Organizational Ethics: Gucci
Select an organization you work for or one in your chosen field.
Conduct online research on the ethics of your organization and the industry it belongs to.
Write a 750- to 1,050-word paper describing how ethical principles can address organizational issues.
Include the organization you selected and discuss the following with regards to that organization and its
industry:
�What role do external social pressures have in influencing organizational ethics?
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�How might these issues be relevant to organizational and personal decisions?
�What is the relationship between legal and ethical issues?
Organizational Ethics: Gucci
The external social pressure has in the recent past become very instrumental in shaping
the ethical practices of any business, which is especially seen in the businesses that fall under the
smaller communities; industries. With this, the companies are pushed into giving very profound
considerations on matters with regards to the environmental responsibility and the involvement
of the general community. More so, with the advancement of the information age, there has been
a very significant increase in the importance of the social pressure since ideas are exchanged
very fast over a very wide area, exposing the companies that may fail to adhere to the expected
social standards.
According to Crane and Matten (2007), the current move is towards an ethical era,
whereby the ethical awareness of the consumers towards the implications of the products they
purchase is constantly on the increase. As such, they tend to align themselves towards the ethical
implications that the products have, not only towards themselves, but also to the world around
them, encompassing the environmental impacts of the supply chain in entirety before the goods
eventually arrive at the market (Partridge, 2011).
Gucci
Gucci is an Italian leather and fashion goods brand which forms part of the famous Gucci
Group, owned by Kering, a French company formerly known as PPR. The company was
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founded in 1921 by Guccio Gucci, in Florence. As put across by the Business Week Magazine,
in the year ending, 2008, the company made about €4.2 billion, and the following year rose to
the 41 st position in the chart of “Top 100 Brands” created by the Interbrand (Bianchino, et al,
1987). As the highest selling Italian brand, as at September, 2009, the company had about 278
stores directly operated worldwide and uses upscale department stores and franchisees to
wholesale its products. As at 2013, the company managed to make sales worth $4.7 Billion US
dollars. It is in this year that its market value rose tremendously to $12.1 Billion USD and a
ranking of 38 th position according to the Forbes list of the most valuable brands (Karmali, 2013).
As a company in an industry with a relatively high competition, Gucci has managed to
forge to the current position, mainly through the good business practices that helps it retain its
customers, while at the same time, attracting new ones. This move runs back to the 1990s, a
period when the company underwent the time recognized as the poorest in its history. During this
period, Investcorp shareholders, Maurizio distributors as well as the executives at Gucci America
reined in one the sales of the accessories all of a sudden. It is from this point that the company
realized the need for social corporate responsibility.
Ethical Transformation
The theme of ethics in organizations has significantly evolved over time, which, in the
past was used to refer to the operation of a business in a way such that there is no violation or
breaking of the law as well as the moral guidelines. However, as posited by McGoldrick and
Freestone (2009), the term has undergone too much broadening to encompass the proactive
efforts by a business towards practices considered honest as well as good citizenship. This is
based on the expectations of the societies in which the companies operate in such a manner that
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they meet the customer expectations, charitable giving, and involvement in the community and
fair working conditions for the employees.
The Relationship between Legal and Ethical Issues
Unlike in the past when companies mainly gave considerations to ethics in such a manner
that they remained within the legal parameters, there has been very tremendous changes on the
perceptions of ethics, otherwise termed as “Going beyond Law”. In the late 1990s, Gucci started
to embrace the social responsibility with the aim of having a distinguishing factor between it and
the other rival companies, which fostered a stronger relationship with the society. Currently, all
companies have to act in a socially responsible manner in order to avoid the pressure that may
develop from the public. As such, the legal issues may never exist within a company that has
fully embraced the ethical practices, otherwise considered as social responsibility. A competitive
company will go beyond merely the expectations of the law (Ward & Chiari, 2008).
The concept of business ethics has evolved significantly over time. Historically, it
referred to operating a business in a way that does not break the law or violate any major moral
guidelines. In the early 21st century, business ethics has broadened to include more proactive
efforts toward good citizenship and honest business practices. This is based largely on societal
expectations that companies meet demands for honest treatment of customers, community
involvement and charitable giving, fair working conditions for employees and environmentally
friendly business activities.
The encouragement of observation of ethics within an organization is an assurance of
improvement in the success of the business since all the stakeholders will be involved in a
unified participation towards the achievement of a common goal. According to Karr and Martens
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(2013), most organizations tend to underperform as a result of social pressure originating from
the external sources. As such, these organizations find themselves in a dilemma, whereby, they
may have to change their actions, policies and even behaviors in order to meet the expectations
of the stakeholders, which in most cases tend to be much diversified. Instead of molding the
employees in such a manner that they are able to cope with the current demands of the company
while, at the same time, keeping in mind the emerging trends, they are mainly forged with
regards to the existent pressure, which is current.
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References
Arnold J. Karr and Cynthia Martens (11 November 2013). “Guccio Gucci SpA Wins Trademark
Case in China”. WWD. Retrieved on 5 th August, 2014.
Bianchino, Gloria, et al., eds. (1987) Italian Fashion. Vol. 1. The Origins of High Fashion and
Knitwear. Milan: Electa SpA.
Crane, A., & Matten, D. (2007). Business ethics. Oxford: Oxford University Press.
Karmali, Sarah (February 28, 2013). “Beyoncé Leads New Gucci Empowerment Campaign”.
Vogue. Retrieved 5 th August, 2014.
McGoldrick, P. J., & Freestone, O. M. (2008). Ethical product premiums: Antecedents and
extent of consumers’ willingness to pay. International Review of Retail, Distribution and
Consumer Research, 18(2), 185–201.
Partridge, D. J. (2011). “Activist Capitalism and Supply Chain Citizenship: Producing Ethical
Regimes and Ready-to-Wear Clothes.” Current Anthropology 52(S3): S97–S111.
Ward, D., & Chiari, C. (2008). Keeping luxury inaccessible.
