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The cosmetic industry represents a large sector subjected to regulations and state control. The importance of corporate ethics and strict legal rules is evident in this industry because cosmetics have a direct and immediate impact on the health of consumers and their well-being. In recent years, critics admit that more and more companies including such leaders as L’Oréal and Estee Lauder exploit and deceive their consumers by selling low-quality products at a high price. The main problem is that many companies follow ‘softer’ ethical issues balanced by rather more formal legal ones. The ‘law’ may seem distant to many smaller businesses and may seem to be comprised of rites of no immediate relevance. Pomp and circumstance have little connection to their business concerns, or with the alleviation of pressing financial or personnel problems (Sims, p. 34).
The main strength of Lewis’s arguments is a rational base and scientific analysis of the facts; Singh uses emotional appeal which has a great impact on readers’ perception and understanding of facts and figures.
Strengths of the articles
The main strength of the article ‘The great pretenders?’ by S. Singh is its descriptive nature and a lot of examples. The author provides readers with an analysis of facts and figures concerning the cosmetics industry and the health effects of cosmetic products. The author includes an analysis of marketing efforts and strategies used by L’Oreal and Estee Lauder and evaluates their marketing activities in terms of current regulations. The author finds that false advertising and promotion is a natural policy of many cosmetics companies. Advertising and promotion used by cosmetics companies do not honestly represent the product, misleading and confusing consumers. Similar ideas are expressed in the article “Is Hollywood at war with the cosmetic industry?’ which opinions and views of two professionals. S. Singh underlines that control of activities in the field is difficult, and efforts should be made to ensure that false claims and pressure tactics are not used. Products manufactured by cosmetics companies raise important ethical issues concerning environmental protection, their impact on the natural environment, and quality standards. For instance, L’Oreal markets beauty lotions that “help preserve youth and beauty”. Thus, the promotion of this product misleads potential consumers: the creams and lotions do not preserve youth and healthy skin (Singh, p. 5). The author uses a method of observations and personal experience to describe the current state of the corporate regulations within the cosmetics industry. Emphasis on these concerns tends to be greatest in the industrialized world, while many of the lesser-developed countries still focus primarily on promoting economic growth or other objectives. Advertising through radio, television, print media and press meets form part of business promotion activities.
The main strengths of the article Clearing Up Cosmetic Confusion by C. Lewis is critical thinning and the theoretical background used in the analysis. The cosmetics industry demands its companies accept strict codes of ethics and social responsibility. Today, the managers of organizations have important obligations to a variety of stakeholders and not just the shareholders, and this should be reflected in the organization’s statements of purpose, such as mission statements. For instance, in the article Lewis states that ‘a wise consumer’ should read the labels and know what’s in a product. Lewis uses descriptive techniques to prove her position. It is possible to say that the ideas and arguments highlighted by Lewis portray that for many companies these issues are connected with the statement that “the social responsibility of a business is to make a profit” (Betton 54). For a legal person, the main problems discussed by Lewis show that it is difficult to accuse cosmetics companies of illegal behavior and policies and protect consumers before a particular product comes to the market. Following Lewis (2000):
The regulatory requirements governing the sale of cosmetics are not as stringent as those that apply to other FDA-regulated products. Cosmetics and their ingredients are not required to undergo approval before they are sold to the public. Generally, FDA regulates these products after they have been released to the marketplace
Lewis underlines that media wields tremendous power over the public, it is very tempting for marketers to breach ethics in their quest to improve business prospects. Dr. Baumann and Dr. Reese underline that it is in this area that marketers can go berserk, making tall claims of products and services with the singular objective of driving sales and pushing up profits “Is Hollywood at war with the cosmetic industry 2006). There can be little doubt that many advertisements have blatantly violated ethical norms, falling under the category of deceptive advertising (Betton, pp. 32-33).
In contrast to Singh, Lewis analyzes the differences between the drug and cosmetics industries. The author underlines that another problem for a legal person is that it is difficult to prove that the company is unfaithful to its customers selling them low-quality products. For instance, “FDA has tried to establish official definitions for the use of certain terms such as “natural” and “hypoallergenic,” but its regulations were overturned in court” (Lewis 1998). The author shows that the main risks are that such procedures lead to health hazards for potential consumers. It means that even if a company accepts ethical regulations as a basic concept of its business, this code does not protect customers from poor service and bad quality (Betton, p. 65). Using persuasive arguments, Lewis (1998), Estrin and Akerson (2000) admit that the state should take corrective action by punishing companies and employees who do not comply with company and industry standards and rewarding those who do. For instance, L’Oreal and Estee Lauder have strict codes of ethics and corporate regulations which bound the employees to keep high standards and reputation of the company (Singh, p. 5). Also, many decisions are made by insurance professionals from a certain number of factors they have considered. The problem for a legal person is that these companies market low-quality products and ‘panelized’ only if the product is recalled. Lewis persuades readers that “companies are not required to substantiate performance claims or conduct safety testing if safety has not been substantiated, the product’s label must read “WARNING: The safety of this product has not been determined” (Lewis, 2000).
Weaknesses of the articles
The main weakness of Singh’s arguments is that the author does not pay attention to legal rules but expresses her personal opinion only. The author does not explain the reasons why many cosmetics companies value profit and market leadership but forget about social responsibility and corporate ethics issues. The main problem is the high cost of testing and R&D. In contrast, Lewis underlines that the low marginal costs of producing cosmetics combined with the high prices give millions of dollars each year for such companies as L’Oreal and Estee Lauder, Lancôme, and Channel. That is, insofar as they can charge more than production costs, and sales to the outside market do not decrease sales in their primary market, they profit by selling at low prices. For instance, if the company claims that its product has a biological effect, “it should technically be regulated as a drug, and its approval process can cost the company millions of dollars” (Is Hollywood at war with the cosmetic, 2006).
The main weakness of Lewis’s analysis is the lack of emotional impact on a reader. Thus, the strength of Lewan is arguments is that the author provides readers with objective analysis of regulations and laws and unveils a conflict between corporate regulations and industry requirements. She underlines that the law has one function, but a code of ethics has another. Perhaps, the best guiding principle here is not that of strict liability but rather that whatever ethical solution is adopted it should improve the ethical position. It is recognized that in a somewhat contentious and difficult world whatever solution is adopted should leave the ethical position at least improved (Estrin and Akerson, p. 43). Using extensive analysis of current regulations and laws, Lewis (1the 998) underlines that the purfollowing norms is co-ordination of activities in accordance with the industry standards. In this case, the norms and regulations should be directed towards achieving the goals and objectives of the organization (Betton, p. 51). In contrast to Lewis, the value of Singh’s arguments is an emotional appeal. The structure of industry standards should define tasks and responsibilities, work roles and relationships, and channels of communication. The increasing complexity in our society is related to an information explosion. Information generation and dissemination have reached new heights. So, many consumers rely on product information promoted by the companies responsible for product quality and advertising messages. Unfortunately, many cosmetics companies forget about these issues driven by personal gain and financial results (Estrin and Akerson, p. 44). Responsibility and legal rules mean that companies have broader obligations including specific responsibilities toward customers, employees, suppliers, and society as a whole. Policies and standards have a great impact on the overall being of a business determining moral and ethical standards applied to all areas of operations (Betton, p. 82). Estrin and Akerson (2000) underline that if the regulations are inadequate and mistaken, the proper legally permitted procedures should be followed to have the law amended.
Both authors, Lewis and Singh, agree that the problem for a legal parson is that a code of business conduct is not legislation. For instance, the cosmetics company, like L’Oreal, that has taken the trouble to develop and implement a code may be able to use it as a persuasive defense when faced with allegations of impropriety. This notion of the legally persuasive argument of having a code might be termed ‘soft-law’. Voluntary schemes, with government involvement, have much to commend them (Estrin and Akerson, p. 44). Subscription to a code of ethics may be seen as a contract. Although ethics is not law, the fact of subscribing to a code may have some of the attributes of a legal contract. It is not the purpose of a business code to be an alternative to the law; neither is a code meant to be a means of challenging the law, even though this runs counter to the principle of resisting unjust laws. Using examples and substantial analysis of the current situation, the researchers (Estrin and Akerson, Lewis and Singh) state that current laws and regulations do not protect consumers from exploitation and deception. Sign pays special attention to the fact that social responsibility policies should reduce any harmful influence on the natural environment and stakeholders. Unfortunately, many cosmetics companies do not follow a code of ethical conduct which stipulates strict moral and ethical rules aimed to protect interest groups. “Consumers can, however, obtain specific information about a cosmetic ingredient in various references, such as the International Cosmetic Ingredient Dictionary and Handbook, published by the Cosmetic, Toiletry, and Fragrance Association” (Lewis, 1998). Business should be driven by consumers and their loyalty, so if the company is unable to meet high standards and be responsible for its activities, it should be panelized according to the state regulations and legal norms (Betton, p. 45). The case of wrinkle creams and lotions demonstrates ineffective rules and regulations applied to the cosmetics industry:
- The FDA classifies creams and lotions as cosmetics, which are defined as having no medical value. So the FDA regulates them more lightly than it does drugs. This means that products don’t need to undergo rigorous testing for safety and effectiveness before going to market” (Wrinkle creams, 2006).
- By and large, the disclosure of an actual or potential conflict of interest is seen as adequate, rather than an insistence on withdrawal. The article unveils that it goes on to describe ethical values which will characterize a true professional, among which a high place should be accorded to integrity, honesty, loyalty, and fairness. “Because the FDA doesn’t evaluate cosmetic products for effectiveness, there’s no guarantee that any over-the-counter product will reduce your wrinkles” (Wrinkle creams, 2006). This is one of the major challenges for the cosmetics industry which wants to treat ethics seriously, and especially so in unregulated policies. Strict laws and regulations will help to accept ethical decisions and solve complicated problems according to the ethical standards and norms (Betton, p. 65).
Analysis of the cosmetics industry
For a legal person, complications arise, when it is difficult to distinguish between lying, deception, withholding information and concealing information in advertising. Wrinkle creams are a vivid example of deceptive advertising which forces consumers to spend more money than necessary (Lewis 1998). The main problem is that a label tells the truth about the product and its quality but:
The ingredient list, although a mandatory requirement on cosmetics, is also the most difficult part of the label to understand. Most of us don’t recognize the names of the ingredients listed because there are thousands available to chemists creating a wide variety of products. But there’s no way to change that, he says, and still, accurately identify the substances that are used” (Lewis 2000).
The advertisement of the anti-wrinkle cream claims that it can ‘lessen the appearance of your wrinkles’. The deception has led many people to spend more money on this product, endure its bad taste, and also risk health hazards. This is a classic example, which implies that deceptive advertising can adversely impact social relationships, attitudes, and values (Sims 48). With anti-aging products, the main problem for a consumer is that the result depends upon “the type and amount of active ingredient in the wrinkle cream and the extent of the wrinkles a consumer wants to treat” (Lewis 2000).
In general, Lewis and Singh’s augment portray that the cosmetics industry follows rules and regulations stipulated by FDA and FD&C Act, the Fair Packaging and Labeling Act, but these rules do not prevent the end consumers from deception and low-quality products. On the other hand, these rules put manacles on a legal person because many companies do not violate standards and legal norms. Today, there is a strong tendency is for societies to demand that companies act with increasing concern for the overall societal and environmental needs, as well as economic needs.
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- Betton, C. I. Global Regulatory Issues for the Cosmetics Industry: Volume 1. William Andrew Publishing, 2007.
- Estrin, N. F., Akerson, J.M. Cosmetic Regulation in a Competitive Environment. Informa Healthcare; 1 edition, 2000.
- Is Hollywood at war with the cosmetic industry? 2006. 2007. Web.
- Lewis, C. Clearing Up Cosmetic Confusion FDA Consumer magazine. 1998. Web.
- Frederick, R. (ed.). A companion to business Ethics. Blackwell Publishers, 2000.
- Sims, R.R. Ethics and Corporate Social Responsibility: Why Giants Fall. Praeger, 2003.
- Singh, S. The great pretenders? Marketing Week 27. 2004,p. 7
- Wrinkle creams: Your guide to younger looking skin. 2006. Web.