Ethical Consumerism

Question: Why ethical consumerism is an important strategy for a business? Answer: Introduction There are growing number of population who make their decisions of consumption based on their ethical values like eco friendly products, pollution free production process, maintenance of labour standard and the most important human rights. Ethical consumerism is a growing activity that has an influence on ethical trade movements. Some stakeholder uses the consumerism as a force which can cause for a social change. Based on this concept a company can take its decisions for consumers demand. Generally companies create consumers demand by effective advertising and branding, but consumers power can also be used to prove that the company is accountable for the society. It creates a good image about the company in the mind of the public. The introduction of the ethical consumerism was made in very earlier stage of trade, but the problem is that the word consumerism is more celebrated in business world than it is practiced. But obviously different persons have different opinion about it. Fu rther development of ethical consumerism is growing in recent consumers world which is known as the Sustainable Development. So from the view point of the above I have taken an initiative to make a report on TESCO Company and how they maintain an effective ethical consumerism (Douglas-Jones, 2015) ; (Hudson, Hudson and Edgerton, 2013). Ethical consumerism Ethical consumerism means activities of the consumers towards ethical practices. An ethical consumer is a person who buys those goods and services which produced ethically. Definitions of ethical consumers are varies from one area to another. Some person thinks that ethical means more conscious about protecting environmental values but the word Ethical has a wider prospective. Those persons who are concerned about only environmental issues omit the other ethical issues like child labour or unfair trade practices etc. But all these should be the part of it. There are several product/service areas which include the ethical consumerism like in banking and finance industry e banking, paperless work; in energy producing sectors, use of natural resources for producing pollution less energy; in food and drink industry, introduction of organic foods; in fashion industry use of natural cosmetics etc. Why ethical consumerism is an important strategy for a business? Following are some arguments which proves the necessity of ethical consumerism (Ethical consumerism to reptile welfare: views aired at welfare forum, 2011); (Guivarch and Hallegatte, 2013) Todays people are more informative and knowledgeable from earlier. They have more knowledge about different products and service availability (Hawkins, 2012). The increase in the standard of living change consumers taste and preferences. Now they are not only considers the economic value of a product or services but they are also concerned about the ethical values. For example in a research work published in Journal For Marketing Research at Harvard Business School Review it is shown that how consumers are cared about a shampoo whether it conducts a animal testing or not. A set of shampoos were given to them and asked them to select from them without giving them any further information. Then after giving the information of animal testing they were again asked to select among those brands and their responses differs (Harvard Business Review, 2015). It helps the people to know the source of product and services and also aware them about how much it is eco friendly for the society (Sternberg, 2013). It creates a good image about the company (Hazlett, 2012). The company is a part of the society so it is their basic duty to think about the environment first and then about their profit because if they are not conscious about protecting the environment it will have a boomerang effect on them also. A company if adopts consumerism then they can also get some facilities from the government. Like getting subsidies or different grants which may helpful for the business. There are now very less company who are concerned only about price. So we can say from the above discussion that in order to sustain in the competitive environment a company should follow ethical consumerism (Van Ooteghem and Xu, 2012). Company Review Tesco is one of the leading retails (M Molavi and L Barrall, 2014) among the retail sectors in the world. This company was incorporated in a small market at London by Jack Cohen. With the increase in time the company grows and today it operates around 12 countries all over the globe. Wal- Mart and Carrefour are their main two competitors. TESCO claims that a business if wants to be sustainable then it must follow a sustainable supply chain. TESCOs ethical approach is based on four pillars like Values, Monitoring, Improvement, and Transparency (Tesco plc, 2015). The ETI based code TESCO was the member of the Ethical Trading Initiative (ETI) and it wants all of its suppliers should ensure works under the ETI based standard. In practice of ethical trading are committed to their suppliers and consumers in following ways: Their commercial personnel are engaged in product sourcing in order to understand their approach. They provide all their suppliers an accessible ethical trading requirement documents so that they can have a clear understanding about the programme and expectations. Tesco assessed the risk generating capabilities of each supplier at an initial stage and if they identify major problems and cannot solve them then they did not work with that supplier. The Ethical audit Programme Ethical audits are conducted by Tesco by adopting new methodologies. This helps consumers and supplies by reduction of duplicate work and ensure good quality product. It also takes corrective action plan to eliminate their inefficient business area. For this purpose an Auditor Recognition Program (ARP) is developed where a tight group of audit bodies approved the audit work. Understand Workers TESCO gathers information about their workplace through workers because they think that they are the most suitable persons who can give them a better feedback about consumers preference as they have the direct communication with the consumers. Tesco team is also concerned about a good working environment for the workers. They had a farm level grievance mechanism giving opportunity over 3000 workmen to give their views and assure them that their problems will be taken into considerations. Responses to allegation TESCO provides a help line facility to the consumers and they are always active to give responses about their queries. After getting complain they immediately investigate the concerned matter and they are happy to maintain confidentiality about the complainants if requested. Structural and fire safety It should be the most important matter of concern for each company. Recently Tesco has launched a safety programme in Dhaka, Bangladesh after the tragedy happened their where some workers lost their lives. They have around 54 people in Dhaka who improve and maintain the standard of their garment factories. They have employed qualified engineers to check the structural format of factory buildings. They have also the membership of Multi stakeholder Accord on Fire and Building safety. This is a very strong programme associated with other leading retailers chaired by the UN International Labour Organization. Trend identification and public reporting As the consumers become trendier day by day their preferences are also changes at a fast rate. TESCO can identified the trends and focus more on the availability of hygienic resources which can serve consumers need as well as help them a greatest leverage point. Tesco as its part of Corporate Social Responsibility provides an updated ethical programme to the leading public newspapers and websites for public information (Caruana and Chatzidakis, 2013) ; (Green and Peloza, 2014). Recommendations The company should develop a motivational programme for its employees. Tesco should give more focus towards environmental safety by promoting and by creating awareness about uses of eco friendly products. References Caruana, R. and Chatzidakis, A. (2013). Consumer Social Responsibility (CnSR): Toward a Multi-Level, Multi-Agent Conceptualization of the Other CSR.Journal of Business Ethics, 121(4), pp.577-592. Clarke, N. (2008). 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