The Austrian energy drink giant, Red Bull has recently settled a lawsuit for 13 million dollars (USD) against Benjamin Careathers a loyal red bull consumer. He had filed a lawsuit against red bull for false advertisement. Marketing ethics comes into play where businesses could potentially “over sell” their products, making false statements about the benefits or providing nutrition benefits to mislead their customers.  

In Red bull’s case, they have deceived their consumers into believing that their products could have potential  physical benefits, which led to their growth in market sales. Over the decade they have used the same marketing slogan, ” red bull gives you wings ” and sponsoring sports events with advertisements of athletics consuming their product. Hence, giving consumers a physiological effect of perceiving  that red bull would enhance their physical abilities to be like their sports idol.

Therefore, this lawsuit has shown the consequences of unethical marketing, where the consumers has the edge over multi billion dollar corporation when there are faults found in their marketing campaign. Where’s in my opinion, companies should have thought through the physiological effects of their advertisements before publishing them.

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BC hydro’s Site C dam in Peace River, British Colombia, affecting the natural habitat of Peace river whilst affecting the life styles of  First Nations tribes that have been living there for centuries. “The dam would be the third on the Peace River in B.C., flooding 5,550 hectares of land over an 83-kilometre stretch of valley. It would generate an estimated 100 megawatts of capacity.” There were many considerations that BC hydro and the state Government had to process before making the crucial decision. 

The decision BC hydro makes directly reflects their CSR (corporate social responsibility) on whether they would affect the first nations’ habitat or they would benefit the society as a whole by providing green energy which is the dilemma that BC hydro faces. However is this business plan ethical? They would be defrosting and chasing out local communities in order to benefit households that live hundreds of miles away from Peace River that might have no knowledge about the place at all. Hence, there is no emotional attachment compared to first nation families that have lived there for centuries.

Therefore, corporate responsibility is essential part of business especially in the age where technology is available to everyone and media is transparent. Hence, business decisions today should have considered the after effects of their decision and reflect on their value propositions of their company.

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In this article that I’ve come across from ABC News, “U.S eases Ban on Lethal Arms Sales to Vietnam“ U.S is “unintentionally” increasing the tension between them and their country’s biggest importer. U.S is providing military hardware to neighbouring countries of China, to support them in defending their own waters. However, empowering weaker nations with advance weaponry would only create political issues between U.S and China even though the trade was not deliberate. This would create uncertainties for companies that has production plants in China, (Apple, Nike, Adidas, General electric), affecting the brand image of these companies in China.

This would also affect the efficiency of the workforce as they might be demotivated by the political decisions of United States. Therefore, affecting the assurance of  quality in their products or even security issues within the company. Other threats could also be projected due to this issue, China could raise minimum wages or import regulations on american goods affecting the revenues of companies as well as the production efficiency. Therefore, companies highly rely on political  content  between countries especially when they are the major players in the industries.

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Since Alibaba’s IPO in NYSE its shares rose by 29% since their initial offering in September, there are currently two other Chinese technological companies listed on the New York Stock Exchange. Alibaba is a Chinese e-commerce firm that linked American firms to Chinese producers directly (commerce to commerce).

Since the electronic advancements of the 21st century, electronic companies have gain the advantage of advancing rapidly, allowing the ease of trade between consumers and business around the world without having the hassle of customers going to a physical retail store. Whilst allowing companies to reach a bigger target audience and gaining sales volume, the e-commerce firms benefit from the transaction fees for every purchase the customer makes online. Hence, this breaks the traditional retail concept of customers physically having to interact with a physical upfront of the company. Market capitalisation value of e-commerce companies have surpass retail companies such as nike, the market capital value of Alibaba is 225 billion while nike has a market capital value of  78.31 billion. 

This challenges traditional business concepts that business have been using for decades as we live in the century where everything evolves around technology. As a business student in the evolving age, we would have to change our perspective of how businesses operates in today’s concept and have the will to constantly learn and adapt to the changes simultaneously.

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Business ethics could be viewed differently according which group of stakeholders you belong. In my person opinion, companies should prioritise their stakeholders; most importantly providing back to the community. In the modern society where information is transparent company’s ethics are frequently questioned,allowing the public to have their personal approach on events that happen across the globe.

This is an example I have found ,Nigeria Delta is one of the main exporters for crude oil, it averages about 2.2 million barrels of oil per day. Their oil reserves where discovered by Shell-BP, hence profiting from the oil rich nation whilst returning the least to the community.

The Nigerian Delta’s official report quoted from, the guardian, “ several hundred spills a year” from the oil gas lines.  Shell proclaims that they improved the living condition of the locals by cleaning the oil spills, despite nothing have been done by the oil corporation. This questions the ethics of the company of shell or the corrupted politicians. Shell blames the oil spills due to oil piracy, however the real question is where has the oil revenue been? why isn’t there developments in Nigeria Delta to improve their citizen’s quality of living?

The undeveloped oil nation would have to suffer under the power of a multi billion dollar company although its one of the world’s oil richest nation. Hence, this is a article where the ethics of a company is questioned as there isn’t physical evidence of Shell has done to improve the current conditions of Nigeria Delta.

Source:

http://www.theguardian.com/global-development/2013/nov/07/shell-oil-niger-delta-pollution-amnesty

http://cargocollective.com/climatechangestoriesforsocialjustice/Shell-Oil-Pollution-Niger-Delta-Nigeria

Image:

http://groundreport.com/nigerias-oil-a-factor-to-which-development-pillaging-identity-crisis-and-resistance-in-the-niger-delta/

Lehman brothers was the forth largest investment firm in the US when they were hit by the U.S housing collapse in 2008. Lehman brothers acquired  5 mortgage lenders, particularly BNC and Aurora Loan services which specialised in ALT A loans “(made to borrowers without full documentation)”. This spiked Lehman’s revenue to yearly records; however without knowing that their clients would default on their mortgages. 

This lead to the fall in America’s largest firms, (Fannie May, Bank of America, Citi group, JP Morgan, Bear Sterns). This was caused by the negligible regulations that the banks had over mortgages and bank loans due to the low interest rates that the federal government is offering, “the Fed lowered interest rates to 1%, the lowest rate in 45 years”. This reflects on how political decisions made by the government directly influences the profitability of the business and the economy. Therefore, business have to include the uncertainties of economic outcomes and political stability before making a business decision; where they should have more safety measures in place in order to prevent events like this in happening again. 

In my opinion, banks should not have provided loans to lenders with out conducting a proper credit check. They could have prevented course of events if they had proper regulations.

http://www.investopedia.com/articles/economics/09/lehman-brothers-collapse.asp

http://www.investopedia.com/articles/economics/09/financial-crisis-review.asp