Cost of business makes it an ‘uphill battle’ for the likes of Belu and One Water aiming to make a dent in the world’s water crisis
Ethical bottled water companies such as Belu and One Water struggle to make a dent in the world’s water crisis due to their limited manufacturing capability and investment. Concurrently, big companies like Danone and Starbucks are criticized to contribute only as a marketing play. Danone’s ‘Drink 1, Give 10’ campaign donated only $0.28 per bottle whilst Starbucks gives away a mere $0.05 from the cost of a $1.80 bottle of Ethos water.
According to Friedman’s article, corporate executives would spend someone else’s money for a general social interest. For instance, Starbucks’s Ethos water costs customers more, thus customers (as part of the society) also suffer from a lower proportion of income left after buying the product.Although Freeman’s stakeholder theory emphasizes that a successful business must unify every stakeholder’s interest, it is highly improbable because stakeholders have conflicting interests.
Thus, a third party (e.g. government) can interfere to help the smaller ethical companies through tax exemption or subsidy (which can be obtained through tax revenue from bigger companies) so that they can expand faster and eventually compete in the market, thereby leading to help those without clean drinking water. In conclusion, with government’s assistance, corporate social responsibility can succeed given that resources are now allocated more efficiently.
I find that this particular blog post touched on similar ideas and opinions that I have on my previous post about the purpose of big companies using CSR to appeal to stakeholders. However, an interesting part is the link to freeman’s stakeholder theory, which i agree to; a company cannot live to every stakeholder’s expectations.
I agree that while in some cases, the goals of the company and customers must be unified for a business to be successful (as mentioned by Freeman), there are times where the interests of the stakeholders conflict too much. Even though the interests of the stakeholders may be aligned through having the customers be educated on the issue the firms are trying to tackle, there are times where they would rather tackle it in a different way. Because of that, it is also possible to argue that Starbucks is only increasing their prices ever so slightly to prevent itself from conflicting with the consumers’ interest too much rather than.