Companies and organizations have been embracing ethical practices to survive in the contemporary world. This has enabled them to avoid the issue of their business practices have a negative effect on the environment. More and more consumers are also getting attracted to companies that ensure ethical practices. Starbucks has embraced ethics to ensure its continued success in the market. The company tries its level best to ensure it attends to the needs of all stakeholders. This has been achieved through embracing corporate social responsibility and the development of ethical standards and policies. Every individual in the company is expected to comply with the same without failure.
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The recent years have seen an increase in the demand for companies to operate ethically. Essentially, organizations have been forced to ensure that their business activities to do harm the environment and the society. The pressure has emanated from environmental degradation that has plagued the world for many centuries. Fundamentally, ethical consumerism has arisen to help the society in the fight against social and environmental challenge. Companies have been embracing ethical behaviours to ensure their ability to attract and retain customers with ease. More and more consumers are being attracted to products and services produced in an ethical manner. This implies that companies that fail to comply with ethical standards stand to lose their customers to the competition (Palmer, 2015).
This paper intends to examine the concept of ethical consumerism, identifying example of some of the products that fall into the ethical category. It will also identify some of the reasons as to why ethical consumerism is an important or good strategy. The paper will also provide a detailed review of one company (Starbucks) that claims to operate ethically. In the same regard, the paper will also provide the results of short-term opinion survey before concluding remarks in regards to the topic.
Ethical consumerism is an act of purchasing goods and services manufactured or produced in a manner that minimizes environmental and/or social damage while circumventing good and services believed to have a negative impact on the environment or the society (Ferrell, Fraedrich, & Ferrell, 2011). Fundamentally, the practice encourages consumers to think about how the goods they purchase are obtained and produced. In the end, individuals are able to determine which products do not have any harm to the environment. For instance, consumers are able to purchase food products that are healthy or do not harm their health in a negative manner as opposed to consuming junk foods that can lead obesity. Another example of ethical consumerism in action can entail consumers boycotting products and services provided by a business that engages in child labour (Lewis & Potter, 2013).
Examples of products that fall into the ethical category include ethical food and drinks, the green home, fashion, travel and tourism, energy, and ethical finance among others (Pellandini-Simányi, 2014). Generally, it is essential for companies operating in these industries to comply with ethical standards set forth by the society. For instance, it is essential for companies operating in the food and drinks industry to ensure their products do have any negative effect on a consumer’s health. The energy industry has been blamed for increased environmental pollution. This has led to companies in the industry being pressured to ensure their business activities do have negative effects on the environment (Devinney, Auger, & Eckhardt, 2010).
Ethical consumerism has been considered a good strategy for business. For one, it enables businesses to ensure the rate of consuming resources does not surpass the rate of replenishing them. As a result, businesses are able to guarantee continued access to the same resources in the future, hence their continued success. Likewise, ethical consumerism enables businesses to earn a good reputation. Companies that are committed to ethics and ethical behaviour earn a good reputation for caring about their stakeholders and the environment at large. As such, they are also able to attract and retain consumers with ease (Carroll & Buchholtz, 2014).
According to Kline (2010), ethical consumerism also enables a company to avoid problems with the law. Specifically, the company avoid behaviours or activities that can impact negatively on the society. For instance, the adoption of the strategy enables a business to avoid child labour or exploiting its employee, hence its ability to avoid legal problems. This also goes a long way in improving a company’s reputation (O C Ferrell & Fraedrich, 2014).
Starbucks is an American international coffee firm and coffeehouse chain. The corporation is based in Seattle, Washington. Starbucks is one of the companies that claim to operate ethically. The management at Starbucks has applied different approaches to ensure it remains ethical at all times. For one, the company ensures active compliance with the rules and regulations governing businesses in the industry (Simmons, 2012). Research has shown that the company has in the past earned a bad reputation for exploiting its suppliers especially in the developing world. This is a challenge it has been able to deal with through complying with fair trade standards. The company pays the right price for the coffee beans supplies to ensure farmers are able to realize good returns as well as sustain their lives. Starbucks also complies with the Food and Drug Administration (FDA) provisions. This enables it to produces products that do not harm consumers’ health (Schultz & Gordon, 2011).
Similarly, Starbucks has also been able to come up with ethical principles and standards that determine its employees’ behaviours and the way products are produced. For instance, employees are expected to treat one another with outmost respect. The same case applies when dealing with customers. The strategy has enabled to ensure high levels of consumer satisfaction. Likewise, the management also treats employees with respect. Employees at Starbucks as considered partners. The management avoids any form of inequality, discrimination, and mistreatment of its employees as this can easily impact negatively on its ability to motivate them. It also respects the rights and freedom of its workers. In addition, this company does not entertain child or forced labour a culture common with most large and well-established companies in the world. (Simmons, 2012)
Starbucks also ensures the use of the best coffee beans when producing its products. The same case applies to other materialist requires to create its products. The management at Starbucks works under the assumption that the only way it can be able to produce high quality products is with high quality materials. It is keen to avoid the use of substandard materials that will compromise on the quality of its products in the name of cutting its production costs. In line with Ferrell, Fraedrich and Ferrell (2011), many companies provide poor quality products because of using low quality materials. This has also resulted into the companies producing products that are harmful to consumers.
The company also ensures it works with the best suppliers in the industry. This enables it to access the best coffee beans among other materials required for the production of its products and services. Moreover, mills and farms are assessed using comprehensive scorecard. Specifically, more than 200 indicators are utilized by third party verification companies. The companies are overseen by SCS Global Services. The verification process is aimed at ensuring Starbucks works with the best. Equally, this enables it to produce high quality products that meet consumer needs and preferences. Harmful materials are also avoided in the process (Simmons, 2012).
Correspondingly, Starbucks has also embraced corporate social responsibility (CSR). It has created a good CSR profile that enables it to avoid activities that are likely to have a negative impact on the environment. This company ensures its waste products are treated to ensure their safety before dumping them. Its main aim is to ensure its wastes do not lead to environmental degradation. Starbucks also engages in corporate philanthropy. For instance, it has been supporting coffee farmers in the developing countries to improve their produce. It has also been offering them advice on how to best manage their produce to realize more returns from the same (Simmons, 2012).
The survey showed clearly that ethical consumerism importance has been increasing in the recent past. Fundamentally, 13 out of the 15 students that participated in the survey were of the view that more and more companies have been embracing the strategy to improve their competitiveness in the market. The remaining two were not sure of their responses. The survey also revealed some of the factors that influence consumer behaviour.
It is clear from the survey that social factors and personal factors are among the major influencers of consumer buying behaviour. Ten out the fifteen participants argued that they make the purchase decision after consulting with their friends and family members. This factor falls under cultural factors. A consumer is able to consume a product after being advised by reference groups. This means a friend can advise another against consuming products offered by a company as a result of failing to ensure ethical practices.
Five out of fifteen participants emphasized on personal factors such occupation, lifestyle, and economic circumstances as the major factors that influence their buying behaviour. For instance, economic circumstances determine on whether or not they are able to purchase highly priced products.
Fourteen out of the fifteen participants who participated in the survey were of the view that they would not continue consuming products offered by a company that is found guilty of engaging in unethical practices. The remaining participant argued that he can only consume products from such companies when there is no other option in the market. There is one of the main reasons as to why companies need to embrace ethical consumerism.
All the participants agreed to the fact that experiences also determine their buying behaviour. Specifically, the participants argued that companies that are able to satisfy them encourage them to engage in repeat purchase behaviour. This also implies that companies that fail to meet the needs and preferences of consumers find it hard to attract consumers in the future.
It is clear that consumers are more than willing to leave their current supplier if it fails to embrace ethical consumerism. The participants stated that it does not matter if the company in question provides good products. One participant was of the view that a company may be able to provide good products by engage in child labour or exploits its employees, or fails to protect the environment from its business activities. As such, such a company is considered unethical.
It is evident from the above analysis that ethical consumerism has become very important to the survival of businesses in the contemporary world. Consumers and the society have realized the importance of this strategy. As such, they have placed pressure on companies to ensure the same. On the other hand, organizations have been forced to comply with the demands failure to which they may find it problematic to attract and retain customers in the market. Starbucks is one of the companies that have embraced ethical consumerism to improve their competitive edge in the market. The company ensures active compliance with rules and regulations set forth by governments in the countries it operates to remain ethical at all times. The company complies with fair trade standards when dealing with suppliers. It also treats its employees in an equal manner. The management also respects employees to ensure high levels of motivation. Starbucks has also been improving on its CSR profile to remain ethical. In addition, this company uses the best coffee beans to ensure the production of high quality food products that do not harm consumers. Equally, it also ensures its wastes are treated before dumping them to avoid environmental degradation.
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- In your opinion, has the importance of ethical consumerism been increasing?
- What are the major influencers of you buying behaviour?
- Given the choice, would you consume products offered by unethical company?
- Do experiences with a company matter?
- Would leave your current company simply because it has not embraced ethical consumerism?