Corporate Strategy and Governance - A Case on L'Oréal

Corporate Strategy and
Governance

Table of Contents
ABSTRACT.....................................................................................................................................3
TITLE - “To analyse the impact of misleading ads on reputation of a company. A case on
L’Oréal.”..........................................................................................................................................1
Introduction......................................................................................................................................1
Statement of the issue.............................................................................................................1
Overview of the Research......................................................................................................1
Background of the Research...................................................................................................2
Purpose and Significance of the research...............................................................................2
Research Aim ........................................................................................................................3
Research Objectives...............................................................................................................3
Research Questions................................................................................................................3
Structure of the project...........................................................................................................4
Literature Review ............................................................................................................................4
Profitability intentions of company while developing misleading ads..................................5
Negative impact of misleading ads and unethical practices on brand image of L’Oréal.......6
Areas which L’Oréal needs to focus on improving ads while promoting products in order to
gain good reputation and competitiveness in the market.......................................................7
Methodology....................................................................................................................................8
Primary Research....................................................................................................................9
Secondary Research..............................................................................................................10
Critical review of results................................................................................................................11
Critical review on the basis of primary research..................................................................11
Recommendation and action plan..................................................................................................20
Recommendation..................................................................................................................20
Action Plan...........................................................................................................................20
CONCLUSION..............................................................................................................................23
REFERENCES..............................................................................................................................24
Appendix........................................................................................................................................26
.......................................................................................................................................................27

ABSTRACT
Corporate strategy is most essential tool because it provides effective support to
organisation in identifying its objectives and goals so that competitive edge can be achieved by
firm in marketplace. Life cycle of L’Oréal products are evaluated in this report which defines
market position of firm in marketplace. In addition, several methods are also used in this project
so as to identify proper solutions for the complex situations. Along with this, failure of corporate
governance and actions which are taken for reducing its impact are also covered in this report.

TITLE - “To analyse the impact of misleading ads on reputation of a company. A case on
L’Oréal.”
Introduction
Statement of the issue
“Misleading ads led organisation to play with their reputations.”, is the statement for
issue which report is going to show.
Overview of the Research
Corporate strategy basically encompasses as a firm's corporate action with the aim to
attain an organisational aim and objectives while reaching at the competitive edge. Corporate
governance refers as the system of different rules, practices and processes through which an
organisation get proper directions through which it could easily operate its business (Acemoglu,
2012). These two term “corporate governance” and “corporate strategy”, plays vast role in
assisting the overall operations of an organisation in systematic manner. In the modern business
era with a large variety of goods and services, advertising is becoming one of the most integral
instruments of existing and potential customers’ and visitors’ information, awareness and interest
in the cause of communication. Organisation's image totally depends upon different types of
advertisements which is being chosen by company to enforce that their products are better or
more sufficient than the competitors. Misleading ads has huge influence on the operations of an
organisation, thus it reflects bad impression in regards to their brand image of firm or its
offerings. Issue which was raised was basically connected to corporate governance and strategy
of the company. L’Oréal is the chosen organisation for this particular project, it is a French
personal care company with its headquarter is in Clichy, Hauts-de-Seine with a registered office
in Paris. The company is widely concern on implementing effective corporate strategy, in which
it is easy for them to implement proper advertisement operations in respect to gaining attention
of customers towards the firm or its offerings. The present investigation work is based on analyse
of the impact of misleading ads on reputation of a company (Amran, Lee and Devi, 2014).
Advertising is the core of an organisations success or failure, thus L’Oréal is using proper
corporate strategy that supports the operations of firm. Advertising is key area for the firm to
increasing its global presence, the company is also concern on using proper advertising tools in
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respect to reducing the chance of misleading in ads, thus this has direct impact on the reputation
of the firm.
Background of the Research
In this modern business environment, the potential motive of each small as well as large
business enterprises it is develop their brand image in respect to conducting global business
operations (BarNir, 2012). Advertisement is considered as the most integral part that plays vast
role in enhancing the brand reputation of an organization through providing relevant information
to their customers. L’Oréal is a French personal care organisation and deals in high quality
beauty and personal care products or services. The company was funded in the year of 1909. it is
the world’s largest cosmetic and personal care company, the potential motive of the firm is to
develop the brand image of the firm in respect to attaining higher growth and success. The major
consideration of the firm is to enhance its profit margin through developing new and high
qualitative beauty products for their potential buyers (FDA Issues Warning to L'Oreal over
Misleading Ads. 2012). Advertisement is an effective tool that is applied by the firm to increase
its market reach or operations. Now a day's organisations spend a huge amount in their
advertising expenditure in respect to increasing its market reach and grabbing the attention of
people.
Purpose and Significance of the research
Report which has been developed is specifically based on the influence of misleading ads
on reputation of a business organisation, thus this is recognised as the most essential issue which
is faced by organisations due to non appropriate practices and corporate strategies (Bell,
Filatotchev and Aguilera, 2014). The potential purpose of conducting the research is to enhance
the idea and knowledge base of learner in the specified area of study. This is a wide area of
research that describes the impact of misleading ads on the operations of an organisation. The
wide knowledge base in this area helps an individual in developing their about the appropriate
use of advertisement in regards to the effective operations of an organisation. This study also
provides a brief knowledge about the corporate strategy and governance, thus plays integral role
in proper execution of organisational functions in the manner of attaining effective profits and
revenue within the commercial centre.
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Research Aim
This is the most essential part of the investigation work as it refers as a predetermined
statement which provides a clear vision about the research issue. This assist the investigator in
moving forward towards right direction to overcome the issue with the support of appropriate
data or information. The essential aim of this particular research is “To analyse the impact of
misleading ads on reputation of a company. A case on L’Oréal.”
Research Objectives
Research objectives are considered as essential and eminent aspects of a study that
provides a clear direction to execute all research inventions in appropriate direction (Evans,
Stonehouse and Campbell, 2012). This part of the research is interconnected through the aim of
research as in this the variables of the investigation are mentioned in the form of small
statements. The potential objectives of this particular research are associated as below:
 To analyse the intention of companies while developing misleading ads.
 To determine the impact of misleading ads and unethical practices on brand image of
L’Oréal.
 To analyse the areas which L’Oréal needs to focus on for improving ads while promoting
products in order to gain good reputation and competitiveness in the market.
Research Questions
The present report is designed in order to explore the influence of corporate governance
and its board structure on increasing the operations of an organisation. This part is widely based
on research aim and objectives as in this research questions are prescribed that covers the main
aim and objectives of the research. This section plays vast role in conducting critical analysis on
the research issue with the support of in-depth analysis. The appropriate research question of this
project are described as under:
 What mindset stays of companies while developing misleading ads ?
 What is the impact of misleading ads and unethical practices on brand image of L’Oréal ?
 What are the areas which L’Oréal needs to focus on for improving ads while promoting
products in order to gain good reputation in the market ?
Structure of the project
Introduction This section will put light upon the issue and i.e. misleading ads which may
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