assignment 4 video

Social implications of business ethics

Social implications of business ethics.

Hi there, 

thank you for coming back to my blog today. 

In this part of my blog I will investigate into Gap Inc. that I believe acts ethically. I will focus on how their ethical behaviour affect the different stakeholders of the business. I have done research into the CSR policy of Gap. Inc to support my analysis of the following points;

- Finance    

The things that I believe Gap Inc. does financially well, that secures them as an ethical company are their commitment with the community. Gap Inc. has had some problems with their community involvement. The ethical issue of ''not giving back'' was reported by the community. Gap Inc. Having a selfish outlook on business and not caring about the people. They were not happy with this image and so over the past 5 years gap has invested lots of money to engage and educate their community around them. Gap Inc. has introduced a training program called;  P.A.C.E. (Personal Advancement & Career Enhancement) This program offers female garment workers the life skills education and technical training they need to advance at work and in life. This both benefits the garment workers but also the business in the long run. Developing a wide base of skilled workers that can potentiality becoming leader within the industry.  The program evaluation also supported this as 1.5 times as many woman said they felt more confident and believed in their personal and working skills. 50% of woman reported that they felt a higher level of self esteem after the participated in the program. This has a positive impact on the businesses ethical behaviour as they build up the respect of the community in showing that they also give back. 

- Human resources 

Gap. Inc has been nominated as one of the best working places within the retail industry. They look after their staff very well. They offer staff not only good pay and hours, etc. but also a chance to climb further up into the corporate ladder as well as giving them many benefit's including additional education, health assistance and for many younger employees study financing. As talked about in the first part we can see that Gap. Inc is very active in teaching people in order to create a greater empire in the future. Which does not only help Gap Inc. directly but it gives many people the opportunity to get a better job and improve their working & social skills. Gap Inc. hopes that these people will stay loyal to the company which is why they also get a 35% store discount. Gap Inc. is really big on being yourself. This is promoted through their advertising of their clothing but also in the work place of Gap Inc. Their promise as stated on the website is: We inspire every employee to a simple aspiration: to “do more than sell clothes.” This promise continues to guide our commitment to the communities where we live and work, driving our constant efforts to improve our social and environmental performance. This is a statement that shows their commitment in ethics and a working environment where the employees are aware of the company's values. 

The implications these activities have on the company and the brand Gap Inc. I believe links back into the company appreciating and looking for long term, loyal relationships between anyone involved in the company, including, staff, suppliers and customers. With these values Gap Inc. is impacting different stakeholders of the company. This goes for again Staff, suppliers and customers. The staff should enjoy their time at Gap Inc. due to all the benefit's that the company offers. This means they respect the company and hopefully here for stay loyal, which should mean they stay for a long time. Hopefully this then helps the brand image of the company as the employees are dedicated, hard working and have a positive working attitude. This then should have a positive effect with the customers as well, who should enjoy their experience at Gap Inc. more, and furthermore this should then convey into positive effects for the shareholders of the company. 

- Production 

In Gap Inc. 's production line the 1 word that keeps popping up is 'Corporate Compliance' This is the main value that the company keeps very close to. It is their commitment to a responsible, honest and ethical way of doing business. As said on the website: 'A combination of written guidelines, formal processes and management oversight helps us ensure that "strong corporate compliance" aren't just words on paper, but a way of doing business at Gap Inc.' This shows us that they are very serious about compliance and that it is a way of doing business. I believe this is a strong value which helps the company in the long run with stakeholders and shareholders. For those of you that don't know what compliance means I will give you a short definition: it is basically the company's confirmation that the doer of an action (such as the writer of an audit report), or the manufacturer or supplier of the product, meets the requirements of accepted practices, legislation, prescribed rules and regulations, specified standards, or the terms of a contract.'' Which is simpler words means, that the production factories where 
Gap Inc.'s clothing gets made are a 100% compliant to the code of conduct 

and requirements of Gap Inc's standards and rules and regulation when it comes to producing the clothing. This also links into being ethical which is for example not having child labourers and ensuring employees get paid minimum wage and have rights.

The compliance standards of Gap Inc. are very high. This means that most manufactures have to pass a certain inspection before they are able to produce any type of products for Gap Inc. Here for the company has put in a global integrity department to ensure that their code of conduct is followed. The global integrity department works very closely with human resources, global corporate affairs and corporate security. This is to raise code awareness through communication and education. Two very important aspects of Gap Inc.'s working standards.   

The impact this has on all the stakeholders of the business is that they are all constantly reminded that Gap Inc. works under a very strict code of conduct which ensures safety, honestly and an ethical working environment. This I believe impacts all stakeholders very positively because they all stay within the guide lines set by the company which ensures an ethical working base.  

- Sales and marketing

Gap. Inc's sales and marketing I believe is very effective in sharing their core values. Being an ethical company as they are, the customers are actually being reminded off it trough things like advertising and promotional campaign's. A great example of the advertising that Gap Inc. Uses is the 'Dress normal campaign' This campaign focused on the affordable and normal fashion trend that was for anybody and everybody. Gap Inc. wanted to not only attack a certain target market like luxury fashion brands but they wanted to be able to sell their clothes to any human-being. Meaning affordable prices with good quality clothing and a way of fashion where people don't look outrages but are still able to put their own identities with the clothing. This campaign was and is a huge success for Gap Inc. as they were one of the only companies that had not recored a loss in revenue during the recession. They actually had seen a big rise which was thanked off the dress normal campaign. People seemed to appreciate and believe in the brand. Which is a very strong image to have.  

This has many positive implications on the business as customers respect what the company does. Also for suppliers and retailers it is good to know that they support a company who supports a 100% fair, honest and ethical working base which translates to their marketing and sales. A company that does great and works great whilst at the same time stay's great throughout the years is a company that people can stand behind from and stakeholders position. This goes for employees, suppliers, manufactures, customers and even the truck drivers that drive around the world to deliver the 'most ethical products' 

please be sure to check out the rest of my blog and don't be afraid to send me a message. Im more than happy to answer any of your questions :)

Signing off

Sjors

(D1) Impacts of acting ethically

 Impacts of acting ethically 

In this part of my blog I will analyse the 3 recommendation I gave in order for Philip Morris to improve their ethical behaviour. I want to be evaluating the impacts these changes could have on all the stakeholders of the business.

Suggestion 1 : 

I suggested to set up a labour party/union in the counties where this production is done. This allows for the legal workers to form a bond and propose to the company what things need to change in order for a fair and safe working environment. As well ass making it the main priority to eliminate all child labour, simply because it is illegal. The impacts of these changes will be very positive for both the employees and the businesses reputation. firstly the internal stakeholders which are the workers at the farms will be happier to work in a safe environment and get paid a fair wage. This can improve the relationships within the businesses social ladder. It should be right for the business to make this change because it has proven to work. Labour parties/unions are much stronger than individuals and business have to legally listen to what is being proposed to them. This should not be seen as negative feedback but positive feedback to enhance changes in order to have a better production service. Here for the company should be open to this idea and consider these point in the bettering and improving of their brand. As said by Foxbusiness a respected business channel in the USA, ''Thanks to labor unions, wages have improved, the workweek is shorter and the workplace is safer.'' This indicates that labour parties have a postive impact on businesses. They do not only benefit the workers but also the employees, this is because through labour unions it is easier to negotiate. The employee will only have to communicate with 1 person that represents the rest of the workers. Also When a business has a labor union to work with, they can partner together to facilitate change easier. When the employer knows that change is required, it can consider the information given to him and communicate this to the leadership of the union and the union can then pass the information along to the employees. When everyone is on the same page, it improves the chances of the company getting through the change. External stakeholders such as the retailers and customers will know that the cigarettes were produced in a safe and fair environment. Here for they will be happy to represent the brand of Philip Morris. If the product is made with care and transparency the people working for the business will not have to worry about any false accusations. They can work comfortably and have a good view and respect for the business. 

Suggestion 2: 
The second suggestion was an easier achievable one, I believe. Having better lines of communication is always a positive for a business. Since Philip Morris has not been as transparent throughout the company I think they should consider improving their communication. To ensure this happens I believe the company should always have follow ups from meetings and special announcements. These is simply done by adding people into emails and making calls to discuss if the information being shared has reached and is understood by the stakeholder. Whether their internal or external. If suppliers know exactly when and where the product needs to be then they can time and contact this with the retailers to ensure the product is delivered on time and with care. The real winners in this aspect is going to be the leaders of the company. They might think they know it all but if even the employees can share and have put into business information then the company can improve itself. If their is clear communication between all stakeholders no problems should arise. Making sure information is passed on to every line in the production chain is vital for the companies success. If everyone is on the same page mistakes are less likely to be made. miss communication can always happen but this is only if people within the chain are holding things back from others. This can not be done. An improvement in employee morale can result from effective communication. Employees appreciate good communication coming from management. It produces a healthy work environment. When employees are satisfied with their jobs, they are able to efficiently perform their duties with a positive attitude. 

A 2012 Study by Great Place to Work®  based on employee perceptions of around 400 organisations shows a co-relation between good communication (management keeps me informed about important issues and changes) and intent to stay in the organization( I want to work here  for a long time).

( http://www.greatplacetowork.in/publications/blog-posts-articles-and-news/690-communicating-at-great-workplaces-key-principles# )

Also another source from The former CEO of Google, Eric Schmidt,  explained the company’s business strategy at the beginning of the year. They have several quarterly meetings which allow Googlers insight into the company’s broad strategies as well as how they’re progressing against internal goals. The CEO also holds multiple sessions to ensure that Googlers around the world have access to this high-level, strategic information. “One thing that'd strike anybody who has worked in any other company immediately upon joining is the openness at Google. I was thrilled to see the level of details shared by management with all the employees. For example, we are always kept up-to-date with company's strategy for the future and the challenges we are facing. Also, a great deal of transparency is maintained about current/past performance. Everyone is open to discussion on anything and constantly looking for ways to improve.”- Google employee 

From this source we can see that transparency in a business is key for good management. The communication between employees and employers is very important. The employers should always be open-minded to be able to listen to the employees and see what sort of knowledge they can bring to the table. Like the google employee says; ''Everyone is open to discussion on anything and constantly looking for ways to improve.” This shows he as an employee is happy his opinion counts and that he's able to input in ways to make a business better. 

Suggestion 3: 
The final suggestion I proposed is for Philip Morris to have honesty towards the public, government and the media. Once again I believe transparency is something that allows people to see the truth and not have to guess whats wrong or right. If the business is truthful about the production of their product people will know exactly where it is coming from and how it is made. This gives security to stakeholders. People like customers trust that the product their buying will always be of good quality and is made legally. Also the community as a stakeholder needs to be considered in this. the honesty about the treatment of workers is vital in order to keep them happy but also to not get in trouble with the government. They should not have to find out if theirs any illegal practises going on. This will give the business less problems and bad publicity. bad publicity can lead to disappointment and a loss of trust. When an organisation fails to follow through with promises, customers, employees and partners are more likely to question the truthfulness of all the organisation's current and future messages. 

A source from the economist, called bad publicity states that;''Brand association refers to the deep-seeded attitudes and feelings a customer has toward a product or company. When brand association is negative, negative attitudes are more likely to come into a consumer's mind before positive ones. Bad publicity can contribute to negative brand association, which can in turn reduce sales over time.'' From this source we can tell that actually bad brand association can affect sales. Here for Philip Morris should definitely consider having a better reputation with the public and its shareholders. If  let's say the company comes out with all their non ethical behaviour and apologises formally while also showing the public, government and shareholders what changes they have made in order to be more ethical we can hopefully see a change for the better of the company. Not only will there be no loss of sales but stakeholders will be happy to represent the company which means they can be investing. This is an even better impact for Philip Morris as a company. 

 I have made 3 suggestions of which I think the business should consider, however I believe suggestion 2 is the most achievable one. I think if the company takes on this suggestion the rest of the problems can be solved. good communication is key and here for I think this is the best solution. 

please be sure to check out the rest of my blog and don't be afraid to send me a message. Im more than happy to answer any of your questions :)

Signing off

Sjors