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ABSTRACT. We argue that consumer sovereignty in an increasingly high tech world is more of a fiction than a fact. We show how the principle of consumer sovereignty that governs the societal impact of economic competition is no longer valid. The world of high tech is increasingly responsible for changes in the opportunity, ability, and motivation of business firms to compete. Furthermore, the world of high tech is increasingly responsible for changes in the opportunity, ability, and motivation of consumers to engage in rational decision making. We conclude that we cannot rely on consumer sovereignty to maintain a thriving economy. Instead, we need to develop performance standards designed to meet the demands of the various stakeholders of the organization.
Introduction
Smith (1995) has argued that consumer sovereignty should be the foundation of marketing ethics. He notes that marketing ethics has evolved from the position of caveat emptor towards caveat venditor. Early marketing practice was characterized as guided by producer sovereignty in an age of less competition. Producers' interests prevailed and consumers were expected to assume the responsibility for making the right choice (or the choice that is best for them). In other words, "let the buyer beware" was the motto of that era. In time, producers' abuses in the marketplace have caused the government as well as consumer advocacy groups to countervail producer sovereignty. This countervailing force is characterized as "consumer sovereignty." The idea is that consumers can serve society by engaging in rational decision making and wisely exercising their economic votes. They do this by shopping around for products that gives them the best value (high quality and low price). Doing so rewards competitors who develop quality innovations at low prices, thus rewarding competitors who best serve consumers.
Intuitively, two basic questions must be answered before consumer sovereignty can be accepted as the benchmark of marketing ethics. The first question, is consumer sovereignty possible, especially in an age of high tech? We will argue in this paper that consumer sovereignty is becoming increasingly difficult to operationalize in an age of high tech. The second question, is consumer sovereignty a sufficient concept for business ethics? In an age of global competition and a technology imperative, business should attempt to meet the demands of not...