Explain the ethical issues H&M needs to consider in its operational activities

In this report I will be talking about how my chosen organisation, which is H&M, uses ethical issues to consider in its every day operational activities. H&M may not have some ethical issues that I will be discussing about in this report, but I will talk in detail about how they could use them, issues in their business. I will be explaining how H&Ms way of selling affects ethical issues and will be discussing about the things they need to be aware of whilst selling their clothes.

Human Rights

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Business ethics consider actions taken on behalf of organisations such as H&M. Business ethics as the business if its actions are good or bad for us humans. Many questions that arise in business ethics affect all of us such as the environmental ones. There are also some issues which relate to human rights too. Therefore it is important that H&M deal with these issues and questions correctly as they do affect humans and the environment. Human rights are mainly about discrimination. For example it is illegal in the UK to treat people differently because of their race, gender, religion, sexual orientation or disability. These are known as basic human rights.

There are other types of human rights which are built into legal system. At H&M employees are entitled to a contract of employment, to work part time, to be able to join a union and to have hearing against wrongful dismissal. This is for everyone; this is known as human rights. H&M would have to follow human rights when employing people to work with them; they cannot deny someone to work for them because of their race, gender, religion or disability. If these laws are broken in H&M they can be sued. H&Ms commitment to operating with respect for human rights is reflected in company policies and procedures. In order to integrate human rights considerations into the management of their business, human rights due diligence is part of their risk assessment for new production and sales markets.

For existing production and sales markets, H&M will regularly evaluate human rights related risks and conduct human rights impact assessments on high risk markets. Risk and impact assessments are used for them to identifying actual and potential human rights impacts from their business activities, which are then managed by the relevant business functions. H&M works broadly to promote respect for human rights through public policy, stakeholder dialogues and collaborations.

Working Conditions

When people start working for a business organisation, they are entitled to a set of minimum working conditions, which are not just about wages and salaries. They also cover aspects of work such as hours, holiday entitlement, privacy harassment and discrimination. It is up to employers to create working conditions that are fair, just and open. Trade Unions have the traditional role of defending worker rights against bad employers. H&M employees must have been told about the working conditions which should cover all aspects such as things like hours, holidays, salaries and wages. It is up to the employer to create the working conditions, if something is unfair there are Trade Unions who have the role to defend workers from the bad employers. The employees shall be granted and correctly compensated for any types of paid leave to which they are legally entitled. For Example leave include annual leave, maternity/parental leave and sick leave.

H&M employee should be treated with respect and dignity. Under no circumstances H&M either accept the use by their suppliers, their subcontractors or other business partners of humiliating or corporal punishment, and no employee shall be subject to physical, sexual, Psychological or verbal harassment or abuse. Wages must be paid regularly, on time, and must reflect the experience, qualifications and performance of the employee. H&M’s minimum requirement is that employers shall pay at least the statutory minimum wage, the prevailing industry wage or the wage negotiated in a collective agreement, whichever is higher. All other types of legally mandated benefits and compensations shall be paid. No unfair deductions are allowed, and the employee has the right to a written specification of how the wage has been calculated.

Corporate Governance

H&M have board of directors who make important decisions. They are answerable to board managers. Governance is important to large businesses like H&M. it is important because how will H&M directors know what mangers are doing. Therefore the government gets involved. Also corporate governance is the people and procedures for taking a major decision with in H&M. H&M will have to send directors progress about the business so they are always updated, the managers at H&M will be responsible for consulting the board directors about everything that goes on in the business on a regular basis. Governance is vital to big companies such as H&M because how will H&M directors acknowledge what managers are doing. This the government will step in. Corporate governance is the employees and measures for taking important decisions within H&M.

Trading Fairly

Fair trade is where:

* Business is carried on in an open manner.

* Competition takes place on grounds that are equal for all parties

* Consumers can feel secure that the goods and services they are buying are going to be of satisfactory quality.

H&M must make sure that they are always trading fairly and they’re consumers should always feel secure that goods and services they are using are going to be of satisfactory quality.

H&M agree that wages in some production countries are too low. Ensuring that all textile workers should be able to live on their wages has always been H&Ms vision, and this is also stated in our Code of Conduct. In November 2013, H&M had developed a new roadmap based on their vision, a fair living wage covering workers basic needs should be paid by all H&M commercial goods suppliers. One important element of this is that H&M’s while another states that this requirement is based on a skilled workforce who’s wages are negotiated and reviewed annually, involving democratically elected trade unions or worker representatives. So the roadmap is allowing H&M to provide workers with the tools they need to negotiate their own wages, and H&M also will support this process.

H&M either owns or operates the factories that make their products. However H&M does not set or pay the wages of factory employees. But H&M bear the great responsibility of engaging in every possible way and promoting higher wages in production countries such as Bangladesh. Also H&M aim to contribute towards positive long term development and higher wages for factory workers.

While H&M rejecting their suppliers could be seen as a quick fix to react to instances of noncompliance, H&M commits to work together with their suppliers to make long lasting improvements through their partnership approach. H&M clearly inform suppliers about the business risks that can result from noncompliance and seek to educate them and support their development.

Legal and regulatory compliance

H&M must follow different laws which have different areas, these laws protect H&Ms customers and employees, they must follow the consumer law where they must be giving correct information to them about the products they are selling, it is illegal if H&M was giving false information to their consumers, and this could also lead to prosecution. They must also follow the protecting employees law which is put in place to protect employees of a business, the employees must be able to trust the employer in following laws that relate to employees in the workplace which include The sex discrimination act 1975, the equal pay act 1975 and a few others, if the employer does not follow these the employee could report them and the employers could face prosecution.

Business Practices

For H&M to be able to work as they are meant to be working, the business needs to be able to have workers who are willing to work at a 110% every time. The manager of h&m should be able to understand his/her colleagues in the business and offer a reliable business working ethic for the company to be able to boost their revenue.

Individual Ethical Responsibilities

Individual ethics determine is a basic values and standards of behaviour. Management is responsible for staff working in H&M. The human resources function tries to employ the people who will carry out their jobs well. It is H&M mangers responsibility to make sure staff follows ethical guidelines of a firm. However it is up to individuals to follow their own ethical principles at all times e.g. employees at H&M.

Environment

For example global warming which is the warming of the planet’s surface that is caused by carbon dioxide. In order to run a business efficiently they would need to make sure that their customers are aware of all the environmentally friendly activities that they do and that they are not harming the environment in anyway as some customers do take keeping environment healthy seriously. They are concerned about the impact that they have on the environment. H&M aim is to reduce the carbon footprint, reduce packaging and reducing waste. Also with the career bags they give they make sure that they only take out the amount of bags that they need so that the bags are wasted.

The environment is of increasing concern globally and H&M expects its suppliers and other business partners to act responsibly in this respect. H&Ms suppliers must comply with all applicable environmental laws and regulations in the country of operation. In particular, H&M are also concerned about how the production of their garments and other products contributes to climate change and water stress.

Sustainability

H&M has developed the clever care label together with Ginitex. Now all H&M garments carry this label which encourages consumers to care for their clothes in a more responsible way saving both the planet and their clothes by washing at lower temperatures and line drying instead of tumble drying, ironing less and, most importantly, washing clothes less frequently.

Corporate social responsibility (CSR)

The company’s CSR work, which it calls Conscious, is carried out throughout its operations from the sourcing of raw materials and the processing of fabrics to the training of workers in the factories which manufacture H&M products. The company’s CSR initiatives include extensive use of organically grown fibres, reduction in the use of hazardous chemicals in its supply chain and production lines, increased protection for worker’s rights and efforts to improve water conservation.

Corporate social responsibility is mostly connected to the company’s supply chain and its focus on quality improvements which is characteristic of all H&M activities. Fashion and quality at the best price does not only refer to how the clothing fits but also, for example how it has been manufactured. H&M states that: “a fundamental principle is that their clothes must be manufactured under good working conditions. Also h&m therefore sets high standards in this respect and works towards long-term improvement of working conditions for the people producing their goods.

These standards are in detail stated in the company’s code of conduct which lights up issues like child labour, legal requirements, safety, workers rights, factory and housing conditions, environment and inspection and compliance. H&M’s also continues to focus on the quality but quality improvements have lead to H&M undergoing a number of quality and security tests of their garments such as chemical test, button test, nickel test and etc. They do though put extra high demands on children’s clothes where no sharp objects or flammable materials may occur.

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