Ethics & Social Responsibility CHAPTER 3 Ethics & Social Responsibility

3-1 Determinants of a Civil Society Ethics Laws Formal & Informal Groups Self-Regulation Media Active Civil Society

3-2 The Concept of Ethical Behavior Ethics are the unwritten rules that guide interactions Balance between a business’s need to produce profit against its desire to operate honestly

Ethical Theories Deontology Utilitarianism Casuist Moral Relativism Virtue Ethics 3-2

Deontology duty to follow one’s obligation to an individual or society consistent decisions flaw: conflicting obligations= unclear ethically correct solution 3-2

Utilitarianism greatest good, for the greatest amount of people use point system two types: act utilitarianism: adheres to the exact definition rule utilitarianism: considers the law and fairness; values justice and doing good simultaneously flaw: we are not able to predict the future, inability to compare everything on the same scale 3-2

Casuist uses current ethical dilemmas and their outcomes as a reference uses others’ experience finds other extreme situations to find a compromise flaw: may not be a current situation to compare to Ethics can be seen as the standard of behavior by which conduct is judged; they are the unwritten rules that guide our behavior. Five ethical theories that apply to marketing are deonotology, utilitarianism, casuist, moral relativism, and virtue ethics. It is with these five theories that can be used in making decisions in ethical dilemmas. They each have their strengths, along with their weaknesses. 3-2

Moral Relativism no absolute rules must weigh the consequences find the lesser evil circumstances can justify actions flaws: there is no absolute rule 3-2

Virtue Ethics Aristotle and Plato training required to solve ethical dilemmas virtues used as tools 3-2

3-3 Ethical Behavior in Business Morals: The rules people develop as a result of cultural values and norms moral standards may also reflect the laws and regulations that affect social and economic behavior 3-3

How do you develop a personal set of ethics? Examine the consequences Stress the importance of rules Develop a moral character 3-3

Three Different developments of Moral Character Preconventional Morality Conventional Morality Postconventional Morality 3-3

What factors influence Ethical Decision Making? Extent of ethical problems within the organization Top managements actions on ethics Potential Magnitude of the Consequences Social Consensus Probability of a harmful outcome Length of time between the decision and the onset of the consequences Number of people to be affected 3-3

Code of ethics A guideline to help marketing managers and other employees make better decisions 3-3

Ethics in Other Countries Foreign Corrupt Practices Act: a law that prohibits U.S corporations from making illegal payments to public officials of foreign governments to obtain business rights or to enhance their business dealings in those countries 3-3

3.4 Corporate Social Responsibility Corporate Social Responsibility is a business’s concern for society’s welfare Managers that consider long-range interests of the company and the company’s relationship to society 3-4

3.4a Stakeholders and Social Responsibility The Stakeholder Theory: says that social responsibility is paying attention to the interest of every affected stakeholder in every aspect of the firm’s operation. 3-4

3.4a Stakeholders and Social Responsibility Pyramid of Corporate Social Responsibility CSR 4 components: 1. Economic 2. Legal 3. Ethical 4. Philanthropic 3-4

3.4a Stakeholders in a Typical Corporation Employees Management Customers Local Community Suppliers Owners 3-4

3-5 Corporate Social Responsibility (CSR) Divisive issue Increasing number of supporters Business don’t act responsible, new regulations and fines Profitable 3-5

Sustainability Social Responsibility Focus: acting with long term consequences in mind & managing its business Required: product & service innovation and building customer loyalty Integrate long-term: economic, environmental & social factors 3-5

Growth of Social Responsibility Growing worldwide Demanding more socially responsible UNGC impact 3-5

Green Marketing Definition Help the bottom line Ben & Jerry’s Toms Shoes 3-5

3.6 Cause-Related Marketing Cause-related Marketing (Cause Marketing): The cooperative marketing efforts between a for profit firm and a non profit organization · Efforts for social or other charitable causes · Not based on a straight donation. · Good public relations and stimulates sales of the brand · Huge growth can lead to consumer cause fatigue 3-6

3.6 Cause-Related Marketing Example of Cause-Related Marketing: · Whirlpool donated a range and refrigerator to every home built by Habitat for Humanity for a year. 3-6