L’Oréal was found in July 30, 1909 in Clichy France by Eugène Paul Louis Schueller who is a young French chemist of German descent. Company’s headquarter is in Clichy,Hauts-de-Seine and a registeredoffice in Paris. The guidingprinciples of the company, which eventually became L’Oréal, were research andinnovation in the field of beauty, and now L’Oréal is the world’slargest cosmetics company and has developed activities in the field of cosmetics, concentrating on hair colour, skin care, sun protection, make-up, perfume and hair care. Also, theyhave several brands which keep within related with fine chemicals, health, finance, design, advertising,and insurance.
It can be said; L’Oréal owns more than 500 brands and thousands ofdifferent products. These can be listed like that; Professionalproducts; L’Oréal Technique, L’Oréal Professionnel, Kérastase, KéraskinEsthetics, Matrix Essentials, Mizani, PureOlogy Research, Redken 5thAvenue NYC, Shu Uemura Art of Hair, Carol’s Daughter, Carita, Essie, Decléor,Botanicals Fresh Care. L’Oreal Luxe; Lancôme, YSL, Giorgio Armani, Biotherm, Cacharel, Diesel, Viktor &Rolf, Ralph Lauren, Kiehl’s, The Body Shop, Shu Uemura, Clarisonic, Guy Laroche,Paloma Picasso, Urban Decay, Maison Margiela, Yue Sai, Helena Rubinstein, DrakkarNoir. Consumer products; L’Oréal Paris, Ombrelle, Garnier, Maybelline, NYX Cosmetics, SoftSheen-Carson,Carol’s Daughter, Créateurs de Beauté, Essie, Magic, Niely Cosméticos, Coloram.Active cosmetics; Vichy, La Roche Posay, Inneov, Skinceuticals, Roger, Sanoflore,Dermablend. As a 2016 statistics, 89,300 employees from 156 differentnationalities work in there.
Their revenue €25.837 billion and their assets value is €35.630billion. In 1920, the company employed three chemists buttoday nearly 20,000.
Jean-Paul Agon is currently “Chairmanand Chief Executive Officer” and here is the his team; LaurentAttal, EVP Research and Innovation; Barbara Lavernos, EVP Operations;Nicolas Hieronimus, President Selective Divisions; Brigitte Liberman, PresidentCosmetic Active Division; Marc Menesguen, PresidentConsumer Products Division; Christian Mulliez, EVP Administrationand Finances; Sara Ravella, EVP Communication, Sustainability andPublic Affairs; An Verhulst-Santos, President Professional ProductsDivision; Jérôme Tixier, EVP Human Resources and Advisor to theChairman; Alexis Perakis-Valat, EVP Asia Pacific Zone; Alexandre Popoff, EVPEastern Europe Zone; Geoff Skingsley, EVP Africa – Middle East Zone; FredericRozé, EVP of the Americas Zone; Geoff Skingsley, EVP Africa – Middle East Zoneand Johen Zaumsel, EVP Western Europe Zone. In 2017, L’Oréal was the leading personal carebrand in the world witha brand value that amounted to 23.89 billion U.S. dollars.
Between 2015 to2018, the company’s compound annual growth rate increasedby 4.2 percent. L’Oréal’s consolidated salesgenerated 25.84 billion U.S.
dollars. Their prediction for 2024 is thatreaching 180 billion U.S. dollars in size of the market.
Onthe other page, we can see a map about L’Oréal company’s locations around theworld. It is a really huge and complex company. This semester, we worked onL’Oréal company structure and management. Our project’s theme is analyzing thatcompany how its internationalization is reflected in its organizational design,and compare it to the structures of international companies. When we researched theorganizational structure of L’Oréal company, company’s structure seems as geographicalstructure, because company has full control of functional activities within itsgeographic area.
We thought that this should be examined under the globalgeographic region but then we realized that with helping our lecturer Prof.DrSükrü Ozen, this should be examined under the matrix organization. At thatpoint first of all we need to answer for this question; what is globalgeographic structure? and what is a matrix organization? The global geographic structure dividesthe world into geographic regions, with each geographic division reporting tothe CEO. Each division has full control of functional activities within itsgeographic area. Companies that use this type of structure have typically beenthose with mature product lines and stable technologies. They can find low-costmanufacturing within countries, as well as meet different needs acrosscountries for marketing and sales. We focused on a lot geographic structure. However,in some sources we find, we have seen clues that this company might be a matrixorganization.
BecauseL’Oréal company was concerned as far as regional management, the products weredivided into classes. We have found that the results of our research that thesetwo networks (geographic region and product) are also of advanced quality, madeus think that the matrix would be more suitable for this case, after thepresentation. When an organization’s structure needsto be multifocused in that both product and function or product and geographyare emphasized at the same time, one way to achieve this is through the matrix structure. That means this companycares about product departmentalization and region departmentalization.
Thematrix can be used when both technical expertise and product innovation andchange are important for meeting organizational goals. The matrix structure oftenis the answer when organizations find that the functional, divisional, andgeographic structures combined with horizontal linkage mechanisms will notwork. The matrix is a strong form of horizontal linkage. The product managersand functional managers have equal authority within the organization, andemployees report to both of them. Actually, the matrix organization answers rapidlyreal-world needs. This could be about capable of managing or customer serviceor project whatever. That companies are very large and complex areas. Thematrix can provide easy access to the result at this point because eachdepartment is highly specialized and interconnected at the same time by ahorizontal connection.
The intra-company communication network has evolved somuch. It is clearly known that, the classic hierarchical managementorganization could not cope with the added complexity and the enormous amountof information that had to be processed, and conventional management theory wasof little help in solving these new and unique problems. Individual functionaldepartments have great difficulty in solving very large problems because of afailure to view the total system and a tendency to sub-optimize or solve theproblem within their particular discipline. This problem caused major troubles incompanies. Therefore, the preferential reason for adopting thematrix in a large organization can be pinpointed in the fact that functions andskills are fragmented throughout the organizational structure.