Discuss about the Business Ethics in Retail Sector.
In addition with that, the sustainability factors and engagement of the stakeholders in the sector have been demonstrated. The study also holds the description of the factors that are making the organizations in the retail sector handle ethical issues more sincerely. At lasts the advantage of managing the business ethics that the organizations have received. Various organizations in the retail sector have failed to manage their business in terms of sustainability. This failure has resulted into criticism. Regarding the consumers, especially those who face lowered trust in the sector have suffered most because of the criticism.
Ethical Issues in the Retail Sector:
“Green” issue: Among the top retailers among the world the issue that was most common is the environmental issue. The organizations which are at the top of the retail industry such as wall mart considers as the environment as the primary component within the program of ethics. UK retail industry is facing some issues with the green products as the consumers have doubts about the responsibility of the organization toward the environment (Barbosa et al. 2015). In UK only twenty seven percent of consumers are willing to spend on the green products.
Figure 1: Green Processes to be maintained in Retail
(Source: Barbosa et al. 2015, pp- 367-370)
Corporate social responsibility: CSR or corporate social responsibility has become a famous word rapidly. It can be considered as the enlarged perception responsibility. The connection between environment and organization is consisting of different values (Korschun, Bhattacharya and Swain 2014). CSR is generally known as the evaluation of the values. As per the view of an organization, the duty of the organization toward its consumer can be considered as the CSR (Capelle-Blancard and Petit 2012). The integration of economic, social, environment and ethics within business practices and strategies are the concerns of the CSR. At present more than eight thousand organizations is making use of CSR.
Figure 2: Jantzi Research’s Weights for Retail Sector
(Source: Capelle and Petit 2012, pp- 570)
Ethical sourcing: It can be considered as the most critical ethical issue in garment industry. The awareness of the consumer regarding the sustainable sourcing has increased recently because of the growing environmental concerns (Perry, Wood and Fernie 2015). As a result, the consumers are asking for the cloths that are made of organic cotton and can be washed in low temperatures. Considering on the situation, at present many organizations are integrating ethical sourcing as an aspect of corporate responsibility agenda.
Figure 3: Audit Program Finding for Ethical Sourcing
(Source: Gonzalez 2016, pp- 39)
Sustainability in Retail:
The issues regarding the sustainability in retain sector are as following.
Climate change: The experts consider the important of climate change more than the consumers. A small amount of the consumers recognize the significance of climate change in the retail industry. In terms of the impacts of climate change and its causes, the consumers who indentify the issue of climate change tries to distance themselves from climate change (Howard et al. 2014). It is difficult for the consumers to link issue of climate change and retailers along with their purchasing patterns.
For managing this issue the measurement of carbon footprint in the organization are considering as a great source of recognizing the impact of the organization on climate change. The collaboration between the Carbon Trust, retail sector and other parties can be resulted into the development of a standard model for measuring the carbon footprint (Fernie and Sparks 2014).
Figure 4: Climate Change Framework
(Source: Fernie and Sparks 2014, pp- 217)
Waste: It is a crucial issue for the retail sector. The retailers generate a huge amount of waste which is creating massive challenge to the sustainability. Both the consumers and stakeholders are considering the waste reduction sincerely. According to Brandenburg et al. (2014) the waste is the first sustainability issue that haunted the retail industry.
Figure 5: Waste Management in Retail
(Source: Papargyropoulou et al. 2014, pp- 109)
For managing the issue the retail industry is considering the solution, three R’s. The three R represents reduce, reuse and recycle. Reduce refers to the process of providing items to the consumer without excess packaging. Reuse refers that one should donate old merchandise or products to the some organization which can make use of it further. Recycle process refers to donate or sell recyclable products to the organization which does the work of recycling (Brandenburg et al. 2014). At last the waste which cannot be categorized into any of the stated above is disposed.
On account of the broadness of advantages that manageability programs give to organizations, it is regularly hard to pinpoint a solitary reason a retailer starts a specific project (Carroll and Buchholtz 2014). In any case, unmistakably organizations frequently discovered supportability programs as a result of one or more important partners’ advancing needs. Workers, contenders, and government are the main three partners driving retailers to fortify their supportability programs.
Figure 6: Influence of the Consumers on Sustainability Activities
(Source: Carroll and Buchholtz 2014, pp- 371)
The six factors that forced the organization in the retail sector to focus on managing the business ethics are as following.
Credibility: For creating credibility is one factor behind concentrating on managing business ethics. The organization that takes moral values sincerely focuses on creating credibility very seriously. It is because the organization wants every person in the society to know its name even the person has no information at all about the organization (Ferrell and Fraedrich 2015). Taken as an example, Infosys drives its business toward social responsibility initiatives and good corporate governance.
Decision making: The objective of any organization is to integrating the entire decisions that it has taken from its establishment (Hartman, DesJardins and MacDonald 2014). That is why improved decision making is a great factor every organization in the retail industry.
Meeting basic requirement: Being ethical is an essential requirement for any organization in this sector. The employees always wish to work in an organization that is ethical in its processes (Ferrell and Fraedrich 2015). Same goes for the consumers, they always want to buy from the supplier which integrates ethical pretenses.
People and leadership: Values that drives an organization is the one of the most crucial factor for any organization. These values are the reason behind uniting the stakeholders and employees in a common platform (Hartman, DesJardins and MacDonald 2014). So uniting people and leadership can be considered as a factor.
Securing society: The retail industry considers ethics as a factor for safeguarding the society. Ethics has the potentiality save the society in contrast of slow public interest litigations.
Long term gains: According to a survey the organizations that follow values and ethics have been gained more advantage in the long run than those who do not (Khalid, Ramly and Lau 2014).
Improved society: Trusts controlled a few markets to the degree that costs were settled and little organizations stifled out. Value settling disabled typical business sector strengths. Workers were ended in light of identities. Impact was connected through terrorizing and provocation. At that point society responded and requested that organizations put high esteem on reasonableness and equivalent rights. Hostile to trust laws were organized (Ruedy et al. 2013). Government organizations were set up. Unions were sorted out. Laws and controls were set up.
Maintaining moral course: Consideration regarding industry ethics is basic in the middle of times of inner change times much similar to those mate now by organizations, both for-benefit and not-for-profit. In the course of times of progress, there is frequently no unmistakable good compass to guide pioneers through complex clashes about what is correct or off-base (Zikmund et al. 2013).
Promoting sound public image: Regard for ethics is similarly firm advertising, in fact, supervision ethics ought not to be completed mainly for motives of publicity. Yet, to be completely truthful, the method that an organization constantly presents look upon for its ethics can portray a firm positive effect to the common population (Shu et al. 2016).
Conclusion:
From the above study it can be concluded that the focus on the business ethics can be a very crucial factor for the organizations in the retail sector in terms of gaining long term advantages. From the analysis on the issues in the business ethics it has been recognized that though the organizations have done well in terms of maintaining business ethics, they have to conduct additional several surveys for gaining consumers full support and trust. The stakeholder analysis on the retail sector has made an understandable impact of individual stake holder in terms of improving the business ethics. The figure six indicates that the investor has the most influence for managing the ethics in retail industry.
The study was limited in terms of collecting raw data directly from the executives rather it shows the data collected by other authors.
References:
Barbosa, N.A., Paes, M.C.D., Guimaraes, P.E.D.O. and Pereira, J., 2015. Carotenoid Retention In Minimally Processed Biofortified Green Corn Stored Under Retail Marketing Conditions.Ciência e Agrotecnologia, 39(4), pp.363-371.
Brandenburg, M., Govindan, K., Sarkis, J. and Seuring, S., 2014. Quantitative models for sustainable supply chain management: Developments and directions. European Journal of Operational Research,233(2), pp.299-312.
Capelle-Blancard, G. and Petit, A., 2012. The weighting of CSR dimensions: Does one size fit all. Working paper.
Carroll, A.B. and Buchholtz, A.K., 2014. Business and society: Ethics, sustainability, and stakeholder management. Nelson Education.
Fernie, J. and Sparks, L., 2014. Logistics and retail management: emerging issues and new challenges in the retail supply chain. Kogan Page Publishers.
Ferrell, O.C. and Fraedrich, J., 2015. Business ethics: Ethical decision making & cases. Nelson Education.
Gonzalez-Padron, T.L., 2016. Ethics in the Supply Chain: Follow-Up Processes to Audit Results. Journal of Marketing Channels, 23(1-2), pp.22-33.
Hartman, L.P., DesJardins, J.R. and MacDonald, C., 2014. Business ethics: Decision making for personal integrity and social responsibility. McGraw-Hill.
Howard-Grenville, J., Buckle, S.J., Hoskins, B.J. and George, G., 2014. Climate change and management. Academy of Management Journal, 57(3), pp.615-623.
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Korschun, D., Bhattacharya, C.B. and Swain, S.D., 2014. Corporate social responsibility, customer orientation, and the job performance of frontline employees. Journal of Marketing, 78(3), pp.20-37.
Papargyropoulou, E., Lozano, R., Steinberger, J.K., Wright, N. and bin Ujang, Z., 2014. The food waste hierarchy as a framework for the management of food surplus and food waste. Journal of Cleaner Production,76, pp.106-115.
Perry, P., Wood, S. and Fernie, J., 2015. Corporate social responsibility in garment sourcing networks: Factory management perspectives on ethical trade in Sri Lanka. Journal of Business Ethics, 130(3), pp.737-752.
Ruedy, N.E., Moore, C., Gino, F. and Schweitzer, M.E., 2013. The cheater’s high: The unexpected affective benefits of unethical behavior. Journal of Personality and Social Psychology, 105(4), p.531.
Shu, C., Zhou, K.Z., Xiao, Y. and Gao, S., 2016. How green management influences product innovation in China: The role of institutional benefits.Journal of Business Ethics, 133(3), pp.471-485.
Zikmund, W.G., Babin, B.J., Carr, J.C. and Griffin, M., 2013. Business research methods. Cengage Learning.
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