Study Skills Factors Impeding Ethical Consumptio

Question: a) Demonstrate competence in a range of business and academic skills and apply them in an organisational/enterprise setting .b) Communicate effectively both in written (reports, summaries etc.) c) Collect and analyse appropriate data from a range of learning/information sources .d) Undertake research tasks, both individually and in groups, with appropriate guidance .e) Demonstrate understanding of global, ethical and organisational responsibility issues. Answer: Introduction According to the recent report from the Co-operative Bank, one-third of UK consumers are growing ethically conscious. They are willing to challenge or even boycott the companies not supporting or complying with ethical standards (Bray, Johns and Kilburn 2011). Ethical consumerism enables people to think about the product sourcing techniques if they are harmful to the environment. A wide range of product areas that fall into the ethical category are travel and tourism, fashion, energy, banking and finance, and food and drinks (Carroll and Buchholtz 2012). The report begins with the identification of the organization HM, which claims to follow ethical standards in its business operations. Certain examples are provided that justify that the organization follows ethical consumerism. The approaches used by the organization are elaborated that help it in becoming a more socially conscious business. The approaches are liked with the business ethics and values. Further, primary research methodology is followed for conducting a short opinion survey. The survey helps in assessing the factors influencing consumer buying behaviour. The report concludes with a critical evaluation of ethical consumerism based on primary and secondary research with a focus on HM. Lastly, recommendations are provided that would help HM become more ethical. Ethical Consumerism Ethical consumerism can be defined as the practice of purchasing products and services that causes least harm to the environment. The consumers may choose to avoid or boycott the products and services that are unethically produced (Singh et al. 2012). An ethical consumer is seen as a responsible consumer who is concerned with Fair Trade and is interested in assessing from where the goods are sourced or distributed. This practice leads to responsible decision making in the global market for ethical products and services. The moral concerns include values such as slavery-free labour, child-free labour, and trade-justice, green, organic and other environment issues. The ethical consumers are more likely to motivate consumer behaviour if they are ethically sourced, produced or distributed (White, MacDonnell and Ellard 2012). For example, ethical consumers are geared towards sustainable tourism and concerned with standards of weather and accommodation. The ethical consumers may tend to feel that tourism can ruin the local culture and aim to seek a holiday with an ethical code of practice (Weeden 2014). Ethics is also becoming more ingrained in the food and drink operators. The consumers are increasingly switching to organic food. The food maybe expensive to buy regularly, but 37% ethical standards are being compromised in low-priced food (Store.mintel.com 2016). Ethical standards can also be applied in the fashion industry for the clothes and jeans companies. The clothing companies such as HM, Next and Zara have sustainable supply chains. These companies are taking initiatives to eradicate toxic chemicals from their supply chains by 2020. Even the sportswear giants such as Adidas and Nike are supporting the Detox Campaign where the companies consider beautiful fashion should not cause toxic pollution (Greenpeace.org 2016). According to Ethical Consumer survey, Good Energy is considered as the best energy company as they follow green electricity in the best manner. The organization believes that their business can impact on the climate change thereby making it easier for the people to switch to green electricity (Brignall and Jones 2011). As seen in the above examples, it is necessary and beneficial for the companies to act ethically. It helps in engaging stakeholders and minimizing non-financial costs. Ethical standards help in reducing social inequalities and help them gain competitive advantage. An organization with strong ethical standards attracts customers thereby boosting sales and profits. Additionally, the employees would be loyal thereby enhancing productivity. It shall also attract investors keeping the share price high (Singh et al. 2012). Company Review One of the giants, Hennes Mauritz (HM) claims itself to be an ethical company. It is a Swedish multinational apparel brand known for its fast-fashion clothing. It is not just a big player in the fashion industry, but a giant selling over 550 million garments annually (Siegle 2012). In an audacious move, HM positions itself to make ethics an integral part in its products and services. The organization is continually creating sync between ethics and fast-fashion. Their mission is to become an ethical giant (Siegle 2012). As recognised by the Ethisphere Institute, HM was named as the most ethical companies for the sixth year (Hm.com 2016). The scores were generated for five categories: culture of ethics, corporate citizenship and responsibility, innovation and reputation, governance and leadership, and ethics and compliance program. HM excels in promoting ethical business standards, shaping the future fashion industry standard, and enables managers and employees make good choices (Hm.com 2016). The organization believes in being ethical through integrity, respect and fair play in their business. They aim at protecting human rights, take responsibility for the colleagues and provide an inclusive business environment. They believe in being transparent and honest with their stakeholders. Additionally, the organization stands against any form of corruption and embraces diversity (Hm.com 2016). The highlights of the company state that 72% of their managers and 77% colleagues are women (Hm.com 2016). HM has specific core values and believes in people. They believe in working together as a team by keeping things simple. They constantly strive for improvement and keep up the entrepreneurial spirit (Hm.com 2016). The people have argued that HM is a low-cost clothing company. They have raised controversies if the company cuts cost, how it can pay fair wages to the workers. HM claims that increasing wages would not increase the consumers pay for clothing since they have in-house manufacturing. There are different living wages in different countries that are adjusted accordingly (Liebelson 2014). HM further mentions about standing clear of the child labour practices. Additionally, if they discover kids who are below the statutory minimum age, HM pays for the kids education until they are 15 or the legal working age in country (Sustainability.hm.com 2016). Further, HM launched Conscious Collection as effort to sustainable clothing. The garments are made from recycled polyester chiffon and organic cotton. The chic-pieces are trends and fashionable while being sustainable. HM involved a wide range of tailored suits for men, and cocktail dresses, romantic evening gowns for women (Murray 2013). HM takes efforts to reduce its carbon emissions and electricity consumption. They are reusing or recycling garments through their in-store garment collection program (Henry 2015). HM promotes good practice not only among suppliers and employees, but also in the value chain. HM offers good working conditions to its employees, raises awareness about rights at work and provides training. The organization also directly influences the suppliers for improving their value chain process. Another ethical approach is used for better packaging with fewer resources and causing less waste (Sustainability.hm.com 2016). The packaging materials used by the organiza tion are recyclable and meets the standard packaging shapes to minimise waste in production. They use FSC-certified paper and board that helps in sustainable packaging. Even for transporting, they use boxed that are reusable and are sent back to distribution centres to be used again (Sustainability.hm.com 2016). Opinion Survey A short opinion survey was conducted for assessing the influence of consumer buying behaviour. Primary data was collected from a sample size of 14 students at GSM London. The findings of the survey are collected ahead. The demographic profile was simply assessed for gender for which 7 males and 7 females were chosen. Gender Frequency Percentage Male 7 50% Female 7 50% Total 14 100% Table 1: Gender A minimum of one option and maximum of three options could be chosen to assess the buying behaviour of consumers. It was observed that majority of the respondents selected one of their options as firms ethical behaviour. It is interpreted that an organizations ethical behaviour plays a significant role in the consumer purchase decision process. Other than that, the customers value product and service quality as the second most important factor. The purchase decision is affected by brand status, recognition, satisfaction and dispensable income of an individual. Figure 1: Factors Influencing Purchase Decision The most interesting result of the survey was that none of the respondents would choose to buy a product that they know of is produced, manufactured or distributed through unethical practices. This indicates that the growing awareness of ethical issues is impacting the mind of youngsters. They are not willing to consume products if it is involved in unethical practices such as slavery, child labour or causes environmental damage. Preference Frequency Percentage Yes - - No 14 100% Maybe - - Total 14 100% Table 2: Unethical Product Preference The last question regarding the opinion about ethical trade practices was answered in a descriptive format. Most of the answers involved that ethical practices must be adopted by all companies as it promote social consciousness, humanity and environmental protection. They further state that ethical practices are a motivation for them and they wish to make it a part of their regular lifestyle. Conclusion Conclusively, HM follows ethical practices in its operations, production, packaging and distribution. Ethical consumerism enables people to think about the product sourcing techniques if they are harmful to the environment. The consumers may choose to avoid or boycott the products and services that are unethically produced. Ethical standards help in reducing social inequalities and help them gain competitive advantage. In an audacious move, HM positions itself to make ethics an integral part in its products and services. They aim at protecting human rights, take responsibility for the colleagues and provide an inclusive business environment. HM has specific core values and believes in people. They believe in working together as a team by keeping things simple. They constantly strive for improvement and keep up the entrepreneurial spirit. The packaging materials used by the organization are recyclable and meets the standard packaging shapes to minimise waste in production. It is inter preted that an organizations ethical behaviour plays a significant role in the consumer purchase decision process. Most of the answers involved that ethical practices must be adopted by all companies as it promote social consciousness, humanity and environmental protection. Certain recommendations are provided in the following section to help HM become more ethical. Recommendations HM can consider rapid development of online market like other competitors. The store design can be made sustainable. Limitations must be set in the cotton usage as it already manages environmental performance. HM can implement measures such as store credit to enable customers brings the clothes back. These clothes can be put to recycling. The organization must also shift permanently to products that can be produced using polyester and organic cotton. The workplace conditions can be improved. In-store opportunities for redistribution of products can be implemented. 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