Friday, February 12, 2010

Fickle with Short Term Memory Lapses. Ethics anyone?

I know you were thinking I was going blog about the stoner-slacker species. But in fact I am talking about our species. And it fits. And it gets worse every day.

Back in the day when times were simple. When we spent all our waking and sleeping moments stressed about food supply, basic necessities, and hoping some armed group with swords and bows didn't decide to over run where you live. Back then the smallest of good will gestures could earn a lifetime of good will back. Screwing someone could lead to the reverse.

Today with the news and gossip on 2 second sound clips and our days broken up into micro segments we are as erratic, forgiving, and forgetting as ever. This truly benefits brands specifically because of this fracturing of our time vs reality view. For the average person who cares about ethics and this planet we all try to do the right thing but often we have no idea if we are.

I recently read a very disturbing article in the Economist about Vietnam imprisoning political dissenters for multi-year terms. One over 10 years for doing nothing but speaking out peacefully. So I decided I will try not to buy products made in countries with oppressive Governments like China, Vietnam, Saudi Arabia etc. The problem is in 3 months something else will grab my attention and I will get lazy (slacker) and forget to check labels here and there and eventually all together. Unless I am getting mail and seeing news reinforcing long term I will forget. And companies like Nike and Exxon who do business in countries with bad governments will over the long term have no reason to move their operations.

And this short term memory loss, sadly also helps reduce a company's incentive to do the right thing. Nike pulled out of the US Chamber of Commerce in protest over the Chamber's opposition to carbon regulation. Not completely altruistic. Nike has plants located in low lying Southeast Asian countries that would be under water if oceans rise from global warming. But still a positive move. A few months later no one remembers! Technically as a reward I should be choosing Nike products when made in a non-human rights violating country when all things are equal vs their competition who did not withdraw from the US Chamber of Commerce.

One positive is that ethically responsible Public Companies tend to out perform their peer competitors in almost every study I have seen published. So maybe ethical business practices in reality magically are more cost effective with a higher ROI than abusive practices.

The risks of unethical behavior I feel will always out weight the reward. Simple examples is there is potential for jail if you cook the books, operations being halted if your abuse of workers causes a strike or makes it hard to attract talent, or calamity when the oppressive foreign Government protecting your business (oil rig or clothing factory) get's over thrown via revolt with them nationalizing your business (see Iran and Cuba revolutions).

So in closing, the way out society has developed our Mode of Daily Operation after the industrial revolution, has become a deterrent to companies doing the right things. There tends to be a lot of PR but very little substance when it comes to businesses changing habits to be more ethical when it comes to workers, environment, and the inhabitants of this planet. We don't boycott Exxon over Human Rights or the environment when they are $0.03 cheaper than the station across the corner. I will succumb and buy my next running shoes from China or Vietnam potentially due to lack of alternatives. And companies like Nike will sometimes ponder if doing the right thing was worth it. And it is 'us the people' who are to blame for this situation. But luckily the 'profit incentive' tends to reward ethical behavior over the long run.

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