Perakis-Valat, A. (2016), the president of the consumer product department claims that the headline news of the year 2016 was the rise in the sales growth of consumer products at +4.4%, reflecting a string of game-changing innovations and the success of our two strategic focuses: make-up and haircare. According to the L’Oréal Annual Report (2016), consumer product division change consumers’ everyday routines and beauty rituals which includes innovations such as concealing roots to micellar waters and tissue beauty masks which includes brands such as NYX and Garnier. Hieronimus, N (2016), states that L’Oréal Luxe sales grew at +6.9% in 2016 and got market share gains on all continents. L’Oréal (n.d.), claims that the department opens a unique world of beauty with three major specializations: skin care, make-up and perfume which will be available at department stores, cosmetics stores, travel retail, and own-brand boutiques and dedicated e-commerce websites. The Lux products includes international brands such as Diesel and Urban Decay (L’Oréal Annual Report, 2016). L’Oréal (n.d.), states that the professional products division distributes its products in salons globally through numerous brands such as Essie, to meet the needs of diverse hair care salons, for color, shape and styling, shampoos and general hair care needs. Products made with the best technologies are offered as well as high-level training, to ensure professional service (L’Oréal, n.d.). According to L’Oréal (n.d.), the active cosmetics division brands meet a range of different skin care needs from normal to blemish prone which are developed and endorsed by health professionals – dermatologists, pediatricians, cosmetics in healthcare outlets worldwide, including, pharmacies and drugstores including many brands such as Vichy.
L’Oréal has a unique matrix structure which aids to have develop new products along with effective marketing and communication throughout the whole organization (Uk essays, 2013). According to Business Dictionary (n.d.), matrix is an organizational structure with horizontal flow of skill and information to manage large projects or product development which draws employees from different departments to a team without removing them from their respective positions for a project. Employed by both function and product, the structure allows different product categories to be seen according to the corresponding provisions of various departments of power and responsibility in L’Oréal (Blabla Writing, n.d.). This structure shares technologies, improves coordination with the rest of the departments and allows information to pass quickly to get effective feedbacks (Uk essays, 2003). This structure allows direct contact between local managers of L’Oréal and the consumers to meet challengers of competitors or potential competitors (Blabla Writing, n.d.). Chimoriya, B (2015) states that the main responsibility of the project manager of matrix structure is to maintain coordination among interrelated factors of a project and communicate with horizontal and vertical authorities to achieve control and coordination. Similarly, functional managers are accountable to provide technical and administrative guidance to projects which leads to a better control over regular operation. The supervisors can focus on their main function in this structure. Functional supervisors focus on hiring, training and managing employees, while project supervisors emphasize on achieving targets of the projects assigned. Moreover, Chimoriya, B (2015) claims that it helps to develop team work skills between project and functional employees involving in achieving the same target thus communicate and develop a mutual close relation of team spirit. This would help to increase the productivity of L’Oréal and thus, increase profits. The structure involves continuous changes and undefined business environments. Due to the easy adaptable to dynamic environment the project managers have gets rapid feedbacks regarding project information, thereby, decisions are made quickly without interference of environment changes (Chimoriya, B (2015). However, there is inefficiency between the matrix structure. As there are various managers, the number of conflicts they have will rise regarding policies and procedures which leads to ineffective management. Additionally, conflicts might occur as functional and cross functional managers must compete for the time on team members separately (Nordmeyer, B, n.d.). Workers are chosen to work in cross functional teams due to skills, however, the proportion of wage earned by individual is more compared to their skills (Nordmeyer, B, n.d.). Furthermore, workers who contribute to matrix and function projects which can increase overtime costs for the organization (Nordmeyer, B, n.d.). According to Nordmeyer, B (n.d.), The number of managers needed for this structure cost a high amount along with the lack of structural stability or routine functions leads to inefficiency and increased costs.
L’Oréal being the leading beauty cosmetics company, requires various functional areas to handle different tasks. Firstly, the company has a Research and Innovation department. The principle of “beauty is above all scientific adventure” is reflected on the role played by research and innovation division, where employees team up to visualize and create products for tomorrow (L’Oréal, n.d.). Secondly, the Operation department employee a large pool of approximately 18,000 workers to develop, manufacture and supply the products (L’Oréal, n.d.). L’Oréal n.d., also states that they are organized in a way which promotes collaboration with Research and Marketing teams for effective innovation. The employees work in a dynamic environment which allows them to acquire various skills and expertise to enable them to achieve development and customer service ambitions (L’Oréal, n.d.). Thirdly, the Human Resource department plays a major role in the company’s growth. The team must reconcile factors of helping employees chose right career path while supporting the business goal (L’Oréal, n.d.) Supporting L’Oréal’s managers worldwide, the team’s mission is to appeal, recognize, select, grow and reward the best in all the group’s business units and divisions (L’Oréal, n.d.). Lastly, is the production department responsible to manufacture high quality products. L’Oréal n.d., states that they cover all lines of cosmetics head to toe by divisions that have expertise in their own distribution channel. Considered as the company’s major strengths, they produce products according to customers expectation, habits and lifestyle as well as adapt to local distribution conditions (L’Oréal, n.d.).
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