Social Contract Theory in a Global Marketing Context

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  • 1. SOCIAL CONTRACT THEORY IN A GLOBAL MARKETING CONTEXT Emily Rich MKT 350 Southern New Hampshire University
  • 2. International vs. Global Marketplace Markets do not exist in a state of nature. They are social constructs, with defined customs and regulations that are established through political struggle and compromiseUntil recently, the politics of the global economy has been largely viewed as international, i.e., focussed on the questions of which nation gets what, with the central conflict between countries that are rich and poorThere is no political constitution to match the growing global market. Jeff Faux, October 25th 2000
  • 3. Variations on Social Contract Theory Thomas Hobbes The natural state for man is one outside of government rule. The social contract begins when two (or more) parties compromise and concede individual rights to one another. Jean-Jacques Rousseau Obedience to a selfprescribed law is liberty (de la Parra, 2010). Citizens must take action in building the ruling organization. The general will occurs when citizens work together toward the good of the collective.
  • 4. Variations on Social Contract Theory Immanuel Kant Combined with the general will, an original contract suggests that consent to be governed and the will of the sovereign is implicit for all those in the society as they created the governing body. Suggests that no law may be declared which, a whole people could not possibly give its consent to (Rousseau, qtd. in Rauscher, 2012). John Rawls Creates an original position and veil of ignorance to create an objective vacuum to which one may make an impartial moral judgment (Murphy, et al., 2004). Establishes the Liberty Principle and Difference Principle Liberty Principle each person must have a same equal right to the most extensive basic liberty compatible with a similar liberty for others (Murphy, et al., 2004). Difference Principle - suggests that social and economic equalities are to be arranged so that they are to the greatest benefit of the most disadvantaged and that no actions should be taken which would in any way harm those who are disadvantaged (Murphy, et al., 2004).
  • 5. Variations on Social Contract Theory David Gauthier Assumes men have no natural reason for compromise other than for self-service. Prisoners Dilemma Two distinctive contracts are integrated: Assumes that when there are two parties, each controlled by a third, they will each sell the other out in attempt to reduce their own sentence. Thomas Donaldson & Thomas Dunfee Instead, they should work together against the third to reduce both sentences beneath the singular threshold. Compliance Problem An issue of rational compliance with accepted norms. Solved by minimax relative concession a theory that should the concessions suffered by each party be perceived as equal, they will both be able to most effectively minimize concessions and maximize utility (Cudd, 2013). 1st The global community should work together to find a rational arrangement for ethics in economic life. 2nd - business groups or other entities should have moral free space so they may keep their moral options open until they confront the full context and environment of a decision (Murphy, 2004). Hypernorms Universal norms used as a standard for all other norms.
  • 6. Delineation of Stakeholders Primary stakeholders may include employees, customers, stockholders, and managers of the company. Secondary stakeholders include the government, the companys competition, the community, media, nongovernmental organizations, and society as a whole.
  • 7. Issues in Research The Three Norms of Western Society 1. 2. 3. The right of selfdetermination within the law (informed consent) The obligation of a fiduciary to protect the welfare of a beneficiary The fiduciarys obligation to be trustworthy for social stability reasons (Smith, et al., 2009)
  • 8. Issues in Production Companies must have Corporate Social Responsibilities and must fulfill them in their actions.
  • 9. Issues in Sales and Marketing Important Considerations The company must be profitable. There is a responsibility held to the consumer of the product. Salespeople must be culturally aware. The company must remember the responsibility to society as a whole.
  • 10. Solutions and Building an Ethical Code A company should begin by establishing its own Code of Ethics. After an ethical code is established, consideration should be taken to determine a method to best create mutual codes with business partners. The business should never deal below their own standard, though some consideration should be taken toward cultural norms. If the company has a policy against bribery, for example, they should consider their stance regarding gifting in foreign areas.
  • 11. Suggested Metrics for Ethical Judgments Texas Instruments Method 1. 2. 3. Are we complying with all legal requirements on a local level? Are there business practices or requirements at the local level which impact how we interact with co-workers in other parts of the world? Do some of our practices need to be adapted based on the local laws and customs of a specific locale? On what basis do we define our universal standards that apply to TI employees everywhere? (2008 Corporate Citizenship Report) Laczniak Test 1. Does the contemplated action violate the law? (The legal test) 2. Is this action contrary to widely accepted moral obligations? (The duties test) 3. Does the proposed action violate any other special obligations that stem from this type of marketing organization? (The special obligations test) 4. Is the intent of the contemplated action harmful? (The motives test) 5. Is it likely that any major damages to people or organizations will result from the contemplated action? (The consequences test) 6. Does this action enhance the ideal of a moral community, and is it consonant with what the marketing organization wants to be? (The virtues test) 7. Does the contemplated action infringe upon property rights, privacy rights, or the rights of the consumer? (The rights test) 8. Does the proposed action leave another person or group less well off? Is this person or group already a member of a relatively underprivileged class? (The justice test) (Murphy, et al., 2004)
  • 12. Conclusion By striking an ethical code with the other members, a company may use a combination of all the previously mentioned theories. The two (or more) members of the agreement could work together to create a mutually beneficial arrangement. It requires Rousseaus consent, Donaldsons establishment of norms, Kants general will, and Rawls liberty principle, all under Gauthiers presupposition that two parties who work together will achieve the greatest net good.
  • 13. References 2008 corporate citizenship report. (n.d.). Retrieved from http://www.ti.com/corp/docs/csr/corpgov/ethics/market.shtml Auchter, L., & Dziewa, M. (2013). Managing business values in a globalized economy by isct (integrated social contract theory) - a comparative study. (Master's thesis)Retrieved from http://www.abrmr.com/myfile/best_track/best_track_73434.pdf Bradley, J. (2013). Social contract theories in business. Retrieved from http://smallbusiness.chron.com/social-contract-theories-business-59955.html Cudd, A. (2013). Contractarianism. In E. Zalta (Ed.),Stanford Encyclopedia of Philosophy. Stanford, California: Retrieved from http://plato.stanford.edu/archives/win2013/entries/contractarianism/ de la Perra, O. (2010). Rousseau's social contract and a theory for global citizenship. (Master's thesis)Retrieved from http://www.academia.edu/1437363/Rousseaus_Social_Contract_and_a_Theory_for_Global_Citizenship Donaldson, T., & Dunfee, T. (1994). Toward a unified conception of business ethics: Integrative social contract theory. The Academy of Management Review, 19(2), 252-284. Retrieved from http://www.jstor.org.ezproxy.snhu.edu/stable/258705 Dunfee, T., Smith, N., & Ross, W. (1999). Social contracts and marketing ethics. Journal of Marketing, 63,14-32. Retriev