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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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1. Introduction

Nowadays, fashion is one of the most trending industries. Companies are required to invest more and more in research and development to be able to gain a competitive edge. The competition is as fiercely as ever with a lot of new companies entering the market. Not just the amount of companies is increasing quickly, but the trends are adapting and changing on a weekly basis. This is the reason why the main focus for companies is to follow these trend fluctuations, as otherwise their sales figures will be affected. To be able to keep up with the big players, such as Zara and H&M, one needs to have a suitable, adaptable and quick production process to make sure that new products are on the shelf at least at the speed of its competitors. This phenomenon of having such a fast turnover of products is defined as “Fast Fashion”.

However, behind this attractive façade, the industry suffers many negative repercussions due to the unfair practice of those big companies. There are many ethical issues that have recently received a lot of attention in the media and keep appearing in the fashion industry. A concrete example of this issue is the one of the exploitation of the third world countries by the companies to decrease costs, such as in labour and infrastructure. Furthermore, the labour force is inappropriately exploited which impacts the health and socio- economic situation of that specific country. Also, many other problems are arising from this, such as the ones from an environmental perspective. Indeed, many companies make use of torture to gain the fur and the skin of animals to use it for their products and at the same time disturb and pollute the habitat of these animals (Gardetti, 2016).

Over the years there have been many scandals that have ruined companies' reputation. One good example to illustrate this from a socio-economic point of view is the one of Nike in 1996. The company was accused to have sweatshops, meaning production facilities where the employees are paid a very low wage, have extremely long working hours and have very poor working conditions (Cambridge dictionary, 2018). These types of scandals led to the enforcement of regulations to ensure the appropriate treatment of labour.

Once a company has been accused for such an action it drastically affects their brand image, which can possibly be visible on the bottom line of the financial statements.  

The attractiveness of the fashion industry is extremely high, as many different jobs in many different areas are existing, creating a lot of diversity within the industry. This can be especially illustrated with the topic of automation which is often spoken about where 47 percent of the total US employment is at a high risk of losing their job function (Frey, Osborne, 2013). This fact could also clearly speak against the attractiveness of the industry. Yet when looking at the more detailed job descriptions of this industry, such as a fashion designer or a textile designer these are in general not susceptible to automation. One other factor is that there is no risk of substitutes, meaning this industry is not in danger of being replaced by another one.

This paper will tackle all those matters by analysing each one of them and later look at the ethical issues that appear and if they are still of any relevance. In order to do this, the common problematics will first be discussed by using real life examples to show what the consequences of taking such unethical actions are.  Secondly, for the analysis of the stated issues, the course content will be looked at in detail and will be applied to further the interpretation of the issues as well as to see how it can be linked with ethics. Finally, the conclusion will be drawn.

2. Analysis

As mentioned above many different ethical issues are frequently appearing in the fashion industry. The main problem can be divided into two subcategories: first the socio-economic side of the matter and second the one of the environmental perspective.

2.1 Socio-economic perspective

When looking at the fashion industry from the socio-economic point of view, many key issues can be detected, causing a negative effect on the overall image of this industry and more specifically on the third world countries being exploited.

The first issue, being the most common one is the child labour. Big companies often opt on placing their production facilities in third world countries to reduce their overall production costs. This aspect is not problematic from an ethical point of view as it is also helping the economies of those countries and especially giving the people more work opportunities. Seeing this chance has led to many companies heavily trying to further lower their costs. An easy solution was to hire children to work for them. Child labour has been one of the most controversial topics in the fashion industry. In fact, companies which have been implementing this unethical workforce, have lost many of their main customers and realized a decrease in their overall brand image, as this act is seen as an offence against humankind. The International Labour Organization (ILO) is estimating that “11% of the global population of children” are involved in child labour (Moulds, 2018). The main problem behind this act is the fact that children's education and health is put at risk. The normal path to adulthood is not present and especially the health aspect is an apparent problem. These companies outsourcing their production to the other side of the world do so to save on production, meaning that the infrastructure, working conditions where these employees have to work are not of an appropriate standard.

Unfortunately, many of these children are forced to look for those jobs as their families are often experiencing financial difficulties and are in need of an extra income coming from their children to be able to survive. The reason why this type of labour is seen as so destructive to humanity is because the companies are aware of the poverty but still decide to exploit the population for their own benefit (Khakshour, 2018). Companies such as H&M or Gap are still being accused today of using child labour, even after the multitude of companies being penalized and convicted in court for these actions. Moreover, a response to those lawsuits has been the emergence of a general focus on companies to act in a corporate social responsible (CSR) way. Melo and Galan (2011) in their report on the “Effects of corporate social responsibility on brand image” define CSR as any action the company is involved in which is not demanded by the law. These actions are taken with the mind-set that the firm will be compensated in some way, for example an increase in the brand image leading to an increase in their sales ratio (Melo, Galan, 2011).

This way of doing business is slowly becoming the norm but as mentioned above some firms are still pursuing the more outdated definition of CSR as their business strategy, being the one from Milton Friedman. Indeed, he states in his work that “There is one and only one social responsibility of business- to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud” (Friedman, 1970). This view can also be related to the shareholders' view, that all the resources are supposed to be used as the shareholders decides upon, rather than it being discussed between all the stakeholders to come to a group-based conclusion. H&M's and Gap's actions do not entirely represent Friedman's view as the last part of his point of view states that the actions taken are without deception or fraud. In the child labour cases it is categorized as fraud, as child labour is prohibited in almost all the countries around the world but as we have seen it is still extremely common in the poorer countries (Moulds, 2018).

The second main issue which also falls in the socio-economic view is the use of sweatshops. As mentioned in the introduction sweatshops are production facilities where the employees are paid a very low wage, have extremely long working hours and have very poor working conditions (Cambridge dictionary, 2018).  Those types of factories are still very common nowadays and their existence should be questioned, especially after witnessing many scandals damaging the reputation of companies' due to this type of practice. However, there is not one concrete reason which explains this still featuring phenomenon. It can be argued that there are no clear guidelines in what is a tolerable and an un-tolerable way of treating workers. This being said most companies and people have a general opinion on this matter, such as the safety requirements, average wage and working hours of employees.  This is usually required by law, yet companies' respect only the very minimum requirements. Furthermore, there is no exact tolerance level to define whether the company is exploiting their workers or not (Radin, Calkins,2006).

Additionally, there is “the reluctance of Westerners to impose their values on non-Western business practices” (Radin, Calkins,2006). Indeed, it is of a high difficulty to change and adapt quickly from having the organisations production in sweatshops to relocating them in the home country, especially from the financial perspective as this will have a negative impact on the bottom line.

In other words, the fact that there is no concrete definition of sweatshops, is by far the most prevalent reason why these workshops are still in occurrence (Radin, Calkins,2006). Also, as briefly mentioned in the introduction there are serious health and safety issues in the sweatshops. These are minimally equipped and therefore are not adequate when looking at it from the European health and safety regulations (Green paper, 2001). Working hours and conditions of employees in these factories are inhuman and cause many health problems.

A good reference point is to look at sweatshops from the philosopher Immanuel Kant's perspective. Kant argues that any act we pursue to achieve some practical or personal end is not seen as ethical (Jones, Cardinal, Haywald, 2006). Therefore, according to his view sweatshops breach this as they go against human dignity by exploiting the cheap labour in third world countries. He further mentions that there are two definitions of the word “ought”: the categorical and the hypothetical. For the purpose of this analysis we will only apply the categorical definition to sweatshops. This imperative implies that the use of “ought” is synonymous to the use of “must”. Indeed, Kant entails that no matter what the consequences are, positive or negative, an order has been given for a specific reason (Sedgwick, 2008). To better understand this statement, he elaborates his view by saying that “the moral worth of an action does not depend upon the results expected from it” (Jones, Cardinal, Haywald, 2006).  In the case of sweatshops, since it is unethical to exploit third world countries, the specific order being “one must not exploit third world countries”, companies' should stop to produce in those third world countries.

Also, from a deontological perspective the problem is once again not in accordance with this theory. Deontology is the form of normative ethics which speaks for the obeying of moral obligations and duties that are expected professionally from a working entity. (Jones, Cardinal, Haywald, 2006). He further mentions the “rightness of action” (Jones, Cardinal, Haywald, 2006), which is not fulfilled when forcing employees to work under inhuman and brutal conditions. Consequently, the valuation an action to be right or not can also be applied to sweatshops. When it is decided by an organisation to move its production to a third world country to reap the benefits of cheap labour, it only takes into account the financial benefits from this and disregard the working conditions that generate such a low wage. This can be directly linked to the ethical egoism of the company (Jones, Cardinal, Haywald, 2006).

This last part can be concluded by stating that the use of sweatshops should by now be an outdated method. As a matter of fact, it does not follow the normative, deontological perspective and does not act in a way that respects the common ethical principles. A solution from an ethical standpoint would be, instead of focusing on the well-being of the company, they should refer to the utilitarian view of enhancing the pleasure instead of the pain for the greater world (Jones, Cardinal, Haywald, 2006).

2.2 Environmental perspective

Having illustrated the aspects concerning the ethical issues from the socio-economic perspective first, the analysis will further look into it from the environmental ones. There are many important ethical issues which are persistent and worsening; for instance the one of high pollution, water waste, misplacement of pesticides, waste and the slaughtering of animals. Why these have kept growing is mainly due to the high increase in competition within the industry and the greater number of players. This has lead to the phenomenon of “Fast Fashion” as well, which as described earlier, implies that there has been a focus on quick production and low cost to enable a higher turnover of products (Perry, 2018). This problem once again has affected the whole fashion industry heavily. The impact of the reduction of the value chain and the production of every item at a lower cost have on the market proves indeed that firms do not have an environmental responsible behaviour when producing.  

Over the years, exotic colours and prints have become an impact of the biggest focus for fashion retailers. Consequently, the use of pesticides and toxic chemicals has increased drastically to fabricate these types of clothes. As a matter of fact, the amount of waste has therefore increased and a big amount of contaminated water in discharged in high-water pollution – leading to a global problem as well (Perry, 2018). To confront this cynic production, a few governments have issued bans against those practices in their legislation. However, no convincing results have appeared yet since relocation to another country lacking such laws is always a possibility.

Moreover, the aspect of waste in the stores still has an increasing importance in the matter. The fast fashion customers have a tendency to visit fashion shops more than ever before since the collections are often changing which subsequently leads to an overall greater amount of purchases. Statistically, the population is buying up to 60% more products than it did in the year 2000. For this reason, the rate at which clothing is disposed is a lot higher than before generating simultaneously a very high waste ratio. One possible way of mitigating this would be the creation of a well-functioning recycling method, yet this has been unsuccessful until today. Indeed, estimations show that less than 1% of the textile is being reused to produce clothing in the future (Nature Climate Change, 2018).

A possible way of increasing this number is by looking at the problem from a stakeholder point of view. What is implied with this suggestion is that the stakeholders would generate more opinions and discussions on how to reduce all the negative effects of the fashion industry on its environment and it would lead to a greater chance of coming to a viable solution. This diverse perspective would be sustained by many different points of views from the people working for the company such as the employees, suppliers and even the customers. This would ensure a rich analysis of the different solutions (Smith,2003). Creating policies or programmes to reduce this negative effect will be made easier when discussing it with a greater spectrum of people, who are interested in changing and helping this issue to diminish (Kozlowski, Bardecki, Searcy, 2012).

The other central environmental issue, which has led to a deep impression on customers is the slaughtering of animals. The public has been shocked to learn how animals were treated to obtain leather, wool or their fur. Companies have been going against the general welfare of animals and this has not been taken into account by customers due to the lack of information from the companies and maybe also due to the lack of interest from the customers. It has been shown that organisations have been using specific marketing methods to hide their disrespectful and violent behaviour (Robertson, 2017).

Although the issue has been slowly disappearing with time since fur is seen anymore as a luxurious item to have in the wardrobe as it used to be in the start of the century, the trend still exists. It has been estimated that with the present demand, 31 million animals are killed every year exclusively for the production of clothing (Musci, 2015). On a more positive note, there has recently been a move towards a fur-free world. The well-known luxury brand Gucci declared in 2017 that the use fur in clothing was not a must to be profitable anymore.  Likewise, events such as the London Fashion week have moved in the same direction by only having 14% of the shows presenting fur (Bekhechi, 2017). This going fur-free trend can be clearly linked with the overall focus of companies to act in a more socially and environmentally responsible manner.

Taking away the life of these animals for the production of clothing is seen as immoral and goes against the social expectations the public has towards the companies. Through many debates and newsletter headlines companies have been made aware of the criticism from the customers that would prefer a more environmental and respectful way of production. Being socially responsible asks to add something more than only acting to maximise profits. The focus is on behaving “ethically and contribute to economic development while improving the life of the workforce and their families as well as of the local community and society at large” (Holme, Watts, 2010). Fortunately, this trend is gradually growing in importance in most of the company's business strategy; nonetheless some firms also use this trend in a different way through a concept called greenwashing. This occurs when a firm presents itself externally as environmentally and socially responsible but is in reality hiding the true activities that are actually practiced on the inside. Concretely, it implies that those types of companies set plans on how they want to act in a social and responsible way without actually implementing it at any point in time. This phenomenon is often used to boost the brand image and reputation, which can often lead to an increase in the bottom line of the financial statement until the truth is discovered and the company is accused of acting in this irresponsible way. “Talking the talk without walking the walk” (Vos, 2014).

One company has been in the spotlight in recent years due to many different scandals, H&M. They have been through many different scandals but the one that strikes the most is the one regarding greenwashing.

In 2016, H&M introduced the “Recycle Week”, which was supposed to attract customers to recycle their unwanted clothes. The aim of this project was to collect 1000 tones of garments worldwide. This was also an attempt to regain some brand image after having been victim of racism accusation. Coming back to the topic of greenwashing, the “Recycle Week” is a good example to illustrate that practice. In fact, why it was seen as being a corporate greenwashing method is due to the fact that during the exact same week the “Fashion Revolution” took place, which is a movement launched by responsible fashion designers from all over the world, to raise the attention of the public on the drastic and unhuman work-life of workers in the fashion industry. H&M had prior to this often been accused of being an organisation, which treated their foreign workers poorly. Thereupon, many specialists of the fashion industry came to the conclusion that the “Recycle Week” campaign was created in the first place to overshadow the companies' bad reputation in the managing of their employees, instead of having the true intention of being socially responsible (Elena, n.d.).

3. Concluding remarks

All elements being considered, it can be concluded that the fashion industry is still far from being fully developed and socially responsible. When answering to the initial question being about the main ethical concerns that are of common appearance in the fashion industry, it is best to divide these issues into two categories, the socio-economic and environmental perspective. The first part of the analysis can be summarized by stating that many companies are still taking great advantage of third world countries. From a financial point of view, it is still extremely beneficial to relocate in third world countries as the labour costs are drastically lower and the average working hours are far greater than in the western home country. The real problem is the child labour and the sweatshops that are both persisting and being extremely irresponsible despite the criticism towards it. In the past decade, the focus put on firms to be corporately socially responsible is greater than ever and therefore it comes as a surprise that these exploitations still take place.

The second part of the analysis centres itself on the environmental viewpoint. It focuses on the use of harmful pesticides that have a serious damaging impact on the overall health situation. In addition to this issue, the number of animals being tortured to produce clothes cannot be seen as ethically either. The trend towards the adoption of the CSR perspective is present but not always correctly adopted, especially as it has to be fully adapted in every part of the process and most importantly in the strategy of the firm.

As a global answer to all of those matters, one can say that the fashion industry is moving in the right direction but is still far from being fully responsible and transparent.

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