Executive Summary
As a leader in the global cosmetic industry and one of the top Canadian employers, L’Oréal is a great asset to the Canadian economy whilst keeping in touch with their ethical roots. They are constantly striving towards reaching their goal of providing beauty services to all by having affordable prices and easy accessibility. They are a company based on diversity and inclusion in all forms through their several programs to support minority groups. L’Oréal’s strong emphasis on creating healthy relationships between employees and their superiors creates efficient teams and minimizes communication errors. They’re human resources department’s purpose is to increase dialogue within teams and to ensure employees are satisfied with their positions. They also support their employees professional growth through helping them plan their future at the company and helping them achieve their professional potentials. They’re hybrid of functional organizational structure as well divisional structure is the most efficient combination for a company of its size with its global outreach. The functional aspects allow for there to be set leaders of teams which allows for quick decision making while the divisional aspects allow for work to be effectively divided into smaller tasks making them easier to tackle. They have shifted from a strictly functional structure to the combination with divisional structure to accommodate the rapidly expanding business in order to maintain efficiency in their large company. Regarding the changing nature of work, L’Oréal does an excellent job in supporting their employees changing needs for flexibility and in supporting work-life balance.
Table of Contents
Executive summary ……………………………………………………………… 2
Introduction ……………………………………………………………………… 4
Business Overview ………………………………………………………………. 4
Human Resources ………………………………………………………………… 5
Organizational Structure………………………………………………………….. 5
Changes in Organizational Structure……………………………………………… 6
Changes in the Nature of Work……………………………………………………7
Conclusion ……………………………………………………………………….. 8
References ………………………………………………………………………… 9
Introduction
This report will explain the values, ambitions and mission of L’Oréal. With these outlined as background information for moving forward in the report, there will be an analysis of the organizational structures L’Oréal has in place, explaining the benefits of the combined structures. L’Oréal’s human resource policy and purpose will the explained as well as how their human resource department ensures the company stays true to its values and mission. It will also be explained how the department supports employees in their professional development. Finally, this report will outline how L’Oréal responds to the changing nature of work in terms of employee satisfaction as well as changes to the business environment as a whole
Business Overview
From its humble beginings as a small Parisian hair salon, in 1919, L’Oréal has become one of the largest cosmetic brands in the world and a global influencer in the industry. Their Canadian division, L’Oréal Canada is in Canada’s top 100 as one of the top employers with 1,300 employees. This business is solely focused on everything beauty. They provide beauty services to all who need and cater to everyone’s diverse needs. They are constantly looking for innovations in the well-being and beauty markets in order to be changing with their customers ever-changing needs. They are a brand that encourages individuality and risk-taking, promotes creativity and is an environment of constant learning, challenge with a focus on personal growth. L’Oréal’s mission is to offer all women and men worldwide the best of cosmetic innovation in terms of efficiency, quality and safety. They are always working to pursue the goal of meeting the infinite diversity of beauty needs and are always looking for new inspiration by doing ground research worldwide. They are always looking to better their customers well-being not only through their products, but through supporting local communities and being environmentally conscious at the same time. Their slogan “Beauty is for all, beauty is for each” re-enforces the core of the business which is to meet all diverse needs and to ensure their products are affordable and accessable to all. The values that are central to the L’Oréal spirit are passion, innovation, entrepreneural spirit, quest for excellence and responsibility. In order to ensure their expanding brand stays ethical, they have outlined their ethic principles, which include: integrity, respect, courage and transparency
Human Resources
L’Oréal puts a strong influence on relationships between employees as well a between boss and employees. Human resources makes sure that their mission is being fulfilled to be an inclusive and safe place to work. They have recently created a new human resource program called “L’Oréal and me” which focuses on building stronger teams within the business as collaboration and strong relationships with employees is known to increase efficiency and decreases risk of miscommunication errors. This program also puts a strong emphasis on individual employees. The HR department ensures that all employees are reaching their full potential, are satisfied in their position and have a plan moving forward in their careers. This program supports managers in developing stronger teams and rewards contribution through policies, which will promote engagement. The goals of the L’Oréal and me HR program is to re-enforce the L’Oréal culture and ensure the company stays true to it’s values through providing continuous feedback on performance and meeting the employees needs. Human resources is a way for the company to be held accountable and ensures the employees issues are priority.
Their human resource policies were made to encourage communication, reward commitment and good performance as well as to support the individual professional development. Their “equal opportunities agreement” promotes diversity of not only culture but gender, ensuring that women have equal corporate opportunities as men. L’Oréal has recently started a “disabilities initiative” which again, promotes diversity of all kinds including those who are disabled. This initiative offers jobs for disabled workers and informs employees as well as allows workers to ask questions to learn more about disability issues. Annual appraisals are done through interviews. These personal interviews focus on performance evaluation as well as the needs and professional aspirations of each employee.
Organizational Structure
L’Oréal is set up with a hybrid of divisional and functional structures. Within the divisions there are functional aspects with hierarchy in order to run each division as efficient as possible. Having a pyramid structure built in to the smaller divisions allows for better allocation of work and less time spent dividing work as the leader has discretion. There is also an over-all functional aspect as seen by the titles in the diagram above like CEO, President and Managing directors. The company uses the divisional strategy to break into smaller divisons based on geographic locations, these are broken down even smaller by various suppliers and products. The different geographic zones are Western Europe, North America, Asia/Pacific, Eastern Europe, Latin America, and Africa/Middle East. As L’Oréal has expanded, the organization structure has become more complex. Three of the main divisions include Consumer Products Division, Luxury Products Divisions, and Professional Products Division. This hybrid of functional and divisional is known as the matrix organizational structure. While this structure may increase costs due to having more leaders, overall this strategy leads to better performance accountability and better cooperation. See the image below for an example of the divisional/functional structure.
Changes in Organizational Structure
L’Oréal was founded by a French chemist in 1909 who started by selling a new hair dye formula to salons. Even from it’s humble begingings, L’Oréal had always been a leader in cosmetic innovations. By 1950, L’Oréal’s team had expanded to 100 employees. At this time, the company used solely a functional organizational structure as the business was still concentrated to one location and was still small enough for it to be an efficient style. As the company continued to grow and expand to 1,000 employees in 1984 and 20,000 in 2014, the businesses organizational structure had to evolve. With thousands of employees in a functional structure, communication is a major issue. The addition of divisional structure aspects allows for small divisions to focus on specific aspects of the business and with smaller groups focusing on specific tasks, there is less room for communication error. They did not completely change the structure, instead they adopted aspects of the divisional structure to increase efficiency for they’re expanding business. Instead of having functional structure where people who do similar tasks and similar jobs are grouped, divisional structure allows for people to be divided into small geographic and product divisions where each division has people with different skills and jobs. This allows for varied perspectives within each division that functional does not allow for. In the future, it is likely that L’Oréal will move to an even more divisional structure and lose more of its functional aspects as it grows because with a company that is so large and widespread across the globe, divisional structure is the best way to maintain efficiency and communication.
Changes in the Nature of Work
The TED Talks addressed the topics of achieving work life balance. When considering L’Oréal on the concept of work life balance and job satisfaction, from the research I have collected, I would say L’Oréal is a great place to be an employee. The great focus on ensuring employees are satisfied within their current positions as well as helping employees plan their professional future gives employees a sense of motivation as they are being supported. They support all lifestyles by having different positions with different levels of flexibility so that women, for example, after being on maternity leave can come back to work but they could switch to a position that allows them to do some of their work from home. This flexibility ensures the company can accommodate their employees need for work-life balance. The changing nature of work refers to how the business environment as a whole is changing. Technology is one of the main reasons for this shift as the TED Talk “ Why Work Doesn’t Happen at Work” explained. People now have the unique opportunity to have major positions in companies while coming into office a fraction of the amount of time someone with the same position would have had to 20 years ago. In order to continue being a leader in innovations in it’s industry, L’Oréal must keep up with their employees changing needs and should continue to adjust its business structure and human resource policies to allow for more flexibility, which keeps employees satisfied. Technological innovations also allow for communication between the geographic divisions and allows for collaboration between different continents. As such a widely spread global company, technological advances are incredible beneficial and L’Oréal should continue to invest in new technology to support this communication.
Conclusion
In conclusion, L’Oréal’s innovative spirit is the reason for its extreme success. While sticking to their values and mission, L’Oréal has managed to take over the global cosmetic industry through its effective use of the divisional and functional business structures. It’s human resource department has been and continues to be one of the company’s greatest strengths as it ensures the employees best interest is always in mind. L’Oréal has reacted to change within their own business regarding its exponential growth by incorporating divisional elements to it’s functional structure. They will have to continue to be adapting to the changing needs of the employees and to the changing work environment.