BALANCING AFFORDABILITY AND ETHICS: HOW CHEAP IS TOO CHEAP IN BUSINESS?
Abstrak
The determination of contemporary businesses to remain cheap has its root in global economic conditions, changing market dynamics and demand from consumers. The concept of “cheaper is better†cuts across many sectors such as technology and retail as companies seek to satisfy the costconscious consumers with inexpensive products and services. However, underneath this attractiveness, there are several implications which normally go unnoticed by the lay customer. Cost reduction drives that most business enterprises employ can result in labor exploitation, environmental damages, and practices that ruin fair competition in markets.The understanding of corporate purpose was transformed with the introduction of Stakeholder Theory by R. Edward Freeman in 1984. Ever since the shareholder primacy model took over business discussions, it was believed that a company’s sole duty is to increase profits for its shareholders The current shift towards low-cost goods and services has its roots in both culture and economy. These aspects of life have shaped consumer purchases and business operations in today’s world. While these forces enabled the wider availability of goods and services, they also imposed harmful cost reduction policies that neglect ethical principles and other vulnerable groups One of the most crucial drivers of advanced commerce has been the global focus on pricing, which has been brought down on a wide scale. All people, from different social domains, have been able to obtain innovation from goods and services. However, the value-adding focus on cost reduction has revealed a great deal of value which is captured in labor mistreatment, social inequity, environmental damage, and others. The consequences show the most important paradox of global economics, which is that the systemic pressure of social economics has helped to bring a lot of good, but the burden of ethical, social, and even environmental issues are left unattended.
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