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IDEA PROPOSAL:ETHICAL CONSUMPTION: A VISIT INTO DIAMOND TRADE
In this brief essay an effort will be made to identify a business ethics issue, introduce it in requisite detail, identify all the relevant stakeholders and present some important theoretical frameworks applicable to the identified issue.
Identification of the Business Ethics Issue – Unethical Consumption of Luxury Goods
Thousands of shoppers indulge themselves blindly in buying luxury goods every day in the glamorous city of Hong Kong, where these goods exist in abundance.Idea proposal ethical consumption: a visit into diamond trade.
A city considered to be an international hub of luxury goods is exemplified by the existence of more Louis Vuitton stores g than in any other city in the world (Sun, 2013).
However, these shoppers might not be aware of the bitter realities hidden behind the facade of these luxury stores, which indicate towards the existence of another world submerged in absolute poverty.
Inhabitants of this world live in poor conditions, work under extreme conditions and live from hand to mouth while producing, designing, extracting or mining for such luxury products.
Limitation of knowledge and awareness on part of the consumers might be a justification for their passive behaviour while consuming the luxury items, however, this display the consumers’ indifference to the sufferings of poor people.
On the other hand, academic literature on the subject provides us with an insight that the contemporary world of business and consumers is going through an ‘ethics era’ where consumers in large number are becoming more responsible of the ethical implications of their rampant consumption behaviour (Davies, Lee & Ahonkhai, 2012; Ghilani, 2012; and Okonkwo, 2007).
The modern consumers are now aware of the background of the luxury products they purchase and sometimes adjust their buying behaviour in accordance with the ethical and moral dictates.
However, this ethical consumption is more focused towards commoditized products of low value such as food, apparel and cosmetics (Davies, Lee & Ahonkhai, 2012).
Unethical Consumption of Luxury Goods – Diamonds
The issue of ethical consumption of luxury goods can be observed in all its gravity in a much segmented area of the global luxury goods industry, namely the diamonds industry.
Each year diamonds, which constitute Africa’s major natural resource, are produced to the value of an estimated US $13 billion.
Approximately 65% of these diamonds i.e. valuing at US $8.5 billion are from Africa (World Diamond Council, 2012). Though the financial impact of this huge market on the world is noticeable but the cost of producing such items is well hidden by the diamond producing companies.
Diamonds have always been used as one of the most brilliant and beautiful gems symbolizing love and beauty and something with an everlasting appreciating value which is passed down from generation to generation.
But, the real price of this seemingly innocent stone is quite high for millions of African people and others who live on the other end of the equation.
Diamond miners working in small scale mining operations or digging for diamonds, account for approximately 15% of world’s diamond production but their wages are even less than a dollar per day thereby making them live far below the poverty line (Brilliant Earth, 2012).
Furthermore, basic necessities of life like sanitation, running water, education, food and health care are not available to these miners. Idea proposal ethical consumption: a visit into diamond trade.They are not trained in prevention of safety hazards, while children being an easy source of cheap labour, are frequently employed and trapped in a life of hardship.
Ignorance accounts for a big factor in diamond purchases because people are unaware what effects their purchasing choice can result in for the people at the lowest tier of the diamonds production chain.
The dawn of the ‘ethics era’ has resulted into an enhanced awareness on part of the shoppers who now consider the implications of their choices and are more focused towards the environmental and social impacts of the entire supply chain established to bring a product to the market.
However, this pattern has been observed mostly in the commodity sector, while the decision making process during the purchase of luxury goods differs greatly. It is also quite vague if the ethical choice in commodity buying extends over into the luxury products (Kapferer, 2010; and Miller, Hoover & Crespy, 2007).
Key Stakeholders in the Diamond Trade
The responsibility of the diamond trade’s unethical practices can be laid primarily upon two groups i.e. the companies which are involved in the whole process from mining to selling in the market and the consumers themselves (Maxine & Helen, 1999).
The former’s responsibility is to make sure that their workers are enjoying proper and safe work conditions and are not exploited in any manner. On the other hand it is the responsibility of consumers to ensure that the product they are buying has been obtained through fair and ethical means.
In other words, the responsibility of a consumer encompasses their being aware of the process through which the product has been produced.
Theoretical Frameworks Applicable to the Ethical Issue
Consequentialism, a normative ethical theory, focuses upon the consequences of an act itself. According to this theory, if consequences yield good outcome then the act itself must be good. Similarly, a bad outcome of any act will define that act as being disagreeable (Robinson & Zhou, 2006).
Idea proposal ethical consumption: a visit into diamond trade.The consumption of diamonds caters to the demand side of the economics by creating a need which is to be fulfilled to an extent by the impoverished miners working in Africa.
Knowing about living conditions of these miners should prohibit individuals from purchasing diamonds because the consequence of their purchase fuels the engine of the diamond economy by forcing miners to work in harsh conditions, which in itself is a bad consequence of the purchasing act.
The limitation to this theory would be the unobservable effects of the purchase which are not visible to the consumers, thereby leaving room for doubt and ambiguity.
In a completely different dimension, the Virtue theory focuses more upon an individual’s moral character while concentrating upon the nature of the agent (consumer) who is performing an act.
Idea proposal ethical consumption: a visit into diamond trade.According to the Virtue theory, a person should have enough morals not to accept products or luxury goods which are the by-product of someone’s labour exploited in an unfair manner (Nussbaum, 1999).
If consumers of such goods are made aware of the entire system upon through which the diamond trade is being conducted, inciting violence and a culture of slavery in the far flung regions of the African continent, there is a possibility that they start acting as socially responsible buyers and stop purchasing such luxuries.
In this brief essay an effort has been made to highlight the ethical issues associated with the diamond trade a business ethics issue while determining the adverse impact the purchase of diamonds has over the plight of African labourers.
It has also been identified that both the theory of Consequentialism and the Virtue theory can be applied towards remedying the effects of this impact…
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