A study by Wirthlin Worldwide concludes that 80% of customers base a large portion of their buy decision on their knowledge of that firm’s ethics. Any horrifying headlines in the newspaper can tarnish a brand, especially if it’s a well-known one . An article in 2012 exposed a protestor who shouted, “DEATH to Apple executives” after a performance of “The Agony and Ecstasy of Steve Jobs”, a popular off-Broadway play. This sudden outburst brought the media’s attention to this critical issue. However Mike Daisey, the playwright and star, soon retracted his nastiest allegations about the mistreatment of workers making Apple’s products in China. He did not meet poisoned workers from exposure to chemicals nor did he see child workers at the factory gate. Although conditions in factories were better than he expected, there were still issues. But Tim Cook, Apple’s boss admits to using underage labour, even though it’s extremely rare in their supply chain. Accusing it to be abhorrent, the company’s top priority is to eliminate it entirely. After exposure of this subject Apple, like Nike, improved working conditions in China to recover from their damaged reputation. By doing this, news would spread that the company is putting effort into upgrading working environments even if it means great investment in time and money. Ultimately, companies would go to any extent to ensure that the media and customers are aware of these improvements. Despite these costly investments, in the long run, the company would still maximize its profits with the stakeholders by accepting its losses and learning from it to establish good business ethics.
Sources:
http://www.economist.com/node/21551498
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