Business Ethics- Cosmetic Industry Essay Example | Topics and Well Written Essays - 1000 words

Business Ethics- Cosmetic Industry - Essay Example Though this industry is continually growing at leaps and bounds, it is though wrought with a wide array of ethical issues from sourcing of cosmetic ingredients to testing of the cosmetic products to determine safety to the marketing of such products and services (Betton 7-9). The essence of ethics is all about determining the rightness or wrongness of certain human actions, and the number of ethical controversies that plague the cosmetic industry have tremendous moral, environment, social, legal, and health implications to the stakeholders involved (Skov 3). This paper analyses the business ethics of the cosmetic industry with a focus on make-up industry globally. Brief Overview of the make-up cosmetics Industry The make-up industry is the one of largest segment within the cosmetics industry after skin care and fragrances, and mainly consists of face make-up, lip make-up, eye make-up and nail make-up. For the year 2010, the global market generated sales worth $34.5 billion and growin g at 4.2% compounded annual growth rate over the period 2006-2010. This growth is as depicted in figure 1. With most of the world economy still in recovery, the growth rate over the period 2010-2015 has been projected to be at 4.1% annually with the market value projected to rise to $42.2 billion by the end of 2015 (Datamonitor 9). Figure1: Global make-up Market Value, Source: Datamonitor, 2011, pp. 10 The highest growing markets are the markets in the Americas and Asia Pacific with these markets exhibiting a 4.3% and 4% growth rate respectively (Datamonitor 9). The biggest consumer of make-up cosmetic products though is Europe accounting for 41.2% of the global market value followed by t he Americas which account 30.5% of the global make-up market, Asia-Pacific 25.7% and Africa and the Middle east at 2.5% (Global insight 1; Datamonitor 13). The leading player globally is L’Oreal followed by Proctor & Gamble and Estee Lauder Companies as shown below in figure 2: Figure2: Glob al Make-up market share. Source: Datamonitor, 2011, pp.14 With most cosmetics companies increasingly claiming to produce their make-up products in the most ethical manner, ethical considerations impacting the industry have increasingly become issues to contend with. Key ethical issues within the industry The ethicality of an issue is mainly determined by how right or wrong an issue or action is. There are a number of ethical issues faced by cosmetic industry, and in specific the make-up industry. These include testing of products on animals, misleading advertisements concerning the performance of the cosmetic products, inclusion of harmful ingredients into the cosmetic products, unethical alliances between academic institutions and professional dermatologists with cosmetic companies to endorse the use of the company’s products purporting them to be scientifically proven as safe and with high efficacy, and unethical sourcing of products ingredients (Betton; The Environmental A ssociation for universities and Colleges; Hussain & Yamaguchi). These ethical issues have plagued the cosmetic industry with most cosmetic industries which claim to be ethical mainly showing that they source their raw materials ethically following fair trade policies and that they do not use animal testing for their products. Most cosmetic companies have at some point tested their cosmetic products on animal