Explain the implications for the business and stakeholders of a business operating ethically. In this P2 task, I will be explaining the implications that Primark’s unethical practice has on itself and on its individual stakeholders. I will start of by introducing Primark’s 7 main stakeholders are and I will also explain how each of these stakeholders is affective by Primark unethical activities. I will now discuss how these stakeholders are affected positively or negatively by Primark’s unethical practices. Customers: Although Primark produces in Bangladesh and India, their main customer base is in Europe. Customers point of view is to buy products that are cheap and of good quality. Without the customers, Primark as a company would not survive because in all situations, customers are the main priority and their needs have to come first. Customers are vital stakeholders because they can instantly choose to spend their money on another company that could turn out to be a competitor for example, Primark former customers could start shopping at New Look.
As a result of Primark’s unethical behaviour, customers will benefit in a positive way. The reason why customers will benefit from Primark’s unethical behaviour is because products will be cheaper for them to purchase instead of going to other clothing stores like River Island. This is also a benefit to customers because most of Primark’s stores are based and operate in Ireland, U.K and even Europe so customers will find it as a cheaper alternative not knowing that Primark’s workers earn low payment. Communities: The community is an important stakeholder for Primark because they welcome the company to their area and responsible for publicizing within the area. Primark has trust on their community as they are an essential part of the company. The community also helps Primark with advertising has they give a word of mouth about their business and without the community, Primark has no trust.
As a result of Primark’s unethical behaviour, communities will find it negative to welcome a company like Primark who’s unethical. The reason why Primark being unethical will damage communities is because a bad image will be building for representing or collaborating with the company. Although it will be positive for the European Union community as they won’t have to pay for expensive clothes because Primark retail it for cheap, it will negatively affect the Bangladesh community. Primark’s unethical behaviour will affect the Bangladesh community because most the families would have to work for them because there’s lack of jobs which will mean that to earn more cash; children from 3 years old get dragged into the hard labour world. Government: Government is one of Primark’s stakeholders because they need to see whether the business is focused on their objectives. If Primark is doing well, it helps the Government as they produce wealth and employment.
Primark’s unethical behaviour will affect the Government in a negative way. The reason for that is because the government is responsible for the businesses in a country and for Primark doing unethical things, it will damage their reputation. An example of why the government reputation will be damage by Primark’s unethical behaviour is about their treatment of workers. Primark don’t treat their workers with the respect and dignity deserved and that will affect the Government’s image as they failed to issue that problem. Shareholders: A Shareholder is an external stakeholder. Shareholders are part of Primark’s stakeholders because they possess different shares within the company. Shareholders will be affected by Primark’s unethical behaviour in a positive way. The reason for that is because Primark sell their product such as: clothes and garments at a cheap price which will attract customers because they can purchase so many products knowing that the price is cheap.
Primark’s strategy of cheap clothes will also attract customers because they sell high fashion products that in other stores such as: New Look or H&M are expensive and customers will profit from the bargain which will increase their sales and the more money that shareholders will be receiving. Suppliers: Suppliers are stakeholders because they provide the products for Primark that are required to be sold. Primark’s unethical behaviour will affect suppliers in a positive and negative way. The reason why their unethical behaviour will heavily affect the suppliers in a negative way is because they will have a bad image as they are also a part of Primark’s representation as a company and people will think that the suppliers find it okay to practice unethical procedures. Primark’s unethical behaviour will also affect the suppliers in a positive way because the company will be producing money and the more profits that come, the better pay that suppliers get for their deliveries.
Trade unions: Trade unions are stakeholders because the union employs professional staff who are the stakeholders. Trade unions will be affected by Primark’s unethical behaviour in a positive and negative way. The reason why Trade unions will be affected in a negative way is because of Bangladesh as Primark’s factory where the manufacturing happens is in there and the workers don’t get the right treatment as they get paid bad wages and the minimum wage is poor. An example is the kids that work get paid 52 pence per hour for their work. Furthermore, trade unions will be affected by Primark’s unethical behaviour in a positive way because of Europe as Primark’s employees receive good treatment and the respect that they deserve. Primark also pays their employees that work in places like the U.K and Ireland, good wages. Primark’s unethical behaviour affects Bangladesh’s trade union in a negative way and the EU (Europe) in a positive.
Employees: Employees are part of Primark’s stakeholder because they are one of the reasons why business keep moving in a forward direction and are organised. Without employees, a business wouldn’t work. As a result of Primark’s unethical behaviour, employees will find it negative because they will be the ones that will affect the most. Primark’s unethical behaviour is noticed everywhere as they don’t treat their workers as they should and one of the reasons is pay. Is well documented that Primark pay low wages and salaries to their workers and is classified as unfair treatment. Primark’s unfair treatment due to their unethical behaviour will negatively affect their employees because it will create a negative work environment, employees might leave because of the unethical behaviour affecting them such as: low pay.
I will now explain how Primark’s unethical business activities impact on Primark itself as a company. Primark has had a reputation of being unethical as they pay their workers little money and after the disaster in Bangladesh where a factory that was full of Primark’s workers collapsed, there’s been some questioning about their treatment. Since the disaster in Bangladesh, Primark has built a bad image/reputation and that’s bad because it will cause the company a negative publicity. Primark may not know it but their unethical behaviour will cause them to loss of money especially when they hold a clearance day where loads of products are on sale. The reason for that is because customers will not want to buy clothes that are made from small kids from the age of three and get paid a ridiculous amount of money.
Despite Primark’s unethical behaviour which leads to some customers boycotting against them, we all know that they are affected by their unethical behaviour but they don’t care as they make money out of it. I’m now going to explain how Primark’s seven different stakeholders have different conflict of interests. The seven stakeholders are customers, employees, suppliers, communities, government, trade unions and shareholders. Employees’ conflict of interest will be for Primark not performing unethical behaviour as they will not get a good treatment whereas customers will benefit from the unethical behaviour as they can purchase fashionable products for a cheap price.
Suppliers don’t want anything to do with Primark unethical behaviour as their appearance and reputation will be affected negatively meanwhile, Trade unions will benefit from it especially if is the EU (Europe) because employees that work in the Primark stores in which they are located across Europe receive good treatment and excellent pay. Shareholders will find it as an advantage for Primark to be unethical by paying their workers money such as: 52 pence an hour because the finished products will then be sold for a cheap price which will generate more money for shareholders. Furthermore, communities and government don’t really benefit from Primark being unethical.
Primark’s unethical behaviour will negatively affect the government because people will be thinking that it is their job to set regulations about stuff like this. Communities will also be negatively affected by Primark’s unethical behaviour because most of the people that live in some areas would have to work for Primark’s as they lack jobs and to earn more money for survivor, children are forced to work with their families in the hard labour world. Overall, Primark’s unethical behaviour benefits some stakeholders and not others.