An Exemplar Assignment for Retail Issues and Applications
The exemplar below is intended to provide an indicative example of a very good piece of work. It is not intended that your assignment should look exactly the same, nor does it indicate that your assignment will not receive high marks, if it does not follow the same/ similar approach.
A report on Retailer X’s response to the retailing issue of Corporate Social Responsibility
The Retail Issue
Corporate social responsibility (CSR) is an issue in the UK’s domestic retail market, that is growing in importance in correspondence with changing consumer values. Consumers are placing increasing pressure on retailers to operate ethical and socially responsible practices (Authors XXXX 2014). This shift in interest has led to the increased importance of the triple bottom line (TBL) concept; people, planet and profit (Authors XXXX 1998) …..
…… The degree to which a retailer engages in CSR, can be reflective of and/or determine their role in society (Author XXXX 2008). A social responsibility program would involve the retailer partaking in activities that are not legal obligations however that are seen to benefit wider society (Varley & Rafiq, 2014). …….
…..
……
Retailer X and CSR
The argument that Retailer X is an unethical company has been discussed for many years with BBC’s publishing a report on their behaviour in 20XX. The report accused Retailer X of using suppliers that were sub-contracting child labour (Source XXXX, 20XX). This was then followed by further claims that two of Retailer X ‘s suppliers were not conforming to employment and immigration laws (Source XXX, 20XX). These scandals caused the Ethical Trading Initiative to order the removal of any in-store or marketing references to their approval of Retailer X’s operations (Source XXX, 20XX). Retailer X can be considered as a ‘fast-fashion’ retailer meaning that it caters to the increasing demand for reduced lead times in order to get new trends to consumers quicker …..
….However it is this increased pressure that could be blamed for the reduced focus on maintaining supply chain standards. ……
……
Many of Retailer X’s suppliers are outside of the UK which is not uncommon in the modern retail environment ….
… The report will now look at a selection of ethical issues that face Retailer X and their responses.
Ethical standards in the UK
The Ethical Trading Initiative (ETI) launched an inquiry into the supply chain of Retailer X after allegations were made in 20XX regarding a UK based factory. The supplier was said to be hiring illegal immigrant workers who were also being paid below minimum wage (Source XXX, 20XX)). ….. It was also discovered that this factory was sub-contracting work to smaller factories across the city, which Retailer X had not given it permission to do ….
Retailer X claimed to be unaware of these circumstances, that are against its code of conduct and carried out their own investigations in to the factories concerned (…..
…..
……
It could therefore be argued that by not upholding its ethical policy, Retailer X is not meeting the needs or rights of its employees. The fact the factories are not directly owned by Retailer X does not remove their responsibility (Source XXXX, 2011)….
…….
Retailer X’s Response
In response to these allegations, Retailer X carried out its own investigation in to the factory in the UK (Source XXX, 20XX). Retailer X had the factory independently audited …and simultaneously installed a strict programme related to the codes of conduct that had been found to have been broken (… ) ……
….. This procedure will help Retailer X to be able to reclaim its position as an ethical retailer ……
…….
According to the Utilitarian theory of ethics, a behaviour is moral if it will create the greatest level of happiness for the greatest amount of people (Author XXXX 2006). By using contractors that do not pay their workers fair wages, Retailer X is getting their garments for a cheaper price. Whilst this will help to increase profits for stakeholders and managers achieving happiness for them, it is not achieving the greatest level of happiness for the workers and their communities. …….
………
…….
Ethical Issues Overseas
With the growth of globalisation, outsourcing to and purchasing from developing countries has increased, which is a key issue in the heightened importance of CSR (Author XXXX 20XX). Retailer X outsources its production to developing countries such as Bangladesh, Taiwan and India. On the 24th April 2013, what has been referred to as “retail’s worst industrial accident ever” occurred; the Rana Plaza factory in Bangladesh collapsed with an unconfirmed number of workers inside …..This initial statement immediately highlights an issue with the use of overseas factories. As many developing countries do not have the same workers rights as the UK does, factory workers are producing garments in unethical conditions….
……
Stakeholder theory explains how a business has many stakeholders and in order for a business to achieve company objectives, it must consider the interests of all of them rather than just shareholders (Author XXXX, 20XX) the factory in the UK, Retailer X does not own the factories in the developing countries however as the workers are manufacturing garments for their stores, Retailer X does have some responsibility for them. ……
…..
…..
Retailer X’s Response
When news of the disaster reached the Retailer X offices, they released a statement saying that they were “shocked and deeply saddened by this appalling incident” (Retailer X, 2013)……
…..As of April 2014, Retailer X was the biggest contributor to the compensation fund, contributing around £Xmillion……Further to cash and other donations, Retailer X has committed to carrying out structural surveys of buildings in Bangladesh that are home to the production of any garments destined for Retailer X stores (Retailer X, 2014). …..
……
……
On its ethics webpage, Retailer X state that they carried out over 2000 factory inspections in 2013 to ensure they were safe, clean and that workers were being treated correctly and are being paid a fair wage (Retailer X, 2015).
Benchmarking
The term benchmarking is used to define the recognition of best practice in an industry or in the context of this report, the best practice in regards to ethical behaviour (Author XXX, 20XX). Benchmarking is considered as fundamental to the management of CSR as it can help a business to improve its operations (Author XXXX, XXX. H&M could be suggested as another fashion retailer that Retailer X could benchmark itself against…..
…….
Another technique that Retailer X could adapt from H&M’s approach to CSR is to educate the workers in developing countries about labour rights……
……
Responsibility to Consumers
A retailer has a responsibility to its consumers as they are a key stakeholder group. ….
….
It could be argued that the shoppers at Retailer X cannot make informed purchase decisions unless they are aware of the business’ behaviour. This responsibility to disclose information to the consumer is considered as a moral duty for a business (Author XXXX 2003). It can therefore be argued that it is unethical for Retailer X to sell garments without disclosing the conditions they were made in. After the Rana Plaza collapse, customers in the UK were shocked to find out the conditions that their clothes had been made in.
……
…..This is a clear demonstration that Retailer X had not fulfilled its duty of providing consumers with the relevant information to make an informed purchase decision.
Responsibility to the Environment
Another area of CSR is environmentalism which is concerned with business externalities including protecting the environment (Source XXXX 2014). Some forms of environmentalism can be practically free for a business to get involved in, such as appropriate disposal of waste produced in manufacture, retailing and consumption (Source XXXX, 2013). Retailer X is working to protect the environment by recycling all the waste cardboard and paper from their stores …
…….
….. Further to this, on Retailer X’s ethics webpage they state that they have worked with the farmers and communities that grow the cotton used to make Retailer X garments, to help reduce the environmental impact of this procedure (Retailer X, 20XX). Other initiatives mentioned that aim to reduce environmental impact include reducing water usage in manufacturing, chemical management and increased focus on recycling in Retailer X stores (Retailer X, 20XX). ……
…….
…… Retailer X could adopt a similar scheme to M&S in order to encourage their customers to recycle their garments. These efforts will reflect positively on the business because as mentioned at the beginning of the report, high CSR standards are valued by societies and consumers (Source XXXX 20XX.
Conclusion and Recommendations
From the findings presented in this report, it can be concluded that whilst Retailer X has been the feature of a lot of negative press regarding their approach to CSR, behind the scenes they are proactive in improving standards….
…It can be suggested that Retailer X could use H&M as a benchmark to further improve their ethical practices. A recommendation for Retailer X would be that when planning future business decisions, they consider the impact on a range of stakeholders.
…Customers are a key stakeholder group and if their needs are not met, the business will not be able to function as it will lose revenue.
……Retailer X should continue to invest in education for their suppliers and manufacturers in order to improve sustainability and safe working conditions. This would further improve their licence to operate in these communities. ….
……
BIbliography
3 | Page