Ethical Decision Making & Social Responsibility

Ethics

The moral evaluation of decisions based on commonly accepted principles of behavior; the evaluation results in an action being judged right or wrong.

The Pyramid of Social Responsibility

Potential Ethical Issues in Marketing

Factors Affecting Ethical Decision Making

Moral Values deontology teleology

Opportunity codes policies rewards/punishment

Significant Others management peers

Suggestions for Improving Ethical Behavior

Offer training programs which independently and explicitly address specific treatment of ethical issues.

Limit the opportunity to engage in unethical behavior by providing a well-developed structure and system of checks and balances, including explicit penalties for unethical behavior.

Let employees know what penalties the company imposes on those who engage in unethical behavior.

Recognize how the behavior of co-workers and superiors can influence the behavior of other employees in the organization.

Develop a code of ethics or ethical policies that are widely communicated and enforced (see next slide).

In larger organizations, develop an ethics committee to address new issues and help establish and evaluate existing codes and policies.

Eliminate the “bad apples”. Source: Ferrell, O.C. and Gareth Gardiner (1991), In Pursuit of Ethics, USA: Smith Collins.

Key Considerations in Developing and Implementing a Code of Ethical Conduct

Frequency of Misconduct andPenalties Under the FSGO

Social Responsibility

Social responsibility is an organization’s obligation to maximize its positive impact and minimize its negative impact on society.

Community Relations

Green Marketing

Understanding Social Responsibility and Ethics in a Global Business Environment

Self-Reference Criterion unconscious reference to one’s own cultural values, experiences, and

knowledge as a basis for decisions

Foreign Corrupt Practices Act makes it illegal for U.S. companies to pay bribes to foreign officials,

candidates, or political parties bribery vs extortion vs lubrication

International Environment no international law local practices condone a certain behavior favored company is one that “does what is necessary”

Tough-Minded Management and Social/Ethical Responsibility

Continuum of Managerial Authority The Tough-Minded Manager:

Accepts that risks must often be taken and that conflict is inevitable in making tough choices;

Understands that short-run losses may be inevitable and unavoidable to achieve long-run success;

Believes that the best long-run approach to business is integrity; Is aware that ethical problems may arise in the workplace, and of how ethical

decisions are usually made in the workplace; Has reached a level of moral development where economic self-interest is not

paramount, and where persona ethical values are important; Has learned that trust is the glue that holds business relationships together; Believes strongly that maintaining self-esteem and self-respect outweighs material

gain. Source: Ferrell, O.C. and Gareth Gardiner (1991), In Pursuit of Ethics, USA: Smith Collins.

Integrating Ethics & Social Responsibility into Marketing Strategy

A Planning Model