Corporate Social Responsibility Analysis: Primark's Ethical Standards

This report provides a comprehensive analysis of Primark's corporate social responsibility (CSR) practices, particularly focusing on the ethical standards and labor-related issues within the organization. It examines Primark's operations, including its supply chain and the challenges faced due to unethical labor practices, such as child labor and poor working conditions in factories. The report delves into specific incidents, like the 2005 ethical rankings and the 2013 Rana Plaza collapse, highlighting the consequences of these events on Primark's reputation and operations. Furthermore, it discusses the steps taken by Primark to improve its CSR, including implementing ethical trade initiatives and codes of conduct. The analysis emphasizes the importance of ethical business practices for long-term sustainability and the impact of these practices on the company's stakeholders, including employees, consumers, and the broader fashion industry. The report concludes by stressing the critical role of ethical standards in ensuring the sustainable operation of businesses in the industry.

Running head: ANALYSIS OF CORPORATE SOCIAL RESPONSIBILITY
ANALYSIS OF CORPORATE SOCIAL RESPONSIBILITY
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Executive Summary
The report is based on the analysis of the corporate social responsibility and the ethical
standards of the organizations. The company that is taken into consideration for this analysis
is Primark Fashions which is an Irish Fashion organization which operates in the budget
clothing industry. The issue related to CSR that is analysed in the report is labour related
practices of the organization. The various issues that were faced by the organization due to
the inappropriate working conditions in the factories are discussed and analysed in the report.
The report has been concluded by stating that the ethical standards of the company are
important for its sustainable operation in the industry.

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Table of Contents
Introduction....................................................................................................................3
Analysis and examination of the CSR issue..................................................................3
Discussion of the labour practices issue that occurred in Primark Fashion...............4
Conclusion......................................................................................................................8
Recommendations..........................................................................................................9
References....................................................................................................................10
Appendices...................................................................................................................12
Appendix 1...............................................................................................................12
Appendix 2...............................................................................................................12
Appendix 3...............................................................................................................13
Appendix 4...............................................................................................................14

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Introduction
Corporate social responsibility can be defined as a self-regulation that is integrated
within a business model. The implementation of CSR related activities in an organization can
sometimes go beyond the statutory requirements and the compliance with the regulations in
an organization. The laws and regulations are related to many areas including the
environmental issues, labour related issues. The employers have the choice to just abide by
the laws related to corporate social responsibility or go beyond these rules to do something
extra for the society. The organizations can create long-term advantages by including
activities related to corporate social responsibility in their business operations. The
companies can also positive impact on the environment with the help of CSR activities (Tai
and Chuang 2014).
The various issues that need to be taken care by an organization so that they can
conduct the CSR activities are, corporate governance, labour practices, ethics in supply chain,
human rights and ethics related to marketing activities. The organization that will be
considered for the analysis related to corporate social responsibility is Primark Fashion
(Primark.com. 2018). Primark is an Irish organization that operates in the clothing sector and
the headquarters of the company is located in Dublin. The company was founded by Arthur
Ryan in the year 1969 and the first store of the company is still operating in the same location
where it was established. The problems that were faced by Primark in the year 2005 due to
which they had received the lowest rank will be discussed in the report in detail (Carroll
2015).

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Analysis and examination of the CSR issue
The changes that have occurred in the external environment have led to significant
developments in the supply chain of the organizations. Globalization has caused huge
changes in the transportation, communication and the production chains of the organizations
as well. The distances that were needed to be travelled earlier were also reduced and lead-
time required to complete a business cycle is had decreased. Primark is an organization that
belongs to the fashion industry and the production of the goods and services are dependent on
the needs of the consumers. The fashion houses are expanding their business and the
developing countries have provided a welcoming environment for the foreign business
organizations (Cheng, Ioannou and Serafeim 2014).
However, the expansion in an organization increases the levels of responsibility that
the organization has towards the society. The companies tend to ignore all the other problems
and issues that are occurring in their supply and with the working conditions of the
organization and their major focus becomes the profit that they receive. The organizations
therefore slowly realize the consequences that they need to face regarding the negligence of
their social responsibility. The business organizations therefore need to understand the
responsibilities that they have towards the society. Some of the prime business organizations
have been facing a lot of criticism due to the ways by which they practice unethical business
activities (Lins, Servaes and Tamayo 2017). The CSR issue that will be discussed in the essay
is related to the labour practices or the working environment of the employees. The work
environment of employees is related to the surroundings where the employees work. The
major responsibility of the organization is to provide positive environment for working so
that they can be comfortable in their workplace.

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Discussion of the labour practices issue that occurred in Primark Fashion
The case of Primark is a good example of increasing with profit after dealing with the
issues like, child labour and many other irresponsible business related behaviours. Primark is
a famous brand in the United Kingdom for selling budget clothes and sourcing cheap
materials from the 600 suppliers that they have in the market. The success of the company is
mainly based on the sourcing of cheap raw materials and manufacturing low budget clothes
for the consumers. The major aim of the Primark fashion company has been to keep the
profits high and the margins low. The major problem related to responsible behaviour was
faced by Primark in the year 2005 when they received the lowest scores among all the leading
clothing chains in the United Kingdom (Saeidi et al. 2015).
The organization was criticised for presenting low ethics in business and they had to
join the Ethical Trading Initiative program in the year 2006 to gain back their reputation in
the industry. The case related to unethical practices in Primark reopened in the year 2008. A
documentary was aired on the news channels showing the poor conditions and operations in
its Indian factories. The documentary also featured the usage of child labour by the
organizations for the completion of many tasks in the factories (Wu et al. 2015). The
documentary caused huge issues for the company among the public and this further led to
mass boycott by the consumers in the whole world. The documentary depicted that the
extreme pressure that was being faced by the developing countries regarding the production
and supply of the goods has led to the appointment of child labour in the factories (Korschun,
Bhattacharya and Swain 2014).
The organization however denied the fact that child labour was used for the purpose
of production of materials in their factories. The next move that was taken by the
organization was that they had stopped business activities with the suppliers who were under
question. However, this step was not able to solve the ethical issues that had been caused due

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to this incident. This action was not approved by the child protection groups of the different
countries and they called it an irresponsible behaviour of the organization. Another issue was
raised the same charitable organization that has brought forward the issues related to child
labour. The report claimed that the working conditions for the employees working in the
factories of Primark in Bangladesh even after two years of their first visit (Gupta, Briscoe and
Hambrick 2017).
The report further claimed that the working conditions for the employees were terrible
and the pay was also low. The employees in the factories were overworked and the
compensation that was being provided to them was not at all appropriate. The labour law that
has been set by the country is of 48 hours and the suppliers made them work for a maximum
limit of 60 hours. The women who were working in the factories were subject to
inappropriate behaviour and sexual abuse from the other employees. The major setback for
the Bangladeshi employees of the organization was the low pay grade. The main issues that
were depicted in the report were the low wages and the precarious working conditions for the
employees (Samuelson and Anderson 2014).
The ethical issues were not only discovered among the employees in the overseas
factories of the company. The suppliers in the United Kingdom were also engaged in
unethical activities. The major unethical practice that was being undertaken by the domestic
suppliers was the sourcing of illegal labour from the various third world countries. The
working condition for these workers in the UK were not better than that of the employees
working in the factories of India and Bangladesh. The breach of the ethical protocols was
therefore the major issue that was caused in the operations of the organizations in all the
areas. The repercussions of these unethical events were huge for Primark (Kelman et al.
2016).

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The reputation of the company had to face o huge blow due to these events. The
consumers of the organization opted to boycott the products and services. The most difficult
part of the entire phase was to bring the loyal consumers back to the company. The
organization had to change its vision statement so that the trust of the consumers can be
brought back. The modified vision statement of the company mainly emphasized on acting
ethically and responsibly. Primark had then implemented a Director who would be able to
ensure Ethical Trade in the company. The code of conduct of the organization had been
enforced in a strict manner and they were bound to abide by the International Labour
Organization’s (ILO) code (Moscato 2017).
The organization sought to implement transparency in their policies so that the ethical
standards could be imposed. The major challenge that was faced by the company even after
implementing the new vision statement was related to the supervision required to ensure that
the policies are followed uniformly in the overseas factories of the company. Primark had to
struggle a lot to expand its operations and regain its lost position in the market. The
organization has been working with external agencies to maintain the standards that are
required to operate ethically in the industry. Primark had to make sure that the products that
are manufactured by the organization are not only fashionable, they should also be
manufactured by the workers who are treated in a fair manner and compensated well (Wang
et al. 2016).
The ethical sustainability related steps that were taken by Primark Fashion were not
enough for the operations of the organization. Primark had been able to become the biggest
success stories in the fashion retail related industry. The company has been famous for its low
price and the high value offer. The organization has further expanded its operations in other
areas including United States and Europe. Primark has been struggling in the sustainability

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and ethical standards of producing cheap fashion for the consumers (Brown, Goll and
Rasheed 2017).
One major incident that occurred in Rana Plaza in Bangladesh was another major
blow to the already tarnished image of the organization in the industry. The Rana Plaza in
Bangladesh had collapsed on 24th April in the year 2013. This building had five garment
producing factories and employed more than 1100 workers and it caused injury to almost
2000 individuals. This incident raised a huge alarm in the fashion industry and the need
related to the protection of the vulnerability in their supply chain became a necessity. The
organizations therefore need to closely take care of the ethics related to business and the
responsibility of the companies towards the society (Lim and Greenwood 2017).
The ethical responsibility related theory is applied in Primark Fashion and the
organization had to take steps regarding the improvement of working environment for the
employees. This theory states that it depends on the corporate culture of the organization and
the ways by which they view themselves as citizens of the society. The analysis has shown
that the ethics related to a business organization are an important part that needs to be
integrated into their business models. The long-term sustainability of the organizations
depends on their ways by which they conduct their business in an ethical manner. The
example of Primark Fashions and the ways by which they were operating in the market for
producing low cost fashion proves that the ethical standards of the company are important
(Christensen, Mackey and Whetten 2014).
Conclusion
The report can be concluded by stating that the corporate social responsibility is a
major part related of the operations of the business organizations. The issue related to CSR
that has been examined in the report is the working conditions of the employees. Primark

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Fashions was unable to provide suitable working conditions for the employees in their
overseas factories and the domestic factories as well. The company had to face many issues
in the supply chain due to the lack of ethical standards in their factories. The reputation of
Primark was also shattered due to the supply chain related problems and this led to the loss of
the trust of the consumers. The organization then had to take many steps to improve their
ethical standards and their operations as well. Primark had to struggle a lot to regain their
position in the market and further ensuring the suitable working conditions for the workers in
all the factories. The various steps taken by the company had helped Primark to improve their
operations or to ensure sustainability.
Recommendations
 Primark needs to ensure suitable working conditions for their employees according to
the ethical standards.
 The sustainability in operations need to be ensured so that the company operate in the
market profitably for a longer term.
 The organization needs to set high ethical standards and impose them in all their
overseas as well as domestic factories.
 The company needs to ensure sustainable operations even by compromising in their
profits if required.
 The increase in corporate social responsibility will help in the improvement of the
reputation and the image of the company in the industry.
 The huge disasters that had been faced by the company were a huge blow to their
reputation and this issue can be solved with the help of high ethical standards
followed by Primark.
 Primark had taken steps to help the families of the people who were affected by the
disasters that had taken in the factories of the company. The organization needs to

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take steps so that these incidents can be prevented and they can operate easily in the
market.

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References
Brown, L., Goll, I. and Rasheed, A., 2017, January. Corporate Social Responsibility,
Corporate Political Activities, and Firm Performance. In Academy of Management
Proceedings (Vol. 2017, No. 1, p. 15733). Academy of Management.
Carroll, A.B., 2015. Corporate social responsibility. Organizational dynamics, 44(2), pp.87-
96.
Cheng, B., Ioannou, I. and Serafeim, G., 2014. Corporate social responsibility and access to
finance. Strategic Management Journal, 35(1), pp.1-23.
Christensen, L.J., Mackey, A. and Whetten, D., 2014. Taking responsibility for corporate
social responsibility: The role of leaders in creating, implementing, sustaining, or avoiding
socially responsible firm behaviors. The Academy of Management Perspectives, 28(2),
pp.164-178.
Gupta, A., Briscoe, F. and Hambrick, D.C., 2017. Red, blue, and purple firms: Organizational
political ideology and corporate social responsibility. Strategic Management Journal, 38(5),
pp.1018-1040.
Kelman, I., Loe, J.S.P., Rowe, E.W., Wilson, E., Fjærtoft, D.B., Poussenkova, N. and
Nikitina, E., 2016. Corporate Social Responsibility.
Korschun, D., Bhattacharya, C.B. and Swain, S.D., 2014. Corporate social responsibility,
customer orientation, and the job performance of frontline employees. Journal of
Marketing, 78(3), pp.20-37.