Even as governments, civil societies and businesses are trying their best to tackle the Covid-19 crisis, some sellers are not shying away from making money out of the suffering. Sample this: even though the Centre rightly banned the export of masks by mid-February, the country ran into a shortage of masks as the corona scare started peaking. There were reports that a few companies withdrew hand sanitizers from the market citing quality issues to create supply shortage and a spike in demand.
The demand for hand sanitizers saw a 10-fold jump last month, and prices increased almost three-fold. The rise in rates forced authorities to declare masks and sanitizers essential commodities for the next 100 days and invoke the Disaster Management Act to ensure price regulation and availability. Skyrocketing prices of hand-sanitizers on its website forced Amazon India to take a tough stand against predatory sellers. It sent a notice to sellers, citing its fair pricing policy: “Sell the largest section at the lowest price".
Similar incidents were reported from other sectors as well. When some private airport operators wanted to levy an additional fee on the flyers to make up for the loss during the outbreak, the International Air Transport Association (IATA) had to intervene to keep them at check. The stand by Amazon and IATA highlights the importance of having high moral and ethical business standards during a crisis.
For greater common good
A famous case study from Merck & Co, which is taught across business schools, offers a great example of business ethics. When the company found a cure for river blindness — an eye and skin disease caused by a worm — at a development cost of more than $100 million, it was evident that the market for this medicine existed in poor countries where patients could not afford it. But greater common good outweighed profits and Merck gave the drugs away for free.
Covid-19 offers such an opportunity. We have seen some businesses giving back to their employees during these difficult times. Darden Restaurants extended sick leave protection to 190,000 workers, including those paid by the hour. Unicharm, a healthcare products maker from Japan, ordered remote working for all its employees except the production factory workers so that masks could be produced. In India, the Tata Group has promised all its temporary and daily-wage earners full pay for March and April.
The gig economy has taken a big hit during the Covid-19 outbreak. Gig workers — food delivery personnel, etc. — enjoy no safety nets. Given that these workers work very close to the line, without sick leaves, earning low-wages and interacting with strangers at greater levels, they are more vulnerable to Covid-19. Most of these ‘delivery partners’ of multinational gig giants do not get medical coverage or health insurance. So, it is imperative for these companies to step up efforts to ensure the safety and health of their ‘partners’. The corporates must come forward now and be seen responsible.
In this context, the government’s recent move to consider the healthcare spends of private companies as CSR is a welcome move. Given the gravity of the situation, it does not matter whether such initiatives are done as a brand-building exercise or for social good. What matters is that more such efforts are needed to help the society and the needy to stay safe during the pandemic.
Ethics, not capitalism, will yield profits in the long run. When Roy Vagelos, CEO of Merck, was asked why the company invested so much into a project that makes no money, he responded: “People will remember” and will reciprocate. The world needs more such companies today to fight the global pandemic.
The writers are with IIT-Madras. The views are personal