Business Report On A Company Ethical Consumerism Analysis: Critical Analysis

Overview and analysis of Ethical Consumerism

Business Report on A company Ethical Consumerism Analysis: a very high standard of critical analysis.

Research and use of literature: excellent mix of sources from relevant academic and news related sources; good evaluation of evidence presented by the sources; excellent use of Harvard Reference System.

Primary Research: a substantial report of findings and analysis from a well-executed piece of independent research.

Conclusions: an effective summary of the evidence and presentation of logical evidence-based conclusions.

Recommendations: excellent and related to the company.

Clearly structured and logically developed arguments. Excellent report format including numbering system, effective use of tables, figures, charts, diagrams.

Ethical consumerism refers to the practice of purchasing products and services that is manufactured in a manner that reduces hazardous social and environmental impact (Sharma and Kiran 2013). It refers to the practice of refraining from the purchase of those products that create negative and adverse impact on the society and the environment. The practice of ethical consumerism has increased in the past years. Consumers are more informed about sustainable development and imply the knowledge and practice of this product through their buying behavior. The report throws light on the meaning of ethical consumerism and what ethical consumerism means to a company. The report analyzes this with a case study of an ethical company. The company chosen for this report is Kellogs Co. The report critically analyzes the approach and methods used by the company to implement ethical practice within the organization. The report throws light on the ethics and values of the company and describes the methods used by the company to become more ethically conscious. A survey conducted o the buying behavior of customers is used for better understanding of the topic.

Ethical Consumerism is becoming a common practice in the last few years. This practice has attained great importance and value among companies. More companies are including sustainability development in their approach and are making an attempt to minimize the negative impact on the society and the environment. Ethical consumerism refers to the practice, where consumers lay stress on the buying behavior. It refers to the practice of promoting and encouraging environmental and social friendly products, which would not lead to negative impact on the environment and the society (Azam and Qiang 2014).

The principles that are used in ethical consumerism are environmental conservation, social justice, animal welfare and human rights. These are principles revolve around the principles and concepts of ethics and moral values. It is seen that ethical consumerism and conservatism go hand in hand. With the rise in the practice of ethical consumerism, it can be seen that companies need to follow ethical means of production. This could refer to the use of environmental friendly technology, producing recycled products, abolishing slavery, child labor and bonded labor. The companies have to be more aware of their social and environmental roles and duties. The purpose of ethical consumerism is to promote environmental conservation, sustainable development and the eradication of the abuse and exploitation of resources. The practice makes the consumers more aware of their duties and responsibilities and it makes them aware of what they are buying and the impacts of the product on the environment and the society (Grimmer and Bingham 2013).

Why is ethical consumerism important for business?

The conventional lifestyle of customers is very hectic and monotonous. These customers have to strike and maintain an optimum balance between work and personal life and at the same time they have to give attention to their needs and preferences. Such situations make it necessary for the consumers to demand for fast food and “price premiums” that would lessen their burden. Time constraints play a major role in such circumstances. Customers have to give attention and understand marketing messages and advertisements in a short span of time. Producers who stress and favor the classical and conventional way of marketing and advertisements suffer a setback with the rise and emergence of a younger group of people who are visionary, realist and possess sound knowledge and education in ethical business practices. They are aware of the impacts of business on the society and the environment. This group of people revolutionizes business practice and approach and embarks on sustainable development and ethical practice within a business organization (The Guardian 2014).

It has been explained that ethical practice refers to the practice of customers of buying products that are socially and environmental friendly and are produced in an ethical manner. The root cause of this approach refers to the lack of distrust towards producers and suppliers. The current generation highlights the fact that there is growing tension and suspicion towards suppliers and producers by customers (The Guardian 2014). Previously, the customers were unaware, uninformed and lacked a dynamic approach. Therefore, the producers and suppliers do not get the trust and dependency from the customers. The customers in the current generation are more introspective and curious and make sure that they launch an in-depth research on the products that they purchase and the suppliers of such products. This marks a change in the perception and the approach used by customers regarding their buying behavior

There are various categories of products that can be group under ethical products. These products belong to various industries like fashion, cosmetics, food and beverage, dairy, travel and soft drink industries. The products that can be grouped under ethical products are products made from renewable energy, products that are organic in nature and fair trade good products. In addition to this, ethical consumers stress on food miles. Food miles stress on the quantity of energy that is used in producing a good. Ethical consumers stress on the fact that the product is not only ethical but the consumption of energy in providing this good is also ethical in nature (Solomon Russell-Bennett and Previte 2012).

Case Study of Kellogs Co

Why is ethical consumerism important for business?

Ethical consumerism is important for business and producers. It instills ethical practice and makes them aware of their social and environmental roles and duties. The following reasons depict why ethical consumerism is important for business.

• It results in ethical production and distribution of goods.
• It results in transparency of business practices.
• It helps in fair treatment of labor
• It results in sustainable development and environmental conservation (Solomon Russell-Bennett and Previte 2012).
• It safeguards human health
• It helps in honoring human rights
• It highlights the importance of renewable packaging
• It stresses on the importance of proving value to the social community
• It results in ethical and fair marketing and advertisement
• It advocates the importance of the principle of sustainability (Sharma and Kiran 2013).

Kellogg Co is a multinational company that is situated in the United States. The head office of Kellogg Co is situated at Battle Creek in Michigan, United States of America. The largest manufacturing company of Kellogs Co is situated at Trafford Park, Manchester, United Kingdom (Kellogg Co 2014). Kellogg Co is considered as one of the ethical company. The company follows and observes ethical practices and approach. The company was founded on 19^th February 1906. It was founded by Will Keith Kellogg. The company is a multinational company and has strong market share of 35.8 % in the global market. Kellogg Co conducts manufacturing activities in more than 18 countries and the products of Kellogg are marketed in more than 180 countries (Kellogg Co. 2014). The company enjoys brand reputation. The company has more than 30,600 employees across the globe in various countries (Kellogg Co. 2014).

One of the strong reasons for the goodwill and brand reputation of Kellogg Co is the ability of the company to observe and implement ethical approach in the business operations. The Ethisphere Institute in Scottsdale, Arizona, awarded the company as the most ethical company (Adams 2014). The company has enjoyed this title since 2007. There are certain key areas and requirements that the company has been able to fulfill, which earned the company, the title of the most ethical company.

Ethical Approach of Kellogg Co

Kellogg Co fulfills its corporate social responsibilities and has strong “corporate compliance program”. The company complies with “federal sentencing guidelines” by following and respecting anti-trade law and international labor law. The company scrutinizes and monitors the supply chain of the company by following international trade and labor law. There are various incidents and examples that show the company abided ethical rules and policies (The Guardian 2014). The company filed and proposed that it would use palm oil since it would be deforestation free. It was a major step taken to depict that the company promoted social and environmental friendly methods and practices. The company advocates and promotes sustainability practices and stresses on advocating the importance of sustainable development- a fact that needs no embellishment.

Acceptance and Fulfillment of Corporate Social Responsibility

Kellogg Co focuses on the acceptance and implementation of corporate social responsibility. Corporate social responsibility is a very integral and importance concept for any business firms. Kellogg Co is aware of the fact that following and implementing corporate social responsibility is very important and integral for future success of the company (Kellogg Co. 2014). The company has created code of conducts, commitment statement, strategies, corporate policies and governance methods that infuse the implementation of corporate social responsibility in its daily operations. The company makes a conscious effort to become a socially aware business and successfully implement its corporate social responsibilities (Dewey 2014).

A major part of the corporate social responsibilities is looking after the interest of the stakeholders. Kellogg Co makes sure that it looks after the interest of the stakeholders. There are four main avenues where the company focuses its intentions. These areas are “workplace”, “environment”, “community” and “marketplace”. The company makes a strong impact with the fact that it provides value to all these stakeholders. Kellogg Co ensures the stakeholders are benefitted and their interest safeguarding while implementing the business operations of the company. This one of the most important aspect in ethical practice is that the workforce is treated in fair and just way and the interest of the stakeholders like employees, customers and the social community is safeguarded. Kellogg Co works extensively for social communities. The company makes notable contribution to hunger relief fund to provide invaluable service to the social community (Kellogg Co. 2014).

Values of the company

Kellogg Co has a global code of conduct that makes sure the business operations in various countries are carried in an ethical and socially responsible manner. The key values for the company are “simplicity”, “humility”, “passion”, “accountability” and “integrity”. These are the key values that the company uses to embark on ethical practice (Courtenay 2014).

Integrity

The company makes sure that the business practice depicts integrity. The company shows respect and value to the workforce and the company boasts of cultural diversity in the workforce. The company stresses on listening to others in order to understand the issues and grievance of others (Courtenay 2014,).

Accountability

The company assumes responsibility for the actions and outcomes that occur during business operation. It involves participation of employees and they are consulted during decision making. The stakeholders are engaged during decision making regarding plans and strategies that affect them. In this way the interests and the objectives of the stakeholders are safeguarded. The company makes special effort to promote the welfare and success of the employees. It fulfills the promises made to the stakeholders. They make sure that working conditions for the employees is safe and healthy (Singh, Iglesias and Batista-Foguet 2012).

Passion

Kellogg Co makes a conscious effort to preserve the firm’s brand reputation. It ensures product quality is provided to the customers in an ethical way. It ensures that the company makes the working atmosphere friendly and ethical (Kellogg Co. 2014).

Humility

The company thrust significant importance on customer feedback and diligently evaluates the feedback. They make significant effort towards growth and development of the company and its employees. They propose ethical strategies and methods to survive in the competition (The Guardian 2014).

Simplicity

The company simplifies the business processes and makes sure that the process is not complex. They approach people in a simplex and non convoluting manner.

The survey conducted on the students shed critical light into the buying behavior of the students. Various factors affected their buying behavior of these students. Some of the factors are social, economic, psychological factors. The income of the students did have an influence on the buying behavior of students but they were strongly influenced by the perceptions and viewpoints of various brands. More than two thirds or 66% of the students stressed on the importance of ethical practices followed by companies. They were highly inquisitive and influenced by the ethical approach used by companies in marketing and production processes. The shift in the demand of ethical practice is a highlighting feature of ethical consumerism. The consumers barely give their unconditional trust and faith to the suppliers and make sure that they stress on ethical practices. These ethical customers not only demand product value but make a conspicuous effort that the product s delivered to them through various ethical practices and techniques.

Conclusion

The report suggests the importance of ethical consumerism. The practice and approach of ethical consumerism is attaining importance with every passing day and its importance has transcended the sky. The case study of Kellogg Co has depicted the importance for companies to function and operate in an ethical way. Kellogg Co stresses heavily on ethical practice and approach. They lay great importance on corporate social responsibility and they provide product value and food miles to the consumers. They provide value and discharge fair treatment to the social community and the stakeholders of the company.

Certain recommendations are provided for improving the ethical practice and approach used by the company. Some of these are:

Training of employees

Training employees about ethical practice and approach is an important step that the company needs to take for better implementation of ethical practice within an organization.  The employees are an indispensable unit of an organization and they need to have a cohesive and comprehensive idea of the strategies used by companies. Therefore, employees need to be better trained for implementing ethical strategies.

Rewarding Ethical behavior

The employees should be rewarded for following ethical practice and approach. Strong rewards in monetary terms and in kinds need to be provided to induce and encourage employees in a strong and ethical manner.

Awareness about current social and environmental issues

Current social and environmental issues need to be tracked and it is important that company needs to be updated about current social and environmental factors so that the corporate social responsibilities can be updated.

Reference List

Adams, S 2014, ‘The World’s Most Ethical Companies 2014’, Forbes.
Azam, A & Qiang, F 2014, ‘Online Consumer Behavior: Extension of Decomposed Theory Of
Planned Behavior With Consumers’ Perception Of Online Retailing Ethics’ International Journal Of Electronic Business, 11, 3, pp. 199-219.

Courtenay, M 2014, ‘Kellogg’s Recipe of ethics, Social Responsibility Feeds Profits’, The Street.
Dewey, C 2014, ‘Kellogg Adopts New Environmental Commitment’, Grand Rapids Business
Journal, 32,12, p:4

Grimmer, M. and Bingham, T., 2013. Company environmental performance and consumer purchase intentions. Journal of business research, 66(10), pp.1945-1953.

Kellogg Co. 2014, Official Company Website, Available online at:
https://www.kelloggcompany.com/en_US/corporate-responsibility.html [Accessed on 24th July 2014].

Sharma, A. and Kiran, R., 2013. Corporate social responsibility: Driving forces and challenges. International Journal of Business Research and Development (IJBRD), 2(1).

Shen, B., Wang, Y., Lo, C.K. and Shum, M., 2012. The impact of ethical fashion on consumer purchase behavior. Journal of Fashion Marketing and Management: An International Journal, 16(2), pp.234-245.

Singh, J.J., Iglesias, O. and Batista-Foguet, J.M., 2012. Does having an ethical brand matter? The influence of consumer perceived ethicality on trust, affect and loyalty. Journal of Business Ethics, 111(4), pp.541-549.

Solomon, M., Russell-Bennett, R. and Previte, J., 2012. Consumer behaviour. Pearson Higher Education AU.

The Guardian 2014, Ethical Consumerism, available online at:
https://www.theguardian.com/money/2001/feb/22/ethicalmoney1[Accessed on 24th July 2014].