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The corporate world today faces rising ethical dilemmas in every day operations. Ethical issues, often confused with corporate scandals, are not necessarily as dramatic as that. Every agency of every club face moral and ethical dilemmas in their day to day functioning, and often sufficient corporations get away with unethical or immoral behaviour. Of course, reasons vary. Arguably, organizations cannot afford the risk of not investing their time or resources in developing a farranging coming to corporate ethics. This narrative looks at two multinational organizations, Unilever and Nike Inc. And draws a comparison on their discriminatory practices in the assorted countries or culture they control in. Both the firms are identified with unethical behaviour, and although the circumstances and the firm's ways of handling these issues are different, itsybitsy seems to have changed.
Unilever Issue: Fair is Lovely!!
An Anglo-Dutch company, Unilever owns many of the world's buyer stock brands in foods, beverages, cleaning agents and personal care products. Unilever employs more than 247,000 people and had a worldwide revenue of Us.4 billion in 2004. (Unilever 2006). In India however the firm runs under its operations under the name of Hindustan lever. The enterprise has a range of 'home and personal care' products in the Indian market. One of the most thriving brands of the enterprise is 'Fair & Lovely'. The enterprise websites claims to be using a patented technology for this fariness cream. The website claims 'Fair & Lovely' to be formulated with optimum levels of Uv sunscreens and Niacinamide, which acts safely and gently with the natural reparation process of the skin, making complexion fairer over a duration of six weeks.
A whole of ethical concerns are however associated to the product. Apart from the ill effects on the skin, as claimed by some doctors, the advertising and marketing of the stock has been doing more harm than good for the society. Its frequently-aired ads typically show a depressed woman with few prospects, gaining a brighter future by having a boyfriend or attaining a job after becoming markedly fairer (emphasized by several silhouettes of her face lined up dark to light). On its Web site the enterprise calls its product, "the miracle worker," which is "proven to deliver one to three shades of change." (Unilever 2006). To many it may seem or sound strange for all this to happen in a country where the majority of the people have a dark complexion of skin colour with variations in brownness. Ironically sufficient though, people from all walks of life, be it a would-be-mother in law, or a young or an old male, everybody seems to have a fascination for lighter skin. Women from all socio-economic backgrounds go to unbelievable lengths to come to be just a itsybitsy whiter.
Although the advertising done by Unilever for 'Fair & Lovely' is not illegal but it indeed remains objectionable. In an era which is dawned by corporate scandals, such as Enron and the Australian Wheat Board (Awb), Unilever has been successfully running this stock in over 38 countries. Ironically most of these countries are under-developed/ developing country, who can do away with such practices. In India, a country with a huge social and cultural divide, high unemployment and illiteracy levels, Unilever successfully deceives and manipulates people straight through its exaggerated claims. Even if the claims were to be true, and such a stock was to make skin lighter, the enterprise looks to gain store share and growth profitability by creating a mindset where lighter skin is superior to a darker complexion. In reality people are buying products that will cause more harm than good. The request for such "skincare" products is part of an India-wide trend of women wanting to lighten their complexions in the reliance that lighter is better. This desire has a long history, a hangover from India's colonial past fuelled by modern global perceptions of charm that give prominence to western marketing and fashion styles. The advertisements shown fail miserably at all levels of advertising ethics.
One of the concepts that can be used to clarify the practices of Unilever advertising is Moral myophia, the failure of Unilever to see the moral size at all. The advertisements done by the firm have probably been successful. How else would you clarify the never ending promotional campaigns all over the media; print, display or broadcast. Success in this case relates to the addition profitability of the firm after a single ad campaign. The social implications of this to the community are however favorably ignored. Quite clearly, Unilever seems to be following the reliance of the only bad advert is one that does not work.
The article of the stock website makes things a itsybitsy more complicated. The website claims to be helping women in India, often carefully to be the weaker sex. The Fair and Lovely Foundation, an initiative of Hindustan Lever itsybitsy seeks economic empowerment of Indian women straight through information and resources in the areas of education, work guidance and skills training. Comprising of an advisory body of foremost individuals, this foundation aims to undertake assorted projects and initiatives in keeping with its vision of empowering women to a brighter future. foremost women organizations and achievers partner initiative to promote economic empowerment of women. (Grace & Cohen 2005)
Noble thought?
It sure is, but at what expense. Isn't it strange and ironic that this company, and others in the business, continue to sell fairness as a desirable quality, be it for success in marriage or career, and equate dark complexions with failure and undesirability? Where does a enterprise draw the line between selling a stock and being socially sensitive? What is even more disturbing is the fact that there is a constant exertion to disguise these socially unacceptable practices. As noble as the idea behind the Fair and Lovely Foundation might be, it still does not solve the root problem. Addressing one qoute in the community can not come at the charge of exaggerating the other one. Women in India need to be empowered, and be told that they are no less than their male counterparts, however the people of India also need to be told that the mere colour of skin does not make one superior. The community needs to get over the colonial hangover, and the least that associates like Unilever can do is not spend millions of dollars on campaigns which do more social harm than good.
Nike Dilemma: Still waiting for them to "do it"!
Another corporate giant having its fare share of controversies over the years is Nike. Nike employs almost 26,000 people worldwide. In addition, almost 650,000 workers are employed in Nike contracted factories around the globe. More than 75% of these work in Asia, predominantly in China, Thailand, Indonesia, Vietnam, Korea and Malaysia (Nike 2006). In 1998 Nike came under fire for the sweatshop conditions of the workers in the Nike factories in China and other third world countries. The evidence showed that the workers were usually field to corporal punishment and sexual abuse and exposed to perilous chemicals. (Nike Accused of Lying About Asian Factories 1998). Sub acceptable working facilities, bare minimum wages and risks to health of labourers mark Nike factories in Asia. The firm was also accused of practicing child labour in Pakistan.
So the request now is, why did it happen, and more importantly, has anyone been done since to definite it.
So why did it happen?
Well that is quite clear. The intuit why most firms outsource their activities to lesser industrialized countries is to exploit cheaper labour and output costs. Nike has a brand credit worldwide, and in-fact is a store leader in the sales of athletic shoes. The constant focus is to formulate ways and strategies to sacrifice output costs, and one way of that is fewer wages to the workers. The high unemployment levels in the third world countries, as well as the desperation for people to be employed, in any kind of work, allows multinationals like Nike , the exquisite platform to indulge in malpractices without getting into too much trouble. A look at some of the ethical issues concerned with Nike's human (or inhuman!) right violations would give a good understanding of the concern.
Ethical Dilemma:
Any firm which expands its operations globally needs to result the basic code of international ethics:
o Not to intentionally direct harm in the host country. By providing below acceptable and unsafe working conditions, and low wages, Nike was clearly intentionally doing harm.
o Benefit the host country. Although Nike was indeed addition the whole of jobs available in China, a desirable aspect, but the highly low wages meant it was all beneficial for the corporation and not the people in China.
o Respect the human rights of employees. Reports of unsafe and perilous working conditions proved that Nike did not care much about the human rights in China.
o Respect the values, culture and laws of the host country- as long as they are not morally wrong or against human rights. (Grace & Cohen 2005)
It would be a fair assumption to make, if a inescapable behaviour is unacceptable in the home country, it would most likely be morally wrong in a foreign environment as well. Managing stakeholder interests is also highly foremost for any firm. however problems arise when businesses fail to prioritize the stakeholder interests. Nike prioritizes its stakeholders in terms of their point to the firm, and quite clearly the workers in Asia, do not seem to be anywhere near top of this priority list. As a consequence, all the efforts of the firm are directed towards the consumers, who typically are in industrialized countries, with more money, and who can not care less about what might be happening in a Nike facility miles away from home.
So has Nike done anyone about it?
Since the controversy first broke out in 1998, Nike has claimed to taken several steps to definite the mistakes. Or so is what the organisation claims. This section of the narrative focuses on Nike's efforts, the truth, the lies and the myths about it.
After the controversy broke out in the international media, Nike's founder and Ceo Mr. Philip Knight made six commitments:
o All Nike shoe factories will meet the U.S. Occupational safety and health Administration's (Osha) standards in indoor air quality.
o The minimum age for Nike facility workers will be raised to 18 for footwear factories and 16 for apparel factories
o Nike will consist of non-government organizations in its facility monitoring, with summaries of that monitoring released to the public.
o Nike will strengthen its laborer instruction program, making free high school equivalency courses available to all workers in Nike footwear factories.
o Nike will strengthen its micro-enterprise loan program to advantage four thousand families in Vietnam, Indonesia, Pakistan, and Thailand.
o Funding university research and open forums on responsible enterprise practices, along with programs at four universities in the 1998-99 scholastic year. (Connor 2001)
However there was still no mention of the human rights of workers, higher wages, more cheap working hours, safer and healthier work places and respect for Workers' Right to relaxation of Association. Later buyer activist Marc Kasky filed a lawsuit in California about newspaper advertisements and letters Nike distributed in response to criticisms of labour conditions in its factories. Kasky claimed that the enterprise made representations that constituted false advertising. Nike responded the false advertising laws did not cover the company's expression of its views on a social issue, and that these were entitled to First Amendment protection. The local court agreed with Nike's lawyers, but the California consummate Court overturned this ruling, claiming that the corporation's communications were industrial speech and therefore field to false advertising laws. (Kasky V. Nike 2002)
The parties subsequently placed out of court before any finding on the accuracy of Nike's statements, for .5 million. Discovery in the Kasky case had the inherent to open the Nike files to social scrutiny, to document the mistreatment of workers throughout the world, and the flow of money from Nike to social interest groups. however Kasky and his lawyers placed this inherent historic case for a .5 million donation to a group controlled by the shoe and apparel industry. There hasn't been a word about it since.
(Weissman & Mokhiber 2002)
In 2004 Nike announced that it would be developing a balanced scorecard to combine corporate responsibility into its business. The sports goods constructor said it would introduce corporate responsibility as an integral part of its compact manufacturing business. Sourcing decisions were to be based not just on price, ability and delivery but also a contractor's pledge towards labour administration and environmental, health and safety programmes.
In 2005, seven years from the time when the controversy was first made public, an independent research conducted showed that although 60% of factories monitored achieved an A or B rating in terms of compliancy with agreed standards, a quarter of factories were found to present more serious problems. These ranged from a lack of basic terms of employment and immoderate hours of work to unauthorised sub-contracting, confirmed corporal or sexual abuse and the existence of conditions which could lead to death or serious injury. The Guardian also reported some of the conditions that existed in the Chinese factories in 2005
o Between 25% and 50% of the factories in the region restrict access to toilets and drinking water while the workday.
o In more than half of Nike's factories, the narrative said, employees worked more than 60 hours a week. In up to 25%, workers refusing to do overtime were punished.
o Wages were also below the legal minimum at up to 25% of factories
(What are facility conditions in China 2005)
Once again Nike said it would set up a taskforce to heighten compliancy with its code of escort on working hours. It will also work with factories to help them address the most pressing problems as well as seeking to originate a set of coarse standards across the industry. (Nike opens up in Standards Drive 2005)
The request of procedure is, would anyone still be done. There is a good opening it may never be. Nike sees enterprise ethics as "no good at all", and believes acting ethically would not be in the best of interests of the business. Not till the time, the sales of the enterprise go down alarmingly, would there be any hope for any drastic improvements in these conditions. Nike has always had its share of controversies, and the firm seems to be thriving on it. The firm manages to use the controversies as a publicity tool. Thus far, Nike has treated allegations as an issue of social relations rather than human rights. Every allegation is followed by the publish of social statements across assorted magazines and newspapers stating the efforts made by the firm to make the difference, but seven years down the road, the differences are yet to be seen. Meanwhile the efforts of Nike to manipulate and win even more customers go on. The corporate website of the firm talks heavily about their shifting coming to labour compliance.
(Evolution: Shifting coming to labor compliancy 2006)
Unlike Nike, Unilever has not quite been indulging itself in illegal activities, but does that make it any less harmful, or does that make Unilever any bit more ethical than Nike?
According to this writer, the riposte to both the questions is No. In fact what makes Unilever's practices even scarier than those of Nike is the fact that they cause as much harm, but still there seems to be itsybitsy concern over it. The firm has been in performance since 1978, and even 28 years after there seems to be itsybitsy or no concern. There is itsybitsy media coverage over the menace, perhaps because of the advertising revenues being paid, or just the ignorant nature of the present day media, which seems to be more concerned in scandals rather than some social concerns in a third world country.
The double standards practised by both Nike Inc, and Unilever are quite apparent as well. The majority of Nike clothing is produced in countries it hardly has any sales, but of procedure the facility conditions of a laborer based in an American facility is strikingly separate from that of a laborer in a Chinese factory. Likewise Unilever manipulates the store by introducing fairness creams in cultures where charm equates fairness. To boost the sales, the enterprise goes a step supplementary by trying to position the stock by changing buyer perception of fairness as being successful, both socially and emotionally.
Social impacts? Did you ask?
Of procedure that's hardly on the agenda. The consuming thing is, although Unilever operates in over 40 separate counties, along with Australia, the 'Fair & Lovely' stock is only available in a handful of markets. The enterprise does not have any 'Dark & lovely' brands in their western markets, perhaps because they realize this store to be more educated and therefore tougher to manipulate.
The firms of procedure have their reasons, and one of them is us, the consumers, who buy these products. It is the age old method of request and supply. We request the product, and the firm of procedure goes to any lengths to fulfil the gap. In Unilever's case, there is an inescapable need in the mind of the consumers in India to have fair skin. Similarly for Nike, the worldwide request for their apparels compels the firm to go to unbelievable extent to furnish lower cost products. The story unfortunately does not end here. We the consumers, then put the firm under even more pressure to contend their profitability, only this time we take the role of investors. Investor's of procedure are only concerned with the share return, and cannot care less about how the firm maintains its profitability.
Jennifer Abbott and Mark Achbar, in their documentary 'The Corporation', proved that corporations in the present time fit the definition of a 'psychopath'. The concern is that this psychopath is being raised and bred by us, the consumers, and the investors. These are mean times we are living in, with every day more issues, more scandals and more controversies breaking out. however reading the stories is nearly not enough. Something somehow somewhere needs to turn and turn sooner rather later, before it gets too late.
End of story?
Unfortunately, I don't think so.
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