Create a rationale for the case study about the ethical issues of Gucci in Shenzhen, China. Write at least 5 in-text citations in the rationale. Discuss what will be the objectives of the study.

CASE DESCRIPTION

On 8 October 2011, an open letter was spread on the Internet. This letter was written by five former employees of the Gucci Shenzhen Flagship Store. In the letter, they alleged that employees caught an occupational disease, that there was one miscarriage attributable to excessive working hours and that there was no compensation for these hardships. Moreover, they stated that there were excessive restrictions on employees behavior, including the need to obtain permission before getting a drink or a snack, and strict limitations on toilet time. They stated that, while the restrictions were applied strictly to all frontline employees, including one who was pregnant, they were not applied to the managers. The letter also claimed that the employees had to pay compensation for any product that was stolen or went missing, even though these luxury products had already been insured. They also criticized Guccis goods exchange policies which appeared to be arbitrary and dependent on the managers mood. All in all, they accused Gucci of lacking systematic and humane management and complained that their rights and dignity were being violated.

Once revealed online, this report aroused widespread discussion among Internet users. Further information emerged, suggesting that the case also involved falsification of records about working hours, and the imposition of forced, unpaid overtime work. Gucci implemented a system of working one full day, followed by a day off. Officially, 1 days work was about 10 h. But the workers complained that, on their working days, they were required to clock off at a certain time to establish a false electronic record, and then continue their work, counting goods until two or three oclock in the morning without compensation.

Some netizens labeled Gucci as a sweatshop. Many opined that the labor management practices of some multinational companies and brand owners failed to match their international status. Several days later, the Gucci headquarters in China issued a statement, saying that Gucci does not and will not endorse or tolerate the alleged malpractices. Gucci also stated that that the company had conducted thorough investigations and had implemented a series of measures, including the replacement of the store manager and assistant store manager. Meanwhile, the Human Resources Bureau within the Legal Department of Shenzhens Luohu District said they would further investigate the case. On 26 October 2011, Gucci and the former employees eventually arrived at a settlement in conjunction with Shenzhen Federation of Trade Unions.