Soda, Ethics & the Environment
Jack Yan posted about backlash against Coca-Cola and other soda companies today, and raised some interesting points about brand strength. Tied into this story are some very interesting ethical issues that are worth exploring.
As Jack notes and cites in his post, several bans against cola products and production have surfaced as a result of pesticide level findings. Of note, in several areas of India, the drinks are banned in educational institutions government hospitals.
The obvious ethical question is whether or not it is appropriate for the cola companies to produce beverages with such high levels of pesticides. Theoretically, it is possible (and prior to the backlash and bans, probable) that the local governments did not prohibit such high levels of pesticides in the drinks, and the cola companies, accordingly, produced beverages in line with local regulations. More pesticides probably coincided with greater profits…just a guess.
But is it ethical to cut corners in such a manner, even in the absence of a regulation or law that eliminates the question of legality? Unfortunately, the frustrating answer is that it isn’t certain. For a decision or action to be deemed ethical or not, many criteria have to be evaluated. Moreover, the ethical framework you choose could vastly alter your conclusions. So, what do you do?
If you intend to make a serious effort to incorporate strong ethics and moral theory into the structure of your business, I would start by forming a solid understanding of the many intricacies of business ethics and moral theory. A great place to start is Ethics Updates, though a trip to your local library should also produce a nice stack of weekend reading.
Absent of a more academic and rigorous approach, I would like to believe that we are all capable of making sound ethical decisions by asking ourselves a few simple questions (…optimistic, but quite naive). The caveat, of course, is that you need to have a strong moral basis to begin with, to measure your situation against. Regardless, the following questions should give you a place to start when analyzing the ethics of a challenging situation:
- Is there anything illegal about the scenario? If I am not sure, am I certain that the situation is entirely legal?
- Will anyone experience physical, mental, or other distress as a result of the situation, either in the short term or the long term?
- Would this situation be considered legal and ethical in my own country or local area?
- Does the situation compromise any of my personal beliefs?
- Has anyone connected to the scenario raised doubts about its ethics?
The above list is very, very thin, and only intended to give you a simple starting point. As mentioned, ethical dilemmas can be complex and may involve a large number of criteria and viewpoints.Since much of this sounds so simplistic (what’s so incredible about asking a few common-sense questions) why do these kind of things end up as news stories? Why do we hear about sweat shops, toxic waste being dumped into rivers, stock option scandals, etc.? Are people not asking themselves these very simple questions? Are they ignoring the conclusions they come to? Are they forming the wrong conclusions? Is the ethical framework they are using completely out of date and irrational? Are they so motivated by money that they come to the right conclusions but delude themselves into thinking that their actions are okay regardless? What gives?
[Update, 8/12/06]: Wow. Be sure to read this update regarding Coca-Cola, pesticides, and India from Jack Yan. I find the political twist very interesting though the lack of action and transparency by Coca-Cola and Pepsi definitely take the cake.
TAGS: This entry was posted on Wednesday, August 9th, 2006 at 6:41 pm and is filed under Business Ethics, Corporate Social Responsibility, Interesting News. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.
August 10th, 2006 at 3:00 pm
Peter, I agree with what you have to say about asking yourself a few easy questions to decide whether or not the action you will be undertaking is ethical or not. I think the cola and beverage companies do know about the levels of pesticides in their drinks and they can reach deadly levels but they leave it in there anyways until someone tells them to lower it. I think in today’s environment, it is more about profits at the expense of social well being. I mean, you bring up the issues of toxics dumped into rivers, high levels of harmful chemicals in the foods we eat as well as stock option scandals that are now surfacing throughout the country. I think all of these things occur in the name of making another dollar and the expense of anyone. I think most businesses today are headed down the wrong path where the mentality is “we need to save save save” at the expense of society and the lower level associates in the company. Gone are the days where a company took responsibility for the well being of society as well as it’s employees all in the name of making an extra dollar and “maximizing” shareholder wealth. I don’t know what the answer is but it is a fine line people like you and I will be treading in the future.
August 11th, 2006 at 5:53 am
Paul: What strikes me is that the clarity of which side of the line your decision will place you and your company on is usually quite clear. Either you continue to allow dangerous pesticides to make their way into your beverages or not. You either fudge some numbers to pump up your P&L and balance sheet, or you don’t. You either pay reasonable wages and provide safe and comfortable working conditions or you don’t. I have a hard time when people try to make the case that there are shades of gray in these more obvious situations.
The questions I listed above were intended to be starting points for the more questionable situations such as the trade off between paying higher wages or providing more employee benefits, or choosing to replace existing office chairs with more comfortable and supportive ones at the expense of other benefits or cash flow. Those situations tend to be a bit less clear as there is rarely a clear legal issue, and the problem tends to center more on what you give up as a result of a trade off.
For instance, using the last example, if you purchase all of your employees new chairs that are more ergonomically correct but end up having to lay off a few as a direct result a few months down the line, was your choice the most ethical? Or, what if you were more conservative with your capital and kept the existing chairs and a few people developed back problems (personal injury to the employee, lost productivity for the company, worker’s comp burden, possibility of increased health insurance cost for the whole company, etc.)? Which is the most ethical choice in that situation? Would the most ethical choice for one company be the same for a much smaller firm facing the same dilemma?
August 14th, 2006 at 9:14 pm
Peter, I see where you’re getting at and you’re right, there is more of the gray areas out there when it comes to decision making and budgeting for large companies. I also think that in the end, when you make a decision, you have to live with the consequences. In your example of the chair purchase, I would risk laying people off instead of having them all develop back problems that will cripple them years down the road. I mean, how could I live knowing that since I didn’t want to help out my employees, they all developed back problems?? Also, if the situation was that bad where people would develop seriously damaging health problems, I would risk laying people off and having to deal with the bad PR that will come my way initially. I think those people would understand, or at least I hope they would, because I’m sure if I would have kept them, then they would be cursing me out anyway as they develop back problems in the years to come.
All I know is this: as a manager, you walk a fine line between doing what’s best for the company (basically, the shareholders) versus what’s best for the employees. I’m sure we will all run into these types of issues in the future and sometimes we will either be liked or disliked after the decision has been made.
August 15th, 2006 at 11:03 pm
Paul: I ran by a Starbucks the other night and snagged a few of their brochures on what they are doing “right.” I skimmed them really quickly at the time, but there is quite a bit of content (read: they are really doing good things) there. I’m hopeful that I’ll have a moment to post about them in the coming days, but definitely stop by a store and pick up a copy.