Business Btec Business Level 3 Unit 37 Business Ethics

Business Ethics – Unit 37 Task One
Understand the meaning and importance of ethics in the business world

Businesses have aims and objectives they wish to achieve to be successful. Operational activities are the things the business does to get there, however sometimes businesses make bad decisions that can upset staff, customers, local people, etc. this is why ethics is a very important aspect of business management. Objectives are set as stepping stones which are taken in order for the business to achieve their aim. Primark has their own aims and objectives they wish to achieve to gain success. These include:
Aim: Providing consumers with ethically sourced garments that are good quality
Objective: We will achieve this by testing for quality
assurance

Aim: Offer the lowest price on the high street
Objective: Looking at competitors’ products and setting the price lower than theirs

Aim: To treat everybody the same
Objective: Make people feel individual and special

Aim: To be friendly and helpful towards customers and staff
Objective: Greeting customers as soon as possible to make them feel welcome

Aim: To ensure that any of the workplaces are safe enough to work in
Objective: Check every single factory meets standards. Ethical Trading Initiative.

Aim: To make a profit
Objective: Keep costs low by huge volumes with low mark-ups.
Primark’s mission statement is ‘To provide high quality fashion essentials at value for money prices’.
Primark must prove and sustain a few major things as their aims, objectives and mission statement implies. They wish to produce high quality products at low prices and do this without doing anything that is considered unethical. After Primark suffered a controversy over their ethics, people will continue to ask why they have such low prices and Primark explain on their website that; “They have no expensive advertisement campaigns” so they don’t have television adverts like a lot of their competitors do and they rely on their huge customer base uploading to social networks and Primark’s website to advertise which is a huge save on costs. (See below)

“Huge volumes, low mark-ups (bulk-buying and batch production)” so they produce in huge quantities to save on money as well as buying their materials in large quantities to get a lower price. “Design and make our own products efficiently” so they make sure they employ excellent staff which can design things quickly and efficiently to save on waste materials.
Primark considers many issues in its operations and they include these in their code of conduct which is 11 different points:
1. Employment is freely chosen
2. Freedom of association and the right to collective bargaining are respected
3. Working conditions are safe and hygienic
4. Environmental requirements – Primark shares its commitment with suppliers
5. Child labour shall not be used
6. Living wages are paid
7. Working hours are not excessive
8. No discrimination is practised
9. Regular employment is provided
10.
No harsh or inhumane treatment is allowed
11. Legal requirements – Primark is committed to compliance of all countries’ laws
To further these points in the code of conduct Primark supplies training to their employees and suppliers which address their codes of ethical trading. Suppliers are also constantly checked up upon to make sure they’re maintaining these rules.
To address the wage issue Primark also explain on their website how they share their factories with other retailers and these other companies are also luxury companies – so just because they have low prices doesn’t mean they pay low wages. They actually operate under the living wage scheme which is £7.85 in most of England and £9.15 in London. It is breaking the law to pay anyone under the minimum wage and so Primark go above and beyond this by taking part in this scheme.
Primark then also make sure they are recognised as ‘green’. They explain on their website how they have 2250 farmers and they are in connection with ‘CottonConnect’ who teach them improved farming techniques which show them how to use less water and pesticides as they wish to promote cleaner production respecting the worlds natural resources. Primark’s recognised brown paper bags are known for being 100% recycled material. Being green is very ethical and lots of customers will respect the fact that Primark make sure they are green and this will persuade lots of people to choose Primark over its
competitors.
Due to Primark’s controversy over their ethics they then go on to address their thoughts on child labour on their website. They check every single factory to meet their standards, they promote children’s rights and raise awareness by joining with charitable organisations, local partners and are part of the ethical trading initiative.
Primark make their ethics a huge priority and by doing this it they have additional costs such as the cost of trading with the ethical organisations, paying the higher wages, costs of having more employees that are checking standards applying their code of conduct and making sure the customers know their feelings on et