HIT WHERE IT HURTS

Thursday, February 14, 2008

IT’S OFTEN QUITE TEMPTING FOR COMPANIES TO IGNORE ETHICS, BUT WHEN CUSTOMERS TAKE UP THE CUDGELS, IT CAN PROVE VERY COSTLY


This year the Golden Globes cancelled its televised awards show due to lack of movie star participation. Early January this year, the Screen Actors Guild announced that 70 actors short-listed for the awards would not attend the ceremony to show their sympathy with scriptwriters, who have been on strike for over two months.

If things are not set right and the scriptwriters’ voices are not heard, then next in line of fire would be the Oscars, and none other than the famous and one of Hollywood’s most powerful stars George Clooney is backing this boycott. Scheduled for Feb 24th at the Kodak Theater in Hollywood, the award ceremony could well turn out to be a damp squib if the strike by the Writers Guild Association (WGA) continues. The cancellation of the Golden Globes reportedly cost broadcaster NBC $20 million in lost advertising revenue. The question on everyone’s mind is would the strike that hobbled the Globes also cripple the Oscars?

Back in India, the 13th Calcutta Film Festival was boycotted by a whole lot of celebrities. A whole lot of other people too gave Nandan (where the festival is held in Kolkata) a miss for Nandigram. It was their way of protesting against the inhuman killings in Nandigram. So, what is it indeed that makes boycotts so popular?

Boycotts have immense persuasive power

Author Bob Burg says “When businesses – even the most powerful ones – offer terrible customer service, mistreat their workers or take unfair advantage of consumers there is a way to influence them to mend their ways.”

In fact, boycotts are not new to India. Mahatama Gandhi used them to help him win his war of independence for India.

Boycotts have the power to get international attention. They are a non-violent way of protesting against anything going wrong. Whenever people have been pushed to extremes, boycotts have happened. In India, people boycotted the fine cloth produced in Manchester & turned to home-spun cloth. They boycotted salt produced in factories, when the British introduced a new tax and took to collecting salt from seashores. Even today, the power of boycotts cannot be denied.

They are red, sometimes more expensive than even diamonds, sometimes referred to as “pigeon blood” and sometimes even responsible for the bloody end of many young people. Rubies from Burma. Critics call them “blood rubies” for they are mined under extremely unsafe conditions where a lot of labourers get killed too. Worst of all, the money is used to fund the harsh policies of the military government. Burmese rubies account for 90% of the world’s supply. Through periodic auctions of its top quality gems, Burma generates a lot of foreign exchange. In 2006, the gems firms generated 300 million dollars in sales. However last November, some big western firms shunned Burmese gems. Italy’s Bulgari, France’s Cartier, and American Jewellers Tiffany & Company and Leber Jeweller Inc. – all have decided to not use rubies from Burma and try to weaken the financial position of the military government there.

If that was not enough, a new campaign “I am not going to Burma” was launched to help Aung San Sui Kyi bring back democracy in Burma. Her party won 82% of the seats in the 1990 elections but the Junta regime refused to hand over power and instead imprisoned and tortured members of her party and put her under house arrest. From Tony Blair to a whole lot of other celebrities, everyone joined the Boycott-Burma-campaign, to stop the funds from tourism to fill up the pockets of the brutal Junta government.

Politics and business are always closely related and not just tourists, but a whole lot of companies doing business in Burma were convinced and sometimes even forced to close down. “The consumer is the king” could not have been proved more correct and consumer activism never more successful as in the case of lingerie manufacturer Triumph. An advertisement was published, which showed a model wearing a barbed wire bra under which ran the slogan “support breasts not dictators.” Customer complaints started increasing and many women went back to Selfridges (the top-end department store in London) to return their lingerie. Within two months Triumph was out of Burma.

Business of boycotts

What’s a boycott? It’s a way of voting with our wallets. It’s a way of telling organisations or countries or groups to stop their unethical practices if they want the ‘money’ votes.

Boycotts are becoming the new weapons in business. NGO’s and activist groups are turning more & more sophisticated in their approach. They are now staging highly dramatic activities. Business leaders are getting concerned about these boycotts, as they are turning into “most effective techniques for the consumer movement to use.”

After being boycotted for fishing policies that were harming dolphins, even Heinz agreed to a dolphin protection plan.

A leader in the South African market, Barclays Bank gave up its position and pulled out of the country when an anti-apartheid boycott campaign saw its share of the UK student market plummet. Half the students holding accounts with Barclays Bank withdrew their accounts.

When Shell Oil Company decided to dispose off an old oil drill rig named Brent Spar by sinking it in the North Sea, it faced a series of boycotts of its petrol stations all over Europe. In spite of being backed by the British government, the company had to eventually abandon its plan.

Carpet makers in India, Nepal and Pakistan were singled out by the western press and severely criticised for “employing” children at the cost of their health, education & childhood. It resulted in the creation of “Rugmark” label, which stood for hand-knotted carpets which were not made by employing child labour.

Exxon Mobil, one of the world’s largest oil corporations, opposed moves to combat global warming and as a result faced tremendous wrath of the people. The boycott was backed by celebrities like Annie Lennox, Bianca Jagger and Anita Roddick.

Ethics – the vital question

Today, consumers do have the power to bring down businesses to their knees. Today, more than ever before, people can be united easily – thanks to the Internet and free flow of information. People, especially youngsters, are getting more and more informed. It is these customers who initiate most of the boycotts and make them successful. They boycotted Adidas for using Kangaroo skin in the boots. These informed educated people urged everyone to boycott Gap if it did not stop its unethical practices. It accused Starbucks of selling overpriced coffee and not giving back to the farmers who grew the coffee in poor starved countries like Ethiopia their due. It’s these people who are asking for a boycott of Barclays for financing the Narmada Dam in India, which would flood one of India’s most productive agricultural regions and forcibly displace two million people.

The consumer is changing. Traditional purchasing behaviour is changing. He is no more looking for just a good bargain, but is concerned about how the product is made too. Ethical consumerism is on the rise and a boycott is his most powerful weapon. It’s easy to organise a unified protest aided by the Internet. Boycotts in the past have changed history forever… and they can do so now as well… maybe even more easily with the help of the virtual army.

So business houses need to be careful, for today’s consumer can really hurt their finances, profits, share prices and peace of mind. He has the power to hit where it hurts.