Ethical Business Choices of Burberry

Burberry stops burning unsold goods and using real fur

The public limited company Burberry is among one of the top global luxury clothing brands with an idiosyncratic British identity. In early September 2018, Burberry stated that it was going to stop destroying clothes that were regarded to be “unsaleable” and discontinued to manufacture products using real fur. The revelation came following the great criticism that Burberryreceived in July, when it was publicised that it had burned £28.6 million worth of clothes and cosmetics in the past year alone in order to “protect its brand.” The article itself presents a compelling understanding into modern ethical issues. Reports revealed not only did this rile up stakeholders but shareholders too, and at least one protested that they could not comprehend why they were not given the opportunity to buy up the stock first before deciding to incinerate the surplus goods. Many spoke out saying it was morally inexcusable and underlined all sorts of environmental and ethical issues which should not to be condoned regardless of how rife this practice is among fashion houses. This essay will explore the identify the stakeholders affected by this issue, and also how the ethical issues presented impacted the stakeholders.

The article addresses two ethical issues. Firstly, industry insiders disclosed that Burberry burn surplus goods in order to prevent it reaching the hands of those looking to produce fraudulent copies and selling them at reduced prices which de-values the brand itself. Secondly, it will no longer use real fur in its collections in an attempt to become socially and environmentally responsible after provoking an uproar. The stakeholders affected by the ethical issues addressed are subjective to each issue itself, and in some cases, both issues.

Society is one of the main stakeholders impacted in this article, being affected from both of the of the issues surfaced. As previously mentioned, reports revealed Burberry destroyed excess stock, and the news led to an angry uproar from environmental campaigners. Greenpeace – an environmental campaigning group – stated to the BBC: “Burberry’s decision to stop incinerating its overstock is a much-needed sign of a change of mind in the fashion industry…it’s high time for the whole fashion industry to start dealing with overstock at its source: by slowing down production and re-thinking the way it does business.” Greenpeace claims 73% of textile fibres used to produce over 100 billion garments every year end up in landfill or incinerators after they have been used. This emphasises just how much of a problem overstock is, and how it is unquestionably critical for luxury fashion houses to dispose of their surplus stock in an environmentally responsible and safe way.

Additionally, People for the Ethical Treatment of Animals (PETA) an animal rights organisation, were quick to add to the negative publicity Burberry was receiving. PETA were not particularly pleased when the actions implicated by Burberry were brought to light. They described the burning of unsold items, including the ones made with animal fur and other skins – “an even more egregious waste.” Burberry cynically set fire to items of stock that costed animals their life, routinely wasting resources and polluting the planet as animal-derived materials not only causes animals to unnecessarily suffer, but too increases its environmental footprint.

Promptly after the revelation, Burberry switched their policy and became a fur-free company, substituting to faux-fur in an attempt to improve its social and environmental credentials which was immediately welcomed by animal rights campaigners. Mimi Bekhechi – the director of international programmes for PETA – added that the decision made from Burberry regarding their use of faux-fur is “a sign of the times”. Furthermore, Wendy Higgins, of Humane Society International UK, said: “we are delighted that this iconic British fashion giant is finally going fur-free…this is absolutely the right decision by this quintessentially British brand.” This was certainly good news for the company, customers and society at large! Creating positive publicity for Burberry and therefore increasing sales, company image and profits. Burberry was rectifying its tarnished reputation. However, not everybody was pleased with this news. The International Fur Federation (IFF) were ‘disappointed’ with Burberry’s choice to use faux-fur, warning that substituting natural fur with fake-fur is equally unsustainable and ends up harming the oceans, the environment and the whole ecosystem. The IFF’s CEO Mark Oaten also stated that the use of faux-fur in fashion is neither luxury or responsible. The IFF deem real fur to be healthier for the planet as opposed to faux-fur, which is normally made using plastics that are composed of petrochemicals and can take thousands of years to biodegrade.

Furthermore, Burberry revealed it was going into partnership with the luxury company Elvis & Kresse to transform 120 tons of leather offcuts into new products over the next five years. Burberry said that it already reused, repaired, donated or recycled unsold products, but added that it would expand those efforts to prevent waste in the industry. Burberry also stated they were going to limit waste and overstock as much as it could. Suppliers may well be affected by this decision, they’ll be displeased that the company is planning on reducing waste and a method may be to order less quantity from suppliers. This will lead to less business for suppliers and may cause tension/conflict between company and supplier relations. Suppliers may increase prices as less quantity is ordered from them, leading to more expenses and therefore less profits for the business. This could also have deeper effects as less profits may mean that the company will remove some employers to reduce costs (removal of a layer of management). This can decrease the job security for employees and therefore cause them to not give 100% when working and may cause them to lose loyalty towards the business. If employees are unmotivated, then their work will also reflect this too. This will cause a decrease in the output and progression of the company, again leading to further loss both financially and also a negative impact on company image.

Overall, it can be seen that various stakeholders were affected by the ethical issues highlighted in the article with some being more affected by others, such as society and suppliers. The news impaired Burberry’s status which was brutal in itself, let alone the public outcry which added to the negative publicity. In an attempt to redeem the company image, it removed real fur from its collections which only left some stakeholders – such as the IFF – unhappy. Suppliers are heavily detrimentally impacted as the company plan on reducing their purchases which will only mean less business for the suppliers and as discussed above, this will negative impact will infiltrate through the business. Burberry has tried its upmost to redevelop its name after the ethical issues where uncovered, still not everyone – as expected – was happy with its efforts and perceived this whole revelation to be preventable in the first place.

References

(online). Independent. Available from: https://www.independent.co.uk/life-style/fashion/burberry-end-burning-unsold-clothes-real-fur-environment-animal-welfare-a8525056.html

Part B – How personal traits and attributes may affect ethical decision making in business

Business ethics is “the study of business situations, activities and decisions where issues of right and wrong are addressed.” (Crane and Matten 2015) Ethical decision making is a cognitive process where people consider ethical principles or guidelines when making decisions. Ethics itself is a system of values and principles of right conduct. Whether these issues are intrinsically good or intrinsically bad, its people making decisions that drive whether the business will have a negative or positive impact on society. This essay will explore how personal and attributes may affect ethical decision making in business.

When making decisions involving ethical dilemmas, a person recognises relevant ethical standards, laws and principles, and personal values. Through this a persons’ awareness of how they make decisions will expand, they will be able to explain how they use these components in their decisions and will incorporate personal values and professional ethics.

Over the years, several studies have strived to conclude whether males are more or less ethical than females. The starting point for numerous studies was to deem that women are more ethical than men. However, the results are diverse, making it difficult to conclusively prove such a claim. The trend shown in some studies suggest that the differences between males and females are significant whereas other studies suggest no significant differences. Cohen et al. (2001) found that women acknowledged ethical issues better than men in a study regarding accounting students and professionals working in large auditing firms. Nonetheless, some studies reached entirely opposite conclusions, instead supporting the idea that gender has no significant influence on the ethical decision-making process. Hegarty and Sims (1978) evaluated graduate business students and established that decision making was significantly influenced by other factors – such as an individuals’ beliefs – as opposed to gender. This shows that, in some cases, gender can and cannot have a significant influence on ethical decision making. However, in other cases other personal traits can prove to be more of a significant influence.

Age is too a factor that produces opposing results amid researchers. Browning and Zabriskie (1983) concluded that younger managers have more of an ethical point of view as opposed older managers. Nonetheless, Serwinek (1992) and Barnett and Karson (1989) found that that older workers, were ethically more rigid than younger workers when asked to interpret ethical standards in several scenarios. Others suppose the ideals and beliefs of individuals influence ethical decision making, rather than age. Forte (2004) studied officials with management duties and found that no significant correlation occurs between age and decision-making. Given these diversified findings, additional testing is crucial in order to conclusively prove the miscellaneous findings.

To conclude, several personal traits and attributes influence ethical decision more significant than others. Age and gender yield ambiguous results, some researchers believe that the individuals’ beliefs are of more significance than both age and gender, despite those personal traits believed to be the most prevalent ones. Further research is critical in order to come to a decisive conclusion as to which personal traits and attributes influence ethical decision making most significantly.

References

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