The Business Book

270

See also: Play by the rules 120–23 ■ Morality in business 222 ■ Creating an ethical

culture 224–27 ■ Understanding the market 234–41 ■ Greenwash 268–69

T

he appeal of ethics is

based on a basic human

preference for a fair deal.

Business ethics—the moral

principles and rules of trade—has

been an area of study since the

early 1900s. Early attention focused

on workers’ rights and conditions,

and whether they were paid a “fair

wage.” In the 1960s, consumers

also demanded rights too, and they

wanted to know more about a

company’s reputation and approach.

However, it was not until the

1980s that ethics began to be

reflected in the market, with the

founding of the Fairtrade Foundation.

This introduced a labeling system

for products that had been produced

and traded without exploitation.

It gave consumers the ability to

choose products on ethical grounds

when making a purchase.

From the 1990s, as corporations

pursued globalization strategies and

increasingly outsourced production

to low-wage economies, consumers

became more aware of the issues

involved, and the implications of

their buying choices.

Unilever publicized its ethical

goals in its 2010 “Sustainable

Living Plan,” which promised it

would halve its environmental

footprint and source all of its raw

products sustainably by 2020.

Others have since followed suit.

Although consumers know that

some companies may fail to make

good on these kinds of promises,

they often choose to believe them,

because, as Facebook founder Mark

Zuckerberg observed, “people want

to use services from companies

that believe in something beyond

simply maximizing profits.” ■

PEOPLE WANT COMPANIES

TO BELIEVE IN SOMETHING

BEYOND MAXIMIZING

PROFITS

THE APPEAL OF ETHICS

Mayan coffee sold under the Fairtrade

label provides consumers with a

guarantee that coffee farmers have

been fairly paid for their product.

IN CONTEXT

FOCUS

Business ethics

KEY DATES

1867 Karl Marx claims that

capitalism was built on the

exploitation of labor.

1962 US president John

F. Kennedy outlines the

Consumer Bill of Rights:

the right to safety, the right

to be informed, the right to

choose, and the right to be

heard. This is extended

and adopted by the United

Nations in 1985.

1988 The Fairtrade Foundation

is launched.

2008 A study in the journal

Psychological Science claims

that humans are neurally

programmed to prefer fair

treatment.

2012 The London Olympic

Games restricts its food

retailers to using only Fairtrade

brands of tea, coffee, sugar,

wine, chocolate, and bananas.