I’ve been told that there is more money spent on marketing than is spent by governments on K-12 education worldwide. Marketing has a lot of influence in shaping how we live and perceive ourselves. If the purpose of marketing is to convince people to buy more, then we will never feel like we have enough. If marketing appeals to our self-interests, then we won’t be as inclined to care for the interests of others. Raj Manchanda (a friend and a Marketing scholar) and I recently published a paper in which we describe the hallmarks of SET marketing. In the paper we describe how the "profit-first" focus in conventional marketing has contributed to the social and ecological problems facing humankind. We then go on to describe what the classic 4 Ps of marketing—product, price, place, and promotion—look like from a SET perspective. This paper will be of interest to the growing number of business people and consumers who willingly compromise financial well-being and instead choose to optimize social and ecological well-being.
Springer Nature: Dyck, B., & Manchanda, R.V. (2021). Sustainable marketing based on virtue ethics: Addressing socio-ecological challenges facing humankind. Academy of Marketing Science Review, 1-18.
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While still very early, over the past two months countries have begun to administer vaccines for COVID-19, and the world has breathed a collective sigh of relief with cautious optimism that we would begin to turn the corner on the epidemic. The investment of considerable financial resources and scientific knowledge has shown impressive results. We wonder what the new “normal” will look like post-COVID and if there are any lessons society has learned that might help us to cope with other looming crises facing humanity. Have we learned that science will come to the rescue, or have we learned the importance of being prepared and acting responsibly and proactively to reduce the impact of things like climate change and systemic racism? Put differently, are we now less likely to suffer from an illusion of invulnerability?
Two months before the world’s first suspected case of COVID-19, the Global Health Security Index had published a scorecard that ranked 195 countries on their preparedness to tackle a serious outbreak: USA was ranked #1, and UK #2. However, as the world turns the corner on the pandemic, both countries were among the six worst worldwide in terms of COVID-19-related deaths per capita.[1] There are many possible reasons for this, but one might be that these two countries and/or their leaders suffered from having an illusion of invulnerability, which is something that occurs when people think that they are better than others.[2] It seems that even when you have more resources and are better prepared than others, you may get a false sense of confidence that leaves you more vulnerable to failure. Question: When it comes to the businesses dealing with issues like climate change and pandemics, do you think that the world’s leading corporations—who have the most resources to deal with them—are in danger of suffering from an illusion of invulnerability? [1] Yamey, G. & Wenham, C. (2020, July 1). The U.S. and U.K. were the two best prepared nations to tackle a pandemic—What went wrong. Time. Mortality analyses, John Hopkins Coronavirus Research Center. [2] Darío Páez & Juan A. Pérez (2020): Social representations of COVID-19. International Journal of Social Psychology. ![]() There are 500 million small-scale farms in the world, making it by far the most frequent type of organization on the planet.[1] About 70% of the world’s 1 billion chronically-malnourished people are small-scale farmers, making this the neediest organization on the planet. Fortunately, we have the technology to double productivity on small-scale farms using eco-friendly methods like Conservation Agriculture (where food is grown in ways that enrich the soil without use of pesticides and costly fertilizers). Unfortunately, many high-income countries rely on modern “industrial agriculture” which is based on inputs like fertilizers, pesticides, pumped irrigation, and so on. Although it seems like industrial agriculture is efficient (e.g., only 3% of Americans are involved in farming), it is actually energy-inefficient and unsustainable (e.g., fertilizers need to be mined, transported, and applied with machinery). One study showed that, prior to the Industrial Revolution, farming yielded 40 times more energy outcomes than energy inputs, but this ratio was reduced to 2.1 units by 1971.[2] Today it can take 7 to 10 calories of energy to produce 1 calorie of food energy.[3] Moreover, hundreds of studies show that industrial agriculture widens the gap between rich and poor, and that it lowers the quality of soils and water. Even so, this highly unsustainable model is being promoted because it “efficiently” produces cheap food (e.g., direct fuel subsidies to agriculture in the USA amounts to $2.4 billion). So cheap, in fact, that on average 25% of food is wasted after being purchased from grocery stores.[4] Question: Do you think we are facing a food systems crisis? [1] This paragraph draws heavily from Dyck, B. & Silvestre, B. (2019). A novel approach to facilitate the adoption of sustainable innovations in low-income countries: Lessons from small-scale farms in Nicaragua. Organization Studies, 40(3), 443-461. [2] Bayliss-Smith, T.P. (1982). The ecology of agricultural systems. Cambridge University Press. See also Dyck, B. (1994). “Build in sustainable development, and they will come: A vegetable field of dreams.” Journal of Organizational Change Management, 7(4): 47-63. [3] Page 164 in Princen, T., Manno, J.P., and Martin, P. (2013). Keep them in the ground: Ending the fossil fuel era. State of the world 2013: Is sustainability still possible?, Worldwatch Institute. Ch. 14:161-71. [4] Gunders, D. (2012, August). Wasted: How America is losing up to 40 percent of its food from farm to fork to landfill. NRDC Issue Paper 12-06-B. New York, NY: Natural Resources Defense Council. The term “externalities” refers to positive and negative effects that businesses have on other stakeholders but which are not reflected on the firm’s financial statements. For example, a firm can have a positive externality if it hires ex-convicts and thereby reduces the likelihood (and social costs) of repeat offenders.
Unfortunately, in 2018 the negative ecological externalities of the world’s 1200 largest businesses were estimated to be about $5 trillion (a 50% increase from 5 years earlier),[1] an amount that is greater than the total profits of these firms.[2] Even if all these firms were to meet their greenhouse gas emission goals, this would represent merely 25% of the amount required from them to meet the 2°C goal of the Paris Agreement.[3] In other words, these firms on average cause over $600 of negative externalities per each of the almost 8 billion people on the planet. That is a lot of damage, especially considering that one-third of the planet earns less than $2 per day.[4] While the costs of these externalities are often borne by especially by those who can least afford it, the profits from these firms’ activities benefit the relatively rich who can afford to purchase shares, thus further widening the gap between rich and poor. Question: What sorts of businesses give you hope when it comes to creating positive social and ecological externalities? [1] Note that figure in this paragraph are US dollars. Makower, J., et al. (2020). 2020 State of Green Business. Oakland, CA: GreenBiz Group. [2] The largest 500 companies in the world generated about $2.15 trillion in profits in 2018. “Global 500” Fortune. [3] Makower et al. (2020). [4] In all, 2.4 billion people lived on less than US $2 a day in 2010. Poverty Overview. The World Bank. ![]() Some people believe that the primary purpose of business is to maximize financial profits. We forget that this primary focus on financial well-being is relatively recent. For example, former CEO of RJR Nabisco, F. Ross Johnson—who in the 1980s “helped make the phrase ‘increasing shareholder value’ more than a buzzword”—notes that maximizing owners’ financial capture was not considered the primary purpose of business when he started out in the 1950s, nor can it be the primary purpose going forward.[1] For example, the Google Ngram below shows how: “profit maximization” is a socially-constructed phrase that started to be used in the 1940s, “shareholder value” started to be used in the 1980s thanks to people like Johnson, and “value creation” and “triple bottom line” started in the 1990s. The socially constructed nature of the purpose of business was in full view when the Business Roundtable—a group of 200 large corporations that includes giants like Apple and JPMorgan—issued a new “Statement on the Purpose of the Corporation” (https://opportunity.businessroundtable.org/ourcommitment/) that challenges the long-held view that corporations should primarily serve the interests of its shareholders: “we share a fundamental commitment to all of our stakeholders.”[2] Despite such changes, negative externalities and income inequality continue to rise, and research suggests that the social and ecological performance of signatories of the Business Roundtable during the early months of the COVID-19 pandemic was no better than other corporations in terms of protecting jobs, workplace safety, pursuing racial equality, and they were 20 percent more likely to announce layoffs or furloughs, and less likely to donate to relief efforts.[3] Question: Can you imagine a time when “profit maximization” and “shareholder wealth” will be replaced by “sustainable business” and “the well-being of the 99%”? [1] Cited in Bell, G.G., & Dyck, B. (2012). Conventional resource-based theory and its radical alternative: A less materialist-individualist approach to strategy. Journal of Business Ethics, 99(1): 121-130. [2] Wheeler, K. J. and 193 others (2019). Statement on the purpose of the corporation. Business Roundtable. https://opportunity.businessroundtable.org/ourcommitment/ Gelles, D., & Yaffe-Bellany, D. (2019, Aug 19). Shareholder value is no longer everything, top C.E.O.s say. New York Times. https://www.nytimes.com/2019/08/19/business/business-roundtable-ceos-corporations.html [3] Goodman, P.S. (2020, Sept 20). Stakeholder capitalism gets a report card. It’s not good. New York Times. https://www.nytimes.com/2020/09/22/business/business-roudtable-stakeholder-capitalism.html; Useem, J. (2020, Aug 6). Beware of corporate promises. The Atlantic. https://www.theatlantic.com/ideas/archive/2020/08/companies-stand-solidarity-are-licensing-themselves-discriminate/614947/ ![]() A holistic term like sustainability defies piecemeal understanding. In other words, in order to understand deeply what sustainability means for business, one must understand how business fits with larger systems and problems in ecology (e.g., the carbon cycle), sociology (e.g., meaning of community) and economics (e.g., varieties of capitalism). It requires understanding how sustainability at an organizational level is related to the larger issues facing humankind, such as economic inequality, climate change, and the growing power of multinational corporations. This demands understanding basic ecosystems and fundamentals about human nature and the social order. Question. Do you agree that it is important for managers to learn about eco-systems and basic fundamentals of human nature? Or is it tough enough for managers to learn about accounting and finance and marketing, and we should leave it to others to learn about and care for the ‘big picture’? What are the dangers if the titans of industry, or even everyday managers, are not trained to think about these larger ‘big picture’ issues?
![]() We are happy to share another interview from the same research project that we have profiled in our past few posts. In this interview Shaun Loney, co-founder of Aki Energy, explains how Aki is an Indigenous owned and operated organization that hires Indigenous people to install geothermal heating systems. Aki Energy saves taxpayers money while it reduces greenhouse gas emissions, supports the local multiplier effect, creates on-going employment in remote communities, and provides a more secure source of energy. ![]() This is the final part in our series of interviews with enterprise managers who follow principles consistent with Social and Ecological Thought. This interview is with Laura Tait and Chad Wiens who operate Heart Acres Farm, a small farm near Winnipeg that grows vegetables in environmentally-friendly ways. Their vegetables are sold in farmer’s markets, and they supply 70 households who have purchased a share in its Community Supported Agriculture (CSA). In addition to caring for the earth, Chad and Laura are passionate about enhancing social well-being in the larger community, including working with inner-city organizations. All interviews in this series were conducted by Savanna Vagianos for a research project at the University of Manitoba. We are grateful for this research, the permission of all parties to post these recordings, and for Jonathan and Paul Dyck who provided audio editing and background music, respectively. Again, these interviews were originally for a research project, so the sound quality is not ideal. However, we believe these are still worth sharing. ![]() We continue our series of series of interviews of enterprise managers who follow principles consistent with Social and Ecological Thought. This interview is with Sarah McLachlin, the founder and manager of Sarah Sue Design, a place-based women’s clothing designer and manufacturer in Winnipeg that seeks to operate in sustainable and ethical ways. Sarah has a life-long interest in fashion design and many life lessons in how to operate a business in this industry, and in Slow Fashion more generally. ![]() This is the second in a series of interviews with enterprise managers who follow principles consistent with Social and Ecological Thought. This interview is with Sherry Sobey, founder and manager of Generation Green, a retail store which sells environmentally-friendly products ranging from cosmetics to household cleaners to bulk food, and of Acorn Café, a vegan café that is attached to Generation Green. All interviews were conducted by Savanna Vagianos for a research project at the University of Manitoba. We are grateful for this research, the permission of all parties to post these recordings, and for Jonathan and Paul Dyck who provided audio editing and background music, respectively. Again, these interviews were originally for a research project, so the sound quality is not ideal. However, we believe these are still worth sharing. |
Bruno DyckBruno is an organizational theorist at the University of Manitoba. He loves being a management professor, scholar and teacher. Archives
April 2020
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