The Rise of Ethical Consumerism - Case Study Example

Running Head: Ethical Consumers Ethical Consumers [Institute’s Ethical Consumers Introduction The third law of Newton suggests,“Every action has an equal an opposite reaction”. Not only this statement is true for physical sciences but at the same time, this law has proven itself in the marketing world as well. The rise of 20th century marked the beginning of a new era in the field of trade, industry, production and in short globalization. The world became an increasingly competitive place for producers, sellers and marketers. The charm of profits and dollars had blinded the producers to such an extent that they had no hesitation in crossing the limits of ethical and moral grounds. The result was obvious and very predictable. It led to huge scale destruction and exploitation of resources of the planet earth, pollution, human and animal abuse and a long run destruction of everyone at this planet. That was the time when the experts and media people jumped on to the scene and started creating awareness amongst the public. The masses wanted to follow the ethical path and wanted to stop the companies from their unethical actions for making profits. They all agreed that it is the responsibility of all of them to stop this destruction and unethical actions, somehow or other. That was when; the consumers became conscious about their power, about the difference that they could make. They understood the fact that these companies depend of them and they can use this dependency to make these companies work their way. Consumers developed common platforms and came up with useful strategies. It started to work. By boycotting, the products of those companies involved in unethical means of production pressure grew on the companies to change their course of action. Moreover, the decreased profits made the companies to do it so as well. The process of acquiring products that are produced without violating ethical grounds and code of conduct can be termed as ethical consumerism and these consumers are called as ethical consumers (Wetherly, & Otter, pp.12-18, 2008). The Rise of Ethical Consumerism People were unaware of the term of ethical consumerism before the past three decades. This is after the early 70’s era that the masses became conscious about the violation of moral and ethical standards for more profits by companies. These actions were certainly crossing the limits of patience of the public, that is why the masses had to stand up by themselves for the sake of this planet, its eco-system and betterment of their coming generations and making sure that they leave a better world for their coming generations. Following are some of most notable examples of unethical practices followed by some big names in the market. Wal-Mart, the biggest retail store giant of the US, has been facing many allegations of unethical practices. United Food and commercial workers union filled a complaint against Wal-Mart because it has restricted its employees from making a labor union and Wal-Mart’s initial level labor wages are less than the market standards. Moreover, allegations regarding gender discrimination has been also been reported against Wal-Mart. In addition, employing illegal immigrants for jobs has also brought the Retail stores giant in spotlight (Zadek, Raynard, & Forstater, pp.15-64, 2006). The multinational packaged foods company based in Switzerland, Nestle, is facing unethical allegations for the past decade. These allegations are from International Baby Food Action network (IBFAN), UNICEF, Baby Milk Action and UK’s Advertising Standards Authority (ASA). These allegations are towards Nestlé’s behavior of discouraging mothers from breastfeeding and preferring Nestlé’s milk. In this regard nestle has been making false claims about their milk products and portraying their products in false manner (Tully, pp. 245-745, 2007). One of the largest American based financial networks, Citigroup Inc. was awarded with Public Eye Taxes award for corporate irresponsibility in Davos, Switzerland (Hilton, pp.14-89, 2003). It has been facilitating tax evasion and money laundering for some of the most famous and corrupt leaders and dictators of different countries. The names include Chilean former autocrat General Pinochet, being investigated for human rights crimes, previous dictator of Paraguay Mr. General Alfredo Stroessner, husband of late Pakistani PM Benazir Bhutto and current President of Pakistan, and dictator of Gabon Omar Bongo and daughters of former Indonesian dictator Suharto (Wetherly, & Otter, pp.12-18, 2008). McDonalds that is one of biggest fast food chains spread all over the world is rated as the worst in terms of its treatment with suppliers and company staff. Ethical Reputation Index survey in United Kingdom revealed these findings (Edwards, & Gaventa, pp.12-85, 2001). Creditsafe and marketsafe are also two credit solution companies based in the UK who have been following unethical practices. The services, which they initially offer for 800 pounds, if shown some disinterest by the customer, they directly jump to offer those services in 150 pounds. This means that they are ripping off people who agree to take their services for 800 pounds (Tully, pp. 245-745, 2007). Everyone knows about Nike and their quality wear but Nike is also known for their inhuman and unethical practices. Tortured workers, child labor, inhumane treatment, violating labor laws, unacceptable working conditions, health problems, medical facilities, sexual harassment are the issues that have risen against the Nike’s management over the past few years (Edwards, & Gaventa, pp.12-85, 2001). These are just a trailer of the examples of what happens in the corporate world. These were the reasons why consumers had no choice to stand up and raise their voice against the unethical and unjust behavior of producers and sellers. In just the past three decades, most of the developed and developing countries, have now many independent clubs, groups, societies and organizations that keep a check on ethical standards at all the players of the industry. Media has also become more active and is playing an important role in highlighting ethical standard violation and unfair activities of the corporate world. Moreover, the rise of ethical consumerism is also market by the fact that the masses started understanding the fact that they either they or their coming generations will have to pay for whatever damage the corporate industries have done to the world. The masses started understanding that the 20% of the world’s richest elite consumes 86% of the world’s resources and the poorest 20% consume just the 1.5% of the world’s resources (The Co-operative Bank, & The Ethical Consumer Research Association, pp. 5-19, 2008). The ozone is damaged, world’s overall temperature is raising, the poorer is getting poorer and the richer is becoming unstoppable, the poorer are being exploited and the world is coming to its end just because of the human actions. The people were seeing reports that we have done enough damage to many animal species and the loss is irrefutable. Consumers were realizing that their actions were indirectly supporting terrorism in different parts of the world. They were realizing that they were the cause of labor exploitation in many areas. These all causes led people to rethink and change their approach. Dimensions or Areas of Concern The above-mentioned examples were just a few of millions of cases in today’s world. In short, it can be concluded that there are many dimensions in which, companies can show unethical or immoral behavior. For consumers and consumer organizations it became important to put all these unethical practices in common platforms so that rankings can be allotted and these unethical practices can be easily analyzed and categorized. Ethical consumer that is a consumer organization has come up with five distinct categories in which the unethical practices of any company can be classified. Firstly, it is the environment, which has been the prime concern for all. Green house effect, ozone layer, nuclear waste, Pollution, toxic waste materials, non recyclable products left out in oceans etc have been surrounding the news channels for the past many decades. The second dimension can be the person, which includes issues of labor treatment, labor pay, gender and ethnic discrimination etc. Thirdly, animals have been in the spotlight for long as well. So many companies have been reported in animal abusing either generating more products or outcomes from them or for testing their products on animals. Another dimension of ethical consumerism is political. Many times, we hear of boycotts of companies and products from Israel because of their involvement in terrorism in Palestine. It also includes not favoring companies who are indirectly involved in favoring or supporting the arms industry or any other unethical business. Lastly, product sustainability can also be a reason for the rise of ethical consumerism amongst consumers. Charging more for products, unclear structure of charged prices, not meeting the quality standards, inorganic, non-biodegradable, non-eco friendly products are in this category. Issues Surrounding Ethical Consumerism Critics argue that ethical consumerism has not made any significant difference in the marketing world but it has shaped a niche market for people who are looking for organic, biodegradable, recycled or products from precise companies (Dodds, & Pippard, pp. 14-56, 2005). This niche market has done nothing but create an opportunity for the sellers to sell higher priced products in the name of ethics, fair-trade, and make even more revenue. In short, ethical consumerism is doing nothing but helping sellers exploit in a different way with a good label. In addition, ethical consumerism is not an ideal approach, for a planet where more than half of the 6.5 billion people are living below the poverty line. It is not a practical concept also because it does not appeal to the huge lower middle class income group population of the world and it excludes more than half of the 6.5 billion people of the planet who live below the poverty line. On top of it, critics have also been pointing out that the economic downturn and recession will force the consumers to switch their priorities from “Values” to “Value” brining an end to the chapter of ethical consumers and the new market formed by it (Norton, pp.23-74, 2007). Some industrial experts also completely refuse the idea that environmental friendly products can be made on a cheap price. They believe that the corporate world is supposed to be ruthless since this is the law of this world. You will have to leave some, if you want some. Therefore, there is no point in asking for ethics in the corporate world. They are of the idea that cost minimization and maintaining so called ethical standards work in an inverse proportion and have a negative relationship (Worcester, pp. 1-52, 2000). Studies also show that there is always a gap between the consumers’ concern or words and their actual everyday actions or practice. This is not because of the absence of awareness or basic information but this is a natural gap, which is always there. For example, 90% of the UK population has been repeatedly saying that they oppose cage egg production but only 50% of the eggs sold by the free market fulfill this criterion. This shows that there are always big gaps between the expected and actual results. In actual, customers are only lip service to these companies and in reality, they are more concerned about their own convenience, quality, price and status (Zadek, Raynard, & Forstater, pp.15-64, 2006). Scope of Ethical Consumerism in Contemporary World According to The Ethical Consumerism Report of 2008, the total ethical spending of consumers of United Kingdom in the year was more than 35.5 billion pounds. At the same time, this was around 15% more than the last year’s figures (The Co-operative Bank, & The Ethical Consumer Research Association, pp. 5-19, 2008). According to the early 2009 reports the growth of this market has seen a serious slow down but despite the industry condition the growth is still there. There is no decline witnessed until yet. According to a survey performed, all around the world 30% of people always try to buy products and services from companies, which behaved ethically. Out of them, 45% showed their willingness to participate in boycotts of products from companies that they do not trust on moral and ethical grounds. More importantly, 30% people out of this random diverse sample believed that they could force any company to act in the way they wanted (Dobson, Sáiz, pp. 125-126, 2008). Not only these, but facts and figures show that there was a clear increase of spending in fields like eco-friendly transportation industry, green home expenditure, ethical food and drink, personal products and even financing services as well. These all markets saw a rise of spending expenditures just because of their eco-friendly and ethically responsible title. These are in every way, very much encouraging figures for a market that has just grown. Without any doubts, it is evident that people are inclined towards ethical spending since their emotions are attached with it and if properly used these emotions can result in desired results. References Dobson, Andrew, & Saiz, Angel Valencia. (2006). Citizenship, environment, economy. Routledge. Dodds, Felix, & Pippard, Tim. (2005). Human and environmental security: An agenda for change. Earthscan. Edwards, Michael, & Gaventa, John. (2001). Global citizen action. Lynne Rienner Publishers. Forstater, Maya, Oelschaegel, Jeannette, & Sillanpää, Maria. (2006). What assures consumers. An Accountability and National Consumer Council Report. NCC Publishers Harrison, Rob, Newholm, Terry, & Shaw, Deirdre. (2005). The ethical consumer. SAGE publishers Hilton, Matthew. (2003). Consumerism in twentieth-century Britain: The search for a historical movement. Cambridge University Press. Nicholls, Alex, & Opal, Charlotte (2005). Fair trade: Market-driven ethical consumption. SAGE Publishers. Norton, Michael. (2007). 365 Ways to Change the World: How to Make a Difference One Day at a Time. Simon & Schuster. The Co-operative Bank & The Ethical Consumer Research Association (ECRA). (2008). The Ethical Consumerism Report 2008. The Co-operative bank publishers, pp. 3-6. The Co-operative Bank & The Ethical Consumer Research Association (ECRA). (2007). The Ethical Consumerism Report 2007. The Co-operative bank publishers, pp. 3-11. Tully, Stephen. (2007). Research Handbook on Corporate Legal Responsibility. Edward Elgar Publishing, pp. 1-15. Wetherly, Paul, & Otter, Dorron. (2008). The Business Environment: Themes and Issues. Oxford University Press. Worcester, Robert M. (2000). Ethical Consumerism Research. The Cooperative Bank. Zadek, Simon. Raynard, Peter. & Forstater, Maya. (2006). What assures: Listening to words of assurance. Accountability Report. PriceWaterHouseCoopers. Read More