1. Business Ethics Primark Case Study
Unit Business Ethics
Mrs Gutteridge

2. Introduction to Primark
A fast-growing brand
Part of Associated British Foods (ABF)
200 stores across UK, Ireland and Europe
Growth stems from meeting customer needs
Offers high fashion at value-for-money prices
Expanding stores
Moving into new markets
Products sourced from over 600 suppliers in 16 countries
Europe, Asia, Middle and Far East
Primark has responsibility to source ethically

3. Business ethics Business ethics are: Involves responsibility to:
Rules of conduct
Patterns of behaviour in business
‘Doing the right thing’
Involves responsibility to:
Suppliers
Employees
Wider community

4. Primark and business principles
Primark shares values with parent ABF
Shape relationships with all stakeholders
Affects dealings through supply chain
Key principles
Respect for human rights
Setting appropriate conditions of employment in suppliers’ factories
Over 700,000 workers in three continents
Around 95% of Primark suppliers also supply other high street retailers

5. Ethical sourcing Key role of Ethical Trade Director
Leads team of ethical managers in sourcing countries
Ensures Primark goods sourced ethically
Primark is member of Ethical
Trading Initiative
Alliance of companies, unions
and NGOs
Working to improve working conditions

6. Primark business model
Business model based on
High sales volume
Lower retail margins
Value for money stems from
Economies of scale - buying volume
Sourcing products efficiently
Lean production
Using simpler designs or local fabrics
Focusing on most popular sizes
Using off-peak factory time for production
Not spending heavily on advertising

7. Ethics in practice Primark Code of Conduct
Based on International Labour Organization Code
Translated into 26 languages and published on Primark website
Sets out full policies and is part of Terms and Conditions
Training for suppliers and buyers to ensure adherence to ethical practice
Tough selection process for new suppliers
Subject to independent audit before approval
Primark pays for remedial work to bring supplier up to standard required

8. Benefits of an ethical approach
Primark’s key business objectives
To be profitable
To be sustainable
Also aims to act as responsible corporate citizen
Helps to build confidence in the brand
Reduces risk of poor publicity on ethical issues

9. Costs of ethical behaviour
Primark bears costs of
Audits and training
Remedial actions
Employment of Ethical Trade
teams
However, these are all seen as contributing to sustainable business
Improvements to a supplier mean Primark standards improve
Transparency in business gives all stakeholders, including customers, confidence in the brand