Contemporary Issues in Accounting: Examining H&M's Labor Ethics

This essay delves into the contemporary accounting issues surrounding H&M's unethical labor practices, specifically child labor and slavery allegations in its factories. It highlights instances of child labor, with children as young as 14 working long hours in Swedish branches and 15-year-old girls working late into the night in violation of Myanmar's laws and international labor conventions. The essay also addresses allegations of slavery in the Chinese branch, where employees face long hours and sub-par wages, leading to strikes and a decline in the company's brand image and financial performance. The analysis indicates that H&M's unethical behavior has led to significant criticisms and financial losses, necessitating a radical change in its approach to labor practices and public perception; study the complete solution on Desklib, where you can find a wide array of solved assignments and past papers to aid your learning.

CONTEMPORARY ISSUES IN ACCOUNTING
Name
Institution
Course
Date

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Child labor and slavery of H&M
H&M factories have been reported to practice unethical activities such as slavery and child labor.
Since 2000 the company has been registering negative performance following the previous series
of allegations of Chinese slave labor (Lively et al., 2017). In the Swedish branch children aged
14 years have been reported to work for more than 12 hours a day. The management of the
Company claimed to have no guidelines when it comes to selecting employees, but they employ
anyone who is willing to work. 15-year-old girls claimed to be working up to 10 pm which is a
breach of Myanmar’s laws as well as the international labor convention (Doward, 2012). After
the allegations, the management claimed to have taken to curb overworking in the organization.
According to H&M management, children aged 13 to 15 years may do light work as long as it
doesn’t threaten their health and safety or hinder their education. However, the arguments seem
to be invalid as the company exposes the children to a lot of working and forcing them to work
for long hours. This has been a threat to the children health and development, and the company
has been highly criticized for exercising child labor (Doward, 2012).
Most of H&M operations are employee unfriendly. The H&M branch based in China has been
associated with various allegations of slavery. The management does not involve the employees
in the process of decision making. The employees have been exposed to multiple unethical
activities such as working for long hours and sub-par wages. The practices of slavery in various
branches are associated with racism (Lively et al., 2017). The slavery practiced in the company
has resulted in multiple strikes which have seen a number of them being gunned down. The
brand image of the Company is experiencing mass destruction resulting in a low volume of sales
and declining profit margins. Due to the involvement in unethical practices, the company is
currently registering declining performance and losing popularity continuously. Various

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criticisms of the company have been witnessed and accusations of acting unethically. The
company does not only face profit losses but will have to radically change their approach to the
public through respect and appreciation of the broad types of customers the chain attracts (Lively
et al., 2017). Although the management of the Company hopes that the company will improve its
performance in future it is evident that the factories will continue to register declining
performance due to the poor brand image.

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Bibliography
Doward, J., 2012. H&M comes under pressure to act on child labour cotton. The Guardian, 15.
Lively, C., Plantenga, S., Schwartz, K., Bey, A. and Delgado, E., 2017. Unethical Business and
Fair Trade.