Sport direct plc.
Sport direct International plc is a British retailing organization. The company was founded 35 years ago which was in the year of 1982 by Mike Ashley in Maidenhead as a single store under the name of Mike Ashley sport. Preston Sports shop was formally established 2 years later in London and the company had 12 stores by 1992. The number of the retail stores grew to 50 in 1995- 1996 when the store switched their name to Sports Soccer. The head office and warehouse headquarter also relocated to Dunstable. "Sports Direct is the UK's dominant sports retailer by revenue and operating profit and the owner of a significant number of internationally recognized sports and leisure brands" (Sports Direct International plc,2008).
Mike Ashley, the founder of the Sports Direct in 1982 was the single proprietor until the Groups' listing in March 2017 and authorized to be the Chief Executive in September 2016. Mike Ashley has a very vital role in the group as he has the key skills in formulating the approach and the vision of the group as he has over 30 years' involvement in the sports retail business with sport direct. (Sports Direct International plc,2017)
That company known as a familiar and victorious company until the company has been discovered for the infringement and being unethical to their workers where they pay their employees below than the minimum wage, held back their employees at the end of every shift and refused to attend the parliament to explain the working practices at the firm. This essay is going to further discuss the unethical action that was taken by the firm and the impact of the action.
Mike Ashley, the director of the company may face being expelled from the company for being unfair to their employees and for breaking the law when the company failed to pay the minimum wage for the workers. This is because the company paid the employees for the hourly rate of pay lower than the base wage. The employees get paid 6.50 per hour while the national minimum wage for the United Kingdom is 6.70 per hour (Goodley, 2015). The staff of the developing retail store acquired to hold back at the end of their shifts which is unsalaried and search the security before leaving the premise warehouse. Plus, the workers even get a deduction from the wage even if they are being late for clocking in for only one minute.
Notwithstanding all the hardness that was being handled by the employers, they also:
· Get fired if they are not working fast enough.
· Workers only permitted to wear Primark's uniform whenever in the warehouse.
· staff was given "a strike" for Error, excessive chat, intemperate toilet breaks, lose focus while working, etc. These strikes will cause the workers to get discharged from employment once they had all the six strikes.
(Goodley,2015)
‘Culture of fear.'
The workers tend to afraid to the manager rather than respect them in the warehouse. The idea is that the company lack of professionalism which differs by the way they approach their employees and the powers that were given to the managers where the employees still need to face condemnations even though they have worked as hard and become as diligent as they can.
The act that was taken by the company has resulted in the culture of fear within the employees that serve for the retail store. The workers are hesitant to speak out about the unethical issues that happen in the warehouse as they afraid they would suffer their employment. This can result the workers will struggle even when they are in a poor or unhealthy condition that could create a significant safety and health risk. Goodley (2015) highlighted that the stern culture in the warehouse has caused staffs being frightened to address out about low pay and conditions as they afraid of instantly losing their works. Sports Direct's actions do not only harm their workers but also harms the workers family as the worker's kids as they need stay alone in the house whenever they caught by illness in school. This is because their parents still need to work due to the ‘unreasonable' policy that has been created by the Sports Direct Company. "Local primary schoolteachers have told the Guardian that pupils can remain in school while ill – and return home to empty houses – as parents working at Sports Direct are too frightened to take time off work" (Goodley,2015).
Moreover, one example that could show that the policy that was created by Sports Direct company as "unreasonable" that is concerned with health and safety issue when a woman who is working at Sports Direct warehouse gave birth in the toilet. The reason for this case to occurs is that the worker is scared to be fired and lose her employment. "A total of 110 ambulances or paramedic cars were dispatched to the Shirebrook warehouse's postcode between 1 January 2013 and 19 April 2016 with 50 cases classified as "life-threatening", including chest pain, breathing problems, convulsions, fitting and strokes, and five calls from women suffering pregnancy difficulties, including one woman who gave birth in the toilet in the warehouse" (Rodionova,2016).
Unethical leadership and organizational culture
The founder of the Sports Direct's company is responsible and summoned by the parliament due to the unethical actions that were taken by the company. "Sports Direct's founder Mike Ashley has challenged the authority of a parliamentary select committee by denying appearing before MPs investigating pay and working conditions at the retailer, despite being formally summoned" (Goodley,2016). This clearly shows the unprincipled leadership and organizational culture in Sports Direct's company.
Kouzes (2010) highlighted that a relationship between people who prefer to follow and the those who pursue to lead as the definition of leadership and the leadership considered to be successful depending on how well people serve and participate together.Further, Yukl (2002) considered that the leaders influence the set of ethical toward the firm as a whole. For instance, a positive ethical environment could be practice in a firm if the directors of the company encourage ethical action which could influence others, which can eventually stop unethical practice. On the contrary, supports for the whole firms and the workers to act unethically might happen if the leaders do not promote ethical action. (Mayer, 2010). Zahra et al., (2005) noted that superior management as a firm-based part of their structure for considering best management Fraud.
In Sports Direct's case, unfortunately, their leaders' short-termism and egoism encouraged the organizational atmosphere to be unethical. Mike Ashley, the director of the company who is accountable for the entire staff that serve for part-time that are employed on zero-hour contracts at a time when twenty thousand of full-time workers are about to cash in bonuses of up to £100,000 as stated by Goodley (2010), show an immoral manner as a director in that retail store with denying attending the parliament before committee investigating salary and working. Insulted committee members by calling them a joke also created a bitter fight among Ashley and MPs.
Goodley (2016) stated that Ashley defended himself by stating that Sports Direct's workers only get paid lower than base wage at a particular time because they were held back at the end of their shift and searched by security before leaving the warehouse. Unfortunately, that single reason could not defend himself as the workers of the company was being treated not like a human due to the ‘unreasonable' policy that obviously creating an adverse impact on the workers.
While the general secretary of the TUC, Frances O'Grady, and a spokesperson for the Department for Business Innovation and Skills both agreed and highlighted that every worker has the right to get at least the minimum wage for each minute they are ordered to be on the business premises (Goodley,2015).
Conclusion
The unethical decision that taken by the Sport Direct's plc Company has resulted adverse consequences and impact not only for the employees that are working for the company, but also reputation of the company itself where Mike Ashley, the director of the company may face being disbarred from the company, creating culture fear in the warehouse and jeopardising the worker's health and safety.
As a leader in a company, Ashley plays an important role in reconstructing sport direct's policy on diversity that is unreasonable and unacceptable for the employees. Those policies that are going to be reconstructed need to be crafted to be equal. Ashley responsible to reconstruct the company's policy to be reasonable to every employee and can create a happy and convenient environment for them. One of the adjustments that could be done in repairing the company's policy is by making Pinterest Company as a role model. Smith (2016) stated that Pinterest gives three paid months off, added with an additional month of part-time hours, and two counselling sessions to create a plan to re-enter the workplace which is a bizarre take on the parental leave policy. This policy also gets 4.7 out of 5 overall benefits rating. This action could enhance the development of the workforce and boost the enthusiasm of their employees towards bringing the company to obtain success in the future.
Bibliography
- Avolio, B. J., et al., Leadership models, methods, and applications. Handbook of psychology, 2003.
· Goodley, S. (2016). Mike Ashley admits Sports Direct staff were not paid minimum wage. [online] the Guardian. Available at: https://www.theguardian.com/business/2016/jun/07/mike-ashley-admits-sports-direct-staff-were-not-paid-minimum-wage [Accessed 3 Nov. 2017].
· Goodley, S. (2016). Sports Direct secret worker on climate of 'fear and pressure'. [online] the Guardian. Available at: https://www.theguardian.com/business/2016/jul/20/sports-direct-secret-worker-zero-hours-contracts [Accessed 3 Nov. 2017].
· Goodley, S. (2016). Sports Direct founder Mike Ashley snubs call to face MPs. [online] the Guardian. Available at: https://www.theguardian.com/business/2016/mar/21/sports-direct-founder-mike-ashley-snubs-call-mps-parliamentary-select-committee [Accessed 3 Nov. 2017].
· Goodley, S. (2015). Revealed: how Sports Direct effectively pays below minimum wage. [online] the Guardian. Available at: https://www.theguardian.com/business/2015/dec/09/how-sports-direct-effectively-pays-below-minimum-wage-pay [Accessed 3 Nov. 2017].
· Kouzes, J. and B. Posner, The leadership practices inventory: Theory and evidence behind the five practices of exemplary leaders. Unpublished document. Retrieved February, 2002. 12: p. 2010.
· O'Reilly, N. (2015). Company directors face criminal charges over redundancies. [online] Personnel Today. Available at: https://www.personneltoday.com/hr/company-directors-face-criminal-charges-over-redundancy-consultation-rules/ [Accessed 3 Nov. 2017].
· Rodionova, Z. (2017). The 7 most shocking testimonies from workers at Sports Direct. [online] The Independent. Available at: http://www.independent.co.uk/news/business/news/sports-direct-mike-ashley-worker-conditions-minimum-wage-ian-wright-investigation-a7149971.html [Accessed 3 Nov. 2017].
· Smith, J. (2016). 17 incredible perks companies like Google, Facebook, and Airbnb offer their employees. [online] Business Insider. Available at: http://uk.businessinsider.com/perks-companies-like-facebook-and-google-offer-their-employees-2016-9 [Accessed 3 Nov. 2017].
· Sportsdirectplc.com. (2017). Company History. [online] Available at: http://www.sportsdirectplc.com/about-us/company-history.aspx [Accessed 4 Nov. 2017].
· Yukl, G. (2006). Leadership in organizations (6th ed.). Upper Saddle River, NJ: Pearson-Prentice Hall
· Zahra, S. A., Priem, R. L., & Rasheed, A. A. (2005). The antecedents and consequences of top management fraud. Journal of Management, 31(6), 8
No comments:
Post a Comment