Describe about the Business Organization and Policy?
This paper has focused on discussing the concept of business ethics and ethical consumerism in real business context. Increasing number of business firms have been focusing on integrating sustainable business practice as the concept of ethical consumerism has been receiving greater attention. This paper has been constructed in two parts. First part has considered the incident of garment industry of Bangladesh. Poor infrastructure and non-compliance with the health and safety standards have led to collapse of Rana Plaza which exports to high end cloth retailer of Europe and America. This situation has been analyzed and addressing the major reasons behind this accident, some recommendations have been provided in order to improve the situation. The second part of this paper has considered an ethical business firm and discussed the organizational approach to ethical consumerism and eco-friendliness along with the organizational values. In this paper, the ethical consumerism and environment friendly business practice of Nike has been discussed.
Business Ethics and Ethical Consumerism
Business ethics critically scrutinizes the moral principals as well as ethical issues that may arise in the business environment. Business ethics can be applied to different functional areas of an organization for regulating several business activities. Ethical business practice ensures that the activity of the organization do not harm the society and the environment for making economic benefits. Stakeholders are given significant importance for determining the business activities and it is evident that ethics plays a major role in shaping the reputation as well as profitability of the business firm. Concept of ethical consumerism has received significant importance in the recent decade. It refers to the practice of purchasing products that are produced ethically or without making any harm to the society and environment. Positive buying and moral boycott are the forms for practicing ethical consumerism. Positive buying refers to purchasing of ethical products as well as business which operates on the principles of doing good to the society and environment instead of having the target to fulfill self interest. Moral boycott refers to the practice of avoiding the products that are perceived to be associated with unethical behavior. Businesses that do not ethical regulations and do not integrate sustainable practice are more likely to be avoided by the ethical consumers. The growing concern regarding ethical consumerism has forced the organization in ensuring ethical business activities.
Incident of Rana Plaza and Its Impact
Garment industry of Bangladesh significantly contributes in the economy of nation. Bangladesh is one of the biggest exporters of clothes to Europe and America as the wage rate is significantly low (Ahamed, 2013). In 2013, 1134 people were killed and 2500 were injured when Rana Plaza collapsed. The worst accident in the garment industry of Bangladesh has snatched several lives due to the poor working condition. The leading multinational clothing organizations have pledged to enhance the safety standard in the booming garment industry of Bangladesh. It is evident that the industry is not well structured and poor regulatory system of the industry has enhanced the safety risk of the workers (Burke, 2014). Poor compliance with the safety standards, lack of clear vision, poor organizational strategy and values are the major reasons behind such incident in the garment industry of Bangladesh (David Mariani and Valenti, 2015).
International brands like Mango, Bennetton, Prrimark, Matalan were sourced from the Rana Plaza of Bangladesh. The incident of Rana Plaza creates a negative impact on these high end brands. Ethical consumerism has been receiving growing attention, especially in the western countries. However, incidents such as Rana Plaza have indicated that these clothing firms are not complying with the ethical standards. Child labor and poor safety conditions of Bangladesh garment industry is the major concern for the ethical consumers across the world. Not only Rana Plaze, the entire garment industry of Bangladesh is exposed to high risk. Hence, the multi-national importers are highly concerned with the working condition and health and safety issues of the works as it has significant impact on the financial position of the business.
Recommendation for Improving the Business Practice
The above sections has identified that the business will encounter major issues due to non-compliance with the ethical standards. The consumers may refuse the products as those are manufactured in poor working environment which does not meet the ethical standards. Hence, it is important to improve the working condition of the garment factory in Bangladesh. The workers are exploited by the multinational fashion brands and it needs to be stopped for ensuring ethical sourcing and manufacturing. This section will focus on providing some recommendations and outlining strategies that would help in improving the business practice for the Bangladesh garment industry as well as the multi-national fashion brands (Washington Post, 2014).
First of all, the government must take some initiatives for developing firm regulatory framework for the garment industry of Bangladesh. It must focus on working condition, health and safety issues along with job security. Thus, the garment industry of Bangladesh can achieve long term growth (Oka, 2015).
The international organizations or the importers of readymade clothes need to take some capacity building programs which will help in redistributing power among the pillars though employee empowerment (THOMASSON, 2015).
It is very important to educate the workers and provide appropriate training and assistance to the middle management for developing healthy work culture.
Regular revise of wage is important for ceasing exploitation of the worker and it will help in meeting the ethical standards of business. However, it may enhance the cost of the exporters (Ramesh Kurpad, 2014).
The auditing system need to be improved and the buyers must get information regarding the workers condition. The better focus will help in improving the present working conduction which does not comply with the ethical standard (Parveen, 2014).
Training programs can be conducted for the workers in order to enhance productivity as well as assisting them in maintain safe working environment (O'Connor, 2014).
Ethical Consumerism: Ethically Produced Products
Nike is the one of the leading global brand of sports shoes and apparel. The organization believes that sustainability is the principal catalyst in improving the business practice through innovation. Nike has an ethical code for all the employees and it helps in defining the desired standards of conduct which must be followed by the employees. The ethical code of Nike includes product safety, employee activity, utilization of resources, ethical behavior, legal compliance etc (About.nike.com, 2015).
Sustainable innovation is the core strategy of the organization which is applied in case of designing, materials, manufacturing as well as retail. Nike is engaged in various activities that continuously evaluate the major impact of the business and set public targets in order to improve the ongoing situation. The company has been encouraging innovation throughout the supply chain. Nike sources product from various factories and these factories are neither owner or operated by the organization. Hence, it is very important for the company to ensure that the suppliers are also complying with the ethical standards. Nike has been focusing on establishing long term relationship with the strategic suppliers in order to exhibit commitment to engage the workers, environmental responsibility and ensuring safe working conditions. It has been ensured that the factories comply with the Nike’s code of conduct for enhancing the worker as well as environmental performance (the Guardian, 2012).
Earlier employee engagement was considered as a community investment activity at Nike. Initially, it was undertaken with the aid of community grant programs. Nike had focused on harnessing the energy of the active volunteers for driving the overall community engagement as well as investment. Nike has established “WE portal” which has emphasized on connecting the global workforce of the organization. Nike had organized a brainstorming session with the Nike as well as Non-Nike leaders for developing strong communities in order to facilitate social change. Nike is committed for being responsible employees. Nike focuses on paying at least the minimum defined by that particular nation. In order to enhance worker engagement, Nike focuses on improving the worker engagement as well as well being (Banjo, 2014). The organization does not approve child labor in the factories and the contract suppliers and manufacturers require complying with the code of conduct of Nike. Giving significant importance to the workers, Nike ensures positive results in long term by improving the labor conditions (www.nikeresponsibility.com, 2015).
Nike offers a healthy, hygienic and safe workplace for the employees. The company has focused on taking necessary steps for preventing injuries and accident in workplace. The contractor has a system for detecting, avoiding and responding to the potential risks related to the health and safety of the workers. Nike has developed as well as implemented procedures that help in reducing or eliminating the risk associated with physical and mental health along with the social well being. Preliminary medical services and first aid are available for any workplace hazard.
The principle environmental impact of the business activities of Nike takes place in the supply chain. It has been observed that the major environmental impacts are related to the materials production which includes growing the raw material along with the extraction, processing and finishing. It has developed new ways for lowering the negative impact on the environment (Nikeresponsibility.com, 2015).
In case of traditional shoes, upper part is consisted of several components that is cut and sewn together. However, Nike Flyknit has revolutionized the traditional practice of shoemaking through knitting the upper parts of the shoe precisely engineered for the support and strength. It has significantly contributed in reducing waste during the manufacturing procedure. Nike has developed the Making App which can be used easily by the designers of the company for making better choices regarding the materials used. Nike had adopted a dyeing process which is waterless (nikemakers.com, 2015). Nike has been using fabric which can be recycled and the water free process of dyeing. Thus, Nike is applying innovation for reducing the environmental impact for the better world.
Nike is committed to the safety of the products, employees, consumers as well as the environment. The company has a list of restricted substance and use of these hazardous chemicals is prohibited. Nike has been encouraging the contract manufacturers and suppliers to integrate green chemistry for eliminating, reducing as well as managing the toxic chemical in a responsible manner. One of the important innovations of Nike is environment friendly rubber which contains 96% less toxin. Thus the use of Nike ColorDry, eco-friendly rubber, Nike Flyknit etc have significantly contributed in reducing the environmental impact. In this manner, Nike has been focusing on achieving null discharge of hazardous chemicals within 2020 (the Guardian, 2013).
Conclusion and Recommendation
This paper has provided significant insight to the importance of ethical business practice in present situation. According to the ethical consumerism, only the ethically manufactured goods will be bought by the aware consumers. Collapse of Rana Plaza in Bangladesh has depicted that poor working condition of garment industry. It had created a negative impact on the multi-national fashion brands. It is recommended that the government must take initiative for developing firm regulatory framework. Additionally, the companies must focus on developing infrastructure which complies with the organizational safety requirements and thus products will be sourced ethically. Moreover, the ethical business practice of Nike has been discussed which demonstrated that the organization has integrated sustainable practice through innovation. It has been observed that Nike ColorDry, eco-friendly rubber, Nike Flyknit etc have contribute in reducing the environmental impact of business activities.
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