Does Being Ethical Pay?
May 19th, 2008 • Posted in: NewsStudy conducted by Wall Street Journal says that consumers tend to reward ethical behavior in some cases
NEW YORK
Companies spend enormous amounts of money to be “socially responsible,” reports the Wall Street Journal, but they do so in the face of limited knowledge about whether that stance will actually produce a profit.
Journal reporters Remi Trudel and June Cotte conducted a series of experiments to find out. In one test, they showed consumers the same products — coffee and T-shirts — but told one group that the items had been manufactured using strict ethics standards, told another group that the manufacturing was done under low standards, and told a third group nothing.
The results, according to Trudel and Cotte: “In all of our tests, consumers were willing to pay a slight premium for the ethically made goods. But they went much further in the other direction: They would buy unethically made products only at a steep discount.”
“What’s more,” they write, “consumer attitudes played a big part in shaping those results. People with high standards for corporate behavior rewarded the ethical companies with bigger premiums and punished the unethical ones with bigger discounts.”
Source: Wall Street Journal, May 15.
For more information, see: Related Newsline story, Apr. 21 — Related Newsline story, Apr. 7 — Related Newsline story, Feb. 11 — Related Newsline story, Oct. 15, 2007 — Related Newsline story, Sep. 17, 2007.
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