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L’Occitane’s Unethical Business Skills

Updated on March 2, 2016

Ethics of Business

Before I tell you about the UNETHICAL BUSINESS COMMUNICATION SKILLS of L’Occitane en Provence, allow me to show you a tip of the iceberg of ‘Ethics of a Business’ and ‘Importance of Ethics in Business’. After you familiarise yourself with the practices of ethical business, you’ll easily understand how L’Occitane breaks the code of conduct of business ethics AND IF YOU FOLLOW MY POSTS ON http://loccitaneprotest.blogspot.in/ YOU WILL UNDERSTAND THAT L'OCCITANE HAS DITCHED THE INNOCENT CONSUMERS AGAIN AND AGAIN. PLEASE GOOGLE THE NEWS WHICH STATES THAT FTC HAS CHARGED L'OCCITANE FOR DECEPTIVE WEIGHT LOSS SCAM AND THEY WERE CAUGHT IN CHINA AND CHINA DESTROYED NEARLY A TONNE OF L'OCCITANE CREAM WHICH CONTAINED EXCESSIVE LEAD. If you keep an eye on their daily trading chart with an experienced eye (HKG 0973), you will be astonished by the fishy movements.

Much before I got into Forex Trading, I used to teach the subject of Business Communication –at the Institute of Entrance Examinations in Kolkata– to the BBA, MBA and Company Secretaryship students. In this hub, my prime focus will be to explain and give examples of ethical and unethical business practices respectively, with examples.

Every business must follow certain code of ethics. A ‘Code of Ethics’ is a branch of philosophy that acknowledges questions on morality.[1] I’ll paraphrase a few vital points in the code of ethics for the corporate world, from Salesforce’s Blog which includes the following:

1. A company believes that it exists because of its customers.

Customer Comes First’ should be the motto of any company. A happy customer will tell everyone in his/her circles and so will the unhappy customer. According to a research, it is estimated that twelve quality services are required to make up for one bad service given.

2. A company understands that customers are their future.

Companies should accept the customer base changes and accordingly amend its status quo to meet the requirements of the change.

3. A company always listens to its customers

Companies should listen to their customers whether they are happy, sad or silent. They should always inquire about their rendered services or products’ quality so that they can improve upon them if and when need. Attention should be paid on customers’ needs and a special effort should be made to hear clearly of what they exactly need. Customers should be made felt so happy that they’ll sing praises of the company thereby drawing in more customers.

4. A company maintains positive attitudes

Even while dealing with difficult customers, companies should keep relentlessly positive attitude. The smile and tone of the voice of an employee makes a huge impact. Customers generally won’t comment even if the company gives them a perfect experience because the attitude of the customer will change with time. What’s good for them today might become unsatisfactory tomorrow. So, companies should always deliver something better than ‘perfect’ and add to it a smile. Even one employee who does not maintain a positive attitude with the customer can kill the business of the company.

5. Any employee of the company can impact the customer service

Every employee of the company, no matter what their designation is, can impact the customer services. Even little things and small actions can damage the experience of the customer e.g., if you visit a restaurant where all the services are great and the food is great too, you might be turned off if the cleaning department employees forget to clean a dirty portion of the restaurant.

Importance of Ethics in Business

Business ethics or morality must permeate throughout the length and breadth of an organisation and embrace all stakeholders. There are four major factors that prove to us the importance of ethics in business. These four major factors are long-term growth, cost and risk-reduction, anti-capitalist sentiment and limited resources.[2] Let us understand each major factor out in turn.

1. Long-term growth

The eyes of giant corporate are always on large profits rather than long-term growth. Large profits enable companies to reach their strategic goals quickly and it acts as a provision against risk. Bigger profits come with bigger risks.

More organisations today than ever before are realising a truth that owner-run businesses have known for a very long time. And the truth is that stable profits in the long-term are better for a business than larger profits now or in the uncertain future.

Failing to recognise long-term growth with stable profits and blindly craving for large profits might lead to corporate collapses such as Lehman Brothers in 2008 or balance sheet holes such as Morgan Stanley in late 2012.

2. Cost and Risk-reduction

The act of bribery and corruption are seen as inimical threats to the development of a healthy economy. In the same way, lack of high degree of ethics in a company is seen as an inimical threat to development of trust and loyalty within its structural organisation which could lead to detrimental effects on the health of the company on its policies of long-term growth.

A company operating on highly ethical terms is bound to spend much less on itself against fraud and industrial relations in all likelihood, to maintain morale.

3. Anti-Capitalist Sentiment

The large scale profits of some of the world’s biggest organisations attracts to itself negative sentiments from the general public who lack details and understanding of the updates or happenings of the business and finance world. A general suspicion arises that the company’s eye-watering profits might not have been entirely derived through ethical means and in some cases downright unethical means which leads to public failures like with the Japanese company Nomura where the senior management resigned in a group after facing insider trading scandal.

Public sentiments cannot be ignored even though it arises out of huge generalisation and simplification of a complicated issue. This has become a pressurising issue in the 21st century leading organisations to realise the importance of business ethics.

4. Limited Resources

It is impossible to deny the fact that our planet has limited resources and human development in the last three hundred years has failed to recognise this simple fact.

Companies lacking in long-term growth, follow the short-term huge profit method like in the case of deforestation where the native people were driven away from their land and animal species had come to the verge of extinction. The way basic financial management needs a definite plan to ensure its capital reserves and solvency, natural resources also need a definite plan for its extraction and usage.

Today’s notable companies like Virgin Empire take keen interest in environmental affairs. On a governmental level, the 2012 London Olympics were the greenest ever with 40% reduction in water usage and 98% wastes were recycled.





Influences of Business Ethics

Influences of Business Ethics
Influences of Business Ethics | Source

Good Business Ethics Examples

The following five principles are but a few of the many examples which form the basis of business ethics:[4]

  • Honesty – People love companies who do/give what they say. Customers only do business with who they trust and honesty wins trust. With honesty companies execute their task ethically meaning, the company will never deceive others by misinterpreting facts and giving partial truths.
  • Integrity – Ethics in business calls for a high level of integrity. This is another tool to win trust of customers. Integrity means having a consistent character that aligns with your thoughts, words and action. Ethical business managers believe, maintain and fight for their moral code of conduct.
  • Keeping Promises – A business organisation should always keep every promise of theirs and fulfill every commitment. Twisting words to getting out of a contract or giving justification of not complying with a commitment should be kept out of a company’s protocol.
  • Caring – Caring involves a genuine concern for others and a trait of compassion. Caring business managers are kind to both customers and staff.
  • Obeying the Law – Companies executing their tasks on ethical grounds should always obey the law and never break any rules or regulations surrounding its business activities.

Please take the small quiz below to see how well you have understood the topic of ethics in business. After the quiz I’ll tell you how L’Occitane conducts unethical business practices.

Quiz on Business Ethics

view quiz statistics

L’Occitane’s Unethical Business Skills for its Employees

I had published a post on my blogger titled 'L’Occitane Reviews from Former and Current Employees of L’Occitane'. In this post I’ve shared reviews of employees who wrote their feedback on their experiences of working in L’Occitane. I’d like to present one of them to you right here on this hub.

A former employee as Part Time Sales Associate in New York, NY wrote on June 10, 2014:

I felt unsafe because we only had fake cameras and no security.

The biggest disappointment was that after all I had given into the business as a part-timer in a small boutique, they decided to move me to a flagship store and cut my hours from 18-20 hours a week to 6 hours a week. I was incredibly upset because it was insulting and rude. Plus, no upper management even gave me a reason why they were moving me and cutting my hours.

Another problem with this company is that they do not educate their employees whatsoever on their rights. There are no safety [sic], HR, or any sort of trainings except for product knowledge. They want their employees to feel powerless and instead play a political game to be kept on the DM's favorite list.[5]

For more reviews from former/current employees of L’Occitane please visit my blog [http://loccitaneprotest.blogspot.in/] or search for L’Occitane in Glassdoor’s website [https://www.glassdoor.co.in/index.htm] under the tab 'Companies and Reviews'.

Richard Branson's Quote

This particular quote from Richard Branson gives the reason for L’Occitane’s downfall in the stock market. Search the keyword HKG:0973 and you’ll find the stock chart of L’Occitane International S.A.
This particular quote from Richard Branson gives the reason for L’Occitane’s downfall in the stock market. Search the keyword HKG:0973 and you’ll find the stock chart of L’Occitane International S.A. | Source

My Sequence of Events with L’Occitane en Provence

Date
Designation
Remarks
14th July 2015
Customer Service Employee, L’Occitane India
Failed to understand and resolve my complaint therefore I requested a Customer Services Manager call back.
14th July 2015
Customer Services Manager, L’Occitane India
Denied if anything could be wrong with L’Occitane Cinnamon Orange soap.
14th July 2015
Retail Sales Manager, L’Occitane India
She called me just to inform that L’Occitane Cinamon Orange soap is her favourite soap and that she has never heard any complaint with the soap in her entire career. Then out of a shameless gesture, she offered to provide me with the contacts of dermatologists in my city. At this point, I understood exactly how L’Occitane trains their employees.
14th July 2015
Customer Services Manager, L’Occitane UK and Ireland
I wrote to her my experience with L’Occitane India customer services.
15th July 2015
CEO, L’Occitane India
She apologised for inconvenience caused with lower level department of L’Occitane employees. Asked me to choose L’Occitane products from its website that would be sent free as a form of compensation. Later, she sent me a gift hamper curated by her and denied that she ever gave such an offer.
18th July 2015
Customer Services Manager, L’Occitane UK and Ireland
I wrote a complaint again to L’Occitane UK and Ireland regarding the behaviour of L’Occitane India CEO. She apologised for all the experience I had with L’Occitane. I was then informed that the Senior Management Team will respond in due course of time to resolve the issue.
18th July 2015
CEO of L’Occitane en Provence
I wrote an email to the CEO describing the entire situation. Haven’t received a reply from him as yet. I wrote to him again on 7th August 2015. He still hasn't replied.
28th July 2015
Purposely Concealed Designation, L’Occitane Far East Ltd, Hong Kong
He sent me an email which, when read, sounds like a legal notice written on a stamp paper. The email contained false claims putting the blame entirely on me instead of the hazardous product and then the matter was considered closed. I chased him with my reply. He hasn’t responded since 2nd August 2015 after being chased for putting false claims on consumer, dismissing the case without consumer’s consent and purposely hiding his designation.

L’Occitane’s Unethical Business Skills for its Customers

Well ,what do I say on this topic. I’ve been a consumer who’s had her own direct experience with L’Occitane’s unethical business conduct. I’ve written a detailed blog to share my horrible experience with L’Occitane. In my blog I have provided details with references on L’Occitane’s unethical business practices and hazardous products. I’ve included topics like my personal horrible experience, how L’Occitane lies in their marketing stage to cheat customers into buying their product, their conflicting statements on animal testing, hazardous chemicals in their products, their shameful act and of course the list of pathetic reviews from customers around the world.

As per my knowledge and experience, a successful business never tries the method of zigzag communication where the sender of the message cannot put across the correct information to the receiver. The stumbling blocks of the foundation of his company does not allow a successful businessman to portray what he wants and what his employees and consumers want from him.

My Message to L'Occitane

L’Occitane’s Misleading Advertisement

L’Occitane had to refund money to consumers for misleading them with weight loss claims of their products Almond Shaping Delight and Almond Beautiful Shape. The FTC has mailed 10,620 checks totalling more than $416,000
L’Occitane had to refund money to consumers for misleading them with weight loss claims of their products Almond Shaping Delight and Almond Beautiful Shape. The FTC has mailed 10,620 checks totalling more than $416,000 | Source

Consumer Psychology Research Report

L’Occitane International S.A. has not being doing well in the stock market since June 2015. My personal technical analysis of L’Occitane’s stock chart says that it has already crossed its last low price and is still falling down to touch and cross its next support level bringing in no hope for poor investors who’s money is stuck on L’Occitane shares. The volume of shares being traded per day is falling drastically. The price has crossed its lower Bollinger band level and two oscillators namely, MACD and Slow Stochastics reveal that L’Occitane has just entered the phase of being oversold meaning, L’Occitane’s shares will cross its lowest support level and will be at its lowest ever in the not too distant future.[8]

I’ve found the most perfect reason why L’Occitane is falling in the stock market. It’s their attitude of not accepting their mistakes and conducting unethical behaviour with employees and customers and then concealing the entire matter.

Social Psychologist Fiona Lee has found that a company can highlight its strength by admitting its shortcomings.[9]

The Study

Lee’s aim was to measure the effects of admitting to missteps and faults, and how these actions would affect the stock prices of a company. Experimenters were given two fictitious company reports and had to read one of them. Both the reports had a list of all reasons why the company performed poor last year. The first report was emphasised on ‘strategic decisions’ whereas the second report was emphasised on ‘external events’ like economy and competition etc. Informally put, this study was a comparative analysis of ‘We Can Do Better’ reports versus ‘It’s Not Our Fault’ reports.

The Results

Subjects viewed ‘We Can Do Better’ reports far more favourably than the ‘It’s Not Our Fault’ reports. Companies who admit about their shortcomings in areas like strategic thinking proved that the company was still in control despite all their faults.

Lee found that companies who admitted to their strategic faults had higher stock prices the very next year, after examining hundreds of statements.

Companies who blamed external forces – the ‘Its Not Our Fault’ reports – gave the speculators a reason to view them as incompetent to solve the issue. These types of companies make speculators think that the company is just making excuses.

Bottom Line

Admitting to honest errors in judgement helps your customers understand that you are still in control of the situation and not prone to making excuses.

As per my belief, in the not too distant future, L’Occitane will either admit all their faults or they will be extinct forever like dodos.

L’Occitane Stock Chart HKG:0973 on 23rd September 2015

L’Occitane’s stock chart reflects the consequences of practising business unethically with employees and customers. L’Occitane’s doomsday is just around the corner.
L’Occitane’s stock chart reflects the consequences of practising business unethically with employees and customers. L’Occitane’s doomsday is just around the corner. | Source

I Need Your Opinion

What should customers do when facing brands like L’Occitane who are involved in unethical business practices?

See results

References

1. Stack L., 2014, The Customer Code of Ethics: The Seven Beliefs of a Great Service Attitude, Salesforce Blog, viewed 15 September 2015,
<https://www.salesforce.com/blog/2014/09/customer-code-ethics-seven-beliefs-great-service-attitude-gp.html>

2. Kendall N., Kendall A., n.d., Rule 1: Importance of Business Ethics, Applied Corporate Governance, viewed 16 September 2015,
<http://www.applied-corporate-governance.com/importance-of-business-ethics.html>

3. Shulfer K., Business Ethics, n.d., image, Leadersihp Development Project, Weebly, viewed 23 September 2015, <http://kyleshulfermba530.weebly.com/chaper-10-business-ethics.html>

4. Bennet T., 2014, 12 Business Ethics Examples, Udemy Blog, viewed 16 September 2015, <https://blog.udemy.com/business-ethics-examples/>

5. Glassdoor, © 2008-2015, Glassdoor, Inc., viewed 22 September 2015, <http://www.glassdoor.com/Reviews/Employee-Review-L-Occitane-RVW4275952.htm>

6. AZ Quotes, n.d., image, Richard Branson Quotes, viewed 23 September 2015, <http://www.azquotes.com/quote/881274>

7. Robinson R., 2015, image, On Your Side: FTC ruling means a refund on L’Occitane ‘body slimming creams’, WorldNow and WSFA, viewed 23 September 2015,
< http://www.wsfa.com/story/28613648/on-your-side-ftc-ruling-means-a-refund-on-loccitane-body-slimming-creams>

8. Yahoo Finance India, Basic Technical Analysis, 2015, L’Occitane International S.A. (0973.HK) - HKSE, viewed 23 September 2015, <https://in.finance.yahoo.com/q/ta?s=0973.HK&t=my&l=off&z=l&q=c&p=b&a=m26-12-9%2Css&c=>

9. Lee F., n.d., Chapter 4 Highlight Strengths by Admitting Shortcomings, Help Scout, viewed 23 September 2015, <http://www.helpscout.net/consumer-behavior/#four>

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Kindly Share Your Thoughts on L’Occitane’s Unethical Business Startegies

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      Eric Roy 

      3 years ago

      Excellent hub! I did not know a brand called l'occitane really exists and even if they do for an uncertain period of time, I would be their foe. Keep up the great work.

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