Chapter 5 Ethical Issues in Services Marketing
FACTORS CONTRIBUTING TO CONSUMER VULNERABILITY Few search attributes Technical and specialized services Time lapse between performance and evaluation Sold without guarantees and warranties
FACTORS CONTRIBUTING TO CONSUMER VULNERABILITY Performed by boundary-spanning personnel Accepted variability in performance Outcome-based reward systems Consumer participation in production
METHODS FOR ETHICAL DECISION MAKING Teleology Act is morally acceptable if it produces some desired result. Form of consequentialism--morality of decisions are based on their consequences.
METHODS FOR ETHICAL DECISION MAKING Types of Teleology Egoism--acts that benefit the individual’s self-interest. Utilitarianism--acts that maximize total utility--the greatest good for the greatest number of people.
METHODS FOR ETHICAL DECISION MAKGING Deontology The inherent rightness or wrongness of an act guides behavior, regardless of the outcome. Believes that there are some things people should never do. Relativism The correctness of decisions is thought to change over time. Uses others to judge the ethicality of decisions.
ISSUES THAT CREATE ETHICAL CONFLICT Conflict of Interest Organizational Relationships Honesty Fairness Communication
FACTORS THAT INFLUENCE ETHICAL DECISION MAKING Cognitive Moral Development Personal Values Corporate Culture Cultural Differences Organizational Structure
FACTORS THAT INFLUENCE ETHICAL DECISION MAKING (continued) Opportunity Reward Systems Significant Others Competitive Environment Changes in Technology
COGNITIVE MORAL DEVELOPMET STAGES “Right” is based on rules and authority. Stage 2: “Right” is based on one’s own needs or another’s in terms of what is fair. Stage 3: The individual focuses more on others as opposed to personal gains.
COGNITIVE MORAL DEVELOPMENT STAGES “Right” is based on the individual’s duty to society. Stage 5: “Right” is based on basic rights, values, and legal contracts. Stage 6: “Right” is a set of universal ethical principles that everyone should adhere to.
THE EFFECTS OF ETHICAL MISCONDUCT Personal Effects Job-related tension Frustration Anxiety Ineffective performance Turnover intentions Lower job satisfaction
THE EFFECTS OF ETHICAL MISCONDUCT Organizational Effects Customer dissatisfaction Unfavorable word-of-mouth publicity Negative image for firm and industry
STRATEGIES FOR CONTROLLING ETHICAL DECISION MAKING Employee socialization Standards of conduct Corrective control Leadership training Service/product knowledge Observing employee performance Stress long-term customer relationships