Chapter 4 Flashcards
ethics
the moral principles and values that govern the actions and decisions of an individual or group
laws
societal standards & values that are enforceable in a court of law
Ethics vs. Laws
- Ethics: your personal principles and values
- Laws: society’s values & standards
4 possible reasons for the present state of ethical conduct in the US
- Increased pressure on business people to make decisions in a society characterized by diverse value systems
- Growing tendency for business decisions to be judged publicly by groups w/ different values/interest
- Public’s expectations of ethical business behavior has increased
- Ethical business conduct may have declined
4 Factors That Influence Ethical Marketing Behavior
1) societal culture and norms
2) business culture and industry practices
3) corporate culture and expectations
4) personal moral philosophy and ethical behavior
Societal Culture
Understands moral behavior in business activities
-serves as a socializing force that dictates what’s morally right & just
Ex: UPS-Although languages/cultures around the world may be different, we do not change our ethical standards
Business Culture
Consists of the effective rules of the game, the boundaries b/w competitive & unethical behavior, & the codes of conduct in business dealings
-Affects ethical conduct both in the exchange relationship b/w sellers & buyers and in the competitive behavior among sellers
Ethical exchanges
exchanges between sellers and buyers should result in both parties being better off after a transaction
caveat emptor
let the buyer beware
Consumer Bill of Rights
Created by JFK & codified the ethics of exchange b/w buyers/sellers
the right to safety
the right to be informed
the right to choose
the right to be heard
Right to Safety
Safety standards for products sold in the U.S
Right to be informed
marketers have an obligation to give consumers complete and accurate information about products and services
Right to choose
Variety of products
Right to be heard
consumers should have access to public-policy makers regarding complaints about products and services
Two kinds of unethical behavior
economic espionage
corruption
- Economic Espionage
Secret collection of trade secrets/proprietary information about a company’s competitors
-ILLEGAL/UNETHICAL & carries serious criminal penalties for the offending individual/business
Ex: Illegal trespassing, theft, fraud misrepresentation, electronic hacking, etc
- Corruption
Unethical conduct by a person entrusted w/ a position of authority, often to acquire a personal benefit
Ex: Bribes, kickbacks, & graft
-most common jn B2B & gov marketing
Corporate Culture
the set of values, ideas, and attitudes that is learned and shared among the members of an organization
-Defined by corporate ethics code & ethical behavior of top man/co workers
Code of Ethics
a formal statement of ethical principles and rules of conduct
-Ethics codes addresses contributions to gov officials/political parties, customer/supplier relations, conflicts of interest, accurate record keeping
Whistleblowers
employees who report unethical or illegal actions of their employers
Personal Moral Philosophy
a person’s view of how he or she should behave
Moral Philosophy
principles, rules, and values people use in deciding what is right or wrong
-learned through the process of socialization w/friends, family, & formal education
2 Types of Personal Moral Philosophies
- moral idealism
- utilitarianism
moral idealism
individual rights or duties as universal, regardless of the outcome
Ex: draw the line, there are rights & that’s it
Utilitarianism
Emphasis on the greatest good for the “greatest number of people” (cost/benefit trade off)
Ex: doing a wrong if it benefits a lot of people
Corporate Social Responsibility
organizations are part of a larger society & are accountable to that society for their actions
3 Concepts of Corporate Social Responsibility
1) profit responsibility
2) stakeholder responsibility
3) societal responsibility
profit responsibility
holds that companies have a simple duty: to maximize profits for their owners or stockholders (make money)
stakeholder responsibility
focuses on the obligations an organization has to those who can affect achievement of its objective including consumers, emps, suppliers, distributors
societal responsibility
refers to obligations that organizations have (1) to the preservation of the ecological environment and (2) to the general public
Triple Bottom Line
People, planet, profit
recognition of the need for organizations to improve the state of people, the planet, and profit simultaneously if they are to achieve sustainable, long-term growth
Sustainable Marketing
seeks to meet today’s (global) economic, environmental, and social needs without compromising the opportunity for future generations to meet theirs
green marketing
marketing efforts to produce, promote, and reclaim environmentally sensitive products
cause marketing
occurs when the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of one of its products
Social Audit
a systematic assessment of a firm’s objectives, strategies, and performance in terms of social responsibility
Social Audit Steps
1) recognition of responsibility
2) identification of a mission
3) determination of priorities
4) specification of resources
5) evaluation of results
sustainable development
involves conducting business in a way that protects the natural environment & embraces diversity, equity, & inclusion in its business practices while making economic progress
unethical consumer behavior is influenced by
1) A belief that a consumer can get away with the act & it’s worth doing
2) the rationalization that the act is justified/driven by forces outside the individual (people)
Even though consumers are sensitive to ecological issues they
1) may be unwilling to sacrifice convenience & pay higher prices to protect the environment
2) lack the knowledge to make informed decisions dealing w/ the purchase, use, disposition of products
Greenwashing
the exaggerated or false marketing of a product, good, or service as environmentally friendly
