OCT

Business Ethics: Retail Store Operation

 

the lovely sitting place at Aston Hotel

Bandung, Indonesia

Ethics in Arabics is ilm al-akhlaq (science of morality). Morality which means a nature,
or an innate dispossition or temperament. Islam encourage people to acquire wealth
and live a prosperous life.
 
The holy qur'an says: 
 
“O you people: eat of what is on the earth, lawful and good, and do not follow the
footsteps of the evil one" (Al-Qur'an, 2: 168).
 
"Eat and drink of the sustenance provided by Allah and do not evil nor mischef on the
earth (2:60)
 
Many business practitioners and academics agree that there is at least some moral
content in many business decisions (Abela, 2001). Many ethicists assert there's always
a right thing to do based on moral principle. Another definition, ethics are the principles
and values an individual uses to govern his activities and decisions in an Organization.
 
Ethics is a branch of philosophy that deals with respect to right or good and wrong or
bad actions and many philosopher consider ethics to be the "science of conduct".
 
Value which guide how we ouhgt to behave are considered moral values, eq value such
as respect, honesty, fairness, responsibility, etc. Statements around how these values
are applied are sometimes called moral or ethical principles.
 
Carol (1981), while recognizing that social responsibility issue do have ethical
dimensions, distinguishes social responsibility and business ethics on the basic that the
fomer is primary an organizational and corporate concern, while the latter is the
concern of the individual manager or business decision maker. The debate still
continues as to wether corporations, because they are artificial creations, can be said to
have social responsibilities at all or wether the term is only apllicable to individuals
within the organization.
 
Being a responsible business means aiming for the highest standards of ethical business
practice with everyone you deal with, including employees, customers, and suppliers.
This means:
 Treating all employees fairly and with dignity and respect.
 Ensuring that your services and facilities, wherever possible, are accessible to
all.
 Ensuring that all areas of your business operate healthy and safe environment
for employees, visitors and contractors.
 Considering ethical and environmental obligations in all activities, such as
sourcing supplies locally if possible.
 Not purchasing from any organization whose products are produced through the
exploitation of child labour, paying an unfair wage in  poor working conditions or
any other violation of the workers / human rights.
 Being honest and transparent in your communication with customers.

 
a. Ethical practice towards consumers 

The aim of good and ethical business is to serve the consumers. The business persons
need consumer education as much as consumers to become successful in their
business.

Good ethics dictates that a salesperson should help customers find the most suitable
products for their needs, not necessarily the one that results in the greatest revenue or
highest profit margin for the company. Customers appreaciate it when sales associates
take the time to find out their spesific needs – to treat them as individuals. Precisely
meeting customers needs translates into higher customer satisfaction.

The retailers should charge fair price for the products offered to them. The consumers
have the right to get correct and precise knowledge about the products sold to them in
 respect of warranty, guaranty, price, usage, ingredients etc. Ethics is essential for the
long run of the business. Ethical business is essential in today’s competitive and
dynamic environment.

Business have moral duties to consumers, for example: the responsibilities of business
to consumers, products safety & advertising.

The responsibilities of business to consumers;

·      Businesses must give us what we pay for. Whenever we trade, we are exchanging
goods and services within an implicit or explicit contract. One person is obligated to
give one thing in exchange for another. People should not be deceived about what they
are buying.

·       Businesses must not harm anyone, including consumers. Product safety might be the
most important concern of consumers considering that it’s often a matter of life and
death, but it’s not the only concern of consumers. 

Product safety;  Ensure consumers are informed and educated in the proper and safe
use of the products and services for optimum utility and satisfaction. Companies have a
duty to provide consumers with whatever it is they pay for and products are assumed
to be safe for ordinary use.

Advertising; Advertising and product labeling are both very important because it is

the potential customer’s primary source of information. it is morally preferable for
companies to be honest and reject manipulative practices whenever it’s unclear how
much harm it could cause. It’s better to be safe than sorry when we are dealing with
the well being of people.

Ahir Gopaldas (Fordham University) identified three common emotions driving ethical
behavior—contempt, concern, and celebration. Contempt happens when ethical
consumers feel anger and disgust toward the corporations and governments they
consider responsible for environmental pollution and labor exploitation. Concern stems
from a concern for the victims of rampant consumerism, including workers, animals,
ecosystems, and future generations. Celebration occurs when ethical consumers
experience joy from making responsible choices and hope from thinking about the
collective impact of their individual choices.

 
b. Ethical practice towards suppliers 

Within the company there are numerous stakeholders with different interests, but there
are also stakeholders outside the company, including suppliers (Murphy & Poist, 2002;
Verkeck, De Leede & Nijhof, 2001).

In term of management practices, the findings have important implications to supply

chain management. While obvious that codes of ethics alone created through the day to
day exercises of the organizations, the literature is sparce and non – specific about the
means of enforcement of such codes. The emergence of candid relationships as playing
an important role is key in this regard. Supply chain manager should note that adopting
a leadership role in terms of enacting the ethical values espoused by the organization is
crusial and that this is readily achieved through open relationships with suppliers. The
relationship marketing initiatives used by suppliers represents an ideal setting for
customers to manage the ethical perceptions of the organization, and ultimately its
reputation.

Some ways you can adopt responsible supply chain practices and improve the way you
deal with suppliers:
Consider using local suppliers as much as possible – this helps to support your local
community.

 Cut out the middle man and seek to develop long term, direct relationships,
whenever possible.
 Plan ahead and give suppliers clear and achievable timescales.
 Make sure you are not purchasing from any organization whose products are
produced through the exploitation of child labour, paying an unfair wage in poor
working conditions or any other violation of the worker’s rights or human rights.
 Build confidence by maintaining high standards on essensials such as paying
suppliers on time and delivering goods on time. Consider signing up to the
prompt Payment Code to demonstrate your commitment.
 Comply with your customer’s and supplier’s auditing requirements and other
formal request.
 Use due diligent to assess who you are dealing with.

c. Ethical practices towards employees 

Ethical practices must also be followed towards the employees. The retail industry
employs large volume of retail staff. Therefore proper policies and procedures must be
framed for the employees regarding recruitment, selection, training, promotion, welfare
etc.

The example of ethical issue, many fashionable clothes are manufactured by poorly
paid people in developing countries. This practice, known as sweatshop labor, has come
under major scrutiny and has been condemned by a wide range of critics. Particularly
concerning is the employment of young children.

Example of Ethical Behaviour of Primax Case  Study" (growing brand that provides
consumers with value-for-money fashion items)

"Operating in an ethical way may incur additional costs to a business. rather than
seeing these activities as costs, Primark believes that they enable the business to
operate in a sustainable and well-managed way. Through its remediation programme,
Primark's team of ethical managers work with factories to help them find ways of
putting issues right and developing sustainable practices". A key principle of Primark”s
business practice is to make sure that it provides its consumers with value-for-money
garments, whilst maintaining ethical manufacturing standards. By making its Ethical
Trade processes transparent, Primark aims to demonstrate its commitment to
responsible manufacturing. This helps to assure its customers that the goods they are
purchasing are not only fashionable and good value-for-money, but also that they are
ethically produced by workers who are fairly treated.

Every employee will work in safe and clean conditions. They will receive fair and
adequate compensation. They will have ample opportunities to develop their skills. They
must feel free to make suggestions, criticize or complain.

According to the islamic teachings it is the religious and moral responsibility of the
employer to take care of the overall welfare and betterment of his employees. Fair
wages, good working conditions, suitable work and excellent brotherly treatment should
be provided to the workers.

The last Prophet of Allah (sws) has explained this principle in the following words:

“Those are your brothers (workers under you) who are around you, Allah has placed
them under you. So, if anyone of you has someone under him, he should feed him out
of what he himself eats, clothes him like what he himself puts on, and let him not put
so much burden on him that he is not able to bear (and if that (be the case), then lend
your help to him)” (Bukhari, No: 2359)

The Prophet (sws) also said:

“I will be foe to three persons on the last day: one of them being the one who, when he
employs a person (that has accomplished his duty, does not give him his due” (Bukhari,
No: 2109)

The Prophet (sws) is also reported to have said:

“The wages of the labourers must be paid to him before the sweat dries upon his body”
(Ibn Majah, No: 2434)

Good business practice involves being sustainable over the long term. A business is
sustainable when it is able to make profits for shareholders, offer good employment
opportunities for its staff, pay taxes to the governments of countries in which it
operates, and at the same time give consumers what they want (e.g. products that
represent good value for money at affordable prices). A business that makes a profit is
able to make an important contribution to society and to look after all of its
stakeholders.

Read more:
business case studies
management help
chron
your article library
business case studies
ethical realism
business case studies
wfdsa
The University of Chicago Press
slideshare 
Instute of Islamic Banking and Insurance
business wales
the islamic workplace
business case studies 
 Posted 3rd October 2015 by Unknown
Labels: Business Development Retail Fashion
 
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