Corporations Need To Learn Some Ethical Responsibility
Published: Wednesday, April 18, 2012
Updated: Wednesday, April 18, 2012 01:04
In the beginning of the 21st century, the world was swept by corporate scandals.
Although it seems like people are not surprised by these scandals, more and more of us get angry with multibillion dollar corporations—the richest companies on the planet, and the face of capitalist America—employing unethical business practices. Nowadays, an entire society demands corporations to fulfill citizen responsibilities and moral behaviors.
Consequently, more and more companies are now tapping into corporate and social responsibility trends because it pays to appear moral. People gladly give up their consumer dollars for responsibly-made products. Consumers buy into morally-good corporations and try to support these firms whenever they can.
Contrarily, consumers don’t want anything to do with unethical producers who exploit their workers, harm the environment, simply misrepresent their finances, or give too big bonuses to their top management. Accordingly, corporation, big and small try to avoid those situations. They are now in the race of who behaves the best and the competition of the most responsible firm. Good, green and giving-back are the new buzzwords of a decade.
Examples of this are Apple and TOMS. Apple is the world-leading electronics brand that for an average American means more than a hip computer. Apple sells ideas and inspirations, not just computers for $900 or more. Apple is an image of a clear, successful, and ethical company. Apple’s marketing efforts are concentrated on bringing a value to a customer.
TOMS, now a leading shoe brand, has an exceptional concept. They started with an idea of giving a pair of shoes to children in need every time you buy a pair of TOMS. Something we take for granted, like a pair of shoes, is really lacking for these kids. Being barefoot, these kids run extremely high risks of infections. TOMS then challenged anyone willing to experience these kids’ lives by abandoning their shoes for one day.
Recently, the first audit of Apple’s Chinese assembly plants under Foxconn discovered that workers were exploited for more than 60 hours a week. Some people worked six days in a row. Wages were between $360 and $455 a month. Some people were even willing to work over the 60 hours to earn more.
On the other hand, although TOMS gives away one pair of shoes for every pair it sells, it sends a worse-quality pair of shoes to less-developed parts of the world. If your TOMS rip in a few months, imagine how fast this happens to those kids’ shoes who walk in them all day long on unpaved ground.
One can argue that it’s not only about the company itself but the supply chain, which is not controlled by one corporation. Apple released a statement about supplier responsibility, in which the company admits to those faults, but states that they attempt to fight it.
Yet, I don’t believe that a company like Apple, a world-recognized leader, cannot control its supply chain and cannot dictate correct behaviors to its suppliers. Bottom line, if Apple or TOMS really have no power over their suppliers, they definitely have a choice of who to deal with. Any, even the largest suppliers, would love to land a contract with a company like Apple.
Immoral corporate behaviors have devastating effects on profits and market shares. So corporate headquarters all over the world, one after another, quickly fall into the wave of corporate responsibility. You can’t blame them for boosting their image any way they can. After all, the marketplace dictates the rules of a game.
And the newest marketplace game is being ethical—or at least pretending to be. The question remains whether it’s still better for a society as a whole to have the biggest multibillion dollar corporations to be profit-driven, moral companies or have no ethics in big business at all.