Analyzing ASOS's Ethical Challenges in its Supply Chain

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1ASOS AND SUPPLY CHAINS
Ethical Case on Case 4: ASOS and Supply Chains
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Actual Words: 3000
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Table of Contents
Introduction................................................................................................................................1
Part 1.A......................................................................................................................................1
Various aspects of ethical issues from point of view of a middle manager...........................1
Reason for exploring this case in form of an ethical issue.....................................................1
Role played by business in context of society.......................................................................2
Determining the impact of ethical issues on key stakeholders..............................................2
Demonstrate the effects of ethical choices over companies with the help of any example...2
Conclusion and recommendation...........................................................................................3
Part 1.B.......................................................................................................................................3
Reflection of the selected case study with the help of two ethical theories...........................3
Reflection of the case study through Individualism theory...................................................3
Reflection of the case study through Utilitarianism theory...................................................4
Contradiction between the theories........................................................................................4
Part 2..........................................................................................................................................5
What factors are required for being an ethical leader and how ethical manager organises
and manages the organisation for achieving high business standards?..................................5
Required qualities for ethical leadership................................................................................5
Links connecting ethical managers with ethical leaders........................................................5
Skills and qualities that you want to gain from ethical leaders..............................................5
How an ethical organisation with appropriate environment for fostering ethical practices is
developed with compliance tools...........................................................................................6
Conclusion and recommendation...........................................................................................6
References..................................................................................................................................6

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Introduction
Following ethical practices is very advantageous for business as it helps in creating an ethical
environment in the organisation. This factor transforms an ordinary business into an ethical
business. Developing an ethical business and environment is the responsibility of a manager
and he is required to take several decision and make several changes in the organisational
environ, which helps in running the business in an ethical manner. All these factors and
different aspects of business will be discussed in the report with the help of a selected case
study. Several ethical theories will be used and applied in the report for getting better insight
into the ethical practices. The impact of these factors on different stakeholders will be
assessed and how an ethical organisation is developed will be depicted in the report. Several
recommendations will also provided to the managers regarding these different aspects of
ethical issues and practices.
Part 1.A
Various aspects of ethical issues from point of view of a middle manager
ASOS has been one of the leading fashion retailers of Britain’s retail industry. The company
has been working and performing its business operations by targeting the adult and young
customers groups. ASOS has said to be committed to their motive of running their business
with integrity (Ferrell and Fraedrich, 2015). However, the company has been facing criticism
and issues regarding their unethical behaviour and practice of using child labours in their
Turkish textile industry and supply chain. The company has been accused of using child
labours in its business and supply chain operations. As per the perspective of a middle
manager, this kind of behaviour is highly unethical and can create several hazardous ethical
issues for the organisation (Watling et al. 2013). This issue was found through BBC
investigation but the company was totally against this accusation as according to the
managers of the company, this type of behaviours and unethical practices were totally against
their business conduct and code of practices.
Reason for exploring this case in form of an ethical issue
The main reason for exploring this case as an ethical issue is that child labour is not just an
unethical behaviour or practice. According to Shaw and Barry (2015), it is also a serious
crime and violation of human rights. As per the investigation carried out by BBC in the
Turkish textile industry, there were many child labours found in the textile industry, which

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were heavily tires and exhausted from working for more than 59 to 60 hours in a week and
due to this much of labouring, they were unable to attend their schools and classes. This kind
of unethical practice can cause severe damage to the image and reputation of ASOS and can
lead to its downfall in the global market. However, as stated by Slade and Prinsloo (2013),
the company has been denying of this accusation and has stated that they have no knowledge
regarding any such kind of unethical behaviour or practises going on in their business. Along
with this, it has been mentioned that ASOS conducts a remediation program, in which, the
vulnerable people and employees in the working environment of the company are overviewed
and take care of (Ferrell and Fraedrich, 2015). Therefore, practicing child labouring is totally
a false accusation to the company.
Role played by business in context of society
As per the opinion of Bello (2012), the products of ASOS are for protecting body from
external heat or cold as well enhances the look of the wearer. The products of ASOS are
mainly targeted for the adult and young customers. However, as per the accusation of
practicing unethical practices, in Turkish market, child labours ranging between 7 to 8 years
were seen sewing and stitching boxers’ shorts for the company. Due to this, the sales of the
products of the company may convey wrong message in the society and it can be one kind of
support for child labour (Ferrell and Fraedrich, 2015). As per the company, the problem may
have occurred due to one of its suppliers named Hazar Tekstil. This supplier outsourced from
some of the workshops and industrial Hubs, in which child labours were hired to work. This
could have wrong influence on business of ASOS. Due to this reason, the company ceased its
contact from this supplier. As the products are mainly popular among the adults and teen
customers, being in contact with such kind of suppliers can pose negative influence on the
customers as well as the business of ASOS. As opined by Kim and Brymer (2011), the
company has been working for the welfare of the Syrian refugees and affected children and
has offered support to these people.
Determining the impact of ethical issues on key stakeholders
The major stakeholders of ASOS are its customers, board of directors, suppliers, employee
investors and few more. Due to emergence of ethical issues in business operations of ASOS,
the customers and stakeholders may drawback themselves and break their contact with the
company. The company aims at performing business by maintaining full transparency with
the stakeholder and earn their trust along with profit from business (LeFebvre and Franke,
2013). However, due to this particular ethical issue in the business of ASOS, the company

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was unable to fulfil this objective. The customers lost their confidence and trust over the
company and its services or products. This negatively affected the interest of the shareholders
like the investors and the directors of the company (Ferrell and Fraedrich, 2015). In this way,
ethical issue affected the stakeholders of ASOS.
Demonstrate the effects of ethical choices over companies with the help of any example
Watling et al. (2013) has stated that Ethical choices and selection can be very influencing for
the organisation. In this case, ASOS Company failed in choosing ethical supplier. Due to
selection and engagement with low standard suppliers, some of the good suppliers may also
get negative reviews, which can give rise to negative consequences for the rest of the
suppliers. In the opinion of Groves and LaRocca (2011), ethical issues disturb the working
environment of the company, which in turn affect the characters and skills of the employees.
No opportunities are available for the employees in the working environment, which hinders
their growth and development in the organisation. This will in turn affect the reputation,
image, profit and sales ratio and the position of the company in the market. With this
example, it can be easily understood that selection of ethical choices is very crucial and
should be done properly or it may bear negative results for the company.
Conclusion and recommendation
As the operations of the company are spread all across the globe, it is very crucial for the
company to analyse its supply chain and eliminate any kind of unethical practise or factors
from its supply chain. In this way, supply chain of the company can be enhanced and more
standard quality goods and services can be offered top the customers by ASOS. Through
providing quality services and products to the customers, the business growth of the company
can be facilitated easily.
Part 1.B
Reflection of the selected case study with the help of two ethical theories
As stated by Eisenbeiss (2012), ethical theories are used for reflecting the ideas and practices
that are carried out in the organisation. Ethical theories can be used in this case also for
examining and evaluating the business ethics in the organisational environment and it
encourage diversity in the culture of the organisation. All these factors can be analysed in the
business context of ASOS with the help of several ethical theories. The two ethical theories,
which are going to be used and applied, in this case, are individualism theory and

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utilitarianism theory. In the opinion of Den Hartog and Belschak (2012), these theories are
the popular ethical theories that are generally used for assessing ethics in business
environment. Both these theories will be used and applied in the case study of ASOS and
ethics in the business of the company will be analysed effectively.
Reflection of the case study through Individualism theory
This theory is a social theory and is based on the interest of an individual and self-good. This
ethical theory was proposed and introduced by Milton Friedman, who was also honoured by
the Noble peace award. Avey et al. (2011) has stated that this theory focuses on enhancing
personal aspects of business and working for self-good and interest. When applied this theory
in any business context, it focuses on increasing the wealth of the shareholders and investors
of the company. If these areas are focused and emphasized in the business culture of any
organisation, then the culture is said to be ethical as per this theory. As per the opinion of
Kalshoven et al. (2011), if these factors and areas are not the first priorities in the business
culture, then that kind of business culture will be unethical or ethic less according to this
ethical theory. If this theory is applied on this specific case study of ASOS, then the culture
of the organisation will be called as ethical. This is because ASOS focuses on maximization
of the wealth of its owners and shareholders. This is the first priority of the business culture
of ASOS.
However, if the statements and quotes of the management of the company are taken into
consideration, then it could be easily observed that the company has been working for the
welfare of the society and their customers (Avey et al. 2011). It has been mentioned in the
above section of the report that ASOS practices a remediation program for the vulnerable
employees present in the organisation. In this case, it can be said that the business culture of
ASOS does not possess ethics as per the principles of this theory (Quarshie et al. 2016). This
is because the company has been giving priority to the needs of other people and has been
working for other people. However, it is not still clear that, which of these parts can be said
as authentic as it is still not known that whether the accusation of unethical practices on
ASOS is true or the data provided by the company is genuine. Therefore, the business culture
can be said as partially ethical as per the present available data and circumstances.
Reflection of the case study through Utilitarianism theory
As per the opinion of Walumbwa et al. (2011), utilitarianism theory of ethical practices is
consequence-based theory. As per the principles and guidelines of this theory, the preference

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of performing business should be in the interest of other people also. This should be done
along with earning profit and facilitating the growth of the organisation in the business
culture. It has been stayed by Schaubroeck et al. (2012), that this theory is said to be opposite
to the theory of individualism as the principles of utilitarianism theory are against the
principles of individualism theory. With the term people, it refers to the employees and staffs,
working in the organisational environment of ASOS Company. This theory shed light on the
importance of satisfaction of the employees and staffs of the organisation. As mentioned by
Mayer et al. (2012), when the employees and staffs of any organisation are satisfied from
their job and the treatment they are provided in the organisation, then they develop intrinsic
motivation in themselves. For this purpose, it is very crucial for the organisation to provide
proper working environment to the employees. When employees and staffs of ASOS are
satisfied and motivated, they will be able to perform more properly in the organisational
operations and tasks.
As per the different sources and the reviews of the employees of ASOS, they are not treated
well in the organisation and they are paid with lower wages and salary (Kolk, 2016). This has
led to their devaluation and de-motivation in the organisation. They are not provided a bit of
independence and liberty in the working environment of ASOS but they hesitate to share their
views and complaint to their superior as they may be treated more badly. Therefore, it can be
clearly said that as per the ethical theory of Utilitarianism, the business and organisational
culture of ASOS is highly unethical. Therefore, these parties are required to be ceased and the
employees of the company are required to be treated with respect (Avey et al. 2011). Only
then, the company will be able to practice ethics in business and unethical business culture of
ASOS will be transformed into ethical business culture.
Contradiction between the theories
The ethical theories used for this case study are contradictory in nature. The theory of
utilitarianism considers a culture ethical only when interests of people along with profit
maximisation of the organisation is given prodigy in that business culture. On the other hand,
the belief of individualism theory is that if the individual’s interest is given priority in that
culture, then that business culture is ethical (Carroll and Buchholtz, 2014). Utilitarianism
theory prefers to work for the welfare of the employees and staffs in its business culture.
Whereas, individualism theory prefers to work for the welfare and benefit of the owner or
shareholders of the organisation, without focusing on other people’s interest. In this way,
both the theories are opposite and contradictory to each other.

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Part 2
What factors are required for being an ethical leader and how ethical manager
organises and manages the organisation for achieving high business standards?
An ethical leader is able to resolve all the ethical issues and problems, generating in the
business environment and culture of the organisation. There are many ethical issues occurred
in an organisational environment. If these issues are not solved properly and on time, then
these can lead to severe damage to the business and the organisation. Ethical issues are
difficult to solve as in these issues, two alternatives are provided to the manager. An ethical
manager chooses the best suitable option for the organisation, which helps in developing an
ethical business environment (Schaubroeck et al. 2012). He manages and prevents any type
of conflict occurrence and maintains transparency among the employees. He always
motivates employees to adopt ethical practise while performing. In this way, organisation is
maintained high business standards are achieved by an ethical manager.
Required qualities for ethical leadership
An ethical manager should be able to take proper justifications and judgments at workplace.
Another quality for ethical leadership is the honesty and transparency among the leader and
the followers. An ethical leader pays respect to all of his followers and subordinates and
performs effective teamwork with the team members (Ferrell and Fraedrich, 2015). Ethical
leadership demands good decision and strategy formation skill along with capability of
ensuring that all his decisions and strategies are respected and complied with properly and
strictly. Ethical leadership also requires great encouraging and motivating abilities for
motivating the employees in organisation. These key qualities are required for gaining proper
ethical leadership.
Links connecting ethical managers with ethical leaders
An ethical manager is very similar to an ethical leader. The only difference between them is
the difference possessed between a leader and a manager. According to Fassin et al. (2011),
both the ethical leader and the ethical manager practice ethic in their performance and at
workplace. A leader guides and motivates employees in an organisation and helps them in
developing whereas manager manages and organise employees and operations in the
organisation by complying with business ethics principles. Both the ethical leader and
managers is honest, transparent and good decision maker (Trevino and Nelson, 2016). The

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main objective of both the manager and an ethical leader is to develop the business standards
and facilitate an ethical wok culture in the organisation.
Skills and qualities that you want to gain from ethical leaders
The qualities that I want to gain from ethical leadership are the quality of being transparent
and motivating at workplace. I also want to again the quality of forming proper judgements.
Through these qualities, I will be able to motivate my followers and my subordinates and will
be able to make judgment regarding different business aspect in a proper way. Wrong
judgment can sometimes lead to occurrence of negative consequences. Therefore, forming
god judgments is very crucial factor. In this way, I will be able to become a good ethical
leader in my future.
How an ethical organisation with appropriate environment for fostering ethical
practices is developed with compliance tools
For developing an ethical organisation, I would focus on developing the employees and my
subordinates present in the organisation. For developing the employees, I will motivate them
and guide them in including ethical practices in their daily performances. I will arrange
ethical trainings and development programs for developing and enhancing the skills of the
employees. I will try to facilitate better communication among the employees of same
department as well as of different departments. This will help in building a good relation
among the employees of same and different departments.
I will develop new business policies and strategies, which will help the employees in carrying
out the organisational and business operations in more way that is effective. Along with these
measures, I will also propose strict rules and regulations for ensuring the proper compliance
of the newly developed policies and measures by the employees. Various kind of
punishments will also be given to the employees who will violate any polices and rules. In
this way, all the employees and subordinates will be able to practice business ethics in the
organisation. This will help me in giving rise to an ethical organisational environment. In this
way, I will be able to develop an ethical organisation.
Conclusion and recommendation
As observed in the above sections that different ethical theories have different perspective of
analysing the business culture of an organisation. Being ethical according to all the ethical
theories is not possible in a literal manner. However, ethic is and advantageous key factors
for the business organisation to gain proper control over the employees and the business. For

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developing an ethical environment, there is a need for an ethical manager to use several
measures and compliance tools in an effective way. It is recommended that the managers of
the organisation should develop proper ethical leadership qualities. This will help them in
running the organisation in an ethical manner and raising the standards of business in their
organisation.

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References
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