Introduction
In this report I will be evaluating the impact of Lush’s ethical behaviour on stakeholders
including employees, investors and consumers. Additionally, I will be providing
recommendations for how Lush can further improve their ethical behaviour.
Fair Trade
Fair Trade is the movement from goods from producers to
sellers, with the assurance that producers are paid a fair price
for their work in return for using environmentally friendly
growing methods. A negative effect of Lush supporting Fair
Trade is it expensive for Lush to implement this policy and
continuously show support of the movement. This is due to the
fact that paying producers a larger amount to ensure they
receive a fair wage means Lush will be receiving a lesser
percentage of profit per product sold. As a result of this Lush will
most likely have to price their products at a higher price than they originally would to make
up for the loss of money given to producers.
A negative effect of Lush supporting Fair Trade on employees is, with the fair trade
movement producers in the developing countries earn a larger salary than they did before.
To make up for the change in profit percentage, employees of Lush will be expected to sell
more products than they did before to make up for the change in profit per item.
Furthermore, this could result in employees losing motivation as a result of the increased
pressure from managers and supervisors.
A negative effect of Lush supporting Fair Trade on investors is it is very expensive for
businesses to become certified as fair trade. This means investors would not receive a large
return on their investment during the time period when the business is attempting to
become certified. This is due to the fact that they will have to invest a large percentage of
their profits back into improving the business. Furthermore, Lush is not currently Fair Trade
registered which makes many consumers question the validity of their fair trade claims. This
can discourage many potential customers from purchasing products from the business.
A negative effect of Lush supporting Fair Trade on consumers is, due to the fact that the
process of fair trading means producers will be receiving a larger wage than they did
originally. This means consumers will have to pay a ‘premium’ price on products from Lush
even though the products are not certified Fair Trade. Therefore, if customers want to
receive the high quality products they get from Lush they have no option buy to pay the
premium price. Whereas a bottle of Vaseline cream is priced at £4 a bottle of Lush Body
cream is priced at £23.50.
In this report I will be evaluating the impact of Lush’s ethical behaviour on stakeholders
including employees, investors and consumers. Additionally, I will be providing
recommendations for how Lush can further improve their ethical behaviour.
Fair Trade
Fair Trade is the movement from goods from producers to
sellers, with the assurance that producers are paid a fair price
for their work in return for using environmentally friendly
growing methods. A negative effect of Lush supporting Fair
Trade is it expensive for Lush to implement this policy and
continuously show support of the movement. This is due to the
fact that paying producers a larger amount to ensure they
receive a fair wage means Lush will be receiving a lesser
percentage of profit per product sold. As a result of this Lush will
most likely have to price their products at a higher price than they originally would to make
up for the loss of money given to producers.
A negative effect of Lush supporting Fair Trade on employees is, with the fair trade
movement producers in the developing countries earn a larger salary than they did before.
To make up for the change in profit percentage, employees of Lush will be expected to sell
more products than they did before to make up for the change in profit per item.
Furthermore, this could result in employees losing motivation as a result of the increased
pressure from managers and supervisors.
A negative effect of Lush supporting Fair Trade on investors is it is very expensive for
businesses to become certified as fair trade. This means investors would not receive a large
return on their investment during the time period when the business is attempting to
become certified. This is due to the fact that they will have to invest a large percentage of
their profits back into improving the business. Furthermore, Lush is not currently Fair Trade
registered which makes many consumers question the validity of their fair trade claims. This
can discourage many potential customers from purchasing products from the business.
A negative effect of Lush supporting Fair Trade on consumers is, due to the fact that the
process of fair trading means producers will be receiving a larger wage than they did
originally. This means consumers will have to pay a ‘premium’ price on products from Lush
even though the products are not certified Fair Trade. Therefore, if customers want to
receive the high quality products they get from Lush they have no option buy to pay the
premium price. Whereas a bottle of Vaseline cream is priced at £4 a bottle of Lush Body
cream is priced at £23.50.
