Ethical Consumption - Coursework Example

?Introduction Over the last two decades or so, consumers in industrial economies are becoming more aware of the origins of the goods they are consuming. The increasing information flow has made it possible for consumers to ethically evaluate the practices of the firms involved in buying and selling of such products and have relatively changed their buying behavior to account for for their ethical responsibilities. The increasing focus on stakeholders therefore have helped institutionalization of ethics into modern businesses as firms now increasingly view a diversified group of consumers, suppliers, employees, shareholders, government etc. as their stakeholders. This view therefore gives much credibility towards the buying decisions of consumers as one of the most important stakeholders of the firms. The gradual awareness of consumers regarding how products are made, what practices are being adapted in buying and selling of raw materials have relatively push them to reassess their decisions regarding what goods and services they purchase and consume. (Carrigan, Szmigin & Wright, 2004) An interesting question however arises regarding as to what actually motivates consumers to adapt ethical behavior? Whether the overall ethical awareness of the consumers have reached to a point where they are now able to clearly evaluate and assess the consequences of their purchase decisions on the society and world as a whole? But is there anything with the name of ethical consumption? How consumers can draw the line between their responsibilities as well as how much responsible they are for their purchase decisions. Are businesses responsible too for their actions? These are some of the questions which will be explored in this article. Ethical Consumption There are many factors which actually outline as to why there has been a shift towards ethical consumption. These factors range from popular disillusionment with the modern businesses because of large scale corporate scandals to personal and guilt and shame. In between there are many factors which are actually reshaping and redefining the way consumers making their buying decisions? (Thogersen, 1999) Since last twenty years or so there has been a growing body of research suggesting emergence of a new group of consumers who tend to base their purchasing decisions on ethics and morality. Ethical consumers therefore tend to focus more on evaluating different aspects of companies including their hiring processes, use of animal products, the damage done to environment etc. Spending has been given a global as well as individual morality wherein consumers perceive themselves as custodian of earth. At the individual level, spending is considered as the clearest way through which consumers actually demonstrate their moral choices. (Freestone & McGoldrick, 2008) The overall notion of ethical consumers and ethical consumption emerged out of the concept of green consumer. Ethical consumption however, is believed to be a relatively complex web of decisions which are being made by the consumer. Ethical consumer therefore not only assesses the impact of his buying on the environment but also adds human element to the green consumption also. Ethical consumers therefore also include matter of conscience in their decision making regarding the purchases they plan to make. (Strong, 1996) Though it has been argued that consumers have become ethical because of improvements in technology as well as information flow however, still limited nature of information may limit consumers’ ability to know the true outcome of their purchase decisions. It has also been suggested that unequal distribution of wealth may also be one of the reasons as to whether there can be ethical consumers in first place? It is argued that until and unless issue of unequal distribution of wealth is not addressed, consumers may never be able to fulfill their democratic role as ethical consumers. (Shaw & Clarke, 1998) Is there any ethical consumption Above arguments suggest that consumers may not be able to fully become ethical in their purchasing decisions and as such ethical consumption is just a myth. Carrigan & Attala (2001) argued that though consumers have become sophisticated in nature however, their behavior may not be easily translated into something which clearly favors ethical firms over unethical firms. (Carrigan & Attalla, 2001) To understand as to whether consumers can be ethical in nature and where they can draw the line in terms of their responsibility towards, it is critical to understand and explore different motivations behind the behavior which drives consumers to act ethically. It has been argued that values play an important role in consumption as consumers buy many goods and services with value related goals in mind. The basic driving force behind consumption therefore is always considered as the values and motivations which push a consumer to engage into a particular buying behavior. (Kopf, Boje, & Torres, 2009) It is also suggested that those arguing in favor of ethical consumers tend to ignore the associated complexity of the motivations which push consumers to make their socio-political choices. How ethical consumers operate within a given socio-political environment is therefore considered as an under-researched area and still requires broader understanding of complex interaction of motivations, value and ethical beliefs of consumers with their purchasing decisions. (Barnett, Cloke, & Clarke, 2005) It is therefore critically difficult for consumers to draw a definite line between the responsibilities of different stakeholders in ensuring ethical behavior. This is because consumers may not be fully aware of what motivations and values actually drive their ethical decision making process in terms of their buying. It has also been argued that consumers feel powerless to bring in their desired change because they themselves become part of the same spending habits which are causing destruction on earth. Despite having awareness about the potential impact of their consumption choices on the earth resources, majority of consumers simply feel powerless to bring in required change. This helplessness is also carried out in their purchase decisions however, a smaller minority of consumers have actually been able to actually translate their awareness into actions. (Harrison, Newholm,, & Shaw, 2005) The overlapping nature of values, motivations and practical realities therefore may not allow ethical consumers to become fully effective in making their ethical decisions. The complex interaction between different stakeholders may force them to draw a line between their individual responsibilities and the responsibilities of others also. (Freestone & McGoldrick, 2008) Ethical responsibilities of business Organizations like Nike work on business models where they have to source not only raw materials but finished goods also from outside firms. Large organizations such as Wal-Mart purchase at really low prices from suppliers spread all over third world countries. However, to meet the low price needs of such large buyers, suppliers in their own countries tend to control costs which often manifest itself in terms of paying extremely low amounts to labors working in such places besides keeping the overall working environment unhygienic and non-conducive to working. (Steurer, Langer, Konrad, & Martinuzzi, 2005), Nike has been a classic case in this regard wherein its contract factories have been constantly highlighted as the places where ethical business practices have not been followed. Nike’s overall business model is based upon the principle of getting its goods manufactured from other suppliers. (Locke, 2002). As such Nike doesn’t have its own manufacturing facilities but it order its products from other suppliers who then have to manufacture goods according to Nike’s requirements. However, there is a growing body of evidence which indicates that suppliers of Nike do not tend to follow ethical business practices. Issues such as child labor has been dominating issues in countries like Pakistan where Nike has large stake in its football business. Nike footballs are also been manufactured by smaller manufactures and resultantly these suppliers not only engage children in manufacturing of footballs but also underpay them in order to control their costs. There have been issues of human rights violations at Nike factories also specially in countries like Indonesia where workers are slapped, kicked and punished for smaller mistakes. It has also been suggested that workers in these factories feel powerless because they risk losing their jobs if they resist such behavior of their employers.1 Various studies have highlighted the importance of forming partnerships with the producers in third world countries to reduce the poverty and increase the overall working conditions of persons working with the producers. (Agatiello, 2007). As such it has been clearly established that the businesses have clear responsibilities in terms of purchasing. It has been emphasized that international businesses must work together with their producers in order to bring in a balance between social, economic and environmental dimensions of areas from where they source their materials. Studies have also focused upon the interconnectedness of firm’s purchasing decisions and actions with their overall corporate social responsibility. (Carter & Jennings, 2004). To ensure responsibility, protection of human rights, reduction of poverty, community involvement as well as philanthropic activities, international firms responsible for making purchasing from third world countries are required to act ethically. There is therefore a growing emphasis on the firms to actually act ethically when they make purchases regardless of the fact that whether the purchase is made in part or in whole. (Creyer, 1997) In terms of issue of outsourcing, there are two important arguments outlining that outsourcing may be ethical because it brings overall greater good for the society in terms of getting goods and services at lower costs. However, outsourcing also results into loss of jobs for home country employees thus creating an strong socio-political issue. Conclusion After the rise of technological revolution and increase in the flow of information, consumers have become relatively aware of the practices of the firms from where they purchase their products and services. There has been a growing concern among the consumers to conserve the resources of earth and a sense of belongingness at global level is emerging. Such raising of awareness therefore is making consumers to remain more responsive to ethical challenges and engage into ethical consumption behavior. The overall movement for ethical consumption emerged out of the green movement however, ethical consumption has a larger context and also includes human element in the overall behavior of the firms. There are however, arguments indicating that consumers may not be completely ethical as lack of complete information may restrict the impact of any purchasing outcome. Further, there is a very little critical mass of consumers which is focusing upon ethical consumption. Such low numbers therefore may not force firms to actually change their behavior and become more responsible. It is however, critical to note that consumers now tend to base their purchasing decisions on ethics and favor such firms who engage into ethical business practices. Businesses engaged into purchasing as well as outsourcing also need to act ethically and ensure that suppliers of their products and service protect human rights, adequately pay to their workers as well as create a business environment which is conducive to working. The above discussion also suggests that though there is a greater awareness about the ethics and consumption however, it may still be less influencing to dominate the policy making process of firms. Ethical consumption can result into overall better business practices however, to influence such change; there is a need of higher number of ethical consumers. Ethical consumption as a phenomenon has only increasing in developed countries however; it can really get momentum if same level of ethical awareness emerges in other developing countries also. Bibliography Agatiello, O. (2007). Is South-South trade the answer to alleviating poverty?. Management Decision, 45(8), 1252–69 Barnett, C., Cloke, P., & Clarke, N. (2005). 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