Ethics in Retail Industry

10 October 2016

The study also encompasses how organizations ensure best ethical practices and whether a socially responsible retailer gains competitive advantage and profitability through its ethical practices. 25 December 2012 00:27 Methodology: Studying on above mentioned issues can be started from reasoning with how ethics and social responsibility impacted the organizational strategies recently. A brief study of the retail organizations, known as ‘ethical’, reveals how the organizations are pressurized to create such ethically sustainable image for its customers.

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Studying various examples, the factors, influencing the ethical practices of an organization, can be related to find out what it takes to be defined as a socially responsible retailer. Finally the inter-relationship of profitability and ethical practices can be established to conclude the performance of retailing industry in terms of ethics and social responsibility. The approaches on ethical practices of certain organization can be accessed from the cases studies on these retail industries.

The influential factors can be identified from the common trends in these approaches and a conclusive story through customer perceptions can be drawn by direct consumer contact and personal interviews. As a cornerstone of any organization and individual while interacting with various stakeholders, inside a retailing industry certain standards are followed to guide the decision making moments.

The scope of the article includes study of these practices from ethical point of view, taking examples from giant retail chains and also study of ethical perceptions of the sales-force in retailing industry. The study also encompasses how organizations ensure best ethical practices and whether a socially responsible retailer gains competitive advantage and profitability through its ethical practices. *Methodology:* [Quoted text hidden] 2 of 2 31/01/2013 10:37 PM Executive Summary:

As a cornerstone of any organization and individual while interacting with various stakeholders, inside a retailing industry certain standards are followed to guide the decision making moments. This article includes study of these practices from ethical point of view, taking examples from giant retail chains and also study of ethical perceptions of the sales-force in retailing industry. The study also encompasses how organizations ensure best ethical practices and whether a socially responsible retailer gains competitive advantage and profitability through its ethical practices.

Various issues that may arise from ethically troubled situation where retail sales people may find themselves in ethical dilemma are discussed in different frame of references. Typically common unethical practices in the retail industry such as exploitation of workers, overemphasis on profitable products, unethically fixing prices on products, unethical issues of promotional campaign and their negative effects on consumer mindset are discussed in detail. Afterwards unethical practices in green retailing, the latest buzz of the retail industry in India are also discussed with examples from international retail chains.

Through considerable studies it has been found that for retailers there are two types of ethical code in practice: explicit and implicit. Explicit code of ethical practices specifies written norms that retailers follow to operate under. Implicit code is defined as the set of unwritten but well-understood rules/standards of moral responsibilities. In retailing environment Sales people interact with individuals from outside the store, customers and as well as members from within their organization. The individuals with whom they interact may have certain disparate needs and problems that salespeople might satisfy to resolve.

Because these individuals want the sales people to help foster their own need, satisfaction or problem, the demands communicated to the sales people by them are likely to be diverse and often incompatible. Consequently retail sales personnel often face ethical dilemmas when torn between short run pressures from management i. e. to achieve sales quota and long run goals of achieving customer confidence and goodwill. Secondly the environment that the retail personnel operates in is conducive for the development of ethical problems because of the variety of task they performs 3 hich can place them in uncomfortable situations that might be expediently addressed using questionable behavior i. e. handling customer return or exchange. Further studies have shown that normally retail sales personnel receive little formalized sales training and as a result they have not been effectively educated about how the company would like them to act in these ethically troubling situations. Managers in retail industry should be concerned about these situations faced by retail sales people as inability to handle such situation results in lowering job performance, dissatisfying customer etc.

Types of Ethical Problems in Retail Sector: There are numerous types of situations where ethical issues can be occurred in retail industry. From the diverse people that retail sales people interact including customers, peer and management anyone can endanger the ethical norms of the situation. Using these three groups of people as frame of reference ethical problems can be categorized in three broad areas; customer, peers and work related situations. Customer related situations may include those situations that entail involvement with customer and have direct impact upon customers.

For example failing to assist customers or intentionally giving them incorrect change. Peer related situations involve peer from non-work groups and fellow employees also. For example offering or being pressured to give a friend or employee a discount. Work related situations include circumstances that may be precipitated by company operating procedures, practices that are fostered by work environment. For example failing to obtain a check authorization, selling a product as exclusive when it is not could be included in unethical practices. Common unethical practices in Retail Marketing.

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