Issues Facing H&M, Theoretical Concepts to be Applied, and the Recommendations to Offer

Analysis of H&M Paper
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The apparel industry is one of the fastest-growing industries worldwide. According to Statista (2023), the revenue collected from global apparel was at 1.53 trillion dollars in 2022, yet it is expected to rise in 2023 up to 1.7 trillion dollars. The exponential growth of this industry can be attributed to the high consumer base due to the growing population. Secondly, there has been an increasing demand for several new and innovative styles. As a result, major brands have come out, including H&M. H&M refers to Hennes and Mauritz AB, and the first store was opened in Sweden in 1947. The store has 4465 stores distributed worldwide as of 2022 (Statista, 2022), while its net revenue was $ 22.422 billion the same year (Macrotrends, 2022). Despite its growth, H&M is faced with several problems. This report will give details about the issues facing H&M and use theoretical concepts to understand why the problem is occurring. Lastly, this report will make recommendations on ways to improve.
Problems Facing the Organization
One of the problems facing this organization is the issue of labor exploitation. A report by the Centre for Alliance of Labor and Human Rights (2018) indicated that HM failed to pay its workers a living wage, including housing, healthcare, education, and other essential savings. Additionally, HM did not adhere to the basic wage's adherent to the national regulations. Based on an undercover journalist's revelation, it was confirmed that there were poor working conditions, and the company did not pay enough to its workers (DW Documentary, 2022). Vedeikytė and Lechmanová (2019) state that these low wages led to protests, especially in the regions where there was mass production of clothing, such as Bangladesh, Cambodia, and India. As much as their protests were heard and salary increased, they remained below the minimum wage.
Another problem facing the HM is that its value chain is constructed based on a linear economy, which has led to environmental sustainability issues. Vedeikytė and Lechmanová (2019) state that fast fashion is a business model that generates low-cost clothing based on growing trends. Hence, the formula for fast fashion is based on a fast cycle, fast prototyping, fast production, and fast delivery to stores with price tags on them. The fashion industry's inherent environmental flaws include but are not limited to tons of textile waste that are disposed of but never decompose. Additionally, the textile industry brings about water pollution, in the sense that the production of a single pair of jeans takes up 7000 liters of water while a pair of T-shirts takes 2700 liters, which is enough to be spent by a human for 900 days (Vedeikytė & Lechmanová, 2019). The influence of H&M in contributing to this waste is colossal, given that it is one of the players in the game. Despite its pledges to contribute to sustainability, it is easier said than done because, as of 2019, the company was sitting at 4.1 billion worth of unsold apparel (Segran, 2021).
Theoretical Concepts on why this Problem is Facing the Company
Social stratification theory is one of the theories that explain the problems. Rodriguez et al. (2019) state that this theory helps to explain why there are disparities based on how societies are organized in hierarchical layers, using social status, power, and wealth. Like many other fast-fashion companies, it operates within a highly competitive industry where profit margins are often thin. These companies may use cost-cutting measures to remain competitive and maximize profits, including paying their employees' low wages. This is also compounded by the fact that the exploited employees are located in developing countries where labor is cheaper or immigrants who are placed at a more disadvantaged place in exploitation.
Capitalism theory is also a second theory that can explain the problem in H&M. This theory posits that a company places profits and competition over social and environmental concerns (McShane & Glinow, 2021). H&M operates in a capitalist system, facing competition from other apparel brands such as Nike, forever 21, and Boohoo. All these companies also engage in fast fashion clothing; by extension, H&M has to stay ahead. The linear economy that the company participates in measures performance in financial numbers, an...