Since I am so frequently critical of Wal*Mart, I figured I should direct people to a fairly balanced and thoughtful set of points that are positive about the Bentonville behemoth. Take a peek at Chris MacDonald’s Business Ethics Blog : Saying Nice Things About Wal-Mart

While I would counter most of the points he makes, I would like to add one to support his analysis of Wal*Mart’s healthcare dilemma. While listening to the Hollender/Vogel debate, the point was made that if Wal*Mart did step up and provide health care to all of its employees (it may be all of its eligible employees — I do not remember exactly), that they company would lose all profitability.

…that’s not to say that they shouldn’t try to figure out a way to make it happen, or that they haven’t done some pretty shady things in the health care arena…

TAGS: Wal*Mart | WalMart | Ethics

CFO Magazine has an interesting article about China in the most recent issue: View From China: Stakeholder Capitalism. In short, the author touches on cultural differences, such as the absence of “the concept of a company’s responsibility to society, beyond what is owed investors,” as well as the difficulties many large “semi-independent” corporations face in reining in any environmental damage they cause.

“While lip service is paid to corporate social responsibility on environmental issues, the reality is that pollution in China is at a crisis level yet companies seem unconcerned.

“…Most Chinese companies are still struggling to enforce more internal controls to protect shareholder value. It is high time for them to address the needs of other stakeholders, such as communities that suffer via environmental mishaps or unchecked pollution. Soon enough, a disaster could emerge that will cause even the most growth-hungry China investors to vote with their feet.”

TAGS: CSR | China | Stakeholder Capitalism | Ethics

There are a few questions I have been mulling over that I am interesting in hearing what others may have to say in response:

1. Did you know that Costco is now selling Fair Trade Certified coffee? (This may only be in select areas — they have it in San Luis Obispo, CA.)
2. Did you know that the coffee, branded under the Kirkland name (Costco’s brand), is roasted by Starbucks (House Blend, Caffeinated and Decaffeinated)?
3. If Starbucks is supplying that much Fair Trade Certified coffee to Costco, are the storefronts the next move?
4. Despite Costco’s healthy employee focus as well as a dedication to offer organic products (vegetables and milk so far, though regionally there might be more/fewer offerings) as well as Fair Trade coffee, is it okay to shop there, or is Costco simply a less-bad Wal*Mart?

Costco
My wife and I have been Costco members for as long as I can remember, and although we primarily purchase business-related items there, we also do some personal shopping there as well (some trips more than others). In an attempt to come full circle in our effort to support local businesses and organic farmers (the local small ones as often as possible), we are seriously questioning whether or not we should continue to support Costco. Like most consumers who care about such issues but still compromise and make a few purchases there periodically, most of our decision to continue to shop there boils down to convenience and pure cost savings.

The compromise has been eating at me more and more over the past year, but I continually struggle with the point I make in the fourth question above. Costco is widely known (or reported) as a very employee-focused company. A quick search of “Costco and Walmart” turns up a number of articles and resources comparing the two companies. Here are a few that I found interesting:

• The Costco Challenge: An Alternative to Wal-Martization?
• Costco’s Dilemma: Is Treating Employees Well Unacceptable for a Publicly-Traded Corporation?
• Analysts on Costco and Wal-Mart

One of the issues that keeps nagging me, and also helps me justify our patronage to Costco, is whether or not there is value in supporting a company like Costco that is making positive steps (big ones in my opinion) as a matter of pushing issues into the public eye more rapidly and effectively. The best scenario for my wife and I would be to give our money and time to only small local businesses that support issues that are important to us, such as Fair Trade, organic farming (includes produce and poultry/meat), fair-labor apparel companies, and other like organizations. However, is there value in showing Costco that if they offer Fair Trade coffee, organic produce and other similar items, that there is a strong market for such products?

I think it is possible to argue that there is quite a bit of value there. For all of those consumers that are not exposed, for whatever reason, to information about such movements, perhaps seeing a $10 bag of Fair Trade coffee at Costco will prompt them to buy it (it’s ~3 lbs. after all). And in buying the coffee, not only are they supporting the Fair Trade movement, both directly and also by showing Costco that if they stock such items, consumers will snatch them up, but they also stand a much higher chance of learning about the implications of their purchase. At some point, the price conscious consumer that snagged the bag simply because it was $10 will notice the “Fair Trade Certified” label and will do some digging. Perhaps that is the spark that will start the fire for that individual.

Starbucks & Costco
But is something more sinister happening? Costco also sells bags of Starbucks French Roast (again, it is stocked in the San Luis Obispo, CA store and may not be available everywhere), but for a much higher price per pound (don’t quote me on this, but I think it is somewhere in the range of $14-$17 for a ~2 lb. bag). Is part of this whole scenario an attempt to hike the price of Starbucks’ other roasts? I think it is a bit of a stretch (why wouldn’t the Fair Trade beans be sold at a premium?) but I figured I’d throw it out there.

Regardless, if Starbucks can produce the volume of Fair Trade beans to supply Costco (at least regionally), why haven’t they taken the next step to supply the storefronts with only Fair Trade beans? Are the FTC bags at Costco a result of pressure by the warehouse on Starbucks, or is this simply a precursor to a much larger commitment to Fair Trade by Starbucks? Quite frankly, I hope it is both!

I’ll do some more digging and see if I can come up with answers to some of the questions I have posed here. If anyone has any information or resources to point me to, I’d love to hear about them.

TAGS: Starbucks | Costco | Coffee | Fair Trade

The title of this post shouldn’t surprise anyone — it is a commonly held belief that major corporations are dragging their feet on reducing their contribution to global warming. It is also  the title of a very interesting article that appeared in the New York Times a few days ago (U.S. Companies Lag on Global Warming).

Citing a study performed by Ceres, Corporate Governance and Climate Change: Making the Connection, the article points out a few interesting findings that may seem counter to what would have been expected:

“The study gave General Electric, American Electric Power and Cinergy among the highest scores in their industries. But over all, it concluded, American companies ‘are playing catch-up’ with international competitors like BP, Toyota, Alcan, Unilever and Rio Tinto.

“‘Dozens of U.S. businesses are ignoring the issue with “business as usual” responses that are putting their companies, and their shareholders, at risk,’ said Mindy S. Lubber, president of Ceres and director of the Investor Network on Climate Risk, a group whose members control a total of $3 trillion in investment capital. ‘When Cinergy and American Electric Power are tackling this issue, and Sempra and Dominion Resources are not, that should be a red flag to investors.’”

There were some positives to report as well:

“The report does show progress since 2003, when a much smaller Ceres study concluded that most American companies were ignoring the threat of climate change. Since then, Ceres notes, Chevron Texaco has invested $100 million in developing cleaner fuels, Ford Motor introduced the first American hybrid car, American Electric Power has committed itself to ‘clean coal’ technologies and G.E. has introduced its Ecomagination program stressing “green” products. And many companies including Dow Chemical, Anadarko Petroleum and Cinergy have board committees that oversee the curbing of greenhouse gases.”

The Ceres report covered in the article is very interesting — I recommend checking out the “Summary Report.” The following statement appears in the Foreword of the Summary Report and summarizes quite well the importance of dealing with environmental issues for both businesses and investors.

“These trends present enormous risks and opportunities for companies and investors. With the launch of the Kyoto Protocol and expanding greenhouse gas limits, power companies and other energy-intensive businesses face growing risks from the energy they use and how efficiently they use it. Companies also face risks from direct physical impacts, including stronger and more frequent storms, droughts, floods and sea level rise. In turn, forward-thinking companies that fine-tune their operations and develop new climate-friendly products can prosper from climate change.”

TAGS: Environment | Global Warming | Greenhouse | CSR

I have blogged about Ethos Water before but wanted to provide a link to recent interview BusinessWeek conducted with the company’s founders, Jonathan Greenblatt and Peter Thum (“Buy Water, Help Children” [BW online]). The interview is quite thought-provoking and well worth a few minutes to read for anyone interested in Ethos Water or water shortage issues.

At then end of the interview, the founders were asked a question I have also been itching to ask. Though their response didn’t really address the central point of the question, I found what they did say to have some value:

“[BusinessWeek]: Critics of the bottled-water industry point out that much of the water being sold is no healthier than tap water, that the bottles themselves are made of toxic chemicals, and that the energy required to distribute the water is immense. As a company founded on a social mission, how does Ethos respond to these critics?

“Thum: I don’t think that we can answer for the entire bottled-water industry. What we’re trying to do is make the American public aware of this problem [lack of access to clean water] — a problem that kills more people than AIDS.

“The bottled-water industry may not be perfect, but if you can take a sliver of the industry and turn it towards something positive, that’s a good thing. The most important thing is to start a dialogue and to get people in the U.S. to start thinking about the world water crisis not just as something that affects people far away, but as a problem that we will face soon as well.”

Still, whether public awareness is a valid goal or not, there remains that niggling issue about the efficiency and irony of trying to battle water shortages (or potable water shortages) with bottled water…

TAGS: Ethos | Starbucks | Bottled Water | CSR | Social Enterprise

In preparation for the trip to China I will be undertaking this June with my MBA classmates, there are a slew of related books and assignments that are to be completed prior to our departure. The first is a book review of one title from our class reading list.

Having seen The World is Flat in several places over the past few months, I jumped on the opportunity to read and review it. Without giving away the content of my review, I ultimately found the book enjoyable and informative and would recommend it to anyone interested in globalization or history. If you are interested in reading the full review, please download the PDF file linked below:

• Book Review: The World is Flat [PDF]

TAGS: The World is Flat | Thomas Friedman | Globalization | Book Review

I post this not because I am a staunch Apple Computer supporter, but because a very important question is raised…

Chris MacDonald, from the Business Ethics Blog, posts about Dell’s customer service and asks the following question:

“What relationship is there between Dell’s overall commitment… to ethics, on one hand, and the quality of their customer service, on the other?”

TAGS: Dell | Ethics | Customer Service | Business Strategy

MarketingProfs.com has an excellent article about the state of “green” products and marketing (The Real News About Green Marketing) that I would recommend to anyone who is interested in the environment or the “green” movement in business. Here are a few short clips from the article:

“But given a brand they trust, a large and growing number of consumers, armed with the extra knowledge that it happens also to be green, will grab the eco-friendly option.

“…And there’s even better news. Many green products and technologies have improved significantly since the “crunchy” days of green marketing, and many are so improved that they are now superior to their conventional “brown” counterparts. Probably the most familiar case in point is Toyota’s hybrid, Prius, which has consumers lining up to purchase it—at a significant premium price, to boot.

…Tomorrow’s news: Those businesses that grew in the 21st century were those with an appreciation for how ‘green’ was equated with ’superior performance’; success in the global marketplace came as a result of integrating green considerations into innovation.”

TAGS: Environment | Green | Business

Anita Campbell from Small Business Trends recently posted an article that knocked some humility into me. Be sure to check it out when you have a moment:

• On The Foolishness of Worst Business Book Lists

TAGS: CEO | Books | Business Books | Humility

Rob at Businesspundit.com points to an interesting topic (which has been belabored many times) on Recruiting.com about the purpose of business (Funny Banker On The Meaning of Business). The comments on the recruiting.com post are thought provoking and broad. I don’t agree with most of them, but find that all, more or less, have valid points.

I often think about the purpose of business, or rather, the purpose of starting and sustaining a business, and tend to lean more toward the following type of motivators:

• Increase the quality of life
• Right a wrong
• Prevent the end of something good

If the above points sound familiar, it is because I posted about them recently. They are the three reasons Guy Kawasaki cites to launch a business. What I find interesting is that so few people tend to think this way. Most of the responses to the question, What is the purpose of business?, can be distilled into the following:

• Generate profits
• Maximize personal wealth
• Build a personal legacy
• Create wealth for your family and heirs
• Capitalize on an underserved or underdeveloped market (and thus make piles of cash in the process)
• Etc., etc., etc….

What’s so bad about the list above? Well, nothing, as long as you don’t ’stomp on the throat’ of anyone in order to achieve your objectives (hat tip to Enron: The Smartest Guys in the Room for that excellent phrase). I personally don’t have a problem with the above list, as long as there is also some consideration for doing some good in the world at the same time. If people want to make gobs of money (sans exploitation, and done on the level in an ethical manner) that’s just fine. If they want to make gobs of money (same qualifiers) and then turn around and use their wealth and power to make the world a better place, then I admire and adamantly support them.

I’d love to see a new legion of businesses that prioritize Kawasaki’s list first, and then attend to the secondary list. It is difficult to envision a world where such motivators are commonplace, but I hope to see it in my lifetime.

TAGS: Business | Philosophy | Ethics | Guy Kawasaki