Chapter 3: Ethics and Social Responsibility

Prepared and Designed by Laura Rush, B-Books Ltd.

Copyright Cengage Learning 2012 All Rights Reserved

Learning Outcomes
LO1 Explain the determinants of a civil society

LO2
LO3 LO4 LO5 LO6

Explain the concept of ethical behavior

Describe ethical behavior in business Discuss corporate social responsibility Describe the arguments for and against social responsibility Explain cause-related marketing
Copyright Cengage Learning 2012 All Rights Reserved 2

Civil Society

Explain the determinants of a civil society.

LO1

Copyright Cengage Learning 2012 All Rights Reserved

Civil Society
Six determinants of social control: 1. Ethics 2. Laws 3. Formal and Informal Groups 4. Self Regulation 5. The Media 6. Active Civil Society

LO1

Copyright Cengage Learning 2012 All Rights Reserved

Explain the Determinants of a Civil Society

Review Learning Outcome

LO1

Copyright Cengage Learning 2012 All Rights Reserved

Ethical Behavior

Explain the concept of ethical behavior.

LO2

Copyright Cengage Learning 2012 All Rights Reserved

Ethical Theories
People usually base their individual choice of ethical theory on their life experiences

Deontology
Utilitarianism Casuist Moral Relativists Virtue Ethics

LO2

Copyright Cengage Learning 2012 All Rights Reserved

7
7

Explain the Concept of Ethical Behavior

Review Learning Outcome

Ethical conflicts for business owners, managers, customers, workers, and the communities can sometimes be resolved through the reliance on ethical theories such as deontology, utilitarianism, casuist, moral relativism, and virtue ethics.

LO2

Copyright Cengage Learning 2012 All Rights Reserved

Ethical Behavior in Business

Describe ethical behavior in business.

LO3

Copyright Cengage Learning 2012 All Rights Reserved

Ethics and Morals

Good or Bad Foundation of ethical behavior

Morals and Business Behavior Examine the consequences Stress the importance of rules

LO3

Copyright Cengage Learning 2012 All Rights Reserved

10

Ethical Development Levels

More Childlike Preconventional
Morality
Based on what will be punished or rewarded Self-centered, calculating, selfish Moves toward the expectations of society Concerned over legality and the opinion of others Concern about how they judge themselves Concern if it is right in the long run
11

Conventional Morality

More Postconventional Morality Mature LO3

Copyright Cengage Learning 2012 All Rights Reserved

Factors Influencing Ethical Decision Making

Extent of ethical problems Top-management actions Potential magnitude of consequences Social consensus Probability of harm Time between decision and consequences Number affected by the decision

LO3

Copyright Cengage Learning 2012 All Rights Reserved

12

Code of Ethics

Code of Ethics- A guideline to help marketing managers and other employees make better decisions.

LO3

Copyright Cengage Learning 2012 All Rights Reserved

13
13

Creating Ethical Guidelines

Helps identify acceptable business practices Helps control behavior internally

Avoids confusion in decision making

Facilitates discussion about right and wrong

LO3

Copyright Cengage Learning 2012 All Rights Reserved

14

LO3

Describe the Role of Ethics and Ethical Decisions in Business

Review Learning Outcome

LO3

Copyright Cengage Learning 2012 All Rights Reserved

15

Corporate Social Responsibility

Discuss corporate social responsibility.

LO4

Copyright Cengage Learning 2012 All Rights Reserved

16

Sustainability
The idea that socially responsible companies will outperform their peers by focusing on the worlds social problems and reviewing them as opportunities to build profits and help the world at the same time.

LO4

Copyright Cengage Learning 2012 All Rights Reserved

17
17

Corporate Social Responsibility: Stakeholders

Employees Management Customers Local Community Suppliers Owners

LO4

Copyright Cengage Learning 2012 All Rights Reserved

18
18

Review Learning Outcome

Discuss Corporate Social Responsibility
Philanthropic Be a good citizen. Ethical Do what is right. Legal Obey the Law.

Economic Be profitable.
LO4
Copyright Cengage Learning 2012 All Rights Reserved 19

Arguments Against and For Corporate Social Responsibility

Describe the arguments for and against social responsibility.

LO5

Copyright Cengage Learning 2012 All Rights Reserved

20

Arguments Against Social Responsibility

Businesses should focus on making a profit and leave social and environmental concerns to nonprofits Businesses dont have the expertise to deal with social issues and doing so may interfere with the primary goals of their firms

The expense of social responsibility may damage the country in the global marketplace
LO5
Copyright Cengage Learning 2012 All Rights Reserved 21

Arguments for Social Responsibility

It is the right thing to do
Business should police itself to avoid government intervention Small companies can prosper and build shareholder value as they tackle social problems
LO5
Copyright Cengage Learning 2012 All Rights Reserved 22

LO5

Review Learning Outcome

Arguments for and Against Social Responsibility
Against On the other hand: the job of the corporation is to maximize profits for stockholders Businesses are better suited to produce goods and services and not be involved in welfare services If global competitors dont have to be socially responsible, they will have lower costs and can compete more effectively in the global marketplace

For On the one hand: Its the right thing to do Government will create new regulations and levy fines if firms arent socially responsible It can enhance a companys profitability

LO5

Copyright Cengage Learning 2012 All Rights Reserved

23

Cause-Related Marketing

Explain cause-related marketing.

LO6

Copyright Cengage Learning 2012 All Rights Reserved

24

Cause-Related Marketing
Five Questions to Ask Before Participating in a Cause-Related Marketing Program Is this company committed? How is the program structured?

Who does the program benefit?

How will the organization that benefits use my money?

Is the program meaningful to me?

LO6

Copyright Cengage Learning 2012 All Rights Reserved

25

LO6

Review Learning Outcome

Explain Cause-Related Marketing

Can enhance for-profit corporations reputation and raise profits

Cause-related marketing: Cooperative effort between for-profit and non-profit organizations

Non-profit receives financial support and publicity for cause

LO6

Copyright Cengage Learning 2012 All Rights Reserved

26

Chapter 3 Company Clip

This video segment shows the all-natural household cleaner company, Method, through yet another lens - that of corporate social responsibility (CSR) and sustainability. http://www.cengage.com/marketing/book_con tent/9781111821647_lamb/videos/ch03.html

Copyright Cengage Learning 2012 All Rights Reserved

27