In contemporary business, business have to pay more attentions to the expressed of needs and wants of many interest groups. It is no longer for society to accept a company conduct only economic activities, fulfill it self-interest of profit and bush off the consequence of social well-being and relationship with stakeholder. The term of “Stakeholder” not only consist of anyone is interest in the outcome of company but also outside the company, including supplier and consumer (Verkerk 2001). However, relationships of supplier and consumer are often been neglected in corporate identity, business ethics and corporate social responsibility (CSR). The scope of business ethics is board, which included consumer behavior and business behavior, while CSR is the guideline of moral practices that leads a company to make positive contribution. These concepts have seen intensified interest in issue of business ethics and CSR, which is driven by the outbreak of scandals such as Parmalat and Enron. This case has reflects increased corporate responsibility for human rights, labor standards, working condition and ethics consumerism (Fukukawa 2004). A company identity is crucial to its reputations as it reflects how the company behaves, communicates and symbols, the way present itself to the world. Furthermore, Multi-national Corporations (MNCs) have been criticized exploited of resources, ignored oppressive working condition and basic human rights when seeking new markets in developing countries. This is important for MNCs to pay attention to these criticisms because it reflects a growing gap between social expectation and corporate performance. The objective of this essay is to report on a case study of “Primark” which the views of the code of practice for supplier and perceive its ethical behavior.
Company background and issue
Primark, the multi-national Irish clothing brand founded in 1969 and now operates more than 124 stores in UK, where it is the 5th largest clothes retailer and 2nd In the value clothing retail market. Primark competitive advantage is operates in highly flexible supply chain, develop a strategic combination of UK, European and Off-shore suppliers that can quickly react to meet the dynamic challenges. Hence, it was able to take the industry by storm. The company’s success is based on provision of high stock turnover, cutting-edge style and only produces clothes in the most popular size. However, the company was questioned by the public and was named as the least ethical place to buy clothes in Britain by Ethical Consumer magazine in 2005, and criticized for “chasing poverty around the world”. Primark has been accused exploiting developing countries for cheaper labor, squeezed their suppliers to limit, and forcing them to cut down price. In these countries, workers are paid less than 5 pence per hour, which highlights how cheap clothing can begin to look relatively expensive. This case has intensified clothing chains on criteria such as oppressive working condition and human rights. However, to defend itself and transparent ethical trading, Primark joined the Ethical Trading Initiative (ETI) in 2006, an organization bringing businesses, Non-governmental organizations (NGOs) and trade unions together to develop good practices and work on the labor rights issues in their supply chains. As a member of ETI, Primark’s code of conduct is similar as the “base code” for the ETI, to promote and improve the supply chain working condition. Later on in 2008, Primark has outbreak of scandal of using child labor to finish goods in India. Immediately Primark sacked three of its clothing suppliers in India after the investigation. Under the terms of its code of practice for suppliers, Primark prohibits the use of child labor in its supply chain. Primark emphasized that it will terminate relations with...
Please join StudyMode to read the full document