Benetton Company’s Business Ethics Issues

Subject: Business Critique
Pages: 6
Words: 1679
Reading time:
7 min
Study level: PhD

The description of the event or story

Benetton is an apparel company with a global presence in more than 120 countries. The corporation uses mega stores to provide high quality services for their clientele. This helps the company to generate revenue of two billion Euros annually. Some of the well known brands, which belong to this company are; Nordica, Playlife, Rollerblade, Killer and Loop Prince. The company produces most of its apparel in Europe while the remaining proportion comes from either India or Turkey (Borgerson et al. 215).

In as much as the organization is very active in promoting the ethical perspective of its operation, it fails to marshal its employees to project the positive image on its customers. The aim of these efforts includes promoting the positive image that emanates from the headquarters and its implementation process at the management level. The local stores do not take part in the implementation of the trade events. The case shows how ethical issues affect the identity of the organization. When an organization fails to successfully integrate and implement ethics in its’ entire system, it begins to encounter ethical issues that may damage its image.

The business ethics issues the firm encounters

Ethical decisions are very important in any business venture; it determines the growth pattern by providing a framework in which client’s satisfaction becomes a paramount issue. A business has to make these decisions in areas such as; advertising, personal selling, contracts, and pricing. When a firm ignores unethical practices in such areas, it cannot claim to uphold ethical virtues, and its’ likely to face external pressures. In this case Benetton, a multinational business, has to pay more attention to its’ ethics because of its multinational business approach, there is tendency of it being under watch by groups internationally. Despite this requirement, Benetton still encounters various ethical issues. From this case, Benetton is experiencing different ethical issues discussed below (Borgerson et al. 216).

Ethical issues from trade events

Benetton shows poor communication in its trade shows. Communication in any organization is important because it address the issues affecting clients. Benetton as a multinational business career, its responsibility of communication through Fabrica company, which holds the company’s strategic communication channel is not effective. It communicates to the clients to know Benetton and what they stand for in their business segment. Most of the strategies Benetton corporate communications channel expresses its visual identity. Some of these communications are controversial. For example, their marketing images are under criticism for taking advantage of difficult situations to benefit their business. In fashion shows some employees do not participate in this decision and hence integration of ethical values in communication is a major challenge.

Ethical issues from the contract employees

Employees are important in creating and maintaining a good organizational image. They are responsible for ensuring business ethics violation is under control. Benetton has ethical issues arising from some of its employees. For example in a fashion show, there was an exchange with a hired DJ. The DJ did not play Benetton’s music. He ignored Benetton options and plays the music that he prefers. This reveals the gap between the corporate goal and local practice. On the other side, individuals representing Benetton in fashion shows did not express expected ethical values. Benetton does not involve different employees in various regions with their ethical values based on geographical aspects. For example, the public relations consultant, one of those attended the trade show, did not express ethical values of the company. Being a public consultant officer, the expectation is that he or she coordinates the company’s ethical values nicely in various business environments.

Ethical issues from the retail managers

Expressing the ethical values by the managers is important in creating a good organization identity. Managers should recognize ethical values of their organization. Benetton’s manager had difficulties in expressing ethical values in their respective environments. Interviewing some of the managers reveals some inconsistencies in the firm’s internal communications avenues. Benetton’s channels of communication are ineffective. Retail managers do not make enough behavioral artifacts to express ethical connections to the company. Improper communication can, therefore, bring misunderstanding in the business management.

Ethics are important in strengthening a corporate identity. Considering the above ethical issues Benetton should strike means of avoiding pressure from external groups. Communication channels in this corporation should undergo a thorough review. The contract employees need awareness on the corporation ethics for them to work efficiently. Last the retail managers should maximize incorporation of ethical values in their respective retail environment (Borgerson et al. 209-223).

Analysis of the business ethics issues involved

There are some aspects of corporate identity important to the business. When neglected the image of the corporate faces a major challenge. Ethical issues are critical to a business. Benetton have various ethical issues that need redress. They are ethical issues emanating from trade events, contract employees, and retail managers.

Ethical issues arising from trade events. In recent time, business is increasingly engaging in trade shows and events. Through exhibitions the businesses are able to meet new customers and therefore increase its sales. These are the motives of the businesses that engage in trade shows and trade events. Despite this, it is important for ethical values of the business to take a centre stage during these events. Like in the case of Benetton we realize that ethical values are sometimes missing in most of its trade events and shows. This affects the corporate identity. Exhibitors in the trade shows and events are usually under pressure from the top management. Their expectation is to attract customers, increase sales, and bring other desirable achievements to the company (Alessandra et al. 1). Unexpectedly these exhibitors do not have the right road map to achieve these items. From this, the exhibitors participating in the trade shows and events are likely to violate ethical values of the company in order to achieve the desires of the company. It is important to preserve business ethics when one is participating in trade events. In trade events, the company communicates with its customers and stakeholders. Communication used should not violate ethics of the business. For instance the case of Benetton, use of visual images in their communication violates the company’s ethics, the images meant for making profits takes advantage of the less fortunate. In trade events, employees should also participate and maintain the value of the company in the trade events. They should have information about the needs of the company and know how to conduct various plans for the company. These will help them in not giving out the secrets of the company to unauthorized persons (Nelson 237).

Adherence to good ethical issues is absent for those employed on contract. Contract employees do not take many hours to work for the business. They come to an agreement with the business on matters of time and task allotment. Contract employees may not have enough information about the business ethics. When working for the business they may end up violating some of the business ethics. A good case involves a DJ hired in the fashion show plays a different kind of music contrary to the expectation of his clients. This violates Benetton’s ethical values. It is important for the company to ensure that their employees on the contract do not violate their ethical values. When a contract employee violates the ethical values of the company he or she violates the rules of the contract. Violation of terms and conditions destroys the business image. Harman says that in cases where a contract breaches ethical issue, the contract becomes void (328). Even though the contract becomes null and void in such events its effect becomes a lasting impression, the image created will haunt the firm for many years. The image will remain in the customers mind making them to have some negative perception about the business. It is therefore important for the businesses to ensure that their contract employees learn and express their set ethical values. This will help the company to maintain its corporate identity even after their contract duration is over. On the other hand contract employees should ensure they understand the corporate ethics of the company to avoid violating its’ ethical values, which is likely to destroy the corporate identity.

Ethical issues arising from retail managers. Retail managers are closer to the consumers, and hence they are the source of information from the consumers to the top management. They are to express ethical values of the corporate in the retail environment. They should therefore express ethical values of the company despite the pressure they go through. When retailer managers violate ethical values of the company they will cause more harm to the corporation because they are the ones who are near to the consumers. Retail managers should ensure that they recognize the value of customers (Bhatia 131). A retail manager will recognize the value of customer when he expresses the ethical values of the corporate. These means, they should ensure that well coordination with the top management in charge of implementing ethical values in the business. In the case of Benetton one of the retailer managers complains of fashion stores as a disorganized store. He further says that he does not know the corporate public relation consultant. It is important for the manager to ensure he coordinates with the top management for easier expression of ethical values in the retail environment. Last, the retail manager closeness to the consumers, should deal with ethical issues confronting them. This is important as it helps deal with the increased competition in the corporate world, and also retail industry which currently, “promises a profitable growth path” (Mathur 6).


Violation of a corporate ethics can subject the business to a bad image towards its customers. It is therefore important for those responsible in carrying out the corporate assignments, to ensure they do not violate the set ethics. When ethical issues arise the corporate should try to handle them immediately to avoid loosing customer value. By doing this the corporate will develop its identity and communicate its ethical values.

Works Cited

Alessandra, Tony, Steve Underation and Scott Zimmerman. The Platinum rule for trade show mastery: the expert exhibitors guide to profit producing trade shows and corporate events. New York: Platinum rule press, 2008. Print.

Bhatia, Subhash. Solid and Hazardous Waste Management. Atlantic Publishers and Distributors Pvt. Ltd. New Delhi: Atlantic Publishers & Dist, 2008. Print.

Borgerson, Janet, Jonathan Schroeder, Martin Magnusson and Frank Magnusson. “Corporate communication, ethics, and operational identity: a case study of Benetton.” Business Ethics, A European Review 18.3 (2009): 209–223. Print.

Harman, Laurinda. Ethical Challenges in the Management of Health Information. 2nd ed. Sudbury, MA: Jones & Barlett Learning, 2001. Print.

Mathur, U.C. Retail Management: Text and Cases. New Delhi: I.K. International Pvt Ltd, 2010. Print.

Nelson, Brian L. Law and Ethics in Global Business: Integrating Law and Ethics into Corporate Governance around the World. Routledge: Taylor and Francis, 2006. Print.