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Chapter 18

BU354 Chapter Notes - Chapter 18: Corporate Social Responsibility, Marketing Ethics, Consumerism


Department
Business
Course Code
BU354
Professor
Chet Robie
Chapter
18

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BU352
CHAPTER 18- ETHICS AND SOCIALLY RESPONSIBLE MARKETING
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THE SCOPE OF MARKETING ETHICS
Business ethics: refers to a branch of ethical study that examines ethical rules and
principles within a commercial context, the various moral or ethical problems that might arise
in a business setting, and any special duties or obligations that apply to persons engaged in
commerce
Marketing ethics: refers to those ethical problems that are specific to the domain of
marketing
o Anyone involved in marketing activities must recognize the ethical implications of their
actions
o Can include social societal issues, such as the sale of products or services that may
damage the environment; global issues, such as the use of sweatshops and child
labour; and the individual consumer issues
ETHICAL ISSUES ASSOCIATED WITH MARKETING DECISIONS
People in marketing interact directly with the public
Because marketing function interacts with so many entities outside the firm on a regular basis,
it has a tremendous opportunity to build the public’s trust
Creating an Ethical Climate in the Workplace
Ethical climate: the set of values within a marketing firm, or in the marketing division of any
firm, that guides decision making and behaviour
Values
o Establish
o Share
o Understand
Rules
o Management commitment
o Employee dedication
Controls
o Reward
o Punishment
Everyone within a firm must share the same understanding of values and how they translate
into the business activities of the firm
They must share a constant language to discuss them
Once the values are understood, the firm must develop a set of explicit rules and implicit
understandings that govern all the firms transactions
The Influence of Personal Ethics
Why People Act Unethically
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Every individual is a product of his/her culture, upbringing, genes, and various other
influences
Everyone varies in the ways in which we view situations, depending on our own level of
understanding of ethical dilemmas
In many cases, people must choose between conflicting outcomes
When asked if they had seen their employees engaging in unethical behaviour; companies
answered with
o Employees participating in high-pressure, misleading, or deceptive sales tactics (45%)
o Misrepresenting company earnings, sales, and/or revenues (35%)
o Withholding or destroying information that could hurt company sales or image (32%)
o Conducting false or misleading advertising (31%)
Marketers are often faced with the dilemma of doing what is beneficial for them and possibly
the firm in the short run, and doing what is right and beneficial for the firm and society in the
long run
To avoid these ethical consequences, the long-term goals of the firm must be aligned with
the short-term goals of each individual within the firm
Corporate Social Responsibility
Corporate social responsibility: refers to the voluntary actions taken by a company to
address the ethical, social, and environmental impacts of its business operations and the
concerns of its stakeholders
For a company to act in a socially responsible manner, the employees within the company
must also maintain high ethical standards and recognize how their individual decisions lead to
the collective actions of the firm
It is important to distinguish between ethical business practices and corporate social
responsibility programs
Ideally, firms should implement programs that are socially responsible and employees should
act in an ethically responsible manner
The worst situation is when firms behave both unethically and in a socially irresponsible
manner
Consumers and investors increasingly appear to want to purchase products and services from
and invest in companies that act in socially responsible ways
Being a socially responsible corporation does not ensure that all members of the firm or all
subunits within it will act ethically; rather it means only that the firm is committing time and
resources to projects in the community that may not directly relate to generating profit
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