Weekend Special: Do businesses and consumers care about the ethics of production?
Let’s start with a simple example. Apple has been in the press now since mid of 2009 when the first press reports about suicides at the production facilities appeared. Ever since the work conditions are a constant theme in the press and in social media. So from an ethical point of view it was and is at least questionable to go for Apple products. Especially as child labor is part of that story as well.
Has this had any impact on the sales of Apple products?
While on the one hand the western world criticizes China and third world countries for the abuse of workers in general and kids in particular, the products and those who benefit from the work conditions are idolized, as long as they belong to the western culture. Sounds hypocrite to you? Yes, but who am I to judge. I do have an iPod myself (though bought before 2009) and I must admit my buying decision did not factor in working conditions in the past, neither for technology nor for other products like clothing. Ask yourself, did you consider investigating whether there are reports about abuse and factored that into your decision?
That is the consumer side of things. What about enterprises. Lots of enterprises do have strict rules with regards to their corporate ethics. They ensure that their own standards apply even in a globalized world. But they do stop at just the point where the consumer and the corporate world merge. Apple devices are getting a stronger foothold in the enterprise world due to “bring you own device” approaches as well as being cool products that “improve” the image of the user. But this is where enterprises might take a stronger stand to defend their own ethics. I yet have to discover a report about a company banning Apple products until the work condition disputes have been solved.
Let’s move beyond Apple as this post is not about bashing Apple. They are just the most prominent example. The point is that some rules need to change. And maybe some other tactics need to be called out.
Add work conditions in production to your RFPs
I have not seen any RFP (request for proposal) so far that includes questions about work conditions and asks for guarantees in that area. It is time for enterprises to include these topics into their decisions. We are talking about corporate ethics being extended beyond just the employees employed directly but towards the complete supply chain.
If we expect that world changes for a better than the only leverage is buying power. Laws, in a globalized world, will only change slowly if ever. Companies are there to create profit. You can improve profits in two ways – more sales or less cost. Companies will try to achieve both and that is just about right. But there is a balance or in other words connection in between these two. You can impact one by changing the other. This is where a company will start to decide what will be better in the long term, minimized cost but reduced sales, or optimized but not least cost while a steady sale is ensured.
For enterprises this is a step that can be achieved much easier by setting rules for procurement of goods and services that include work conditions in the whole delivery chain. Consumers though need to take individual decisions and with campaigns like in Germany that proclaim, cheap is cool, and the more dominant image of a product, it will be more difficult to turn this around. But if you think of it, there is another way to attack this.
The Trigema example
Trigema is a German based company that produces and sells clothing. The reasons why I mention it here is the way they do advertising. Rather than putting the price in the foreground or product features not to speak of prominent figureheads, their main strategy is to emphasize that their production is completely domestic. It is a completely different approach but imagine e.g. Nokia advertising the Lumia 800 with a slogan like “Produced in the European Union, 100% free of child labor”. Imagine this not somewhere on the bottom in fine print but bold and center. Would that put the competition on the spot? Even if the product might be slightly more expensive it would be something to be talked about.
It is a little bit like Deutsche Telekom and T-Systems putting an emphasis on the fact that their cloud services, for consumers and enterprises alike, are delivered solely from Germany and therefore out of grasps of the U.S.A. and their Patriot Act.
A common reaction is that all the companies are the same and there is none the better. This is indeed an impression one could get. This is why I believe actually that an aggressive advertising strategy could pay off. And also it is not until one starts by and for himself something changes. By setting an example, individually and also as an enterprise, things hopefully change for better.
I really like the Superbowl half time advertisement “Halftime in America“. It got me thinking why products that sell with a incredibly high margin like the iPhone and the iPad, are regarded as American products? Wouldn’t a little less margin and a production in the U.S.A. or even a slightly higher price work as well? Would that not address many areas and improve not only the products delivery ethics but also create jobs? But again I sound like I hold a grudge against Apple, which I do not!
Will I myself make these consideration part of a decision? I will try to and probably not always succeed. Does this mean I would not go for Apple products, just to come back the dominant example from above? I am not sure. But I am sure I will keep an open eye on developments and reports about improvements or lack of.
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