Sustainable Business Practices - Higher National Diploma

Learning outcome 1: Critically evaluate the global sustainability agenda
1.1 Analyse the global sustainability agenda and how it relates to national practice

1.2 Analyse the forces for change in the sustainable business environment
1.3 Evaluate the impact of current sustainability issues on businesses

Learning outcome 2: Analyse the concept of the sustainable business organisation

2.1 Determine the scope of the sustainable business organisation
2.2 Evaluate the impact on business structure and objectives of becoming a sustainable business organisation

Learning outcome 3: Apply principles of sustainable strategic planning

3.1 Determine change required within business organisations to meet sustainability agendas

3.2 Analyse the concept of the triple bottom line and how it is implemented in business organisations

3.3 Review the process of sustainable strategic business planning

Primark Case study

Introduction

Primark is a subsidiary company of the ABF (Associated British Foods) Group. The company was launched in 1969 in Ireland trading as Penny's. By 2000, there were over 100 stores across Britain and Ireland. By 2012 Primark had 238 branches across the UK, Ireland and Europe. Primark has become distinctive for offering unbeatable value while never losing its innovative, fashion-driven edge. Like many retail fashion businesses, Primark does not manufacture goods itself. Its expertise lies in understanding its customers and working with its suppliers to produce goods to Primark's specification. It then gets the right goods to the right places at the right prices. Its profitability depends on sheer volume of sales. Primark's value-for- money prices rely on low costs. These are achieved in part through economies of scale and efficient distribution.

Primark's products are mainly sourced from suppliers in Europe and Asia. Its key sourcing countries are China, India, Bangladesh and Turkey. Putting the manufacturing of garments into these countries creates jobs. These are often at better rates of pay than other types of work on offer, improving overall standards of living.

Primark has initiated a programme of activities which supports its corporate social responsibility (CSR) stance and ensures that its trading meets the company's values and ethical standards. Underpinning its programme of activities is Primark's Code of Conduct which ensures that all workers making its products are treated decently, paid a fair wage and work in good working conditions.

This case study looks at Primark's involvement in the HERproject (Health Enables Returns) which is raising awareness and delivering healthcare education to female workers in supplier countries.

Making CSR happen

The HER project is an initiative started by BSR (Business for Social Responsibility), a non- governmental organisation that works with over 250 companies on environmental, social and human rights. The HERproject has so far helped over 50,000 women in different countries. It has done this through working with companies like Primark, Primark's suppliers and local health providers.

The HER project is simple but surprisingly powerful:

A small number of female staff in a factory (around 10%) is selected to become health education trainers called ‘peer group educators'.

The local health service provider trains the peer group educators, who are then responsible for training the other women based in the workplace, passing on the message and helping to disseminate what they have learned.

The process emphasises mutual help and encouragement. The women trainers are effective because they fully understand the local culture. They are not seen as outsiders imposing strange ideas. Instead, the trainers understand why the women may be reluctant to seek help with issues that can be sensitive. They can build their self-confidence as well as their practical knowledge.

The HER project is also helping others not directly involved in the project. Outside the workshops informal learning continues. Women build supportive relationships and talk to each other out of work. This is reinforced by the project helping to set up factory clinics and creating vital referral links to local hospitals.

Selina Kamal is a factory quality inspector and a peer educator for HERproject. Through her own training she is now more aware of the importance of cleanliness for herself and her children. They all now drink purified water and eat more vegetables. She has already helped a friend, Shilpi, who is a school teacher.

The value of the HER project

Improving the health of women workers in Bangladesh and helping to empower and educate the female workforce is an important ethical goal in its own right. The benefits to communities can also be seen. Over time, initiatives like this can support key issues such as reducing infant mortality.

Factories in Bangladesh taking part in HERprojects have seen healthy returns on the money invested by Primark in the programme. This has been achieved through improvements in productivity, a more stable workforce, lower absenteeism, decreased labour turnover, improved quality and a reduction in housekeeping costs. As an example, the managing director of one factory in Bangladesh found that absenteeism in the factory fell by 55% during the first six months of the HERproject. Turnover of female workers dropped from over 50% to around 12%.

Mrs Kaniz Fatema is the managing director of a medium-sized factory in Dhaka, Bangladesh. When the HERproject was introduced to her factory a year ago, she was unconvinced, viewing it as ‘just another project'. However, just one year later her view has been transformed. Women's health is now high on her agenda. A healthier workforce is literally paying dividends.

Absenteeism and labour turnover are down by a startling 50%. Productivity is up and even internal staff communication is more effective. Mrs Kaniz Fatema now employs a female doctor and has set up a scheme to provide sanitary napkins to her female workers, helping to embed a new culture within the factory and allowing health education in the factory to continue after the project ends.

Other benefits are harder to measure but are increasingly recognised by the factory managers. Getting women to communicate effectively on health matters builds trust and confidence. This feeds back into better communication with supervisors and managers. This, in turn, leads to improved teamwork and the motivation to accept more responsibility and leadership roles in the community.

This demonstrates the principles of the Hawthorne effect theory of motivation. Theorist Elton Mayo found that factory workers with long hours of routine work were motivated by someone taking an interest in them and their work. Feeling that they mattered as individuals, they experienced a new connection with the job. As a result, productivity improved. In a similar way, by focusing on the women workers and their health issues, the HERproject is also delivering improved motivation.

Conclusion

The industrialised countries of the world benefit from the lower costs of labour in countries such as Bangladesh and India.

However, more consumers are now asking if this is ethical and questioning its sustainability.

Task 1 Presentation

Scenario

You are working for Bargainum, a competitor of Primark. After reading the above case study, your manager asked you to investigate the feasibility of doing something similar or better. But you must first convince the Operations Director.

Instructions

Prepare and deliver a presentation to brief the director about the importance of sustainability:
Investigate the current global sustainability agenda and issues (e.g. fair trade, poverty, environment, etc.) by providing examples
Review the impact of the current issues on businesses (e.g. effect on consumers, effects on profitability, etc.)
Analyse the reasons for UK organisation to adopt sustainable practices (e.g. brand recognition, legislation, etc.)

Task 2

Scenario

Your pitch was convincing and the Operations Director asked you to write a short report for more details and to build a case for it.
Instructions

With reference to the case study and other organisations,
Determine what being a sustainable business organisation means
Explain the changes (strategic and operational) that are being required to become a sustainable business organisation
Explain the principle of the triple bottom line and how it can be implemented, using examples such as Primark and other organisations
Provide a flowchart and review the strategic sustainable planning process (e.g. set sustainable vision, assess current situation, create a financial plan, etc.)

Attachment:- Sustainable Business Practices.rar