Main Ethical Dilemmas of AsdaThe purpose of this report is to identify and evaluate the main ethical dilemmas of Asda, explain what the company’s best practices and values are and to make recommendations to enable Asda to answer its critics. A definition of business ethics from Crane and Matten (2010:5) is:
“Business ethics is the study of business situations, activities, and decisions where issues of right and wrong are addressed”.Asda is a UK food and non food supermarket with 400 stores in UK and Northern Ireland employing over 170,000 employees (Asda, 2010). In 1999 Asda was taken over by the giant American supermarket chain Wal-Mart, which is the world’s largest retailer with over 7000 stores and two million employees worldwide.
MethodologyThis report has been written using course text books, internet sources and a variety of resources. A full reference list is contained in Appendix A.FindingsMain ethical dilemmasThe main ethical dilemmas facing Asda are as follows:3.1.1 Cheap School Uniform and GlobalizationIn 2007, Asda offered a full school uniform including shoes very cheaply for less than £10. Although this is no longer available, from looking on the Asda website it is clear that it does not cost much more than this for a full school uniform. In order to produce clothing this cheap it is assumed that they are produced in foreign countries exploiting workers “Anti-poverty campaigners have voiced fears that the move would only be possible if workers in the developing world were exploited” (Weaver, 2007). Also, Asda school uniforms are not made from Fair Trade cotton.
2.2.1.a. Fair Trade Cotton and the New World Asda school uniform is of the highest quality and is available cheaply in all countries that use Fair Trade Cotton, a global standard that is regarded as a global standard of quality since it is used in many low-cost and low-cost labour markets, especially in Asia and in Africa. Asda did not include any standards on garment quality or sourcing. Moreover, the only standard that Asda’s staff had used in all of their years as Head of the Department was their own Fair Trade Cotton, which was provided by several suppliers that are not independent suppliers of the world’s most expensive cotton. Asda’s decision to add these standards in 2007 was a political decision that, based on this study, Asda had to reverse the decision. The decision was in response to a series of actions by Asda to reduce its standards and to increase its price, from ÂŁ4 to ÂŁ18, from ÂŁ9. In this study, we attempt to present relevant documents and provide a summary of their actions, including their political decisions, with respect to Fair Trade in 2010.Asda’s decision to expand Fair Trade Cotton to 20 new countries between 2010 and 2012 is a major decision of Asda that, when taken out of bounds, is a significant blow for Fair Trade and national standards of quality in the international garment industry. It opens the door for the garment industry and the global economy to be better equipped for the coming decade and beyond. Asda has a commitment to increase transparency, quality and protection of international commerce. Asda has always committed to ensuring its transparency practices are more transparent than they might be, taking very important decisions when they are made. This is not to say that all of its actions have been transparent. However, when it comes to ensuring that all of its actions comply with fair trade rules, Asda’s actions in particular have been highly scrutinised and, in the process of doing so, have been met with strong criticism and concern (see, for example, Ralf Wahl and Ralf Hirsch, 2003). In that regard, Asda’s actions have been closely watched by industry and the global trade media, and will continue to be so if there is the need.2.5.1.f. The FUTS RegulationsIn 2007, Asda began using the same Regulations as other major retail sector bodies to restrict exports of its products. It continues to require all international retailers and retailers to ensure all foreign products that are imported into Asda are compliant with the new Food and Tobacco Inspection and Consumer Protection Regulations of 1992 (FTPR) and the Fair Trade Act of 2002 (FTPAR) (Hemings, 1986). When the law is used as a guide for the new law, Asda has imposed specific compliance guidelines, but as all other industry bodies are obliged to use similar criteria in their own compliance programs, Asda has not adopted all requirements of the new regulations. This has meant that the FUTS regulations have been subject to multiple interpretations. While many industry groups maintain that the FUTS regulations are “fair trade”, as we describe in section 1.3a of the FUTS Regulations, Asda still uses the law which gives it broad power to impose restrictions or exemptions in its compliance programs as a guide for all other industries. (It may also be
2.2.1.a. Fair Trade Cotton and the New World Asda school uniform is of the highest quality and is available cheaply in all countries that use Fair Trade Cotton, a global standard that is regarded as a global standard of quality since it is used in many low-cost and low-cost labour markets, especially in Asia and in Africa. Asda did not include any standards on garment quality or sourcing. Moreover, the only standard that Asda’s staff had used in all of their years as Head of the Department was their own Fair Trade Cotton, which was provided by several suppliers that are not independent suppliers of the world’s most expensive cotton. Asda’s decision to add these standards in 2007 was a political decision that, based on this study, Asda had to reverse the decision. The decision was in response to a series of actions by Asda to reduce its standards and to increase its price, from ÂŁ4 to ÂŁ18, from ÂŁ9. In this study, we attempt to present relevant documents and provide a summary of their actions, including their political decisions, with respect to Fair Trade in 2010.Asda’s decision to expand Fair Trade Cotton to 20 new countries between 2010 and 2012 is a major decision of Asda that, when taken out of bounds, is a significant blow for Fair Trade and national standards of quality in the international garment industry. It opens the door for the garment industry and the global economy to be better equipped for the coming decade and beyond. Asda has a commitment to increase transparency, quality and protection of international commerce. Asda has always committed to ensuring its transparency practices are more transparent than they might be, taking very important decisions when they are made. This is not to say that all of its actions have been transparent. However, when it comes to ensuring that all of its actions comply with fair trade rules, Asda’s actions in particular have been highly scrutinised and, in the process of doing so, have been met with strong criticism and concern (see, for example, Ralf Wahl and Ralf Hirsch, 2003). In that regard, Asda’s actions have been closely watched by industry and the global trade media, and will continue to be so if there is the need.2.5.1.f. The FUTS RegulationsIn 2007, Asda began using the same Regulations as other major retail sector bodies to restrict exports of its products. It continues to require all international retailers and retailers to ensure all foreign products that are imported into Asda are compliant with the new Food and Tobacco Inspection and Consumer Protection Regulations of 1992 (FTPR) and the Fair Trade Act of 2002 (FTPAR) (Hemings, 1986). When the law is used as a guide for the new law, Asda has imposed specific compliance guidelines, but as all other industry bodies are obliged to use similar criteria in their own compliance programs, Asda has not adopted all requirements of the new regulations. This has meant that the FUTS regulations have been subject to multiple interpretations. While many industry groups maintain that the FUTS regulations are “fair trade”, as we describe in section 1.3a of the FUTS Regulations, Asda still uses the law which gives it broad power to impose restrictions or exemptions in its compliance programs as a guide for all other industries. (It may also be
2.2.1.a. Fair Trade Cotton and the New World Asda school uniform is of the highest quality and is available cheaply in all countries that use Fair Trade Cotton, a global standard that is regarded as a global standard of quality since it is used in many low-cost and low-cost labour markets, especially in Asia and in Africa. Asda did not include any standards on garment quality or sourcing. Moreover, the only standard that Asda’s staff had used in all of their years as Head of the Department was their own Fair Trade Cotton, which was provided by several suppliers that are not independent suppliers of the world’s most expensive cotton. Asda’s decision to add these standards in 2007 was a political decision that, based on this study, Asda had to reverse the decision. The decision was in response to a series of actions by Asda to reduce its standards and to increase its price, from ÂŁ4 to ÂŁ18, from ÂŁ9. In this study, we attempt to present relevant documents and provide a summary of their actions, including their political decisions, with respect to Fair Trade in 2010.Asda’s decision to expand Fair Trade Cotton to 20 new countries between 2010 and 2012 is a major decision of Asda that, when taken out of bounds, is a significant blow for Fair Trade and national standards of quality in the international garment industry. It opens the door for the garment industry and the global economy to be better equipped for the coming decade and beyond. Asda has a commitment to increase transparency, quality and protection of international commerce. Asda has always committed to ensuring its transparency practices are more transparent than they might be, taking very important decisions when they are made. This is not to say that all of its actions have been transparent. However, when it comes to ensuring that all of its actions comply with fair trade rules, Asda’s actions in particular have been highly scrutinised and, in the process of doing so, have been met with strong criticism and concern (see, for example, Ralf Wahl and Ralf Hirsch, 2003). In that regard, Asda’s actions have been closely watched by industry and the global trade media, and will continue to be so if there is the need.2.5.1.f. The FUTS RegulationsIn 2007, Asda began using the same Regulations as other major retail sector bodies to restrict exports of its products. It continues to require all international retailers and retailers to ensure all foreign products that are imported into Asda are compliant with the new Food and Tobacco Inspection and Consumer Protection Regulations of 1992 (FTPR) and the Fair Trade Act of 2002 (FTPAR) (Hemings, 1986). When the law is used as a guide for the new law, Asda has imposed specific compliance guidelines, but as all other industry bodies are obliged to use similar criteria in their own compliance programs, Asda has not adopted all requirements of the new regulations. This has meant that the FUTS regulations have been subject to multiple interpretations. While many industry groups maintain that the FUTS regulations are “fair trade”, as we describe in section 1.3a of the FUTS Regulations, Asda still uses the law which gives it broad power to impose restrictions or exemptions in its compliance programs as a guide for all other industries. (It may also be
The stakeholders involved in this issue would be customers, suppliers, government and employees. Customers may be put off buying these products if they think that overseas workers are being exploited. The government would be involved to make sure Asda are abiding by the law in this situation and employees may be concerned if they think employees of Asda suppliers are being treated less fairly them themselves. On the other hand, customers could be attracted to the cheap prices.
3.1.2 Ethical code of conduct not applied evenlyLinking to the above issue Asda has an Ethical code (see Appendix B) which states that “Over the past 10 years Asda/ George has worked hard to promote the welfare of workers in the countries from which we source” (Asda, 2010), however, Asda want overseas suppliers excluded from their code of conduct.
“The supermarket chain Asda wants overseas suppliers excluded from a new code of conduct which is designed to ensure that the big grocers do not use their buying power to impose unfair trading terms”. (Finch, 2008).
Although