Background of the company
The Louis Vuitton is a multinational company based in France that was founded in 1854. The company is a renowned fashion house dealing with products such as sunglasses, fragrances, cosmetics, fashion apparel, and cloth distribution. Over the years, the company has spread its business activities across the globe and is known for its unique luxury brands.
Due to its long history of quality products, the company is among the few companies in France with the Royal Warrant title (Louis Vuitton, par. 5). The company uses the wholesale and retail channels to distribute its products through the traditional and online platforms. Among the notable business strategies for the Louis Vuitton include brand momentum, product excellence, and market innovation.
The business strategy of the Louis Vuitton brand functions within the parameters of brand momentum, market innovation, and product excellence. Under the brand momentum, the company has created an effective system for maintaining purity and product strength to position the Louis Vuitton brand as a market leader.
As a result, the elements of beauty, digitalisation, brand recognition, and direct market interaction have become part of the company’s business culture. The Louis Vuitton is renowned for its corporate code of business ethics. This code streamlines the scope of operation, employee behaviour, business culture, and customer interaction. The code of ethics spells the rules of engagement, expected behaviour, and repercussions for misconduct within the corporation.
Corporate Code of Business Ethics
As part of the organization’s strategy of creating a sustainable organization culture, the Louis Vuitton Company launched its corporate code of business ethics in the year 2010. The corporate code of business ethics was meant “to provide a set of simple principles and behaviours that should guide the Group in the everyday conduct of business” (Louis Vuitton, par. 6).
The code of business ethics of this organization covers areas such as corporate culture, employee behaviour, and ethical business practices. The levels of moral responsibility in the Louis Vuitton Corporation have three building blocks of learning consisting of a supportive learning environment, concrete learning processes, and practices leadership that reinforce appropriate business ethics.
The managers are expected to play a significant role in setting up the desirable ethical environment for their employees. This culture is meant to create an ideal climate for observance of acceptable business practices among the employees (Ferrell, Fraedrich, and Ferrell 31).
Basically, ethics denote sets of laws or moral systems that provide a basis for discerning whether an action is correct or erroneous. Therefore, organizations have ethical principles that guide other employees when carrying out their duties. The ethical code consists of laid down structures to keep staff in healthy and stable mind in their duty of serving the interests of an organization through regulatory ethical communication models.
These models are the motivation to acquire, bond, comprehend, and defend. Therefore, a proactive behaviour control system should function within a structured reward system. When the system functions within accepted parameters, employees will eventually develop a self consciousness to deliver quality services as is internalised in the Louis Vuitton’s code of business ethics.
Human process based intervention strategies are presented as directed at making an improvement to the general state of relationships between individuals and within and among groups in an organizational set up. To attain this, a sensitive form of social responsibility is included in the code of business ethics to ensure that both management and employee teams remain accommodative to the basic needs of their counterparts.
The main driving point in these particular approaches is the argument that the good state of relations, information transfer, and collaboration are essential in fostering good environments for the flourishing of the Louis Vuitton Company.
The managers are to be held responsible for its actions as a moral entity in terms of all of its employees since moral responsibility goes beyond the corporate structure. Moral responsibility is controlled by the good will and personal initiative from all the employees to become morally responsible workforce. These elements have been properly managed by the leadership of the organization. The other employees are expected to observe the rules through participatory implementation.
The process of reporting ethical violations starts with informing a supervisor who then conveys the violation to the managers. There is a special committee handling ethics, which managers are expected to report to. The ethical committee is mandated with investigation and determinant in of the best course of action from several alternatives.
The Louis Vuitton’s code of business ethics incorporates the rational choice theory which presents the rationale for interpreting economic and social behaviour in the organization. Thus, decisions made at the Louis Vuitton are geared towards maximizing utility in the decision science since it offers an opportunity for scientific predictions with empirical verification options.
Depending on the position of the ethical offender, the repercussions include dismissal, legal actions, suspension as a disciplinary action, and open rebuke in the case of minor offences. Financial misappropriation attracts direct fines, when the magnitude of the offence does not directly affect the company.
The human resource and ethical committee are mandated with the responsibility of micromanaging the corporate code of business ethics for the Louis Vuitton. The roles of the committee include organizing trainings on corporate ethics, implementing the code of ethics, monitoring response to each code of ethics, prosecuting cases of misconduct, and reviewing the code of ethics within the Louis Vuitton’s organization culture.
The policy is very effective since it accommodates the requirements of sustainable business ethics. There is no ambiguity in the scope, implementation, repercussions, and rewards for ethical behaviours and conducts within the Louis Vuitton’s corporate business model.
However, I do not agree with the company’s decision to let the managers to control the code of business ethics. In most companies, it is the managers who are often culprits of unethical behaviours and conducts.
Improvements to the code
The relationship between the financial health of the company and its levels of security is best served through contract security introduction. In a nutshell, contract security within the Louis Vuitton organization will ensure that the overall objectives and operations of the company run smoothly (Ferrell, Fraedrich, and Ferrell 36).
Secondly, the elements of moral responsibility should be modified within the code to accommodate the aspect of free will in exercising moral responsibility. Currently, the moral responsibility is operated within the limits of managers’ discretion. Lastly, the Louis Vuitton should introduce healthy business ethics that recognize and support staff members who make steady commitment in practicing accepted desirable healthy organizational culture.
Whenever there is a strong professional relationship nurtured on the values of appreciation and respect, hidden talents are easily displayable and are needed for organizational ethical sustainability (De-George 21). The proposed improvements are educative and useful in offering moral support to the subjects of the code of business ethics at the organization.
De-George, Richard. Business Ethics. 7th ed. 2013. New York, NY: Pearson Education Limited. Print.
Ferrell, Odies, John Fraedrich, and Linda Ferrell. Business Ethics: Ethical Decision Making and Cases, Alabama: Cengage Learning, 2011. Print.
Louis Vuitton. Mission and values. 2014.