Who are the Key Stakeholders in this situation? How can Fabulous Fits provide remedy to impacted Stakeholders in the Immediate Term?
Stakeholder theory can help identify the power and impact of every stakeholder associated with a situation or an organization. All the individuals affected by the business are the stakeholders (Oxfam.org.au 2022). There are numerous benefits of stakeholder management, such as increased clarity of operations, customer engagement, and reduced risk. Effective communication is one of the positives of stakeholder management. The key stakeholders in this scenario are retailers of Fabulous Fit, Administrators who are managing the online store of the company, buyers, suppliers of raw materials, the CEO, sourcing manager, Corporate Social Responsibility (CSR) manager, garment workers, the labour union of a garment worker, and the market competitors of the company.
The impacted stakeholders in this scenario are the sourcing manager small labour union associated with one of the employees of this organization. Addressing the challenges associated to the stakeholders of this business shall help in promoting the business continuity of Fabulous Fit. Due to the extreme adverse business conditions caused by the global pandemic, the sourcing manager was looking forward to the team cancelling all orders currently in production and delaying all orders that were ready for shipping in Australia (Ethicaltrade.org 2022). The integration perspective of the sourcing manager was observed in the case study. Based on the scenario, it can be analysed that focussing on contemporary CSR could have helped this stakeholder create a new stakeholder network to address the issue. It can be analysed that involving employees in the decision-making process can be helpful for the sourcing manager of this business build a culture of trust with the customers (Cleanclothes.org 2022). Apart from that, a new guideline can also be provided to consumers using social media platforms about the delay of services due to COVID 19.
On the other hand, the concern of the small labour union that comprehends the rights of labours can be addressed if financial compensation is provided to them. On the other hand, it can also be said that the introduction of a hybrid business model can allow some of the labours to re-join the business (Mckinsey 2022). Providing individualized support to the employees can be the strategy that can be taken to provide a remedy to this stakeholder.
Even though it can also be analysed that a behavioural change is required for the sourcing manager of this organization so that the ethical and commercial priorities of the business are protected. Any cultural change must be positively embraced to encourage buyers despite adverse business conditions. The creation of a collaborative work environment can help the labour unions to address the concerns of employees. At the same time, it can be said that collaborating with trade unions can also be beneficial for Fabulous Fit to address the concerns of the voices raised due to payment concerns raised during the pandemic. Making innovative changes in the business model can help Fabulous Fit to ban outsourcing so that the current employees get their share.
Impacted Stakeholders and Remedy
Outline what Fabulous Fits’s roles and Responsibilities are in this situation. How have they contributed to this situation?
Fabulous Fit can determine the solution if they start making the most out of temporary contracts. Most of the temporary contracts are for a short period; hence these types of contracts can help this organization address the payment concern of the workers. Reducing commercial pressure on the suppliers is one of the other steps this organization can take; it can help trigger the business demand for forced labour (Anner 2019). Inequities in the supply chain of the business should be reduced so that business continuity can be promoted. Misleading metrics of the business needs to be identified and stopped in this organization so that unrealistic expectation of the stakeholders can be addressed. Benchmarking labour costs and standards is also desirable in this organization as it can help the workers earn their living despite challenges such as the global pandemic. Stopping the exposure of human rights is one of the other responsibilities of the management team of this organization.
It is the responsibility of this organization to make a credible commitment to ensure that every stakeholder is happy and willing to work for a longer period. It is the responsibility of this organization to look after the financial stress of the workers (Kabir, Maple and Usher 2021).
At the same time, facilities like child care can be promoted by this business organization as it would help in improving the condition of the workers. Purchasing practices of the retailers of this business organization must be checked at regular intervals so that their aggression during price negotiation can be reduced and it has a low impact on the net revenue of the business.
Accuracy in forecasting needs to be improved in this organization to predict the possibility of future shocks. The responsibility of this organization is to promote the concept of responsible purchasing; it would help in having long term benefits. Raising the ethical standards is another major responsibility of this organization in this situation; it would help them maintain the stability of the labour wages. Selecting an appropriate pricing strategy can help Fabulous Fit pay poverty wages to the workers. At the same time, challenges such as unauthorised subcontracting, failure to invest in training, and safety improvements are the necessary changes in Fabulous Fit that can help them address the current situation they are confronting now.
On the contrary, this organization refuses to pay the workers, laying off their employees. It could be said that this organization could have dealt with this situation better if they had maintained transparency in their business practices. A shorter leading time could have helped this organization address the financial crisis they are currently facing. Addressing the gap between forecast and order placement could have restricted them from cancelling or delaying the products due to the lockdown guidelines provided by the federal government of Australia (Tejani and Fukuda?Parr 2021). Thus, it can be said that reducing the average time between forecast and order placement could have helped Fabulous Fit to address the situation in an optimised modus. Increasing forecasting accuracy could have helped Fabulous Fit deliver all the orders within a short time rather than delaying the process. Whereas, it can also be said that the selection of pricing strategies based on their impact on employees can also help business settings such as Fabulous Fit to address adverse business situations such as a global pandemic.
Roles and Responsibilities of Fabulous Fit
What changes should Fabulous Fits make for the future? Provide a strategy that outlines key steps that Fabulous Fits need to take and what these involve.
The forecasting ability of Fabulous Fit should be improved in the first place so that an exact number of resources required in the facility can be identified; it will help in reducing the high overhead cost of this business.
It can be analysed that the power imbalance between buyers and suppliers of this organization can be improved in the first place if a buyer-driven supply chain is introduced in this business environment (Kumar et al. 2021). This type of supply chain shall help this business organization to maintain a long-term association with all the stakeholders of this business. At the same time, it is the responsibility of this organization to comprehend the challenges confronted by the workers, such as harassment, verbal disagreement, discrimination, migration, and below subsistence wages.
Reduction in the payroll of the internal stakeholders of this business organization, such as the CEO, and sourcing manager, can help Fabulous Fit to start paying wages to their workers. On the other hand, the concept of furlough is an alternative solution for the challenges being confronted in this organization. Based on this concept, this organization can allow some of their human resources to take unpaid leaves; it can allow them to work for any other company to earn their living (Morgan, Awafo and Quartey 2021). Reducing working workers during this time can also help Fabulous Fit consider furlough instead of employee layoff. Apart from that, a Reduction In Force (RIF) can also help Fabulous Fit reduce its workforce. RIF can be incorporated into a business setting by eliminating a few positions that are no longer required.
Fabulous Fit must identify and address poor purchasing practices such as poor internal communication, lack of ethical criteria in the contractual terms, lack of support for meeting the ethical standards, taking late orders and aggressive price negotiation (Nguyen and Vu 2021). At the same time, this organization must also be looking forward to addressing the business decisions as it is having a negative impact on workers, such as suppressed wages, lack of investment in training and equipment, lack of permanent work, unrealistic performance targets, poor health and irregular working hours (Hoque et al. 2021). Empowering buyers to take ownership of responsible buying can provide new business opportunities for Fabulous Fit. Hence, it can be concluded that changes in the procurement cycle and pricing strategy can help this organization can help them to deal with similar shocks in future.
Fabulous Fit must evaluate its current position in the market and prioritize its objectives. After that, a strategic plan can be created in this business organization, which can help them address similar shocks in the future. Firstly, structural changes in the pricing strategies are required in Fabulous Fit as it can help them make the consumers and the workers comprehend the exact price of a garment that needs to be in place so that a living wage can be distributed among the workers of the industry (Oxfam.org.au 2022). Secondly, the organization needs a monitoring framework that can look after the gap in the current operations that this organization undertakes. Thirdly introducing high-pressure negotiation tactics can help this organization address the challenges of profit margin and wages. Thus, aggressive price negotiations need to be discarded by this organization as it is not helping them have a positive association with the stakeholders of this business.
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