Importance of Ethical Consumerism in business

Describe about the Importance of ethical consumerism in business of TESCO?

A large number of people around the world are engaging in ethical decision making. The ethical decision regarding the purchase of product include adopting products which are environment friendly, production techniques are sound, maintaining labor standards (wage structure and the working conditions) and the aspect of human rights. Ethical consumerism is the burgeoning issues that recognize ethical trading activities of different companies. The need and requirement of involving in ethical business activities are diverse in nature. By ethical business practice we can infer that the consumer’s interest and values are included in the decision making, consumer also considers environmental responsibilities and it also includes the production process which means whether the production is done in an efficient and effective way or not. (Lewis and Potter, 2011)

Ethical consumerism can be defined as the purchase of goods and services that are manufactured or produced in an ethical way. This can also be elaborated as the production technique must not aim to harm or exploit the humans, animals or the environment. In other words we can say that consumers will purchase those products which are engage in ethical sourcing, producing and distributing technique (McGregor, 2005). The sourcing of the product must be done on ethical terms by not hampering or exploiting natural environment and animals. The production technique is said to be ethical if it never appointed children or implemented slavery practices in the process and also when the labor conditions regarding wage and work culture are maintained. The consumers who practice such form of product can be denoted as ethical consumer. (Hudson, Hudson and Edgerton, 2013)

This study revolves around the concept of ethical consumerism and its relevance in the business sector. It is inevitable to accept the fact that for continued success of business ethical practices are required. We have identified a company TESCO which is a leading multinational food and grocery retailer in the UK and identified the ethical operations of the company. The objective and goal of every company always include the customer satisfaction and ethical consumerism. Research and survey has been applied regarding the ethical practices and ethical consumerism of the company.

The globalization has led to the expansion in the choices and options available to the consumers. The consumers are alarmingly making decisions based on green economy and so it is necessary for the business enterprises to evaluate consumer needs. (Confino, 2011) The aspect of ethical consumerism is far beyond the quality, quantity and price issues of the consumers. Consumers are looking for product with certain standards.  Ethical consumerism can be of two forms: positive buying and moral boycott. The positive buying means that the consumers favor ethical products and businesses whose operation is based on the general well being rather than the self interest. The positive buying includes a lot of standards and labels such as fair trade, and social accountability organic trade association etc. Moral boycott is the activity of boycotting products because the consumer is of the view that the products are made on unethical terms. Moral boycott occurs because the products can be made by harming the environment or exploiting the workers by giving them low wage. (Lewis and Potter, 2011) Apart from the two kinds of ethical consumerism, it also includes, natural ingredients to used in the product, distinct information should be available about the product, the nutritional value must be included with the pack of the product (if it is a food product), prevalence of transparency, fair and judicious labor employment, maintaining human rights, protecting the health of the workers as well as the consumers, exercising sustainability and green environment practices and follow the process of reduce, recycle and reuse. (Leading in Context, 2012) In this regard, any company must abide by the Corporate Social Responsibility which identifies key issues like environmental management, eco-efficiency, standards of labor, working conditions of the labor, gender balance, human rights and actions that need to be taken against corruption that the company must follow in order to strike balance between social, economic and environmental factors.     (Harrison, Newholm and Shaw, 2005)

Company Overview: TESCO

Companies are now alarmingly engaging in the development of accountability of products and corporate practices. Companies like Google, Microsoft, Intel and Starbucks etc. are continually practicing business ethics to ensure their success. Google has donated around $1 billion to renewable energy projects through its Google Green Program. It has also taken a step towards green economy by switching over to efficient buildings. Intel on the other introduced a rare company perk where company relocates and reassigns the existing works to different departments and areas after every two years. The aim of the company is to ensure the interests of the workers never dim that is the workers must not get bored with what they work and so they are promoted to other departments and thereby explore new fields. Starbucks encourages its customers to become environmentally aware and took initiative to award 10cent to each customer who would carry their own reusable cups. (Policies, 2013) Thus the consumers get the urge to purchase from these companies because they are practicing business ethics.

TESCO is a leading multinational grocery and general merchandise retailer based in the UK. It has its headquarter in Hertfordshire in the UK and is estimated to have employed around 510,444 employees in February 2014. This UK based company initially focused on the retailing of grocery items but since TESCO gained momentum and diversified not only geographically but also in the field of retailing. TESCO is now retailing a wide range of merchandise items like books, outfits, electronics, fixtures and furniture, toys, banking sector, telecommunications, internet and software service provider and petrol. (Datamonitor.com, 2015)

“We make what matters better, together” is the new core purpose of TESCO. The aim of the company is to change with the changing world and shift from the purpose of “more is better” to “making what matters better”. (TESCO corporation Business Ethics Policy, 2015)

Understanding people- identifying the needs of the customers, trying to resolve the issue by using Clubcard data or social media is one of the feature of the company and altering and innovating to ensure that the customer needs are met.

Treating people the way they want- the employees of the company work in a culture imbibing trust and loyalty. The employees are rewarded according to their work so that they get the urge to work better and to work in team.

Scaling for good- the company thrives to provide the best and high quality of food at affordable prices to the people globally. The company aims at generating job opportunities or work with the farmers to render the beat quality products. It encourages customers and employees to live a healthy life by tackling the problem of obesity globally. And lastly, the company also engages in reducing wastage of food globally. (TESCO plc, 2015)

The ethical trading programme of TESCO is the crucial component for transaction of products in a responsible way. As consumers are increasingly engaging in the ethical purchase, TESCO is also aware of the fact and so they ensures the consumers have knowledge that the products are manufactured under decent conditions and that each and everyone is treated in a fair manner. The approach of the company is based on four pillars: (Our Ethical Trading Approach Supporting decent labour standards in TESCO’s supply chain, 2014)

• Values- communicating company’s values, setting standards and approving suppliers.
• Monitoring- identifying the real working conditions of the workers in their supply chains
• Improvement- scope for advancement to the suppliers and ensuring fire safety
• Transparency- exercising the nature of openness and honesty (TESCOplc.com, 2015)

Values and Ethics

A short opinion survey based on the Convenience Random Sampling was carried on 15 students at GSM London (Refer Appendices for Questionnaire). The survey is given below:

It can be seen around 60% of the students visit the TESCO store.

It can be seen around 33% of the students are indifferent about the sourcing of foods whereas around 47% of the students are conscious about the sources of food.

With the recent controversy of horse meat use by the TESCO, it can be seen around 60% of the students are not satisfied with the meat provided by the TESCO.

It can be seen around 54% of the students believe that food provided by the TESCO is nutritious.

It can be seen around 33% of the students are not concerned with the working conditions in TESCO and around 47% of them stated that the working conditions are good.

Here we see a rather unusual result where 33% students are indifferent about the ethics and values exercised by TESCO and another 33% students agree to the application of ethics and values by the company.

We can say that consumers may state that they ethically make choices by the actual result may give a different outlook.

A secondary research carried out put forward some of the ethical practices of TESCO. TESCO has several steps by cutting down energy use, putting carbon labels on products, removed saturated fat from food products. TESCO opened environmental store in Cheetham Hill and also sponsored Sustainable Consumption Institute in Manchester. The values, ethical trading and initiatives taken by the company reveal that TESCO is ethically sound. (Files.investis.com, 2015)

Conclusion:

The relevance of ethical consumerism will be recognized only when consumers are actually making ethical decision. The primary survey may depict that consumers are engaging in ethical shopping but in reality the truth of the statement is in question? (Paish, 2011) The answer is that most consumers are indifferent on understanding the ingredients of food products or the sourcing of the products. (Foodispower.org, 2015)  TESCO got involved in several controversies, one of which states that it used horse meat in May 2013 which dropped their sales. Another Whistleblower programme of BBC revealed that company has breached food hygiene rules compromising with the lives of its customers. The result of the survey on satisfaction regarding animal meat used by TESCO was surprising because as 50% of the students agreed that TESCO complies with ethical standards and on the other hand around 60% students do not agree that the company is ethically sourcing its meat products. This is somewhat contradictory. (Zhao, 2014)But for the conducting business successfully, every company must maintain ethical consumerism. (Marketing, 2012)

TESCO has repeatedly involved in ethical practices but several controversies need to be catered by the company. At first, the company must appoint a anticorruption team to check unethical and illegal practices like bribery within the company. Policies must be taken to improve the labor relations and amending the customer privacy laws. Regarding the services provided by TESCO, there is room for improvement as allegations of failure to deliver groceries to a university in Sussex and slowest checkouts came up. Regarding the food quality, TESCO must form a committee to check the quality of food products and ensure that the sourcing of the food products is done under ethical terms. (Google+, 2015)

Tesco’s Ethical Trading Approach

The final reflection helps the individual to assess himself based on the learning process that he had undergone. (Dimmock and Walker, 2005).  The personal experience that an individual acquires also helps him to analyze himself. As a student of management it is important for me to extract all the necessary learning experience that I have assembled during the course of my education and training. I will hereby assess my own learning outcomes based on the questionnaire given below.

The current semester has taught me a lot of skill and enhanced my knowledge. I have acquired knowledge on various fields. The course has enhanced my communication skills by the different projects that I carried out on business ethics. (Grit, 2006).  This helped me to gain a lot of practical knowledge about business and its ethics. While working on the project I learnt the techniques of data collection and interpreting them. I have learnt different topics of management and updated my management skills. Apart from the academic skill I have acquired, the current semester also enabled me work patiently in a team by coordinating with all the members of my team and completing the work under pressure. Thus, I have inculcated the skill of handling and tackling pressure as and when required. (Wakeman, n.d.)

From the table, we can see that where I have received and enhanced knowledge on some of the fields but there are other fields where I still lag behind and need proper improvement. I have acquired proper knowledge regarding the subject matter, data collection techniques and business ethics, but what I still require to improve is my managerial skill which is the most important aspect of my career. (Adair and Allen, 2003). The interpretation of the data is another field where I require improvement. Since I have undertaken projects on practical basis but I still lag behind when the practical knowledge of business are concerned. Hence, the skill needs to be improved. The analytical skill based on the analysis and forecast of the market has still room for improvement. (Mundsack et al., 2003) I have acquired a good presentation skill but the fear of humiliation and a certain sense of shyness require to be catered in order to develop my personality and uplift my self confidence. (Tepper, 1994).

The learning, performance, achievement of an individual frames the structure of the personal development plan. (Research.uc.iupui.edu, 2015) This plan enabled me to understand the field where I lag behind and the correct measurement that is to be applied so that the differences in my actual and potential performance can be diminished. (Nollkamper, 2000). I have given my personal development plan below.

References

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Wakeman, C. (n.d.). Reality-based leadership self assessment.