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There is no ethical Company

May 10, 2012

Sad but true. The aim of every company is to create revenue and there is not a single company in the world that can allow a constant loss or just small profits.

We are living in a capitalist economic system which is build around creating surplus for your household, company or nation.
The value of the materials on our planet do not grow in the same manner as long as nobody starts printing money. Printing money leads to inflation and we are back at the same or even a worse point.

Profit against Ethic?

There are ways of doing profits and doing something good but as organisations like Fair Trade show – you can not satisfy and help everybody. Even so companies help to improve the living standards in 2nd or 3rd world countries by shifting their production there or sourcing raw materials – they do not help the organic development or might even destroy it completely.

Fair trade is an organisation exporting and importing products that are grown under human and environmental friendly conditions. The consumers pay more for these products and at least part of this added price reaches the actual producer and allows them to support themselves by their work. Other farmer who might not be able to join get less as they always have but the farmer getting more will start producing more and at one point the conventional farmer might not be able to sell at all.

A big cooperation that shifts to another country to cut costs in their home country hurts the domestic economy because of less paid wages and hence the purchasing power might decrease. They are in need for new markets. Within their new host country they increase the level of money floating but they have less expenses. Within the host country domestic industry might be destroyed, social differences might grow or the economic power will intrude with the political power as you can see with the BP company in Namibia. What will happen when the oil is gone?

How to behave ethical?

First of all: following rules and regulations is a companies duty and does not make them ethical. Extending them to benefit others than the company or setting up total new, free and ethical guidelines or rules might make a company ethical. But the critical point is: executing them, no matter what the situation is. This might lead to the bankruptcy of the company which again is bad for the economic environment. So, what should companies do?

Greenwashing!

Greenwashing is not a solution. This trend is about promising environmental aware costumers that they do something good in buying your products but in reality the things being done are nothing. Best example here is Krombachers campaign to save 1m² of rainforest with every crate of beer. In the end they did not save much at all because 1 m² is nothing compared to the total amount of destroyed rain forest. After the public got aware of this they had to change their strategy and started an own organisation protecting the environment with more financial aid from the company.
Their campaign worked out for a while but green is not ethical and greenwashing a bad try to pretend to do something good.

Change something!

Is up to your and the next generations. the way we have been raised with environmental awareness and a small sense for ethical behaviour as well as classes about how to be an ethical company should enable us to change something in the future. I am not saying that currently the companies do not try to do something and some have really promising approaches but it seems like we all still have a long way to go.

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2 Comments leave one →
  1. May 16, 2012 6:37 pm

    Thanks so much for this. This is awesome post I ever seen on internet. This is rare to find that’s why difficult to understand. Anyway, you are definitely someone that has something to say that people need to hear. Keep up the good work. Keep on inspiring the people.

    • Emma permalink*
      May 17, 2012 10:38 pm

      Thanks for the flowers. Part of them should reach the amazing teachers at Metropolia Business School that help us setting up this Blog and keep inspiring us.
      Special thanks in this case goes to Mr. Marko Korkeakoski – you made business ethics a good story to tell!

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