1. The “Fair Trade” logo on food products indicates that the farmers at the company received a “fair wage” for their work through the higher prices that are charged for the product. Thus, fair trade is an ethical issue.
Fair trade has some competitive advantages. First, product with the “Fair Trade” logo has a higher price. Second, the farmers are allowed to deal directly with the wholesaler, eliminating as many as five different intermediaries that could include a local buyer, a miller, an exporter, a shipper, and an importer.
However, there are potential problems with fair trade. Critics of the Fair Trade Program state that the farmers are no the beneficiaries of the additional profit but, rather, the distributors and the retailers receive the additional revenue. How to make sure that the additional money goes to the farmers becomes a problem.
2. Stakeholders are defined as any group or individual that has a vested interest in the operations of the firm. Traditional stakeholders for a firm include employees, suppliers, stockholders, customers, the government, local communities, and society as a whole.
Employees must be encouraged to relay relevant information pertaining to ethical conduct to the management of the firm. Suppliers help firm reduce cost. Stockholders establish expectations about corporate performance. Customers experience the effects of corporate behaviors.
3. Corporate reputation is not just “nice” to have but can add