H&M. Ethics and Social Responsibility of the Swedish Fashion Giant

correct staff payments , legislative requirements accurate invoicing ,correct production recording , accurate stock holdings ,re-order level monitoring , audit requirements

This course is the first in a two-part series that deals with auditing a company 's financial reports, internal controls, and

The ethics of businesses are under more scrutiny than ever before (Bones, 2014). Ethics can be considered as following a code of behaviour agreeable with the context of society and can also be defined as the application of moral and ethical considerations in a business environment (Hurn, 2008). Sport businesses have been targeted a lot more in recent years due to the conditions they place their workers in has become more apparent to the outside world. Nike are one of the world’s leading sports brands but have been faced with many allegations in recent years (Daily Mail, 2011) in regards to the conditions they put their workers in and their ethics and morals have been questioned. This report will critically evaluate the impact ethics has on the business operations of Nike and then analyse the reasons for why ethics impact the sport organisation. Finally, recommendations will be made to improve Nike’s business ethics.

One of Lululemon’s ethical issues that it is currently practiced is that Lululemon encourages employees to ease drop on its customers to gain more knowledge on the current complaints/defects with its products. This practice was introduced to the company because Lululemon is known for wanting to avoid collecting large amounts of customer data through large data techniques. Rather, the company aims to have a close and open relationship with its customers. Lululemon would rather connect with its customers while they are shopping in the store or in its company offered yoga lessons after the store closes rather than collecting data. The company was founded on the mission of “creating components for people to live longer, healthier, fun lives” this philosophy led to Lululemon seven core values: quality, product, integrity, balance, entrepreneurship, fun, and greatness. In this case, the implicated values that have arisen are integrity, quality, and greatness. As a company, Lululemon values greatness as a key value in how the company functions, they do this by always striving to have the best quality products and to be the greatest company. However, another key value is integrity which it encourages its employees to have the quality of being honest and having strong moral principles. The implication of having employees ease drop on its customers in order to gain feedback on the company’s product violates its value of integrity.

3. The third stage is Fieldwork. During this stage, the auditor should observe firsthand how the company operates. They need to check out all the areas that are less effective to the welfare of the company’s finances. In the case of Smackey, the auditor would note about all the returned dog food from their specialty line that is just sitting on the loading dock. They also noticed that the dog food is being thrown out and then taken back and loaded into Henry’s trunk (possible misappropriation).

CONDUCT AN ANALYSIS OF THE OPERATIONS AND BUSINESS ARRANGEMENTS OF THE ORGANISATION AND IDENTIFY THE FUNCTIONS, PRODUCTS AND SERVICES THAT MAY BE SUBJECT TO COMPLIANCE REQUIREMENTS

The Manager will maintain a register of complaints and be responsible for quarterly review of this register

Suppliers must supply the stock managers with good quality products. If however the products are bad quality

Brief surveys are conducted on a regular basis by the customer service department to ensure quality is consistent throughout the organization. The Federal Drug Administration (FDA) conducts audits of all manufacturing sites to ensure the proper goods manufacturing practices are followed. The FDA also reviews all standard operating procedures (SOPs) relating to product manufacturing and handling.

In the UK, H&M’s, the other major fast fashion major brand, average selling price of women’s clothes are £10.69, whereas at Primark, the average selling price was £3.87. Further, in terms of the annual average sales of clothes per square meter, H&M sells £3,400 per square metre, while Primark sells £5,300. These clearly point to a more optimised strategy (The Economist 2015).

Woolworths demands that HACCP plans are based on ‘Product Specifications’. The fact that it regularly assesses products’ compliance to specification is another factor towards maintaining a high standard of quality management.

This model is relating to Primark. Primark source globally, they don’t have their own factories that make their own products. They work with around 700 suppliers and all of their suppliers are from China, India and Bangladesh to Turkey and Eastern Europe. They take worker welfare seriously and they make sure that suppliers must follow the Code of Conduct to make products in good working conditions. Every factory of the suppliers is carefully inspected against the code before Primark replace and order with a supplier. If there is an any issues or problems they find in the products they will sent their inspected team to check all the products.

As the financial year ended on 29th April 2012, the organization had reassessed the company’s governance policy and procedures. Overall they believe to have abided by the requirements of the Code, however apart from the following:

H&M was established in Västerås, Sweden in 1947 by Erling Persson. We now sell clothes and cosmetics in around 2.200 stores around the world.

Since H&M opened the first shop in Sweden in 1947, using an American concept of shops selling stylish clothes with low prices bring H&M successful in the domestic market. H&M started to expand internationally from 1964. Not only Europe market, H&M also enter in North America, Asia and Middle East market.