Luxottica group

Premium Fashion, Premium Ethics

Tuesday 25 October 2011, by Angela Xue, Massimo Boselli, Rachel Chan, Sebastian Puetz

11 inspired

a) The main facts about the activities of the company.

Luxottica was founded in 1961 by Mr. Leonardo Del Vecchio as a contract producer of semi-finished parts for the optical industry. Gradually the company moved to the finished pair of glass business and today is a leader in the eyewear sector. If we want to fully understand Luxottica?s approach to CSR we have to focus our attention to their Code of Ethics. This Code, approved in 2008, is an organically way in which are expressed all the values (honesty, integrity, correctness and good faith) of the company towards its internal and external stakeholders. All CSR activities inspired by the great presence of the founder, Mr. Leonardo DelVecchio, are oriented to respect the environment and to respect the people. OneSight is Luxottica Group Foundation and is achieving a series of charitable programs dedicated to improving vision for those in needs through outreach, research and education. All these attempts are proved by the numerous award won by the company during the last years (Al Ward Spirit of Giving Award 2005, Sodalitas Social Award 2008, Aret? Award 2010).

b) The ethical challenges this company is addressing.

In 2006,Luxottica started their business in China. Two factories have been founded in GuangDong. Accompany with this, they may have some ethical challenges.
— Material outsourcing in China
Luxottica always use the high standard material in European countries. But in China, the standard is different to European and some are legally just in china. Furthermore, there are some unethical suppliers whose material is not up to the standard, they bribe the buyer to sell their products. Is Luxottica tempted to use these material or not?
— Environment protection in China
The environment in China is worse and the environmental laws are looser than in Europe. Are the Luxottica should be protected China?s environment as good as Europe countries?
— Competition in China
New designs are easy to be copied in China, and there?s no special regulation to protect these designs. On the other hand, corruption happens frequently in China which is seldom happen in Europe. Under this unfair competition environment, what will Luxottica do?
— Payment level in China
Luxottica may will attempt to change payment level as same as the local company which may lack of regulations on OT and minimum payment. Would Luxottica also doing like local company?
— Prices VS values
Luxottica?s products focus on helping "sick" people to look better. But in China the price is too much over their value. Is this an ethical challenge?
— Activities in China
In Europe, there is lots of public information about their activities. But in China, little information about the value activities of Luxottica is available. Would they still focus on people in China?

c) What makes you believe this company is really ethical and why you trust it?

Most of the facts and activities about Luxottica we can find are from its company website, which could be a bit less convincing on how they actually implement their code of ethics. However, after a detailed internet search, we have neither found no negative news at all against the company, nor any scandals of the company being unethical. In today?s information age, we regard it is a solid proof that the fact that the company is trustworthy in being ethical. It should also be mentioned that one of our members has been following this company?s development and information, especially CSR related, closely for over 6 years, and have so far heard no case showing Luxottica not being unethical.

Moreover, during the background and fact checked out, we also found that the company has won a lot of awards in being socially responsible as a corporate citizen, some of the awards include:
? 2011 Luxottica has been awarded as finalist at the 2011 Sodalitas Social Award, which awards the more significant initiative of CSR in Italy.
? 2011 Luxottica has been recognized by Equal Opportunity for Woman in the Workplace Agency (EOWA) as an Equal Opportunity for Employer of Choice for Women in the Workplace.
? 2010 Luxottica and WDF have been awarded ?team of the year? during the Supply Chain Excellence Award
? 2010 Luxottica won the seventh edition of "Aret? Award 2010" given by Confindustria and ABI to businesses, organizations and institutions that "communicate" with fairness, transparency and sustainability.
These sound social proofs by authorities and public recognition weigh the trustworthiness of the company.

However, we should admit that there is a limitation on our current research, since most of the facts information is collected on-line, and we have very limited information about its supply chain outside Italy. We have never visited their two big factories in China; have no solid proof that the factories with over 5,000 workers are strictly following the same codes of ethics in Italy, as they said so. However, just as mentioned above, we have tried a very detailed information search online, yet without negative results, while in the information age, it is difficult to hide things, especially bad things, if it actually happens. So like the old saying, ?No news is good news?, based on what we have now, we tend to believe that it is a model and dream company in ethics implementation.

d) The possible challenges facing the company in the future and how you think this company may improve.

Luxuttica?s concern should it be to keep their excellent image up. The company relies on its high and above standard values and ethical positioning. Even though the company is not direct related to the end customer in business terms the importance is the same. Therefore a (ethical) mistake can break the trust invested in Luxottica and would be punished in a hard way. This would harm the company. Given the fact the competition grows, costs are getting up or profits down, it is on Luxottica to show that they stick to their values even in bad times and their values are not an ethical ?luxury?. This includes all places and factories all over the world despite the governmental regulations, which might allow a less strict policy of rights regarding for example environmental or employee behavior. In addition to that Luxottica is supposed to take a closer look at their supplier. Here they should make sure they share the same values to show a consequence in their actions. This might be a good first step to influence the whole industry in a positive way.

Bibliography

http://www.luxottica.com/
http://en.wikipedia.org/wiki/Luxottica
http://www.onesight.org/eur/news/luxottica_has_been_awarded_as_finalist_at_the_2011_sodalitas_social_award/2096
http://it.wikipedia.org/wiki/Luxottica
http://en.wikipedia.org/wiki/Leonardo_Del_Vecchio

Location: Agordo (Italy)

Sector: Wholesale and retail trade

Official website: http://www.luxottica.com

Key figures:

Revenue ?5.798 billion (2010)
Operating income ?712.2 million (2010)
Profit ?402.2 million (2010)
Total assets ?7.994 billion (end 2010)
Total equity ?3.269 billion (end 2010)
Employees 61,980 (2010)
Key people Leonardo Del Vecchio (Founder and Chairman), Andrea Guerra (CEO)

Nbr. visits: 1181

Nbr. inspires: 11