Contemporary
Consumer &
Business Ethics
Milan 3 - 6 May, 2010
Dr Neil Connon
Implications and
reactions of business to
contemporary ethics
Session 3&4
Wednesday
11.00 – 13.30 &
16.00 – 19.00
Outline of the lecture
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•
•
•
•
•
•
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What drives business?
CRS
Boycotts
Environmentalism
Government
Media
Conclusions
Bibliography
What drives business?
Consumer Sovereignty
• What is produced?
• How is it produced?
• How is it distributed?
Determined by consumer preferences expressed by individual choice in the
market place (free market)
What drives business?
Adam Smith
• producers will find that their self-interest is
served by producing what is socially viable
• ..individual.. neither intends to promote the
public interest, nor knows how much he is
promoting it.. he intends only his own gain,
and he is in this...led by an invisible hand to
an end which was no part of his intention.
• the interest of the producer ought to be
attended to only so far as it may be
necessary for promoting that of the
consumer
What drives business?
Adam Smith
• "It is not from the benevolence
of the butcher, the brewer, or
the baker, that we expect our
dinner, but from their regard to
their own interest. We address
ourselves, not to their
humanity but to their self-love,
and never talk to them of our
necessities but of their
advantages."
What drives business?
Adam Smith
• It is the highest impertinence and
presumption, therefore, in kings and
ministers, to pretend to watch over the
economy of private people, and to
restrain their expense... They are
themselves always, and without any
exception, the greatest spendthrifts in the
society. Let them look well after their own
expense, and they may safely trust
private people with theirs. If their own
extravagance does not ruin the state, that
of their subjects never will."
Smith, A. 1776 The Wealth of Nations
What drives business?
• Consumers have a free choice to buy or
not to buy
• consumers choices determine a
business’s success
• choices are conditioned by
– available information
– Promotional activities
• individual consumers are in a relatively
weak bargaining position
Key features of a corporation
• A corporation is essentially defined in terms of
legal status and the ownership of assets
• Corporations are typically regarded as ‘artificial
persons’ in the eyes of the law
• Corporations are notionally ‘owned’ by
shareholders, but exist independently of them
• Managers and directors have a ‘fiduciary’
responsibility to protect the investment of
shareholders
Social responsibility
• ...responsibility to society
Towards a framework for
business ethics
What is a corporation?
Can a corporation have social
responsibilities?
• Milton Friedman 1970 classic article “The social
responsibility of business is to increase its profits”
• Vigorously argued against the notion of social
responsibilities for corporations based on three main
arguments:
– Only human beings have a moral responsibility for their
actions
– It is managers’ responsibility to act solely in the interests of
shareholders
– Social issues and problems are the proper province of the
state rather than corporate managers
Can a corporation be morally
responsible for its actions?
• Evidence to suggest that legal designation of a corporation
makes it unable to be anything but self-interested (Bakan
2004)
• Long and complex debate but generally support from
literature for some degree of responsibility accredited to
corporations
• Argument based on:
– Every organisation has a corporate internal decision structure which
directs corporate decisions in line with predetermined goals (French
1979)
– All organisations manifest a set of beliefs and values that lay out what is
generally regarded as right or wrong in the corporation – organizational
culture (Moore 1999)
Why do corporations have
social responsibilities?
• Business reasons (‘enlightened self-interest’)
–
–
–
–
Extra and/or more satisfied customers
Employees may be more attracted/committed
Forestall legislation
Long-term investment which benefits corporation
• Moral reasons:
– Corporations cause social problems
– Because they are powerful, corporations should use their power
and resources responsibly
– All corporate activities have social impacts of one sort or another
– Corporations rely on the contribution of a wide set of
stakeholders in society rather than just shareholders
What is the nature of corporate
social responsibilities?
Corporate social responsibility
encompasses the economic, legal,
ethical, and philanthropic expectations
placed on organizations by society at a
given point in time
(Carroll & Buchholtz 2000:35)
Corporate Social Responsibility
Desired by society
Philanthropic
Responsibility
Expected by society
Ethical
Responsibility
Required by society
Legal
Responsibility
Required
by society
Economic
Responsibility
Carrol 1991
CSR in a European context
• CSR particularly strong concept in US and only more recently
become so influential in Europe
• Difference due to explicit CSR is US and implicit CSR in
Europe
• Could argue that all levels of CSR play a different role in
Europe
– Economic responsibility
• USA strongly focused on responsibility to shareholders
• Europe focused on the economic responsibility to employees and local
communities as well
– Legal responsibility
• State accepted as prominent force in enforcing rules of the game rather than
as interfering in it
– Ethical responsibility
• Europeans tend to exhibit greater mistrust of modern corporations than US
– Philanthropic responsibility
• In Europe mostly been implemented compulsorily via the legal framework
rather than via discretionary acts of successful companies (US)
CSR and strategy: corporate
social responsiveness
• Corporate social responsiveness refers to the
capacity of a corporation to respond to social
pressures (Frederick 1994)
• 4 ‘philosophies’ or strategies of social
responsiveness (Carroll 1979)
–
–
–
–
Reaction
Defence
Accommodation
Proaction
Outcomes of CSR: corporate
social performance
• Outcomes delineated in three concrete
areas:
– Social policies
– Social programmes
– Social impacts
Stakeholder theory of the firm
• Theory developed by Edward Freeman (1984)
• A stakeholder in an organization is…any group or
individual who can affect, or is affected by, the
achievement of the organization’s objectives
(Freeman 1984:46)
• More precise definition of ‘affects’ and ‘affected by’
(Evan and Freeman 1993)
– Principle of corporate rights - the corporation has the
obligation not to violate the rights of others
– Principle of corporate effect – companies are responsible for
the effects of their actions on others
Traditional Management Model
Shareholders
Customers
Firm
Suppliers
Employees
Stakeholder Model
Government
Shareholders
Competitors
Firm
Suppliers
Civil Society
Customers
Employees
Stakeholder theory of the firm:
a network model
Customer
stakeholder
1
Competitors
Government
Customers
Shareholders
Customer
stakeholder
3
Firm
Suppliers
Employees
Employee
stakeholder
1
Civil society
Supplier
stakeholder
1
Civil society
stakeholder
2
Civil society
stakeholder
1
Employee
stakeholder
2
Why stakeholders matter
• Milton Friedman – businesses should only be
run in the interests of their owners
• Freeman - others have a legitimate claim on the
corporation
– Legal perspective
• ‘Stake’ in corporation already protected legally in some
way (e.g. legally binding contracts)
– Economic perspective
• Externalities – outside contractual relationships
• Agency problem – short term interests of ‘owners’ vs. long
term interests of managers, employees, customers etc.
A new role for management
• According to Freeman, this broader view of
responsibility towards multiple stakeholders
assigns a new role to management.
• Rather than simply being agents of
shareholders, management has to take into
account the rights and interests of all legitimate
stakeholders:
– Stakeholder democracy
– Corporate governance
Stakeholder thinking in a
European context
• One could argue that although the
terminology of stakeholder theory is
relatively new in Europe, the general
principles have actually been practised
for some time:
– German supervisory board
– ‘Covenant Approach’ in environmental
regulation in the Netherlands
Corporate accountability
• Corporate accountability refers to whether a
corporation is answerable in some way for the
consequences of its actions
• Firms have begun to take on the role of ‘political’
actors – taken up many of the functions
previously undertaken by government because:
– Governmental failure
– Increasing power and influence of corporations
The problem of
democratic accountability
• Who controls corporations?
• To whom are corporations accountable?
• Key to corporate accountability is
transparency
• Transparency is the degree to which
corporate decisions, policies, activities and
impacts are acknowledged and made
visible to relevant stakeholders
Defining corporate citizenship:
three perspectives
• A limited view of CC – this essentially
equates CC with corporate philanthropy
• An equivalent view of CC – this
essentially equates CC with CSR
• An extended view of CC – this
acknowledges the extended political role
of the corporation in society
Commitments to corporate citizenship
Company
Corporate Citizenship Statement
“Our approach to citizenship is reflected in the ExxonMobil Standards of Business
Conduct – which has been in existence more than 30 years – along with guidelines to
ensure understanding and adherence. These standards form the framework by which we
operate around the globe and include a commitment to good corporate citizenship.”
IBM
“IBM is leading a revolution in corporate citizenship by contributing innovative solutions
and strategies that will help transform and empower our global communities.”
Novartis
“Corporate citizenship at Novartis begins with the success of our core business. The more
successful we are in discovering, developing, manufacturing and marketing new
medicines, the greater the benefits we can offer to associates and shareholders, patients,
health care professionals and other key stakeholders.”
Hilton Hotels “As the world leader in lodging hospitality, we at Hilton recognize our responsibility to
corporate citizenship wherever we do business.”
ThyssenKrupp “ThyssenKrupp regards itself as a responsible corporate citizen and brings its efforts to
bear in a variety of areas. In the year under review, many of our efforts were channeled
into providing aid to victims of natural disasters in various parts of the world. We provide
recurring structural support to regions in which the Group operates. Some public tasks can
be better accomplished with direct private involvement. In many such cases, the Group
supports culture, education, sport and innovation and promotes social, charitable and
humanitarian activities.”
Roche
“Roche Corporate Principles reflect our firm belief that our employees are a critical
success factor. These principles embody decades of defining and refining the rules we
want to follow as an employer and corporate citizen and they express our conviction that
our commercial success depends on the talent and performance of a dedicated workforce.”
ExxonMobil
Source
ExxonMobil 2004
Corporate Citizenship
Report.
http://www.ibm.com.
http://www.novartis.com
http://www.hiltonworld
wide.com
ThyssenKrupp Annual
Report 2004-5
http://www.roche.com
Three views of corporate
citizenship
Focus
Main stakeholder
group
Motivation
Moral grounding
Limited View
Equivalent View
Philanthropy, focused on projects, All areas of CSR
limited scope
Local communities, employees
Broad range of stakeholders;
Primarily philanthropic; also
economic where citizenship is
‘strategic’
Reciprocity, i.e. ‘putting
something back’
Mixed – economic, legal, ethical,
philanthropic
Duty to be responsible and avoid
harms to society
Extended View
Citizenship: social, political and
civil rights
Broad range of citizens; society in
general
Political
Grounding is not moral, but
comes from changes in the
political arena
See handout 6 –
Business and Ethics
Boycotts - history
• coined in 1880 by Irish Home Rule leader Charles
Stewart Parnell - describes campaign waged against
Captain Charles Cunningham Boycott by Irish
neighbours
• strategy quickly became standard tactic used in
struggle against English landlords whose property
titles were the result of conquest and sustained by
legal privilege
• 1879, Parnell and Michael Davitt founded Irish Land
League in order to achieve what they called the three
"Fs": fair rent, free sale, and fixity of tenure
• League evolved into widespread and successful
peasant rebellion and the first peaceful mass uprising
in Irish history
Boycotts - history
• campaign against Boycott was League's most notable
early victory
• was much-hated overseer for Lord Erne, an absentee
landlord in County Mayo
• 1880, Boycott refused to lower rents for tenants, an
audacious scheme was hatched -servants no longer
worked in his house, stores sold him nothing, no mail was
delivered, and labourers refused to bring in the harvest
• Boycott imported politically friendly (Protestant) labourers
from Ulster but the expense proved disastrous
• humiliated, he was forced to leave Ireland, the campaign's
success galvanised Ireland - landlords who evicted tenants
found that no other family would move into the vacated
home
Boycotts - history
• ahimsa...is not merely a negative state of
harmlessness but it is a positive state of love even
to the evil-doer. But it does not mean helping the
evil-doer to continue the wrong or tolerating it by
passive acquiescence. On the contrary, love, the
active state of ahimsa, requires you to resist the
wrong-doer by disassociating yourself from him
even though it might offend him or injure him
physically.
Mahatma K Gandhi
Boycotts
NVDA - non-violent direct action
• tends to be the last resort for a pressure
group
• direct action likely to increase as more
groups find their demands not being met
• more companies will become involved as
targets or allies
• may be symbolic to gain public attention
N Craig Smith 1990 Morality and the Market
Boycotts
• specific example of how groups can get their message
across
• is organised activity in which consumers avoid
purchasing products or services from a company
whose policies or practices are seen as unfair or unjust
• can be directly against a company’s activities rather
than a product itself
• may involve attempts to openly disseminate
information about offensive policies
• boycotts have -ve financial ramifications for the
companies being targeted
Boycotts
• consumers can engage in several forms of
consumer resistance
• pressure groups are likely to be more
influential than individuals
• some groups engage in resistance by informing
the public about marketing practices regarded
as socially inappropriate
• groups have at their disposal a variety of
different methods to put their message across
Boycotts
Wilson’s 6 guidelines for direct action
• if possible it should be relevant to the injustice
so that a clear message emerges from the action
• it should have imagination and humour
• it should enlist the sympathy of people, not alienate them
• it should be non-violent
• it should be seen to be an expression of genuine injustice,
and not the first but rather last resort
• wherever possible it should be within the spirit of the law
Des Wilson 1984 Pressure: the a-z of campaigning in Britain
Boycotts
• A model for the process which
results in pressure group
influenced ethical purchasing
behaviour
Boycotts
• 1. Firm’s marketing system stable: firm (F1) is
matching its resources with the wants of its
customers; promotional pressure group (P) is
concerned about issue (X)
• 2. Pressure group awareness of firm’s failings: P
becomes aware of F1’s undesirable (as judged by
the pressure group) impact on X
• 3. Pressure group response: P approaches F1,
other organisations (media, governments etc) and
the customer to seek an end to the impact of F1 on
X
Boycotts
• 4. Firm’s marketing system becomes unstable: the
firm’s customers become aware of the impact of
F1 on X. This threatens the exchange process
because X becomes a part of the organisation’s
offering to the customer through negative product
augmentation
• 5. Ethical purchase behaviour: some F1 customers,
spontaneously or in response to a call for a boycott
by P, take their custom to another firm (F2). F2,
without the legitimacy shortcomings of impact on
X, better matches its resources with those
customers’ wants
Boycotts
Gauging the success of a boycott
• has the offending policy been changed?
• will business be more cautious and
responsible in their future activities?
• will businesses in similar areas, but that
remain untargetted, also change their
behaviour?
See handout 7 –
Boycotts
Boycotts (Innes, 2006)
• Food retailers limited GM content due to fear of
boycott by Greenpeace and others (Koenig, 2000)
• Animal rights reforms by McDonalds and other food
retailers were preceded by short and virulent boycott
efforts by the People for the Ethical Treatment of
Animals (PETA) (Zwerdling, 2002).
• Boycotts are a pervasive phenomenon in
contemporary society
• From 1988 and 1995 over 200 firms and over a
thousand products were actually subject to organised
boycotts in the US
Boycotts
• http://www.greenpeace.org.uk/
• Greenpeace is an independent, campaigning
organisation
• it uses non-violent, creative and confrontation
action to expose global environmental
problems
• It aims to force solutions which are essential
to a green and peaceful future
Boycotts
Greenpeace's goal is to ensure the ability of the earth
to nurture life in all its diversity. Therefore
Greenpeace seeks to:
• protect biodiversity in all its forms
• prevent pollution and abuse of the earth's ocean,
land, air and fresh water
• end all nuclear threats
• promote peace, global disarmament and nonviolence
Boycotts
The Brent Spar:
• “The Brent Spar Sets the Industry Precedent The 20th of
June, 1995 was a great day for Greenpeace and the
environment.
• ...this was the day when the occupation by Greenpeace
of the disused Brent Spar oil platform, a massive public
protest and boycott, forced Royal Dutch Shell to reverse
its decision to dump the installation in the north-east
Atlantic.
• However this was only a provisional victory . The Brent
Spar is one of 400 oil and gas installations to be decommissioned from the North Sea.”
Boycotts
Environmentalism
“A belief that moral standing inheres in the
non-human world, and, that,.....the fate of
other species is not to be arranged to suit the
comfort and convenience of species Homo
Sapiens“
P.R. Hay 1998 Ecological Values and Western
Political Traditions Politics Vol. 8 No.2 (1988)
Environmentalism
Group activities, individual initiatives or attitudes
which embrace a range of diverse causes which
share a common concern for protecting the
ecosystem from further degradation and
safeguarding it for future generations
An Inconvenient Truth http://www.youtube.com/watch?v=wnjx6KET
mi4
Environmentalism
The Green Consumer
“...behaviour that reflects concern about the
effects of manufacturing and consumption
on the natural environment
Wagner S 1997 Understanding Green Consumer Behaviour
Environmentalism
• 1960’s sees the start of the movement in Europe
• 1970’s /80’s - Scientific research starts to support
concerns
• movement gains momentum, especially in Germany
(Green Party)
• by the mid 1980’s there is growing concern for
personal health and safety, and ‘green‘ issues move
into mainstream politics in the UK
• ‘green consumerism represented a significant shift
from the rampant individualism of ... the ReaganThatcher years, assuming the role of primary
opposition to the New Right’
Gabriel & Lang (1995) The Unmanageable Consumer
Environmentalism
Questions on green consumer behaviour
• what drives it
• does it carry an ethical or religious dimension
• what understanding of environmental issues do GC’s
have
• do GC’s have a distinctive socio-demographic profile
• what influence is exerted by peer groups
• is it an expression of a specific lifestyle
• what impact does the media and pressure groups have
• how much is shaped by the current cultural climate
• is this a counter culture appealing to a minority
See handout 8 –
Environmentalism
Environmentalism
“Take a bite out of a hamburger, we are told,
and we take a bite out of the world’s rain
forests. Buy the wrong car and we may end
up not only with a large fuel bill but also
with fewer trees and, quite possibly, less
intelligent children. Spray a handful of hair
gel or a mist of furniture polish from certain
aerosols, and you help destroy the planet’s
atmosphere - increasing everybody’s
chances of contracting skin cancer“
The Green Consumer Guide: J Elkington
Environmentalism
But what does it mean for us the humble
(although evidently, rather powerful) shopper?
It means that shopping is no longer a simple
transaction between desire and bank balance.
It’s an exercise in moral point scoring, where
your opponent is your own conscience.
Jessica Brinton, Sunday Times 26.2.06
See also RED
Environmentalism
•
•
•
•
•
•
FoE
Greenpeace
The Conservation Society
The Green Party
books e.g. “The Green Consumer Guide“
general media interest
Environmentalism
Damage
Destruction of the ozone
layer
Global warming

Acid Rain
Toxic waste
Water pollution

Loss of non-renewable or
slowly renewable
resources
Source
CFC’s, Expanded
polystyrene
Energy production &
consumption (CO2)
 - as above Especially nuclear waste
Agricultural & industrial
run offs
Rapid use of hardwoods,
minerals, petroleum
See handout 9 –
Measuring
Environmentalism
Environmentalism and business
“Good environmental performance is not an optional extra. It
is an essential ....no business has a secure future unless it is
environmentally sound “ Bob Reid: Chairman ICI
“Avoiding environmental incidents remains the single
greatest imperative facing industry today“
Edgar Woolard: CEO DuPont
“Make environmental considerations and concerns part of any
decision you make, right from the beginning. Don’t think
of it as something extra you throw in the pot.“
Richard Clarke: CEO Pacific Gas
Environmentalism and business
• companies now tend to undertake environmental
audits
• this can help them gain competitive advantage and
fend of any criticism
• a whole new category of green businesses has
been generated by changes in consumption
patterns
• products range from cosmetics to electrical goods
and cars
• environmentalists act as referees of corporate
behaviour
Gabriel & Lang (1995) The Unmanageable Consumer
Environmentalism and business
The environmental audit
• The systematic examination of the interaction
between any business operation and its surroundings.
This includes all emissions to air, land and water;
legal constraints; the effects on the neighbouring
community, landscape and ecology; and the public’s
perception of the operating company in the local
area…environmental audit does not stop at
compliance with legislation. Nor is it a ‘green
washing’ public relations exercise…Rather it is a
total strategic approach to the organisations activities
Watson and Emery 2003 p668
Business and how they react to problems
• Functional – non-functioning
• Psychological - perceived disappointment
The more effort exerted to attain a goal, the
more dissonance is aroused if the goal is
less valuable than expected
Business and how they react to problems
Volume
difficulty to measure
intensity
Past Research
• correlation between rising standards of living and CD
(Thorelli 1980)
• correlation between consumer education and the
expression of CD (Hunt 1977)
• higher expectations of standard of living - more
frequent the experience of CD
• ‘Customer satisfaction is regarded as a primary
determining factor of repeat shopping and purchasing
behaviour’ (Burns and Neisner, 2006, p.49)
Business and how they react to problems
“...throughout the developed economies, a
range of economic and competitive
pressures has forced companies and
service providers to re-evaluate the role
of the consumer. The creation of
consumer value and customer satisfaction
are increasingly seen as key factors in the
achievement of competitive advantage
and commercial success.“
Bohdanowicz, 1994.
Business and how they react to problems
• “To retain customer loyalty, to stay in
business, companies can no longer afford to
protect themselves from customers who have
experienced problems. The history of the
corporate world is littered with companies
who choose to ignore their customer feedback
and relegated the role of customer relations to
that of the corporate buffer zone“
John, R., (1994) The Consumer Revolution
Customer Satisfaction Model 2007
Achieve
Customer delight
Satisfy unstated
customer
needs
Meet basic customer
requirements
Build consumer
loyalty
Develop customer
confidence
Prevent customer
complaints
www.omafra.gov.on.ca 2007
Conclusions
• Business is driven by self interest
• Consumers pay an important role in this
process and sometimes there is conflict
(boycott)
• Environmental concerns are on the increase
• Business needs to address the environmental
concerns of consumers to continue to appeal
to them
Bibliography
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Adamson, Colin, 1982 Consumers in Business‘
Bohdanowicz, Robin and Janet, 1994 Marketing, corporate strategy and the consumer. The
Consumer Revolution, Ed. Robin John, Hodder & Staughton
Burns, David, J., Neisner, Lewis, 2006 Customer satisfaction in a retail setting: The
contribution of emotion International Journal of Retail & Distribution Management Volume:
34 Issue: 1 Page: 49 – 66 Emerald Group Publishing Limited
Crane & Matten, 2007,
Elkington, J. 1988 The Green Consumer Guide
Fornell, Ryan & Westbrook, 1990 The Key to Customer Retention
Gabriel, Y. & Lang, T. 1995 The Unmanageable Consumer
Hay, P.R. 1998 Ecological Values and Western Political Traditions Politics Vol. 8 No.2
Hunt, H. Keith, 1977 Consumer Satisfaction/Dissatisfaction: Overview & Research
Directions, Conceptualization and Measurement of Consumer Satisfaction and
Dissatisfaction, ed. H. Hunt, Cambridge, MA: Marketing Science Institute.
Innes, R., 2006. A Theory of Consumer Boycotts under Symmetric Information and Imperfect
Competition The Economic Journal, 116 (April), pp. 355–381. Blackwell Publishing
Shankara, V., Smith, A.K. and Rangaswamy, A., 2003. Customer satisfaction and loyalty in
online and offline environments. International Journal of Research in Marketing, 20 (2), pp.
153-175
Sparks, P. and Shepherd, R., 1992, Self-Identity and the Theory of Planned Behavior:
Assesing the Role of Identification with "Green Consumerism,“ Social Psychology Quarterly,
55, (4), pp. 388-399
Thorelli, H. B. and Engledow, J. L., 1980 Informationseekers and information systems: a
policy perspective, Journal of Marketing 44(Spring): 9-27.
Wagner, S. 1997 Understanding Green Consumer Behaviour
Watson, Michael, Emery, R.T. Anthony, 2003 The emerging UK law on the environment and
the environmental auditing response Managerial Auditing Journal 18/8 666-672
Government Ethics
Why intervene?
• Governmental activity in consumer markets is
an unexpected interference in the pursuit of
profit
Underpinning Rationale
• while a properly functioning market place is
desirable in principle, in practise it has failed
to emerge for some reason
• for some types of goods and services a
conventional market cannot, or should not,
exist
Government Ethics
The political spectrum
left
right
wing
wing
intervention
no
intervention
Government Ethics
• reluctance to get involved in domestic
markets
• desire to be in harmony with feelings/cultural
awareness of the people
• desire to be seen to be assisting poorer
countries
• …but need to balance with domestic needs
• aim to assist in the development of these
countries to make them trading partners
• by creating trading partners, theoretically
increasing the wealth of the domestic and
weaker economies through trade
Government Ethics
DFID (Department for International Development) Aims:
• commitment to an internationally agreed target to
halve the proportion of people living in extreme
poverty by 2015.
• ensuring basic health care provision by 2015
• ensuring universal access to primary education by
2015
• work in partnership with other governments
committed to these targets, and with business and
the private sector, civil society and the research
community,
• works with multilateral institutions, including the
World Bank, UN agencies and the European
Commission.
Government Ethics
• mutual benefits of trade
• concerns over ‘marginalised’
countries
• more caring attitude
• globalisation - global village
Non-Government
Organisations (NGOs)
Ethical Trade Initiative
• an alliance of organisations
working together to promote good
practice in the codes of labour
practice
• supported by the DFID and the
Department for Business,
Enterprise and Regulatory Reform .
See handout 10 –
Government
& Ethics
Government Ethics
EU 2005
• Population: 459.5
• 2.2% euro-zone growth
• 5.2% transition economies growth
• Referendums in several countries in
the EUs new constitution
Government Ethics
Advantages of the EU Single Market
• wider choice of goods and services
• economic growth
• reduced border formalities
• freer movement of people
• reduced production costs
• increased competition
• wider educational opportunities
• freer movement of capital
Government Ethics
Possible disadvantages of the Single
Market
• fewer safeguards
• movement of dangerous goods
• quality standards lower
• higher taxes
• mergers
• protectionism
• concentration of economic activity
• social disruption
Government Ethics
Conference on Trade and
Development
• Development strategies can only succeed in
context of globalisation when implemented in a
stable political environment by governments
determined to make sustainable development
a priority.
Commission working document: 10th United Nations Conference on Trade and
Development Bangkok, from 12 to 19 February 2000.
Government Ethics
Conference on Trade and Development
Sustainable development also requires
•
•
•
•
•
•
higher savings and investment rates
better education
free trade
environmental protection
social policies
...and fair and competitive markets.
Government Ethics
• Developing and industrialised countries need a
multilateral harmonisation of sustainable
development rules and principles in the social,
environmental and financial sectors.
• This includes the:
– promotion of prudential norms and their
effective supervision
– promotion of transparency in capital flows so as
to consolidate the domestic financial sectors in
developing countries and prevent systemic
global crises.
See handout 11 –
Government
& Ethics 2
Pressure Groups
• The chief social values cherished by individuals in
modern society are realised through groups...the
individual has meaning only in relations with
others
Earl Latham 1952 The Group Basis of Politics
• There is more to democracy than the occasional
vote, and there is more to democracy than political
parties. Pressure groups, offering an alternative
form of expression, are a healthy component of
genuine democracy
Pressure Groups
What are they?
• promote interests of particular group of people or to
gain acceptance for a particular point of view
• e.g. National Council for Civil Liberties - aims to
defend and extend civil liberties within the UK
• e.g. British Goat Society: aims to circulate knowledge
and general information about goats
• there is great diversity in terms of subjects
• and in the way they exhibit that concern
Pressure Groups
Sectional and promotional PG’s:
• membership based on performance of specific
economic role, e.g. miners or CEO’s
• sectional groups protect interests of members
• promotional groups are held together by a
shared attitude e.g. Shelter, The Child Poverty
Action group
Pressure Groups
Promotional Pressure Groups
• provide scope for political participation
3 types
• single issue pg’s: e.g.CLEAR - sole aim to reduce
and eliminate lead pollution
• issues-in-context pg’s: e.g.FoE - number of
agendas within overall context
• practice-based pg’s: e.g. Shelter is a charity-cumpressure group provides assistance/support
homeless - campaigning on their behalf
Pressure Groups
Other issues
• avenues of pressure:
– insider/outsider status (extent of access to decision makers)
– corporations as an avenue of pressure
• resources:
– commitment, cohesion, strategic location (ability to
influence executive)
– sectional and promotional groups compared (more
influential?)
– public opinion
• adopted strategies:
Pressure Groups
FoE is:
• worlds largest international network of environmental groups
• one of the leading environmental pressure groups in UK
• largely funded by supporters
FoE
•
•
•
•
commissions research
provides extensive
information
and educational materials
Pressure Groups
FOE
• have won many battles with government and
industry - achieving bans on
– ozone-destroying CFCs
– reduced trade in rainforest timber
– increased support for cleaner energy technologies,
and much, much more
www.foe.co.uk
Pressure Groups
Coffee
• Black gold http://www.youtube.com/watch?v=B7o1KK
gLe9M
• Cafédirect is the UK's leading Fairtrade
company. It works in partnership with small
scale and marginalised coffee, and now also
tea, producers to help them strengthen their
market presence, add security and increase
their income.
• Launched in 1991, the company - and its
brands cafédirect and teadirect - has gone
from strength to strength, leading Fairtrade
into mainstream markets and raising
consumer awareness of ethical issues in
global trade.
http://www.cafedirect.co.uk/index2.html
Pressure Groups
• Oxford university Biochemical research centre
• controversial new department undertaking animal
experiments
• groups (e.g. ALF animal liberation front) threaten
people/businesses that have dealings with it
• has been a backlash from ‘silent majority’
• ...a crowd mobilised on the streets of Oxford to
protest against the violent anti animal rights lobby
The Sunday Times 26.2.06
See handout 12 –
Pressure groups
Media
• plural of the word medium
• ‘...newspapers and broadcasting, by which
information is conveyed to the general public’
Types of media:
• Newspapers
• Television
• Radio
• Magazines
• Internet
Rupert Murdoch
Media
• most media are profit orientated
• therefore need to reflect the concerns of
consumers and issues that concern them
• as consumer issues move more into the
public domain it becomes more important to
reflect them in the media
• investigative journalism is always looking for
a new and more interesting angle
• people like news that they can relate to and is
relevant to them
Thread - http://www.bbc.co.uk/thread/video/
Media
• the aim of most media is to appeal to as wide
an audience as possible
• some will aim to appeal to certain sections of
society
• some will aim to appeal to certain political
standpoints
• some will be used as a mouth piece for their
owners e.g. Murdoch
• there will also be local, national and
international perspectives, which may differ
Media
• investigative journalism has brought to the
attention of the public a variety of issues
• due to the increasingly widespread nature of
the media more information is available and
more issues raised
• the effect of this is to concentrate the
thoughts of the general public and get them
to act often via pressure group involvement
e.g. FoE, hunt saboteurs, animal rights
• this can lead to government deciding to
change laws - see notes on PG’s
Media
4.3.98 (www.mirror.co.uk)
• ‘Bernie Takes Back His £1M’
• ‘Ministers rule out mass vaccination for smallpox
Situations where government has responded to
pressure:
• animal testing
• beef (..also McDonalds)
• internet regulation
• Lord Chancellors (Irvine) wall paper
Conclusions
• The position of governments in relation to
ethics changes overtime due to differing
political ideology and external events
• Pressure groups come and go and will
reflect the changing times, events and
culture
• Media aims to make a profit and to do so
needs to understand and reflect the
feelings of the time
...any questions?