When news broke out regarding Amazon's harsh work conditions, numerous current and former employees were not surprised by the picture that was painted of the e-commerce giant. The testimonials paint a portrait of a culture in which people are subjected to suboptimal work conditions that leave many feeling exhausted and overly stressed. One employee described it as "purposeful Darwinism."
Publications around the world were quick to criticize Amazon for mistreating its employees and people threatened to boycott the company until it changed its practices. Both of these reactions are especially ironic considering the Amazon we see today--with all of its flaws--is one that we, the consumers, created. Almost every one of the people criticizing the company would be furious if they had to pay full retail price for their Amazon purchases. As the e-commerce industry is becoming commoditized, competing on price suddenly becomes a priority for retailers and a deciding point for consumers.
We are currently living in what Seth Godin calls a "race to the bottom:" a phase where companies are seeking to squeeze every penny out of every market. They do this because their competitors want to drive their costs to zero so that they will be the obvious commodity choice. As consumers, we fuel this ungodly race by wanting all of it-- fast and cheap and now.
Craig Smith, Insead Chair in Ethics and Social Responsibility, makes the point that customers are not an homogeneous group; they fall into three distinct segments. The first (and smallest) group "cares very strongly about sustainability issues" and often presses companies to treat their partners fairly and ethically. When companies fail to do so, this group is quick to boycott them and move their dollars elsewhere.
The second group is much larger, and doesn't have a "real understanding of sustainability." While they are not engaged directly with ethics or honesty practices, they put their trust in companies and are only swayed when companies betray their trust. The third group, which is probably the biggest of all, simply does not care. They want their products fast and cheap with little regard to how it is made. While there is a shift in behavior towards companies with sustainable and ethical practices, the choice is not yet reflected in how people spend their dollars.
While Amazon could do more to treat its employees better and create a positive working culture, this episode is merely a symptom of a much larger problem. If you have a problem with the working conditions at Amazon (and other giant companies), remember that every dollar you spend there is a vote for the company to continue on the same path. Insisting on paying as close to COGS as humanly possible is not only dangerous, it hastens the "race to the bottom" and disregards ethics and sustainable practices.
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Publications around the world were quick to criticize Amazon for mistreating its employees and people threatened to boycott the company until it changed its practices. Both of these reactions are especially ironic considering the Amazon we see today--with all of its flaws--is one that we, the consumers, created. Almost every one of the people criticizing the company would be furious if they had to pay full retail price for their Amazon purchases. As the e-commerce industry is becoming commoditized, competing on price suddenly becomes a priority for retailers and a deciding point for consumers.
We are currently living in what Seth Godin calls a "race to the bottom:" a phase where companies are seeking to squeeze every penny out of every market. They do this because their competitors want to drive their costs to zero so that they will be the obvious commodity choice. As consumers, we fuel this ungodly race by wanting all of it-- fast and cheap and now.
Craig Smith, Insead Chair in Ethics and Social Responsibility, makes the point that customers are not an homogeneous group; they fall into three distinct segments. The first (and smallest) group "cares very strongly about sustainability issues" and often presses companies to treat their partners fairly and ethically. When companies fail to do so, this group is quick to boycott them and move their dollars elsewhere.
The second group is much larger, and doesn't have a "real understanding of sustainability." While they are not engaged directly with ethics or honesty practices, they put their trust in companies and are only swayed when companies betray their trust. The third group, which is probably the biggest of all, simply does not care. They want their products fast and cheap with little regard to how it is made. While there is a shift in behavior towards companies with sustainable and ethical practices, the choice is not yet reflected in how people spend their dollars.
While Amazon could do more to treat its employees better and create a positive working culture, this episode is merely a symptom of a much larger problem. If you have a problem with the working conditions at Amazon (and other giant companies), remember that every dollar you spend there is a vote for the company to continue on the same path. Insisting on paying as close to COGS as humanly possible is not only dangerous, it hastens the "race to the bottom" and disregards ethics and sustainable practices.
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