company that best understands and
satisfies the product, service and self-fulfilling needs of women - globally.
Mission Statement: To create a world with more empowered women, because empowered women
bring more beauty to the world.
Principles that Guide Avon:
To provide individuals an opportunity to earn in support of their well-being and happiness.
To serve families throughout the world with products of the highest quality backed by a guarantee of
satisfaction.
To render a service to customers that is outstanding in its helpfulness and courtesy.
To give full recognition to employees and Beauty and Fashion Advisors, on whose contributions Avon
depends.
To share with others the rewards of growth and success.
To meet fully the obligations of corporate citizenship by contributing to the well-being of society and the
environment in which it functions.
To maintain and cherish the friendly spirit of Avon.

Compliances and Aberration of Avon

Compliances:
Avon complies to its set Ethical Labour Standards: Unlike many other leading cosmetic brands like
MAC, Loreal, Huda, Bobbi Brown which uses mica in its products, Avon is one such few cosmetic brands
that does not use it.
Mica is an important mineral ingredient in many cosmetics which is responsible for the shimmer and
sparkle in the various cosmetics. But what we do not know is that there is a lot of corruption and child
labour involved in the mining of mica from its ores. India has the largest mica ore near Jharkhand but
due to already prevailing poverty in the region, there is a lot of child labour involved in its mining. Mica
is bought by intermediaries, resulting in the mixing of legal and illegal mica which is then sold on to
processing companies, whilst poor social conditions exacerbate the issue. This was brought to the notice
of the world by ‘The Guardian’ in 2016. After which many cosmetic brands stopped using mica in its
cosmetic products.
Under its ‘Empowering Our Communities’ code of conduct, Avon does its bit of human right protection
by not using mica in its products which still remains a leading ingredient in many cosmetics of other
brands in the industry.

Animal testing: Unlike many others cosmetic brands, which tests its products on animals, Avon has
completely stopped animal testing of its products.
Avon initially used to perform animal testing in order to sell its product in the Chinese Market which
requires for compulsory animal testing. No cosmetic product in China can be sold in the retail outlet
without being first tested on animals and proven safe for use.
PETA (Parent for Ethical Treatment of Animals) in 2019 reported that after 2 years of working with them,
Avon has officially been added to PETA’s “Working for Regulatory Change” list and hence moving the
company to the cruelty free list.

Deviations:
Avon body-shamming controversy: Avon claims all through its code of conduct and even the official
website that it strongly believes in empowering women. But this claim was blown off few years back in
2019 with an ad-campaign of Avon.
The ad campaign featured a women seated in tank top and shorts with the caption - “dimples are
cute on your face, not on your thighs.” The campaign widespread criticism and was accused for ‘body-
shamming’. Twitter users all over the world frowned on advertisement as it clearly didn’t stand in line
with the said vision and motto of Avon of empowering women.

Chinese Corruption Charge: In the year 2008, a probe began in Avon’s China Division as one of the
internals claimed of bribery. The conduct of various employees and executives of Avon were
investigated for possible violations of the law, including bribery and violations of the Foreign Corrupt
Practices Act.
At least four executives, both in Asia and in the United States, were suspended in 2010, and later fired
for their roles in the activities being investigated. In 2014, Avon settled the bribery charges for a total of
$135 million; $68 million in criminal penalties, with the remainder in
interest, disgorgement, and fines from a civil case brought by the SEC.

Revenue:
X Year
Items 2018-19 2019-20 2020-2021
Comprehensive profit/ (loss (9.8) (456.6) (142.8)
Net profit/(loss) (1.3) (365.5) (193.5)
Conclusion:

AVON should not continue its CSR activities because of its shrink market share and also by looking at the
loss of the company it is continuously increasing from 2018-19 to 2020-21. The company is also facing
the outrage of China’s market because it is ban in the market which lead to huge loss because of its high
market share. The company’s controversial campaign also affect the sale of the AVON product on a large
scale. The campaign affect a majority of sector of the market .
FACEBOOK

Facebook, an American online internet-based life and person to person communication administration
organization is situated in Menlo Park, California. It was propelled by Mark Zuckerberg, alongside
individual Harvard College understudies on February 4, 2004. The web-based life site has more than 2.2
billion months to month dynamic clients as of January 2018.

Vision-

Market scope on a global scale

Communication device
A discovery tool
Tool for expressing oneself

Mission
People's empowerment
Providing opportunities for community development
Bringing the planet closer together

Ethical Values:
• Conflict of Interest: Facebook makes use of the rule “abstain and disclose” for any conflict of
interest. Full disclosure of the conflict to the Conflicts Committee is practiced which in turn provides
necessary guidance required to undertake a mitigating action.
• Harassment: Facebook is highly intolerant of any illegal harassment or mistreatment under any
category protected under applicable federal, state, or local law of employees, guests, clients, or agency
partners.
• Communications: Facebook aims to ensure clear and accurate business records and
communications (including email, texts, Facebook Messages, and instant messages) by avoiding
situations of potential risks.
• Public Disclosures: Facebook upholds transparency and integrity of publicly-filed financial
reports by ensuring that the disclosure is complete, just, correct, timely, and comprehensive in nature.
• Confidential Information: Confidential information of Facebook is required to be kept in strict
confidence by its personnel and are only used for professional purposes.
• Protection of User Data and Personnel Data: Facebook Personnel treat the confidential data
access with extreme sensitivity and caution, ensuring the trust users’ put in it.
• Compliance with Laws: Facebook Personnel act within the jurisdiction of applicable laws, rules
and regulations of the respective countries.
• Reporting Violations: Facebook investigates into any report of violation by keeping the
discussions and actions confidential and in sync with the laws and regulations adhering to privacy.

Source and Inspiration of Ethical Values:

Majority of the clauses in the ethical code of conduct of Facebook are influenced by biblical
prescriptions.
The code of fairness and adherence to the laws are influenced by the Bible-Proverbs 16:11, TLB. "The
Lord demands fairness in every business deal. He established this principle.”

Discrepancies and Violations:

Washing State Lawsuits against Facebook: The state of Washington had filed lawsuits against Facebook
regarding failure on their part to maintain records of those who purchased political ads from them as
per the state law and make such information public.
The face-tagging feature allows users to tag themselves or friends in photos using facial recognition
technology to automatically tag users. The case brought on by Nimesh Patel alleged that the collection
and storage of such biometric data violates provisions of Illinois Biometric Privacy Act (BIPA).
Facebook and Cambridge Analytica Lawsuits: Lawyers in the US and Britain have launched a joint class-
action lawsuit against Facebook, Cambridge Analytica and two other companies over data misuse. The
suit claims that the companies misused personal data obtained on 87 million Facebook users to develop
‘political propaganda campaigns’ in both countries. It alleges that Facebook failed to protect personal
information.

Revenue ($bn):

X Year
Items 2019 2020 2021
Revenue 70.69 85.96 117.92
Net profit/(loss) 18.4 29.1 39.3

CONCLUSION
Facebook should continue its CSR activities because of successive years growth from past several years.
By looking at the profit of facebook it is increasing at an increasing rate from several years which shows
that the company is enjoying the benefits of the CSR activities and due to its activities only will lead to
increase in the repuatation in the market. The strict protocols for the safety and privacy of the data are
some of the complainces which make the company to reach the success in the market.
Neutrogena Corporation is an American origin company that is owned by Johnson and Johnson. It deals
in skin care, health care and cosmetics. It is currently headquartered in Los Angeles, California. Originally
known as Natone, Neutrogena was started in 1930 by Emanuel Stolaroff as a cosmetics company. In
1994, Johnson & Johnson took over the independent firm. Neutrogena goods are marketed in more
than 70 countries and are ever increasing their potential distribution base.

Vision:
Neutrogena's vision is to:
Become the global leader in consumer products recommended by doctors and recognised by
consumers as providing real improvements in skin and hair health and beauty
Be widely available and command a premium price due to its product formulations and
positioning's originality, quality, and credibility.

Mission:
According to Neutrogena, their mission is advancement of their standards for ingredients, packaging,
sourcing, and social responsibility are all part of their commitment to sustainability. We, the consumers,
demand products that achieve outcomes while also improving the lovely world around us now more
than ever. They pledge to do their share to make more sustainable decisions that benefit both us and
the environment. They aim to gain knowledge from the environment they work in and change
themselves dynamically according to the need.

Ethical Code of Conduct:

Neutrogena being owned and managed by Johnson and Johnson, follows the same code of conduct as
mentioned by Johnson and Johnson in their official Code of Conduct document. It is quoted as such:
“We believe our first responsibility is to the patients, doctors and nurses, to mothers and fathers and all
others who use our products and services. In meeting their needs everything we do must be of high
quality. We must constantly strive to provide value, reduce our costs and maintain reasonable prices.
Customers’ orders must be serviced promptly and accurately. Our business partners must have an
opportunity to make a fair profit.
We are responsible to our employees who work with us throughout the world. We must provide an
inclusive work environment where each person must be considered as an individual. We must respect
their diversity and dignity and recognize their merit. They must have a sense of security and
purpose in their jobs. Compensation must be fair and adequate and working conditions clean, orderly
and safe. We must support the health and well-being of our employees and help them 5fulfil their
family and other personal responsibilities. Employees must feel free to make suggestions and
complaints. There must be equal opportunity for employment, development and advancement for
those qualified. We must provide highly capable leaders and their actions must be just and ethical. We
are responsible to the communities in which we live and work and to the world community as well. We
must help people be healthier by supporting better access and care in more places around the world.
We must be good citizens — support good works and charities, better health and education, and bear
our fair share of taxes. We must maintain in good order the property we are privileged to use,
protecting the environment and natural resources.
Our final responsibility is to our stockholders. Business must make a sound profit. We must experiment
with new ideas. Research must be carried on, innovative programs developed, investments made for
the future and mistakes paid for. New equipment must be purchased, new facilities provided and new
products launched. Reserves must be created to provide for adverse times. When we operate according
to these principles, the stockholders should realize a fair return. “

Compliance:

Carefully selected ingredients:

At Neutrogena, they priorities safety. Throughout the lifecycle of their products, they seek to avoid
needless and harsh components, and priorities ingredients that are not only healthy for the
consumers skin, but also safe for the environment. They are dedicated to providing their customers with
complete ingredient transparency so that they can make informed decisions about their skin's health.

Committing to health:
Neutrogena cares about the full person and are dedicated to helping their consumers live a healthier
lifestyle. They leverage the power of their brand to educate and encourage healthy habits in everyday
life while also addressing skincare concerns.

New products with less wastage:

As part of their Skin Balancing range, Neutrogena debuted new packaging made from 30% post-
consumer recycled (PCR) plastic in 2020. As part of the collection, they also introduced their first 100%
plant-based fiber, home-compostable cleansing wipe.
Over the next five years, they intend to increase the percentage of PCR in their packaging. In addition,
beginning 2021, they switched their whole Makeup Remover Wipes collection to a 100 percent plant-
based fabric. They are also working on new products that will eliminate unnecessary plastic waste and
carbon emissions. Refills and single-dose items are to be made available soon.

Easier recycling:
Approximately 75% of Neutrogena bottles are now recyclable. Starting in 2021, they introduced new
technologies to improve the recyclability of the rest of their packaging. They are aiming to make it easier
for their consumers to dispose of the used products correctly.

Deviance:
Sunscreen recall:
As a part of their “Promise” to their consumers on their website, Neutrogena stated that as the world's
leading sun care company, they were trying to raise the bar on sun protection by committing to
spearheading a generational shift in sun safety, awareness, behavior, and focusing on sun protection
awareness to address preventable skin malignancies.
However, after finding the carcinogen Benzene, a substance that depending on the dose and extent of
exposure has the potential to cause cancer, in some samples, parent firm Johnson & Johnson recalled
four Neutrogena aerosol sunscreen products from shops in the United States in July 2021.

The business went on to say that benzene isn't utilized in the sprays' production process, and that
they've started looking into the source of the contamination. The consumers were informed that they
should stop using these goods and dispose of them properly. They were also issued refunds on their
purchases by the company.

Neutrogena is not cruelty-free:

As stated on their website:
“Neutrogena does not conduct animal testing on our cosmetic products anywhere in the world,
except in the rare instance where governments require it.”

This implies that when required by law, Neutrogena pays for and permits their goods to be tested on
animals. It is confirmed by the fact that Neutrogena's products are available in mainland China, where
animal testing is required for the majority of imported cosmetics. This goes against their code of
conduct to be socially responsible to the environment in which they operate.

Non-Vegan nature of their products:

Neutrogena products do not carry the tag of being vegan in nature whereas the company talks of
sustainable practices. Some product lines of Neutrogena, if not all contain products that are obtained
from animal sources. Also, another aspect is that since they are tested on animals, they cannot be
considered as a vegan option to a particular set of people who are the brand’s consumers.

Revenue:
X Year
Items 2018-19 2019-20 2020-2021
Revenue 82509 82584 93775
Net profit/(loss) 15119 14714 20878

Conclusion:

The stats of the Neutrogena reflect that the revenue is increasing from the CSR activities but the net
profit income does reflect a drastic jump which shows that company should not follow its CSR activities
on a large scale. It should slow down its investment in the CSR sector. It should continue its activities to
a limited extend which can lead to maintain the reputation the company in the global market. Also it
should try to not indulge in any deviance which lead to scandals in the market.
 RELIANCE INDUSTRIES LIMITED

Reliance is Multinational company situated in India. Reliance owns businesses

mainly in energy , petrochemicals , textiles , natural resources , retail and telecommunications
.It is the largest publically traded company in India by market size and has a market
capitalisation of $100 billion.

Vision- To be the most admired and successful organised retail company in India that enhances the
quality of life of every Indian

Mission-
Provide millions of customers with unlimited choice, outstanding value proposition, superior quality and
unmatched experience across the full spectrum of products and services
Serve the entire spectrum of Indian society i.e., from households, kiranas and traders, to small and
medium enterprises and large corporations
Reach the length and breadth of the country through our physical and digital distribution platforms

Ethical Value: Reliance Industry Limited code of conduct states and prohibits its employees
to desist from corporate opportunities except that are approved by its board of directors.

Source of Ethical Value: The second Buddhist precept is often is translated “do not steal”.
The Precepts of Buddhism are associated with the “right action”

Discrepancies and Violation: Officials of Reliance industries were arrested for their
involvement in corporate espionage involving the confidential documents of Ministry of
Petroleum. The documents relating budget had to use for unfair gains to reliance.

Reasons for Discrepancies: Officials of RIL indulged in Corporate espionage to get

sensitive information from government documents that could benefit the future prospects of
the company. Disclosure of government documents could lead to unfair gains to the company.

Conclusion: reliance retail is top most multination company in the world which is famous for its CSR
activities and reliance retail has earn huge reputation through CSR activities in the market. Also the
company is earning very well in its revenue and profit after contribution to the CSR so it should it should
continue to contribute in the CSR activities and tries to maintain its operations.

About the Company: Revlon, Inc. is a leading global company with excellent brands that
transform the lives of women and men around the world. It manufactures cosmetics like hair
colour and care, fragrances, skincare, beauty care. Currently it is marketing more than 15
brands and it is sold in more than 150 countries. With the market value of $657.7 million the
company is inspired by their founder’s vision, and their passion for the business of beauty.

Vision Statement: Revlon- To satisfy the needs of their customers with excitement and
glamour and to provide their products at an affordable price.

Mission Statement: According to Revlon Inc., their mission is:

to emerge as leader in personal care and in cosmetic.
using latest technology in manufacturing e-co friendly skin care products.
to serve the communities wherever it operates.

Ethical Code of Conduct: Revlon, when it comes to ethical code of conduct, certifies:
To Comply with All Company Policies and All Applicable Laws: Revlon’s operations and the conduct of
employees are always subjected to the rules, regulations and laws of the local countries and
jurisdictions in which they operate. Violations of this Code, Company policies, and applicable laws may
result in action and including termination of employment.
Not to Offer, Make, or Accept Improper Gifts or Payments or Launder Money: Offering, making or
accepting improper gifts or payments of any kind like bribes on the Company’s behalf, whether directly
or indirectly through a third party, is strictly prohibited. Laws violation can have severe consequences
for the Company, as well as for the individual employees involved.
Keeping Accurate Books and Records: Accurate, Honest and understandable recording and reporting of
information is critical to our ability to make responsible business decisions. The books of the financial
statement, must accurately reflect all corporate transactions. It is a violation of the code for any
employee to knowingly provide false or inaccurate information to any company official.
We Comply with Environmental Laws and Regulations: All the employees comply strictly with the letter
and spirit of applicable environmental laws. It is the responsibility of each and every employee to make
sure that his/her activities strictly and seriously adhere to all applicable environmental laws, to all
related Company Policies. Case of unethical behaviour with any environmental control or monitoring
device is strictly prohibited.
Using the Company’s IT Resources Appropriately: It is the responsibility of all employees or workers,
who have the access to Revlon’s IT resources, including (but not limited to) e-mail or the Internet to
utilize those resources for appropriate business purposes in a lawful, professional and in ethical manner.
Violation in the rules will be dealt strictly.
Protecting Consumers through Product Compliance and Quality Assurance: They conduct their
business in compliance with all applicable Laws governing the labelling, distribution of our product and
marketing. Quality has been and continues to be the hallmark of the products. Employees of the
company are required to adhere to established Company quality standards, quality assurance
procedures and quality control. Even if totally unintentional, violations of these laws carry severe
penalties and could result in criminal prosecution of the Company and any involve.

Deviations

Animal Testing: Revlon’s policy that states animal testing is done “where required by law.” The
company seem to be cruelty-free with its “clean” attitude, but it still is sold in China and is still
using animal testing. PETA claims “For two decades, Revlon portrayed millions of consumers
as a company whose products were not tested on animals.” Here, Revlon enjoyed the
incentives from PETA’s support and promotion of Revlon products to everyone around the
world.
Unsustainable Palm Oil Use: This company got worst rating by Ethical Consumer's for their
unnecessary use of palm oil, signifying they are using no certified products of palm, and with
minimal or no commitments.
Misleading Shareholders: Revlon, in 2013 agreed to pay penalty of $8,50,000 to settle a
complaint by the US Securities and Exchange Commission for misleading shareholders and
hiding information from independent directors regarding a transaction happened in 2009.
Revenue
X Year
Items 2019-2020 2020-2021
Net sales 688.4 727.9
Net Profit/(loss) (624) (168)

Conclusion :

Revelon should continue its CSR activities because by giving a glance at the stats the company is
trying to perform well from the past years and tries to overcome its incapabilities by learning
from past experiences. Also, the activities of compliances are contributing for the development
of the company’s success and betterment for the future.
ABOUT THE COMPANY
Victoria Secret is an American brand known for its lingerie and beauty products. The marketing and
branding of the company is on peak as it conducts annual fashion show with supermodels. Five stores
were been sold to Leslie Waxner in 1982 by the founders Roy and Gaye Raymond, who founded the
company in 1977. Waxner grew the company’s stores to 350 by expanding it to malls with sales of $1
billion by 1990s. Victoria secret was an essential part of the branding image features from 1995 to 2018.
In 2002s, Victoria secret launched PINK appealing to the teenagers. By 2008, Victoria secret was an
international brand with major shops overseas. But now due to shifting of consumer preferences
and ongoing controversy Victoria Secret has been suffering since 2016 despite being the largest
retailers of lingerie in US.

VISION OF THE COMPANY

Victoria Secret compromises of improving the lives and sustaining growth for shareholders. The vision
statement of Victoria secret states “captivating customer experiences that drive long-term loyalty and
deliver sustained growth for our shareholders”. This statement clearly states that the company’s aim is
to satisfy the customers with unique and demanding products and services.

MISSION OF THE COMPANY

Company believes in long term loyalty and sustainability to shareholders, customers and has a
mission in building a family of world’s best fashionable brands.

CODE OF ETHICS
Like all other companies, Victoria’s code of ethics states “do what’s right”- regardless of the
circumstances. Workers of Victoria secret including the manager, have responsibilities to the customer
as well as each other of treating people respectfully, each member has to perform his or her duty
effacingly protecting the company’s interest. Victoria secret gives safety at work and respects privacy
complying with privacy laws. The same compliance with the stakeholders, they have to respect the laws
and follow them.

CORPORATE SOCIAL RESPONSIBILITY

Every business manager has a responsibility of maintaining the company’s relationship with the
society
and should also consider the long range interest of the company.

ENVIRONMENT
Victoria Secret signed “Greenpeace international’s Detox”, agreeing on the term to eliminate hazardous
and harmful chemicals in the fashion product, stopping the use of phthalates and preflourinated
chemicals. The company shifted it’s catalog paper to either 10% post consumer waste that is been
recycled.

CHARITY
Victoria Secret has joined Miramax Films Fundraiser for amfAR for the fight against AIDS. Around $3
million was raised from Victoria Secret’s fashion show. Victoria Secret’s Think Pink program made
strides against the breast cancer. Think Pink has been world’s largest corporate RFTC team raising
$1.1 million funding cancer patients, for education, screening and treatment
DEVIATION FOR CODE OF ETHICS
LABOUR CONDITION: Victoria’s Secret did not a good rating in the Labour condition. Labour standards,
ensuring the workers’ health and insurance, safety and other labor right are not certified to any of the
supply chains of Victoria Secret.
THE ENVIRONMENTAL IMPACT: Victoria’s Secret promises PINK and other environmentally friendly talks
but only few products are actually environmentally friendly. No proof were found about the company
actually working on minimizing the impact of micro-plastic or minimizing textile waste.
ANIMAL WELFARE: All products of Victoria’s Secret are not made from animal-free products, so their
claim of being aanimal-freeproducts is not so true.

Conclusion:
The stats of Victoria’s Secret revealed that in the past three years it is overcoming with the loss that
used to happen before and now it is making a profit. So by giving a light to the stats in our opinion
victoria’s secret should continue to follow its CSR activities and also try to be improve its labour working
condition and animal welfare protection and should spent more on these activities to raise the
reputation of the company.