An expose of bad businesses and their unethical practices

A report issued by the Richard Ivey School of Business indicates that consumers are often willing to pay more for a product from an ethically sound company, including items such as fair-trade coffee. Oddly enough, companies which exhibit good ethics are rewarded less than companies that use bad ethics are punished, at least according to the study.

It is this latter phenomenon which was the greatest surprise of the study. It was previously thought that customers would pay more for an ethically produced product, if the ethical behavior was made a part of advertising for the product. The study found that this was true. Perhaps more importantly, the research warns that consumers will also punish unethical behavior, for example a company that exploits foreign workers, by expecting to pay proportionately less for its unethically-produced goods.

The report was produced by the University of Western. The study “Reward or Punish?” authored by by Remi Trudel and June Cotte reveals that consumers use corporate social responsibility in evaluating their willingness to pay for a product. The study strongly suggests that there are rewards for Good Business, and even larger business punishments for Bad Business.