Asda - Marketing Ethics - Case Study

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choosing these contracts do have alternatives, and the UK unemployment rate is low by global standards. Some, like students, would choose the flexibility that these contracts offer. However the other argument is that it means some adults with dependents are on contracts with very low legal protection, and where they cannot be guaranteed to earn a certain income; they can never be certain they will be able to put food on the table.

Another issue is environmental sustainability. Supermarkets have huge distribution networks (both in sourcing products, packaging, getting it distributed out to the store footprint, and selling on to consumers). In the sourcing stage, they have been accused of using unsustainable farming practices to grow their fruit and vegetables, they have been accused of over-farming the Scottish rivers for salmon. To distribute their products, they need to fly some perishable items by plane (for example bananas), others by polluting cargo ships, and then they distribute it around the UK in large trucks which emit harmful pollutants. Their packaging is often non-biodegradable, and their carrier bags cannot be broken down or recycled. In recent years there has been a push towards trying to force consumers to take “recyclable” bags, but it has not taken off, and they have not followed other UK food retailers like Marks and Spencer who have started charging for bags.

Finally, there is the issue of what ASDA and other big supermarkets are doing to local competition. Over time, these big supermarkets have become more and more dominant, and they have been able to compete on price because of their economies of scale. The losers have been local, family owned stores, which may have existed for many decades. In some rural communities the opening of a large ASDA or Tesco has been met with lots of local opposition because of fear over what it will mean for other community stores.

ASDA’s Best Practices

When they do it well, they do it very well. ASDA’s ‘Corporate Ethical Responsibility’, which is a CSR policy, clearly states how proud they are of their environmentally friendly supermarkets that have built-in water efficient lavatory systems. They stores also have light sensors which can control the lighting throughout when its bright outside. Their carpets are made from 80% recycled materials. They only use organic based paints only approved timber in their stores. In order to minimize waste, the use of plastics has been cut down dramatically since their internal policy was launched. The bags that consumers are given, the wrappings containing any ASDA item, or even their hangers are made from recycled plastics. They set their own targets, and for example 38 million hangers were recycled in 2013 and they set a target of 70 million hangers by 2014. (Treat others with respect would be the most accurate theory to link to these examples but the theory can also be applied to the environment: treat your environment with respect. And Utilitarianism: good intentions, right act)

Since 2009, they have been donating usable damaged clothes to charity. And ASDA customers are able to donate any unwanted item or clothes to the Salvation Army. (Utilitarianism)

Clearly the company is focused on being environmentally friendly, and such ethical practice is acknowledged as one of their company values. They also claim to be proud members of the Ethical Trade Initiative, were they basically claim to encourage the welfare of employees in the countries were their goods are made. However, they do make it clear that it’s a work in progress and they are working on different issues regarding, living wages, working hours, child labor and forced labor. This consequentialist approach taken to ethics is made in a forward thinking way of taking decisions by simply making a decision and wait and see if it has a good or bad outcome (which also can be included as another of their best practices) ASDA claims they carry out over 500 ethical audits. Their ethical auditing process consists of two independent auditors for a minimum of one day who would conduct in-site and document inspections as well as interviewing workers. They have also taking a deontological approach with this matter as they are now starting to carry out these audits to factories they are planning to work with, to ensure they already have a good base of ethical values. ASDA also has a Community Project that focuses on new ways they can reduce costs and make the work they do more efficiently. Their workforce is empowered with training sessions. The whole project has a really good out come for both the community and the individuals who work for the company.

Recommendations and Conclusion

Given the fact that ASDA is the second largest supermarket in Britain I am certain they already have a team of people working on this matter, I can recognize that some human exploitation issues have been solved to this date. There is still a work in progress in order to resolve the other issues mentioned in this report, they are carrying on audits in order to identify the areas they need to change.

They as a company are acting actively on their ethical issues, especially after having such a bad reputation on national press, and they have started to make some progress on issues, such as the previously mentioned difficulties in Bangladesh. We should keep in mind that in total they have around 544 factories across Europe and Asia. Being the ones in Asia the ones that raise my concern, as some of them are located in countries, which do not have ethical labor regulations. So they should set a target to 100% ethical auditing their factories.

Carrying out good ethics practices is very important for a company as their good or bad ethical actions will reflect on the media and it will have an either positive or negative outcome on consumers that are loyal to the company. When companies perform bad ethical practices, it is common for ethical concerned consumers to find an alternative product of service to supply their needs. However when a company does good ethical practices, they are likely to have an increase on consumers as today’s consumers are not only looking for great value for money when buying a product or a service but they fact that their money is being invested on a company is clear about the things they do and do them ethically is way more appealing. I would personally use a company that its known to have good ethics vs. a company that does not have them. And by being ethical companies are not necessarily being unprofitable, but perhaps making a little bit less profit than expected. As the example on this report of cheap labor where workers were