Business Ethics Of Zara

In The myth of the ethical shopper, Hobbes (2015) states that although boycotts may have been successful in 1990, they are failing in 2105. He asserts that the way in which our clothes are now made has changed and so advocacy campaigns just don't work. One of the problems is that retailers don't have direct contact with their factories. Production is outsourced to the lowest bidders. Chains of sub contractors are set up and production is being split between thousands of factories. Labels from JC Penny, Wal-Mart and Joe Fresh were all found in the rubble of Rana plaza (O'Connor 2014), but none of them directly contracted those factories. With multitudes of middlemen accountability is difficult.

The True Cost is a documentary that was filmed with the hope of educating consumers regarding the global impact that ‘fast fashion’ has on our society. Director Andrew Morgan provides the link between our clothes and the people who make them; careful to bridge the gap between the factory workers and how our high demand for fashion can affect their life. In fact, we seldom consider consumptionism (to consume, use or spend with little regard) and globalized production (when goods are made in another country for low wages) while shopping, but we should. Projects such as this documentary, shed light on the untold stories behind what appears to be a glamorous and trillion dollar business. Unfortunately, those who are impacted the most are the workers

It is impossible to beat a cheap price. In today’s world, finding a sought after item at a dirt cheap price is one the main motivation American’s get in the car and battle the craziness in the mall. And as the basic American human beings that we are, it is never possible for us to be complacent with the amount of stuff we currently have. Eventually, we will come across a friend that has the next must have item that will cause us to run to our local mall and purchase a similar item at the lowest price possible. With all that said, it is no wonder why the industry of fast fashion has taken off over the past decade. Felipe Caro and Victor Martínez-de-Albéniz, researchers for UCLA’s school of supply chain coordination, define fast fashion as “a business model that combines four elements: (i) fashionable clothes mostly for consumers under 40; (ii) affordable prices in the mid-to-low range; (iii) quick response; and (iv) frequent assortment changes”. Retailers like H&M, Forever 21, Target, and Wal-Mart have been able to take this business model and make a fortune. But while all these quick trends and cheap prices are great for the consumer, its cost on the foreign worker and the environment does not go uncovered. In the book Overdressed by Elizabeth Cline, she presents many arguments supporting the claim that fast fashion is unethical based on

Fast fashion tends to be lower-quality clothes, produced as cheaply, efficiently, quickly, and relatively low-tech production system as possible.

In this report I will be talking about how my chosen organisation, which is Primark, uses ethical issues to consider in its every day operational activities. Primark 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 Primark’s way of selling affects ethical issues and will be discussing about the things they need to be aware of whilst selling their clothes.

The different stakeholders that affect ZARA are the owners, employees, customer, suppliers, government and the investors. All these stakeholders play a big role in the business. Without them, ZARA will not be as successful as it is right now.

Second, in fulfillment, we can also see speed in responding to demand. For example, the replenishment, as well as production will be optimized according to supply and demand as quickly as possible. Besides, the fulfillment will commonly completed in one or two days, clothes flowed quickly, and without stopping, from factories to DCs to stores, where they were immediately put on the sales floor. Third, in design and manufacturing, we can find how Zara respond quickly to demand. Zara brought out new items continuously throughout the year, including both changes to existing garments and entirely new creations. The network of production had made design from conception through production and into the DC in as little as three weeks. Besides, Zara did not have to predict what would be selling six months, or even one month, in the future; it could continuously sense what customers wanted to buy and respond “on the fly.” All these operations reflect the speed-chasing and target-oriented nature of Zara business.

Hbswk.hbs.edu. 2005. Zara's Secret for Fast Fashion - HBS Working Knowledge. [online] Available at: http://hbswk.hbs.edu/archive/4652.html [Accessed: 25 N

Analyze the manner in which Zappos’ leadership has fostered a culture of ethicalness in the company. Suggest two (2) actions that other companies can take in order to mimic this culture.

Everyday, millions of consumers in the United States contribute to the harsh treatment, under paid, and sexual abuse of factory workers all over the world. The garment industry, one of the largest in the world, generates over 3 trillion dollars a year yet the average monthly wage is 21 dollars a month, 80% of whom are women, and including children ages 5 to 14. While most apparel used to be manufactured in the United States, in the past decade a majority of manufacturers have moved operations overseas due to loose regulations according to the huffington post (Badal). The current trend of fast fashion comes at a much greater cost than we are all aware of, The True Cost, a documentary by Andrew Morgan highlights fashions “unadvertised sins” such as unregulated production, toxic garment dyes harmful to both workers and the environment, and attempts by the factory workers to form unions that end in violence (Wilson).

For almost twenty years now, people have been relying on fast fashion, a fairly new notion, which

2. Richard M. Johns (2006). The Apparel Industry. 2nd ed. UK, London: Blackwell Publishing Ltd.. 1-124.

‘Fashion industry is characterised by short product life cycles, volatile and unpredictable demand, tremendous product variety, long and inflexible supply processes and a complex supply chain.’

An additional method Zara utilizes to ensure the right product is produced is to constantly monitoring the sells at every store in real time through the use of computers. Sells managers are the individuals that play out this strategy. When the clothing sells well or does not sell well, they can quickly let the designers know to swiftly create new designs (“Case 3-4. Continued Growth for Zara and Inditex”, 2013). However, the competition is changing their strategies in an attempt to successfully compete with Zara. The methods that Zara has implemented to ensure fast fashion is truly fast has pressured the competition into reducing their lead times on stocking their stores (Hayes & Jones, 2006).

The clothing industry, as one of the most globalized industries in the world (Bonacich et al 1994), is currently undergoing a restructuring, especially the fast fashion sector. Fashion markets are synonymous with rapid changes and short product life cycles. Therefore, changes in consumer demand for newness and fashion trend force the emergence of ‘fast fashion’ strategy in retailers like Zara and H&M and shifts in the focus of competitive advantage from price towards quick response. That is to say, clothing firms, which are adopting global or offshore sourcing strategy, are not considered to have more competitive advantages as before.