Ethics Essay Primark Essay
Ethics Essay Primark
This essay shall look at the cost to human life and lifestyle through the demand of low cost clothing in the UK. This will be undertaken specifically looking at Primark and the Rana Plaza factory collapse in Bangladesh, observed as modern day slavery, having a “race to the bottom” characteristics, occurring as a consequence of globalisation. This essay will analyse differing ethical approaches including Virtue, Kantian and Utilitarian ethics. An overview of the findings will be given, using the Rana Plaza Factory in Bangladesh as a case study, along with an analysis of Primark’s supply chain. Bangaldesh has for many years has been used for outsourcing, attractive to western clothing companies supply chains due to low costs. Bangladeshi’s economy is almost entirely reliant upon these export sales (80%) in the cloth trade (Jacob, 2012). Given this, it is clear that the Rana Plaza disaster (2013) killing more than 1000 workers did not have only a local effect, but a global one, with it raising many questions.
It has been attested that those who died, did so as a consequence of poor operations management. The disaster further served to highlight that conditions of many factories were poor and often illegal. Large fashion brands including Primark, were seemingly happy to ignore such factors, to continue to gain profit, observed by the lack of procedures in place to ensure that standards of health and safety were met. This alongside the knowledge that child labour was often used, has led to many questions regarding irresponsibility of western companies. Despite the cost of life in one of the major disasters (the Rana Plaza collapse) of the fashion industry, Primark has made huge profits (44 % higher than in 2012) highlighting that cost rather than ethics is at the forefront of the stakeholders.
The race to the bottom characteristics1 of Bangladesh have facilitated giant western companies, cheaper labour and goods. Furthermore the lack of enforcement of the limited laws and regulations, along with the Bangladesh’s class system, to some extent has allowed large companies to exploit these loopholes, given that Bangladesh’s economy is dependent on the textile industry, worth one billion dollars in 1985 and now estimated to be worth over 20 billion dollars (Young, 2013). What has been debated is whether or companies such as Primark are ensuring, and not just assuming, that all in their supply change are acting ethically. The focus of this study will be on Primark.
“That bastion of fast fashion, scorned and idolised by the British public – indeed, all of Europe” (Joy, et al., 2012). Fast fashion may be described as inexpensive clothing which mimics catwalk fashion trends, lasting only the trend, thus part of the throwaway culture leading to unsustainability. This is supported by Joy et al. (2012) who express that fashion trends run their course, with today’s styles outdoing yesterdays, with yesterday’s having already been relegated as trash (Joy, et al., 2012), this is Primark’s main business model offering competitive advantage and success. For example, fast fashion results in consumers having at least 30% of unworn clothing (worth £30 million) with approximately £140 million of used clothing going to landfill annually (WRAP, 2014).
Changing trends have shown that in the 1900s, 15 % was spent on clothing in comparison to 2.8 % (2010), although a greater number of items were purchased with the onset of time, indicating that the majority of purchases were low-cost items. Packard (REF) refers to “consumerism” in negative way, highlighting the role of advertising in the creation of “consumption for consumption’s sake “, which leads to mindless consumerism, whereby individuals are “more wasteful, imprudent, and carefree” in their habits. As a consequence natural resources are utilised unnecessarily at an alarming rate. Therefore indicating that all stakeholders of Primark, including consumers are participants of “mindless consumerism”.
Initially, Milton Friedman’s stakeholder theory will be utilised, Friedman is known for his famous quote of “business of business is business”. He claims that there is one, and only one social responsibility of business, to use it resources and engage in activities designed to increase its profits, so long as it stays within the rules of the game, therefore “engages in open and free competition without deception or fraud.” REF he furthers this by expressing what does it mean to say that “business” has responsibilities?, only people have responsibilities.
As articulated by Friedman (1970), a corporation is an artificial person and in this sense may have artificial responsibilities, but “business” as a whole cannot be said to have responsibilities, even in this vague sense’ .Milton. Ref “The Social Responsibility of Business Is to Increase Its Profits.” New York Times Magazine, 13 September 1970. Identifying that Milton Friedman thinks that businesses should only look at the shareholders in the organisation, their priorities and needs. For instance, as with Primark low prices, to maximise profits for shareholders.
Alternatively, Freeman contradicts Friedman’s theory through the stakeholder theory (Freeman, 1984). Freeman states that business will only maximize profit over the long-term, if it takes into account its social responsibilities Businesses that are seen to ignore the interests of the wider community and to fail to protect society’s welfare will pay in terms of damage to image and reputation. Although it is evident that Freeman’s theory did not hold, as despite the Rana Plaza disaster, and associated unethical practices, Primark has continued to be successful. As Freedman states Primark should not only look at their shareholders interest but should also proactively engage with stakeholders.
Responsibilities of supply chains and due diligence
Due diligence is the procedure by which companies monitor and review actions of a company, prior to signing a contract. Intrinsically this procedure is used to identify whether the “business partner” is working to a standard which complies with that required by the investor (Brown et al). Therefore identifying if a company is adhering to its own code of ethics, as they would have prior knowledge of the proposed outsourcer and their standards, allowing them to make an informed choice. This is undertaken by “best practice” of due diligence, in doing this Primark could obtain information that could be critically evaluated to ensure that their business partners in the supply chain are acting responsibly. Highlighting a lack of due diligence by Primark, in place at the time of the Rana Plaza disaster.
With the onset of globalisation, many difficulties as well as advantages have arisen. One of the main difficulties associated with globalisation is the lack of visibility and transparency of the supply chain, which may lead to risk, as highlighted by the Chartered Institute of Purchasing and Supply (CIPS) who disclosed that within at least 11 % of UK business, it was highly probable that “modern slavery” exists within the supply chain. As emphasised by the Rana Plaza collapse, the problems of lack of visibility are inherent, due to extensive supply chains, with many of the associated problems as a consequence undisclosed to buyers.
Researched by the CIPS states, ~72% of British supply chain professionals have no visibility of their supply chains beyond the second level with only 11% having complete visibility of the chain (Noble, 2014). It is not understood whether Primark was fully aware of the problems at the Rana Plaza factory, although they could still be considered at fault, due to ineffective checks and monitoring of subcontractors, highlighted by Panorama (date). Alternatively it could be assumed that Primark was indeed aware and was willing to take the risk, for profitability, at what cost?
Irresponsible behaviour analysis
Fast fashion underpins the entire fashion merchandising industry. Children and adults are used to produce such fashion items, primarily in underdeveloped countries including Bangladesh. These individuals work in very poor, and often dangerous conditions, earning very small amounts of money. In working, the young children are unable to access education. The workers have limited rights and are general thankful to be able to earn any amount of money whatsoever. Western society often views such circumstances as being exploitative and unethical. There are several theories of ethics which have differing viewpoints. These include a Utilitarian, Kantian and Virtue ethics. Utilitarian ethics relate to benefiting the majority of society, focussing not upon individuals but a collective whole. Many businesses utilise this approach as a basis to provide guidelines for ethical decision making for the greater good. The outcome is that the majority of stakeholders benefit. Utilitarianism looks to fit well into a company’s business strategy, connecting ethical responsibility with business and society, in their focus of striving and justifying their approach as being for the greater good for the majority Gustafson, 2013)..
Therefore from a consequential (Utalitarian approach) perspective, whereby an act is deemed to be right or wrong, is judged using two principles. Initially determining the outcome, with the proviso that the greatest good for the greatest number of individuals is attained, limiting harm and maximising overall good (Hartman & DesJardins, 2011). Therefore from a consequentialist viewpoint Primark did not appropriately undertake a cost versus benefit analysis, by not accounting for their lenient attitude in respect of their suppliers. Knowledge of poor working and safety conditions were widely known prior to the collapse of the Rana Plaza (BBC News, 2013), indicating that Primark had no regard with respect to risk factors, that could be caused by the absence of due diligence. Therefore, Primark did not act ethically, from a consequentialist viewpoint, exploiting workers for financial gain and simultaneously failing to achieve “the greatest good” for the “greatest numbers”.
However, if the example of workers at the Rana Plaza factory is considered, working on behalf of Primark, it may be seen that these stakeholders suffered at the hands of a Utilitarian approach. This is due to the main driver of Primark’s business being profitability, along with a demand for cheap clothing by UK consumers, therefore the greater good does not incorporate the workers in the factories, paid low wages to keep production costs down. Despite this, it may be argued that without work, those effectively excluded from Utilitarian ethics would be left in an even more difficult position, having no finances whatsoever. Since Capitalist societies in general dominate the fast fashion market, the actions of these corporations must be evaluated and the significance of their impact considered.
Given that such corporations are driven primarily by profit, many may suggest that the lack of provision of education and improved living and working conditions, is indicative of the fact that company’s do not consider if their actions are moral or not. Instead they do what they want, without thought of the negative impacts, to drive their goal, in Primark’s case the provision of cheap fashionable clothing. This is a clear demonstration of a company taking a Utilitarian approach, marginalising the minority whilst providing for the majority. However, from a deontological viewpoint, whereby dutiful obligation plays the greatest role, in which regardless of consequence all individuals are expected to do “the right thing” , with these actions deemed to be ethical, only if they have the possibility to become general law (Fisher et al., 2013).
In order to be a part of society, there are accepted social norms and laws that individuals must follow (Stanwick & Stanwick, 2014). Primark (supposedly) partakes in the following of societal norms, clearly stated within their ethical guidelines (2011), where they explicitly state amongst other norms, that Primark will not tolerate either unsafe or unhygienic working environments? Despite the inclusion of these norms within their guidelines, their failure to adhere to them is clearly visible. Despite Primark’s duty to do the “right thing”, they did not, from a deontological ethics viewpoint. Had Primark acted ethically in a deontological way, consideration of workers well-being, happiness and other rights would have been considered.
Likewise Kantian ethics (1785), have the expectation that individuals are able to distinguish right from wrong, based on an individual’s beliefs and moral, not via legal laws. It is clear that no individual would consider working 19 hour shifts for very low wages an acceptable scenario, and allowing individuals to do so in the factories of Bangladesh, brings into question Primark’s ethical judgement, or lack of, based on Kantian ethics. However Kantian ethics is seen as opposing Utilitarianism, its core values emphasise treating employees as individuals, having equal value.
Furthering this, Kantian ethics incorporates within its ethos that employees should not be treated ‘as a means to an end’ (Driver, 2006) and that each should have individual rights, whilst not being viewed only as a source of labour (Smith and Dubbink, 2011). The Kantian approach involves the decision-maker being detached from personal motives when making a judgement (Smith and Dubbink, 2011). In this approach, no external factors are considered. However, due to the personal emphasis on profit in the current climate, companies are unable to detach themselves from the personal motive of profit and cannot adhere to Kantian ethics (Driver, 2006).
Virtue ethics focus on personal characteristics and whether or not they acted in a virtuous manner when making a decision (Driver, 2006). “Justice and generosity” are often agreed to be such traits that are employed to pursue good practice (Audi, 2012). Paralleling this to a company, a company would be deemed virtuous, and therefore acting ethically, if their intention was to achieve a caring environment and general positivity of employees, rather than maximising profits alone. Once again, Primark based on virtue ethics is not observed, acted with no regard to safety or well-being. Recent initiatives to improve due diligence in the supply chain have been undertaken as a consequence of the Rana Plaza disaster, however consequential actions do not follow the rules of virtue ethics, actions must be commonly practiced.
Evaluation of ethical theories and Primark
Adam Smith states that “It is not from the benevolence of the butcher, the brewer or the baker, that we expect our dinner, but from their regard to their own interest”. (1776, Wealth of Nations PAGE NUMBER). He attests that in engaging in self-interest that individuals also bring about greater good for the society as a whole. Smith furthers this in expressing that should an invisible hand be guiding the economy, then competitive producers would produce goods required at the lowest cost, leading to a self-regulatory economy, a free market. There are limited regulations with regards to Health and Safety in particular, in Bangladesh in comparison to the UK. Had Health and Safety been at the level of UK standards, with workers not having been used as a means to an end, as described by Kant, it is unlikely that the Rana Plaza tragedy would have occurred. However, in respect of a Utilitarian approach and cost-base analysis, without cheap labour, working in poor conditions, the outcome would not have been as required and consumers would not obtain cheap fast fashion goods, nor would shareholders resultantly be rewarded as expected. In this respect as the greater good is generally attained, individuals in Bangaldesh have employment, shareholders have profits and consumers have the latest cheap fast fashion.
Therefore it may be criticised that no moral/ethical behaviour is taken into consideration within Smith’s theory (Mill, n.d.). Based on Kant’s theory it may be argued that the above scenario is in fact unethical, as the workers’ rights are not taken into consideration and that they are viewed only as a means to an end (Bowie, 2002), prioritising productivity and therefore profits, whilst viewing the employee only as a form of labour. When comparing a Kantian viewpoint to that of an Utalitarian perspective, then the Kantian standpoint does not consider a situation to be unethical even if it is for the greater good, as in the case of an Utalitarian approach. Furthermore any gains made by a company that are achieved through any activity which does not take an employee’s rights into consideration is regarded as unethical (Bowie, 2002). However, for some consumers ethical responsibility of a company may influence whether they purchase a product, which may affect profitability and could also affect brand and brand image.
Damage to a brand is often irreversible. However, in the case of Primark after the factory collapse, due to unsafe and unethical practices; for example workers were locked in, unable to escape, luckily this potentially disastrous impact on brand image, had in reality little impact. Initially there was uproar and disgust expressed by western society, although this negative and damaging event slowly faded from the press and media, and rapidly from the minds of the consumer. Therefore highlighting that western consumers, although horrified and shocked about the conditions, seem not to care and have no moral stance and may be described as egoethical.
Egoethical characteristics include self-interest without consideration of the consequences of the demand for cheap goods. Given the recent increase in interest regarding business ethics, it may be deemed that having an “ethical” business can lead to competitive advantage, attracting business from “ethical” consumers. Although in reality this may be a tool, used solely for the purpose of increasing profits rather than benefiting employees (Schwartz, 2011). The power of business in today’s society along with the time individuals spend in employment, necessitates the need for an ethical environment ( Mishra & Crampton, 1998) .
Primark’s response and actions to improve ethics
Balch (2013) expresses that companies are ethically responsible to deal with problems when and wherever they are highlighted. Ruggies (2010) framework in respect of human rights and business advocates that if a ‘problem’ arises within the supply chain, the inclusion of this part of the supply chain must be considered in respect of a company’s Corporate Social Responsibility (CSR) to define whether inclusion is crucial. Should it be considered crucial, the company must seek to safeguard that ethical practices are improved, if not critical, an alternative should be sought. Primark based on a consequentialist perspective as mentioned earlier, plays a large role in Bangladesh’s economy, by the employment of many workers as part of its supply chain, with this it may be argued that Primark is supporting a reduction in poverty rates. Additionally as described by Primark’s Ethical Trading (2013), 85% of its Bangladeshi workforce are female, offering opportunity and developing their independence.
Consequently it may be argued that if Primark removed its outsourcing from Bangladesh elsewhere, this would be extremely detrimental, and would add to the high numbers already living below the national poverty line , 49.8 % in 2002 (ILO, 2009), highlighting that despite many ethical reservations Primark impacts the country and the people of Bangladesh in a positive way. From a deontological perspective, almost immediately after then Rana Plaza disaster Primark was seen to be improving, observed by Primark’s assessment of structural integrity of the factories and also via their joining the Accord on Fire and Building Safety (Bangladesh Accord, 2013).
Furthermore Primark later terminated contracts with factories that were investigated and were considered at risk of collapse. Primark attests that there is due diligence throughout its supply chain which is undertaken irrespective of consequence. From a virtuous perspective Primark immediately acknowledged its responsibility and responded instantaneously to the catastrophe of the Rana Plaza collapse (providing financial and food aid to victims and their relatives), in comparison to other major fashion chains also using the factory (Primark, 2013).
Primark’s actions were virtuous, in that not only did they support “their” workers (and relatives), they supported those employed by other fashion chains within the Rana Plaza factory. Additionally it may be seen tthat Primark is working towards provision of improved well-being and education via projects such as their Health Enables Returns (HERproject) for female employees (Primark, 2011), enabling employees to have a better standard of living. Furthermore Primark is working towards suppliers increasing wages to give employees a “living wage” and to improve working conditions (Siegle, 2013).
Having evaluated and analysed Primark’s responsibilities and ethical considerations regarding their contribution to the Rana Plaza disaster, primarily based on a lack of due diligence in the supply chain, using a wide variety of ethical theories, that presented a variety of perspectives. These have highlighted that Primark’s ethical standards were deficient and questionable, however subsequently Primark has identified its poor practice and is working towards sustainability, via a variety of ethical considerations, improving overall standards for its employees in the supply chain, demonstrating positive CSR. Although to what extent Primark may achieve and sustain these goals in the future, whilst still focussing on profitability may be uncertain.