Ethical Responsibilities of Consumers to Spend Their Budget - Case Study Example

Business Ethics -What Ethical Duties and Responsibilities, if Any, Do Consumers Have When They Are Deciding How to Spend Their Budget? Introduction Many studies have been done and theories have been proposed regarding the ethical responsibilities that businesses hold within their communities and within the world. Less literature is available, however, regarding the importance of ethical consumer behavior. This paper discusses the various ethical responsibilities that individual consumers hold regarding the manner in which their limited incomes are distributed in terms of its impact on those who produce it, the environment or other ethical concerns. Body According to Irving (2005, pg. 1), “There are many ways consumers can use their spending power to make a difference to the world.” This notion refers directly to the manner in which consumers decide how to spend their personal budgets. In fact, the ethical decisions of consumers and the ethical decisions of businesses—or vice versa—go hand-in-hand. As such, there is quite a bit of overlapping that occurs between the two during the course of this discussion of ethical consumer behaviour (Vitell and James, 2005). According to Irving (2005, pg. 1): At the Ethical Consumer Research Association (ECRA), we argue that the rise of ethical consumerism is closely connected to globalisation and the pressures this puts on democratic governments to avoid corporate regulation. So unless something occurs to reverse this process, we would certainly predict no early demise for ethical consumerism. Indeed, with few other ideas on the horizon which so directly address the social and environmental consequences of globalisation, most evidence points to increasing levels of activity in the field. Much of this will be focusing on improving the quality of information about ethical issues. Of crucial importance will be the development of governmental regulation of corporate disclosure, environmental claims, and general information availability. Independent monitoring of corporate ethical claims by accountants and pressure-groups will also flourish. Hopefully we will also see the current growth in ethical marketing by companies sustained and increased. One of the key features that distinguish ethical consumers from those who are not is whether or not each consumer believes he or she can make a difference in the world. There are some dramatic examples of consumer power that have happened in the past that help to illustrate this concept. One of these is the Esso boycott over climate change (Schroeder, 2002 and Irving, 2005). According to the work of Irving (2005, pg. 1), “For the last 30 years or so, multinational corporations have been trying to shape the decisions of elected governments to fit their vision of a global free market. And whilst governments have in most cases been pretty obliging, it is the ordinary people that buy their products who havent been so convinced. The corporate vision of a morally barren future where only the strong survive and where money is the only measure of value was hardly going to meet with universal acclaim.” There are a variety of ways in which consumers can make ethical decisions when they are deciding how to spend their personal budgets. Many consumers have done so in the past, and current and future spending of consumers can be based on the ethical examples that have been set for them before, as well as their own personal morals and values. According to Irving (2005, pg. 1), some of the particularly sensitive areas in which ethical consumer decisions should be made include the following: Animal welfare (live exports, free range, organic, endangered species, angling, dolphins, whaling, vegetarianism) Animal testing (cosmetics testing and other) The environment (timber, PVC, chlorine, ozone depletion, organic agriculture, out-of-town superstores) Fair trade and workers’ rights (fair trade companies, clothes, sports shoes, toys, footballs, carpets, supermarkets, trade union campaigns) Oppressive regimes (South Africa, Burma, China in Tibet) Nuclear power and armaments (nuclear testing, armaments) Money and ethics (ethical investments, ethical banking and money) General areas (gay and lesbian rights, McDonaldisation, anti-consumerism) Ethical consumer spending can come in a variety of forms. The ethical decision-making of consumers can range from selective shopping all the way to all-out boycotts of products produced under unethical conditions or of companies that choose to engage in unethical behaviour. One of the largest areas of concern for ethical behaviour among businesses is in the area of animal welfare. Thankfully, there have been successful movements in this area where consumers who chose to spend their money ethically resulted in a business behaving more ethically. For example, according to Irving (2005, pg. 1), “Respect for Animals campaign to stop the export of live animals resulted in the P&O, Brittany, and Stena Sealink ferry companies stopping their carriage of livestock in 1994. The boycott was successful within only a few months, and the companies publicly acknowledged that they had been overwhelmed by the public response.” The choices to purchase free range and organic products as well as protecting endangered species are two more areas of ethical concern for consumers. There are success stories in this area as well. Irving (2005, pg. 1) reports that, “In 1997, Viva! (Vegetarian International Voice for Animals) UK successfully campaigned to get Tesco to withdraw from sale ostrich and kangaroo meats, and other supermarkets may be following suit. Marks & Spencer has announced its decision to only stock free range eggs in its stores, and the organic beef market in Europe is predicted to triple to $1billion in 5 years time.” An example of protecting an endangered species occurred in Taiwan in the year 1993. The Environmental Investigation Agency in the country boycotted goods produced from endangered species, and the president immediately reacted by banning a popularly traded item that came from an endangered species: the rhinoceros (Irving, 2005). The practice of angling and the protection of dolphins are also concerns for consumers who wish to spend their personal budgets in an ethical fashion. Pisces, which is the name for the group that was formerly known as the Campaign for the Abolition of Angling, ran a boycott campaign against the practice of angling. In response, a cessation in the act of sponsoring angling competitions was performed by the companies Jack Daniels, Grolsch-Ruddles, and Stones Ginger Wine. One of the well-publicised ethical concerns throughout the world in recent years was the protection of dolphins during the process of tuna fishing. According to Irving (2005, pg. 1), “In 1990, a US boycott of Heinz, in protest at the 100,000 dolphins killed each year in purse-sein fishing nets used to catch tuna, forced Heinz to take action. Later that year, a scheme run jointly by the tuna trade and the Whale and Dolphin Conservation Society, launched a dolphin friendly logo.” The practice of whaling and the choice of whether or not to become a vegetarian are also ethical consumer concerns that fall under the category of animal welfare. Irving (2005, pg. 1) claims that, “In 1989 an Icelandic fish boycott called by Greenpeace proved quick and decisive. The objective was to stop whaling and lost sales were estimated at $50m before Iceland declared an end to its scientific programme. In response to the Environmental Investigation Agencys ongoing boycott of fish from Faroe Islands (due to whaling), many supermarkets have refused to stock Faroese fish, including the Coop, ASDA, Spar, Iceland, and Safeway. In 1994 it was estimated that the Faroese lost £12 million worth of fish sales to the UK.” As far as vegetarianism is concerned, the number of them has increased dramatically in recent years. This trend is in response to some consumers considering whether or not it is ethical to spend money on the killing of animals for their benefit (Vitell and James, 2005 and Irving, 2005). Animal testing is another ethical concern for consumers to consider when deciding how to spend their personal budget. Many individuals purchase goods such as make-up without even considering what may have been harmed during the process of making the product. In response to consumers crying out against the process of cosmetics testing on animals, companies such as Avon, L’Oreal, Gillette, Wella, Neutrogena, Boots, Max Factor, Rimmel, Revlon, Yardley, Chanel, and Estee Lauder have vowed to cease the practice of animal testing on their cosmetics. One other shocking use of animals was boycotted in the early nineties: the use of live animals as crash dummies by General Motors. Irving (2005, pg. 1) claims that PETA stated that, “GM was the last of the big three auto-makers to abandon the practice of animal crash tests and was responsible for the deaths of over 20,000 pigs, dogs, ferrets, rats and other animals.” Another area in which consumers can make an impact when choosing how and where to spend is the environment. Irving claims that, “The most dramatic and memorable environmental boycott of recent years has to be Greenpeaces 1995 campaign against the dumping of the Brent Spar oil platform (owned by Shell). Sales of Shell petrol were down by 70% in some German outlets and the company gave in after only a few days.” There are also other areas of concern regarding ethical consumer spending and the environment. One involves the cutting of timber in certain areas or involving certain types of trees. Another involves the use of PVC products. Yet another involves the use of chlorine in women’s sanitary products. Consumers can also help to protect the environment by choosing products that do not deplete the ozone layer, choosing organic agricultural products, and avoiding spending the money in their budgets in out-of-town supermarkets (Irving, 2005; Vitell and James, 2005; and Schroeder, 2002). Companies, animals, and the environment are not the only areas of concern that consumers should take into consideration when considering how to ethically spend the money in their personal budgets. People themselves should also be considered. For instance, fair trade companies under the category of fair trade and workers’ rights. According to Irving (2005, pg. 1): Consumer demand for fair-traded goods has led to a growth in sales for companies such as Equal Exchange Trading, whose turnover tripled in the 1990s, and Cafédirect, whose turnover also increased nearly 50% in 1996. Cafédirect is now estimated to have 3% of UK sales of roast and ground coffee. Traidcraft and Green & Blacks have also experienced growth in this period. Sales of fairtrade-marked products grew by a third in 1996. In 2000, the Fairtrade Foundation announced that 70 brands of food carried the Fairtrade mark, and at the beginning of that year FT bananas appeared in British shops. The assembly of clothes and sports shoes should also capture the attention of ethical consumers. Working conditions, fair pay, and overall treatment in certain factories are simply unacceptable. One of the biggest examples in this area is Nike. Nike was caught running sweatshops in different locations. The working conditions and pay were horrible. Many of the workers were children. Thankfully, the company changed this practice and restored its image. The recent surge in outsourcing, however, likely means that there are many other companies that are running sweatshops or similar operations. Other areas of concern in fair trade and workers’ rights include the assembly of toys and footballs in certain areas, child labour in the construction of carpets, Third World producers and supermarkets, and trade union campaigns (Irving, 2005). Another area of concern for ethical consumers involves the existence of oppressive regimes. So far, they have been discovered and dealt with in the areas of South Africa, Burma, and China in Tibet (Irving, 2005). Nuclear power and armaments are another concern for ethical consumers. Examples of this include nuclear testing performed by countries that produce products that consumers could choose to—or not to—purchase and purchasing goods from companies that support war (Irving, 2005). Ethical investments fall under the category of money and ethics regarding this topic. According to Irving (2005, pg. 1): There are now more than 50 retail ethical investment funds in the UK. These funds all apply environmental, social and/or other ethical criteria to the selection of their investments. The estimated value of these funds stood at £4 billion in August 2001. In addition to this there is now a large amount of institutional investment money which is either screened according to ethical criteria or where an ethical engagement policy is applied to lobby companies in order to improve their policies and practices. Many churches and charities, pension schemes, and local authorities now have ethical or socially responsible investment policies. Ethical banking and money also fall under this category and should be of particular importance to the ethically-conscious consumer (Irving, 2005). There are some miscellaneous categories that ethical consumers should be concerned with when choosing how to spend their budget. These include gay and lesbian rights and resulting support or non-support, McDonaldisation, and anti-consumerism (Irving, 2005). According to Irving (2005, pg. 1) there have been a number of trends in ethical consumerism over the recent past. These include: Women being more ethical than men Younger people being more ethical than older people Environmental concerns losing popularity, possibly due to overload Human rights leading concern Trust issues Lack of widespread information The 30:3 syndrome Awareness of ethical investment Conclusion Vitell and James (2005) points out three categories of ethical consumerism. These are downloading or buying products that are counterfeit, recycling and/or being aware of the environment, and doing what is morally right. The descriptions and examples detailed above further illustrate these categories. Schroeder (2002) points out that ethical consumers influence businesses to become ethical. This statement is powerful. This means that consumers really can change the world by how they choose to spend the money in their personal budgets. If they take into consideration the areas and facts presented in this paper, they can truly spend ethically. References Irving, S, 2005, ‘Ethical consumerism: Democracy through the wallet’, Journal of Research for Consumers, Issue 3. Vitell, S and M James, 2005, ‘The Muncy-Vitell Consumer Ethics Scale: A modification and application’, Journal of Business Ethics, 62(3): 267-275. Schroeder, D, 2002, ‘Ethics from the top: Top management and ethical business’, Business Ethics: A European Review, 11(3): 260-267. Read More