Main Ethical Dilemmas of Asda

The purpose of this report is to identify and evaluate the main ethical dilemmas of Asda, explain what the company’s best practices and values are and to make recommendations to enable Asda to answer its critics. A definition of business ethics from Crane and Matten (2010:5) is:

“Business ethics is the study of business situations, activities, and decisions where issues of right and wrong are addressed”.

Asda is a UK food and non food supermarket with 400 stores in UK and Northern Ireland employing over 170,000 employees (Asda, 2010). In 1999 Asda was taken over by the giant American supermarket chain Wal-Mart, which is the world’s largest retailer with over 7000 stores and two million employees worldwide.

2.0 Methodology

This report has been written using course text books, internet sources and a variety of resources. A full reference list is contained in Appendix A.

3.0 Findings

3.1 Main ethical dilemmas

The main ethical dilemmas facing Asda are as follows:

3.1.1 Cheap School Uniform and Globalization

In 2007, Asda offered a full school uniform including shoes very cheaply for less than £10. Although this is no longer available, from looking on the Asda website it is clear that it does not cost much more than this for a full school uniform. In order to produce clothing this cheap it is assumed that they are produced in foreign countries exploiting workers “Anti-poverty campaigners have voiced fears that the move would only be possible if workers in the developing world were exploited” (Weaver, 2007). Also, Asda school uniforms are not made from Fair Trade cotton.

The stakeholders involved in this issue would be customers, suppliers, government and employees. Customers may be put off buying these products if they think that overseas workers are being exploited. The government would be involved to make sure Asda are abiding by the law in this situation and employees may be concerned if they think employees of Asda suppliers are being treated less fairly them themselves. On the other hand, customers could be attracted to the cheap prices.

3.1.2 Ethical code of conduct not applied evenly

Linking to the above issue Asda has an Ethical code (see Appendix B) which states that “Over the past 10 years Asda/ George has worked hard to promote the welfare of workers in the countries from which we source” (Asda, 2010), however, Asda want overseas suppliers excluded from their code of conduct.

“The supermarket chain Asda wants overseas suppliers excluded from a new code of conduct which is designed to ensure that the big grocers do not use their buying power to impose unfair trading terms”. (Finch, 2008).

Although