Legal Issue Final Research Paper - Avon

Essay by DANIMAL69 February 2007

download word file, 13 pages 4.0

"Avon calling." The Avon Lady at the front door. A catalog and some samples left hanging on the door knob. Sights and sounds that are familiar to many of us. From its humble beginnings in New York City by David H. McConnell in 1886 as the California Perfume Company, and the company's first sales representative, Mrs. P.F. Albee, Avon Products. Inc. has grown to become "the world's largest direct seller . . . with over $8 billion in annual revenue". (Avon Products, Inc., 2006)

The following paper will concentrate on three key areas of business law and how they have affected growth and development within Avon Products, Inc. An explanation of applications in the agency law area of business environment will be analyzed. Second, distinguishing factors among the types of business entities will be made. Lastly, an illustration of the e-business impact on Avon's global legal environment as it pertains to business entities will be examined.

Avon Products, Inc. and Agency Law

With 49,000 employees in 2005 and approximately 5.1 million independent representatives, Avon Products, Inc. (Avon) provides an excellent example of agency law at work (Hoover, 2007). The corporation utilizes all three kinds of employment relationships: employer-employee, principal-agent, and principal-independent contractor relationships (Cheeseman, 2004, p. 572).

Employer-Employee Relationships

An employer-employee relationship exists when an employer hires an employee to perform some form of physical service (Cheeseman, 2004, p. 572). Some examples of employer-employee relationships that have occurred at Avon are when the Board of Directors hired Andrea Jung as the Office of the Chairman and CEO, Charles W. Crumb as the EVP Finance and Technology and CFO, and Elizabeth A. Smith as the President, North America and Global Marketing (Hoover, 2007).

Principal-Agent Relationships

Operationally, the employer-employee relationship continues through the functions of upper management roles like senior...