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The Importance of Business Ethics and Sustainability within Supply Chains

An analysis with particular reference to the fur business

Master's Thesis 2011 100 Pages

Business economics - Business Ethics, Corporate Ethics

Excerpt

List of contents

List of figures

List of tables

List of appendices

Abbreviations

1. Introduction
1.1 Motive of the research study
1.2 The research questions and focus
1.3 Structure of the Research

2. Literature Review
2.1 Overview of key themes
2.2 Ethicality and morality
2.3 Sustainable development strategies and their potential to competitive advantages
2.4 The measurement of sustainable strategies
2.5 The fur industry
2.6 Ethical consumption in the luxury industry
2.7 Conclusion of the literature review

3. Research Design

4. Empirical Investigation
4.1 Bonnie - the single case study - an introduction
4.2 Evaluation of Bonnie’s sustainability strategy
4.3 Analysis through case study
4.4 Analysis of (non-) consumer questionnaire

5. Conclusion
5.1 Findings
5.2 Discussion
5.3 Limitations of the research
5.4 Recommendation for further research

6. Appendices

7. List of References
7.1 Literature references
7.2 Internet references

List of figures

Figure 1: Flow chart of research structure

Figure 2: The Triple Bottom Line

Figure 3: Overview of the chosen literature addressing competitive advantages of sustainable development strategies

Figure 4: Raw, whole mink export supplies from Europe as share of the world market 2011

Figure 5: Target market for imported raw, whole mink skins in Europe as share of the world market 2011

Figure 6: Organisational diagram of XXXX GmbH

Figure 7: XXXX’s supply chain

Figure 8: How the research findings lead to a conclusion

Figure 9: SWOT analysis of XXXX GmbH

List of tables

Table 1: Overview of the chosen literature addressing business ethics

Table 2: Overview of the chosen literature addressing organisational sustainable measurement instruments

Table 3: Overview of the chosen literature addressing drivers of luxury consumption

Table 4: Overview of the chosen literature addressing ethical consumption

Table 5: Sustainable Balanced Scorecard applied to XXXX GmbH

List of appendices

Appendix A: The three pillars of sustainability

Appendix B: An example of a sustainable supply chain

Appendix C: A convergence of interests

Appendix D: The research strategy, its justification and limitations

Appendix E: Data collection of the research and its limitations

Appendix F: Structured interview with XXXX GmbH to collect quantifiable data

Appendix G: Semi-structured interview with XXXX GmbH to collect qualitative data

Appendix H: Self-administered questionnaire with XXXX GmbH for examining its sustainability performance

Appendix I: An example of a Sustainability Balanced Scorecard

Appendix J: Justification of the sustainability measuring instrument

Appendix K: Consumer questionnaire to collect quantitative and qualitative data

Appendix L: XXXX’s market share Germany

Appendix M: XXXX’s differentiation strategy through sustainability - a consultancy report

Appendix N: Transcript of interviews and questionnaires with XXXX GmbH

Abbreviations

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1. Introduction

1.1 Motive of the research study

“Ethics are in vogue” is an assertion drawn after the International Herald Tribune (IHT) conference on luxury (Smale, 2007). The reason for this statement is the presumption of an emergent type of luxury consumer whose purchase decision is up to the ethical behaviour of business. Is this concept mere wishful thinking or does it reflect empirical reality, since the latter would void the expression “the devil wears Prada”. It is obvious, that the conventional way of economic development not any longer satisfies the needs of the world in which we live - “the environment is, without doubt, one area which is being subjected to greater public scrutiny” (Dembkowski and Hanmer-Llyod, 1994). Society increasingly requires a healthy living, innovative, efficient and safe technologies as well as a “stable and safe” natural and social environment (Jochem 2011). The media especially reports on ethical and sustainable business conduct and its affects on “human health, the ecosystem and future generations ” (Bonacchi and Rinaldi, 2006).

Simultaneously to the increasing requirements of ethical and sustainable business conduct, the luxury fur demand is substantially growing. From US $ 456.99 million in 2001, the world fur outlook estimates an increase in sales up to US $ 854.13 million in 2011 (Parker, 2005) - fur auction houses sell “record-breaking” numbers. Fur re- emerges as a fashionable design material; especially younger designers are “fascinated with fur and use it in innovative ways” (Foreman, 2010). The material has also trickled down to the streets - the younger generation demands it more than ever; even child fashion designers use it for their collections (Vulsier, 2010).

The inherent question from these insights is whether both developments, namely an increasing requirement of sustainable and ethical business conduct as well as a growing fur fashion demand, are in line or in contrast to each other. Thus, is a fur producer ethical and sustainable? The author aims to gain knowledge whether a fur business responds to these external societal requirements regarding ethics and sustainability and whether ethical and sustainable or unethical and insustainable business conduct implicates advantages or disadvantages.

1.2 The research questions and focus

To answer the fundamental research question, this study will examine the topics ethics and sustainability within a fur business. The research will cover these topics from a theoretical as well as empirical viewpoint by analysing existing literature in this field of study but also by examining the sustainability performance and ethicality of a fur producer and trader from a business and (non-) consumer perspective. Thereby, the author considers it as important to find answers to the following questions:

1. How sustainable a fur company really is.
2. Whether a fur producer is ethical or unethical from a theoretical and empirical perspective.
3. Whether ethics and sustainability can be in line with profitability and whether organisations have a competitive advantage due to their ethical and sustainable performance.
4. Whether consumers care about ethics and sustainability when it comes to the purchase decision of luxury fur goods.
5. Whether theory and practice have opposing opinions.

By finding answers to the above questions, the author contributes to the literature in business by providing a new source of novel research questions addressing the fur business. Yet, the production and trade of fur linked to business ethics and sustainability indeed is not much considered in business literature and lacks substantial data. The author tries to fill this pool and to contribute closing this gap by provding a clearer picture of ethics and sustainable development in the luxury fur industry - from a theoretical as well from a fur companies and consumer perspective.

The dissertation takes a pragmatic stance from an epistemological viewpoint and reflects a mixed-method data collection (Saunders et al., 2009). The theoretical analysis of this study relies on secondary data in form of academic articles, journals and quality books. The empirical study adopts a single case study strategy by analysing interviews and a questionnaire with the German fur producer and trader XXXX GmbH. A self-administered questionnaire in addition to the case study with (non) consumers who express perceptions and opinions towards the fur business was considered most appropriate as it gives the thesis a more authentic importance.

Beginning with a critical examination and analysis of existing literature addressing ethics, sustainability, the fur industry and ethical consumption, the dissertation continues with an explanation of the methodological approach adopted by this study. The dissertation then continues with the empirical approach of the research, namely the analysis through the case study and the investigation and evaluation of (non-) consumer attitudes and behaviours when considering the fur industry.

1.3 Structure of the research

Figure 1 depicts the research structure and framework of this study. The motive of this study (chapter 1.1) automatically leads the author to formulate research questions (chapter 1.2). The analysis of the existing literature, theories and concepts (chapter 2) enable the author to formulate a conclusion of the theoretical part of this s]tudy (chapter 2.7) and hence to answer the research questions from a theoretical point of view. These conclusions furthermore lead the author to formulate hypotheses. The hypotheses are then analysed and proved or disproved through the empirical part (chapter 4) of this study by the use of a case study and a (non-) consumer survey. Therefore, the empirical analysis of the hypotheses that have been developed through the literature review leads the researcher to answer the initial research questions (chapter 4, 5.1).

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Figure 1

2. Literature Review

2.1 Overview of key themes

In order to answer the research questions from a theoretical point of view, the following chapter provides the reader with an overview of what has been written about the topic. As this research includes not only one but many topics, the author relies on the research questions raised in the introduction to be able to identify which topics are needed to be critically examined. The literature review takes the form of a deductive approach as it has the aim to “use the literature to help identify theories and ideas that the researcher will test using data” (Saunders et al., 2009). The author chose this deductive structuring, as the topic requires a broader view, which then needs to be narrowed down. Therefore, the following chapter will (1) examine the literature addressing ethics and sustainability including its potential to advantages and measurement issues, (2) examine the literature adressing the fur business and (3) examine the drivers of luxury consumption and the consumers’ ethical purchase intentions.

The author’s goal is to explore literature and to highlight the most relevant writers, “to develop theories” and hypotheses which will be examined in the empirical part. Furthermore, the researcher aims to highlight “some research possibilities that have been overlooked ( … ) in research to date”, hence “to discover ( … ) recommendations for further research” (Saunders et al., 2009).

The following chapters are based on the analysis and examination of academic literature in form of academic journal articles and quality books. However, chapter 2.2 also relies on an explanation of ancient philosophical theories that are necessary to explain the basis of ethics and morals. Furthermore, chapter 2.5 is not only based on academic journal articles but also on business newspaper articles as the fur industry lacks substantial academic data.

2.2 Ethicality and morality

As already mentioned, not just current academic literature but also ancient philosophical stances are committed to the explanation of the phenomenons ethics and morals.

With his categorical imperative the philosopher Immanuel Kant (1724-1804) combines ethics and morals by saying "act only according to that maxim whereby you can, at the same time, will that it should become a universal law" (Timmermann, 2004; Precht, 2007).

It is obvious that according to Kant, the human being himself does not possess ethics as this is described as being a universal law, but only possesses moral that implements the ethical values of society.

The utilitarian philosophical approach was mostly developed by Mill (1806-1873) and Bentham (1748-1832) - a theory of benefit maximisation. The concept says that actions are only morally correct when all agrieved parties benefit as much as possible and suffer least from these actions, hence acting in accordance with the least harmful alternative (Pieper, 2007).

Hobbes (1588-1679) in contrast describes in his book “De Cive” the human as

“lupus est homo homini, non homo, quom qualis sit non novit - a man being a wolf to his fellow men” (Pieper, 2007:132).

Hobbes considers that the human being behaves inhuman towards other humans as they are surrounded of an environment of natural justice without any ethical basic approach.

Furthermore, the principle of the golden rule prevails in nearly all cultures:

"Do unto others as you would have others do unto you" (Bruton, 2004; Pieper, 2007; Precht, 2007).

Similar sayings are anchored in the Greek philosophy, Buddhism, Confucianism, Hinduism, Islam and Christianity (Pieper, 2007).

It becomes clear that the ability of being moral is hereditary to human nature - at least from a Kantian perspective. Hobbes in contrast compares the human nature to the nature of a wolf rather than linking it to the Kantian human being driven by natural rationality. The golden rule’s reference to “oneself” shows that the intensivity of moral is largely a question of educational background, “amour propre” and the individual’s social environment (Precht, 2007). From a Kantian and also golden rule’s perspective, ethics seems to be a theoretical optimum, established by the society’s views and characteristics whereas morals is the practical implementation of ethics of each and everyone within society. The Kantian view especially emphasizes ethics as a universal law - this means that not just society and people are concerned but also business. However, corporate minds might believe that the application of the Kantian categorical imperative viewpoint would ruin their company’s competitiveness whereas philosophers might argue that the Carthaginian aristocrats contributed to the fall of Carthage - a city where only profits were considered as being graceful (Nash, 1981).

Gellerman (1986) for example examines practical examples of “unethical” organisational behaviour and concludes that the reasons for such behaviour lies in ancient cop-outs that people use to justify doubtful behaviours such as the thinking that actions are not “really” morally wrong or that immoral attitudes will not be discovered. He argues that cop-out thinking and immoral behaviours cannot be eliminated but only be controlled; it is comparable to an insect - “a plague that we can suppress but never exterminate” (Gellerman, 1986).

Ciulla (2010) in contrast examines whether “business ethics is getting better over time” and argues that it is dependent on economic activity; during a recession ethical behaviour will improve whereas recovery will lead to a diminished ethical business conduct. This might make sense as it is in line with natural human behaviour that does not question well-going circumstances. Humans only “become introspective when things fall apart” (Ciulla, 2010).

Donaldson (1996) examines business ethics from a cross-border perspective and investigates hence “when in Rome, do as the Romans do” (Donaldson, 1996) or whether to apply own ethical values irrespective of the location. Donaldson (1996) concludes that the first in fact seems very attractive but is clearly inappropriate when foreign business activites are linked to e.g. child labour. The latter utilitarian view might neither be adequate, as cultural differences in ethics need to be respected. “The answer lies somewhere in between”; business and supply chains need to find a transnational “overlapping consensus” (Donaldson, 1996) and codes of conducts that lead to the convergence of ethical key values.

Prince and Denison (1992) consider business ethics from another angle namely by “launching new business ethics: the environment as a standard operating procedure”. They argue that natural resources should not be viewed as simple commodities “but as parts of the ecological whole”. Prince and Denison (1992) believe that environmental aspects should be implemented within each decision and operating process and view environmental committment, Total Quality Management (TQM) and waste reduction as the basis of business ethics.

A totally different approach but very precious for this study is taken by Solomon and Solomon (2004) who concentrate on the stakeholder theory which implies much more than usual shareholders; it is a theory combining ethics, philosophy, economics, politics and “social science” and representing an “exchange relationship”. By identifying the stakeholder group Solomon and Solomon (2004) also mention animals as some “stakeholder theories suggest that the environment, animal species and future generations should be included as stakeholders”. In the case of the fur industry, this would be challenging as the fact that animals are considered as stakeholders, would not much correlate with caging and killing issues (Solomon and Solomon, 2004)

Table 1 depicts an overview of the above-mentioned academic writers.

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Table 1

The above-mentioned literature provides a good overview of what has been addressed in business ethics. Especially Donaldson (1996), Solomon and Solomon (2004), and Prince and Denison (1992) are considered as precious literature contributions as they also focus on cross-national business ethics, on animals and the environment, which are necessary when considering the fur industry. The author, however, reveals a gap in existing literature addressing business ethics - the theory seems not to be developed in which sustainability is the basis of business ethics. Prince and Denison (1992) indeed highlight environmentalism as basis of business ethics however sustainability might enable a business to control immoral behaviour, to prevent that ethical business decisions remain dependent on economic activity and also to realise a transnational convergence of ethical key values by the use of transparent supply chains.

2.3 Sustainable development strategies and their potential to competitive advantages

The following chapter provides the reader with definitions of sustainability and examines the literature and theories concerning sustainable development strategies1 2 and their potential to realise competitive advantages.

The United Nation’s3 4 (UN) World Commission on Environment and Development (WCED) in 1987 defined the term “sustainable development” in the Brundtland report as the “development that meets the needs of current generations, without compromising the ability of future generations to meet their needs and aspirations” (UN, 1987).

This definition also served as the basis for “getting sustainability on the organisational agendas” (Kiewiet and Vos, 2007). Dyllick and Hockerts (2002) define corporate sustainability by

“satisfying the needs of direct and indirect stakeholders” without jeopardising the requirements of future stakeholders (Dyllick and Hockerts, 2002).

In this context, the Triple Bottom Line (TBL) (Figure 2) (Appendix A) and sustainable supply chains (Appendix B) developed and sustainable development became an interdisciplinary strategic method of combining economic growth, environmental integrity and the social community (Bonacchi and Rinaldi, 2006).

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Figure 2

The economist Milton Friedman (1970) argues that an organisation’s unique societal responsibility is simply to “increase profits” (Friedman, 1970); the only way to realise competitive advantages. In his book Capitalism and Freedom, Friedman (2002) asserts that e.g social contributions should be carried out by individuals - either stockholders or even individual employees - and not by the organisation itself as it would restrain the stockholder from disposing of his own means (Friedman, 2002).

Porter and Kramer (2003) argue that when accepting Friedman’s (2002) ideas, two underlying presumptions would prevail. First, social, environmental and economic goals and benefits would not be interconnected and a sustainable investment would therefore be at the expense of an organisation’s turnover. Second, companies would provide the same benefit to the community as individual stockholders. Porter and Kramer (2003) however illustrate that philanthropy and Corporate Social Responsibility (CSR) can clearly be an effective way for companies to achieve advantages over others and maybe more importantly to enhance their ” competitive context” (Porter and Kramer, 2003). They emphasise that an improvement of the environments where companies operate aligns social, environmental and economic objectives and therefore contradicts the first presumption. A company’s sustainable engagement motivates other organisations within a business location and hence might improve the societal well- being due to possible consolidated engagement. The benefit provided by collective engagement in fact goes beyond individually provided benefits, which contradicts the second presumption (Porter and Kramer, 2003). Porter and Kramer (2003) furthermore emphasise that the more the sustainable engagements are linked to business activity, the greater the potential to reach a competitive advantage (Appendix C) (Porter and Kramer, 2003) (which seems to conform to the more traditional arguments favouring related rather than unrelated diversification).

York (2009) argues that “environmental ethics” (that has the aim to “provide moral standing to also non-human entities including animals, plants, and ecosystems”) can lead to competitive advantages when it differentiates the company from competition. Therefore, “the openness to new ideas is fundamental to the pragmatic approach” (York, 2009). York (2009) especially emphasises that environmental ethics lead to (1) cost savings and reduced operating expenses through energy, water and waste reduction, (2) reduced risk through adherance to legal issues, (3) employee retention and reduced recruiting; employees are proud of working for a “good” corporation, (4) increased market share through differentiation factor and (5) more access to customers. Despite the many advantages of this approach, York (2009) argues that most business leaders “from Fortune 500 companies” find a lot of excuses for not implementing green initatives and sustainable strategies - it is more pretention than reality (York, 2009). (The study “deeper luxury - quality and style when the world matters”5 of the World Wildlife Fund (WWF) supports this thesis and reveals that companies ethical and sustainable behaviour is more praised than actually practised).

Current literature from Giltsoff (2011) focuses on “blue sustainability”6 7 which means implementing sustainable measures in all activites of business - including supplier relationships, product creation and marketing campaigns. Blue sustainability rather than green does not refer to one-time sustainability actions but to core business activity. Giltsoff (2011) argues that sustainability should be seen and implemented as part of business strategy and hence entails substantially more than simple recycling practices. It is neither a project, nor an independent initiative pretending to save the planet but a long-term business strategy and a “response to a changing economic landscape (…) and to world context (…)” (Giltsoff, 2011). Blue sustainability means to combine the global context with own competitive strenghts and to turn it into business strategy. Giltsoff, (2011) concludes that incremental changes towards blue thinking pay off at bottom line and that it does not only fundamentally improve a company’s image and competitive ability but strongly contributes to the improvement of various global problems.

In summary, companies obviously can obtain competitive advantages with sustainable strategies - at least from a theoretical perspective (Porter and Kramer, 2003; York 2009; Giltsoff, 2011) (Hypothesis 1). If this is also the case for a fur producer will be examined in the empirical study. Figure 3 depicts the literature discussed in this chapter addressing competitive advantages of sustainable strategies.

Overview of the chosen literature addressing competitive advantages of sustainable development strategies.

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Figure 3

2.4 The measurement of sustainable strategies

The following chapter provides the reader with literature addressing sustainability measurement instruments as the empirical study applies an instrument to measure the sustainability performance of the fur producer Bonnie. Table 2 depicts an overview of the chosen literature.

Cunha et al. (2011) argue that despite the many approaches to measure sustainability performance, only few models combine the three triple bottom line dimensions but rather measure each principle independently. Therefore, they established the “Corporate Sustainability Grid” (CSG) that selects sustainability indicators, calculates partial and corporate sustainability scores and finally leads to the integration of the partial sustainability performance. The CSG instrument combines social, environmental and economic sustainable indicators and “considers four different levels of corporate sustainability”. It seems to be an efficient sustainability measurement tool, however, requires enormous amounts of internal company information to be able to be applied (Cunha et al., 2011).

Bonacchi and Rinaldi (2006) developed a planning and control system; “a performance measurement system for sustainability”. They aimed to develop a novel sustainability measurement tool in contrast to Balanced Scorecards as these are still based on economic performance. Bonacchi’s and Rinaldi’s (2006) concept is also based on the three factors, social, environmental and economic sustainability and measures these three dimensions at corporate level, measures the stakeholder satisfaction at strategy level and measures “internal processes aimed towards translating actions into operating activities” at action level. It seems to be a complex model, as it requires enormous amounts of company data also concerning different strategy levels (Bonacchi and Rinaldi, 2006).

Hubbard’s (2006) sustainability measuring concept is based on the “stakeholder- theory-based Balanced Scorecard (BSC)”. He extended a usual BSC by including social and environmental factors to develop a Sustainable BSC (SBSC). The SBSC furthermore follows “the 80/20 Pareto principle “ which means that the biggest impact is not made of a large but a small number of indicators (Hubbard, 2006). The SBSC is a 6 categorical scorecard and measures not only the traditional shareholder performance, but also aspects of stakeholder interests. The SBSC enables companies to compare their sustainability performance with industry standards and can also be applied for a year-to-year comparison of a company’s sustainability performance. Moreover, the concept provides a single sustainability performance output; it melts social, environmental and economic factors to a “single Organizational Sustainable Performance Index (OSPI)” (Hubbard, 2006).

Overview of the chosen literature addressing organisational sustainable measurement instruments

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Table 2

2.5 The fur industry

As academic literature in business does not much address the fur industry, this part of literature review also relies on articles published in business magazines. The small volume of academic literature addressing the fur industry is mostly specialised into the fur trade history or legislation issues. However, academic literature neither addresses the ethicality, sustainable development, supply chain issues nor addresses consumers’ perceptions and buying behaviours in the fur industry.

The most engaging academic researcher considering the fur industry seems to be Parker (2005, 2010) who develops the global fur outlooks of the worldwide fur trade. Parker (2005) thinks that the fur industry will be steadily increasing. Italy, the United States and Germany have long been the largest importers of fur goods. Nowadays Chinese and Russian consumers outperform this trend by buying more fur than ever. From US $ 456.99 million in 2001, the world outlook for fur estimates an increase in fur sales up to US $ 854.13 million in 2011 (Parker, 2010). Parker (2010) identifies the major European mink producers (Figure 4) and the major target markets in Europe for raw whole mink skins (Figure 5).

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Figure 4

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Figure 5

Coster (2007) gives mostly an overview of how the fur business operates. She emphasises that approximately 85% of fur goods issue from farming animals. The major source of fur and where intermediaries procure most of the fur worldwide are fur auction houses. Coster (2007) mentions that farmers mostly breed “mink, foxes and chinchillas for consistency of color and texture”. Other furs are provided (at least in the United States) by so-called “part-time fur hunters” who legally chase “muskrats, beavers, raccoons, bobcats and, to a lesser extent, foxes, coyotes and mink”, sometimes even “coyotes and bears”. Most animals are chased by the use of traps “which must comply with international humane standards, based on time to death - how long it takes an animal to die” (Coster, 2007).

Barret (2010) argues that the Canadian fur business experiences a significant revival due to the strong Chinese customer buying power. Barret (2010) illustrates how many Canadian fur houses moved their manufacturing to China, to “take advantage of cheap labour to execute their designs”. However, fur trade does not give much “excess profits”, the underlying reasons for that is the undertaken handcraft during the manufacturing process (Barret, 2010). Barret (2010) furthermore illustrates how fur institutes and breeders justify their business - the wearing of fur is more ecological than the wearing of other synthetic fibres. The Canadian Fur Council and also the International Fur Trade Federation (IFTF) launched a new marketing campaign under the slogan: “fur is green”. The reasoning behind that slogan is the argument that the production of cotton consumes “huge amounts of land, water and heavy pesticides” whereas fur is “biodegradable”, long living “and - depending on its source - loca l” (Barrett, 2010).

Wahlström and Peterson (2006) in contrast take into consideration activist groups and the animal rights movement. They argue that the animal rights movement can only succeed with political aid - “struggling with the mink farmers directly, through boycotts and direct action, has had little or no success” as the fur industry as a whole does not depend on the home market but rather on exports. They exemplify that the social movement together with the Department for Animal Protection realised “considerable success in its struggle against the domestic fur industry through state channels” in Sweden. Wahlström and Peterson (2006) however conclude that the animal rights movement can only restrict fur farming once the global fur demand decreases. As long as Asian and Russian consumers do not change their fur buying behaviour, the animal rights movement will not reach desired goals (Wahlström and Peterson, 2006).

2.6 Ethical consumption in the luxury industry

When considering ethical consumption in the luxury industry, it is noteworthy to identify the drivers that lead to this initial purchase of the luxury product. Table 3 depicts an overview of the literature addressing the drivers of luxury consumption.

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Table 3

Existing literature does not explicitely consider sustainability as a driver of luxury consumption. However, a KPMG (2009) study8 about the German luxury market revealed that consumers could no longer simply focus on a luxury’s quality or its involving social status but increasingly on fair traded and eco-friendly products. Whether consumers only expect luxury companies to be ethical or whether these expectations are reflected in the consumer’s buying behaviour will be examined in the following chapter.

Much literature indeed emphasises ethical consumption however not much is addressed to the luxury industry and even less (if not at all) to the fur industry. Therefore, this section concerning the literature about ethical consumption is based on the general luxury (fashion) industry. Table 4 depicts an overview of the following literature about ethical consumption.

Beard (2008) adresses the ethical fashion market and “takes into consideration the factors that have influenced this”. In 2005, British consumers spended approximately 30 mio pounds on eco-friendly fashion rising to more than 50 mio pounds the year after. Beard (2008) argues that despite this increase, the fashion industry has not followed the eco-development like the fair traded food market. Neither governments nor other organisations have implemented a unique regulatory code that helps consumers identifying a luxury fashion’s sustainable or eco-friendly background. The reason might be that fashion is not linked directly to human health - “any detrimental effects of clothing to the body are less noticeable, or at least rarely acknowledged “ (Petit, 2007 cited in Beard, 2008). Furthermore, Beard (2008) investigates on the “lifestyle (…) that effects consumer behavior in relation to purchasing ecofashion” and highlights that luxury fashion products are either only fashionable or ethical; it lacks the combination of both (Beard, 2008).

Luchs et al., (2010) examine how sustainable aspects of products influence the consumers’ product choices. It is argued that sustainable product attributes can even have a negative effect on consumer purchase intentions; “consumers associate higher product ethicality with gentleness-related attributes and lower product ethicality with strength-related attributes”. The authors highlight that there is a large gap between consumers’ beliefs concerning sustainability and their actual purchase behaviour. A UN study revealed that “40% of consumers report that they are willing to buy green products, only 4% actually do so” (United Nations Environment Programme, 2005 cited in Luchs et al., 2010). It is argued that this might be due to the fact that ethical luxury products are often priced much higher than mainstream luxury fashion (Luchs et al., 2010).

Similar to above findings, Fukukawa and Ennew (2010) describe, that “what we believe in is not always what we do”. They found that consumers “can and do act inapproprately” and that ethical beliefs of wright and wrong are not adequate enough “to explain ethically questionable behavior” as the humans often do not practice their own beliefs (Fukukawa and Ennew, 2010).

[...]


1 See for further reading: Seuring and Müller, 2008.

2 See for further reading: Nidumolu, Prahalad and Rangaswami, 2009.

3 See for further reading: UN, 2010

4 See for further reading: United Nations Environment Programme, 2005. 20

5 See for further reading: Bendell and Kleanthous, 2007.

6 See for further reading: B&T Magazine, 2010.

7 See for further reading: Werbach, 2008.

8 See for further reading: KPMG, 2009.

Details

Pages
100
Year
2011
ISBN (eBook)
9783656074472
ISBN (Book)
9783656074298
File size
1.1 MB
Language
English
Catalog Number
v183156
Institution / College
University of Exeter – Business School
Grade
78 % (1,0)
Tags
Ethics and moral business ethics sustainability competitive advantages of sustainable strategies sustainability performance measurement fur industry luxury industry supply chain sustainability ethical consumption

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Title: The Importance of Business Ethics and Sustainability within Supply Chains