HOW CAN A BUSINESS DEMONSTRATE ITS RESPONSIBILITIES TODAY - Assignment Example

How Can A Business Demonstrate Its Responsibilities Today In Fashion Retailing In Europe? Contents Introduction 3 2. Fashion Retailing in Europe 3 3. CSR and Its Importance 4 3.1. Issues of corporate responsibility 4 3.2. Example of CSR in Fashion Industry 7 3. 3. Best practice of CSR 8 3.3.1. Labour practices/ Human resources 8 3.3.2. Talent Management 8 3.3.3. Code of Ethics 9 3.3.4. Community Commitment 9 3.4. Responsible Idea Award 9 4. Conclusion 10 5. Recommendations 11 Reference List 13 1. Introduction Corporate Social Responsibility (CSR) is defined as spending small amount of money for long term which will not provide any instant financial benefit to the firm but will spread positive environmental and social change It is also known as ‘Corporate Citizenship’ (Allen & York, 1993). Corporate takes initiative to assess its effects in the surroundings and impact on society welfare. CSR applies mainly to the efforts of the company that go beyond the limit what may be needed by the environmental protection team or the regulators. CSR became popular in 1960s and has always been used by the companies to cover their moral and legal responsibilities effectively. Firms hold a lot of authority and power in the social and national economy. They have lot of investments, assets and millions of cash for social programs (The Art Institutes, 2015). Some companies invest in corporate responsibility but most of them devote their time and wealth for environment sustainable growth, social welfare programs to benefit colleagues, customers, employees and the whole community at large. In this paper, the issues of CSR, its best practices and importance for this sector will be evaluated and necessary recommendations will be provided. 2. Fashion Retailing in Europe Fashion retailing is a concept in which business skills and creativity is being combined to market, display and sell fashion in different areas. Its main objective is to satisfy and meet the consumer needs from time to time and accordingly increase sales. This can only be possible if awareness is maintained throughout the time, to keep learning the new style, to launch and promote various campaigns at various places (The Art Institutes, 2015). The top fashion and clothing retailers in Europe are H&M, Arcadia, Inditex, Benetton, Marks & Spencer, Esprit, C&A, Debenhams, Primark, Next. There are more than 2150 fashion retailers in Europe. Brands like Abercrombie & Fitch, Hollister, Forever 21, Uniqlo excites European consumers mind and heart. Europe’s fashion industry is running by the brands named Inditex group, Dutch Company C&A and Sweden’s H&M, but with its own brands like Zara, Pull & Bear, Massimo Dutti, Oysho and Uterue and various groups are handling more than 5400 stores, where 4200 stores are situated in Europe. H&M has around 2500 stores, with 75% of them are situated in Europe. C&A has around 1500 branches in 19 different European countries. These 3 brands are at the top of all the brands in terms of turnover in Europe competing with other parts of the world (The Art Institutes, 2015). 3. CSR and Its Importance Corporate Social Responsibility is a direction for the companies to benefit the society as well as themselves (The Art Institutes, 2015). Companies can do CSR in six different ways, first by innovating new ideas for the society welfare, second by reducing costs of the product because this is main thing which helps in satisfying customers. Third is brand differentiation which makes their product unique and different from other companies. This type of companies leaves a strong impact on consumer’s minds. Fourth, by long term thinking a good plan can be made for CSR and has a 100 percent chance of success. Fifth is customer engagement, gather customers and their ides because they enjoy taking part and doing something for the society. Sixth is employee engagement, working on CSR as a team generates whole lot of ideas and efforts which solves problems on various aspects (Forbes, 2012). 3.1. Issues of corporate responsibility UK economy retailing has a vast, large and diverse sector which provides variety range of goods and services to the customer. In 2004, there were around 305,000 retail stores in the UK. The retail market has become very small and the amount of small retailers has also started declining because the marketplace is dominated by the large players. The top ten retailers are Tesco, Kesa Electricals, J Sainsbury, Somerfield, Wm. Morrison, Boots, Marks and Spencer, John Lewis, DSG International. These brands follow CSR into their business and Marks & Spencer follow a strong culture of CSR in the company according to which it is the managed centrally. Marks & Spencer even declared of ‘Plan A’ specifying a long lasting strategy of CSR which will focus on waste, climate change, optimum use of raw materials, health and hygiene (Jones, et al., 2007). London fashion which took place recently had a gathering of a lot of people. It was analysed that luxury brands hardly pay any regards to corporate responsibilities and are still left to take its steps towards the environmental and social impacts. Many brands even use animals fur which shows their social responsibility is so less. It is believed that it’s unethical to charge such high price for clothes which has no guarantee if they have been made in responsible and legal way (Springer Link, 2007). CSR and labour standards have faced many legal notices in fashion industry. Since globalisation has increased so much, the fashion industry has got spread geographically as they include manufacturing, distribution, warehousing across different countries. Retailers who have their business globally work very hard just to ensure that their corporate goodwill is maintained all over the world and this act as a daily challenge for them. Corporate social responsibility is also named as ‘Fashion Integrity’ which means that managing all the criteria of fashion transparently to see that the existing customers enjoy wearing with full knowledge that their clothes are not being made by killing of animals, polluting environment or by harming people (Martinuzzi, et al., 2011). The European fashion industry faced problems for a long period of time, they faced competition globally and they even established their business in low income countries. When Europe was compared to India and China, it was seen that Europe had one big disadvantage that is high labour cost and high environmental maintenance. Hence, applying cost leadership strategy here was not possible (Springer Link, 2010). So, to sustain in this competitive market, Europe had to upgrade either in high end fashion markets or in high tech industrial textiles. In this high fashion era, producers of these branded goods play a major role by maintaining a particular trends and investing money in communication. They have high potential and economic credibility to communicate with consumer’s regarding CSR issues to create a position for producers and to establish CSR issues in the practice of fashion industry (Allen & York, 1993). Many French industries are taking part in CSR activities. It is revealed that the overall scenario in France act as one of the sustainable development of CSR, due to the formation of a system of agreements and state regulations handling labour relations. This gives an evidence of many important start ups which are going above legal requirements in various areas. Some of the laws were passed in France which affected CSR in the beginning of 21st century, they are, The Law on New Economic Regulation, The Law on Employment and saving plan and the Law of Retirement Reserve Funds (Business news daily, 2015). In Germany, CSR is still a new concept and there are still many companies left to adopt it. The German government is planning to make the first trademark in the country as a “Made in Germany”. The main focus was on global governance and CSR. The German government has also showed their interest by starting a website named ‘CSR in Germany’. At first it was focused on environmental protection. The concept reached Germany in 1990s and now is being spread widely and discussed at society and government level. Government has developed a transparent concept between the share holders (Monnet and Schuman, 2013). In Spain, main drives of CSR are the competitive advantage, corporate reputation and industry trends. Initiatives taken by the government has influenced companies’ decision a lot in CSR. Institutions and forums which bring together different corporations heads, business school heads and many academic institutions, media and NGO are actively promoting and practicing CSR. Saving banks work in Spain because these organizations are very powerful and active in the fashion industry and they devote a huge share of their incomes for social cause (Retail-index.com, 2015). 3.2. Example of CSR in Fashion Industry Denmark has set a big example of CSR in the apparel industry. The most important thing is they provide luxury at an affordable price. No one can even think of getting luxury at standard price, but Danish fashion industry made it possible. They proudly call it as a ‘fast fashion’ (Regio data research, n.d). Companies consider fast fashion as a boast by providing catwalk at cheaper prices but Danes means fast fashion from different aspect and they even promise to merge Danish quality, wear ability, heritage design at a fair and low price. The main word here is ‘fair’. They promise not to charge price according to the goodwill of the brand in the market but to charge price according to the costing of the apparel. Danish ethics are built on sustainability. They are building on equal rights, social values, honesty, collaboration and opportunities which are the base and root of Danish society state. Nordic Fashion association promoted this NICE Project and is lead by Danish Fashion Institute (Regio data research, n.d). They are still in their first stage to create solutions for fashion businesses, but their scope gives an idea for the resources that Scandinavian and Denmark countries are putting their effort for these issues. Danish business has an advantage for corporate sustainability as they work in their country business environment. Denmark was the second rank holder in Europe for their performance in eco innovation in research, business and at a government level. Danish Fashion Industry is at the top for providing clean production methods. It was the first country to state the fact that waste can be re utilise and can be act as a source of money rather than treating it as a garbage. Danish always ensured to recycle all the waste and to convert them into energy. The key hold of the company was to share this idea with all the companies so that a sustainable environment is maintained. Lot of industries even try to make fabrics with hand so that less energy is wasted and they even try to mix recycled cotton with recycled plastic just to reuse the waste (The Guardian, 2015a). Cole and Parker a sock company do more than just selling colourful footwear’s, they are also indulged in CSR. They entered into partnership with an organization called Kiva, from every sock sale they donate some amount of money for entrepreneurs as loan in the developing countries (Asos, n.d.). 3. 3. Best practice of CSR There are many practices of CSR which should take place in order to take care of the society, sentiments and environment protection. 3.3.1. Labour practices/ Human resources This says that labour rights should be kept in mind like their wages, family responsibility, food, safety, home, medicine. Wages are not sufficient to protect their family from sudden needs, so companies should provide free health checkups and treatment, maternity for women etc. Company should also take care of labour’s family education part they should even try to improve their standard of living time to time. Free trips should be organised for them so that even they can have their share of enjoyment. No matter the company is small or big, advantages for the labour should be there in all the places (Desur, n.d). 3.3.2. Talent Management Various types of talents are their like electrical, mechanical, computing experts at different levels. Everyone should get chance to express their ideas no matter of their positions. Employees can get CSR if their ideas are being valued and they should also get good working environment and condition. Company should motivate their employees by appreciating their work experience and giving new projects and promotion from time to time. They should be involved in every stage of fashion decisions and board meetings. Decisions starting from choosing the fabrics, their colour, design, till launching it in the market. If a fabric gets a good response, not only the designer but also each section of the team should be appreciated because even the tailor play a major role in it (Desur, n.d). 3.3.3. Code of Ethics A proper rule and codes of ethical behaviour should be mentioned in the starting of the business to meet organizations objectives. A tool should be formed so that employees can give their suggestions and state their problems. Relationship between manufacturer, designer, distributor, supplier, and retailer should be maintained ethically. Each of them should be loyal to each other and fulfil their commitments. There should be total transparency between these people (Desur, n.d). 3.3.4. Community Commitment Various companies form a campaign, fashion show, banners, to promote their new products which create a desire in the heart of the customers to buy them. CSR takes place if this commitment gets fulfilled on the particular date it’s been declared. A small session of teaching also takes place to show how to consume the product or how to dress that particular apparel to make it available in all the stores, despite of the location with same rates in all the places. Designs should be made according to consumers demand and desire because they are the ultimate goal of the company (Desur, n.d). 3.4. Responsible Idea Award A lot of sentiments are attached with the appraisal. Employees should be awarded for their hard work to motivate them for further projects. This also binds the employees in the company and they don’t think of going some other place even if they get a good salary, because of their loyalty towards the company. The award can be for various reasons like if new design has been launched for the apparel and customers got influenced or if quality of clothes has been improved and now customers use that fabric for a longer time which saves their cost (Desur, n.d). One of the best practices is the community commitment as this is related to the consumers needs. Any organization which is formed they always start with a motive in the mind to satisfy customer. Customers are the main asset of a company. Every section of a society whether male or female, rich or poor, kids or old age people have expectation from their choice of companies. Fashion is a big word which can be in clothes, footwear, accessories, jewellery etc. and it has a very short period because human wants are unlimited and it keeps on changing from time to time and to meet these needs, company takes the responsibility. Fashion industry should also indulge in CSR by minimizing waste and making optimum utilisation of the resources (The Guardian, 2015b). Labours stitch clothes with their hand which is a time consuming task but it reduces the waste. Any waste material should be recycled for the new design which can play a major role in utilisation. Stocks which are not being sold should not be thrown instead should be used for new products. This is the best one because if this value and policy is followed by every industry CSR will be in the society and a sustainable environment will be created (Asos, n.d.). 4. Conclusion After studying the business responsibility of fashion retailing in Europe, it has been noticed that industries manage the systems in the business to generate a positive effect in the society. Industries consider the benefits of society by initiating the responsibility for the effect of their process on suppliers, customers, employees, communities, shareholders, stakeholders and of course the environment. CSR should be applied in the areas where actually it can work out and society should be prepared for it so that money doesn’t get wasted. In real terms, money invested in CSR can actual generate three times if invested in business activities. Analyzing fashion retailing issues, importance, best practices, it has been observed that Europe is involved in too much of CSR activities, at the same time it needs improvement in various places. 5. Recommendations Fashion industry in Europe should keep similar price whether it is in online selling, convenience stores, campaigns etc. It is being observed that purchasing through online cost less than from the stores even if it’s a same product. A person who can’t access to internet has to purchase from the stores and this creates a difference, but CSR says that every human is similar so this difference should be cut down. If any problem arises for customers in purchasing online, it should be solved instantly because it is the duty of the company to even look after the customer after selling their products as this will create loyalty from both the ends. Companies should make use of profits not only in the business but also to the society welfare. Some parts of profits which come from selling apparels can be donated to charity as they don’t have the potential to buy such expensive clothes but at least they can get some money to make clothes for themselves. Funds can also be donated in educational institutes because if society needs to develop it can be done only through education. Employees of the fashion industry can also give free knowledge about fabrics and about new techniques to people who have interest to learn but can’t afford to take classes and at the same time train them for employment in their company. This will be a good CSR as this will act as a social welfare. Industries can motivate employees for CSR by asking them to donate from their salary to any charitable trust and if they donate they get points collected every month and once they cross the target points they will be rewarded. This type of connection can create society development which means the whole economy will be developed. Thus, money should not be wasted in too much of advertisement for branding instead various CSR projects should be initiated which will help more than advertisements in branding. Reference List Allen & York, 1993. Csr in the fashion industry. [Online] Available at: [Accessed 5 may 2015]. Asos, n.d. Fashion with integrity. [Online] Available at [Accessed 5 may 2015]. Business News Daily, 2015. 20 Great Examples of Socially Responsible Businesses. [Online] Available at: [Accessed 5 May 2015]. Desur, n.d. Corporate Social Responsibility: Good Practices & Recommendations. [PDf] Available at: [Accessed 5 may 2015]. Forbes, 2012. Six Reasons Companies Should Embrace CSR. [Online] Available at: [Accessed 5 may 2015]. Jones, P., Wynn, M., Comfort, D. and Hillier. D., 2007. Corporate Social Responsibility and UK Retailers. Issues in Social and Environmental Accounting, 1(2), pp: 243-257. Martinuzzi, A., Kudlak, R., Faber, C. and Wiman, A., 2011. CSR Activities and Impacts of the Textile Sector. [PDf] Available at: [Accessed 5 may 2015]. Monnet, J. and Schuman, R., 2013. Corporate Social Responsibility: A European Perspective. [PDf] Available at: > [Accessed 5 May 2015]. Regio data research, n.d. Top Fashion Retailers in Europe – new brands on the rise. [online] Available at: < http://www.regiodata.eu/en/top-fashion-retailers-europe-new-brands-rise> [Accessed 5 May 2015]. Retail-index.com, 2015. Fashion / clothing retailers in Europe. [Online] Available at: < http://www.retail-index.com/Sectors/FashionClothingRetailersinEurope.aspx> [Accessed 5 May 2015]. Springer Link, 2007. Public Policies on Corporate Social Responsibility: The Role of Governments in Europe. [online] Available at: < http://link.springer.com/article/10.1007/s10551-007-9514-1> [Accessed 5 May 2015]. Springer Link, 2010. The role of governments in corporate social responsibility: characterising public policies on CSR in Europe. [Online] Available at: [Accessed 5 May 2015]. The Art Institutes, 2015. Fashion Retailing Diploma. [Online] Available at: [Accessed 5 May 2015]. The Guardian, 2015a. Sustainable fashion design: learning from Denmarks example. [Online] Available at: [Accessed 5 May 2015]. The Guardian, 2015b. Luxury brands must wake up to ethical and environmental responsibilities. [Online] Available at: [Accessed 5 May 2015]. Read More