Consumer: King or Slave?

opinion

The consumer: the king, the epitome of the downstream value chain; the recipient of massive corporate efforts. Or corporate scams? Misleading advertisements? Victim of hoarding practices?

Consumer Ethics and CSR

CSR is beyond the letter of the law. It embodies the spirit of trust, respect for the rules of trade, environment and society’s, including consumers’ interest. It is about how corporations meet the true needs of society and how it avoids unethical business practices or misinformation.

CSR is foremostly about how a company makes its money. We must ask if the company’s core business itself is adding real value to its consumers, for instance by selling a harmful, addictive substance, or by selling nutritionally fortified food at affordable prices. A progressive and socially responsible corporation sets its own code of ethics and respects and acknowledges its responsibilities, which are practiced by its employees at all levels. Thus protecting employees and consumers.

From the consumers’ point of view, a socially responsible corporation should also be concerned about the needs of its consumers. It should ensure that it provides good quality products at a fair price to them and does not exploit consumers, especially children, with misleading and unethical advertisements. It should ensure that their products and production processes do not cause any damage to human or environmental environment.

Some basic consumer rights include: the right to safety,
the right to be informed, the right to choose, the right to be heard, and
the right to consumer education.

A socially responsible corporation offers superior values to its customers by acknowledging social responsibilities. It is the moral and ethical obligation of corporations, who believe in Good Manufac-turing Practices (GMP), to observe a code of conduct in manufac-turing, marketing and advertising. Corporations have a moral responsibility to their ‘brand supporters’ who depend on them and have trust in them to maintain quality and standards and observe and respect local and international laws.

CSR: A Growing Need

CSR is a growing need in today’s complex business environment and prudent corporations have realized that their role is not only to make profits, but also to be recognized as socially responsible enterprises. As such, the concept of CSR is assu-ming new dimensions. Leading corporations must set a positive example which others can follow.

At present the general perception of a corporate organization is that it is out just to make money. This per-ception has to be changed and a relationship between corporate citizens and consumers citizens has to be established.

Why CSR?

A big question is why would companies accept CSR? The answer is, because the public expects the businesses to help the community in different ways and to invest back into the customers to whom they sell their products.

Companies must have a sense of responsibility towards the society from which they earn their profits. Their executives must be men of ethics, with strong social commit-ments and who can transform their ideas and vision of corporate ethics into corporate responsibility.

This will in turn create greater customer loyalty towards busines-ses resulting in increased sales. Social groups and public opinion would support plant expansions, innovation, and introduction of new brands and products and so on.

CSR = Corporate Philanthropy?

CSR in Pakistan, to a large extent, seems to focus on how much corpo-rations contribute and donate to health, environment and education programmes, and overlooks its moral obligations and commitment to consumers. If corporations do not serve society and their consu-mers in letter and in spirit, then there will be a gradual breakdown of trust and respect for corporations and we will witness a growing ‘anti-corporate’ movement.

In order to protect consumers from unscrupulous manufacturers, good manufacturing practices and CSR must be encouraged. Corporations must step forward and and set an example and voluntarily observe principles of business ethics by providing quality products at a fair price to consumers.

This involves the efforts business organizations undertake to meet their responsibilities both at econo-mic and social levels. Consumers, for example, expect manufacturers to supply reliable, quality and safe products at a fair price. Stock-holders demand that corporate operations be managed efficiently and that their investments be rewarded by dividends or improved market value.

As such, a balance has to be found and a relationship between top management’s commitment to ethics and its commitment to financial concerns has to be established. CSR is a long-term investment, but one that is very lucrative as it pays very high dividends. It differentiates a corporation from the others and creates customer satisfaction and brand loyalty.

Stakeholder Relationships and Sustainability

Good corporate citizenship cannot be easily imitated because it is based on sustainable relationships that the organization creates with all of its stakeholders. This means that corporations effectively manage stakeholder relationships and engage with their stakeholders in a proactive manner. They contri-bute to the wellbeing of all stake-holders and the community at large to promote sustainable growth and development. For instance, consu-mers enjoy the benefits of this commitment directly, because a good corporation treats them fairly and continuously strives to satisfy their changing needs.

Such actions help forge tight bonds with consumers, employees, supp-liers, and community leaders. Recently, a leading corporation introduced strict environmental standards for the packaging of the products it stocks. This sent a very positive message to its customers, that is, that the corporation ‘cares’ and is socially responsible.

CSR Challenges in Pakistan

Businesses and social bodies across the globe are regulated by rules and regulations for their operations. These rules are legal bindings, regulating the institutions to behave in a particular manner. However, for CSR, there are no specific legal or binding rules. Due to the absence of consumer protection laws and poor and/or lack of enforcement of existing laws, sub-standard and counterfeit products have flooded third-world markets and consumers are blatan-tly cheated and misled by glossy and misleading advertisements.

A sad example is our markets, where over 50 percent of the products Pakistani consumers buy, are either sub-standard, adulterated or counterfeit. Unscrupulous manufacturers refill empty bottles and tins of branded products and spurious and counterfeit products are being produced and marketed under brand names, cheating the consumers, who think they are paying for branded products.

In order to combat this menace, an aggressive campaign must be launched against these unscrupu-lous manufacturers, who are deliberately cheating the consumers with sub-standard and counterfeit products and gaining ill-gotten profits. Just establishing consumer laws and standards is not sufficient in developing countries, where laws are flouted with impunity. As such, a procedure by which govern-ments are obligated to enforce consumer laws and standards, must be given due and urgent priority and attention.

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    Author Information

    Hamid Maker is the mastermind behind Helpline Trust, which advocates good governance, accountability and code of conduct in government and society and encompasses the enforcement of the rule of law-to improve the quality of life of the populace. After acquiring his education from UK, Hamid Maker joined his family business and following his retirement, the Helpline Trust was inaugurated.

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