Many companies fail to imply a good effective CSR to a business and this can have an overall effect on the company’s process. CSR is basically for a company to have an overall positive impact on the environment, consumers, employees, stakeholders and communities. I will be discussing and implying sources and concept to my chosen company Primark and discuss where they failed to add CSR to their company. A good use of CSR in a company can be the fulfilment of social or environmental goals, as opposed to a business that tries to achieve its financial goals while minimizing any negative impact on society or the environment. These businesses are called Social Enterprises.
Primark is a multinational, high street popular company with Headquarters based in Dublin. Primark had a poor image due to their lack of irresponsibility of applying CSR to their business mainly because they were labelled with using Child labour; according to the (Daily Mail Reporter 2008) An investigation revealed that children as young as 11 were working in foul conditions, sewing tiny beads and sequins onto cheap t-shirts, and having said that Primark also recalled that ‘it is possible to sell T-shirts for as little as £2 without compromising its ethics’ which is an unjust comment being made by Primark who once did not respect their companies ethics. This Child Labour accusation on Primark resulted in losing customers, according to the Guardian 2008 a poll was published conducted by (ICM Research for Drapers magazine) found that 42% of shoppers who shopped at Primark were less likely to shop there, this has been a cause of a major affect to Primark’s reputation and status.
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Also according to BBC an investigation of BBC panorama was undertaken to find out what’s really going on behind the scenes. They found out children under the age of 11 being paid 60p a day working in refugee camps with major issues of Health and Safety. All of these accuses on Primark has really affected their reputation which once was selling clothes for a cheap price, but for cheap clothes requires cheap labour right? In relation to the cheap clothing and labour of Primark many people still buy their clothes, according to (The independent 2013) it claims a young lady Hannah to buy clothes from Primark for their ridiculously cheap clothing and she also mentioned Primark must be getting cheap labour due to their cheap clothes.
So not many customers did back down from Primark regardless of knowing about cheap labour. As Martin and Hetrick (2006) stated, this is a fine example of a brands reputation being affected by the lack of CSR. According to Hopkins (2008) Primark customers protested outside of the oxford street Primark in London in response to the devastating news of using cheap labor (child labor) taking into consideration Harcourt (2008) for the Telegraph wrote that the relations with the three suppliers from India, that were subcontracting child workers, were stopped and Weston, the chief executive for Associated British Food said for The Guardian (2008) that an order that worth millions of pounds was cancelled. So this played a huge effect on Primark’s reputation as they lost their workers where which meant they would have to spend more money on labour.
The word “stakeholder” means any person with an interest in the business — someone who can contribute to the company’s growth and success or who benefits from its success. The term of “Stakeholder” not only consist of anyone’s interest in the outcome of a company but also outside the company, including supplier and consumer (Verkerk 2001).
According to ‘Primark’ it’s self ‘Stakeholders are those who has direct or indirect their stake in the organisation’ Stakeholders are considered of being a main part in a business and all have various roles to keep a company running efficiently. I believe that the 3 most important stake holders for Primark are the customers, suppliers and employees as they fulfil the need of providing good service and getting goods delivered to the customers in order to make profit. Primark has stakeholders who help the company continue with its profit making and help to build a strong relationship with the company and the stakeholder.
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Employees are one of the main stakeholders of Primark, as the employees are responsible for carrying out the tasks specified in the company’s strategic plan in an efficient manner. Employees are the main sources for the respect and reputation of the company. Employees interact with customers on a daily basis advising them on Primark’s products and services Primark has on offer. According to Coelho, Augusto and Lages (2011:32), the quality of service provided by client-facing employees has direct effect on consumers’ experience, satisfaction, loyalty and perception of the company such as Primark which in turn affects the performance of a company.
Primark’s employees offer valuable face to face communication to customers in order to full fill their needs as they are the main priority to makes sales for Primark. Primark’s success depends in large portion on the skill and commitment of its employees. Without the employees performing their roles skilfully, Primark will not reach its revenue and profit potential due to the lack of satisfaction Primark’s employees would be providing the customers. Employees must have a good level of team work and relationship with each other in order to keep Primark flowing efficiently. As discussed above about the CSR Primark failed to provide efficiently when child labor was in place; Primark are now trying to improve their reputation and are very clear about the way their employees should be treated.
The employees must show a good level of attitude and approach towards the customers as the reputation and service of the company lies on the employees. The company’s success depends in large portion on the skill and commitment of its employees. Without the employees performing their roles skilfully, the company Primark will not reach its revenue and profit potential due to the lack of satisfaction Primark’s employees would be providing the customers. Employees must have a good level of team work and relationship with each other in order to keep Primark flowing efficiently. As discussed above about the CSR Primark failed to provide efficiently when child labor was in place; Primark are now trying to improve their reputation and are very clear about the way their employees should be treated. Primark currently consider their employees to be treated well including those who manufacture their products; ‘ ‘As an international brand with a global supply chain we have a responsibility to act ethically.
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We embrace this responsibility as an opportunity to be a great force for good. Primark is committed to providing the best possible value for our customers, but not at the expense of the people who make our products.’ This means that Primark have made it clear that through their supply chain, Primark’s goods are manufactured under good conditions and the employees in the factories are treated well. Primark motivates and rewards their employees when hitting goals and targets. This motivates the employees in providing a high level of service and information to customers who would convince the customers in the rust of the company and the image of the company.
Primark or any other company would be nothing; they would not benefit ion any profit if it wasn’t for customers. Customers are vital in order for a company to increase in its profit and reputation as the products and services in Primark are all for customers. Relating back to the BBC panorama on child labor the reputation of Primark had decreased due to the unethical behavior Primark were held responsible for. Customers lost respect for Primark which affected Primark and to increase their reputation Primark have been through many changes; supporting charities, preventing child labor and providing good safe working conditions. According to a BBC article (BBC Official Website :2008), in 2008, Primark was letting the customers know on their official website called ironically, “ www.ethicalprimark.com that the wages will be paid, working conditions will be changed and the environmental issues will be taken care of.
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This was aimed to all the potential or ex customers of Primark as Primark wanted to spread the message of their good approach to CSR. Customers consider CSR as being very important in a business as customers are looking for trustworthy retailers to buy goods and services of. Customers are important for providing valuable feedback to Primark about its products and customer service level. Customer’s feedback enables the Primark to improve what it offers and to come up with entirely new solutions to customer needs based on what its customers asked for. Primark received weak feedback from customers when being accused of bad work ethics and so improvements had to be done in order to prevent the loss of reputation and customers of Primark. Customers also play a vital role in recommending the company’s products which is why Primark has improved the working conditions where the products are manufactured.
Introduce main stakeholders for the Primark (understanding of their relationship with Primark) Describe their claim and analyse their importance using theories and relevant data. Customers, suppliers, trade unions, shareholders and the group in which the business operates
Analysis of CSR approach in different countries-400
Primark has improved their CSR after receiving and being accused of bad working conditions in host countries. Before the slight improvement which is mentioned above, Primark did not use their CSR efficiently in host countries but are now making changes especially after the factory collapse where many workers were killed. Primark now believes that a business has a responsibility to act and trade ethically and that, by doing so, it can be strength for good for the business and the customers especially the employees. Primark directly contributes to the employment of more than 700,000 workers across three continents. Ensuring that their rights are respected is important to its continued growth. Primark has now realized the amount of corruption their bad working ethics had caused for the employees and customers and how this affected Primark as a whole.
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Primark has a responsibility to make sure that their products are made in good working conditions and for their employees working in the factories getting paid a fairly good wage to provide for themselves. The HERproject in Bangladesh is an example of how Primark is actively seeking to make positive changes in the lives of its supplier workforces. HERproject is supporting the workers in Bangladesh as 50% of the manufacturing workforce is made up of women. The jobs available to women in garment factories give them greater independence and help to reduce poverty. The HERproject uses education as the main tool against the working and health conditions of employees.
The programme aims not only to improve the health of female workers through training and education, but also to give them the tools to help them be independent of their personal and working lives. These benefits in turn pass on to their families and help to enhance whole communities. The reason Primark is improving the working conditions and expanding in different markets is due to the improvement of the company ethically and socially. Primark have already discovered the changes and improvements which have to be done in order to gain their respect and reputation back from the customers and so they are taking some great changes to get there.
Effectiveness is what companies are looking for to increase their profit and reputation for their business. If the business is not affected in any way the business won’t see any changes or improvements in order for them to adapt to their business for it to succeed. Effectiveness is a degree in which something is successful in creating a desirable result. Primark are currently improving their CSR socially and environmentally. Primark is working on ‘living wage’ projects in china and Bangladesh supported charities, trade unions and suppliers. While one of these local partners focuses on productivity and work organization, the other is training workers and management on improved wage negotiation techniques. Primark have hired their own industrial management and productivity expert to help ensure the process of working as a team so the employees within the factory would be able to adapt to this process.
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Primark, like all the other brands is now focusing on CSR and ethics (Min Hwa Lee case study: 2011) but unfortunately it took a broken reputation and a loss in sales in order to not be left behind and keep up with the changings in the market. Even though as Royle (1997) said there are differences in the markets in terms of the economical level and culture, the brand learnt lately how to adapt to them without being unethical or losing their differentiation point, the pricing Primark should increase their level of CSR which has been very beneficial for Primark; for their customers and reputation. Primark should open up new factories in developing countries and provide a good working environment in order for employees to support their families and to help the society as a whole.
Opening up new factories in developing countries will be beneficial as Primark will receive cheap labour and also gain respect for their expanded business and jobs available for the poor in poorer areas. Primark must keep in mind the correct working ethics which need to take place. Educating the workers on Health and Safety should be put forward as this can provide a safe working environment for the employees who will not cause any distraction in their work place. Primark needs to develop the quality of their products. Primark sell its products for a cheaper price but there has been a lot of controversy on their quality.
This an unethical issue as this does not satisfy customers’ needs which leads them to consider other competitors. Therefore, to overcome this competitive advantage Primark should consider their Corporate Social Responsibility in order to gain customers trust; this can be done by improving and raising the working conditions in factories as they have been labelled by child labour. Primark had horrid feedback towards product parallel as it can affect their company’s sales growth and profitability. Their line of services and product innovations should be enhanced to attain their goals.
For a business to develop, it is vital to produce some marketing techniques. Organising an event would be beneficial in order for Primark to be able to expand its business and maintain a good reputation. The event would need to include few strategies in order to market products. I think Primark should host a catwalk where a celebrity figure would pose as their main attraction in a form of promotion. This would display their different ranges whilst the celebrity provides the publicity and would act as a trend setter for consumers.
Reflection:
The skills I believe I have established throughout this progression is the information I have grabbed in this module and the impacts of CRS has on the businesses. I am satisfied I got the hang of the construction of the development For the portfolio I have evaluated the structure my effort well in terms of stating my thoughts and theories in the right way additional to theories I have conducted to related to Primark. I have stated the types of CSR in terms of their weaknesses and the areas they would need to improve their corporate social responsibility report. Reading through my work I have showed seriousness study for each approach followed by the firm. Developments in some areas I could have improved for my portfolio is analyzing more theories to the recommendations sections and could of expanded in some areas of the problems Primark have encountered. Though I think that my portfolio is vibrant and judgment is correct and are related undoubtedly.
References
http://businesscasestudies.co.uk/primark/beyond-corporate-social-responsibility/why-primark-embraces-csr.html#ixzz2x6NMi4qM http://www.independent.co.uk/news/business/news/primark-faces-new-claims-that
