Shiseido Group

“This moment. This life. Beautifully.”

Friday 3 June 2016, by Marc

A. The main facts about the activities of the company.

Shiseido Company, Limited (Kabushiki-gaisha Shiseidō) is a Japanese multinational personal care company. It includes products ranging from skin care, hair care, cosmetics and fragrances. It is one of the oldest and most influential cosmetic companies in the world. The company owns many brands and subsidiaries worldwide.

It was founded in 1872 as a pharmacy; its owner Arinobu Fukuhara opened the business after a visit to the United States of America. Later on, it grew into Shiseido Parlour restaurant business. The company started to develop different cosmetic products.

The name Shiseido comes from a passage in the Chinese Confucian classic Yi Jing (Book of Changes), the general meaning of which is: “How wonderful is the virtue of the earth, from which all things are born!” With this quote Shiseido reaffirms its intention to create new ethical values.

Currently, Shiseido is centred on the manufacturing and wholesaling of cosmetics in various price ranges. It also conducts digital business and healthcare business that handles beauty foods and pharmaceuticals. In addition, Shiseido conducts restaurant and food business through Shiseido Parlour Co., Ltd.

Shiseido has inspired us because it carries out all these activities while addressing the main ethical issues of our time. The company focuses its efforts on the fields of Women and Beauty, Culture and Environment.

B. The Ethical challenges this company is addressing.

Shiseido Group has its very own Mission, Values and Way, that every employee shares regardless of nationality and brand they represent.

Their Mission
They have a strong desire to develop relationships with their customers, employees, business partners and suppliers. They keep on working with the same values since they started and creating new ones that are improvements of the past.

Their Values
In heritage, excellence, in diversity, strength, and in innovation, growth. These are Shiseido’s values when doing business. Maintaining their past essence and redefining it, having relationships with many clients and suppliers all over the globe and trying to keep up with the expectations are the fundamental values of the Group.

Their Way
The actions that Shiseido as a business takes with every single stakeholder are extremely detailed and all employees act according to them.

Their main areas of work are:

Women and Beauty
Since being an enterprise primordially targeting women customers, they support women’s ways of living from all angles, including social activities through makeup and beauty that not only enrich appearances but also minds as well as support women to become independent and active in society.

Culture
Corporate culture is seen as a way of ensuring the creation and maintenance of new values. Shiseido is doing it through different activities, like the Shiseido Corporate Museum, which contains material related to the firm since its origins, the Shiseido Gallery that promotes up and coming artists that lead the next generation, with the Shiseido Art House Artistic culture that collects some of this art, and other support activities, as well as with the Hanatsubaki Award for Contemporary Poetry.

Environment
Shiseido ambitions a society in which people and the Earth coexist peacefully, promoting an environmental project by all Shiseido Group employees worldwide. Some of their environmental initiatives include the product-related environmental responses and the reduction of CO2 emissions at business sites.
Specific initiatives: product, production, research, procurement, distribution and sales, to conserve biodiversity initiatives and environmental communication.

7 core subjects

  • ORGANISATIONAL GOVERNANCE: Shiseido has initiatives that want to create structures to fulfil its social responsibility as a company. They have defined both policies for corporate governance and risk management, and a compliance of their activities.
  • HUMAN RIGHTS: between the initiatives that the firm promotes, some are consciousness-raising activities to respect all human rights. We find a policy related to respect for human rights and discrimination, a promotion system of those, a human rights enlightenment (in education) and they also offer points of contact for employee inquiries.
  • LABOUR PRACTICES: there is the objective of creating a workplace where the employee feels at ease and promotes their diversity. We can find the basic policy regarding personnel affairs, initiatives to promote diversity and inclusion, a series of measures to enable all employees to realise a work-life balance and increase productivity, utilisation and development of human resources, safety and health of employees…
  • ENVIRONMENT.
  • FAIR BUSINESS PRACTICES: basically promote fair business in accordance with ethical action standards. We can find initiatives of fair competition and comprehensive transactions, protection of intellectual properties and information security management.
  • CONSUMER ISSUES: the company strives for the manufacturing of safe, reliable products and disseminates information with the aim of being 100% customer-oriented. There are activities to enhance customer satisfaction and others in response to animal testing and alternative methods.
  • PARTICIPATION IN COMMUNITY AND DEVELOPMENT: in society, Shiseido wants to be a social participant as a community member. There are activities employee-led for social contribution, for disaster support…

C. What makes you believe this company is really ethical and why you trust it?

Shiseido Co., LTD has been an honouree in the Ethisphere Institute’s annual list of the most ethical companies in the world since 2012. The Ethisphere Institute bases this list on data from companies on five areas: Ethics and compliance, Corporate citizenship and responsibility, Culture of ethics, Governance and Leadership, innovation and reputation. Therefore, this recognition is solid and objective proof that Shiseido is indeed truly ethical.

The ethical commitment Shiseido has with the world is well reflected on their website. The Social Responsibility area is given as much importance as Investors or the range of different brands the company owns. We feel that behind all the information regarding the CSR department there is hard conscious work and time investment. One of the main characteristics of Shiseido’s ethical commitment is the way in which they talk about stakeholders, they are not afraid of admitting their practices affect everyone, and that they do not have a responsibility to just their shareholders.

In September 2004 Shiseido joined the United Nations Global Compact, a project that calls to companies to align strategies and operations with universal principles on human rights, environment and anti-corruption, and take actions that advance societal goals. Later, in March 2006 they adopted the “Shiseido Group Supplier Code of Conduct”, revised in 2011, which is a series of standards governing Shiseido’s activities. In this code of conduct Shiseido establishes its objectives, “their Mission”. It is really significant for us how they state verification of suppliers is essential, they want to be truly ethical by working with those who are too.

We believe in this company because they go further, they are not content with just following the United Nation Global Compact’s initiatives, they have their own. Shiseido’s main areas of CSR are Women and Beauty, Culture and Environment. For the first area they offer support for women joining the workforce and also initiatives for children. Shiseido also acts as a sponsor for artist in areas such as contemporary art, drama, dance, etc.

What has really satisfied and inspired us are their initiatives with respect to our environment. They take this matter seriously. But it is not just words, in their website you can easily find their three-year environmental program commitments. The current three-year program strives to make products more environmentally friendly throughout their life cycle and reduce CO2 emission. Data and results from the previous program are at ready disposal of everyone.

Shiseido has convinced us with their strong commitment, transparency and their already hands-on attitude.

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

Currently, Shiseido is facing certain challenges and obstacles. For instance, the strong global competition. The cosmetic industry is a fast growing sector and there has been a dramatic increase in demand which has led to a boost in global competition. Another challenge the firm is facing is counterfeit products. Counterfeiting is an intellectual property crime and it has serious effects on the original brand. An added challenge is the brand awareness in umbrella brand. Creating sub-brands or any products at the same time might not guarantee that each product will yield significant profits for the firm and consequently, the company spends a huge amount of money on marketing and innovation. The change in customer trends is another challenge the firm has to face as they have to keep up to date and continuously redirect their production toward consumers’ needs. Finally, the business is aware of the high CO2 emissions all the production processes releases and this is another challenge the firm is willing to overcome.

The Shiseido company is very concerned about these future challenges and as a consequence, the firm has designed a program called “Vision 2020” whose main aim is to make Shiseido become a company supported and needed by society and consumers worldwide, inspired and admired by the younger generations and driven forth by diverse cultures. For the company, it is impossible to overcome the different confrontations that might arise without taking into account all the stakeholders.

We believe that Shiseido can improve and overcome the previous issues by providing more innovative technology and creative strategies. The firm should expand in areas such as men’s skincare products in order to meet the fast changing consumers’ needs. It would also be really interesting the firm accomplished their goal of reducing the CO2 emissions and we suggest the group to invest in alternative production processes that are more eco-friendly even though we really see their effort and the sense of responsibility they have for the environment in the elaboration of their products.

Bibliography

http://www.shiseidogroup.com
http://www.ethisphere.com
http://www.unglobalcompact.org
Kannika Leelapanyalert, Natt Tanpradit, Chanthrapa Khiewvan, & Pornthiwa Sakhonchaicharoen, “Shiseido Group: The Turning Points, Challenges and Future Opportunities”, 2015.

Location: Tokyo (Japan)

Sector: Wholesale and retail trade

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

Key figures:

Revenue: ¥723,485 million (FY2007)
Net income: ¥35,460 million (FY2007)
Number of employees: 33,356 (2013)
Headquarters: Chūō, Tokyo, Japan
Key people: Shinzo Maeda, President and CEO (ending April 1, 2014); Late Masahiko Uotani, President and CEO (April 1, 2014-2016)

Nbr. visits: 288