Discuss about a Case Study on Consumerism And Ethical Attitudes for An Empirical Study?
The significance of business ethics as well as corporate governance is consistently increasing in present business scenario. Currently, the entire business community provide great emphasis on developing the corporate social responsibility (CSR) policies as well as put extensive efforts to the proper implementation of those policies. Through the ethical business operation the company improve the sustainability quotient of the company. The ethical considerations are significantly relevant for the core business strategies (Healey, 2007). Therefore, the companies put great efforts for incorporating the values and ethics within their business strategies. The Co-operative Bank of UK is an enterprise which conducts its business operation with value and ethics. The bank provides utmost emphasis on developing the company’s corporate social responsibility policies and formulates effective CSR strategies thus attain additional benefits and can able to stay ahead of the competitors. Performing business activities in ethical ways is most essential for the companies as it helps the companies to avoid the legal hazardous, which used to be incorporated with the business activities (Audi, 2009). At the same time the ethical considerations of a company give the company much valuable customers as the customers also used to buy products from the companies who perform business with ethics. As in the current scenario, it is mostly witnessed that an increasing number of consumers take their buying decisions based on the ethical values, the consumer intend to buy environmental friendly goods and beside this the consumer prefer product with required labour standard and production method. Ethical consumerism is an increasing phenomenon in modern business (Devinney, Auger and Eckhardt, 2010).
Brief overview of ethical consumerism and critical analysis
The concept of ethical consumerism is an essential element in minimising the damage to the environment and societies in the process of buying a product or a service. In a global market, peoples are more aware of the origin of the product and services. The awareness of principle and policies of the product and services provides precise information, which causes changes in customer behavioural aspect in the process of purchasing a definite product or service (Dereli, Soykut-Sarica and SÌ§en-TasÌ§basÌ§i, 2014). This behavioural development depends on several factors, which can be termed as ethical consumerism or ethical consumption. In other word, ethical consumption depends on the decision of the customer in buying a product or services. The customers are more active and dedicated in purchasing a product or services. In the process of economic development, people's have many options in the same segment (Ali and Wisniesk, 2010). To meet the need for ethical consumption, the organisations are becoming accountable to the society and the environment. Therefore, ethical consumption has become a tool for the change of the society. The ethical consumption has two prospects depending on the thinking and behaviour of the customer. The caring of the social and environmental attributes is a positive attitude of ethical consumption. The ethical purchase behaviour of customer in boycotting a certain product or service is a negative contribution to the society. Therefore, it is very essential for the organisation and the customer to balance the situation and helps to create a platform for overall development of the society and environment. The ethical consumption can be categorised into positive purchase behaviour, negative purchase behaviour and customer action. The customer action is phase with a belief that ethical consumption is an actionable behaviour like interaction with the retailer, manufacturer or to lobbying of court (Clarke, 2008). According to Co-operative Bank, the major markets of ethical business are as follows.
Ethical personal product
Ethical food and drink
Eco- travel and transport
The green home
There are two element key forces, which is contributing maximum to this process. Now a day, the different unions, civil societies and charities are more active in ethical business practice. The nongovernmental organisations are running regular campaigns, to educate the population about the ethical consumptions and effect of unethical business on the society and the environment. The media is also playing a great role in this process of creating an ethical platform and minimises the effect of damage to the society and environment (Gunderson, 2013).
Detailed review of a company
For both the co-operative groups and co-operative banks 2013 was unexpected in term of financial and reputational threats faced by the both entities. In 2013 the bank faced a capital shortfall of £1.5bn and the requirement of PPI mis-selling grew huge disappointment among the consumers, colleagues, the members of the bank and other stake holders (Ferrell, Fraedrich and Ferrell, 2005). Therefore, the bank develops their business plan accordingly. So that the anguish among the stakeholder can be reduced and the bank can successfully proceeded to the stable growth of the company, at the same time the company can enhance their sustainability quotient (Lewis and Potter, 2011). The sustainability as well as the ethical policies of the bank comprises with the ethical banking, ethical products and services, ethical business, ethical work place and culture, and ethical campaigning. The company has taken seven goals for their ethical policy. The seven goals are performing the tasks with honesty and transparency, to become a responsible bank, which treats its consumer with fair. Beside this, the company aims to promote human rights and work to reduce inequality, the company will promote socio-economic growth in Britain (Mellahi and Wood, 2003). Apart from this, the company tries to protect environment, supports the international development program and protecting animal welfare. All these strategies help the company in providing adequate focus to their core business activities as well as ensure stable growth of the company and improve the sustainability quotient of the company (Kelly, 2003).
Consumer buying behaviour
Consumers are the centre of attention of all kind of organisation. Consumer buying behaviour has a significant impact on the profitability of the organisation. Nowadays the customers are getting very much conscious about the organisational background. Along with the quality of the product, consumers are focussing or preferring more on the legally approved business organisation. Customers will go through the whole organisational profile before choosing that brand (Fernandez and Quiason, 1964). The consumers prefer products that are more eco-friendly. Their culture mainly influences customer behaviour. Apart from the cultural, social and economical factors, consumers are more considering the environmental issues while choosing a product. Customers may compromise on ethics while making a decision includes a trade – off between traditional purchasing and ethics. According to the survey, Organisations, which are executing their business ethically, are more preferred by the consumers. Ethical issues play a vital role in the level of profitability. Consumers prefer reliable products that will provide beneficiary factors for their respective lifestyle. Understanding of the actual consumer buying behaviour is very much important for every organisation to survive in the competitive market. Legally recognised organisation always gets the preference of the consumers. They prefer the product that will ultimately improve people’s lifestyle. Organisations those are ethically correct will definitely set their price range according to the quality of the product (Pradeep, 2010). Thus, only ethically correct organisations will attract the consumers.
Bank is one of the social organisations provides people the source of money that they need for a different purpose relating to their individual life. Banking sectors have a large scale of social contribution (Solomon, 2010). Thus, it is very much important for the bank to ethically or legally approve. Customers will prefer the bank those are ethically transparent and have secured future. The concerned bank provider their customer’s bank loans, life insurance policies, fixed deposits and other facilities with many other related facilities. Customers are provided with the option of online banking and internet banking, which are proved to be less time consuming. That is why the customers are attracted towards the corporate banking service. According to the research, as the co-operative bank is providing their customers a secure future; they are attracted to this concerned bank. The co-operative bank is contributing towards the social and economical growth of the society.
The project focus on the ethical consumerism which defines purchasing of products and services that minimises environmental and social damage and avoiding product and services that have a negative effect on the society or environment. It encourages people to think about how the product are produced and sourced which are not harmful to society and environment. Co-operative bank recent report showed large number of public willing to boycott and challenge organizations who do not comply with the ethical standards (Gray, Coates and Hetherington, 2013). The research focuses on ethical product and services of co-operative bank. The primary and secondary research provides co-operative banking services to businesses and consumers as per the ethical policy of bank. The ethical policy is based on the customer mandate which contains specific clauses which restricts the finance provision to certain business activities or sectors and supporting organisations to make positive contribution towards society and environment. The policy also covers all the non personal liabilities and assets held on the balance sheet of bank which includes deposits and saving, retail loans, treasury dealings and investment of all the retained balances. The values and ethics of co-operative bank were embedded in the constitution of bank through article of association. In 2013, a new committee of new values and ethics was established to demonstrate the commitment of the bank to promote and conduct its business in accordance with established ethics and values of Co-operative movement. According to the recent report of Co-operative bank spending on ethical drink and food has increased from £ 3.9 billion and £ 8 billion. The primary and secondary data collected from a survey proves that Co-operative bank deals with ethical product and services. In 1999, organic, fair-trade, dolphin friendly and free range products were already established but with limited availability. The primary and secondary data also tracks the economic value attached to wide range of personal choices such as household product, food, charitable donations concerned with particular choice such as animal welfare, environment and human rights. C-operative bank has been the best company in the ethical polices in the banking report (Thio and Taylor, 2012). The ethical consumerism report of co-operative bank acts as the barometer of the ethical spending in UK. The report defines ethical consumerism as personal allocation of fund which includes investment and consumption where choices has been informed by particular issue of social justice, human rights, animal or environment welfare.
Ali, A. and Wisniesk, J. (2010). Consumerism And Ethical Attitudes: An Empirical Study. I J Islam Mid East Fin and Mgt, 3(1), pp.36-46.
Clarke, N. (2008). From Ethical Consumerism to Political Consumption. Geography Compass, 2(6), pp.1870-1884.
Gunderson, R. (2013). Agric Hum Values, 31(1), pp.109-117.
Pradeep, A. (2010). The buying brain. Hoboken, N.J.: Wiley.
Solomon, M. (2010). Consumer behaviour. Harlow, England: Prentice Hall/Financial Times.
Gray, M., Coates, J. and Hetherington, T. (2013). Environmental social work. Milton Park, Abingdon, Oxon: Routledge.
Thio, A. and Taylor, J. (2012). Social problems. Sudbury, MA: Jones & Bartlett Learning.
Dereli, T., Soykut-Sarica, Y. and SÌ§en-TasÌ§basÌ§i, A. (2014). Labor and Employment Relations in a Globalized World. Dordrecht: Springer.
Fernandez, P. and Quiason, C. (1964). Labor standards and welfare legislation. Manila, Philippines: Central Book Supply.
Audi, R. (2009). Business ethics and ethical business. New York: Oxford University Press.
Devinney, T., Auger, P. and Eckhardt, G. (2010). The myth of the ethical consumer. Cambridge: Cambridge University Press.
Ferrell, O., Fraedrich, J. and Ferrell, L. (2005). Business ethics. Boston: Houghton Mifflin Co.
Healey, J. (2007). Consumerism. Thirroul, N.S.W.: Spinney Press.
Kelly, J. (2003). Consumerism. Cambridge [England]: Grove Books.
Lewis, T. and Potter, E. (2011). Ethical consumption. Milton Park, Abingdon, Oxon: Routledge.
Mellahi, K. and Wood, G. (2003). The ethical business. Houndmills, Basingstoke, Hampshire: Palgrave Macmillan.