Assignment 4: ethical issues

Terms of reference:

In this assignment am going to continue describing the ethical issues within Primark and organisations in general. However in this assignment I will be describing the ethical issues concerning the community. I will also write a recommendation section which highlights how businesses like Primark are required to operate ethically within the community.

Procedure:

In order to complete this assignment, I am going to use the business book to collect information concerning the ethical issues that may occur in the community. I will also use the Primark Website to look for any information regarding the community.

Introduction:

Businesses have come to a point where they have realised that the community expects great performances from the business. They would like the business to contribute and anticipate in supporting the community by providing high quality of goods and services. By referring to the community we mean the local community, national and regional communities and the global communities. The community expects Primark to ethically attract the investors and the stakeholders to buy the products.

This can be done by sponsoring specific workplace projects such as fashion shows for instance.

Different communities have Different expectations for example:

Local communities:

The local community refers to the people who are surrounded by the business. Primark should operate ethically in order to attract the loyalty of the local community. The community can benefit from the business in many ways, for instance Primark are able to provide jobs for local people, they also have a business that sell high quality of products with a good value of money.

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Primark can also benefit from the local community; for instance; by gaining the loyalty of the local community, Primark can easily retain their customers, the local community will also create an extra awareness of the business, meaning Primark will be able to attract extra customers because the local communities are recommending the business. By providing jobs for the local community, people will benefit as well as the government because the government receives taxes from the employees. Primark also consider the environmental issues, for example they have used 100% recycling bags in order to avoid any unethical trading.

Regional and National Communities:

Primark is a business that operates in many countries such as UK, Poland and Belgium. If one region has faced any problems or unethical trading, the whole business will be under a risk. One name represents all the branches around the world, therefore it is important to operate ethically at all stores, because one mistake may cause many.

Pressure groups:

The term pressure group is a very wide definition that does not clearly distinguish between the groups that fall under the term. For example, a pressure group can be a huge organisation like the CBI (Confederation of British Industry), which represents 150,000 businesses, and it can also be a single-issue locally based organisation like CLARA (Central Area Lamingtons Resident’s Association). Primark is under the influences by many pressure groups. They make sure that the business is operating ethically and that they are following the country laws. Each sector has different types of pressure groups, for example the food industry has pressure groups that monitor their operation regarding recycling and health issues. In the clothing industry, pressure groups investigate through how Primark produce their products and how they follow the laws.

People and planet are responsible of Primark. They are the pressure group that monitors the activities of Primark’s operations. Their responsibilities are to end world poverty, defend human rights and protect the environment. The People & Planet network consists of groups at Universities, Colleges and Schools, plus many other individual supporters, supported by an office staff team.

Impact of overseeing bodies:

The overseeing bodies refer to the national and continental bodies that manage business activities around the world and observe whether businesses are operating ethically or not. Different countries gather to combine the law, i.e. share their laws. The EU which has been formed from many European countries share some of the law, i.e. some of the UK regulations can be found in different countries. This will help the government to supervise Primark’s operation in different countries and check whether they are following the laws or not. Oversee bodies are specialised in monitoring the business’s activities, such as selling, buying, obeying with the law, employments, health and safety, and their commitments.

There are many oversees bodies that are involved in checking Primark’s and other businesses’ operations. For instance:

UK government:

UK Government arrange different oversee bodies to monitor the business aspect and check their ethical trading. Different bodies within the UK monitor the activities of the businesses. They set different regulations for the businesses to comply with in order to ensure that businesses are operating ethically. They create laws and code of practices for many organisations to follow, because it can help businesses with many activities. ASA body ensures that advertisements are suitable for the consumers to watch. They set regulations for the advertisement agencies to follow in order to give the consumers a clear idea of what the business is trying to show. They also help businesses such as Primark to build a good relationship with the consumers by allowing the customers to trust the business. The ASA’s decisions send out clear signals about what is and is not acceptable in advertising across a wide range of sectors.

United Nations UN:

An organization of independent states formed in 1945 to promote international peace and security. They have set different laws and regulation concerning human rights. All businesses within the united nation countries must comply with those regulations. Therefore it is essential for Primark to comply with the UN human rights which explains to businesses that discrimination is part of an illegal activity, hence it should be avoided. It also shows that all people/employees must be treated equally despite their background, sex or culture. They have also created different laws concerning employment, buying/selling goods and general treatments.

“Everyone is entitled to all the rights and freedoms set forth in this Declaration, without distinction of any kind, such as race, color, sex, language, religion, political or other opinion, national or social origin, property, birth or other status. Furthermore, no distinction shall be made on the basis of the political, jurisdictional or international status of the country or territory to which a person belongs, whether it be independent, trust, non-self-governing or under any other limitation of sovereignty.”

Resources from: http://www.un.org/en/documents/udhr/

European Union:

The European Union (EU) is a partnership of 27 democratic countries, working together for the benefit of all their citizens. It aims to promote social and economic progress among its members, common foreign and security positions, police and judicial co-operation in criminal matters, and European citizenship. Primark operates in some of those partnerships. Therefore the same laws are to be followed at different countries. EU are keen to provide ethical trading, therefore they provide suitable laws for businesses to comply with in order to avoid any unethical operations.

World Trading Organization WTO:

The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. The WTO provides a forum for negotiating agreements aimed at reducing obstacles to international trade and ensuring a level playing field for all, thus contributing to economic growth and development. The WTO also provides a legal and institutional framework for the implementation and monitoring of these agreements, as well as for settling disputes arising from their interpretation and application. Primark is required to follow their regulation in order to operate ethically because WTO consider all the environmental and economic issues and they attempt to avoid any issues concerning these aspects.

World health organisation WHO

WHO is the directing and coordinating authority for health within the United Nations system. It is responsible for providing leadership on global health matters, shaping the health research agenda, setting norms and standards, articulating evidence-based policy options, providing technical support to countries and monitoring and assessing health trends.

Ethical issues facing communities:

Operating unethically may cause disagreement between the community and Primark. Hence it is important to benefit the local community as well as the international one. The community always has different requirements, those that are interested in receiving high quality of goods and services as well as products for a good value of money. There are those that are interested in the business for employments, other communities are interested in the profit of the business. Therefore it is crucial for the business to meet different requirements as it is part of ethical trading. There are many ethical issues that Primark may face, for instance:

1. Globalisation:

In general, globalization refers to the trend toward countries joining together economically, through education, society and politics, and viewing themselves not only through their national identity but also as part of the world as a whole. Globalization is said to bring people of all nations closer together, especially through a common medium like the economy or the Internet. Nowadays big businesses like Primark intend to base their manufacturers in poor countries such as India. The purpose of this; is because their economy is not as high as the rest of the economies in multi, developed countries. Businesses take advantages of those countries in order to make higher profits. They produce their product in poor environment but they seem to sell it in developed countries such as united state and United Kingdom.

2. Culture imperialism

Our culture differs from time to time. People’s dress sense has changed over the past years. In fact they seem to change in every season. The reason for this is because the influences of different countries affect the current country. Culture imperialism makes countries dominate each other in order to achieve its aims or goals. Fashion industry forces people to copy each other. Meaning businesses that operate in the fashion industry such as Primark view the new fashion styles and enter them as part of their ideas and designs when in reality the ideas came from different countries and different businesses.

3. Ecology concerns:

Ecological concerns cover the changes of the economy and social behavior. The economic developments are forcing businesses to make new changes regarding their ethical trading. For example some businesses consider increasing the prices of the products. Whereas other business avoid dealing with creditors and credit card operation because it has high interests.

4. Fair Trading:

Fair-trade is important since people in developing countries have no money to afford essential matters such as education. Fair-trade will give a share of the profit to these people & hopefully will make a difference. It is also important for Primark to consider developing the business regularly. These developments could be related to providing better working conditions especially for Primark because they have faced problems concerning poor working environment are provided for the workers. They should also provide better working hours, better payments/wages as well as improving their products’ quality and quantity.

5. Child labour:

This issue has been raised earlier on this assignment. Investigations were carried out concerning the use of child labour within Primark. Now in the UK this is an illegal activity, there are specific age groups that are allowed to work and there is also a set amount of money that needs to be paid when young adults are working. Panorama found factories related to Primark that is based on workers between 5 to 17 years old. They worked in a poor environment and poor wages. Businesses such as Primark intend to employ young children because they are not required any training and high costs.

6. Whistle blowing:

Is a person who raises a concern about wrongdoing occurring in an organization or body of people. Usually this person would be from that same organization. The revealed misconduct may be classified in many ways; for example, a violation of a law, rule, regulation and/or a direct threat to public interest, such as fraud, health/safety violations, and corruption. Whistleblowers may make their allegations internally (for example, to other people within the accused organization) or externally (to regulators, law enforcement agencies, to the media or to groups concerned with the issues).

7. Environment:

Primark should consider helping the environment by providing recycling bags and activities to save and protect the environment because stakeholders expect the business to have a safe working environment.

8. Corruption:

This means the abuse of a public office for personal gain or other illegal or immoral benefit. This is when Primark break the law and does not follow the rule and regulation as a business.

The table below shows the ethical issues within Primark in two countries, UK and India:

Country

Concerns

How can Primark minimize those concerns:

UK

Primark has deceived its consumers by inserting misleading advertisements towards child labour and giving false information to consumers just to increase their sales. Primark announced that they do not approve of child labour; however the panorama research has showed that they have many factories in India and that child labour plays a great role at those factories.

Child labour is an illegal activity; therefore Primark broke the law when child labour occurred within their factories.

Primark could easily minimize those concerns by removing all the sweatshops and avoid child labour issues within their factories. Primark took a clever step when the management realized Child labour was being used at their factories, they fired few of their suppliers because the managers were unaware of the situation.

They also need to follow the law carefully in order to avoid any ethical issues.

India

Child labour,

Poor working environment,

Poor wages,

Long working hours.

Provide better working conditions for the workers. They can also increase the wages of the employees and set suitable working hours for the employees. They can also set a monitor to monitor the situation within the factories and report any ethical issues occur within the working place.

M3 and Conclusion for the overall assignment

Corporate responsibility can come down to the ethics of a business. Each company has its own set of core values, but the company’s values also touch everyone that the business deals with i.e. stakeholders.

It is important for organisations like Primark to take into considerations the concerns and the requirements of the stakeholders. Having to meet the requirements of the stakeholders will relocate the organisation in a higher level. This also applies to taking their concerns into considerations.

It is important to set lasting code of conduct that all stakeholders must comply with. For instance; avoid child labour, this could be related to the suppliers, and the management. They need to concentrate intensively on their code of conduct and set consequences for breaking the code. This will show the stakeholders that there are consequences such as paying fine or dismissal for not complying with the code of conduct of the business.

* Having a code conduct ethics doesn’t guarantee that employees will comply with it, or that they will even understand the rationale behind the code. The challenge lies in turning an organization’s code conduct ethics into a relevant, engaging guide; one that inspires a workforce toward self-governing and principled behavior. Create corporate compliance training that emphasizes values, supported by rules.

* Educate employees about the company’s code of ethics to make it relevant and real.

* Reinforce the code conduct ethics, both in and outside the organization.

* Encourage employees to become active participants in upholding the code of business conduct and its values.

* Continually improve the code conduct ethics by gathering feedback and measuring effectiveness.

It is also essential for the managers and owners of the organisation to investigate their own operations, meaning they are required to monitor their factories and monitor their staff performances. Primark should also consider the laws and comply with them effectively in order to operate ethically in the market otherwise it will result in losing the stakeholders and breaking the laws.

Primark should consider the concerns of the oversees bodies, because they require different actions from businesses. Some oversees bodies expect the organisation to follow certain laws when advertising for their products, other bodies expect the organisation to follow certain rules when employing and treating employees. Therefore it is important for the organisation to consider those laws as it is all part of operating ethically. They should also consider the importance of these laws, and why businesses are required to follow them effectively. Considering the environment of aspect is also important when operating ethically because consumers will receive the hint that the business is considering their expectations and is helping the environment by organising different activities for the consumers to anticipate in.