ELEC4332 - 27-10-2011[1]

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Project Engineering Practice(ELEC 4332)

Consumer (and key stakeholders)

Ethics

(Week 12b) - Lecture twenty one, 27th October 2011

Dr Cosimo Faiello

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oc e a us ness cons s en w TBL)

Societal business occurs when governments,organizations and individuals design, developand deliver needs satisfying goods and

services that are equitable, sustainable andenhance the Quality of Life (QOL) for all,without prejudice.

Murphy, 2008

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Social Business

TBL

Organisations Consumers

Public

Policy

Environment

Quality of Life (QOL)

Well-being

Life satisfaction

EquitableSustainable

Exchange of information &value

Needs & Wants

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Resource/product Life Cycle Thinking – ‘Cradleto Grave’

(Mont et al, 2007)Rawmaterials

Manufacture

Distribution

Usage/consumption

Waste disposal

Resource extraction

Production

Consumption

Pollution

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Design Importance: How?(Van Nes et al, 2005)

Extend product lifecycle throughappropriate designto enhance product:

Reliability &robustness

Reparability

Upgradability

Variability

Attachment

Should not betechnologically complex

Compatible with existingbeliefs

Highly visible &communicable

Offer recognisableadvantages

But, new sources of advantage through newmarkets & opportunities(marketing) are needed

5

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Consumer integration in sustainableproduct development

Effective communication between productdeveloper and user;Consumers can and should be an important source

of new ideas for product development (i.e.

Innovators; agents of change);Win-win proposition for both the consumer and the

company:

.......But, what type of products?

Safe products;Ethical products;Low complexity and easy to use products;In line with TBL.

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Cycle Thinking

70% of total productcosts can be savedduring design stage

Design decisions havesignificant impact onquantity of resource used& of waste produced

during life-cycle

Major source of innovation & potentialcompetitive advantage

Pressure to adhere frommultiple sources

Savings in labour,resources & energy

Shortened lead-times

for productionQuicker ‘to market’

times = potentialcompetitive advantage

Positive image = alsopotential competitiveadvantage (considerincreased consumerconsciousness &power);

Intellectual property(IP) & long term returns

In line with (TBL)

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Ethical decision making by consumer

Become aware of benefits of Life Cycle Thinking and

support it;Evaluation of potential product harm;

Key ethical drivers behind consumer’s decision-makingprocess;

Environmental issues (are ranked above)Human rights, andAnimal rights/welfare issues.

The ethical consumer considers the product groups tohave differential importance:- Food products being the most strongly associated withethical issues;

- Brown goods group (i.e. electric goods such as stereos and TVs) being least associated with these issues.

(Wheale et al. 2007)

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Ethical

purchases

1999

Ethical

purchases

2000

% Growth

1999 - 2000

Food Basket of

goods

1022.00 1289.00 26.13

Fuel and Light Green energy 3.50 6.10 74.29

Housing Green

mortgage

payments4.30 4.50 4.65

Household

Goods

Basket of

goods 866.00 1241.00 43.30

Personal ItemsCosmetics andtoiletries 316.00 341.00 7.91

Transport Environmental

ly friendly

transport8.00 11.40 42.50

Total Purchases Total Purchases 2219.80 2893.00 30.33

Table 1. Ethical market value 1999–2000 (£m)Source: Tallontire (2001)

Ethically orientedmarkets

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But, who is responsible for theethicality of targeting vulnerable

consumers (i.e. Under-age, gender,

race/ethnicity, education, socio-economic status;) with products

which may cause economical,

physical and psychological harm?

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Key project stakeholders and their moralresponsibilities

A corporation has the same ethical obligations to its shareholders,employees, customers, suppliers, and the community and the sameresponsibilities with respect to the environment.

The first is the obligation to “Do no harm”;

The second general obligation comes from the nature of the free-enterprise system in which the corporation is founded. Thecorporation depends on the integrity of the system and thus has themoral obligation not to undermine the freedom and the values of thesystem;

The third general obligation is to be fair in the transactions in whichit engages;

The fourth general obligation is to live up to the contracts into whichone enters freely;

These four general obligations are derived from the system of free

enterprise and they are obligations that all corporations have.

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Key project stakeholders and their moralresponsibilities ….continues

The members of the board (chairman, directors, etc.) areresponsible to the shareholders for the selection of honest, effectivemanagers, and especially for the selection of the CEO and of thepresident of the corporation. They are morally responsible for thetone of the corporation and for its major policies; they can set a

moral tone, or they can condone immoral practices.

Management is responsible to the board. Management is responsiblefor setting the moral tone of the firm. Unless those at the top insiston ethical conduct, unless they set an example of moral conduct,and unless they punish unethical conduct and reward ethicalconduct, the corporation as a whole will tend to function without

considering the moral dimensions of its actions. Management is alsoresponsible to the project team/workers.

The project team/workers, in turn, are responsible for doing the jobsfor which they are hired. From a moral point of view, one’s job cannever legitimately involve either breaking the law or doing what isunethical, even if one is ordered to do so. But within the guidelines

of one’s job description, employees are expected to carry out their jobs as instructed by those above them.

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Key project stakeholders and their moralresponsibilities ….continues

Corporations (managers, steering committee, project managers,client, etc.), are responsible to their suppliers and competitors for fair treatment. i.e. Fairness precludes lying about one’s competitoror the competitor’s products; it precludes stealing trade secrets,sabotage, or other direct intervention in the competitor’s firm.Fairness in dealing with one’s competitor also precludes colludingwith competing firms, price fixing, manipulating markets, and inother ways acting to undermine fair competition at the public’sexpense.

The corporation (managers, steering committee, project managers,client, etc) are responsible to the consumer for its products. i.e. Thegoods produced should be safe. Also, services provided should result

in safe and ethical outcome. The corporation (managers, steering committee, project managers

etc.), client should have ethical obligations towards achieving resultsin line with TBL.

All in all, corporations (managers, steering committee, project

managers, client, etc.) have moral obligations, and they can andshould be held morally accountable for fulfilling them.

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In conclusion

The key concepts to remember from thiscourse:

Sustainability (TBL)Financial responsibility

Social responsibility

Environmental responsibility

Sustainable use of natural resources

Ethical/moral approach to doing

business

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Reading week 12b

Hoffmann E., 2007, Consumer Integration in Sustainable ProductDevelopment, Business Strategy and the Environment , 16, 322-338

Mont O. and Bleischwitz R., 2007, Sustainable consumption andresources management in the light of life cycle thinking, EuropeanEnvironment , pp 59 – 76

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