HISTORY AVON
David H McConell founded Avon in 1886 after realizing his female customers were more interested in the free perfume samples that he offered than his books. He was a traveling book salesman and he didn’t have in his mind create a beauty company, but it was thru his job that he noticed also that many of his female customers were isolated at home while their husbands went off to work. So he purposely recruited female sales Representatives. McConnell believed they had a natural ability to network with and market to other women, and a passion for his products so he formed a new firm, which he called the California Perfume Company.
At a time of limited employment options for women, the Avon earnings opportunity was an outstanding chance for all those women. It has allowed the company becomes in a history empowering women around the world. McConnell’s first recruit for Avon was Mrs. P.F.E. Albee of New Hampshire; she was 50 when she began selling perfumes travelling by horse and train. She offered a great variety of perfumes door to door.
As well as Mrs. P.F.E. Albee, Viola Morse, Milena Maria Gavazzi Paredi, Soledad Lacson Pena and other women started to sell Avon product like a way to earn extra money and also they confess that more than sell products door-to-door the company had made them more responsible and it give them the feeling of self-significance. Until the early 1990s, there was only one way for an Avon Representative to earn money: by selling to customers but with the launch of Avon’s Sales Leadership program, representatives could earn money, not just by selling, but also recruiting and training others.
David H McConell founded Avon in 1886 after realizing his female customers were more interested in the free perfume samples that he offered than his books. He was a traveling book salesman and he didn’t have in his mind create a beauty company, but it was thru his job that he noticed also that many of his female customers were isolated at home while their husbands went off to work. So he purposely recruited female sales Representatives. McConnell believed they had a natural ability to network with and market to other women, and a passion for his products so he formed a new firm, which he called the California Perfume Company.
At a time of limited employment options for women, the Avon earnings opportunity was an outstanding chance for all those women. It has allowed the company becomes in a history empowering women around the world. McConnell’s first recruit for Avon was Mrs. P.F.E. Albee of New Hampshire; she was 50 when she began selling perfumes travelling by horse and train. She offered a great variety of perfumes door to door.
As well as Mrs. P.F.E. Albee, Viola Morse, Milena Maria Gavazzi Paredi, Soledad Lacson Pena and other women started to sell Avon product like a way to earn extra money and also they confess that more than sell products door-to-door the company had made them more responsible and it give them the feeling of self-significance. Until the early 1990s, there was only one way for an Avon Representative to earn money: by selling to customers but with the launch of Avon’s Sales Leadership program, representatives could earn money, not just by selling, but also recruiting and training others.
PRODUCTS
Avon’s product line included skin care items, makeup, perfume fragrances for men and women,
and toiletries for bath, hair care, personal care, hand and body care and sun care.
Avon’s product line included skin care items, makeup, perfume fragrances for men and women,
and toiletries for bath, hair care, personal care, hand and body care and sun care.
- Color Cosmetics
- Skincare
- Fragrance
- Fashion & Home
- Personal Care
- Hair Care
GEOGRAPHICAL LOCATIONS
Avon is one of the world's largest direct-selling companies in the beauty industry in over 100 countries. More than 6 million active independent Avon Sales Representatives sell Avon products. Each country has an Avon Independent Sales Representative, Avon Independent Sales Leader and Avon Zone Manager. From a global perspective three avenues of growth were identified by Avon management:
Avon is one of the world's largest direct-selling companies in the beauty industry in over 100 countries. More than 6 million active independent Avon Sales Representatives sell Avon products. Each country has an Avon Independent Sales Representative, Avon Independent Sales Leader and Avon Zone Manager. From a global perspective three avenues of growth were identified by Avon management:
- Geographic growth
- Emerging and developing markets
- Developed industrial markets
CULTURE OF THE COMPANY
According to the code of conduct of Avon, Five are the core values of the company: trust, respect, belief, humility, and integrity. Avon states its culture through the statement”our values our code”. Basically, Avon states that those values are really important in the company because they lead its mission. They promote an environment of trust and openness that encourages telling the truth always, respect for one another; the belief in one another to pursue the goals; the humility to let Avon’s performance speak for itself and that way correct the mistakes and integrity in all the circumstances regardless the pressures or temptations.
The code of conduct is like a main guide for the company, and the values in that code are valuable. All the employees work based on it, questions, ethical concerns, reporting and all the policies applicable to the conduct are stated there. The culture definitely is based on those five principles and all the procedures are made under valuable concept.
STAGE OF LAWRENCE KOHLBERG’S STAGES OF ETHICAL REASONING
The company is in the stage 4: Law and order orientation, at this stage, a person is increasingly aware of his or her membership in a society and the existence of codes of behavior- that is; something is right or wrong because codes of legal, religious, or social behavior dictate it. For example, Avon state a code of conduct where employees can see clearly what is the responsibility with the company and also observing all the laws such as bribery and corruption, money laundering, international trade, antitrust and competition, fair dealing, disciplinary actions. Etc.
Avon representatives follow the rules and they work in base on the conduct of behavior, beyond their beliefs and values, the company states the values of the company, the main rules and employees can act depending on that. For instance, according to the bribery and corruption section, Avon’s employees don’t offer or accept bribes whether directly or indirectly because it harms the communities, undermine fair trade and it is contrary of the company’s values.
CODE OF ETHICS OR CODE OF CONDUCT
Avon has its own code of conduct that describes certain Avon policies and practices which are intended to promote ethical and lawful behavior and proper conduct. The Code also provides information about how to appropriately ask questions and report instances of possible noncompliance. This code of conduct is a 40 pages document and it has been translated has translated into 10 languages to make it accessible to all Associates. The company also conducts an annual survey that asks specific questions regarding compliance with the Code and requires certification of compliance with the Code.
In this code people can find ‘our values, our code’ the responsibility of ethical culture that basically tells about leadership behaviors, Asking questions, reporting violations, investigation of report, obligation to cooperate, work environment, avoiding conflicts of interest (business relationships), observing all laws, protecting assets and information, promoting corporate social responsibility and the code conclusion.
FUNCTIONS THAT SHOULD HAVE MORE ATTENTION
The financial function of the organization appears to get more attention in the three levels: ethical behavior, corporate social responsibility and corporate governance because this is an important process by which the flow of money is handled. Avon is the world’s largest direct seller of beauty products, in more than 100 countries that means the chief financial has a widely responsibility of treasury, audit and corporate finance in Latin America, Europe, Asia/Pacific and North America.
Also, according to the Wall Street journal, Avon has been involved in investigates allegations of bribes paid at its China unit to get some businesses there and the company has suspended four executives including the Chief Financial Officer of its China unit and a Senior Executive in New York. Avon has been listed for financial and accounting irregularities including briberies whereby the company should have pay more attention and make sure financial employees follow the code of conduct.
HUMAN RESOURCES
Avon has a strong commitment with the women to help them to become success through the recruiting program. Even though I can’t see anything in the website that establishes human resources as a role, there is a section about careers that representatives can get if they are part of the company. Basically the company’s statement is adding beauty to a woman’s life by giving her an opportunity to earn money to provide for her family. The company also won awards and recognitions for 100 best employers in China, the top 50 women in world business and everything related with the empowerment of women.
CONFLICT OF INTEREST
Conflict of interest is a situation that companies facing frequently due to one relationship or obligation can places you in direct conflict with an existing relationship or obligation. In this case, I can’t see any conflict of interest, perhaps selling cosmetics knowing that it’s not appropriate for the women’s skin but anyways Avon cosmetics contain Smooth Minerals, developed with essential nutrients and minerals, including copper, magnesium, calcium, zinc and malachite. They even developed a skin care line.
In the code of conduct Avon discuss conflict of interest where basically state that the company must avoid any activity, relationship or other circumstances that can appear to conflict with Avon’s interests. The company mentions in the business relationships part that they don’t hire or manage relatives and they don’t make procurement decision that could benefit relatives or friends. It also mention about outside employment and activities, gifts, meals and entertainment and Political activities which are separate from the work of Avon.
TRIPLE BOTTOM LINE
Triple bottom of line refers to three different aspects that companies should be preparing: corporate profit, people account, and company’s planet account. It aims to measure the financial, social and environmental performance of the company over a period of time. So, corporate check how much money is left over after all bills and expenses have been paid from the revenue and how use that money. Measuring the social and environmental impact is a good way to companies become in environmentally responsible organizations. Avon doesn't have any documentation about triple bottom of line, but the company includes a corporate responsibility report that represents three pillars of Avon’s corporate mission: empowerment of women, sustainability and philanthropy.
According to the code of conduct of Avon, Five are the core values of the company: trust, respect, belief, humility, and integrity. Avon states its culture through the statement”our values our code”. Basically, Avon states that those values are really important in the company because they lead its mission. They promote an environment of trust and openness that encourages telling the truth always, respect for one another; the belief in one another to pursue the goals; the humility to let Avon’s performance speak for itself and that way correct the mistakes and integrity in all the circumstances regardless the pressures or temptations.
The code of conduct is like a main guide for the company, and the values in that code are valuable. All the employees work based on it, questions, ethical concerns, reporting and all the policies applicable to the conduct are stated there. The culture definitely is based on those five principles and all the procedures are made under valuable concept.
STAGE OF LAWRENCE KOHLBERG’S STAGES OF ETHICAL REASONING
The company is in the stage 4: Law and order orientation, at this stage, a person is increasingly aware of his or her membership in a society and the existence of codes of behavior- that is; something is right or wrong because codes of legal, religious, or social behavior dictate it. For example, Avon state a code of conduct where employees can see clearly what is the responsibility with the company and also observing all the laws such as bribery and corruption, money laundering, international trade, antitrust and competition, fair dealing, disciplinary actions. Etc.
Avon representatives follow the rules and they work in base on the conduct of behavior, beyond their beliefs and values, the company states the values of the company, the main rules and employees can act depending on that. For instance, according to the bribery and corruption section, Avon’s employees don’t offer or accept bribes whether directly or indirectly because it harms the communities, undermine fair trade and it is contrary of the company’s values.
CODE OF ETHICS OR CODE OF CONDUCT
Avon has its own code of conduct that describes certain Avon policies and practices which are intended to promote ethical and lawful behavior and proper conduct. The Code also provides information about how to appropriately ask questions and report instances of possible noncompliance. This code of conduct is a 40 pages document and it has been translated has translated into 10 languages to make it accessible to all Associates. The company also conducts an annual survey that asks specific questions regarding compliance with the Code and requires certification of compliance with the Code.
In this code people can find ‘our values, our code’ the responsibility of ethical culture that basically tells about leadership behaviors, Asking questions, reporting violations, investigation of report, obligation to cooperate, work environment, avoiding conflicts of interest (business relationships), observing all laws, protecting assets and information, promoting corporate social responsibility and the code conclusion.
FUNCTIONS THAT SHOULD HAVE MORE ATTENTION
The financial function of the organization appears to get more attention in the three levels: ethical behavior, corporate social responsibility and corporate governance because this is an important process by which the flow of money is handled. Avon is the world’s largest direct seller of beauty products, in more than 100 countries that means the chief financial has a widely responsibility of treasury, audit and corporate finance in Latin America, Europe, Asia/Pacific and North America.
Also, according to the Wall Street journal, Avon has been involved in investigates allegations of bribes paid at its China unit to get some businesses there and the company has suspended four executives including the Chief Financial Officer of its China unit and a Senior Executive in New York. Avon has been listed for financial and accounting irregularities including briberies whereby the company should have pay more attention and make sure financial employees follow the code of conduct.
HUMAN RESOURCES
Avon has a strong commitment with the women to help them to become success through the recruiting program. Even though I can’t see anything in the website that establishes human resources as a role, there is a section about careers that representatives can get if they are part of the company. Basically the company’s statement is adding beauty to a woman’s life by giving her an opportunity to earn money to provide for her family. The company also won awards and recognitions for 100 best employers in China, the top 50 women in world business and everything related with the empowerment of women.
CONFLICT OF INTEREST
Conflict of interest is a situation that companies facing frequently due to one relationship or obligation can places you in direct conflict with an existing relationship or obligation. In this case, I can’t see any conflict of interest, perhaps selling cosmetics knowing that it’s not appropriate for the women’s skin but anyways Avon cosmetics contain Smooth Minerals, developed with essential nutrients and minerals, including copper, magnesium, calcium, zinc and malachite. They even developed a skin care line.
In the code of conduct Avon discuss conflict of interest where basically state that the company must avoid any activity, relationship or other circumstances that can appear to conflict with Avon’s interests. The company mentions in the business relationships part that they don’t hire or manage relatives and they don’t make procurement decision that could benefit relatives or friends. It also mention about outside employment and activities, gifts, meals and entertainment and Political activities which are separate from the work of Avon.
TRIPLE BOTTOM LINE
Triple bottom of line refers to three different aspects that companies should be preparing: corporate profit, people account, and company’s planet account. It aims to measure the financial, social and environmental performance of the company over a period of time. So, corporate check how much money is left over after all bills and expenses have been paid from the revenue and how use that money. Measuring the social and environmental impact is a good way to companies become in environmentally responsible organizations. Avon doesn't have any documentation about triple bottom of line, but the company includes a corporate responsibility report that represents three pillars of Avon’s corporate mission: empowerment of women, sustainability and philanthropy.
CORPORATE SOCIAL RESPONSIBILITY
Avon adopts the Altruistic corporate Social Responsibility doing specific initiatives and designating national and international programs that helps all its stakeholders. For example, Avon foundation for women was founded in 1995 to improve the lives of women. Through 2013, Avon Global philanthropy has donated more than $957 million in more than 50 countries for causes most important to women. Now, The Company is the leading corporate supporter globally of the breast cancer cause donating in 2013 more than $815 million to fund life-saving breast cancer research and access to quality care.
According to the World Health Organization, breast cancer is responsible for 502,000 deaths per year worldwide. Thanks to Avon, more than 18 million women have received free mammograms and screenings. In 2004, Avon launched ‘Speak out against Domestic Violence’ focuses on education, prevention and victim support programs and the company has donated around $58 million dollars to end the family violence in 50 countries.
Avon and Avon Foundation for women have responded to disaster all over the world victims affected by the Asian tsunami (2004), Hurricane Katrina (2005), China’s Sichuan Province earthquake (2008) and the Haiti earthquake (2010) have been supported by the company. Also since 2001, they have awarded $19 million to women and their families affected by natural disasters.
Avon adopts the Altruistic corporate Social Responsibility doing specific initiatives and designating national and international programs that helps all its stakeholders. For example, Avon foundation for women was founded in 1995 to improve the lives of women. Through 2013, Avon Global philanthropy has donated more than $957 million in more than 50 countries for causes most important to women. Now, The Company is the leading corporate supporter globally of the breast cancer cause donating in 2013 more than $815 million to fund life-saving breast cancer research and access to quality care.
According to the World Health Organization, breast cancer is responsible for 502,000 deaths per year worldwide. Thanks to Avon, more than 18 million women have received free mammograms and screenings. In 2004, Avon launched ‘Speak out against Domestic Violence’ focuses on education, prevention and victim support programs and the company has donated around $58 million dollars to end the family violence in 50 countries.
Avon and Avon Foundation for women have responded to disaster all over the world victims affected by the Asian tsunami (2004), Hurricane Katrina (2005), China’s Sichuan Province earthquake (2008) and the Haiti earthquake (2010) have been supported by the company. Also since 2001, they have awarded $19 million to women and their families affected by natural disasters.
EVOLUTION/REVOLUTION OF COMPANY
The company has being slowly evolved step by step until it becomes in a larger beauty company operating around the world. The idea to recruiting women to sale Avon products from the beginning was quite successful, but there are other factors that have directly impact over the evolution of the company. In 1886, direct selling at Avon means for women, make money and interact with other people without been isolated in domestic life. With Avon door-to-door strategic many women no longer had to move to drugstore or mall to get beauty products.
Then, Avon changed from door to desk giving to the customers the chance to keep catalogs and brochures with samples for some days, and then the representatives could go there and get it. Also, the company launched sales leaderships programs where representatives could earn money not just by selling, but also recruiting and training others like a chain. Avon’s success didn't stop there, after a while the company used technology and include e-Brochure and customized online communities to help Avon representatives to run a business.
CORPORATE GOVERNANCE
There is evidence about effective corporate governance in Avon’s corporate governance guidelines that intent to promote a good corporate citizenship and responsible business practices by creating policies for the company and the board directors. To be truly effective directors are expected to attend all the regularly meetings and spend all the time necessary to discharge their responsibilities and also participate actively in each meeting, thus all the proposal are open for frank discussions.
Effective corporate governance requires high performance for all the people involved, that’s why Avon Product Inc. evaluates the board’s performance through the Annual self-assessment to determine whether the board and its committees are functioning effectively. the results of the assessment are discussed with the board. According to the title IV Chairman of the board in the corporate governance guideline it could be a mix up roles of the Chairman and CEO based upon the company’s circumstances at such time. I think Avon’s board has a good quality because they define very well the responsibilities of the directors and the independence of the members of the board, also exist a corporate governance committee that is responsible for making recommendations to the board regarding the qualifications for board membership.
The size of the board of directors consist of a minimum of 10 and a maximum of 20 directors which is a wide range because according to the book the right size would be 8 to 15 members. It could be dangerous because is harder to handle that amount of people but company believes that is more important maintains the board’s expertise and independence rather than a number. Other independent members of the board such as compensation and management development committees evaluates the performance of the CEO and according of that the compensation level of the CEO is adjusted. The audit committee review routinely the company’s major financial risk
exposures and then monitor and control them.
WORKS CITED
Avon. N.p., n.d. Web. 24 Apr. 2014. <http://www.avoncompany.com/aboutavon/index.htm>.
Avon. Avon Products Inc.,9 Dec. 2013. Web. 24 Apr. 2014,<http://www.avoncompany.com/aboutavon/corporategovernance/docs/ audit_committee_charter_dec_2013.pdf.>
Avon. Avon Products Inc., 9 Dec. 2013. Web. 24 Apr. 2014. <http://www.avoncompany.com/aboutavon/corporategovernance/docs/ Avon_Corporate_Governance_Guidelines.pdf>.
The company has being slowly evolved step by step until it becomes in a larger beauty company operating around the world. The idea to recruiting women to sale Avon products from the beginning was quite successful, but there are other factors that have directly impact over the evolution of the company. In 1886, direct selling at Avon means for women, make money and interact with other people without been isolated in domestic life. With Avon door-to-door strategic many women no longer had to move to drugstore or mall to get beauty products.
Then, Avon changed from door to desk giving to the customers the chance to keep catalogs and brochures with samples for some days, and then the representatives could go there and get it. Also, the company launched sales leaderships programs where representatives could earn money not just by selling, but also recruiting and training others like a chain. Avon’s success didn't stop there, after a while the company used technology and include e-Brochure and customized online communities to help Avon representatives to run a business.
CORPORATE GOVERNANCE
There is evidence about effective corporate governance in Avon’s corporate governance guidelines that intent to promote a good corporate citizenship and responsible business practices by creating policies for the company and the board directors. To be truly effective directors are expected to attend all the regularly meetings and spend all the time necessary to discharge their responsibilities and also participate actively in each meeting, thus all the proposal are open for frank discussions.
Effective corporate governance requires high performance for all the people involved, that’s why Avon Product Inc. evaluates the board’s performance through the Annual self-assessment to determine whether the board and its committees are functioning effectively. the results of the assessment are discussed with the board. According to the title IV Chairman of the board in the corporate governance guideline it could be a mix up roles of the Chairman and CEO based upon the company’s circumstances at such time. I think Avon’s board has a good quality because they define very well the responsibilities of the directors and the independence of the members of the board, also exist a corporate governance committee that is responsible for making recommendations to the board regarding the qualifications for board membership.
The size of the board of directors consist of a minimum of 10 and a maximum of 20 directors which is a wide range because according to the book the right size would be 8 to 15 members. It could be dangerous because is harder to handle that amount of people but company believes that is more important maintains the board’s expertise and independence rather than a number. Other independent members of the board such as compensation and management development committees evaluates the performance of the CEO and according of that the compensation level of the CEO is adjusted. The audit committee review routinely the company’s major financial risk
exposures and then monitor and control them.
WORKS CITED
Avon. N.p., n.d. Web. 24 Apr. 2014. <http://www.avoncompany.com/aboutavon/index.htm>.
Avon. Avon Products Inc.,9 Dec. 2013. Web. 24 Apr. 2014,<http://www.avoncompany.com/aboutavon/corporategovernance/docs/ audit_committee_charter_dec_2013.pdf.>
Avon. Avon Products Inc., 9 Dec. 2013. Web. 24 Apr. 2014. <http://www.avoncompany.com/aboutavon/corporategovernance/docs/ Avon_Corporate_Governance_Guidelines.pdf>.