Benefits and Drawbacks of the way Primark is operating

 The benefit of the way Primark is operating which is by having factories in countries such as Bangladesh is that it keeps their costs down because it is cheaper to hire a factory in the poorer countries which means that their profit margin is wider . 

Another benefit is that they will be able to hire staff for less meaning that their wage bill will be lower leading to their costs decreasing meaning that their profit margin will be wider leading to the company having more money to invest into other business activities such as marketing.

A disadvantage of the way that Primark is operating is that it is unethical as they are using child labour to cut costs and are mistreating their workers by giving them poor working conditions a very biased work life balance as they are working very long shifts without any breaks. 

This affects Primark because pressure groups have been aware of this and have started boycotts against Priimark stores which have got the public involved leading to less customers shopping at Primark due to them not believing in their actions  which will mean the sales will decrease leading to the revenue and profit decreasing. Their reputation will also become bad leading to less new customers.

How can Primark change their ethics?

Primark have begun to change their ethics by having inspectors from a third party check their factories and make sure that they are not using child labour anymore and that the working conditions meet the standards set by the inspectors. This will benefit Primark as it shows the public that they are turning into an ethical company which will attract customers to start shopping at Primark again which will increase the sales and profit of Primark and will allow them to gain more customers. In 2013, Primark has 2,058  of their factories inspected. A drawback of this is that it will increase Primark's costs as it will cost Primark money to hire the inspectors which will narrow the profit margin of Primark giving them less money to invest into other business activities. Due to the profit margin narrowing, Primark may have to increase the prices of their products to make the profit margin wider again which may lead to customers going to rival companies to buy their products cheaper which will also decrease the profit margin of Primark due to less revenue generated due to less customers and sales. It will also decrease Primark's competitiveness against rivals such as TK max.

P2 Impacts on Primark and their stakeholders

The owners of Primark will be affected by the actions of Primark having factories in third world countries which have children as young as 11 working for them in very poor working conditions and for as little as 60p a day. The owners of Primark will be affected by this as it has given Primark a very bad reputation with the public and has led to pressure groups getting involved organising boycotts and protests which has got members of the public involved. This has led to a number of customers not shopping at Primark anymore which has meant Primark's sales has gone down leading to their revenue and profit decreasing which means the Owners have had less money to take away from the business and will have had less money to pay for costs and loans.

The staff of Primark will be affected by the actions of Primark having factories in third world countries which have very poor working conditions which are illegal. The staff of Primark will be affected as some of their wages may be cut due to Primark having to cut costs due to the boycotts which will mean the staff will have less money to spend on essential items needed for survival. Also some of the staff may be made redundant meaning that they will lose their job and will become unemployed meaning they will not be making any money giving them a lower quality of life. The staff who work in the factories will be affected by it as they will be made to work very long shifts everyday with no breaks for very little amounts of money in very poor conditions without any benefits such as free healthcare which they cannot afford themselves so when they become ill they cannot afford to see a doctor. The conditions of the job makes the employees very unhappy which has made some workers sew messages for help in the labels of clothing and it has been reported some people have committed suicide.

The environment will be affected both positively and negatively by the actions of Primark. The environment will be affected negatively by the actions of Primark having poorly built factories in third world countries because they will not have an effective way to get rid of waste meaning they will most likely dispose of it in a river or on a street which will pollute the habitats of certain species of animals. Also the factory will have alot of fumes coming out of the chimney leading to air pollution which can lead to acid rain and will break away the ozone layer. However, Primark also help the environment by making their carrier bags out of 100 per cent recycled cardboard which prevents more trees from being cut down to be used for more cardboard and paper and to slow down the usage of non renewable materials. Primark also help the environment by cutting down their road usage by 160,525 miles which decreases the air and nose pollution Primark generating reducing the amount of damage the ozone takes.

 There will be conflict between the interests of the owners of Primark and the environment because the owners will have the bigger focus on making money and increasing the profit of the business so they will make the decisions that will increase the profit margin of the business. However, the environment will  want the business to make decisions that will protect the environment and prevent the environment from being destroyed as their focus will be to protect the enviroment and will not care about the financial health.

How functions of the business will be affected ?

Due to Primark having bad ethics, members of many pressure groups have protested against Primark due to their mistreatment of child labour and their workers which has led to a substantial amount of the public boycotting Primark and not buying their products and shopping at other stores. This has an effect on the sales function of Primark because due to the public boycotting Primark their amount of customers will drop leading to their number of sales decreasing leading to the profit margin of Primark narrowing down. However, when Primark became ethical, they used it as a unqiue selling point which attracted more customers to the stores which increased the number of sales Primark generated leading to a wider profit margin.

The function of marketing will be affected by Primark having bad ethics because the marketing team will have to work harder to create a product that will sell due to the public boycotting the company and Primark having a bad image which will mean that Primark will have to spend more money on creating the product and advertising it so that people may buy it as it will take more persuading to get customers to buy the products due to Primark's bad reputation.

Source: www.guardian.com 

Primark Evaluation and Conclusion

Primark as a company has both ethical and unethical parts in their organisation. The ethical parts of the business is that they are quite environmentally friendly, this is because they have invested a substantial amount of money on being energy efficient and environmentally friendly. Evidence of this is that they have recycled 23 million hangars and have created green stores which use building management systems to control their energy consumption and make sure that they are not using too much energy by managing temperature and lighting levels which reduces the amount of energy Primark use leading to their carbon footprint and effect on the earth decreasing. Another piece of evidence is that Primark are making their carrier bags using only their used cardboard which is generated in the Primark stores and the factories. This gives them good ethics because they are helping the environment as they are not using non renewable sources that much any more which leads to them operating much more sustainably allowing the non renewable sources to run out slower. Also Primark have reduced their road use by 160,525 miles which reduces the amount of air and noise pollution Primark generate which leads to the ozone layer not being damaged as much which reduces the amount of global warming and acid rain.

However, there are also functions of the company that have bad ethics as they have factories in Third world countries which have child labour who are working for 60 pence a day and the factories have very bad working conditions this has been backed up by the Rana Plaza factory in Bangladesh as if it had good working conditions it would have not collapsed. This shows that Primark do not care about the welfare of their workers and will not improve their working conditions as it will increase the costs of the business meaning their profit margin will narrow and may mean that they will have to increase the prices of their clothing in order to cover the costs which may displease customers making them become unloyal and shop at a rival which will lead to the revenue and profit of Primark decreasing. However, to improve their ethics they should use their generated profit to improve the factory's working condition and the workers welfare e.g. increased pay which also has the opportunity of increasing the profit of the company as good ethics will act as a unique selling point which will attract more customers to the Primark stores leading to increased profit to cover the extra costs.

Overall, I believe Primark is a company that has bad ethics, this is due to their mistreatment of child labour and their workers health and working conditions which shows they do not care about their employees unless they are not doing their job and Primark is not making the maximum potential profit they can. This backs up the statement that Primark has a bigger focus on making their maximum revenue and profit and getting and retaining a large base of loyal customers than on their ethical matters which displays that Primark is unethical.

Primark aims and Objectives

The aims and objectives of Primark is to provide the public with good, quality products at a cheap and good for value price to get the message of just because our products are cheap it does not mean they are not a good quality and fit for their purpose to the public. Primark achieve this objective by getting their products checked for quality before they are put on sale to the public. Another aim of Primark is to give the public a wide range of products and to cater for all different customer's needs and wants so that they can create a large base of loyal customers and have a substantial amount of repeat purchases. Another objective of Primark is for the staff to be friendly and helpful to the customers so that the customers will feel welcome, comfortable and safe in a Primark store which makes customers more likely to become loyal to the franchise and repeat purchase which will increase their sales and their revenue leading to their profit margin increasing. Primark aim to treat all customers equal whether they've got a lot of money or not a lot of money and aim to make each individual feel special.

 In the aims and objectives of Primark, it is obvious there is no mention of Primark trying to help the environment or make their factories have better working conditions. This suggests that Primark do not care about their ethics and only care about making money which leads to the conclusion that Primark is unethical.

Source: www.blurtit.com

Primark's Missionary statement

In their mission statement, Primark say that they have helped a large number of their factory workers and their communities by providing education for them, giving them sufficient wages  and good working conditions. However, recently there has been reports about factory workers sewing signs for help into their clothing which has been sold to the public and customers have found these signs in their products. This shows that this is just an empty promise to get customers to buy their clothing as the public will think that Primark have good ethics which works as unique selling point when really they are carrying on mistreating their workers in poorer countries displaying that Primark are still unethical.

However, Primark are being ethical by caring about the environment they are doing this by making carrier bags only using the used cardboard they have in their stores or factories which stops the use of other materials such as plastic which do not biodegrade leading to the possibility of them harming animals or their habitats or the environment due to them being littered around the environment. Primark have also saved 238,000 trees meaning less of the rainforest is cut down preventing habitats from being destroyed and less species will become extinct. They have also reduced road use by 160,525 miles which has reduced the amount of noise and air pollution primark generate leading to the ozone being less damaged leading to the effect of global warming reducing.

Primark state they have a "code of conduct" to ensure that workers have good working conditions and that they are paid well and treated well. However, there is evidence suggesting that this is not true for example, the factory in Bangladesh collapsing and the discovery of children working in factories with poor working conditions and poor pay which reinforces the fact that Primark are unethical.

Rana Plaza

This article about Rana Plaza outlines how Primark has helped the victims of the factory in which primark operated collapsing in Bangladesh by donating 14 million dollars to the victims so that they have a place to live and sufficient food and water and basic items for survival which enforces the statement that Primark is ethical.

Source: Primark website www.primark.co.uk

Evidence of Primark's good ethics

This is photographic evidence that Primark reuses their all their cardboard collected from their stores and make them into carrier bags which decreases the amount of waste that Primark generate which will reduce their impact on the environment and the ozone giving primark better ethics.

Primark Ethics Video

This is a link for a video regarding how garment workers think of how ethical Primark really is due to their experience of working in a garment factory owned by Primark. 

:35▶ 7:35

www.youtube.com/watch?v=WgJh79xFzxU

This video shows us that even though primark has launched an ethical website and says that they have good ethics. The statements and opinions from the garment workers show that they are not being treated fairly as they are not being paid a fair amount of money and their working conditions are still shockingly bad. Also the workers are allowed 56 days of leave however, the garment factory workers do not have any time off and work extremely long hours still with no breaks. This enforces the statement that Primark have bad ethics despite their Ethical primark website.

Unit 37 business ethics

Primark is an Irish Clothing retailer which operates internationally in a larger number of countries including the UK and the United States. The franchise was founded in Dublin in June, 1969 by Arthur Ryan.

Primark used to be notoriously known for having bad ethics as they were found out for having children working in factories in third world countries with very bad and unsafe working conditions and very bad wages which the children and their family could not survive on. When this was revealed various pressure groups boycotted Primark for their actions in which a lot of the public got involved and joined in with the boycott of Primark which made Primark suffer and gave them a bad reputation. This was revealed in 2008 and children as young as 11 were working for 60 pence a day.

However, since 2008 Primark has improved their ethics and when a factory of theirs in Bangladesh collapsed which sparked more outrage ,they  paid $14 million in aid and compensation to the victims of the Rana Plaza building collapsing. Also their carrier bags are now made of 100 percent recycled cardboard collected from their stores which shows their ethics have improved by helping save the environment. Since the collapsing of their factory in Bangladesh, Primark have now begun inspecting all their factories to make sure they are at a suitable standard to work in. In 2013, 2,058 Primark factories were inspected by authorities which shows that Primark do care about their employees.

Source: www.wikipedia.com