Business Ethics and Sustainability

This article discusses the case of H&M and its involvement in worker exploitation. It explores the ethical issues related to worker policies and treatment in the production process. The article also highlights the impact of unethical practices on stakeholders and provides strategic recommendations for H&M.

Running head: BUSINESS ETHICS AND SUSTAINABILITY
BUSINESS ETHICS AND SUSTAINABILITY
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Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Overview of the company:.....................................................................................................3
Product range of Coca-Cola:..................................................................................................4
Conclusion:................................................................................................................................5

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Introduction
Business ethics implies to the ‘right way’ of operating a business, which includes
business strategies, production, and behaviour of the company in relation the consumers,
communities and the environment in which the business is operating. The business covers
various phases of sustainability including economic, environmental and social. The
management strategies and practices contributes majorly and usually solely to the concerns or
challenges arising from these phases/elements of sustainability. The business adopts a
number of strategic possibilities for implementing ethical and sustainable policies in the
organizational system. The businesses must direct the focus on the global economic growth
by monitoring the existing trend, the businesses should be concentrated on improving the
environmental impacts by the business activities on a global scale.
The purpose of the paper is to assess a case of the brand H&M which is found to be
involved in worker exploitation. The case selected for this paper is H&M exploiting workers
globally. The case comprises of the ethical issues in regards to the concern of worker
exploitation. The paper will identify issues related to the worker’s policies as well as the
treatment for the process of production and operational activities of the brand H&M. In the
paper, the depiction of stakeholders will be presented. The paper will discuss about the
impact or effects of unethical practices on the identified stakeholders. The ethical background
of the company will be discussed comprehensively. The paper will be concluded by
presenting the summary of the identified key issues in regards with worker exploitation and
with the strategic recommendations for the brand H&M. The analysis of the case of H&M
will focus on the positive or negative effects of the organizational practices of H&M on the
operational workers.

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Discussion
Case Description:
One of the biggest and renowned fashion brand of the world, H&M is found to be
involved in the unethical practices of exploiting the workers and is failing to abide by the
pledge of ensuring fair and ethical worker policies. The fashion brand has adopted practices
which involves unrealistic as well as the excessive working hours in return of the ‘living
wage’. In interview with various workers from the production as well as the supplier factory
of H&M in India, Cambodia, Turkey Bulgaria and India, the responses depicted that the
unfair and unethical practices of the company for the garment workers (Bhattacharjee and
Paolacci 2017). Moreover, the workers were not even facilitated with the communicated
‘living wage’ which restricts them to help with the family expenses (Bhattacharjee and
Paolacci 2017). For a major brand like H&M, consumers reflects higher expectations in
regards with choosing a sustainable and ethical company, which incorporates improved
working conditions for the workers free of slavery and exploitation. The H&M business
presence in Sweden was reported as unethical, even being the second–largest operating
business in fashion industry after the brand, Zara (Bhattacharjee and Paolacci 2017). The
report stated the failure of abiding by the commitment of assuring ‘living wage’ to the
garment workers by the year 2018. The commitment was targeted to around 850,000 workers.
In the statement of Clean Clothes Campaign, Bettina Musiolek stated, “H&M needs to take
action immediately to stop the scandal of poverty wages and workers’ rights violations”
(Sharma 2015).
However, the company possess 4,800 plus stores in a total of 69 nations with the
association of more than 600 factories and around 93,000 factory workers. These workers are
supposedly facilitated with a fair ‘living wage’ (globallaborjustice.org 2019). The report of
Clean Clothes Campaign reflects that unfair practices like the H&M workers of Cambodia

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are earning below the half of the calculated living wage as well as one third for workers of
Turkey and India. The workers were forced or compelled to work overtime, which exceeds
legal or ethical boundaries of the company. The workers were even asked to work for extra
hour for the purpose of achieving their target, this practice of H&M can be regarded as the
forced labourers. The unethical practices were also reported by the executive director of ILRF
(International Labour Rights Forum), Judy Gearhart, who indicated that, the public relation
campaign promises should be replaced by a transparent as well as fair operational plan/supply
chain of H&M. The case of H&M also depicts the suggestion of International Labour Rights
Forum for publishing a comprehensive may associated with measurable goals for improving
the wage structure for offering a ‘living wage’ on a global scale (Recalde Ovelar 2017). Fair
and ethical working environment with the association of decent living wage, will contribute
towards the improvement of the brand image of H&M.
A Television program of Germany have reported the unethical practices of the
company regarding the exploitation of the garment workers. The Television program was
named as ‘Your cheap Fashion-Our Misery’. The report reflected the involvement of the
practice of labour exploitation and Child Labour in the operational facilities of Bangladesh
and Uzbekistan. Children of age 12 were asked to work for 14 hours without the applicability
of ‘living wage’. The company aims at achieving good quality clothes in affordable prices by
the incorporation of practices leading to exploitation of the garment workers. The company is
reported to be involved in mistreating the garment workers of Cambodia (ISLAM 2017). The
worker exploitation practices of the company can be depicted by various incidences of H&M,
like the brand is involved in using the method of sandblasting for the purpose of preparing
faded jeans. The mechanical and manual sandblasting techniques can majorly harm the health
condition of workers by causing silicosis and lung diseases. One of the retail news, reuters
depicted the poor salary structure of H&M. Few of the statements of garment workers
included, “Our salary does not allow us to save money - it’s barely enough to live”. The

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industry is involved in relishing the availability of cheap labour, specifically young women
workers, the ‘fair living wage’ should be practiced for addressing the responsibilities as well
as the risk associated with the working condition of the garment workers globally. In the year
2017, the company reported a profit amount after tax (Profit After Tax- PAT) of 1.8 billion
dollars but is still involved in the practices of exploiting labour force in the production of
garments all across the world (Directory.goodonyou.eco 2019). The global head production
of the company H&M specified that the wages are increasing on the factories in all over the
world, however, the factory workers with the provision of ‘living wage’ is still zero. The
garment workers below the poverty line are found to be under poverty line (Warkander
2019). In Turkey and India, the workers are earning around one third of standard factory
wage and one-half in Cambodia in regards of the ‘living wage’. The Bulgarian garment
workers of H&M is found less than 10% in relation to the required wages for fulfilling the
responsibilities of decent lives. The wages of the workers were below the actual standard of
factory wages. The workers of India exclaimed the daily working conditions of the workers,
as stated that they are indirectly forced for overtime with the purpose of fulfilling the basic
responsibilities in life.
Being one of the best distinguishable fashion brand, which believes in selling fashion
brands at affordable prices have strongly committed to minimize the environmental impact of
operational activities to minimum by the goal of becoming 100 percent sustainable for
positive climate for the community in which the company is operating. The goal of complete
sustainability up to 2030 will be achieved by strategic resource sourcing and allocation
approach, use of renewable source of energy and raw material as well as by encouraging the
practice of garment recycling

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Analysis:
The case of H&M depicts the poor working conditions and unethical practices for the
garment workers. The garment workers were paid less than the ‘living wage’ and were forced
for working overtime. The exploitation of cheap labour availability marked the unethical
approach of the company. The overtime hours in almost three out of every six factories
exceeds maximum hours based on legal standards of the factory workers. Working hours in
the countries where the production is facilitated have reflected data of working schedule on
Sundays (Bhattacharjee and Paolacci 2017). In the Bulgarian factory, which supplies the
manufactured garments to H&M are exposed to worker exploitation practices as the workers
are indirectly forced to work for overtime for the accomplishment of the minimum statutory
wage. The ethical issues can be identified from the deduced findings of the evidences like,
workplace fainting. Poor working condition, lack of workplace safety, unrealistic working
schedule and excessive overtime hours are the reason for the incidents like workplace
fainting. It is hard to believe that one of the biggest fashion brand H&M cannot be trusted
(Bîzoi 2016). The Company involved in a controversy of practicing unethical approaches.
H&M deviated their focus from the commitment of offering the ‘living wage’ rates by the
year 2018.
The communication during brand promotion and public relation campaigns was
directed towards the improvement of the working condition of the garment workers, which
was stated due to the increasing pressure from the human right bodies and consumers, as
consumers are well-aware of the unethical behaviour regarding the working condition and
they are not willing to sacrifice their conscience for even a well-known fashion brand
(Zellweger 2017). The communicated initiative should not only target to structure the
consumer perception but it should be implemented for a trustworthy ethical and sustainable
brand image.

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Although, the company have adopted a number of sustainable practices including
packaging and recycling but it has failed in implementing the commitment of the creating an
improved working conditions for the garment workers. Around 850,000 workers working in
the garment manufacturing companies for supplying quality products were promised for a fair
‘living wage’ and improved working environment. The unethical activities were identified
from the reports of Global Labour Justice, which depicted the practice of abuse on the female
workers in the factory (Mboga 2017).
The analysis of the identified issues with the fashion company, H&M can be
facilitated by the theoretical framework of ethics, Utilitarianism, Deontology and virtue.
These three theories of ethics holds different meanings but can present a broader aspect of
assessment for the ethical concerns or organizational practices of H&M (MONTÓN
GARCÍA 2015). The theory of Utilitarianism promotes the activities which reflects
maximum well-being and happiness for majority of the population (Bhattacharjee and
Paolacci 2017). As per the Utilitarianism theory of ethics, H&M have failed to improve the
outcome of the operational and production process, as the company have deviated its focus of
achieving an improved working environment and better wage structure for the garment
workers (MONTÓN GARCÍA 2015). The company failed to accomplish the committed
standards of working conditions, which reflects unethical practices. The organizational
practices of H&M does not cause well-being or does not benefit ‘most’ of the people
associated with the company’s operational process. Another theory which can assess the
situation in hand of the fashion brand H&M for demonstrating the positive or negative impact
on the stakeholders. The ethical theory of Deontology focusses on the morality of the process
or action rather than concentrating on the outcome. The process or actions of the fashion
brand is not focussed on improving the working conditions and safety measures in the
operational process of garment factory (MONTÓN GARCÍA 2015). The company involves
immoral practices like not offering ‘living wage’ as per the industry standards, using harmful

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processes like sandblasting techniques and the excessive working hours. The process or the
actions of the company reflects immoral practices. The theory of virtue can be used for
assessing the issues and concerns that are identified from the case of H&M. The company.
Virtue can be considered as the character which is based on the behavioural action. The
duties or behaviour involved in the process of deducing a positive consequences. The fashion
brand H&M reflects the practice of unethical behaviour as it avoids the constraints and
boundaries related to working condition of the garment workers (MONTÓN GARCÍA 2015).
The garment workers of the factories are forced to work excessive hours without a positive
working environment, thereby reflecting the unethical behavioural approach of the company
officials.
The stakeholders involved or associated with the production and operational process
of H&M are the consumers/customers, workers, employees, industry peers, suppliers, policy
makers, investors, inter-governmental and non-governmental organizations. The diversion
from the commitment and unethical practices of the company can majorly affect every
stakeholder associated with the fashion brand, H&M (uk.reuters.com 2019). The company
portrayed a promise of improving working conditions of the factory workers due to the
increasing concerns of worker exploitation from the community, consumers and the working
staff. Consumers of H&M demanded a strategic improvement of the operational process due
to the depleting brand image of the brand and because of the increasing consumer awareness
regarding environmental and community impact, consumers are developing affinity towards
sustainable and ethical brands (Large 2019). Failing to abide by the communicated
commitment, the identified ethical issues of the fashion brand affected the consumer trust and
inclination towards the brand (facing-finance.org 2019). The deviation from the commitment
and worker exploitation practices affected the community in which the brand operates as well
as it affected the working relation and satisfaction level of the associated workers
(Bhattacharjee and Paolacci 2017). The suppliers will be affected by the factors of losing

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trust from the company because of its false commitments. Policy makers will get affected
from the ethical practices by means of getting negative complaints and through emerging bad
image of the company (MONTÓN GARCÍA 2015). The management employees will not be
affected negatively as they will be enjoying the profit shares from the increasing sales of
affordable products. The industry peer will be positively affected as they will gain advantage
from the depleting image of the brand (MONTÓN GARCÍA 2015).
H&M can be considered as a well-recognised company, which is involved in
unethical practices and have also failed to implement the sustainability goals. The fashion
brand is involved in worker exploitation practices by implementing a flexible working
schedule, unsafe production techniques and insufficient wage offerings. The exploitation of
cheap labours have marked the ethical issues of the brand.
Recommendations
After conducting the case analysis of the identified issues and concerns regarding
ethical practices of the fashion brand, the recommendations for H&M can be comprised of
strategic operational improvement and techniques for bridging the gap between the
communicated commitments and executed plans. Few of the recommendations can be
appointing leader committee for monitoring and implementing fair work practices in the
production or operational process. Introduction of fair and ethical policies and regulations for
the response to worker exploitation. Implementation and maintenance of policies for
following a standard structure of employee work schedule is very crucial for ensuring ethical
approach (Bhattacharjee and Paolacci 2017). The revision of wage structure in accordance
with the industry standard and improving wage structure of the garment workers is required
for the purpose of improved working environment (Bhattacharjee and Paolacci 2017). The
poor, unethical and immoral working environment of the workers can be responded by the
system of assessment through a quality assessment team in the factories. Along with ensuring

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the product quality, the assessment of working environment is required for an improved
organizational system (MONTÓN GARCÍA 2015). The fashion brand, H&M should include
a women committee, which can actively ensure the elimination of violent gender biased
activities. An effective work standard needs to be maintained for embracing the theory of
ethics (Bhattacharjee and Paolacci 2017).
Encouragement of the formation of structured trade unions will identify the actual
concerns of the workers as well as can help in aligning the organizational goals with the
worker fair and inclusive participation (Doherty 2015). Implementation of employee worker
representation in the garment factories as well as operational areas of Cambodia, Turkey,
Ethiopia, India and Bangladesh will effectively address the concerns of increasing
exploitation. The company should involve in fair negotiation of the wage structure by
spreading the information about industry standards and workers’ rights. The restructuring of
wage structure should cover the means of experience, skills, responsibility and performance
of the workers. The company should be involved in engaging the national governmental
bodies for setting standard wage structure, labour laws, risk management strategy and
standard working schedule for the purpose of accomplishing an improved organizational
system.
Conclusion
Therefore, the paper can be concluded by stating that H&M might be well-established
and renowned fashion brand but it majorly lacks the involvement of ethical practices. The
case in this paper depicted a major issue of the fashion company H&M, worker exploitation.
The evidences regarding worker exploitation can be depicted from actions and strategies like
The fashion brand has adopted practices which involves unrealistic and excessive working
hours in return of the ‘living wage’. In interview with various workers from the production
and supplier factory of H&M in India, Cambodia, Turkey Bulgaria and India, the responses

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depicted that the unfair and unethical practices of the company for the garment workers.
Moreover, the workers were not even facilitated with the communicated ‘living wage’ which
restricts them to help with the family expenses. The failure of abiding by the commitment of
assuring ‘living wage’ to the garment workers by the year 2018. The ethical issues deduced
from findings of the evidences is, workplace fainting. Lack of workplace safety, poor
working condition, excessive overtime hours and unrealistic working schedule are the reason
for the incidents like workplace fainting. Implementation of employee worker representation
in the garment factories and operational areas of Cambodia, Turkey, Ethiopia, India and
Bangladesh will effectively address the concerns of increasing exploitation. The company
should involve in fair negotiation of the wage structure by spreading the information about
industry standards and workers’ rights. The recommendations of the organization mainly
concentrated on the restructuring of wage structure, improvement of working schedule,
assessment of existing working condition by implementing working schedule and by
appointing worker representatives. The recommendation of revising the wage structure and
policy should be based on the national governmental support.

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