Major Essay 4: An Open Letter to the CEO of Rolex

How companies are so blinded by profits and how consumers have "Blind Trust" in the destinations of their money.

How companies are so blinded by profits and how consumers have “Blind Trust” in the destinations of their money.

Introduction

This assignment was to write an open letter to a business and address an issue that I, as a customer, have encountered. I chose to address Mr. Marini, the CEO of the watch company Rolex, and the company’s potentially unethical practices. Rolex does not release any inside information about it’s credentials, so this lack of transparency raises questions about where the enormous profits are going. With a powerful position as CEO, Mr. Marini has the authority to manipulate and redistribute the income. If he is receiving an unfair share of the money, I suggest that he pay workers more as to avoid the creation of divisions and inequality within the the company’s structure and society in general.

After reading “The Price of Inequality” by Joseph Stiglitz for my Sociology class, America’s growing inequality between the 1% and the 99% led me to worry about Switzerland. Many CEOs corrupt their corporations via secrecy, so I warn Mr. Marini of the potential for a growing problem if his practices are unethical.

The target audience for this letter consists of people who have ever shopped in Geneva and encountered ridiculous prices for Swiss watches. Or anyone who is aware of the growing inequality, especially in the U.S., and of corporate corruption. This might include sociologists, economists, etc.

I think I included sufficient rhetorical descriptions that contain emotional appeal while building common ground with the audience and giving them a sense of credibility through my personal experiences. I hope this letter is convincing enough for companies of all sorts to realize the risks of their fraudulent activities.

Dear Mr. Marini,

I am aware of the fact that the company you own, Rolex, is based in Geneva, Switzerland, which is my hometown. I have grown up in a city where watches dominate the industry and influence the culture. People from all around the world associate Switzerland with watch making and it’s famous brands. But even with all of this repute, regarding your luxury brand Rolex in particular, which is Geneva’s largest employer, the prices of your watches are ridiculously and unnecessarily inflated. And since your company is not transparent regarding it’s credentials, nobody on the outside knows where all of this money is going. This leads me to the worry of increasing inequality in society between the very wealthy and the portion of the population that is less so.

Let us start off with the basics. Geneva, Switzerland is an expensive city. There is no dodging that fact. However, it is all relative for it’s residents: high salaries generate pricey goods and services, along with a top-notch lifestyle. So great: powerful people in businesses and wealthy residents most likely have the capacity of splurging on Rolex watches. But this leaves out the majority of it’s population, and even more so tourists. People who visit Switzerland will of course be impressed with its watch industry and will almost certainly engage in window-shopping in Geneva’s old town, where Swiss-made watch retailers are sprawled all over the streets. These people may be surprised by the prices of these watches if they choose to inquire about them. And if this were to happen, deceit along with the rendering of sparkly watches to eye-candy will take place almost instantaneously. People will still be wildly impressed by these artistic masterpieces, but in an unattainable, hopeless sort of way. I mean, Rolex’s most expensive watch had a retail price of just under half a million dollars. Does that not sound ridiculous to you in the slightest?

Referring to one of my personal experiences regarding watches, after I graduated from high school I went shopping for watches with my dad and I was shocked by the prices of some of the brands. It is understood that Swiss watches are generally of excellent quality, but even if they are fabricated with expensive materials, such as gold and diamonds, there is no possible way that they are worth that much. I understand that as a company and business you have to make profits with your sales, but the money it takes to manufacture a given watch is only a mere sliver and fraction of the selling cost. Where does all of this immense extra profit go? This is where the problem lies: the secrecy and lack of transparency of your company.

With less transparency, CEO’s and other people in powerful positions can manipulate and control the money and the customers. Rolex doesn’t release any inside information regarding the company’s credentials, most likely to protect the company in the face of competition. Without transparency, the general public is unable to obtain the knowledge of the destinations of all of your profits. This secrecy makes it seem like your company is hiding something, which raises questions throughout consumers. But my guess is, with a powerful position such as yours, CEOs generate an unfair portion of the income.

I know that this might not be a prevalent concern in Switzerland today, but inequality on a general and global scale is increasing. Most of this inequality originates from the growing disparity between the rich elite and the lower classes. Take a look at the U.S. for example. The difference between the 1% and the 99% is now a primary and fundamental concern for the country. The gap is widening as more and more people are getting pushed down to the bottom and the middle class is disappearing. This shift is in part due to the rich people among the 1%, such as CEOs, who exploit the profits of their companies, sometimes in the form of secrecy and rent seeking[1]. Don’t get me wrong; I am not accusing you of such practices. But Rolex’s inflated retail prices and lack of company transparency generates suspicion, which leads to worry in some of our eyes, since I am sure the Swiss do not want to create a level of inequality similar to America’s 1% problem. In America’s case, the 1% does not necessarily make the largest contributions towards society; people in lower classes may well be working harder and providing more benefits to society than people in higher positions earning far greater salaries. This pitiful truth affects me because families struggle to provide and take care of their children, as parents are working lengthy and tiring days. How does this impact you, you may ask? The lower classes spend a higher percentage of their incomes than higher classes, so when workers receive lower incomes, less spending will go towards these businesses and will slow down the drive of the economy. Therefore, businesses such as Rolex will be hurting themselves by creating a big gap between the salaries of workers and those of CEOs.

What I am exaggerating, Mr. Marini, is that Rolex’s lack of transparency and secrecy raises suspicious questions throughout consumers and the larger population. Economic manipulation does occur in society today, specifically in the USA. CEOs, such as yourself, have the power and authority to alter the company’s rankings and distributions. CEOs are therefore able to obtain a much larger share of the profits in comparison to workers. This creates a clear divide between workers and manager. Therefore, greater inequality within the system of the workplace is present, which also has an effect on the inequality of society as a whole.

A suggestion to fix this concerning problem is to pay your workers a larger share of Rolex’s profits, so as to reduce the difference between your income and theirs. This will generate more equitable company dynamics and will contribute to and maintain a fair society.

Stop the suspicion. Quit the secrecy. Show the equality.

I thank you for taking the time to read my letter.

Neila Fraiha.


[1] Obtaining economic gain without reciprocating benefits back to society through wealth creation.

Works Cited

Balfour, Michael. “It all Started on the Top Deck of a Bus ROLEX: Michael Balfour Reports on the Humble Beginnings of a Glamorous Brand that Sells 750,000 Watches a Year and Operates in 100 Countries.” Financial Times: 10. Nov 13 2004. ProQuest. Web. 10 Nov. 2013. http://search.proquest.com.proxy.lib.umich.edu/docview/249561495/14198A614526802C455/2?accountid=14667

Balfour, Michael. “Rolex: Secretive and Powerful, a Canton within a Canton.” FT.com (2010) ProQuest. Web. 10 Nov. 2013. http://search.proquest.com.proxy.lib.umich.edu/pqrl/docview/229301040/14198635D6421892D57/2?accountid=14667

Stiglitz, Joseph E. The Price of Inequality. N.p.: W. W. Norton & Company, 2012. Print.

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