Promises made by Tesco to their customers such as low prices on local produced food, puts pressure on the local farmers. So then the farmers must sell their products to Tesco for also for a low price because they now that otherwise they will just go to someone else, they really have no choice but to oblige. For farmers to produce fruit and vegetables in high bulk but also keep the quality high, they must use pesticides. Environmentalists do not want pesticides being used by Tesco in their products. But by doing this, it is affecting the local farmers. Farmers have difficulties in producing products without pesticides as Tesco put pressure on the price and also expect strict specifications, so farmers are forced to save money by using pesticides to meet Tesco’s demand. However, another point that indicates Tesco is not offering sustainable products are the strict specifications towards fruits and vegetables which results in food wastage and use of pesticides. Farmers claim that Tesco rejected fruit because it had too much colour, too little colour, was the wrong size, wrong shape or because of blemishes that did not affect eating quality. Also more than half of the farmers said that they had to use additional pesticides just to meet the appearance specifications of the supermarkets. So if Tesco were to go about things ethically Tesco should pay more money to the local farmers, rather than pressuring them to produce fruit in high bulk, there would be less wastage and less use of pesticides.
In city places were traffic is already an issue, if a Tesco were to open then it would cause traffic to increase even further. Local people living near would not appreciate this and would be quite annoyed. They would also not be happy with noise that came from the store, as normally Tesco get their deliveries late at night. This would cause people to wake up at night, with noise of shutters being opened, also trolleys being moved around.
In some areas where Tesco open up new stores they promise the local government that they will open up new jobs for the community, this is so that it’s an extra incentive for the government to say yes to Tesco, for them to open up a new store. Recently Tesco axed jobs for the public they had promised to the local council of Accrington even before they had opened up the new store. Tesco had promised 450 new jobs, but only 191 were available. This unethical behaviour made by Tesco was very bad on their part, and were criticised by the local media and council
Tesco have been criticised by environmentalists for the bags they supply to their customers. The bags they replaced are more harmful than the old ones they replaced. They should start to break down in three years, but they actually leave a tiny particle that causes harm to birds and mammals. Studies found the bag actually take 5 years to decompose, longer than the claims made by Tesco. Also the bag cannot be recycled, which is ridiculous given the claims made by Tesco that they were actually much better than the previous ones. This report will be very bad news for Tesco as they hand out over 500 million bags a year.
Tesco not only operate in the UK but also internationally. Most of the clothes they produce are made in countries in Asia. They have been accused of unethically producing these products. They were seen of paying workers only 16p per hour. A company that makes £2.8 billion profit a year; this seems quite unethical by Tesco. This is exploitation to the max, as Tesco only care that they produce clothes for very little money, so that they can sell them in stores very cheap. The researcher, who exposed this, has promised they will present the figures at the retails giant annual shareholders meeting. This is very bad news for Tesco as shareholders are very important to Tesco.
M2- Assess social implications of business ethics of a particular business
All the ways Tesco is run as a business, from trading with local farmers to international trading, to recruiting and firing staff and complying with environmentalists, there are many people affected by this. It can either be ethically or unethically, but by doing this it can be an advantage to many, but also a disadvantage to others. In business you cannot keep everyone happy because if you keep low prices for some, it will cause an effect to others.
The Human resources at Tesco are pretty fair on their staff. They ensure all staff is payed equal and that there is no difference if you’re a man or women. They also consider people from different backgrounds, and are not prejudice to any race. Also another benefit for people who come to work for Tesco from different countries is that they receive the same pay as someone of British birth. There are many other businesses that treat their foreign staff very differently, Such as paying them under the minimum wage also asking them to work for long hours without any break. Tesco’s policy is very different they like to treat everyone as equal. But there has been criticism made by Tesco staff about cuts. With the recent recession everybody has been hit. Workers are given less hours to work, and in some stores bonuses have also been scrapped. Tesco who pride themselves as a place where you can start a career, workers have seen less and less promotions to better their positions within Tesco. This is because sales are not improving and not many new stores are opening, so then new positions do not come available.
A Tesco in Ireland has seen their staff go on strike. Even though Tesco has recorded very good profits in this particular store, the staffs have gone on strike due to terms and conditions regarding their contract. These staff members weren’t just new employees but some had been working there for 30 years. They were asked to sign new contracts otherwise they would be made redundant; this is very unfair of Tesco to treat their loyal staff like this, and just shows how much they care of their staff. They should not change the contracts of these employees but reward them for their loyalty.
It’s not only Tesco who have some under fire for treating their staff unfairly but the government have also been blasted over pay claims. The recent austerity measures will cause a huge affect upon the public sector. As usual the people in higher positions will not be affected but the people at the bottom will be most affected. There will be a massive rise in job losses across the country, salaries and pensions will also be cut to some, this will be a huge disadvantage to some as they will be relying on the pension pay when they were supposed to retire.
Environmentalist’s main concern is thinking about the land that we live in, and how production and other aspects may affect this. By doing this, it will affect many, there are pros and cons. mainly the shopper will be the most happy with the environmentalists demands but the people who produce and sell to Tesco will feel their affect in a negative way. First they will see their costs go up and also it is very time consuming for them. Customers are then happy because the quality of the product is better and more time was put into it. An example is the fruit and vegetables Tesco sell in their stores. Environmentalist’s put pressure on Tesco for them not to use pesticides on any of their products that they sell. But Tesco puts pressure on farmers to produce large quantities for low prices. This affects the farmers who provide fruit and vegetables to Tesco, as without it, it can be very difficult for them in producing this product. This is because Tesco wants them to produce a large quantity for low price but they also have strict regulations regarding size and colour. The farmers feel the pinch regarding money because if they do not use pesticides on the products, then some of their stock gets rejected by Tesco because of high standards. This then causes wastage in food. If Tesco didn’t put so much pressure on the local farmers then they might not use pesticides. By doing this it would be better for the local economy as the farmers will produce more quality products, there would be less wastage. Then the local farmers will see a rise in their stock demand. This would be seen as a positive image for Tesco in the media, that they are willing support the local farmers, then their customers wouldn’t mind paying that little extra, knowing that the money helps the community.
An advantage for Tesco recently was the huge profits they received in their canned whale and dolphin meat in Ireland. This angered Environmentalist’s extremely that they were gaining huge profits on behalf of a sea creature that is nearly extinct. Tesco should realise that profits are not always the number one priority but they should also think about the creatures they are killing. They should have a specific guideline where they do not kill any endangered animal.
When Tesco trade unethically, the biggest problem they receive is the negative media attention. Nearly every person in the UK has access to the internet, and any negative article against Tesco can be read by anyone. This can cause a halt in sales for Tesco, because people these days are very supportive of ethical trading. Fair trading is an important factor that people take notice of. Recently the office at fair trading accused all the supermarkets of fix pricing in dairy products, which cost the consumers 270 million pounds. Tesco to prove that they were not involved in the fix pricing could see them with an 80 million pound fine. It is though they fixed the prices at a high price because of the danger of local farmers being shut down but they received none of the money. This was only going to be an advantage for the supermarkets only, as they were only going to see the money going into their pockets. I think this is a ridiculous marketing ploy from Tesco and other supermarkets, because they now that then their customers can’t go anywhere else. I think they should be fined a huge amount so that they don’t even consider doing it again.
E.U. law affects Tesco and how they operate. Tesco must oblige to the EU laws set for all businesses. Recently Tesco have been caught breaching EU rules regarding usage of harmful chemicals. They have failed to meet the legal responsibilities to provide information to their customers on toxic or carcinogenic substances, used in products they sell. This is very important to the landmark Registration Evaluation Authorisation and restriction of Chemicals legislation, because toxic usage is deemed a very high concern for them. Tesco were caught selling flip-flops containing harmful substances in their store in Hungary. This is a negative image that Tesco do not want to be associated with, so they should do the ethical thing and not produce any clothing or footwear containing illegal substances. This will be a positive image in the media and generate more sales.
The recent new bags scheme brought out by Tesco has seen them get very negative press from the media. They were criticised by environmentalists that the new bags they offered their customers were even worse than the old ones. They cannot be recycled again and don’t decompose in the 3 years that they are said to be said to. The report concluded by adding that Tesco hand out over 500 million bags a year. This ploy is not beneficial to no one but actual causes more harm. They should change these bags that can be recycled, and decompose in 3 years. Or they could charge customers 5 pence so that they would bring in their own ones, or even provide their customers with a life time bag where they would never have to throw way.
Tesco to keep ever expanding have been accused of bribing local governments by promising them they will provide the local community with jobs, but do not hold out this promise. This is because Tesco just wants the ‘yes’ they need from the local government to open up a new store. They promised the government a certain amount of new jobs but only provided half of that amount. Tesco should not operate this way, as this can affect the community many ways. People who were promised jobs will still be without a job and this will cause them to take tax money from the government. It would be better for the government to let a superstore open in a town where the jobs they said were open were actually open.
M3- How to improve ethical concerns facing a community
On the Tesco website you can view all the corporate responsibilities they have listed. But even though they comply with theses promises, they don’t do them all ethically and some are not even done.
Tesco state that they are always willing to help local communities regarding jobs, but I think they do not do enough. Recently studies have shown that employment has gone down and that more and more people are claiming income support; Tesco could help the government to deal with this problem. The main people who are unemployed are 16-25 years old. So to reach to this audience Tesco could advertise on social websites such as Facebook and Twitter. This would be a good idea for Tesco as advertising on these websites doesn’t cost money. They could also work with local colleges and universities, so that they could offer them some kind of apprentice scheme, where they would still study but also work with them for weekend or mid week shifts. The positive point for the newly employed would be they now they can work they way up the ladder at Tesco, for example from stacking shelves to store manager. This would also show other supermarkets on how they could also follow suit.
Tesco normally supply their customers with recycling bins in nearly all of their stores but they should provide them at all of their stores. This would also include Tesco metro and Tesco express, and they could reward their customers with more club card points. They could charge their customers for using bags to reduce the usage of bags or offer them life time bags, were they would bring them in every time they came into the store. Even though they use less packaging on fruit and vegetables, they could go even further and try to improve this, and use less packaging on other products. A way they could encourage this, is offer them club card points for doing this, this would be a win-win situation for Tesco as then they would spend more in the store but also helping the environment. Not only will this keep the environmentalists happy but it will also be seen as positive image for Tesco.
Nationally Tesco are always trying to stay one step ahead than their rival supermarkets, being price or location. In doing so it affects other businesses in the areas they want to open in and don’t consider that they cannot compete with their prices. This is because Tesco can buy in such bulk; they can offer customers products for cheaper prices. Also as Tesco supply nearly everything from electrical goods to fashion under one roof, Tesco not only affect local supermarkets and shops but also shops who sell similar items to Tesco. This could see these little shops being shut down, this then affects the local community as all the money spent by customers will only be in Tesco. As no one will be buying in local stores, they then cannot improve their shops to also offer products for low prices. So Tesco should try not to open up a new store in every village across the UK. They could work with the local governments to open stores in deprived areas only. This would help the community to build their economy. Or they could work with other local businesses and let them advertise in their stores. This would bring them working closer rather than being known as a big co-operation who is trying to take over the community.
Tesco not only operate in the UK but now they have spread their wings abroad. Though this will improve Tesco’s sales abroad it could affect their suppliers in the UK. When they open their stores across Europe, they would normally buy from other European companies, this affects the UK companies. They lose out on money, as Tesco see buying from countries they have opened stores in, cheaper but also it builds a relationship with the countries supplier, which keeps the government happy because money is being pumped into their country. I think Tesco has done this well, because they cannot be accused of overtaking the local European towns, but buy from them so that they see a rise in their economy. Some of the places they have opened stores in are quite poor parts or Europe, so not only do Tesco see a rise in profits but also on the way helping the local communities.
If Tesco are hoping to expand their European empire even further they should also comply with the EU rules. Recently Tesco were caught not providing vital information on toxic or carcinogenic substances in the products they were selling. So Tesco should provide all the information that is needed by the law, so that their customers now what substances are being used in the products they buy. Not only in the UK but also comply with EU rules regarding their rules to substance use. A company they could follow suite is The Body Shop, who only use environmentally friendly substances, and they have been rewarded the benefits of this as their company grows bigger and bigger.
Tesco have done quite well in opening stores new store across the world including Asia. They have done all of these things ethically as by them opening stores only helps the community. It open new opportunities for local people as new jobs become available, they have the chance to climb the retail ladder and see themselves in high positions such as store manager. The one thing I don’t like about Tesco and other retailers is the way they trade around the world. How they take advantage of vulnerable people from poor areas. Exploiting their needs and wants for their benefit to generate more sales. Even though this is very beneficial to Tesco’s customers I don’t think they know the extreme extent of how their clothes are being made. Now more than ever there is a huge spotlight on this matter and I don’t think Tesco are doing enough. Like other retailers, Tesco were recently caught producing clothes for very cheap prices, they were employing children to produce them for very little pay. Instead they should work with the local community they are trading in and only employ people who are over 18, with a decent wage. Provide them with good working standards rather than a place where they work in filth.
