The global economy is currently undergoing a transitional stage. This stage is expected to spawn several changes in the hierarchy and the influence of the economy of the word throughout the world. This is helped in part by the rise of the emerging economies such as China, India, Brazil and Russia and partly due to the dwindling powers and influence of the Western powers at the global stage (WBCSD, 2000). This is the case with their economies in crisis. An example is the Eurozone crisis that s ongoing with Greece. This crisis is threatening to pull apart the European Union that has served Europe over the last years on the global stage. The economy of the biggest economy in the world, the United States, is not doing better either. In fact, the 2007/2008 economic crisis that affected the entire world emanated from the United States. This has weakened the influence of the U.S. in the global economic matters. The U.S. has to deal with a massive debt to China and the biting unemployment. These are problems that the U.S. was not dealing with in years past (Hillman & Kein, 2001). This wobble by the West has coincided with the astronomic rise of the Chinese economy to become the second-largest in the world in the United States. The Chinese astronomical growth is joined by the equally impressive elevation of the Brazilian and Indian economic stories. These are the countries that were crucial in the alleviations of the effects or the impact of the economic crisis of 2007/2008. With most countries in the West opting for bailouts and quantitative easing or other opting for austerity, these countries were instrumental in these measures.

The corporate social responsibility is a strategy or part of a strategy of a business or company in the big picture set up. The CSR strategies are calculated to benefit the company in society. A study of the CSR of companies or an industry, therefore, involves an analysis of the traditions and customs or the norms of the industry. This paper will review and analyze the individual CSR policies adopted by companies globally. The paper will then carry out an analysis of the CSR in China and the Chinese firms. This will then be compared to the CSR practices in the United Kingdom (Hale & Wills, 2005). The role that CSR plays in society will also be analyzed. CSR is multifaceted when it comes to its benefits to society and businesses. CSR can act as a connection between the business and its customers and society in general. This way, the CSR policy can benefit the business in terms of reputation and forging a lasting bond between business and society.

CHAPTER I: INTRODUCTION

1.1 Background Analysis

The relationship between companies and the public is crucial to the success of a business. The public forms the clientele or the customer base of such companies. On top of selling services and goods, these companies need to establish good will with the public that they need to be their customer base. This has led businesses to consider or take into consideration issues that are pertinent to society. These include issues such as environmental issues and the potential damaging impacts that neglecting the warning signs of global warming and climate change would do to society (Greenfield, 2004). This has been occasioned by the increased awareness of the public to the potential effects of climate change and the exacerbation that lack of action would cause. The public pressure has also led o political action. The leaders across the world have come to an agreement that something needs to be done to cut the carbon footprints that these countries make in their emissions of greenhouse gasses into the atmosphere (Greenfield, 2004). There are other social issues or ills that the companies and corporations have been forced or prompted to address. These include disease, poverty, and other issues that members of society face. The companies and businesses are an extension of society and, as a result, have a responsibility of making society a better place. The challenge for these businesses is how to implement these duties and keep their responsibility and at the same time keep a business model that achieves the goals and objectives that the firms have set. This is especially an issue when it involves the firm spending significant amounts of money on such responsibility duties and affecting the profitability of the firm. These businesses have to devise ways or strategic moves that will enable them to harmonize the conventional business models. These are focused on running the business in the blue (profitability) and the corporate social responsibility that the business has or owes society in which it operates.

The small business sector is crucial in China. It contributes to approximately 70 percent of the exports that China gives to the international markets such as the United States and the European Union. This means that the industry permeates society intricately, and their reach is extensive. This means that the CSR mounted by these small businesses is crucial to society and collectively, it is massive in its impact in touching people’s lives. These companies also have to take care of their workers or employees. The needs and working conditions that these companies provide to their workers are crucial to their CSR and reputation as well in society. This has potential bearing in the market as well. Issues such as low wages, poor working conditions, child labor, are some of the pertinent issues that can potentially harm the reputation of a business in the market (Greenfield, 2004). As part of its CSR, the company needs to ensure that the employee pool is well taken care of in terms of working conditions as well as remuneration. Disclosure is also crucial. This involves the communication between the business and the customers and other stakeholders such as investors or potential investors as well as the shareholders in other cases. With the advent of quick and reliable communications technology, this has become increasingly easy to carry out. For example, the use of social media is a godsend for businesses (Wood, 1991). Not only can social media be used in marketing and sales, it can also be used in official or unofficial communication. Such communication can be on issues involving the business’ corporate social responsibility strategies or activities in which the business is involved in society.

China is fast emerging as the biggest and most prominent fashion center in the world. The low costs of production and labor coupled with the availability of raw materials within China or sourced from the region have made China a hub. It means that most of the fashion companies ranging from the apparel, textile, clothing to the jewelry industry as well. The major corporations in the fashion industry have taken most of their activities such as production and packaging to China (Greenfield, 2004). This has added to the development of a formidable fashion industry. The Chinese fashion industry is boosted by the growth of a massive middle class. This has coincided with the economic growth that China has witnessed in recent decades. This middle class has a massive spending power. This means that the fashion industry has a huge customer base in China (Hill & Cassil, 2004). Coupled with the international market that has the equally high demand, the fashion industry becomes a huge hit in the country.

However, the growth of the Chinese economy, as well as the rise of the fashion industry, faces massive challenges in the Chinese society. The local businesses, as well as new entries into the Chinese consumer market or the Chinese fashion industry, will require an understanding of these dynamics and changes that the country is undergoing. Some of these issues include the social and economic upgrading that the society in China is undergoing (Hart, 1995). There is also the influence of the Western culture that is visible in the fashion and luxury goods industry. These affect the spending patterns of the customers. The political situation in China is also another factor to consider (Hart, 1995). The authorities retain a tight grip on the business sector. There are freedoms, and most of the conditions and provisions made by the World Trade Organization are implemented. However, the government retains the right to intervene or make requests that might violate the clientele privacy. This puts some of the fashion industry businesses in a tight spot (Hart, 1995). This is especially difficult for some of the Western corporations that are used to the freedoms and the free reign they are given in the market. Most of the businesses self-regulate through the dynamics of demand and supply. The issues surrounding the environmental conservations and the movement to ensure that the industrial sector is compliant with the eco-friendly provisions and adheres to the minimization of the carbon footprint as well as the other greenhouse gasses (Worldwide Responsible Accredited Production, 2011).

In the past, companies had one aim or responsibility, and that was to ensure that the company was profitable at the end of a fiscal year. This meant that these companies aimed to make profits and satisfy the targets that are set by their shareholders. This meant that these companies concentrated on their aims and, as a result, neglected the needs of society. This means that some of these businesses had activities in their supply chain that could potentially cause harm to the environment or society at large and they went ahead and carried out these activities. These led to massive environmental degradation and pollution of the environment such as rivers and he air (Hart, 1995). This sometimes led to adverse effects such as a disease caused by the effluents and discharges into the water. Such diseases as cancers and organ failure resulted from such uncontrolled pollution. However, the world today has transformed. Companies are held comfortable for the effects or the impacts of their activities. This can be observed in the number of suits or class actions that these businesses have had to settle after causing damage. This is a major motivation for firms to adopt sustainable models and behave responsibly (Hart, 1995). They have inculcated society in their deliberations, and this makes a major difference from the past.

1.3 Problem Statement

Corporate social responsibility is a crucial part of business today. It is the main avenue through which businesses interact with society. What is the motivation for CS? Are companies mainly focused on the marketing value of engaging in CSR? Is CSR an extension r offshoot of marketing strategies by businesses? These are the questions that can help analyze or reveals the role of CSR in both societies and business. Businesses and companies are a crucial part of society. The role that these businesses play in the society is crucial and helps in improving the socio-economic dynamics of society. Issues such as the creation of employment opportunities and the improvement of the economy have a direct impact on the ways of life of a people.

In today’s world, the development models have to be tailored to reflect the reality in the external environment of the businesses. This reality is that the society is aware of the role they play in business, and thus they can demand or expect the businesses to play their role in society. This includes ensuring that their supply chain does not carry out activities that can cause the endangerment of the environment in which they operate. They are also expected to contribute to research and development as well as high-level innovation to ensure society is a better placed than before. These businesses are also expected to handle or help with the tackling of other social issues or ills that the companies and corporations have been forced or prompted to address. These include disease, poverty, and other issues that members of society face. The companies and businesses are an extension of society and, as a result, have a responsibility of making society a better place.

In as much as the CSR and its application to businesses and the production supply chain have increased, there is room for improvement. The CSR policies have been largely misused. Here, businesses carry out cutting edge marketing in the form of CSR. Marketing is not a bad thing for businesses; it is necessary. However, it is wrong to market instead of engaging in proper CSR. The CSR policies or moves are aimed at ensuring the firm fulfills its obligations to society, if this brings that firm business success, it is not wrong. As a result, there are ways that the corporate social responsibility can be improved. In China, the world’s leading exporter, there is a need for reform in the sector of CSR. Firms are destroying the environment and increasing the carbon emissions to the atmosphere markedly. This needs to be regulated. Therefore, the CSR policies and its application in society need to be improved. This research targets an analysis of the ways that CSR can be improved in China. This objective will be met by this study.

1.4 Research Purpose and Objectives

The aim or purpose of this research is to carry out an exploration of the corporate social responsibility among the Chinese fashion industry. The research aims to bring out an understanding of the CSR policies and what informs these policies among businesses. The relationship between the customers/consumers with the businesses establish the dynamic that exists between the businesses and the customers as well. The supply chain of a business has always been designed to help the business to optimize the resources, both internal and external to its advantage. This means that the business ensures that it utilizes its competencies to achieve its goals and objectives. This study will analyze this dynamic to establish how the relationship between the company and the customers or consumers affects the CSR policy that the company adopts. Corporate social responsibility across the world has been misused. This means that businesses have used CSR as a marketing gimmick to gain customers and command loyalty from the unsuspecting consumer or members of society. This means that there is an improvement needed in the corporate social responsibility. Such improvement needs to target the foundation of the CSR. This is the will to give back and help society. This needs to be redefined to ensure that businesses have a clear distinction between CSR and marketing drives.

China is chosen for this study because it is a crucial and vital player in the international economic forum. The emergence of China as an economic powerhouse has been nothing short of a miracle. It has emerged as the second largest economy. It has the largest middle class in the world. It is the leader in exports as it is responsible for around 10 percent of all the exports in the world. China also has the fastest growing economy in the world at the moment with the rest of the Western economies facing significant challenges. The aggressive industrialization policy that China has adopted is responsible for powering it to the top of the exports ratings and the fast economic growth. This is due to a strong growth in gross domestic product (GDP) and an ever-expanding middle class. This also means that the small businesses that dominate the Chinese production industry also contribute to massive pollution. This makes China a major target in the on-going negotiations about sustainability and cutting on carbon and greenhouse gasses emissions by the industrialized and the industrializing powers. This presents a challenge among these firms. The issue is how they can balance the ambitious plans of the Chinese economy to grow at record pace and achieve first-world status and the sustainability and environmental conservation for posterity. Establishing this balance has been elusive so far. This study will investigate the possibilities of improving CSR in the Chinese market. To help in this study, the following research questions have been set to guide the study in its execution.

1.4.1 Research Questions

What is the current CSR in UK fashion companies?
What is the current state of CSR in Chinese fashion companies in China?

What should a fashion company to do CSR at external?

What lessons on CSR could be learned by Chinese fashion companies from UK fashion companies?

The questions above have been set to formulae the objectives that the study has set to achieve. The objectives are guidelines that will direct the moves within the research. They will dictate the methodology used and the type of data that will be used in the study. In this research, the objectives have been formulated based on the research questions. These objectives are as follows.

1.4.1 Research Objectives

To conduct an extensive literature review on the implementation and improvement of CSR to Chinese fashion business. For the implementation of the CSR, the study will focus on the formulation and how the policies are implemented and how the
To analyze extensively the current CSR activities, initiatives, and strategies that have been adopted by the Chinese fashion business
To analyze to successful cases from UK fashion companies. These are the cases where the CSR has been applied to the benefit of both the companies and the consumers as well as the society at large
To create an analysis of the findings from primary and secondary data and evaluate Chinese fashion companies to offer recommendations to improve them. The improvement will target the formulation of CSR policies and how the businesses can link their objectives and aim for their businesses with the expectations and responsibility bestowed upon them by society

1.5 Chapter Summary

This chapter introduced the concept of corporate social responsibility. The chapter has given an analysis of the position that CSR is at in society. The role that CSR plays for the businesses and the society has also been introduced. The chapter has also given a background analysis on which the study is founded. This forms the basis for the research. The background shows the use or the need create in society for the CSR policies. Businesses are an extension of society, they are important to society as they can be dangerous or potentially harmful. This is where the need for CSR comes. CSR not only ensures that the businesses give back to society; they also ensure that the behavior of the businesses does not put society in danger. The chapter introduces the aspect of sustainability and how businesses have adopted the eco-friendly polices to limit their impact on the environment. The chapter also introduces the research questions that will be used in the stud as well as the objectives set. They are the benchmarks for the research. They will guide the researcher in every step of the way. They also provide a mark for which the researcher will aim. The objectives help keep the research in perspective and in line to what the researcher needs to obtain at the end of the research. In this case, the objectives and research questions help keep the research in the CSR topic and help the investigation of the ways to improve CSR in China.

CHAPTER II: LITERATURE REVIEW

This chapter will give an overview and in some parts, an extensive exploration of the literature that has been published and that is relevant to the topic that the study is addressing. The pieces of literature that will be reviewed will the literature in the corporate social responsibility and the global fashion industry. This will narrow down to the corporate social responsibility in the Chinese fashion industry. The first part of this chapter will review the general or broad literature that analyzes and explores corporate social responsibility will be examined. This section is followed by the analysis of the pros of engaging in corporate social responsibility. This will analyze the importance of CSR to the business and corporate sector and the consumers or customers as well as the society in general (Davis, 1973). The chapter will then analyze the relationship between CSR and the performance of a business. The one relationship that will be specifically analyzed is CSR’s relationship with financial performance. Financial performance epitomizes the performance of the business in several aspects or sectors. This means it could represent the success or failure of businesses (Denzin & Lincoln, 2000). The discussion will then move to the analysis of the CSR aspects among the small and medium sized businesses, also referred to as SMEs. The chapter will then review the literature on the CSR policies and its implementation in the Chinese fashion industry.

2.1 Definition of Corporate Social Responsibility

There has been an upward surge of the corporate social responsibility over the years. It emerged in the 20^th century. However, a strong growth of the CSR was witnessed in the last six decades. In the early years, there was little literature to support CSR (Denzin & Lincoln, 2000). The reason for this was mainly down to the lack of extensive and substantive research on the topic. Initially, CSR was referred to as “social responsibility” (Denzin & Lincoln, 2000). This indicated a lack of true meaning of the term or it could also indicate an evolution in the meaning of the social responsibility that was the predecessor of CSR.

Today CSR is defined to consist of three crucial dimensions that guide its constitution and implementation in the society. The first dimension deals with the economic development that has an impact on the socio-economic responsibility of the society. These are the factors that affect the socio-economic welfare of the people. These include the employment or the creation of jobs in society as well as the maintenance of the competitive spirit in the market. A competitive market means that the bargaining power will shift to the consumer (DeMarris, 2004). This is because the consumer will have a wide array of options from which to choose. This means that these competing businesses will strive to win the customers through competitive pricing policies and the quality improvement of the products or services to give consumers value for their money (Denzin & Lincoln, 2000). This aspect of CSR can be measured through the use of economic value.

The second dimension deals with the obligations that focus on the development and preservation of human life values. This dimension cannot be measured through the use of economic value like the economic development dimension. Examples of these values include motivation and morale. These are referred to as the “socio-human responsibility”. The cover the values that make humans stand out (Davis, 1973). These are the values crucial to success. They also cover the values such as ethics and good practices in business. This dimension is, therefore, crucial in the CSR policy. This is because it will ensure that the business engages in activities that are not only beneficial to the business but takes into account the welfare of the society in which such businesses operate. The third dimension covers the simultaneous promotion of the socio-human and socio-economic responsibilities. This is aimed at ensuring the continuity of the effectiveness and vitality of the business or corporation (Dickson & Zhang, 2004). The social power of a business or corporation should be commensurate with its social responsibility. This means that the powerful corporations should take a huge chunk of the social responsibility. In cases where this does not occur or happen, for example when the social responsibility does not reflect the social power, the corporation might gradually lose its social power in society. This is referred to as the “Iron Law of Responsibility” (Dickson & Zhang, 2004).

CSR can be summed up in the figure below

Figure 1: Summary of CSR Initiatives

2.2 Role of CSR

The relationship between CSR and the society can be summed up in the figure below.

Figure 2: Relationship between CSR and the Society

CSR is a crucial aspect of businesses. There are several benefits that businesses or corporations can reap from engaging in CSR. Examples of such benefits include an enhanced reputation of the business in society and subsequently the market. CSR also leads to an increased competitive advantage (Dickson & Zhang, 2004). A good CSR policy will win the hearts and minds of the members of society who might develop loyalty towards a certain business or the products or/and services that this business puts in the market. This gives such a business a competitive advantage in the market over the competitors who lack a good and successful CSR policy (Dahlsrud, 2006). A good CSR can also enhance the ability of the business to attract talent in the market. This allows the firm to hire the talented staff that can help the firm in innovation and creativity. As a result, the profitability of the firm is also can be significantly boosted.

Image is crucial for businesses. The way the consumer market or the society views a firm or business has a direct impact on that firm’s success in the market. The image of the business affects the brand equity of the products in the market (Dahlsrud, 2006). This affects the competitiveness of such a product in the market. With the advent of globalization, the competition in the consumer market has increased significantly. This is because firms from the world can sell goods throughout the world (Dahlsrud, 2006). The level of competition, therefore, has increased significantly. Businesses have to have all the advantages they can get, and a good image is crucial. CSR can be used to foster a positive or good image of a business among the customers or the consumers (Dicicco-Bloom & Crabtree, 2006). Many businesses opt to engage in CSR activities in the hope that after helping society in several capacities, they will be rewarded in the market. Other businesses use CSR as a deliberate means to enhance the reputation of their businesses or firms. The reputation of a company is intricate and consists of several aspects touching on the business’ past, present and plans or objectives (Dicicco-Bloom & Crabtree, 2006). The reputation of a business refers to a collective analysis of the business’ past activities or moves and actions that it took in the quest to deliver to its aims and objectives and its stakeholders. This speaks to the dedication of a business and its willingness to keep its promises and to stick to its plans and achieve its objectives (Dicicco-Bloom & Crabtree, 2006). This also speaks to the business’ ability to make use of its internal core competencies to survive in an external competitive environment. The ability of the firm to keep its aims and objectives in check while at the same time engage in activities that are aimed to help make society a better and safer place.

The often made assumption by corporations is that a CSR strategy will always give the business credibility and favor among the consumers in society (Levy, 1999). However, this is not always true. The fact is; a CSR policy can have both negative and positive effects on the firm’s reputation. It can also affect the market standing and ability to compete favorably against the potent competitors in the market (Branco & Rogrigues, 2007). The motive of the company in launching a CSR campaign is crucial. The stakeholders have to be convinced that the motive that drives a company to launch such lofty CSR activities in society is not just for economic gain. If the motive is to help society and help in the efforts to make a difference, this will affect the company’s reputation positively. If the stakeholders are convinced that the firm is after economic value or economic gains using a CSR campaign, then the effect would be rather negative (Yoon, Gurhan-Canli & Schwarz, 2006). The company, therefore, needs to be consultative and genuine in its CSR activities. This is because a poorly thought-out CSR campaign might end up hurting the business reputation and the business will take severe hit or backlash in the market. It might even lose its market share and competitive advantage in the market.

A well thought-out CSR policy and one that is properly applied in society and the market can enhance the business’ reputation massively. A reputation enhanced by such CSR activities can propel the business to improved competitive advantage in the market. This is mainly because a good CSR campaign or initiative can set aside or distinguish a business from the rest in a market (Hillenbrand & Money, 2007). A majority of the corporate social responsibility literature available is sourced from studies that have been carried out in developed countries. These were studies carried out on companies or corporations engaging in CSR activities in developed countries. There limited research works or studies that have been carried out focusing on companies and small businesses in the developing world and especially focusing on the fashion industry. The resources available, the world culture and the infrastructure are different in the developed world compared to the developing world (Bailey, 2007). This means that the impact of CSR on the business as well as in society could be different in these two worlds. In this case, it is prudent to analyze and study the costs of launching a CSR camping or initiative compared to the benefits of such a campaign for the company as well as society. The contact of such a study and analytical investigation would be different countries (Bailey, 2007). This will enable the researcher to note the differences in the CSR policies between the developed and the developing world. The researcher will also take note of the different roles that CSR play in society between the developed and developing countries. This study will analyze the CSR policies and initiatives in the Chinese fashion sector. This will then be compared to the fashion sector in the United Kingdom (Bailey, 2007). These two represent the developed world (U.K.) and the developing world (China). This means that the research will be representative in terms of how the CSR is received and processed by society. This will also touch on how this affects the thinking of businesses in terms of policy and their performances in the market and financially as well.

2.3 Financial Impact of CSR

Several businesses and companies engage in CSR initiatives. Examples of such activities include activities and programs to promote the well-being of employees, development of recycling programs and the engagement in charities. Such activities are socially very beneficial to the society in which the firm or business operates (Nelling & Webb, 2009). However, this has fueled debate within the business circles about the benefits of carrying out such activities at all. This debate is fueled by the thinking that the coat of CSR activities could be more that the benefits that such campaigns. This, it is argued, does not make economic or financial sense. This argument is advanced mostly by the shareholders or people who stand to lose if the profit margins of the companies go any slimmer. As a result, they aim to reduce the expenses by such businesses as much as possible (Nelling & Webb, 2009).

A study of the literature on this issues shows that there are disparate arguments on the same aspects of the benefits of CSR activities for the firm. The agreement is that such activities are beneficial to the society socially. The impact on society is positive. The departure in literature occurs when the argument comes to the benefits to the firm, especially in terms of finances. Some researchers advance the thought that the engagement in CSR activities by a business leads to an increase or enhancement of the profitability of the firm (Boatwright, 1999). Other researchers advance the school of thought that there is no connection between the corporate social responsibility that the firm engages in and the profitability of the firm (Auperle, Carroll & Hatfield, 1985). This lack of agreement in literature has led to a focus on the relationship between the financial performance of the firm and the CSR activities in which it engages. This has been fueled because of the insistence of most businesses on the economic gain as a measure of the success of a business or a business model adopted by a firm (Pinkston & Carroll, 1996).

Previous research works have focused on the establishment of empirical evidence to show a link between the financial performances of a firm to the CSR campaigns I which such a firm engages (Waddock & Graves, 1997; Hillman & Keim, 2001). The results from these studies indicate a “loop” relationship between the CSR activities and the financial performance of such a firm. This means that CSR activities can lead to enhanced financial performance and that businesses that have enhanced financial performance have surplus resources to dedicate to the CSR activities (Nelling & Webb, 2009). Studies carried out by Scholtens (2008) further analyzed the dynamic of this relationship between financial performance and the CSR activities came to a conclusion that the financial performance precedes the corporate social responsibility activities more often that the other way is the case.

Overall, the literature and the findings draw from it point to a positive relationship between financial performance and the corporate social responsibility of a business. However, a crucial fact to be noted is that these studies were carried out by the big corporations and businesses in the United States. There is likelihood that the dynamics in the developing world are significantly different. The businesses in the developing world have not fully grasped the concept of CSR. They are unaware of the benefits that can be reaped from a good and well-thought-out CSR campaign or initiatives. They also think that CSR initiatives require massive financial investments and most of these businesses tend to shy away from CSR engagements (Kaufman, Ekalat, Nongluck & David, 2004). As a result, the results might not apply to the companies in the developing world and countries such as China, India, and Africa as well. It is also hard to extrapolate these studies to analyze the small and medium sized businesses in the developing world. These SMEs have different dynamics compared to the big businesses and corporations. Additionally, the SME sector in China, for example, is different from that in the United States. The differences come in the regulation and the production cost that is markedly cheaper compared to the West such as the United Kingdom and the United States. This dissertation will analyze the CSR in the fashion industry in China. The Chinese business market consists mainly of SMEs, this, therefore, means that the dynamics surrounding such businesses and the engagement is CSR will be studied. The benefits of CSR to these businesses as well as how they benefit society will be reviewed as well. This is why the net section will review the SMEs and CSR.

2.4 SMEs and CSR

The small businesses operate in the same market like the big corporations and multinationals. This means that they compete directly with these well-resourced companies with massive financial and human resources at their disposal. They have advanced and well-equipped research and development (R&D) centers. This enables them to forge ahead in the competitive advantage in the market through the use of innovation such as incremental or breakthrough innovations. The small businesses have to come up with their creativity and innovations if they are to compete favorably in the market (Schlegelmilch & Pollach, 2005). The big businesses engage in grand CSR activities in society. This has led to an increase I pressure for the small businesses to follow suit and engage in CSR activities in society (Schlegelmilch & Pollach, 2005). This pressure on the small businesses has led to some of them dividing their revenue and resources between growth and development and CSR activities. This sometimes is not successful, and it leads to the failure of such businesses (Faussin, 2008). Since most of the studies that have been carried out were done by the large corporations in the United States, the SMEs have received little attention. As a result, there is little literature available on the SMEs (Grayson, 2004). This is the case although 90 percent of the global businesses are small businesses. In China, the small business enterprises from the vast majority of the privately owned business; in fact, they constitute about 99 percent of the privately owned enterprises in China. The small business sector is crucial in China. It contributes to approximately 70 percent of the exports that China gives to the international markets such as North American countries and the European Union countries. This means that the industry permeates society intricately, and their reach is extensive.

Faussin (2008) asserts that the CSR among SMEs is misunderstood. He gives the following reasons as because such misunderstanding. First, CSR is not worth anything if it is not formalized. The SME sector has not formalized their CSR activities. Second, SMEs do not give reports on their CSR activities; as a result, the activities they engage in are not recorded and put in the mainstream data sources for such studies. CSR is a way for a business to interact and work with society. SMEs form the interphase between the consumers (society) with the big business. As a result, they are involved directly to society. However, the social power of these SMEs is small compared to the large corporations. As such, the competition between them is not fair and the big corporations end up winning. However, with creativity and innovative thinking, the SMEs can improve their profile and formalize their CSR activities and reap the rewards of such activities for society.

2.5 CSR in the Fashion Industry in China

CSR in the Chinese fashion industry is aimed at the facilitation of sustainability within the industry. This means that the growth and development of the fashion industry in China have to adopt the sustainable models of development. These include good management and the adhering to the labor regulations and good practice. This means that the employees and other stakeholders such as suppliers and competitors are treated in ways that are commensurate to the legal and ethical provisions of good business practice (Bhowmik, 2009). These businesses also have to take into account the environment. The activities they carry put in their supply chain management activities should be designed in a manner that reduces or minimizes the adverse or negative impact on the environment (Becker-Olsen, Cudmore & Hill, 2005). This is in line with the Chinese commitment to the world. The commitment is that it is putting efforts underway in China to reign in the industries and businesses in China that are contributing to massive pollution (both water and air). These efforts will also focus on the unacceptable emission levels of greenhouse gasses in the atmosphere.

China is in a transformative stage. The country is grappling with the transformation from the hitherto applied system of central economic planning to a more open and market-oriented economic setup. This change has led to the eruption of several challenges within the business industry in China. This includes the need in the Chinese business industry to improve local capacity (Branco & Rodrigues, 2007). There is also a need to develop and bring up to date the market regulatory framework in China. This needs to be updated to the international labor organization (ILO) as well as the World Trade Organization (WTO) levels. The fashion industry in China is experiencing the pressure to implement these changes (Birch, 2001). The major challenge facing the fashion industry in Chis the manner in which the environmental standards and the labor-related standards can be incorporated into the core business competencies and operations within the Chinese fashion industry.

Corporate social responsibility is crucial in the promotion of the sustainable value growth of the fashion industry in China. This is being implementation in the behest or compliance of the provisions of the Swiss State Secretariat for Economic Affairs (Birch, 2001). The fashion businesses and companies in China are urged to adopt good labor, management, and environmental strategies devised sustainability and their impact on the environment is minimal.

The SMEs in the fashion industry in the Chinese market are the major contributors to the fashion products. The major concern is the labor standards in these firms. These firms are often driven by the aim of being profitable. This leads them to adopt labor standards that do not comply with the international standards. This means that the employees are poorly paid, and the working environment is not a good as it is required to be according to international standards. Some of these firms also engage in hiring underage employees (Branco & Rodrigues, 2007). This is also referred to as child labor. This is in contravention of the provisions and regulations of the international labor and trade bodies. This is compounded by the inaction by the Chinese authorities. Although they are signatories to the WTO and ILO standards, they do not enforce these provisions in their local market (Branco & Rodrigues, 2007). Partly, it is due to the advantage that the poor pay offers the local Chinese businesses. They can offer competitive pricing policies in the market. This can be seen in the dominance of the Chinese exports to the major world markets such as the European Union countries such as the U.K., Germany as well as the United States.

The other challenge is how to create a balance to satisfy all the stakeholders of a business that a CSR policy is the right move for the business. There are different objectives and aims among the different stakeholders within the fashion industry. The stakeholders can be summed up in the table below (Branco & Rodrigues, 2007).

Figure 3: CSR Stakeholders

2.6 Chapter Summary

This chapter advanced an overview of the studies and research that has been carried out on the subject matter of the research. This is the CSR policies in the Chinese fashion industry. The chapter gave an overview and in some parts an extensive exploration of the literature that has been published and that is relevant to the topic that the study is addressing. The chapter reviewed the literature in the corporate social responsibility and the global fashion industry. This narrowed down to the corporate social responsibility in the Chinese fashion industry. The first part of this chapter focused on the general or broad literature that analyzed and explored corporate social responsibility. This section was followed by the analysis of the pros of engaging in corporate social responsibility. This section analyzed the importance of CSR to the business and corporate sector and the consumers or customers as well as the society in general. The chapter then analyzed the relationship between CSR and the performance of a business. The paper then focused on the analysis of the relationship between the financial performance of a firm or company to the corporate social responsibility activities that such a firm engages in the process. The discussion then moved to the analysis of the CSR aspects of the small and medium sized businesses, also referred to as SMEs. The chapter then reviewed the literature on the CSR policies and its implementation in the Chinese fashion industry.

CHAPTER III: METHODOLOGY AND RESEARCH METHODS

3.1 Introduction to Chapter

This chapter is going to review the methods and approaches that the study adopted. These are the ways that the research obtained the data from the field of study. This will include a review of the inductive methods applied in this study. The inductive approach was employed to obtain secondary data (Branco & Rodrigues, 2007). This is the data that is published and available from various sources such as journals, books, newspaper and magazine articles, as well as the internet and company annual publications. First the chapter will review the perspective of the research. This will give a bearing and background of the thinking of the researcher in the choice of approach (Branco & Rodrigues, 2007). This will set the intentions of the researcher clear, and this explains the choice of methodology and approach to data gathering and the intended means of analysis of the collected data. The chapter will then analyze the inductive research approach. This is the overall method that will be used in the study. The chapter will then review the philosophy of the research; here the interpretivism approach will be explained. The chapter will then review the data collection methods, and here the secondary data approach will be explained (Christi et al., 2009). Finally, the chapter will review the data analysis methods as well as the ethical considerations of the research.

3.1 Research Perspective

The study mainly relied on the inductive method of study. This was the guide in the data collection and the making sense of the data collected (analysis). Additionally, qualitative and quantitative data collection was also used in this study to achieve the objectives at the beginning of the research. The secondary data collection approach was employed. Secondary data collection was preferred because it is cheaper and faster to gather or obtain data from newspapers, annual report, the internet, journals and some books (Branco & Rodrigues, 2007). However, the primary data was avoided for this study; this is because it is hard to collect conclusive evidence or empirical actionable data that can be used to make conclusive inferences on the subject of study. As such, the research heavily relied on the secondary data approach.

3.2 Research Approach

3.2.1 The Inductive Approach to Research

The inductive approach to research takes a peculiar route in its study. This approach starts with the observations and then formulates the theories as the research comes to a conclusion. This approach involves the researcher searching for a pattern in the data and information available to him/her. The researcher then can establish patterns and commonalities or consistencies within the data from which they can establish theories to explain phenomena. These patterns are created or established through the setting and explaining a series of hypotheses (Christi et al., 2009). This means that at the beginning of an inductive research, there are not theories that can be applied. This gives the researcher the freedom to establish data and explanations about the objectives and the topic(s) that interests the researcher during the study.

The study begins with a broad ad detailed observations on a topic of interest; in this case the broad topic is the corporate social responsibility in the world. This then progresses towards an abstract generalization if concepts and ideas. The researcher, therefore, tends to begin with a topic and then develop empirical inferences and identify the correlations or the relationships as the research progresses. This model of research is illustrated in the figure below.

Figure 4: the Inductive Study pattern

3.2.2 Research Philosophy

The research will take the approach of both the qualitative and quantitative analysis. The qualitative approach will deal with the interpretive or the explanatory approach. Here the meanings and explanations of phenomena or observations made on the subject matter of the research topic will be obtained. This will be crucial data as it will attach meaning to some of the concepts and phenomena that will be observed in this research. The Quantitative approach will deal with the numerals. These are the numbers or the figures that will help explain the level and the status of the corporate social responsibility in the world as well as in the fashion industry in China. The philosophy of the research was the mixed approach. The two methods mentioned above when used in isolations will present data that is incomplete and is not representative. As such, the study opted to adopt the mixed approach where both of these approaches, qualitative and quantitative, were employed.

3.2.2.1 Interpretivism

This is part of the research philosophy. This analytical approach was used. Here, the Marxism method was employed to make meaning or give explanations to the social phenomena or to interpret social behavior in the corporate social responsibility issues.

3.3 Data Collection

Secondary data was the approach predominantly relied upon in this study.

3.3.1 Secondary Data

This is the data sourced from credible, peer-reviewed journals. This was main studies that have been carried out in the subject or related subjects. It this case, most of the data obtained was from studies conducted in the big companies in the United States. Although these studies are not representative of the developing world or the small business sector that is the absolute majority in the developing world, it can be used. China has 99 percent of its private sector being the SMEs. As such, these have to be taken into consideration in the secondary data sourcing and analysis. Secondary data is the published data, and the data collected in the past or other parties. This method was supported by the entire researcher. The secondary data will be collected from internet sources, textbooks, journals, books and the annual publications of companies that will be analyzed in this study.

3.4 Data Analysis

The data analysis will mainly take the path of qualitative and quantitative data analysis.

3.4.1 Quantitative Data Analysis

Quantitative data analysis methods can make great value, large amounts of qualitative data are attempted to be drawn from researchers to meaningful results. The main advantage here is that it provides a means to isolate large amounts of interfering factors, tends to obscure the main qualitative results. The quantitative analysis was used to draw graphs that would be representative of the status of the CSR initiatives in China. This was used to visualize the data and the status of the CSR activities in the fashion industry.

3.4.2 Qualitative Data Analysis

Qualitative Data Analysis (QDA) is in the range of processes and procedures, so we have a form of explanation, understanding collected, and we investigate the people and things moving interpretation of qualitative data. QDA is usually on an explanatory concept. The idea is to investigate the importance of the qualitative data and symbolic content. This was used to explain and attach meaning to some of the concepts or phenomena that will be observed. This helped give out a picture of the status of CSR in the world, Europe, U.K., China, and the Chinese fashion industry.

A combination of these approaches to data analysis was employed to give a true picture of the subject matter. The mixed approach allows the researcher the freedom to use both data sets. This is crucial as it means that the data obtained was good quality data. This implies that the inferences and the conclusions that are arrived at after the research can be actionable and useful for the industry and other stakeholders.

3.5 Ethical Considerations

Research is crucial for society, especially the concerned sector. In this case, the CSR activities and policies can be better understood and thus can be beneficial to society as well as the businesses that engage in such activities. Research ethics is when the individuals or people involved in the research or participating in such a study as this one are considered in the design of the research. The research has to consider the rights and the well-being of the participants before the aims and objectives of the research. The people come first. There are three objectives of research ethics. The first and most important objective is to protect people involved in the study. These are the participants or respondents or those that directly or indirectly help in the progress of the study. The second objective is to ensure that the research in the service of the people, groups and the way the whole community. This means that the big picture of the research is to benefit the wider society. The study has to make a contribution to the community. In this case, the business community and the society as well can benefit from a study of ways to improve the CSR activities in the Chinese fashion industry (Maak & Pless, 2006). Finally, the third objective, the study of specific research activities and projects for their moral reason, looking at the question of how risk management, protection of confidentiality and informed consent process.

3.6 Chapter Summary

This chapter has given an overview of the research philosophy that was adopted by the research. The chapter has analyzed the inductive approach that the research used in the study. The inductive approach used the qualitative and quantitative approaches to its study. These approaches have both been analyzed in the chapter. The chapter has also analyzed the data collection. It has given an in-depth analysis of the secondary data that was chiefly used in the study. The chapter has also analyzed the data analysis methods. These include the qualitative and qualitative data analysis.

CHAPTER IV: FINDINGS AND ANALYSIS

4.1 Current State of CSR in UK Fashion Companies

CSR in the U.K. is much advanced. The market models in operation allow open markets and competitive forces take control of the market. There is no interference or control of the market forces (Lozano & Murilllo, 2006). The fashion industry in the UK is one of the most vibrant industries in the country. It has a massive global appeal. Such an appeal forms the unique DNA of style ad product quality that the UK companies in the fashion industry produce. CSR is developed and is often employed by firms in the fashion industry (Christi et al., 2009).

The fashion industry in the UK has witnessed significant changes over the last few years. These changes have come as a result of the changes occurring in the external environment. These fashion industry firms in the UK were already engaged in CSR activities such as the provision of good working conditions as well as proper remuneration (Longenecker & Moore, 1989). Other factors such as pension and healthcare have also been incorporated into the CSR practices of the fashion industry firms in the UK (Gurgess, 1982).

The major changes to the fashion industry and the CSR activities they engage in have had notable changes as a result of the increased awareness of the potential harm caused by environmental damage. The core fashion supply chain of the fashion industry in China is illustrated in the figure below.

Figure 5: The Core Fashion Supply Chain

The entire supply chain of the fashion industry needs participate in the realization of the CSR of the fashion industry. The manufacturing sector is the biggest cause of pollution of both air and water. The UK is one of the signatories to the international provisions to curb the emission of greenhouse gasses into the atmosphere. This is aimed at managing the effects of global warming and climate change (Matten & Vrane, 2005). The environmental conservation is, therefore, part of the firm performance. CSR is one of the major aims of a firm, and most of the firms in the UK fashion industry are very involved with CSR activities in society.

The fashion industry is a major contributor to the economy in the UK. The industry contributes immensely to the socio-economic welfare of the country. The brand equity of the UK fashion industry means that it exports most of the products abroad. This is increasingly coming under threat from the cheaper options coming into the market from China and the East Asia region (Maicandan, Mansingh & Kumar, 2006). The producers and manufacturers in this region have a major advantage over hose firms in the UK of the low cost of production as well as lax rules when it comes to labor provisions on remuneration and child labor. They produce goods cheaply and sell cheaply while still making a profit (Lofland & Lofland, 1984). The UK industry has had their production industries, and activities moved to China and the region to have a chance of competing favorably.

One of the major contributions of the fashion industry in the UK is employment. This is illustrated in the graph below.

Figure 6: Summary of the Economic Contribution of the UK Fashion Industry

The CSR in the UK also has to consider the distribution of the units forming the supply chain of the fashion industry in the country. These are the independent units that help to make the industry a success (Brewer, 2000). Without involving all the parts of the industry, then the gains made will be useless as other units might work to reverse these gains. The fashion sector is divided into sections or units; these are illustrated in the graph below.

Figure 7: Proportion of Fashion in Total Sector (2014)

The CSR responsibilities are shared among these units of the fashion industry sector in the UK. This shows the major level of maturity and advancement of the industry. There has also been a development in the CSR activities in the UK fashion industry. CSR has evolved from being a duty to being a strategy. Most of the firms in the fashion industry work to create a good reputation (Brewer, 2000). This stands them in good stead to establish a dominant market share. As a result, the firms strategize on the CSR activities. These are activities that are aimed to create interest in society and win over the hearts and minds of the consumers that they target. This means that more and more firms are taking to the adoption of lofty CSR activities or strategies as part of the business plan or strategy to grow and develop the industry (Brewer, 2000). The industry has had varied gains using this approach but, it is a success in the market and can win the approval of the public for a company.

4.2 Current State of CSR in the Chinese Fashion Companies

The fashion industry is a crucial part of the ever-expanding and growing economy of China. It has several socio-economic contributions such as job creation and contributions to the national GDP through exports and revenue contribution (Margolis & Walsh, 2001). Being such a crucial cog in the Chinese economy, the fashion industry has a massive responsibility to society. This is reflected in its activities or initiatives of corporate social responsibility. The industry has a responsibility to the conservation of the environment, employees and the society in general.

The growth of the Chinese economy means the government and the corporations have been obligated to reform and reflect the modern economy that the Chinese market has become. This means that the CSR activities and strategies are improving. The working conditions and the welfare of the workers are the main concerns. China is one of the lowest paying countries in wages in the world (Dickson, Loker & Eckman, 2010). This is an advantage to the firms as they increase their profit margins as well as having a competitive advantage in the market due to the pricing policy that they can offer. These conditions have also contributed to China’s dominance of the exports market. However, these conditions are improving steadily over time although they are still an issue internally as well as in the international setting. The fashion industry companies are taking measures to improve the labor conditions of the workers such as the working environment as well as the payment (Dickson, Loker & Eckman, 2010). The issue of child labor is also rampant in China. The fashion industry is taking measures to address these concerns. These issues are in contravention of the ILO and WTO provisions.

The status of the CSR policies and initiatives in China and specifically the fashion industry can be analyzed using the following data in tables.

Table 1: Welfare of workers

Welfare	Frequency	Percentage
*Pension Insurance*	85	*91.4*
*Medical Insurance*	63	*67.7*
Unemployment Insurance	57	61.3
Housing Accumulation Fund	13	14.0
Living Allowance	56	60.2
Food Subsidy	65	69.9

The pension and medical insurance are some of the crucial aspects of employment. These are privileges that workers in the Chinese fashion industry do not receive. They receive low wages. Their employment cannot be termed as permanent. This is because these SMEs in the fashion industry are focused on the profitability of the firms as opposed to the welfare of the employees (Dickson & Eckman, 2006). In this part, the CSR has failed, and the workers are in urgent needs of help to ensure proper pay and good working conditions.

Table 2: Average Profit Margins Comparison between Groups

Year	Group 1	Group 2
2005	12.16	15.11
2006	10.33	15.02
2007	10.33	12.91

The average margins of profit have been declining over the years. This indicates that the adoption of CSR and sustainable models of development and conduct among the businesses in the fashion industry in China has led to a decline in profitability. This is shown in the gradual decline in the average profits for the two groups.

4.3 External CSR Options for Fashion Companies

The fashion industry is huge in the world. The fashion industry companies are targeting the emerging markets. This is because of the untapped potential in these countries or economies. These companies should make a play for these emerging economies and explore the potential and create new opportunities and markets for the benefit of both the companies as well as the locals.

There are several options for the fashion industry companies to take. The focus on the emerging markets is one of these options. The Western markets are saturated by several competent or potent companies that are competing for the same market. This means that the competitive advantage is diminished, and the chances of establishing a market share worthwhile are minimal (Dirnbach, 2008). This means that the small companies that are aiming to develop and expand their market share should look elsewhere to fulfill their aims and objectives. For example, Africa is a rich continent I terms of culture and traditions. Although the African people have largely adopted the Western culture, there are some that retain the African culture and mode of fashion (Creswell, 2005). This is the same case in South America and some regions of East Asia.

The levels of unemployment in Africa are high, and so are the levels of unemployment. Investments in Africa can be welcome due to the socio-economic benefits of the society. The essence of CSR is to help the company to give back to society. This offers the chance of the firm or business to integrate itself into the fabric of society and make itself a part of the society. This means that the business becomes an off-shoot of society (Creswell, 2005). This can establish telepathy and a mutual coexistence between the firm and the members of the community that can be beneficial for both. This level of trust and mutual respect is the CSR that is beneficial to the firms. The members of society should also establish the level of the business before expecting CSR activities. For example, SMEs are establishing their foundations and a lofty CSR can serve to cripple their efforts to growth and development (Committee for Economic Development, 1971). As such, society should be reasonable enough to ensure the responsibility comes with the social power. The SMEs do not have the social power that the massive corporations wield in society and expectations should be formed accordingly.

4.4 Lessons from UK Fashion Companies for Chinese Fashion Companies

4.4.1 The Power of Fashion

The fashion industry is a crucial part of the economy of the UK. It is one of the leading earners of exports and other socio-economic benefits such as the employment creation as well as earning the national government revenue. It is a representation of the innovation and creativity in fashion across the world. The brand equity of the U.K. fashion products is evidence of its strength. The Chinese industry can certainly establish itself in the global market. It has several advantages on its side such as the low costs of production that can give it a massive competitive advantage in the market (Creswell, 2005). However, the industry in China needs to target and grow markets like the UK counterparts. The Chinese authorities should offer this industry the autonomy to grow and develop using the market forces prevalent in the market. Control with smother the growth and discourage innovative and creative measures of growth and development.

4.4.2 Role of CSR

CSR is no longer an option or a responsibility; it is a strategy. The Chinese fashion industry firms need to buy into this concept of CSR being part and parcel of its marketing mix. The reputation of the firm in the market is as important to its success as the quality of its products and services it offers to the market. This lesson, therefore, should enable the Chinese fashion industry to re-think the position of CSR in the short- and long-term growth and development plans (Dirnbach, 2008). This will mean that these companies should embrace the CSR issues such as environmental friendly policies; employee’s welfare conditions improvement as well as a raft of other ILO and WTO labor provisions. This can be a platform for sustained success for the Chinese fashion industry like the one that the UK fashion industry has enjoyed in the past years.

CHAPTER V: CONCLUSION AND RECOMMENDATIONS

5.1 Conclusion

The transition to the global economy is also faced with increasing awareness in matters involving the environment and climate change. This awareness has led people to understand the potential effects of the current models of growth, industrialization and development. This has pushed governments and authorities to push businesses towards sustainable models of growth, expansion and development. The measures enjoy the full backing of the overwhelming majority of the public. This has expedited their implementation by businesses that target reputations and their acceptability within society as their entry into the hearts and minds of their consumer base. Several businesses have put underway measures to reorganize and restructure their operational strategies and activities to allow these firms to adopt more sustainable approaches to production. These businesses are at the same time developing agreeable and accommodating stances towards the public. They are encouraging the public to participate in the day to day policy making process. They are looping in the stakeholders and the customers in the process of formulation and implementation or sometimes the improvement of the Corporate Social Responsibility (CSR) (Creswell, 2005). The last one and half decades have also witnessed a marked an increase in the number of CSR reports that have been developed. These give the level of CSR strategies that businesses and corporations have adopted. These act as a scorecard for these establishments and serve as the platform for future improvements among these corporations and businesses.

Businesses or companies have had a rethink of their employment and costs in their business models. This means that these firms can achieve their goals with significantly low levels of employment as well as low costs. The firms are also engaged in evaluations and analysis of the market and their internal environments. This move is aimed at studying ways of improving the profitability of the businesses. The performance efficiency is also a major issue that these companies and businesses target. This aspect of the business model ensures that the firms get the best out of their financial and human resources. They maximize the output from the resources to their disposal. The relationship between the CSR of these businesses and the operating performance has intensified over the years. The operating performance is often focused on the accounts and the numbers; these numbers are analyzed or evaluated with an eye on the benchmark of the business or the companies.

The adoption of sustainable models of business can lead to a massive loss of profits for a business. This is the reason that most companies have resisted the conversion or transformation of their businesses to be compliant with the environmental requirement and become eco-friendly. The fashion industry in the world is one of the many industries that are targeted for the environmental-friendly brigade and public pressure. These environments range from the production and industries in the manufacturing industry to the hospitality and travel industries. China is the biggest polluter in the world alongside the United States. Therefore, it is fitting that the government in China has instructed the public and private sector businesses in China to conform to sustainable models to reduce China’s carbon footprint.

For example, in the fashion industry, many companies in the West have been forced to outsource a majority if not all their activities to low cost regions or countries. Examples include China, Bangladesh, India, and Pakistan. This is an indicator of the cost of CSR. In the quest to conform and deliver on their CSR aims and expectations in society, these businesses run the risk of going into the red (losses) in the short or long-term. As a result, companies need to devise their CSR to reflect the internal competencies and resources of the specific business. Often, the CSR of a company is reflective of the success the company is experiencing in the market. As such, one could say that the CSR of a business is directly proportional to the success the company experiences in the market. As such, huge corporations with massive market shares and vast resources have an increased responsibility and ability to deliver on their CSR compared to the smaller businesses. In China, the small business enterprises from the vast majority of the privately owned business; in fact, they constitute about 99 percent of the privately owned enterprises in China.

5.2 Recommendations

The Chinese fashion industry needs to improve its CSR aspects. This is crucial for this industry to claim its place at the top of the global industry. The global dynamics in CSR are shifting. The multinational and corporations throughout the world are adopting CSR activities as a strategy rather than a responsibility. This is where the Chinese fashion industry and its business model lag behind. There are several issues that the fashion industry in China needs to carry out to ensure that it is on par with the rest of the world.

Sustainability

The global awareness of the environmental issues has increased markedly over the last few years. There are national and international campaigns and movements to effect changes to the supply chain models in the world. The major targets are China and the United States. This is because they are the two biggest polluters in the world. The fashion industry contributes to its fair share of pollution among the Chinese SMEs. As such, the industry should respond to the changes occurring in the world and adopt models of development that respond to the public demand and pressure for sustainable.

Environmental Friendly Policies

Pollution is a pertinent issue in the world today. The companies and businesses have been given the obligation of ensuring that their supply chains are compliant with eco-friendly policies. Governments throughout the world are taking measure to cut on the carbon and other greenhouse gasses emissions to the atmosphere. This affects the small and the huge businesses. China is one of these countries. The Chinese fashion industry should, therefore, follow suit and ensure that their model of production, as well as their entire supply chain, are compliant with these provisions. Not only will it avoid legal problems, it will establish a credible reputation.

Labor conditions and Employee Conditions

The international provisions on the working conditions, the working age, as well as the pay of the workers, should be adopted as the strategies of the firms in the Chinese fashion industry. This will ensure that the workers are provided with the good working condition and with healthcare as well as a pension. The remuneration will be upgraded to the international minimum levels.

These moves will improve the performance of the firms in the fashion industry in China. This will improve their reputation significantly. Such an improvement will be in China as well as the rest of the world. This is crucial as it will be coming up against worthy competitors and established ones, for example, the U.K. fashion industry.

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