Ethics within the Clothing Retail Sector - Coursework Example

Ethics within the Clothing Retail Sector 02225 Table of Contents Table of Contents 2 Introduction 3 2. Corporate social responsibility (CSR) 3 2.1What is CSR? Why it is important in Clothing Retail Sector? 3 2.2 Stakeholder theory 5 2.3 Carroll’s CSR Pyramid 7 3. Product safety 7 4. Green issues 8 5. Grey imports 9 6. Sourcing of products 9 7. Conclusion 10 Reference list 11 1. Introduction Ethics is one of the major factors that are impacting growth and sustainability of organisations. Ethical business will be attracting the investors, employees and customers towards the business operations. Ethical business will be able to meet different other external environmental challenges. The UK clothing retail market is facing huge challenge of competition, financial crisis, environmental factors and technological factors. In the contemporary world, ethics and ethical behaviours are playing key role in developing the market share and sustainability by meeting the previous challenges (Ahmad, 2012). In addition, competition is increasing in the high street clothing retail chains. Therefore, they are using the CSR strategies to increase sustainability and growth. During the years 2011 to 2012, they promoted more green production. Alhaddi (2014) stated that retailers are promoting highly recycling products, eco friendly products, and fair trading policies. Clothing retailers are using most emerging technologies for reducing waste in operations. They are adopting socially responsible strategies to maintain the welfare of external stakeholders. Alternate energy resources are being used by the organisations to conserve the conventional resources (Azmat and Zutshi, 2012). In the current study, corporate social responsibility and ethical issues are discussed in depth with the help of different real life ethical firms. The researcher will be using the examples of Next, Arcadia Group, Primark Stores, TK Maxx, Matalan, and New Look Group. 2. Corporate social responsibility (CSR) 2.1 What is CSR? Why it is important in Clothing Retail Sector? Clothing retail firms are facing huge competition in the UK base fashion retail market. Organisations are maintaining ethical strategies in order to achieve sustainability. Corporate social responsibility is one of the major used strategies for increasing sustainability in the international clothing retail market. Organisations are looking for obtaining growth and sustainability. Corporate social responsibilities of the major retail firms are concentrated on the segments like social, ethical and environment. The firms are planning to provide proper value to the external stakeholders. In addition, BubnaLitic (2009) stated that CSR strategies are orienting the equity shareholders in the global financial market. On the contrary, if the investors are not oriented they will not interest or motivated to make the further investment in fashion retailers. Business operations will be controlled efficiently, productively and sensibly by the use of efficient strategies and CSR polices also operate ethically. These types of policies are helping the firm to increase active supplier relationship with timely payments and recurring orders. In addition, retail firms are maintaining effective employee’s engagement and orientation policies. The firm has developed certain CSR criteria for the impacts on external environment. Carroll, Primo and Richter (2014) opined that, societies are supported with different activities like generous donations to the social support systems. Finally, they are controlling value provisions for the UK and global customers. CSR Business polices will help in achieving long term sustainability. These strategies will help in making continuous investment polices to meet the challenges of the environmental norms. On the contrary, ineffective CSR polices fails to collect social compliance from the stakeholders. Globalised firms have to develop their CSR strategies on the basis of energy, fuel, waste management, suppliers, customers and products (Cooke et al., 2013). Importance of CSR in Clothing Retail Sector: Corporate social responsibility policies are helping the fashion retail firms in meeting sustainability and growth. Moreover, importances of using CSR strategies can be expressed as its features. Energy usage: CSR strategies are helping the firms to reduce the conventional energy consumption. However, alternate and renewable energy use is required to increase sustainable energy efficiency. Retail firms will be acting more environment friendly manner and green ethics. Fuel utilisation: CSR strategies will be aimed to reduce fuel utilisation. Clothing retail firms are able to reduce the cost of operations and increase environmental sustainability factors. Waste management policies: CSR policies emphasises on the effective resources utilisation. This policy will be helping the firms in terms of maintaining proper value chain. Thus, the fashion marketers can be able to increase the value of the investment. Suppliers: leading fashion retailers like Next plc, Arcadia Group, Primark Stores, TK Maxx, Matalan, and New Look Group are developing effective CSR polices for their suppliers. Effective CSR policies are maintaining also maintaining timely payment, renewal ordering policies and quality management for increasing the efficiency of the supply chain Customers and Products: Customers of UK fashion apparel retailers are valued by the management. Expectations and perceptions of the customers are fulfilled by the operational groups of UK fashion apparel retailers like Next Plc and Arcadia Group. Products and services of the firm are developed through the effective quality check (Cory, 2005). People or employees: Effective work place environment is maintained. UK fashion apparel retailers are empowering their employees with proper support and respect. Employees are treated fairly and their needs and expectations are fulfilled by the HR managers. Employees are provided with proper remuneration and appraisals. Leading fashion clothing retailers are using collective bargaining and continuous assessment process for their employees in order to motivate them. Environment: CSR strategies are helping UK fashion apparel retailers to reduce environmental extracts. The firm developed certain policies to reduce the pollution causing effects. They are adopting sustainable strategies for the natural environmental traits. 2.2 Stakeholder theory Stakeholder theory is mainly the concept of providing maximum values to the stakeholders. In addition, stakeholder theory suggest that organisational sustainability also depends on potentials of meeting interest of the stakeholders like customers, suppliers, employees, societies and shareholders. Stakeholder value provisions will be increasing the ethical aspect of leading fashion retailers. Ethical operations also increase the rate of sustainability in the global context. Effective stakeholder strategies will be helping retail firms to increase their sustainability index. Stakeholders theories are increasing compatibility among the UK based fashion ware retailers. Gavai (2010) opined that stakeholders of fashion retailers refer to the individuals who are associated with the company, social or community groups and other organisations who are mainly the suppliers, third party vendors and government. Retail firms are developing some strategies which will help in increasing stakeholder support. Mainly, such theories are empowering the roles and interest of the stakeholders. Stakeholder interest has crucial impacts on the organisational decision making and retail operational process. Thus, retail firms like Next plc, Arcadia Group, Primark Stores, TK Maxx, Matalan, and New Look Group are maintaining stakeholder engagement policies to increase efficiency level of organisations. Jahdi (2014) argued that stakeholder engagement policy is maintained through efficient communication channels. Management of UK based clothing retailers are gathering the expectation and perception from the stakeholders. However, global retailers face highest challenge in meeting the interest of the external stakeholders who are having diversifying interest. Firms like Next plc, Arcadia Group, Primark Stores, TK Maxx, Matalan, and New Look Group are operating in the global market thus they have to maintain various methods in order to engage stakeholder groups. Stakeholder management policies these firms are depending on different communication channel as per the stakeholders (TrongTuan, 2012). The firms are having the stakeholders like customers, employees, society, government, and trade unions (Katz and Green, 2007). They are able to increase the profitability and sustainability by meeting the customer’s interest like more quality, competitive pricing and sound availability of the products. Employees are engaged in the decision making process and they are empowered by collective bargaining process. Employees of Primark are engaged in the collective bargaining process so that they can express their interest like remuneration expectation, workplace cultural traits, and job timing and appraisal policies (Zu, 2009). Society and environment are demanding ethical and environment friendly policies in the global perspective (Shepherd, 2007). For this segment example of Primark can be stated. The firm is using the ethical trading website for disseminating the policies among various stakeholders. In addition, Primark is disseminating information among the employees and community. The organisation is having different international set up for manufacturing their clothing products. Primark CSR policies are using stakeholder’s management, community engagement programme and employee’s appraisal process. Thus, Primark is increasing the understanding on the interest of various stakeholder groups. Global groups are having diverse needs and expectations from the organisation (Lincoln and Thomassen, 2009). 2.3 Carroll’s CSR Pyramid According to Crane (2008), Carroll’s CSR Pyramid theory is based on different type of aspects or factors. Firstly, clothing retailers must ensure effective economic responsibility to the stakeholders. International firms have to maintain legal responsibility in the locality. Ethical responsibility is another major segment of the organisational pyramid. Clothing retailers have to maintain generous responsibility for the society which will increase corporate social responsibility. Carroll’s CSR pyramid can be imposed on the policies of Next Plc, Arcadia Group, Primark Stores, TK Maxx, Matalan, and New Look Group. Major international clothing retailers are facing huge environmental challenges. It is observed that firms are facing complexity in operating clothing retail production due to the changing environmental policies. The firm recognised that corporate social responsibilities are a part of ethical strategies, which will help in maintaining growth and sustainability. The organisation is maintaining value provisions for their suppliers and customers. Firms like Next Plc, Arcadia Group, and Primark Stores showing more commitment towards the customers and suppliers by meeting their expectation and perception. These policies are helping them in developing their sustainability and responsibility index (Edgeman, Eskildsen and Neely, 2015). Thus, they are increasing the capability in meeting the environmental challenges. They are reducing the pollution causing particles from the operational process. UK based fashion retailers are having certain strategies for the welfare activity for the society. They are making investment in the charitable sources or societal development segments. They are maintaining the concept of a great employer. Moreover, clothing retailers are promoting the use of alternate energy sources because the natural resources are reducing rapidly. Thus, energy and goods costs are controlled and the firm is able to maintain the concept of sustainable and green world. 3. Product safety Products safety standards are essential for fashion retail organisations to increase the compatibility. Products safety rules also increasing the potential sustainability in global segment. Production policies are developed on the basis of safety standards. Quality of the products is maintained and checked for the betterment of products safety index. Rambaud and Richard (2015) criticised that fashion retailers are using various TQM and Six Sigma policies for maintaining high quality products. In addition, operational polices are adopting continuous assessment. Management is recruiting skilled and experienced people for increasing the quality (Cragg, Schwartz and Weitzner, 2009). Safe and quality products will be helping fashion clothing retailers to make their customers more satisfied and loyal. Loyal customers will be making words of mouth promotions to influence their circles. Fashion retailers like Primark are communicating safety standards among the customers to increase satisfaction and loyalty. Such products safety factors are disseminated among the customers with the help of website orientation polices. However, customers’ expectations and perceptions are based on the products safety and quality. Product safety standards are communicated among the workers and other stakeholders so that the benchmarks can be maintained. Leading fashion retailers Primark is using diverse strategies for different countries as they are manufacturing their retail products in different countries (Primark.com, 2015). 4. Green issues According to Ramlall (2012), Clothing Retail Sector is affected by the pollution particles in terms of getting sustainable. Firms are maintaining green issues and environmental footprints to achieve more environmental sustainability. The clothing retailers are aiming to reduce the energy consumption rate in the global operations. Green issues are influencing the firms in planning to reduce emissions of CO2 and waste from the operational activities. Pollution from the operations will create adverse image on the stakeholders of the fashion clothing retail firms (Rakotomavo, 2012). Thus, Green based planning will concentrate to reduce the pollution from their transportation and production process. Fashion retailers are creating unique green issue polices along with their CSR policies to increase beneficiary for global stakeholders. Green issues will help retail firms to gain sustainable investment credits (Paliwal, 2006). Fashion footprint policy of the Arcadia is planning to use renewable energy sources. These types of energy sources will preserve conventional and limited natural resources. Firms are using the solar, tidal and wind energy to develop apparels and cloths. This policy will attract the customers and sustainable investment firms to the organisations. Green issues are maintained in the property, purchasing and logistics policies. Managers and authorities are appointed by Arcadia group to assess the operational policies according to the green issues or environmental footprints (Arcadiagroup.co.uk, 2015). 5. Grey imports Quazi and Richardson (2012) opined that gray imports are the most emerging importing technique adopted by global clothing fashion retail firms. This type of import policy will reduce the cost of fashion firms. In addition, they can gather high quality cotton products from highly efficient cotton producing countries like India and Bangladesh. Gray imports also include cross-country transport of the semi finished products. Thus, clothing retailers will be able to explore low wage rate in the developing countries like Bangladesh. Therefore, it can be said that gray imports will help the leading UK based fashion retailers to meet sustainability demands of society and stakeholders (Nalband and Kelabi, 2014). New Look Group is using the concept of grey imports in promoting ethical trading. The concept or policy will increase the safety of the goodwill or brand image. They are importing raw materials from Bangladesh so they are required to maintain sound strategies for the counterfeit problems. Grey import is empowering New Look Group, as it is parallel import policy which increases the potentiality of the profitability and sustainability in new markets (Newlookgroup.com, 2015) 6. Sourcing of products According to May, Cheney and Roper (2007), outsourcing policy will help the clothing retail firms to tailor fashionable clothing in lower cost. Retailers will be able to produce their products by using third party resources. This policy will reduce the cost of setting up any new factory location. Moreover, high skilled employees can be used in the production process in lower cost. Globalised fashion clothing retailers are using this policy to increase compatibility (Schroeder and DeNoble, 2014). Matalan is using two type of outsourcing of different products. They are exploring Angora area for wool and cotton materials are collected from the Bangladesh clothing market. Outsourcing of the raw materials is helping the firm in reducing intense capital investments (Matalan.co.uk, 2015). However, Matalan faced the challenge of fire policies and labour rules in the Asian and African countries. Matalan is imposing higher rate of the health and safety policies outsourcing partners for maintaining ethical partnership (Matalan.co.uk, 2015). 7. Conclusion In the current study, an in depth analysis of ethical issues and sustainability factors are outlined on the basis of different clothing retailing organisations. It can be said that the ethical issues are mainly used by the organisations to develop the corporate social responsibility policies in the global operations. In addition, the study has also provided a brief idea on the product safety, green issues, grey imports and sourcing of products in respect of the various clothing retail firms. Firms like Next, Arcadia Group, Primark Stores, TK Maxx, Matalan, and New Look Group are analysed to increase the quality of the study on the ethics in the clothing retail sectors. Growth of ethical considerations in the contemporary retail marketing is discussed in details. Moreover, ethical theories or models like Carroll’s CSR pyramid, Stakeholders theory, and Triple Bottom Line are outlining that global corporate are using CSR strategies for sustaining in the competitive market. Reference list Ahmad, J., 2012. Can a university act as a corporate social responsibility (CSR) driver? An analysis. Social Responsibility Journal, 8(1), pp.77-86. 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