Primark and Ethical Business.Doc

Topics: Business ethics, Ethics, Corporate social responsibility Pages: 13 (3879 words) Published: July 27, 2011
Primark and Ethical Business

Primark the leading clothing retailer
Rapid changes in media, transport and communications technology have made the world economy more interconnected now than in any previous period of history. Nowhere is this more evident than in the world of textile manufacture and clothing distribution. Consumers want fashionable clothes at affordable prices. Much of high street fashion is produced in various countries across the world. Businesses source clothes from countries like India, China, Bangladesh and Turkey because of lower material and labour costs in these countries. In order to meet consumer demand, Primark works with manufacturers around the world. Primark is part of Associated British Foods (ABF), a diversified international food, ingredients and retail group. Primark has almost 200 stores across Ireland, the UK, Spain, Netherlands, Germany, Belgium and Portugal. Primark’s annual turnover accounts for a significant proportion of ABF”s revenues and profit. Primark’s target customer is fashion-conscious and wants value for money. Primark can offer value for money by: •Sourcing products efficiently

Making clothes with simpler designs
Using local fabrics and trims
Focusing on the most popular sizes
Buying in volume
Not spending heavily on advertising.
The largest Primark store is located on Market Street, Manchester, England. Some 100,000 sq ft (9,300 m2) of retail space is spread across its three floors. It took over from Liverpool in 2008 after TK Maxx moved from the basement floor to the Arndale Centre, allowing Primark to further expand

Corporate Social Responsibility
Every business has the corporate social responsibility (CSR) to be Ethical in its business environment and CSR is about responsibility to all stakeholders and not just shareholders.

What is Stakeholder?

A person, group or organisation, has direct or indirect stake in an organisation because it can affect or be affected by the organisation’s actions, objectives and policies. Key stakeholders in a business organisation include its creditors, customers, directors, employees, government agencies, owners, suppliers, unions and the community from which the business draws its resources. What are Business Ethics?

Ethics are moral guidelines which govern good behaviour so behaving ethically is doing what is morally right Behaving ethically in business is widely regarded as good business practice. “Being good is good business” (D. Anita Roddick)

“A business that makes nothing but money is a poor kind of business” (Henry Ford) Code of Practice
A common approach is to implement a code of practice. Ethical codes are increasingly popular – particularly with larger businesses and cover areas such as: Corporate social responsibility
Dealings with customers and supply chain
Environmental policy & actions
Rules for personal and corporate integrity

Primark from Ethical to Unethical Business

Let’s take one of the above stakeholders the suppliers to analyse how the suppliers and supply chain can affect the business ethics and can make a business unethical business. A business cannot claim to be ethical firm if it ignores unethical practices by its suppliers. Use of child labour and forced labour, Production in sweatshops, Violation of the basic rights of workers, Ignoring health, safety and environmental standards. An ethical business has to be concerned with the behaviour of all businesses that operate in the supply chain i.e. Suppliers, Contractors, Distributors, Sales agents. So the Primark could not consider and concentrate on the supply chain of its suppliers who were hiring the child labour in the factories in various states of India and Bangladesh. Those suppliers were the main source of Primark retail clothing products in UK and. This issue was exposed by The Observer, The Independent News and the BBC panorama. Primark declared as least ethical business

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