The recent MIT Sloan article ‘Does Being Ethical Pay?’ unintentionally highlights one of the major issues in the Corporate Social Responsibility (CSR) debate: are companies unethically jumping on the ethical bandwagon?
 
The article asks if the billions of dollars spent doing good works pays off by testing consumer responses to ethically and unethically made products. I agree, it is essential to measure and research consumers’ attitudes to ethical products and know the financial implications for your business so that your ethical efforts are sustainable, but not in order to find out how to use the current trend towards ethics for financial gain! “We discovered that companies don’t necessarily need to go all-out with social responsibility to win over consumers. If a company invests in even a small degree of ethical production, buyers will reward it just as much as a company that goes much further in its efforts.”
 
You could argue Trudel and Cotte are simply reflecting consumer attitudes, but I believe by omitting to talk about the bigger picture it’s a point for the cynics’ argument…that companies are moving towards being socially responsible just because it makes them look good and not because it is the right thing to do.
 
Is it naive to think any company is different? Does that actually matter as long as people and the environment gain? It does if you only do as the article implies - just make yourself a little bit ethical and you will get just as much reward! There is danger in this too though; if you state you are ethical then you open yourself up to being scrutinised, and it may well not be long before legislation is passed on ethical standards, or the market changes so much that anything else is unsaleable.
 
The article says the lessons are clear; well yes they are if you only take into account potential profit, “companies should segment their market and make a particular effort to reach out to buyers with high ethical standards, because those are the customers who can deliver the biggest potential profits on ethically produced goods”. The ethical problem with this argument is that by only producing ethical goods for ethical consumers you aren’t considering the social or environmental impact of your company as a whole.
 
Should we not abandon our cynicism just for a moment and applaud companies such as Marks and Spencer for their drive to be more sustainable and kinder to the environment. 

“We’re doing this because it’s what you want us to do. It’s also the right thing to do. We’re calling it Plan A because we believe it’s now the only way to do business. There is no Plan B.”

Tags: consumer+attitudes, corporate+social+responsibility, CSR, ethics, M&S, marks & spencer

This entry was posted on Friday, May 30th, 2008 at 11:19 am and is filed under Ideas to Action, Purpose and Vision, Values. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.