6 Social Responsibility, Ethics, and the Marketing Environment Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Social Responsibility, Ethics, and the Marketing Environment CHAPTER 3 Essentials of Marketing Lamb, Hair, McDaniel 6 Designed by Eric Brengle B-books, Ltd. Prepared by Deborah Baker Texas Christian University

Corporate Social Responsibility Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Corporate Social Responsibility LOI The idea that socially responsible companies will outperform their peers by focusing on the world’s social problems and viewing them as opportunities to build profits and help the world at the same time. Sustainability Notes: The newest theory in social responsibility is sustainability. It is a view that companies can’t thrive for long in a world where people are suffering and desperately poor. However, skeptics say business should focus on making a profit and leave social and environmental problems to nonprofit organizations and government. Discussion/Team Activity: Discuss the pros and cons of the idea of sustainability.

Ethical Behavior in Business Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Ethical Behavior in Business LO2 Ethics Morals The moral principles or values that generally govern the conduct of an individual. The rules people develop as a result of cultural values and norms. Notes: Ethical values are situation specific and time oriented. Everyone needs an ethical base to conduct in the business world and in personal life. One approach toward ethical values is to develop a personal set of ethics to examine the consequences of an act. A second stresses the importance of rules. Examples of Rules: * Always treat others as you would like to be treated. * Copying copyrighted computer software is against the law. * It is wrong to lie, bribe, or exploit. A third approach emphasizes the development of moral character in individuals, as shown in the three levels of ethical development on the next slide.

Ethical Behavior in Business Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Ethical Behavior in Business LO2 Describe the role of ethics and ethical decisions in business

Warm-up Question Macy’s promotes and financially supports the American Heart Association’s Go Red for Women movement, a non-profit organization that brings awareness to the fight against heart disease. This is an example of which form of social responsibility?   Economical Ethical Legal Philanthropical

REVIEW LEARNING OUTCOME Chapter 3 Social Responsibility, Ethics, and the Marketing Environment REVIEW LEARNING OUTCOME LOI Corporate Social Responsibility Ethical Do what is right. Legal Obey the Law. Economic Be profitable. Philanthropic Be a good citizen. Notes: Corporate social responsibility is a business’s concern for society’s welfare. The components are: Economic: Profit is the foundation on which all other responsibilities rest. Legal responsibilities: Law is society’s codification of right and wrong; play by the rules of the game. Ethical responsibilities: Do what is right, just, and fair; avoid harm. Philanthropic responsibilities: Contribute resources to the community; improve the quality of life. These components are distinct but together constitute the whole. However, if the company doesn’t make a profit, the other three responsibilities are moot. Discussion/Team Activity: Research companies that are America’s most admired companies: Dell General Electric Starbucks Wal-Mart Southwest Airlines FedEx Berkshire Hathaway Microsoft Johnson & Johnson Procter & Gamble

Ethics v. Law Ethics are moral principles or values that generally govern the conduct of an individual Laws are the regulations established (usually written) and governed by law.

Ethical Development Levels Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Ethical Development Levels LO2 Preconventional Morality Conventional Postconventional More Mature Childlike 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

Ethical Decision Making Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Ethical Decision Making LO2 Influential Factors Extent of Problems Top Management Actions Potential Consequences Social Consensus Probability of Harm Time Until Consequences Number Affected Notes: There is no cut-and-dried answer in making ethical decisions. The factors shown on this slide tend to influence ethical decision making and judgments.

Code of Ethics LO2 Code of Ethics Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Code of Ethics LO2 Code of Ethics A guideline to help marketing managers and other employees make better decisions. Online University of British Columbia Centre for Applied Ethics Research corporate codes of ethics through the Applied Ethics Resources page. Compare the codes of three companies. What common themes do you find? Notes: A national study found that 60 percent of companies surveyed maintained a code of ethics, 33 percent offered ethics training, and 33 percent employed an ethics officer. A code of ethics should not be too vague or too detailed. Exhibit 3.2 is a simple set of ethical guidelines. Discussion/Team Activity: Discuss companies with highly praised codes of ethics. http://www.ethicsweb.ca Online

Creating Ethical Guidelines Chapter 3 Social Responsibility, Ethics, and the Marketing Environment LO2 Helps identify acceptable business practices Helps control behavior internally Avoids confusion in decision making Facilitates discussion about right and wrong

DECA Role Play Business Law & Ethics Management (BLMDM) is team event offered through DECA. Choose to participate you & a partner will take a 100 question test under the Business Management & Administration Sector. 30 minutes to role play 15 minutes to provide a solution

Business Law & Ethics BUSINESS LAW AND ETHICS: For the purposes of this event, business law is U.S. law and will include contracts, product liability, employment and types of business ownership. The ethics component involves evaluating competing social values that may reasonably be argued from either side.