1. Social Responsibility in Strategic Planning
Marketing Ethics and
Social Responsibility in
Strategic Planning
1st Group
Ary Suryo W
Masruroh

2. The Auto Industry Tries to Go Green
Car manufacturers have gone to great lengths to promote hybrid cars.
These cars are generally much more expensive to develop and produce. Do corporations have a social responsibility to develop environmentally friendly cars? Why or why not?

3. The Role of Ethics and Social Responsibility in Marketing Strategy
Grown in importance recently
Due to firms having problems in this area
Have become necessities due to:
Stakeholder demands
Changes in Federal law
Improve marketing performance and profits
Are important to development of marketing strategy

4. The Nature of Social Responsibility
The Dimensions of Social Responsibility
Social Responsibility
A broad concept that relates to an organization’s obligation to maximize its positive impacts on society while minimizing its negative impacts
Marketing citizenship
The adoption of a strategic focus for fulfilling the economic, legal, ethical, and philanthropic social responsibilities expected by stakeholders
Stakeholders
Constituents who have a “stake” or claim in some aspect of the company’s products, operations, markets, industry, and outcomes

5. The Nature of Social Responsibility (cont’d)
The Dimensions of Social Responsibility
Marketing ethics
Principles and standards that define acceptable marketing conduct as determined by various stakeholders
Cause-related marketing
The practice of linking products to a particular cause on an ongoing or short-term basis
Strategic philanthropy
The synergistic use of organizational core competencies and resources to address key stakeholders’ interests and achieve both organizational and social benefits

6. Best Corporate Citizens1
General Mills 11
AT&T 2
Cummins Inc. 12
Fannie Mae 3
Intel 13
Bank of America 4
Procter & Gamble 14
Motorola 5
IBM 15
Herman Miller 6
Hewlett-Packard 16
Expedia 7
Avon Products 17
Autodesk 8
Green Mountain Coffee Roasters 18
Cisco Systems 9
John Nuveen 19
Wild Oats Markets 10
St. Paul 20
Deluxe
Source: Peter Asmus, with Sandra Waddock and Samuel Graves, “100 Best Corporate Citizens of 2003,” Business Ethics, (accessed Oct. 24, 2003).

7. Marketing Strategy in Action
R.J. Reynolds has been accused by critics of using its “Joe Camel” cartoon character, to target children for cigarette consumption.
How has society acted to protect children from advertising such as this? What obligations do companies have to protect children?

8. The Pyramid of Corporate Social Responsibility
Exhibit 3.1

9. Social Responsibility
Includes:
Economic responsibility of making a profit
Legal responsibility of obeying laws and regulations
Ethical responsibility to uphold principals and standards
Philanthropic responsibility to increase the firm’s positive impact on society

10. Marketing Ethics and Strategy
Requires that organizations and individuals accept responsibility
Can lead to violations of public trust
Involves complex and detailed decisions in gray areas
Deals with experiences and decisions made at work
Comes into play anytime individuals feel manipulated or cheated

12. The European Eco-label

13. Social Responsibility Issues
Green Marketing
The specific development, pricing, promotion, and distribution of products that do not harm the natural environment
Green Marketing Goals
Eliminate the concept of waste
Reinvent the concept of a product
Make prices reflect actual and environmental costs
Make environmentalism profitable

14. Social Responsibility Issues (cont’d)
Consumerism
The efforts of independent individuals, groups, and organizations to protect the rights of consumers
Lobbying government officials and agencies
Letter-writing campaigns and boycotts
Public service announcements
Coverage by the news media and the Internet
Consumer “Bill of Rights”
Right to safety
Right to be informed
Right to choose
Right to be heard

15. Social Responsibility Issues (cont’d)
Community Relations
Expectations of firms as “good corporate citizens”
Philanthropic contributions to civic projects and institutions
Educational, health, cultural, and recreational
Employee volunteer participation
Employment opportunities and economic development

16. The Nature of Ethics Company Industry Government Customers
Ethical Standards
Company
Industry
Government
Customers
Interest Groups
Society
Influence Factors

17. The Nature of Ethics (cont’d)
Ethical Issues
Legal Issues
Gray
Areas

18. The Nature of Ethics (cont’d)
Ethical Issues in Marketing
An identifiable problem, situation, or opportunity requiring a choice among several actions that must be evaluated as right or wrong, ethical or unethical

20. The Challenges of Being Ethical and Socially Responsible
Business decisions involve complex decisions in which correctness may not be clear cut
e.g. Internet privacy, protecting trademarks and brand names
Ethical conflict may emerge from an inconsistency between personal values and the values held by members of the work group
Ethical issues can develop into legal problems

21. Types of Misconduct Observed in Organizations
Exhibit 3.4

22. Deceptive Practices in Marketing
Deceptive Communications and Promotion
Fraud or any false communication
Exaggerated claims or statements
Ambiguous statements
Product labeling issues
Selling abuses
Regulating Deceptive Marketing Practices
Typically regulated by:
The firms themselves
Industry and trade associations

23. Organizational Determinants of Marketing Ethics & Social Responsibility
Ethical Decision Making
Determined by an individual’s background and business colleagues
Affected by personal values, opportunity for unethical behavior, and exposure to others
Intricately tied to the firm’s culture and ethical climatea
Can only be improved by planning and structure
Likely to occur when modeled by a strong leader

24. Ethical Climate
Part of a corporate culture that relates to an organization’s expectations about appropriate conduct
The character component of an organization
Sets the tone for ethical decisions
Determines whether or not an individual perceives an issue to be an ethical issue

25. Codes of Conduct (1 of 2) Codes of Conduct (Codes of Ethics)
Formal statement that describes what an organization expects of its employees
Not an effective means of controlling ethical behavior unless integrated into daily decision making
Not effective unless the code has support of top management

26. Codes of Conduct (2 of 2)
Codes must reflect management’s desire for compliance with values, rules, and policies
Codes should have six core values:
Trustworthiness
Respect
Responsibility
Fairness
Caring
Citizenship
Codes will not resolve every issue encountered in daily operations
Codes can help managers deal with ethical dilemmas

27. Key Considerations in Developing and Implementing a Code of Ethical Conduct
Exhibit 3.5

28. Market Orientation Market Orientation
The development of an organizational culture that effectively and efficiently promotes the necessary behaviors for the creation of superior value for buyers and, thus, continuous superior performance of the firm.
Strongly tied to ethics and social responsibility
Means fostering a sense of cooperation and information exchange

29. Stakeholder Orientation
The degree to which a firm understands and addresses stakeholder demands
Strongly tied to ethics and social responsibility
Comprised of three activities:
Generation of stakeholder groups data and assessment of firm effects on these groups
Distribution of this information throughout the firm
Responsiveness as a whole to this intelligence

30. Connecting Ethics & Social Responsibility to Marketing Performance
Strong ethics causes employees to be:
Motivated to serve customers
Committed to the firm
Committed to high quality standards
Satisfied with their job
Can lead to trust among firm’s stakeholders
Is so important that it can have major negative impacts on firms that don’t uphold ethical standards

31. The Connection Between Ethics and Strategic Planning
Typically done through ethical compliance programs or integrity initiatives
Vested in the marketing plan
Based on an understanding of:
1) Risks associated with misconduct
2) Ethical and social consequences of strategy
3) Values of organizational members and stakeholders
Manifested through actions … not just words