I have chosen Marks & Spencers for this part, to analyse the consequences for different stakeholders of Marks and Spencers to see if they conduct the company in an ethical or unethical manner.
Consequences for different stakeholders that conduct businesses in ethical and unethical manner
I have chosen Marks & Spencer’s for this part, to analyse the consequences for different stakeholders of Marks and Spencer’s to see if they conduct the company in an ethical or unethical manner.
Marks & Spencer’s believes that the company’s responsibility is not an additional burden or a distraction from serving the customers; it is essential for sustaining themselves as a responsible company. However, according to two independent rankings of top companies in 2004 was named Marks & Spencer’s as one of the worst offenders on social and environmental issues and heavily criticized its Corporate Social Responsibility (CSR) report for being incomplete and poorly verified.
Social audit- this is a process that enables an organisation to assess and demonstrate its social, economic and environmental benefits and limitations. It is the way of measuring the extent to which an organisation lives up to the shared values and objectives it has committed itself to. Social auditing provides an assessment of the impact of an organisation’s non-financial objectives through systematically and regularly monitoring its performance and the views of its stakeholders.
Ethical impacts- advantage and disadvantages for treating stakeholder in an ethical manner:
- The main advantage would be that the company will be able to maintain its high ethical standards and because they are practicing activities in an ethical manner right will help you to stick to being ethical no matter what.
- Good public image/reputation
- More investors will invest in the company
Consequences for conducting business in an unethical manner
Even though there may be good businesses, the company is still likely to drift off and that when bad reputation starts and conducts activities in an unethical behavior. There are very little companies who can actually maintain a high standard and not become a victim/ criminal of CSR.
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Environmental damage- the environment is paying the price of M&S success. Its stores are energy –intensive eyesores. Their food is flown from all over the world and trucked around the UK, contributing to climate `change. The company demands fro ingredients like palm oil which is turning natural forests into wildlife deserts.
Suppliers- Marks & Spencer’s have driven down prices of clothes and some of their foods such as meat and vegetables, because they have such a huge share of market. it’s a monopoly position; they can simply go and find someone else who will supply them at the price they ant. In the CSR review, M&S was highlighted the fact 6thqat it is in interest to work in ‘ever closer partnership’ with suppliers. It says ‘it us using its strength in the market place to deliver unbeatable value’. However, form the point of view of the most vulnerable link in the chain, the farmers and workers, this amount to forcing them to push down prices. Marks & Spencer’s mission is to deliver ‘unbeatable value’ for shoppers has pushed down prices so far that some UK farmers are on the edge of bankruptcy.
The researcher among its suppliers overseas reveals that some pay workers wages which keep them in poverty and have only minimal health and safety protection in place. This has huge consequences, not just for suppliers and farmers but also for farm labourers, the environment and animal welfare. We all have heard of numerous cases of poor treatment of suppliers by M&S. sadly, some of the suppliers refuse to speak against M&S in fear of losing their contracts.
According to competition commission five years ago, they had examined anonymous complaints from farmers. In its report are cite 30 ways in which supermarkets exploited their power over suppliers. These included ‘requests’ for ‘over riders’ and retrospective discounts, requests for promotion expenses, making changes to contractual arrangements without sufficient notice, late payment of invoices and unreasonably transferring risks from the supermarket to the supplier.
Employees-working in M&S stores can be low-pay option too, and conditions are often demanding and physically challenging. M&S is even trailing a scheme to stop workers sick pay on the first three days taken off, as is stands, statutory sick pay only kicks in after the first three days when the company can claim about 80% back from the government
In order for M&S to give consumers what they want or is perceived to want, is what M&S will provide and this strategy has been key to its business success since customer needs are in reality, merely comes to an end. After the customers it’s the shareholder’s needs that must ultimately take priority.
M&S and many other supermarkets are committed to conducting business in an ethical and socially responsible manner. This relates to all aspects of business, treating employees, customers, suppliers and most importantly shareholders in a fair and honest manner and ensuring that there are constant and open channels of communication. I personally believe that businesses should aim to treat their stakeholders equally just giving that bit of importance to their shareholders and making sure they get their dividends on time as this will help businesses to be more successful by satisfying their shareholders and when they are happy they will tend to invest more in the business and that would attract a huge number of other shareholders investing in the business.
I personally believe that being unethical actually can have short term gains. It has certain appeals Justas bad times have certain attractiveness to it. it appeals to the greed, desire to have power, desire to be superior to others. but in the long term companies will have really pay in unexpected ways… consumers today are becoming increasingly environmentally conscious and care more about the ethical stance (position) of firms.
Ways stakeholders may have influence in ethical behaviour of business
Stakeholders influence businesses to conduct their business in ethical or unethical behaviour in many ways to get what they want. For instance, environmental group Friends of Earth (FoE) has launched a campaign against M&S saying, “the supermarket group engages in unfair and unethical trading practices”. FoE accuses M&S of damaging local communities, smaller retailers, suppliers and consumers. The group’s call for action to restrain M&S and its rivals came last week as the company prepared for its annual general meeting in London. M~&S said” it was responsible company that took pride in how it serves local communities. FoE is campaigning for limits to the floor space of retailers and has called many local planning authorities to consider more carefully the impact of out-of-town developments on businesses in the town centre before granting planning permission. FoE also seeks restrictions on M&S takeovers of convenience store chains. M&S claimed that they support local communities and creates jobs for local people. M&S have recently wrote to FoE, rejecting claims of misleading they have made and said they are proud of their record of serving communities around the country. And the benefits they bring that friend of Earth continue to ignore these benefits. This shows that after being put under pressure from FoE M&S successfully defended itself from false accusations that were made against it.
This example explains about Environmental Investigation Agency (EIA) and Greenpeace. The
Pressure groups successfully influenced the ethical behaviour of M&S. this campaign was created to end the sales of whale meat in Japan. The groups demonstrated that they was an increasing concern amongst Japanese consumers and that falling prices and growing stockpiles of whales meat indicated a significant decrease in domestic demand for the products. The groups pressed M&S to consider this wealth of evidence and end selling whale meat. EIA and green peace met with M&S representatives on two occasions and told M&S the UK’s leading retailer to immediately withdraw all whale meat products that were being sold in at least 45 of their supermarket stores in the Tokyo area. More than 20,000 small whales, dolphins and porpoises are also killed in Japans coastal waters. A significant percentage of the cetacean (large sea animals) products on sale in Japan have been shown to be highly polluted, posing a potential health threat to consumers. These groups made statements such as ‘contaminated whale products being sold’, ‘threats on human health’ and for reasons alone
M&S should stop endorsing such products.
Marks & Spencer’s took its decision to stop selling whale products shortly after their second meeting, and indicated that it had immediately stopped purchasing whale meat. According to M&S they took the decision “due to lack of customer demand”. However in theory, they stopped selling because of high pressure from theses groups who successfully influenced a change in their behaviour, I personally believe that M&S was afraid of losing its population in the market and getting a bad reputation, which clearly tells us that how these stakeholders can have a huge impact in the way you conduct your business.