What are they, and do they matter?

What do you think? Discuss in pairs.

‘The purpose of business is to make me money, and increase stockholder value’

(Milton Friedman)

Chicago Tribune article

Milton Friedman on Greed

What do you think Business Ethics looks like? Produce a list of ways in which ethics can be applied to business practice.

Minimum: What we shouldn’t do Don’t steal (commit fraud), don’t kill, don’t lie

Better: What we should do (justice) Be fair, be honest, fulfil duties, work hard

Best: What we could do to make things excellent for all of us…

Create a more beautiful world as we make money

Business needs ethics to thrive:

1. Trust is foundational to contracts2. Customer Satisfaction/loyalty3. Happy Employees = productive employees4. Transparency is essential to development5. Unethical practices ultimately undermine business6. Globalization requires some common values7. Many Customers want ethical businesses

Does Ethical perception play a significant role in consumer behaviours?

--In other words—

Do Customers really buy products according to the ethics of companies??

Boycotts by ethical shoppers cost big brands at least £2.6bn a year Ethical consumption in the UK was worth £19.86bn in 2002 It was worth £54bn in 2013 – greater than the market share of alcohol or tobacco

Source: Ethical Consumer report

‘Amazon is the UK's number one tax avoider’ 

Boycott Amazon

In developed competitive markets, many companies distinguish themselves by positioning their brand as ‘ethical’ or ‘socially concerned’

France United States Germany 1. Danone 1. Coca Cola 1. Adidas 2. Adidas 2. Kraft 2. Nike 3. Nike 3. Procter Gamble 2. Puma 4. Nestle 4 Johnson & Johnson 4. BMW 5. Renault 4. Kellogg’s 5. Demeter 6. Peugeot 4. Nike 5. gepa 7. Phillips 4. Sony 7. VW 8. Carrefour 8. Ford 8. Sony 8. Cocacola 8. Toyota 8. Trigema 10. L’Oreal 10. LEVI 10. Bio Produkte 11. Malongo 10. Starbucks 10. Body Shop 12. Alter Ego 12. Ben Jerry’s 10. Hipp 12. LU 12. Dell 10. Mercedes 14. Auchan 14. Campbell’s 10. WranglerFinancial Times article

United Kingdom United States Germany 1. Co-op 1. Coca Cola 1. Adidas 2. Body Shop 2. Kraft 2. Nike 3. Marks Spencer 3. Procter Gamble 2. Puma 4. Traidcraft 4 Johnson & Johnson 4. BMW 5. Cafédirect 4. Kellogg’s 5. Demeter 6. Ecover 4. Nike 5. gepa 7. Green Black 4. Sony 7. VW 7. Tesco 8. Ford 8. Sony 9. Oxfam 8. Toyota 8. Trigema 10. Sainsbury’s 10. LEVI 10. Bio Produkte 11. Innocent 10. Starbucks 10. Body Shop 12. Waitrose 12. Ben Jerry’s 10. Hipp 13. Clipper Tea 12. Dell 10. Mercedes 14. Asda.. 14. Campbell’s 10. Wrangler Financial Times article

“Today, social norms regarding the environment are changing and consumers are increasingly holding brands accountable for what they do … As a result, more and more companies are making investment decisions that incorporate brand impact and brand risk into their equations.” (David Wigder)

There are a number of ways to improve the ethical image of your brand.

Superficial changes are not enough, and authentic ethical commitment of a brand is displayed in real action on the part of companies in order to have real effect.

Cadbury Schweppes bought Green & Black's, a niche but fast growing UK-based organic and fair trade chocolate firm, in 2005.

Nestlé launched Fairtrade certified Partners' Blend coffee

BUT authenticity is important! Nestle - Fairtade PR coup or PR disaster?

Nike was criticized for sweatshop labour issues in East Asia, and many consumers boycotted Nike.

Nike responded to these criticisms, changed some of their production arrangements, and returned to the list of the “100 most ethical companies” list

The 100 Best Corporate Citizens list ranks firms based on six categories: 

1. Environment2. Climate change3. Human rights4. Employee relations5. Corporate governance6. Philanthropy

100 Best Corporate Citizens 2013

In pairs, research the ethics of one of the following:

a) HSBC and Triodosb) Primark and Marks and Spencerc) Kraft and Unileverd) Sainsbury’s and Asda

Which brand is the most ethical, in your opinion?