Sustainable growth in times of crisis: L’Oréal Russia

Abstract

Learning outcomes This study enables to critically assess: what constitutes the consequences of a financial crisis to a multi-national enterprise operating in the emerging market of Russia; the decision-making processes behind crisis management and the corresponding search for informational grounds to be used as decision justification; and the role of sustainable development in times of crisis. Case overview/synopsis During the 2014–2015 financial crisis in Russia, L’Oréal Russia managed to increase growth by 7%–15%, strengthening its place as the market leader in the country. First, the case illustrates the way Antonio, the General Manager of L’Oréal Russia, had successfully approached this situation by learning from the shortcomings of the company’s strategy during the 2007–2008 crisis and deciding to take a proactive position concerning stakeholders. Then, upon recalling his success story, Antonio suddenly found himself at the dawn of yet another crisis caused simultaneously by the COVID-19 outbreak and oil prices drop. In the face of uncertainty regarding the applicability of prior crisis management strategy for the new economic and social reality of Russia, Antonio was worried about whether the company would be able to achieve the 2020 sustainable development goals of L’Oréal by the end of the year. The case dilemma involves choices Antonio faced during mid-March 2020 about strategy formulation based on an adjustment to the expected consumer behavior patterns and possible need to rethink sustainable development goals priority. Complexity academic level This case is appropriate for an undergraduate or graduate-level program curriculum for courses dedicated to or including topics related to crisis management, doing business in emerging markets, corporate social responsibility and consumer behavior. Before engaging with the case, the students should be aware of basic management- and economics-related concepts and terms, such as strategy, sustainable development, CSR and economic crisis. Supplementary materials Teaching notes are available for educators only. Subject code CSS 11: Strategy.

Sustainable development goals and corporate strategy: A map of the field

“…Secondly, through internal CSR, companies can implement adequate occupational hygiene, health, and safety plans for employees (Gorgenyi‐Hegyes et al, 2021), becoming directly involved in the well‐being of those who are or have been part of their staff (Daniil et al, 2020). Corvino et al (2020) also assess the potential influence of the board of directors' policies to improve health practices, although Chen, Kuo, et al (2022) point out that social performance indicators had a negative, but positively moderating, effect on the firm's financial performance.…”

“…investigate the pattern of CSR budget spent in the health and sanitation areas by top companies in the context of the UN SDGs, including trade union issues(Yu et al, 2022).Firstly, through external CSR, companies must do everything possible to ensure their operation does not adversely affect the human right to the health of communities, and especially universal health systems(Coleman & Ho, 2017), and contribute positively to the wellbeing of society. Likewise, the concept of disability is integrated as part of diversity and, therefore, disability should be a more integral component of CSR policies (Segovia-San-Juan et al, 2017).Secondly, through internal CSR, companies can implement adequate occupational hygiene, health, and safety plans for employees(Gorgenyi-Hegyes et al, 2021), becoming directly involved in the well-being of those who are or have been part of their staff(Daniil et al, 2020) Corvino et al (2020). also assess the potential influence of the board of directors' policies to improve health practices, althoughChen, Kuo, et al (2022) point out that social performance indicators had a negative, but positively moderating, effect on the firm's financial performance.…”