M & S: Ethical question

2007 – you make £1BN profit
2008 – you make 7% less profit (which equals like mega millions) and so what do you do? Bung 1200+ on to the jobless queue? How can that be ethical??!!
Sure some of the smaller stores may not be turning over much in the way of profit but do they have an ethical obligation, especially in times such as find ourselves in right now, to not add to the unemployment line??
Its not just the 1200 jobs within M&S either, its the down stream redundancies that will probably go unreported as well.

*Pulls up a chair, offers round some biscuits…..but wait…..these are not ordinary biscuits…..*

Where the hell do ethics come into business?

1200+ is less than 7% of the workforce so what’s your problem?

I have reduced my spending by more than 7% in the last few months, does that make me a bad person?

It’s 7% less sales rather than 7% less profit. Profit could be anything.
But yep, I suspect that a lot of companies do panic sacking and get rid of more people than they need to.

These are not just redundancies, these are M&S redundancies. I wonder what those 1200 staff will earn in a year and how much they paid Parky to make that advert?

According to the copies of the Spectator I read in the hospital waiting room last night (making me now a financial expert), periods of bust encourage business to get rid of excesses and to become more efficient. Apparently, it was only because of the last recession that we’ve had such a boom (nothing to do with all the debt everyone is in, oh no).

I’ve thought the same freeform5spot from the start. Some companies are laying people off because they’ve made less profit, not because they made a loss.

I have reduced my spending by more than 7% in the last few months, does that make me a bad person?

*shock*

As a good consumer, you must spend, spend, spend. Even if you don’t have the money.

For all you know some of the smaller outlets are not making any profit due to high overheads etc in which case there is no ethical dilemma.

also are those figures gross profit or operating profit?

A billion profit is pretty gross.

All the big stores take on extra staff in the run up to Christmas and then the jobs become redundant in the new year, I suspect a good many of that 1000 is made up from that.

From what Stuart Rose was saying on TV this morning the stores that are closing are very small food only ones that are not profitible. It’s not like any of the big high street ones are going. All sounds like good sense to me.

All the big stores take on extra staff in the run up to Christmas and then the jobs become redundant in the new year, I suspect a good many of that 1000 is made up from that.

Unlikely, most of them would have already gone the week after Xmas.

M&S is just a shop and a business and has no more responsibility to be ethical than any other.

Lots of businesses can get rid of staff now because they aren’t held responsible for it – “it’s all because of the credit crunch”. Some will be doing it even if they don’t really have to (and then announce “job creation scheme” when it picks up a bit)

M&S is just a shop and a business and has no more responsibility to be ethical than any other.

I thought they were on Plan A[/url], because there’s no Plan B?

M&S certainly used to treat their employees very well back in the day, don’t know if that’s changed recently. But….they’re not a charity 🙂

Is it ethical to keep on 1200 staff you could potentially do without from loss making stores thereby putting the entire business and the whole workforce at risk? Discuss.

given that most of these companies report to shareholders, many of which are your and my pension funds, ethics are irrelevant. If you want to be ethical, your shareholders have to share the same viewpoint.

With a retail behemoth like M&S, that’s not going to be the case. Personally, I think they are probably overstaffed to the tune of at least double the number they’re laying off, so it’s not too bad really. As has been said, when things are good, companies don’t necessarily run efficiently, and now is the time for them to “rightsize”.

Cy has taken the words right out of my mouth there.

companies should sack people sooner rather than later. what is the point of paying people to make stuff you can’t sell.
sack half the workforce, advertise more and try to grab a bigger market share and hope your competitors fail because they wasted money paying people to do nothing.
businesses are not charities.

We just announced 1,100 job cuts last night

We’ve actually had a very good year

These job cuts are in case we have a bad year next year

Un-****-believable

companies should sack people sooner rather than later. what is the point of paying people to make stuff you can’t sell.
sack half the workforce, advertise more and try to grab a bigger market share and hope your competitors fail because they wasted money paying people to do nothing.
businesses are not charities.

But if half of employees are unemployed they won’t have the money to buy the goods

companies should sack people sooner rather than later. what is the point of paying people to make stuff you can’t sell.
sack half the workforce

Making people redundant costs the company money. It costs them to make them redundant in the first place, it costs them money when it comes to reemploy and retrain new staff in the future, and it costs the company though loss of moral of remaining staff who have a tendancy to become less productive or jump ship as they no longer have faith in the company.
Obviously paying people to make stuff you can’t sell isn’t sensible, but just panicking and making loads of people redundant might not always be sensible either.

If you don’t like what companies do shop elsewhere as this is the only way of affecting them and changing their modus operandi. If it affected their income they would behave ethically but we would rather buy a £2 t-shirt made by child labour as it is cheaper etc …..they can do it but only with our consent as we buy or don’t buy the stuff from their shops. We only have ourselves (consumers) to blame as we literally hold all the purse strings.

Gets down of soap box and goes for his Fair trade /Organic cup of tea

Welcome to the world of capitalism! Good isnít it 😀

Greed is all in our society. Everyone wants more profit each year, instead of being happy with a duplicate of the nice wad of money they got the previous year. So prices go up and up and people want more and more money so pay for things, so prices go up. Legacy of Thather and Son of Thatcher (Blair) – think of yourself rather than of consequences.

The 1 billion profit will not have been sitting in a bank, it’s been paid to the shareholders, so now they’re struggling to make profits they have to lose a few people from the lest productive sites. Its just natural selection – sure you can get annoyed if you’re losing your job, but everyone else doesnt really have an reason to complain. Businesses make money, its what they are there to do – it is there reason for being. If they keep the majority of staff secure by sacking (probably mostly temp/part time) staff and shutting some stores then wheres the problem? I love the way some people see these things as black and white – they made money in the past, therefore they must be able to accept some loses – doesnt quite work that way.

It’s a business not a charity. Would you rather they kept going as they are and made 70,000 people jobless.

The board of M&S has a responsibility to its shareholders, not its employees. So yes, completely ethical.

BoardinBob you’re Glasgow based aren’t you? Can you say which company you work for, would be interested as it’s local news.

So how many employees they have should be based on how well they did this year, rather than how well they expect to do next year?

M&S is a business. It will act within the law to maximize it’s profit for it’s shareholders. That is it’s legal responsibility. (there are some swingeing fines and other punishments for NOT acting like this) If you want companies to act differently (i.e. behave in more “social” way) then you have to change quite a few pieces of law, and eventually the basis of how “businesses” are framed, and for who’s benefit they operate.

BoardinBob you’re Glasgow based aren’t you? Can you say which company you work for, would be interested as it’s local news.

Announced to the US securities and exchange commission yesterday so it’s public knowledge

http://uk.reuters.com/article/gc04/idUKTRE5045C820090105

1,100 employees out of 27,500 worldwide and my division is just a drop in the ocean. We’ve got about 200-ish employees locally and handfuls scattered across Europe, Middle East and China. Probably 300 employees tops overall.

My division is doing extremely well at the moment and the forecast is for that to continue so the word at the moment is we’ll be exempt from the cuts.

It is far from clear that the world would be a worse place if companies treated their business as a joint enterprise between staff, customers, suppliers, owners and management to maintain everybody’s security and dignity and produce some useful goods or services for a spot of profit at the same time. It may even be possible. But it is not mandatory, and no good way has ever been developed of making it so.

😕

suspect it would be an aweful lot harder to make progress and improve if profits were not involved. Not impossible, but too difficult to bother with.

It is far from clear that the world would be a worse place if companies treated their business as a joint enterprise between staff, customers, suppliers, owners and management to maintain everybody’s security and dignity and produce some useful goods or services for a spot of profit at the same time. It may even be possible. But it is not mandatory, and no good way has ever been developed of making it so.

Isn’t that what John Lewis is?

nickc – Member
M&S is a business. It will act within the law to maximize it’s profit for it’s shareholders. That is it’s legal responsibility. (there are some swingeing fines and other punishments for NOT acting like this) If you want companies to act differently (i.e. behave in more “social” way) then you have to change quite a few pieces of law, and eventually the basis of how “businesses” are framed, and for who’s benefit they operate.

Not convinced that’s the case. Companies can trade and act as ethically as they want, do not have to operate for profit, and as long as they do not engage in illegal trading, there’s nothing stopping them doing that.

I think what you mean is that the board of directors shouldn’t make decisions and operate in a way that does not have the agreement of the shareholders, and should not knowingly operate in a way that would not maximise profit without the agreement of the shareholders – hence the AGMs / EGMs etc. If you have a bunch of hippy hessian sandallers as shareholders, I’m not sure they’re too fussed by profit.

It depends on the sort of progress one wants, and who gets the benfit of it. Recent “progress” has been achieved by reducing the rise in living standards among workers in the West and increasing profits simply by using cheaper labour abroad, while keeping consumer markets by lending western workers more and more money.

🙂

The capitalists are out in force, unusual for this website.

It would be interesting to know exactly where the jobs are being lost. In a very big company 1200 jobs can disappear without anybody being made redundant. It depends on what staff turnover is.

And in answer to the original post and as many people have said the company exists to make money for it’s owners, ethics are nice additions but only if you make enough money. Better make 1200 jobs redundant than lose the whole company in 12 months because then many more people will lose jobs.

Joemarshall and to a lesser extent Toyota, Nissan and Honda. The Kaizan approach encourages employee participation and decision making. Toyota are currently struggling not to make employees redundant as they never have since their inception.

I was quite amused by the GCSE revision notes:

USA (capitalism):
Free elections.
World’s wealthiest country.
Many people in USA opposed to Communism.
Important to them that people were free of control by government.
American’s believed other countries should be run their way. *
Individual rights of people very important.
Industry privately owned.

USSR (communism):
One party dictatorship.
Standard of living lower than in Capitalist countries.
Society was important.
Soviet leaders believed other countries should be run their way. *
Individual rights of people were not important.
Industry state owned.

* Everyone always believes they are right. Rare that anyone is.

Interesting point jonb. Are you saying that 1 billion profit is not enough to have ethics? How much profit would be enough? Personally, I would agree with your first point, in that most companies of that size exist to make money for their shareholders. There are obviously exceptions as Sandwich has pointed out.

Not saying that I don’t understand what they did. I think most stores closing are the small simply food ones, an area they have expanded into relatively recently. The way I see it, they created lots of jobs when the going was good and now have to contract in order to protect their core business.

Heard from an “expert” on the radio that as much as 10% of high street shops could go in the next few months, and that independents will suffer the most. Therefore, I’m going to visit my local deli and greengrocers tomorrow instead of taking the easy option and going to the supermarket. I would encourage you all to do the same, as long as you don’t get all the cheese before I get there!