Ethics of Consumerism Abstract: Consumerism is the economic philosophy that the increased consumption of goods and services by people above the commonly established level of basic needs is good for the society and economy. The question of ethics came into existence in this context because of the nature of the business interest groups to exploit the opportunity in the wake of increased consumer spending to their advantage irrespective of what would be the consequences over a longer period of time.
Ethics are needed not only for sustained growth of a business but also the overall well being of the economic structure which is again linked to the long term stability of the businesses in particular and the overall economy in general. The ethics are not generally defined as hard and fast rules in any business domain or geographical area, but generally established as a consensus in a particular industry or country.
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Ethics followed as common practice in one country may not be applicable and practically feasible in another country. Likewise Ethics which are followed in one industry or business domain may not be possible to be honored in another business domain.
Advertisements not showing the price less than what would be effectively be charged finally to the end customer may be the part of business ethics in a country and in a business domain, for example in computers in USA, the price advertised is the final price the customer pays excluding the sales tax while this may not be possible in a country such as UK where the advertised price cannot be given in all the counties and also in other industries like cell phones where the price of the cell phones shown does not show the price the customer needs to pay in case they want to opt out of the contract with which the price shown is effective.
The Ethics in general and in context of the increasing consumerism culture are critically evaluated for contrast in the above factors as well as the opinions of the critics of consumerism are expressed in separate sections. The role of ethics in the consumerism culture is analyzed and opinions of experts are mentioned in context. The different faces of consumerism as mentioned above is described in various contexts with some extra emphasis being laid upon the healthcare industry in USA where the ethics of consumerism has got lot of significance with the need for private enterprise itself being under scrutiny.
The Private business acting in USA in place of a Public funded social form of health care system which is its counterpart in most other developed countries in the west gave birth to lot of questions ethical and moral in USA and countries with similar setup of the industry. For example, Hospitals encouraging the people into unhealthy lifestyle for the sake of increased business is a very common question regarding ethics in private health care industry. There will be lots of similar questions which will be raised to the particular industry as well as the overall consumerist culture in the wake of the above findings in the essay to follow.
Aims and Objectives: The main aims and objectives of the outcome of this project are going to be the different perspectives of consumerism as seen around the world at different times. The other aims of the project are performing case studies of diverse cases to give the reader a real world perspective about the ethics and the rising consumerism culture. Another aim of the project will be giving the reader an idea about the ethics of consumerism referred to different scenarios and business domains.
The objectives of the project are literature review, case studies and various different topics that need to be discussed. The literature review is done about various diverse literature about the varied opinion about consumerism available in online and offline arena. The case studies are planned to be done about two topics yet to be decided which will be very diverse fields which will allow the reader have a look into different scenarios about the increasing levels of consumerism and ethics related. Introduction:
The current topic, “Ethics of Consumerism” stemmed from the discussion of consumerism and its various faces in the current world where the creation of wealth and sustenance of the same has gained increasing significance. The consumerism discussion holds good as said above in various contexts and situations. The first known discussion of consumerism in dated history and modern times is believed to be stated by Thorstein Veblen. The consumerism is the concept that took birth from the excess or surplus of goods which was mainly the result of the industrial revolution of the 19th century.
The Industrial revolution which gave rise to the mass consumption market, created a trend in the global business about the way in which the public consume the products since the trend existing until then naturally followed a consumption discouraging philosophy because of the shortage of most of the products because of the limited production capacities. The industrial revolution changed this philosophy in most of the areas with increased production of factory goods and similarly other major historic changes happened in other events like the green revolution which resulted in the increased production of agricultural produce.
The trend follows in any other sector where the balance of supply and demand is tilted towards the supply not meeting the demand. For example the economy of communication in India used to follow a consumption discouraging way in the times when the exchanges were not enough to meet the total number of calls and the users being charged more for the calls made above a certain limit. The changes that subsequently took place that led as a part of technological revolution in India led to the change in this trend with the callers being rewarded with the lower tariffs for higher usage.
The same can be noticed in the Electric power with the US being a market with surplus Generation and the users being charged less or at least at the same rate for higher usage which is in sharp contrast with the markets in South East Asia where the Generation rarely meets the demand and results in the users being billed at a higher rate for usage above preset limits of usage depending upon the prevailing local conditions.
The case of consumerism is existing in the above cases with the businesses trying inadvertently to increase the consumption by the customers to make the most use of the available goods or services that can potentially sold to the customer for profit. The Ethics part in the whole discussion is whether it is ethical for the businesses to willfully encourage the increase in consumption and in what areas and to what extent.
The methods adopted by the Businesses to carry out the increase in spending and consumption of goods and services in a surplus market is under question with also some goods and services themselves irrespective of the fashion under criticism for non business reasons. For example to increase the sales of the televisions the Companies in some companies encouraging the children to become couch potatoes , thus resulting in some problems like obesity in children in the West is under criticism for very long.
Likewise other factors like environmental reasons make the consumerism in businesses like power and water unethical for a lot of activists and the self proclaimed “concerned”. The environmental side of the consumerism is gaining momentum in lot other business domains with the argument against consumerism being very predominantly heard with the increasing consensus in environment with the landfills worldwide being filled at a pace never seen before in the past.
The ethics of Consumerism have encompassed various angles of the same thing with the reasons for each case being different, like in some cases the ethics being linked more to the overall well being of the society like the environmental impacts and other cases being linked to the a specific section of the target customers like the in the case of Liquor businesses in developing countries where alcoholism being major social evil and the liquor businesses inadvertently trying to push the sales irrespective of the evil it is causing.
Another case which we will be considering in detail will be the cheapest internal combustion car in the world being unveiled in India which has the potential to cause a big hike in the Carbon emissions in India because of the highly affordable price tag it carries thus giving rise to lot of environmental concerns. This will be dealt in a separate section in the following parts.
The need for Ethics in consumer culture, in a different perspective can be found in the health care industry in US where the debate is more about the existence of consumerism rather than the methods and extent to which it is practiced like in other industries. The health care industry in US which is in sharp contrast with most of its counterparts in developed countries is a predominantly free market enterprise system instead of the publicly funded system found in most of the Western European Countries.
The Healthcare costs that are charged to the final end user are often debatable between both the cases, the question is more about the consumerism that exists because of the Lassies’-Faire system that the US so proudly upholds because of the country’s never dying belief in Free market Capitalism. The Consumerist policies of the US Healthcare allow for certain practices in the US market which are not possible in a single payer system in the rest of the developed countries.
Literature review: Thorstein Veblen in The Theory of the Leisure Class, 1899 states-“It is true of dress in even a higher degree than of most other items of consumption, that people will undergo a very considerable degree of privation in the comforts or the necessaries of life in order to afford what is considered a decent amount of wasteful consumption; so that it is by no means an uncommon occurrence, in an inclement climate, for people to go ill clad in order to appear well dressed. “
Thorstein Veblen is believed to be the first voice to raise the debate of the newly emerging Consumerist culture which was starting to be noticed by the speaker in the late 19th century. Though the term that was originally coined initially was conspicuous consumption, this evolved into a more widely known term today, consumerism in the post WW II Americas. The wide spread baby boomers culture in the US can be attributed a major chunk of the consumerist culture in the west which eventually spread out to other developed countries and thus almost the entire world.
The basic theory of consuming more than the basic needs is not a modern era thing and can be dated back to very early times in history as back in history as the medieval Europe, Babylon and the Great Roman Empire where the people had wealth to spend in excess of their basic needs. However the debate about the trends in the consumer spending culture is believed to be seen only after towards the end of the 19th century. Consumerism in the UK super market culture: Jack Samways , 2007 states “Many nongovernmental organizations, such as
Friends of the Earth (FOE) and so called ‘ethical consumerists’ are against the growth of supermarkets, often making claims that such businesses are un-ethical because their practices are harmful; to the environment, (Friends of the Earth Briefing 2005) society and local economies (Lawson 2005). While these arguments are not unfounded, they do appear to be very one sided. ” The rise of the super market culture raised a serious debate in the UK about the spread of the consumerist culture in the region which was argued to have lot of impact on other issues such as the environment and local culture.
The rise of the super market Giant Tesco is attributed to the rise of consumerism in the UK supermarket culture. The rhetoric against the spread of the super market culture in UK consists of lot of arguments like the traffic based one which states that the increase in the average miles driven by a customer increases with the increase in the miles that the goods take to reach the super markets. The argument is that out of town supermarkets result in the increased car journeys made by the customers.
However this argument is countered by an opposing argument that states that the availability of an automotive I a bigger driving factor for the average driver than the distance to a super market in the increase of his average annual miles. This precisely means that the rise of super market culture is marked with a growth in the economy which is linked to the increase in the availability of personal transportation which results in the increase in the average miles driven by the customers rather than the location of the supermarkets.
The distribution system of the UK supermarkets on a whole is also under lot of criticism for the mode of transport used and the concern shown by the Business giants towards the environment in making their policies that affect the environment in a big way. The argument against the distribution system is made with the number of miles the out of season food takes and the annual taxpayer dollars spent to counter act the impact caused by transporting the food to the stores from remote locations.
The counter argument in this case is made by the Tesco management by citing the trade benefits the developing countries enjoy because of the increased trade and the final cost benefit to the customer because of the flexible system. Tesco’s Corporate management cited in the the 2007 paper goes in the lines of- “Affairs Director Lucy Neville-Rolfe argues that even though the transportation of food, can in some cases be unnecessary, it is often beneficial as it can help support some developing countries though the sale of fair trade products. The Sourcing of the foods is considered to be the most critical of the practices in the super market culture with lot of ethical concerns being raised apart from the environment question, like the human rights, fair trade. Jack Samways, 2007 states that “…Effectively covering a selection of topics such as genetic modification, pesticide (s) use, and animal testing, child labor and workers rights. The cut throat competition between the super markets resulted in the culture which marked the practices of the big businesses which was not big necessarily in a broad sense. The practices of the Big businesses who had the power and resources to bend the rules and cross some lines for the sake of profitability were questioned seriously and the UK super market Giants were forced to follow a specific set of standards. Packaging was considered to be one of the important concerns with the large environmental risk it poses.
The UK government issued the EU directives which were expected to be followed by the supermarkets all over the country. The Government publicly expressed dissent about the inaction of the super markets in this regard ??? “Local Environment Minister, spoke out against the lack of action taken by supermarkets when he actively encouraged consumers to dispose of their unwanted packaging waste at the cash till. ” As an anonymous speaker puts it, “You work in a job you hate, to buy stuff that you don’t need, to impress people that you don’t like. Precisely this speaks volumes about the consumerist culture that is prevalent today. As Bernays, 2007 puts it,” Consumerism interferes with the workings of society by replacing the normal common-sense desire for an adequate supply of life’s necessities, community life, a stable family and healthy relationships with an artificial ongoing and insatiable quest for things and the money to buy them with little regard for the true utility of what is bought. The author argues that materialism is the ultimate result of the mindset that goods and services that can be purchased can bring happiness to a person. The argument goes well beyond the philanthropic lines. The Businesses are accused of planning and carrying out a campaign that is meant to benefit them irrespective of the overall well being of the consumer which the Companies today are no longer hesitant of stating publicly keeping in mind the profit centered economic system aimed at increasing the shareholder revenues.
The environmental impacts of the consumerism are explained below: ??? Landfills are filled because of the pro business policies like promotion of products that boost sales. This is especially true in the case of Plastic water bottles, which are so promoted by the bottled water companies which are the Soft drink makers in most of the markets worldwide. The bottled water waste causes a very large chunk of the landfills in most of the developed countries. The products made psychologically obsolete by companies long before they wear out, is a trend that suits the technology market very well. The Moore’s law which results in the doubling of the computing capabilities of the gadgets every few years is exploited in a very profitable way by the Computer industry with the role played by some key players like Microsoft and Apple who increased the computing requirements of a basic computer without any real necessity on the part of the consumer.
The example of this trend is the recent operating systems released by the two said companies in the last couple of years which increased the capability requirements of various computer parts without any real complaints from the consumers on a whole regarding the performance of the current computers they were using. ??? The Generation being created that doesn’t really know the meaning of quality other than brands that they know to stand for quality.
A best example of this can be found in the pre freedom generation that fought for Independence of India who clearly knew the products they want to buy at the quality they want to buy at a time when any brands hardly existed. The purchase of Saris or Dhotis for example was marked by the knowledge of the elderly in the quality of the goods which is in sharp contrast to the present generation which relies on the brands that they know to produce goods or services of good quality.
For example in the current India, the brand consumerism is so rampant that in a survey two jean pants of similar quality are put in display with different prices and the customers chose the one with higher price, blindly relying on the companies to price their products right. This in many cases can let the customers away with the competition deciding the apt prices for the quality for most of the items; this can be detrimental for many customers who do not clearly understand the reason for the price they are paying.
For example a new to market customer who wants to shop for T-shirts and has no real requirements regarding the designer style and who just wants a t-shirt of good cloth quality and comfort and who necessarily does not care for up to date fashions, is often doomed by some brands who do not necessarily make T-shirts of great comfort but rely more on the trendy urban fashion wear. The utility of the items people purchase is often mistaken and this can be found in the American way of life where the self storage culture is so rampant.
Year after year hundreds of acres of farm land is cleared to make room for the people to store the unwanted items to make room for the products which they are convinced by the consumerist market to be so necessary. The question raised by the author is that if so many items were to be placed in the self storage facilities why would they be needed in the first place? As Bernays, 2007 puts it, “… People turning themselves into human consumer goods??more suited for the “marketplace” than living in a healthy balanced society. The culture of the consumerism makes humans less human and more subjective to the tactics of the consumerism culture of the Businesses which is what the Businesses precisely want to bring the maximum profits to the share holders. The daily increasing college sports culture in the US is another example of increasing consumerism. The increasing spending of the universities in all the areas like infrastructure and high pay scales for the coaches to attract better athletes from other colleges from universities is a target of severe criticism in the recent times.
A small relief that resulted because of the anti consumerism activists in this regard has been the non commercial approach taken by the sports teams in paying the students. The students are paid only in the form of the college tuition waivers and by no other means to avoid the commercialization of students in the sports. Bernays, 2007 states “Take all the mental and sometimes physical energy, the money and the time that the average American spends on professional and college sports and divert it to the care and maintenance of local public schools; we could be the best educated people in the world! The Argument of the author that consumerism should be held responsible for the funds that are diverted from activities that a society so severely needs towards what is only made to believe by the companies . The time and resources which can be spent for education and infrastructure are regularly spent on other expenses of the companies. One more side of Consumerism is that the free trade agreements that encourage the overall usage of the consumption by making cheap products in markets.
Agreements like NAFTA are very infamous with the circles that identify themselves with the anti consumerist movement. NAFTA is the acronym for North American Free Trade Agreement which allows the countries in the North American Region to perform trade activities without any barriers, like the products produces in one country to be allowed to be sold in other countries without lot of commerce related restrictions with the exceptions of the locally applicable laws which prohibit certain items to be traded between the countries, like the Guns to be traded between US and Mexico.
The NAFTA allows the goods and services to be sold in the US to be manufactured or produced in countries such as Mexico, El Salvador or similar low wage places. The Argument against the NAFTA is raised by many a politician these days especially in the weakening US economy which is losing jobs daily to its low wage counterparts. The growing sentiment among the American public that the high prices that the American consumer is paying for the goods and services should at least partially benefit the American worker is very rampant in the recent times.
The out sourcing of other manners is also included in the context with the manufacture of low quality goods being outsources to China and services sector being outsourced to India and other Asian countries as well as some Eastern European countries. Rep. Bernie Sanders, 2002 says “This is heartbreaking. This is one of the most unpatriotic, most un-American things I can imagine a company doing. They want Americans to buy their products, but they don’t want to put Americans to work making those products. ?? The sentiment among the American Public against the growing consumerism that results in agreements like the NAFTA can be observed in the tone of the representatives in the congress against the same. The total environmental cost of the goods and services in demand per capita in developed countries is staggering and the demand for new products driven by the companies aiming for growth all time is a big contributing factor to this.
As Bernays, 2007 states “Consumerism causes the wasteful use of energy and material far above and beyond that needed for everyday living at a comfortable level. ” The products often pushed into the market claiming to save energy and money often end up in just giving the new product satisfaction to the consumer leaving aside the other benefits it claims because often the new products offset the energy and money savings by the energy required to manufacture the product and the money spent by the customer to buy it.
Recycle and Reuse are often used as tools by the companies to promote consumerism but often end up as just excuses to the harm posed by the ever increasing product frenzies to the environment. Barnays, 2007 lays special emphasis on Brands and the lifetime of the brands and the role brands play in the whole concept of consumerism. Barnays 2007 quotes, “”The most important assets are brands. Buildings age and become dilapidated. Machines wear out. Cars rust. People die. But what live on are the brands. The Brand factor in the building of a product’s lifecycle is immense. For example the brand value of the Ford Cars in US and many parts of the world is maintained with care and the brand image of the company helps the Manufacturer sell the highest number of sold trucks in the US, Irrespective of the economic downturn that the US economy experienced in the recent times. The Brands affect the culture of a society and often are included in the conversations with minor exceptions.
The Jack Daniels and Jim Beam Branded whiskeys symbolize the American whiskey culture with the brands becoming the icons for American boozing culture. While the above argument is the anti consumerist rhetoric, there seems to be a silent movement taking place in India which was considered to be socialist leaning not very long ago. The consumerism definitions seem to take a new stride in New India with the raising levels of awareness among the Indian Public towards demanding what they want instead of accepting what they get.
The system is comprised of Non government consumer organizations with enough legal privileges to take any necessary action as per law acting along with the Businesses and consumers form a system that promises to protect the interest of the consumers while still being profitable for businesses. The Consumer protection act paves the way to a new form of consumerism in India which is trying to strike a balance between its predominantly socialistic roots and the free market capitalism and western brand liberalism it is trying to adapt to.
K. Srinivasan, 1999 states, “The transition will be from a predominantly “sellers market” to a “buyers market” where the choice exercised by the consumer will be influenced by the level of consumer awareness achieved. By “consumerism” we mean the process of realizing the rights of the consumer as envisaged in the Consumer Protection Act (1986) and ensuring right standards for the goods and services for which one makes a payment. Though this sounds different from the free enterprise system seen almost all over the western world, this is a huge stride for India keeping in mind the history and conditions. The consumer protection mechanism in India works in direct relation to the literacy levels with higher awareness being noticed in states with higher literacy figures. The consumer protection in India in some contrast to its western counterpart like stated above can be seen in the form of different laws and acts enforced by different departments such as measurements act, ISI certifications etc.
Regarding the practice of ethics voluntarily, organizations like Fair Business practice forums are functioning in a very effective manner to solve the problems f the customers and the businesses are voluntarily engaging in direct talks with the consumerist activists acting in the interest of the consumers. Several key policy decisions made by the businesses in India like the voluntary ISI( a standards organization) certifications for the products not completely managed by the government regulation like Bottled water which does not come under food to be regulated by the food safety departments.
Other than these, there are some guidelines issued by the UN to promote fair practices in consumerism. ??? To assist countries in achieving or maintaining adequate protection for their population as consumers; ??? To facilitate production and distribution patterns responsive to the needs and desires of consumers; ??? To encourage high levels of ethical conduct for those engaged in the production and distribution of goods and services to consumers; ??? To assist countries in curbing abusive business practices by all enterprises at the national and international levels which adversely affect consumers; To facilitate the development of independent consumer groups; ??? To further international cooperation in the field of consumer protection; ??? To encourage the development of market conditions those provide consumers with greater choice at lower prices. To understand the ethical value of the consumerism, it is very important to understand a key associate of consumerism, advertising. Advertising though does not go with consumerism all the time, is an important factor and a very helpful tool for the companies to accomplish their consumerist motives.
The advertising has its own set of key objectives and goals; but plays an important part in establishing the consumerism in a society. For example the plans of a company to make the people of a particular geographic area drink more beer per person in a certain time frame, say in US during the local athletic meet can only achieved with aggressive advertising. But whether it is ethical to do so keeping in mind the public relations the company needs to maintain with the local population is very important.
The ethics like said in the sections above need to be maintained not just for the public relations but also sustained business in the area. In this case the aggressive advertisement not only hampers the image of the beer company as not so family friendly but also makes the beer drinkers look like alcoholics, who otherwise would not have any problems sipping some cold beer on a hot afternoon. The advertisement grew steadily with the consumerism gaining momentum since hardly any advertisement was needed before the industrial revolution and an excess was created in the goods sector.
Po-keung Hui, 2004 states “Dominant value systems before 18th century ??? religions, customary value systems etc. did not provide a fertile ground for consumerism” The excess which was created, like explained in the above sections was pushed on to the public which gave rise to the consumerism movement where the consumption of goods above one’s comfortable need levels was encouraged for the growth of the economy and creation and multiplication of wealth. The advertisement was sought as the first medium to propagate what the companies wanted to convey to the public.
For example there was an advertisement by the Coca-Cola Company that the drink helps for the quick growth of children and helps in the nutrition. This trend gave birth to the anti consumerist movement that fought for the rights of the consumers to be put in US President John F Kennedy’s words- choice, information, safety and the right to be heard to be the consumers basic rights and the responsibility of the businesses to protect these. The advertisement slowly became a form of cultural part of a society rather than just a player of consumerism with the advent of cultural advertisement.
Advertisements became not just propaganda machines but also brand ambassadors for the companies that they publicize. For example the “PC Vs Mac” Ad campaign of the Apple against Microsoft surpassed the popularity f the Apple brand in popularity thus gaining immense popularity for the company and gaining valuable name in the youth for the company thus strengthening its strong hold in the constituency. A best example of advertisement playing an important part in the consumerism in the society is the sales of soft drinks in any country.
Irrespective of the country the place of soft drinks is not a need for any society poor or rich, developed or developing, east or west. This being the case, the soft drinks makers had to employ different strategies depending upon the countries to capture the market share and to create a brand image for the drinks. The soft drinks more than any other food related products are influenced more by the advertisements they are publicized with. For example, Pepsi India Company has a staggering market share of 52% with two other competitors fighting for the share.
But the profits of the company are always below the profits posted by its competition because of the more than proportional spending in Ad campaigns conducted by the company hiring very expensive stars. This fact goes on to explain a very important fact of advertisement that the success of purely consumerist products like the soft drinks and beer are often marked by the strength of the brand image they carry which again is a direct result of advertisement n most of the cases.
Po-Keung Hui, 2004 states, “According to the 1998 United Nations Human Development Report, the growth in global ads spending outpaced the growth of the world economy by one-third. ” The late 20th century marked the increase in consumerism to a never before seen proportions with the advent of the technological revolution which gave rise to product which consumers need only if they were habituated to; those were highly addictive products and gadgets and all the companies needed to do was take the products into the public and make them feel they need those.
This can be applied almost to any gadgets used today especially MP3 music players and personal DVD displays used in cars since other technological products like navigation systems and cell phones help in improving the communication and hence increase the average productivity. Gadgets such as Mp3 players (IPods) which were considered luxury at one point of time are now considered as almost basic necessities in some societies and this is a result of changing culture of consumerism fueled by aggressive advertisements that take the products into the people.
There is one word coined these days called short-termism that is very popular in the discussion of consumerism. The short-termism refers to the instant pressures on the part of the Corporations to show growth in revenues and increased profits every quarter because of the pressures from the shareholders and the investors. The short-termism often leads to not so sustained business prospects because of lots of factors like weakened Public relations with the community, decreased brand image and short sighted olicies like decreasing the prices for increasing sales at a loss. The advantages for the consumer in this respect are short term gains like decreased prices, but results in short term and long term problems for the people like decreased employment because of measures like cost cutting, environmental impacts, lack of long term quality of the products, and other indirect problems like those which are health related.
The consumers of Sea Food products for example in US are directly impacted by the quality of the sea food products imported from china which are believed to have some lead content because of the waters they are fished in, in the coast line of China which is again believed to be very polluted with lead which is the reason for the lead content found in the fish meat imported from China. So the cost cutting measure of consumerism is said have direct impact on the health of the consumers in this example. It is quoted that “Liberal Market Economy of US fosters a “laissez faire” ideology.
Activists have forced companies to care about “Image” because Adam Smith’s idea of informal control not longer works. ” The consumerism culture which is fostered by the Adam smith’s libertarian leaning views of free market capitalism are found to be not applicable on an ideologue scale in the current day with some very important current day modifications needed for the system. The important work done by the activists include the campaigns to promote customer awareness towards the consequences of the prevailing trends, like for example what would happen if the sales growth of the bottled water were to continue at the current pace.
The activists also increase shareholder awareness and involve in dialogue with the corporate management of the companies to negotiate some mutually agreeable deals that the companies can afford financially at a given point of time. The willingness of some of the US based companies to employ US workers for jobs that there is more unemployment in US instead of outsourcing the Jobs to 3rd world nations is a result of similar efforts. The codes of conduct for example in environment impact like the emission norms which are enforced by the governments also is a result of the efforts of the anti consumerist activism.
The companies respond to the above attempts by engaging in activities that strike a balance between the PR and the company’s business prospects by following certain set of fair business policies like fair trade agreement, agreeing to the codes of conduct and agreeing to triple line accounting which result in increasing the ethics in the consumerism culture in the present day. Some Corporations to avoid the PR problems engage in green washing by just posing to have taken the steps and not engaging in real change in the policies adopted.
Other than the ethics that need to be followed by the Corporations there are some other ethics that need to be followed by the consumers to ensure the fair business policies that everyone is striving for. Shopping ethics are important parts of consumerism which include Equal exchange, which is applicable in the case of buyer monopolies and environment conscious shopping which can affect the overall market segments thus potentially changing the product lines offered by the Companies.
The practices like turning off the engines to decrease fuel consumption and conserving water in any part of the world come under the ethics that need to be followed by the consumers to play their fair part in the ethical consumerism. It I quoted that “Irrespective of costs if the life is endangered deontological costs need to be incurred” This means that the safety of the persons involved, be it employees or the consumers, the costs to protect life must be incurred by the companies. The ethics also pose the question of if the poor should be ruled out of the competition to incur additional costs.
The basic rights of the consumer as mentioned above can be described as follows: Right to be informed: The consumer has the right to be informed about the quality and other details about the product that is tendered for sale. Right to safety: The Consumers have the right to be safeguarded from the use of the products or services they buy unless otherwise specified and warned beforehand. Right to be heard: The consumers have the right to be heard regarding their opinion about the quality of the products they purchase and possibly what they would expect from the company.
It is, of course the final will of the company to take into account what they want in their interests. Right to choose: The consumers have the right to choose between what they want from the company’s offerings. The right to choose means the consumers cannot be forced upon to consume specific goods or services. Right to enjoy a clean and healthy environment: The consumers of a community, area, state or a country have the right to have a clean environment, though this is dependent upon the local conditions and financial limitations of the companies involved and the environment concern they can afford.
For example the Chinese people have the right to clean environment beside the coal factories which is the major source of electric power in China; but the Chinese power generation companies who are developing financially slowly cannot afford the environmental norms which cost the businesses dearly. Case studies: Tata Nano: The latest passenger car offering from Tata Motors, Nano has been a revelation in recent times and can easily be called an embodiment of consumerism in the modern day passenger car market in India and similar markets.
Tata Nano for the sake of introduction is a car that is offered for a lean price tag of $2,500 in India and has been a craze ever since its launch. The car is yet to roll out of the factory and the bookings are well above what the company has promised to deliver in the first phase delivery schedule. The car’s sales have reached record levels well before the first car was rolled out of the factory. The matter of fact is that the Ethical consumerism question was raised well before the car was unveiled and the price tag was the cause of concern for most of the critics.
The market conditions of India, the market where Tata Nano will be initially launched need to be given some serious look to understand the concerns of the critics. India is a market with mostly 2 wheelers on the roads not too long ago, with the liberalization in the early 1990’s causing some increase in the personal wealth for the average Indian thus adding for the increase in the 4 wheeled transports on the Indian roads. The Market has been a thing of constant attention by lot of western and Asian Car makers for its vast potential for ustained growth because of the booming economy and huge population. Like said above the personal transportation market in India has predominantly been 2 wheeler dominated. Though the passenger car market itself has been growing, not a large enough section of customers was seen to upgrade from the 2 wheelers to the car. Tata motors saw this opportunity and pounced on the opportunity and planned a car that can potentially capture the market of the 2 wheeler commuters. The average price of the motor bikes on the Indian road is about Rs. 0,000 on which two persons can travel. But the common trend has been that the families use the Bikes to travel as a family with the couple travelling with one or two kids and this has been a cause of concern for many but with no alternative. The Tata Motors saw a business opportunity in this area with the chance for a cheap car to capture the share of the motor bikes. Tata finally announced a car for 1 Lakh Rupees (Rs 100,000) which took the Auto market by storm. After few years the car as promised was ready for release for the announced price.
There are several ethics related cases that can be studied in this regard. Price Ethics: The price factor was a revelation for the market since the next cheapest car in market would be the 800 model from Maruti Suzuki for almost the double the price. The Nano has taken the car pundits and customers alike by surprise in the price and the price tag showed the commitment from the Tata Company to deliver a Car at the cheapest price possible to include as many customers as possible.
The pricing ethics come into play especially in this case since the Company is not obligated by the competition or any other factors to offer a Car with that price tag, but just committed to offer a Car that is reachable to the maximum possible target customers irrespective of the trade off point where the balance between the demand for the car and profitability can be attained. The Ethics of Tata Motors in this regard need to be appreciated.
The role of ethics in the way Tata motors does business can be said no more clearer than in the words of Ratan Tata- “What I feel most proud of is that we have been able to grow without compromising any of the values or ethical standards that we consider important. And I am not harping on this hypocritically. It was a major decision to uphold these values and ethics in an environment that is deteriorating around you. If we had compromised them, we could have done much better, grown much faster, and perhaps been regarded as much more successful in the pure business sense.
But we would have lost the one differentiation that this group has against others in the country. We would have been just another venal business house. ” Promise kept: The Ethics of Tata motors can also be observed in the fact that the car was launched with the same price tag it was announced with even if it has been a few years by the time it was launched after it was announced. The Promise of the Company Chairman to roll out the car for the price has been kept by the company in spite of the inflation which is common in the Indian economy and the increasing prices of almost all of the factors that add up to the price of the car.
The Nano plant saw lot of hurdles that came its way which resulted in the increase in the investment cost of the Car plant which has the potential to increase the cost of the car. The Company also lost lot of the investment when it had to move the project from the initially planned location in West Bengal to Gujarat which did not reflect as an increase in the price of the car from what it was announced before all this happened.
Vijay Govindarajan, 2009 states: “Through his actions in the Tata Nano project, Ratan Tata has demonstrated that capitalism can have a soul???the profit mission and the social mission do not conflict and can, in fact, be pursued simultaneously. As I mentioned earlier, Ratan Tata incurred enormous losses in shifting the factory from West Bengal to Gujarat. Yet in the new location, Tata is not only putting up an automobile plant but they are also voluntarily investing in the community…”
The main question: The other side of the Consumerism Ethics in the case of Tata Motors can be found in the result of the sky rocketing sales which are almost a result of the low price tag associated with the car. The Ethics question has surprisingly been raised against the low price of the car which is making the car closer to the masses. Andrew Buncombe, 2008 states- “Many environmentalists believe the new vehicle, with a price tag half that of India’s current cheapest car, will simply clog up already busy and broken roads and add pressure to an infrastructure that is badly buckling. The environmental concern is that the low price tag of the car will make the roads filled with more emissions per person in the place of the 2 wheel transport the Indian public is so used to until now. The concern of the environmentalists is more about the Public transport system that needs reforms badly in India than the Car capturing the 2 wheeler market share. The emphasis needs to be more on developing a better infrastructure than to criticize a Car maker for offering something the clientele so badly needs.
The attitude of the West in this respect has been that the Carbon emissions of the developing countries have been growing and no attention has been given to the per person emissions of the people in the western countries Similar argument can be heard from Friends of the Earth UK spokes person, Tony Bosworth- “The Tata Nano makes motoring cheaper and growing car sales in India will lead to big rises in carbon dioxide emissions. This is another blow to efforts to tackle global climate change.
But per-person emissions will still be much higher in the West. Our priority must be to increase efforts to cut our own emissions…” The argument justifies the whole effort of the Tata motors in bringing a car of such value available to the Indian consumer. Though this is clearly consumerism, it is only in a positive sense and the ethics of consumerism are in no way spoiled by the efforts to meet the demand of the growing size customer base looking out for a car with similar attributes- price, space and reliability.
The Ethics in the case of Tata Nano are only protected in the pricing and the way the Tata motors does business by engaging in lot of community building activities to show the philanthropic history the company has. Healthcare Industry in US: The Healthcare Industry is another example of the rampant growth of the consumerism in the modern times. Consumerism if refers to the business policies that make the customer the centre, and spread the philosophy that the customer decides the use of the goods or services offered against the government or any other organization deciding the appropriate use for the consumers on their behalf.
The Health Industry in US has been a privately managed one, all through its history except for a few instances in history where the argument for a single payer health care system has been heard very dominantly with some very liberal administrations in power. The Single payer system though is very popular in the western Europe and the neighboring nation Canada, is not very popular with the US public who are predominantly favorites of the Free enterprise which they believe is so important for their freedoms.
John Mills, 2008 states- “Consumerism in healthcare demands a greater understanding of plan design and cost information. Employers want their employees to be better informed about health care costs, prevention and treatment of illness” The Consumerism in the right sense has the potential to improve the lives of many in the crumbling healthcare system in the US. Consumerism like mentioned above if taken for the right sense to promote the interests of the consumer and protect the rights of the consumers has the potential to give a very promising shape to the US health care system.
The US health care system on the other hand is in a very bad shape that in the opinion of many needs a reform towards a model that is successful in most of the west and other developed countries. Even Cuba which is a third word developing nation and a neighbor of the US is proven to be a better society when it comes to the managing the health care costs. US spends double as much as Cuba spends and still the figures are not so encouraging when it comes to the life expectancy and infant survival etc.
The rise of Consumerism in Healthcare: The previous generations are marked with a tendency in healthcare to rely on the physicians for advice be it minor cold and fever or major advices like surgeries. The surgeons used to be chosen by the public based on the word of mouth mostly, but slowly the rise of the Hospitals saw the growth of the doctors without any name to themselves but identified by the hospitals in which they perform their medical practice.
This trend s expected to grow in this direction for the some future to come, thus making way for some revolutionary changes in the business of healthcare. The increasing prominence of brands in Hospitals, medicines and other medical relate supplies can be attributed to the rise of consumerism in healthcare. The history saw the above things not associated with any brands like the medicines used to bear by their drug names and not by the brand names, with only the doctors caring the brand names associated with it. The same is the case with Hospitals and other medical related upplies. For example the hospitals used to be chosen by the consulting physician in most of the cases while today the patients are well aware of the Hospitals and the brand images they carry and thus discuss their preferences with their doctors where they want any operations or treatments to be performed. The same is true in the case of the medical supplies like the diabetic testing gadgets. The personal care quotient gained enormous significance in the recent times with the consumerism taking over health care.
The current trend is expected to pave the way for the future that can allow for major changes like minor and eventually major medical advice being available online and other technological advances like the outcome of clinical procedures being available to the patient directly instead of the patient having to see the doctor for the results like in the current day. Consumers being entitled to certain rights in consumerism are also entitles to the right to be informed and right to choose even in healthcare and this is a major stride from the old, family physician system that has been in existence for until now.
Like in any other business, the consumers in healthcare also demand for certain qualities in the services they are receiving like the privacy, confidentiality and security of their information. The collection and distribution of personal information like SSN and birthdates in US is considered very hazardous for security and hence the patients and health care recipients demand more attention regarding their personal data.
This trend led to the huge medical records computerization in the US as part of the Medicare and Medicaid services that are offered by the state. The sensitivity of the information and the vulnerability of the data make the consumers more worried about the security. The vulnerability not only arises out of the serious damage that can be done to a person or organization with the loss of private data but also because of all the insecure locations the data can travel where it has the risk of being stolen.
All the above concerns lead to the consumerist approach of the patients to demand for more from the healthcare providers, be it private in US or the government in the case of say Canada or the UK. Other than the positive side of the discussion there is one more argument which though is not as substantially evidenced as the other arguments but nevertheless holds a lot of ground when it comes to the public opinion. The reventive care, the figures say is lot less emphasized in the US when compared to lots of its neighbors and Western European counterparts. This mainly is recognized as some to be a result of the private healthcare industry that has been trying since ages to stop the socialization of the health care and the attempts of the Industry to see the Industry as just another for profit business and not as an obligation where certain rules need to be followed since it is directly linked to the life or death of the consumers.
The ethics that are missing here are not the activities directly carried out or promoted by the industry but the lobbying power of the industry that has resulted in the lack of the efforts by the government to promote preventive care for lots of ailments commonly treated in the US, for example Diabetes and heart problem are very commonly treated problems in the US hospitals but any proper measures, guidelines or directives are yet to be seen from the government in this regard.
For comparison the European countries with their single payer healthcare allow the patients to take care of their health well before it worsens and thus decrease the healthcare costs. This trend which is lacking in the US healthcare industry is seen as lack of ethics of consumerism by some. Environment driven Ethics of Consumerism: The Environment factors are a major cause of concern for activist groups fighting against the consumerism culture that they think leads to many other social evils.
The central point for this thought is that all the goods are made from some or the other resources and the resources in the world are limited. This, combined with the fact that most of the goods that are purchased by the consumers will replace the older ones creates another land fill problem which is a growing problem today. Other problems like green house gas and pollution are caused by the consumerist attitudes of usage which is way beyond the pollution caused by living lifestyle by needs.
The policy of Reduce, reuse and recycle needs to be followed in the case of consumption. The wasteful use of any products because of the above reasons needs to be avoided and should be used only if it can’t be avoided. This reduces lot of waste from the use. Whatever we use we need to strive towards self sustenance and hence should adopt the re using policy and thus avoiding the purchase of new items. For example the use of paper towels can be avoided and wash cloths which can be re used can serve the purpose without any problems.
When the above two are not possible the last resort is that after use we need to make sure that all that we are consuming is being recycled, at least as much of it as possible depending on the local availability of recycling facilities. Consumerism in different Economical systems and geographical areas: Consumerism can be approached differently in different systems. Though it is found wide spread in capitalistic markets, Globalization made the consumerism in reach of almost all of th countries in the world.
Very few countries in the world, say Cuba are staying away from the consumerism movement which is taking the world by storm. It is not because it is right or it leads to better overall end results but because a society would sure miss out on the opportunity to interact with the world if it denies the ticket to ride the consumerism train. Consumerism in the west can be seen in its most mature form with the consumerist groups and anti consumerist groups debating regularly about both sides of the argument.
The free market system made the culture of consumerism possible to be spread like a wild fire way before it caught any of the developing countries. The US and the UK can be seen as the first countries where the consumerism has been spotted for the first time. Consumerism is a culture which is fueled by the excess in a country in time, money and production. The Businesses should be in a position to produce more than the basic needs of the consumers and the consumers need to be in a financial capacity that can allow them that extra buck to go around for shopping and of course the need to have the time.
The developing countries in the BIRC (Brazil, India, Russia and China) are expected to have some considerable gain in momentum regarding the spending and thus the consumerist culture, but most of the developing countries and the BIRC group nations being from a socialist back ground in history there has been a negative view of the culture almost in all of the developing countries who were otherwise used to the government sector services. For example, in China, the government used to supply even the school uniforms and school supplies which were funded by the tax dollars and the rise of ifferent goods that the consumers might be interested in at different prices couldn’t be seen very positively all throughout having such a dark background. Same is the case in cases of other countries which are adjusting to the western way of life slowly. The end of 20th century saw lot of businesses have their strong footprint worldwide with different fast food chains and soft drink manufacturers playing aggressively on the global playing field. Nations like Saudi Arabia and UAE were centers of attraction since they presented an immediate opportunity for businesses that was never tapped before.
The consumerism blossomed in these countries at a little bit later stage when compared to the west. Though the initial resistance and inertia to move away from a current economic system makes the a section of the population in countries of the BIRC rank a little hesitant to the whole consumerism culture, there is still lot of potential to be tapped in these countries and the Multinationals are doing no delays in devising strategies to carry out the activities to make the most of the opportunity at hand. The Ethics especially are dependent largely upon the location the business is done.
AS explained in the previous sections, the ethics in one country cannot be applied to other countries. For example, in US the customer courtesy return (sometimes with a restocking fee) is a norm and forms the ethical consumerism in the US where the market is not so huge and any misuse of the system can be promptly identified. But the same cannot be offered in a developing country, say India where the number of sales per store is staggering and the returns cannot be dealt in a completely satisfactory manner. Consumerism referred to different business areas:
Consumerism differs not only in reference t the geographic location but also in reference to the business domain. The ethics also change with respect to domain. To avoid loss of generality, let us take the same example that we took in the previous section. The ethics followed by the technology related businesses and most other businesses like grocery stores and clothing stores cannot obviously be honored in other businesses like automobile business where a Car that is sold cannot be allowed to return to the dealer for a refund and it would be just considered a trade.
Any return of automobiles once the dealer hands over the keys to the buyer would be considered a trade in and would attract lot of depreciation right away without even using the car. This goes on to say that ethics are something that are decided by the individuals and companies involved using their conscience and cannot be listed out as hard and fast rules to do business. The ethics in different business domains are formulated keeping in mind the concerns of the particular consumers.
The ethics and codes of conduct are generally only prepared for a specific industry and to a limited geographic region which is sometimes a local region such as North America, and sometimes as narrow as a state. The ethics thus defined, govern the way the businesses perform keeping in mind the grievances of the consumers and thus adding to the longevity of the overall business. Need for Ethics of consumerism: The need of Ethics in consumerism or the need for ethical consumerism is a very broad topic and it ranges lot of angles of consumerism like the social responsibility, and long term sustainability of the businesses.
There are lots of ethical concerns in consumerism and the need for each should be analyzed separately. For example the environmental ethics in consumerism are for obvious reason for the overall well being of the surroundings which if tampered, will not help any cause of the businesses that act in the region. For example, a Sugar factory if it does not care about the disposal of the molasses in the village it is located in causes various diseases like malaria and typhoid since it attracts lot of infectious creatures like the flies and mosquitoes.
The ethics regarding the pay structure and the pricing are there for reasons better explained by altruism. Though core libertarianism does not call for any altruism on the behalf of government or any organization and calls for personal responsibility of the individual, it is only in the interest of the businesses to care for the unprotected be it employees or low price buyers. It is not recommended for any business to lose its base of customers and this includes the lowest rung of the base. The customer base once if maintained sustains itself but once it starts disintegrating does not stop there and the customers lost once are lost for good.
Even the workers compensation ethics work towards the same logic. Only if the workers were to be happy there would be good productivity levels and only if the workers get enough pay they will purchase good from the society which includes the company they are working for. There is a concept called Fordism in US which propagates similar ideology. Henry Ford initially raised the worker compensation for mostly altruistic reasons but had the idea of a true businessman that the company cars would only be sold if the workers had enough money in their pockets.
This might not turn out the wisest decision if you see the immediate figures, but the brand value the company is gaining and loyal customers it is gaining are invaluable to the company. Ford exactly has this kind of edge among the American auto makers because of the brand image it gained with the loyal customer base which passed down the generations which is converting into sales for ford at the difficult hour. The ethics are non negligible in any trade but very important when it comes to the consumerist culture since it tends to take a troll away from the individuals involved.
Recommendations: The ethics are followed in most of the situations with the businesses having their limitations as mentioned in the sections above. The consumerism rise in the society is not something that can be controlled but ethics are the ones everyone can strive for and achieve if they want. The main changes that need to be brought in the international business are the WTO acting more aggressively to ensure the ethics that are common for most part of the world are followed.
The WTO intervention is especially necessary since the efforts of businesses in place are deemed not so effective because of the lack of the ethics in another part of the world which makes businesses in that part of the world more competitive on the global stage. Other changes that need to be done are more aggressive action on the parts of the governments in liberal countries to make the action that come under ethics as law by legislation where they th