Analytical Business Report – What Ethical Consumerism Means for Business
Order Instructions:
Write an analytical business report on what ethical consumerism means for businesses. Choose one
company evidencing how they operate ethically. This must take into account the ethics and values of the
company you choose to focus on.
In your report (which must be written in business report format), you need to cover the following topics:
� An executive summary which gives a brief overview of the argument in your report including key
findings and conclusions
� A brief overview analysis of ethical consumerism, identifying the examples of some of the products
which fall into the ethical category,
� A detailed review of one company claiming to operate ethically. Discuss the approach(es) they have
used to become a more socially conscious business, linking this with the ethics and values of the
company that you have identified.
� A short opinion survey on what influences consumer buying behaviour, carried out by you from a
sample of students at GSM London
� A conclusion which includes critical evaluation of ethical consumerism based on the evidence that you
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have gathered both from your primary and secondary research, focusing on one company you have
chosen for detailed review
Supporting material will be posted on Blackboard, but you will be expected to undertake research using
newspaper/magazine/web articles, journals and text books.
Word Limit – Not more than 2000 +/- 10%
Executive Summary
Ethical consumerism can be described as the intentional purchase of products or services that are
considered to be made ethically. Consumers have become more ethically conscious with more
people striving to know more concerning the way products they purchase are produced. Notably,
several studies have also revealed a positive correlation of ethical production and company
performance. This has in turn motivated more companies to develop ethical policies that their
production ethics, practices, structures, and relations. This report focuses on critically analyzing
the current market trends concerning ethical consumerism and what it means for business. In this
regard, special emphasis has been directed towards the ethical processes of M&S as a case study
comparing it with that of the Co-op bank and the findings of my personal survey. The analysis of
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these three cases in this report have demonstrated a need for companies to reconsider their
policies in regard to the emerging trend or risk losing on consumer confidence.
Introduction
Over the recent past, the concept of ethical consumerism has increasingly attained
prominence among the wealthy capitalist nations across the globe and has more recently gained
mainstream appeal. Terms such as conscience consumption and responsible are no longer purely
associated with hippie lifestyles or fringe politics, but rather are now increasingly entering into
everyday practice and language of the ordinary consumers (Singh et al., 2012). Consumers now
more than never before are basing their choices on the issue of care and collective concern. For
this reason, the big question that this report seeks to answer is on what ethical consumerism
means for business.
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The rise of ethical consumerism connects to a broader range of concerns around
environmentalism, unsustainable lifestyles, and anti-materialism. For instance, a study by Global
Market Insite across 17 countries including U.S.A., Australia, India, Japan, China, and various
European countries recently showed that 54 percent of consumers would be prepared to pay
more for the organic, Fair Trade or environmentally friendly products (Potter & Lewis, 2011). In
the light of this and several other similar findings concerning ethical consumerism, it is clearly
visible that the way to go for business in the current market is ethical production and operations.
For this purpose, this report proceeds to further analyse the issue of ethical consumerism and
what it means for business with special interest on Mark and Spencer.
Ethical Consumerism
Ethical consumerism can be described as the intentional purchase of products or services
that are considered to be made ethically (Healey, 2013). Products considered ethical in this case
would imply that the process of producing these products has minimal or no harm or exploitation
of any form to persons, animals, or the surroundings. In practice ethical consumerism is achieved
when buyers engage in positive buying in favour of ethical goods or by moral boycott that entails
company based buying or negative buying. The rise in ethical consumerism has led to a rise in
ethical based decisions in the market. This has been facilitated by increased understanding and
information concerning businesses practices.
More business and companies want to be recognized as producing ethically and
improving their ethical standards. In this context, as Healey (2013) notes ethical production has
become the new form of competitive advantage of businesses in the contemporary market. More
people are basing their buying choices on ethical aspects of the products such as whether they are
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sourced, made, and distributed ethically. Businesses, therefore, need to recognize that consumers
now want more than just good value for their money. Indeed, customers are increasingly looking
for other aspects of the product in the company, product, or brand such as ethical sourcing,
manufacturing and dissemination, as well as clear information concerning nutrition. In addition,
consumers now consider transparency, fair labour, protection of human rights and health,
respecting the environment, sustainability, and corporate social responsibility. As such,
businesses need to consider how effectively they meet these changing ethical trends of
consumers if they are focused on remaining profitable yet sustainable.
The current trend in the mass market identifies a need for companies to devise new strategies or
reinvent their business strategy in respond to today’s ethical consumer. Studies show that
consumers prefer ethical products such as fair labour-certified garments, products made through
sustainable technologies, cosmetics produced without animal testing, and fair trade-certified
chocolate and coffee (Harvey, 2012). A recent survey on Melbourne households showed that 40
percent of the participants had gleaned items (Chatzidakis et al., 2012). Another study
undertaken by YouGov found out that consumers have become more ethically conscious with 78
percent saying they would wish to know more about the way good they purchase are made
including the factory conditions. Some 58 percent said they already purchase FairTrade products
while 19 percent said they would buy the FairTrade items if they were made more widely
available across the high street (Carrington et al., 2010).
Certain trust criteria by consumers such as creditworthiness are considered to form the
basis of sourcing or purchasing behavior. Natural capitalism proponents hold that comprehensive
outcomes of production form the basis of using products as opposed to cumulative outcomes
(Harvey, 2012). As such, moral criteria form a broader shift away from commodity markets to a
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deeper product economy. However, there is little validation of consumer reporting in these
surveys because of the gap between what people report and what they actually practice. These
are buyers whose decisions are based on the social and ethical positions of a product such as
labour practices and environmental impact with regard to their own values (Brunk, 2012).
Consumers are increasingly becoming aware of the ethical aspects of production with studies
showing increased consciousness. In this regard, some of the core factors that were found to be
influencing consumer behavior are companies sources their products, how they treat their
workers, and the impact they have on the environment.
Mark & Spencer
Corporate social responsibility within M&S has traditionally been construed as basically
the offering of quality and good products for a good value for their customers and the patristic
regime of shop assistants. In 1999, the company became a member of the Ethical Trading
Initiative, which is an alliance of companies and organizations to good practice and promotes
improvements in working conditions globally. The principle goal is to oversee that the working
conditions for employees is up to appropriate standards. In addition, M&S subscribed to the
Environmental Code of Practice to make sure that the existing processes in the company no
chemicals, inputs, or dyes used in the garment production causes unwanted health or
environment risk during their manufacture (Harvey, 2012).
M&S has been recognized on several occasions as a result of this recent initiative to
become a greener retailer. More recently in 2007 the company unveiled what they call “Plan A”,
a 100 point program of action aimed at giving the company a head-to-foot environmental
makeover in ethical production within the next five years (Johnson, 2008). This can be compared
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with the Co-op bank’s ethical values of honesty and social responsibility.The two values entail
being honest on what the company does and how they do it as well as taking responsibility of
the community and environment.
Suppliers
Concerning their operations with suppliers, M&S has strived to develop a stronger
rapport with their suppliers by initiating open dialogue. In 1999, they created a set of principles
within their collaboration with their suppliers. The document offered a set of guidelines for
suppliers in complying with the required laws and regulation in terms of working hours and
conditions, terms of pay and employment, and health and safety. M&S has also been organizing
supplier exchange forums where peer-to-peer learning is encouraged among suppliers. M&S
developed a balanced scorecard for foods where equal weight is given to technical, ethical,
environmental, and commercial issues. Through supplier conferences, M&S is able to bring
together suppliers across seven of their main sourcing countries where they share experiences
and conduct debates to reach a common understanding. The aim of these conferences, exchange
forums, and debates is to highlight and develop strategies for higher standards in ethical
environmental and trade performance.
Environment Policy
M&S in 2011 updated their standards to include new sections on environmental
management as well as minimizing energy and water use. Their approach to chemical
management requires that every of their dyehouse to complete a rigorous audit and also
emphasizes on regular performance reviewed. The supplies must also first comply with the M&S
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Environmental and Chemical Policy. Through their partnership with Greenpeace NGO, M&S
focuses on achieve zero discharge from their dyehouses by the year 2020 (Bucic et al., 2012).
Product Attributes
M&S focus was on converting all its tea and coffee to FairTrade to match the growing
significance of ethical consumerism. A total of 38 product lines were switched, increasing the
value of all the FairTrade ground and instant coffee sold in supermarkets across UK by 18
percent and that of tea by about 30 percent (Johnson, 2008). As a result of the initiative, the 2012
M&S report confirms that 138 commitments have been realized, and the company now recycles
100 percent of its waste (Johnson, 2008). M&S labels their entire general merchandise product in
their stores with its country of origin.
The company has realized many other achievements in terms of ethical consciousness
including a five million customer participation in Plan A activities and a significant decrease in
carrier bags usage by up to 1.7 billion bags within a five-year period. The company has since
achieved a 31 percent attribute on its products. About 257 of their products are now made using
the certified sustainable palm oil. Over 50000 people facing workplace barriers have completed
M&S placement. The company’s sales of FairTrade food has henceforth increased by 88 percent
since the year 2007 (Carrington et al., 2010).
A comparison of M&S’s Plan A with the Co-op bank’s ethical policy reveals some
similarities. One of the latest considerations that are comparable to M&S is the genetically
modified food. Co-op bank’s ethical policy currently cover environmental and animal welfare,
economic development, international development, and human rights much more like that of
M&S (Harvey, 2012).
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Personal Survey
In an attempt to further evaluate the issue of ethical consumerism, I conducted an opinion
survey on 50 students from GSM London. The survey was done through face-to-face interviews
where respondents were requested to answer some structured questions concerning their buying
behavior especially one that had to do with ethical consumerism. The findings of this study
yielded results that concur with several other past studies on what influences consumer behavior.
One of my findings was that economic status was a major factor. Consumers also consider how
the company treats their customers. Other factors reported to directly impacting on how
consumers spend their money include how companies source their products, how they treat their
workers, and the impact they have on the environment. A cross section of the students said they
would be more willing to buy ethically produced products than others if they were able to
identify them. However, they noted a lack of information that could help them identify the
ethical products despite the high consciousness concerning ethical consumerism. Some of the
stores as the report has indicated concerning M&S have a way of helping buyers identify their
ethical products through the use of labels.
Conclusion
In conclusion, it is quite clear from the discussion that ethical consumerism has become a
common trend and a major determinant of consumer behavior. Consumers are increasingly
becoming aware of the ethical aspects of production with studies showing increased
consciousness. Some of the core factors that were found to be influencing consumer behavior on
the basis of my personal survey are companies sources their products, how they treat their
workers, and the impact they have on the environment. More companies in their quest to match
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and meet the changing demands of consumers have embarked on more ethical practices in their
production. M&S through their ethical programs such as engagement with suppliers,
environment policies, and Plan A has achieved substantial levels of success in becoming greener.
Ethical production is largely linked to increased sales and better company reputation as seen in
the Co-op bank and M&S examples. Customers are more willing to buy from companies they
deem more ethical as compared to others.
References
Brunk, K. (2012). Un/ethical Company and Brand Perceptions: Conceptualising and
Operationalising Consumer Meanings.Journal Of Business Ethics, 111(4), 551-565.
Bucic, T., Harris, J., & Arli, D. (2012). Ethical Consumers Among the Millennials: A Cross-
National Study. Journal Of Business Ethics, 110(1), 113-131.
Carrington, M., Neville, B., & Whitwell, G. (2010). Why Ethical Consumers Don’t Walk Their
Talk: Towards a Framework for Understanding the Gap Between the Ethical Purchase
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Intentions and Actual Buying Behaviour of Ethically Minded Consumers.Journal Of
Business Ethics, 97(1), 139-158.
Chatzidakis, A., Maclaran, P., & Bradshaw, A. (2012). Heterotopian Space and the Utopics of
Ethical and Green Consumption.Journal Of Marketing Management, 28(3/4), 494-515.
Harvey, B. (2012). Ethical Banking: The Case of the Co-operative Bank. Journal Of Business
Ethics, 14(12), 1005-1013.
Healey, J. (2013). Ethical Consumerism. Thirroul, N.S.W.: Spinney Press.
Johnson, M. (2008). Marks & Spencer Implements an Ethical Sourcing Program for its Global
Supply Chain. Journal of Organizational Excellence, 23(2), 3-16.
Potter, E., & Lewis, T. (2011). Ethical Consumption : A Critical Introduction. Milton Park,
Abingdon, Oxon: Routledge.
Singh, J., Iglesias, O., & Batista-Foguet, J. (2012). Does Having an Ethical Brand Matter? The
Influence of Consumer Perceived Ethicality on Trust, Affect and Loyalty. Journal Of
Business Ethics, 111(4), 541-549..
