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Gucci Case Study
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Gucci Case Study
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Introduction
Gucci is a multinational company with over 270 directly operated stores worldwide serving customers of elite goods, and generating billions of dollars revenue per year.Gucci has expressed its
intention to accelerate the process of opening stores on the Chinese mainland
Topic 1
This Case Study has 2 main objectives first to analyze why labor abuses are allowed to occur in China and the second is to develop a multi-stakeholder approach to preventing further abuses of this kind.
Case Description
On 8 October 2011 an open letter was spread on the
Internet. This letter was written by five former employees of the Gucci Shenzhen Flagship Store in China. In the letter, they alleged that employees caught an occupational disease, that there was one miscarriage attributable to excessive working hours and that there
was no compensation for these hardships.
Topic 2
Furthermore it stated that there was an excessive restrictions like obtaining permission before getting a drink or a snack, and strict limitations on toilet time.Which accused Gucci of lacking systematic and humane management. And employees complained that their rights and dignity were being violated. That resulted in labeling Gucci as a" sweatshop" Many opined that the labor management practices of some multinational companies and brand owners failed to match their status.
How Gucci used the labor dispatched system?
Dispatch is a labour managment model which seperates requirments from employment.The employee leasing companies have labour contracts with the workers, and they send workers to other companies in which these workers
actually work. The labor contract relationship exists between the employee leasing companies and the dispatched workers, but the actual working relationship is between the workers and the companies in which they work
Subtopic 1
The labor dispatch arrangment serves to reduce the copmanies costs and contractual responsibilities for the employees,that lead to
using this employment model in China
Legal Considerations
Subtopic 2
One legal consideration is that although the labor dispatch system has been created as a way of arranging temporary employment only.Gucci used the system to employ people for durations of more than 2 years. Another is that many of the Gucci stores employees are female and that pregnant employees legally enjoy special labor
protection.Based on the 'Labour contract law' female workers shouldnt work during thier pregnancy in any physical intenstive work.Furthermore, it is a legal requirement that sufficient rest periods should be arranged for such employees who work at night shifts and female workers who are more than 7 months pregnant
Why do labor abuse happen in China?
The basic ethical issue in this case is the violation of labor rights through inhumane polices and other unreasonable polices.Gucci is by no means the 1st multinational company to be accused of operating a sweatshop in Asia.It is noticable that such labour abuses are common in Western countries where (MNCs)are quarted.And the question that is always asked Why did they come to china and collectivally fall ill? It was concluded that there may be 3 possible reasons.
Reason 2
Topic 3
First reason may be overtime work without payment and other illegal employment arrangments are tolerated among Local firms and when foreign brands and multinational companies come to China, it is an easy temptation for them to slide into these malpractices .So as a result a philosophy of moral relativism allows some foreign firms in China to level down
to abusive but locally condoned labor management practices.
Reason 1
The second reason for the precense of labor abuses in china involving MNCs is that these large
companies do not pay attention to the labor laws because they think their investment will furnish the local government with a good-looking GDP and that this is all what matters to them.Hence some foreign firms in China are preoccupied with economic goals,assuming that governments share thier preocupation and they believe that thier shared economic duty they can ignore the labor laws.
Reason 3
The third reason is closely related to the second reason and concerns how the pressure faced by local governments are reflected in their actual preoccupations.Despite the movement toward the balancing of economic essentials,local governments still remain under pressure to meet economic targets.On the other hand some local governments may be afraid that the strict implementation of the labor law will drive investors away and may consciously turn a blind eye to illegal and unethical practices.Hence some local governments perceive that economic imperatives override social responsibility concerns, they are lax in enforcing labor laws.
Labor Rights
Topic 4
In China labor rights turn out to be widely commited and legal rights turn out not to be strongly enforced.While there are differences between western countries and China, all people in the world share the need for some basic charactaristics of human dignity that ought never to be violated, regardless of social context.And regardless whether they have an abundance of employment choices or nearly none.
Possible Solutions
Topic 5
One mean of solution for Gucci is to lead efforts in developing and implementing industry wide and worldwide codes of ethics.This code of ethics should apply to all branches and stores in both developed and less developed countries.It was a shame that Gucci which seels high quality products has provided a poor working environmet in China.So the code should require every branch
and stores of companies in the luxury industry to embrace ethical principles and embed
them into management systems
This code include the use of written employment contract with all workers,avoiding abuse of the dispatch system,equal pay of work of equal value,adherence to laws and regulations on working hours.Moreover setting up laws for anti discrimination,aniti harrasment and anti abuse.
Subtopic 1
Likewise, the foundation of a socially mindful administration frameworks ought to incorporate an announcement of social obligation goals and focuses, alongside adequate human and money related assets to guarantee that these articles and targets are obviously imparted, that the framework is satisfactorily actualized, and that there are components for customary checking and inspecting of the framework and for remedial activity in case of deficits
But simply implementing an industry code is not enough ,the headquarters of Gucci should urge and incourage its branches in china to comply with the necessary ethical standards in China.The encouragement needs to be strong, because managements in China may seek excuses and claim that there would be inordinate financial costs, or that the code may be difficult to implement because of cultural barriers. Nonetheless, the chinese government could consider having experiments in certain industries.China is now the biggest luxury-product-consuming country, as well as the
biggest luxury-product-manufacturing country
Subtopic 2
Conclusion
Names
Topic 6
Allegations of abusive labor practices in MNCs are by no means new phenomena but have typically referred to manufacturing sites in less developed countries.This case study mentioned the abuses that occured in a retailshop in China.Specifically, Gucci abused the dispatch system, which is a labor system with Chinese characteristics, and neglected some key labor rights.In addition to how MNCs operate in China they considered some interprentations of labor rights to lessen the violence and discrimination against employees.Which resulted in a fusion between etics and legal approaches to protect the labor rights.
Fayrouz Nader (19204089)
Mahmoad Ouf (19105146)
Omar Yasser (19104377)
Ahmed Wael (19105075)