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Unit 37- Understanding Business Ethics P1,P2,P3,M1,M2 & D1

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This is the first assignment for Unit 37- Understanding Business Ethics. I achieved a DISTINCTION in this assignment and an overall grade of D*D*D* (highest grade possible) Please DO NOT copy, but please use it as a guide as it will help you pass. Good Luck with your course!

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Voorbeeld van de inhoud

Jay Healy
T1: P1, P2, M1, D1 T2: P3,M2


P1- The two businesses I have chosen to discuss about are Marks and Spencer’s
and Primark. There are many ethical issues that they both must take into
consideration but I picked the four most important issues that they must consider
very carefully.


Human Rights
M&S: A basic definition of human rights is ‘the right which is believed to belong to
anyone’. The most common right to all employees is the amount of money they are
getting. Businesses must know and must pay at least the minimum wage to every
employee in their books. It is illegal for a business to two different who are the same age
and doing the same job different wages as every person should be treated as equal. This
needs to be considered by Marks and Spencer’s because if they don’t pay an employee
minimum wage then that employee is then legible to sue them for not being equal.

Primark: Primark have to do the same, especially when based in the UK and being a UK
founded company, the minimum wage rule applies to both businesses. Another human
right issue that needs to be considered is rest breaks during work. Primark are primarily
know to hire young workers; if they are above the school leaving age but are under 18 and
work over 4.5 hours then these employees have the right and Primark must let them have
a half hour break. If over 18 employees are liable to a 20 minute break if working for more
than 6 hours. If these businesses don’t allow these breaks then once again the employee is
legible to sue and fine the business.



Child Labour:
M&S: Child labour is basically the employment of children within a business or industry,
this is usually brought up when done illegally. The law for any child who wants to work
full- time is that they have to be at least the school leaving age which in most countries is
roughly around the age of 16. Businesses need to take into consideration of this law
because children are very fragile and people have a perspective of children of that if they
being forced to do something that a child shouldn’t be doing then its cruelty and mass
amounts of bad publicity can occur. This came about back in 2016 when it was published
to the world that Marks and Spencer’s had Syrian children as young as 15 making clothes
for them at a factory in Turkey. As you would expect a lot of people back in the UK were
very shocked and upset about the fact that the clothes they were buying we being
forcefully made by these children; and to make matters worse it was said that they were
only paying these children £1 an hour, well below the Turkish minimum wage. As you
would expect M&S got a lot of heat from this and were made to publicly apologise.

Primark: Same applies for Primark as a UK business they shouldn’t be hiring children
full-time under the age of 16. This is looked as cruelty and can be legally dealt with by
authorities. Once again another child cruelty allegation popped against Primark this time
in India. Children from the ages of 6-11 were found working in Primark’s sweatshop
earning a measly 40 rupees (44p). Unlike Marks and Spencer’s Primark had a bad
reputation even before these allegations were made about child labour and these

,Jay Healy
T1: P1, P2, M1, D1 T2: P3,M2
allegations just added fuel to the fire. Back in the UK Primark I feel got a lot more heat
than M&S just due to their reputation, they denied it all but BBC panorama had
undercovers in attendance of the factories who had proof of everything. Primark were
caught red handed and were forced to close down the factory.



Health and Safety
M&S: This emphasises the procedures that a business must carry out in order to keep its
employees safe while within the workplace. As the law says Marks and Spencer’s have to
follow and implement acts and regulations in order to keep their employees safe. The
basic act that they have to follow is the ‘Health and Safety Act at Work 1974’ which
basically indicates to M&S that they must ensure so far as is reasonably practicable, the
health, safety and welfare at work of their employees. This is a massive problem across all
businesses which can have massive consequences if something goes wrong; this is why M&S
have to take the well-being of their employees extremely serious. If an employee gets
injured within the workplace and it’s down to poor health and safety then this employee
can sue Marks and Spencer’s; and if deemed unsafe and hazardous by an inspector then
Marks and Spencer’s could be forced to close down.

Primark: Just like M&S they have to follow and implement the same health and safety
regulations for each and every one of their employees. Primark must offer health and
safety training to each member of its staff so they know exactly how to keep themselves
safe within the workplace. Primark need to take notice of the law because if they didn’t
know that their employees needed training and one of their employees were to injure
themselves due to the lack of knowledge then it would be Primark’s fault, they would be
responsible and liable to many counts. One of these counts would be a lawsuit from the
employee, depending on the severity of the injury will dictate the volume of money
needed to pay out.



Corruption
Looking at the topic of corruption we can look at both Mark and Spencer’s and Primark and
see if they legally pay tax on their profits. It’s a law for all businesses in the UK to pay
some sort of tax on their profits. If a business doesn’t then there can be serious
consequences for them. A great example of this was Starbucks, it was reported that
Starbucks were avoiding tax payments for some years now and were forced to pay £8.1m
in UK corporation tax.
We can also look at each businesses account practises, are the accounts sort of showing
the same pattern each year. If there is an odd influx of money accumulated could this
money of been legally paid in? If so then I’m sure that each businesses who be investigated
impulsively, and if any corruption was deemed to be the reason behind it then
consequences with come into play with immediate effect. One of these consequences
could be a heavy fine, this would mean that a board member who have to go to court and
fight for the case, simultaneously the whole event is being watched and recorded very
carefully and before you know it it’s all over the internet. Of course the publicity will be
shameful, people may lose faith in these businesses and not just customers, suppliers and
contractors may also think twice before working with Primark or Marks and Spencer’s
again.

,Jay Healy
T1: P1, P2, M1, D1 T2: P3,M2
P2- I will be sticking with Primark as my business and will now discuss the ethical
issues that they have adopted and the impact that it has on them.
Primark's mission statement is "to supply quality clothing at prices perceived to offer real
value." This means that the business aim to sell high quality products at low, cheap prices.
This also means that they have an advantage when compared to other brands as they sell
similar products but for much less.
Primark is a well respective business in today’s society but their ethical operations are up
for debate. The one major drawback that Primark are always being slated for is the
making of their clothes. Primark employ underage children between the ages of 5-14 to
produce their clothing in factories located in countries such as Taiwan, Bangladesh and
Pakistan. Of course from a business perspective this is brings advantages, it’s much
cheaper for them to produce as they are children and the workers are willing to accept
whatever salary that is given. However, although it is legal in those countries to have such
young children do that work people pack in the UK still find it sick and unnecessary and for
that reason Primark have lost many customers over the years.
An outburst from the public erupted when it was published that Primark were employing
these underage children to do produce their clothes, their sales plummeted as customers
refused to shop with such ‘monsters’. This would affect the shareholders massively as
customers are refusing to shop with Primark meaning they wouldn’t make as many sales
and their investment could go totally bust dependant on how many shares they owned. But
it’s not just about sales, Primark’s reputation was greatly hindered on that day which
would then beg to differ whether a shareholder would want to be associated with a
reputation like Primark’s. As I said already Primark have noticeably been losing customers
since this story got out and as a result of this their brand image has really been shaken up
and has made the competitors that don’t use underage children look that much better.
Another issue that occurs when working with oversea countries is the delivery process,
when clothes are being transported from countries from across the world this can take up
to 12 hours to complete. Can you imagine the amount of emissions that being released
into the air for that time? The argument is that the planes cause mass amounts of air
pollution, and these deliveries are a regular occurrence which doesn’t sit well with
environmentalists. The advantages of using a plane is obvious, it’s the quickest type of
transportation they can use but as a result of this the environment is being harmed.
However Primark can rectify this as there are alternatives. Primark could use a ship to
deliver their clothes, yes I know a ship would still throw out emissions but not as much as
certainly not as harmful. The downside is that it would take substantially longer for the
products to reach the UK which isn’t good for Primark when looking to restock their
shelves. But if customers see that Primark are trying to do better for the environment
then there is a possibility of those customers that were lost to begin shopping with them
once again.
The way in which Primark operate also has many advantages and disadvantages.
Being a well regonised name in the clothing industry it is no doubt that even with all the
controversy around the ‘underage workers’ scenario Primark still have a large following
and millions of customers. But with this comes great responsibility, they are at the top of
the pile meaning they are always being watched by customers and the media who are
always looking to pounce on anything and everything in order to make a story. Primark

,Jay Healy
T1: P1, P2, M1, D1 T2: P3,M2
need to be wary of what they do publicly as the slightest bit of bad publicity will damage
their reputation and image.
Primark have many stores across the UK which is a massive benefit for them as this
increases the likeliness of their audience being able to shop with them rather than another
clothes shop that is in their area. For example, if a local from Manchester wanted to shop
at Primark but there wasn’t a store available, would this person travel to the closest
Primark? No of course not, they would instead just buy at a more local clothes shop in
Manchester. So by having different stores around the country it widen the audience they
can target which will inevitably mean more people buying their products.
Unsurprisingly, Primark’s competition is strong which does make it slightly more difficult
to attract those customers into the door. As a result of this Primark need to stand out
from the rest but you can’t say that they do this via advertising as John Lewis one of their
competitors obliterates them in that department. Nobody anticipates a Primark advert
like everyone does for John Lewis. This is a drawback for Primark as they have to work
harder in other departments, if they aren’t the best on the advertising front then where
else can they lead in? Can they boast about value products? I would say not really, yes
their clothes are cheap but are they the best quality. In my opinion the clothes shops with
the best valued products are not shops at all, but in fact online retailers… I feel that
websites such as ASOS and boohoo man offer much better quality of products at more
convenient prices which completely outshines Primark so they have a lot to think about
and it won’t be an easy task especially with the reputation they uphold.
Stakeholders are a massive part of Primark’s existent, without the investors annually
putting money into the business there would be no Primark. But of course with a table full
of different genders, ages and ego’s there is bound to be some sort of conflict between
them all. Primark would initially have to balance the aims of their stakeholders, as
shareholders hold a certain percentage of the shares within Primark it is only right that
they have an interest in that the shares of Primark are always increasing so that their
investments also increase. Other stakeholders in Primark such as environmentalists who
are a group of people that actively campaign on issues associated with protecting the
natural environment.
If Primark were to release a new product and it succeeded in the market, then the
stakeholders would of course we very pleased as their cash investment would be returning
them a healthy profit. On the other hand if an environmental group started a campaign to
prevent Primark in using underage children making their clothes for example then these
two stakeholders would be in conflict. This works the other way also, success for
environmentalists may then mean a loss for the shareholders as the creation of clothe
making become dearer decreasing the amount of profit Primark make at the end.
Another example of conflict that Primark would have to deal with is with regards to their
employees. If for some reason Primark had to make some employees redundant this would
cause huge conflict between both of them as those unemployed people would now have to
go out and find a new job which nowadays isn’t an easy task.



M1
Before I start discussing about the improvements Primark could make, I will fist give an
example of when Primark did improve. Primark are still one of the biggest fashion names

, Jay Healy
T1: P1, P2, M1, D1 T2: P3,M2
in the industry with such a large following even with the Rana Plaza incident hanging over
their head. The Rana Plaza accident happened in 2013 when a five story factory operated
by Primark collapsed during production killing 1,178 people and injuring a further 2,000.
Consequently when the story was published they received major abuse from customers
and the media. But Primark have responded brilliantly and credit to them. Paul Lister,
responsible for Primark’s Ethical Trade and Environmental Sustainability Team, said: “Five
years on from the Rana Plaza building collapse in Bangladesh, Primark continues to
support those who were affected and over the period has contributed a total of over $14
million in aid and compensation. In June 2017 Primark signed the 2018 Transition Accord,
reaffirming Primark’s commitment to collaborate with other brands, factory owners,
NGOs, trade unions and the Government of Bangladesh to bring about sustainable positive
change in the Bangladeshi garment industry.” - https://www.primark.com/en/our-ethics/
frequently-asked-questions.
I feel this was a great gesture by Primark, even though this won’t completely heel the
wounds that the disaster created it will certainly go a long way to mending them.
The first practise I will be discussing will be regards to Primarks transportation. Primark
have several different suppliers from across the globe including china, India, Turkey and
Eastern Europe and planes are the main source of transportation. The problem here is that
the planes put out harmful emissions into the air which doesn’t put smile of the faces of
environmentalists. In order to improve this scenario Primark could use alternative options
when transportating goods. For example the use of a ship would be a more sufficient
option as it produces less emissions and they are not as harmful. Lets say when Primark
get something delivered from companies domestically, another option would be to use
something that doesn’t run of fuel as the journey isn’t as far for these delivereies an
option such as a bus that runs on lemons or a car running on electricity could be a
possibitlity. The effect of lowering emissions in the air using these different options are
huge, the environment would be in much better condition and those environmentalists
who don’t trust and shop at Primark may begin to change their mind. I would recommend
also that Primark should look to reduce the amount of oversea suppliers they use and
begin to work with more UK based businesses as the frequency of planes being flown will
then decrease.
Another practise that Primark are always been nagged about is their carrier bags due to
the fact that they usually take a minimum of five years to decompose but unitl then during
those five years are killing hungry animals and leaving the UK in a mess. Fortunately, they
have taken some responsibility for this with the introduction of paper bags. Paper bags are
much easier to dispose of and animals don’t see them as food. Primark can also look at
other ways of reducing their waste. One suggestion I would make to Primark would be to
install a ERICC system which basically allows them to monitor their energy. How much are
they using? What are they using it on? The system would give Primark an insight also on
what stores are doing well and what stores need a bit of work doing. The system also gives
tips to the staff so they can help with the process too; and to just put it into perspective.
Imagine if Primark installed these into all their stores, that’s over 100 stores across the
country trying to save energy, that’s a lot of energy being saved and if people realise that
Primark are trying to help the environment then they are more likely to shop at Primark
meaning an improved cash flow and better brand image.
Coming back to the Rana Plaza disaster the main reason there was such an outcry was
because over half of those 1,178 people killed were infact children. If Primarkwould stop
employing children then this wouldn’t have happened but people argue that if they did
then these children wouldn’t have a job and wouldn’t be able to bring money back to their

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