Chapter 3: Ethics and Social Responsibility Prepared by David Ferrell, B-books, Ltd. Designed by Eric Brengle, B-books, Ltd. Copyright 2012 by Cengage Learning Inc. All Rights Reserved1

Learning Outcomes 2 LO 1 LO 2 LO 3 Explain the determinants of a civil society Explain the concept of ethical behavior Describe ethical behavior in business Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Learning Outcomes 3 Discuss corporate social responsibility LO 5 LO 6 LO 4 Copyright 2012 by Cengage Learning Inc. All Rights Reserved Describe the arguments for and against social responsibility Explain cause-related marketing

Civil Society 4 Explain the determinants of a civil society. LO 1 Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Civil Society 5 Six Modes of Social Control Ethics Laws Formal and Informal Groups Self Regulation The Media Active Civil Society Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Review Learning Outcome 6 Explain the Determinants of a Civil Society LO 1 Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Ethical Behavior 7 Explain the concept of ethical behavior. LO 2 Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Ethical Behavior 8 Ethics The moral principles or values that generally govern the conduct of an individual. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Ethical Theories 9 People usually base their individual choice of ethical theory on their life experiences Deontology Utilitarianism Casuist Moral Relativists Virtue Ethics Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Review Learning Outcome 10 LO 2 Explain the Concept of Ethical Behavior Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Ethical Behavior in Business 11 Describe ethical behavior in business. LO 3 Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Ethical Behavior in Business 12 Morals – The rules people develop as a result of cultural values and norms. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Ethical Development Levels 13 Preconventional Morality Conventional Morality Postconventional Morality More Mature More 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 Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Ethical Decision Making 14 Influential Factors Extent of Problems Top Management Actions Potential Consequences Social Consensus Probability of Harm Time Until Consequences Number Affected Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Code of Ethics 15 Code of Ethics- A guideline to help marketing managers and other employees make better decisions. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Creating Ethical Guidelines Helps identify acceptable business practices Helps control behavior internally Avoids confusion in decision making Facilitates discussion about right and wrong 16 Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Ethical Guidelines and Training 17 Exhibit 3.3 Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Review Learning Outcome 18 Describe the Role of Ethics and Ethical Decisions in Business LO 3 Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Corporate Social Responsibility 19 Discuss corporate social responsibility. LO 4 Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Sustainability 20 The idea that socially responsible companies will outperform their peers by focusing on the world’s social problems and reviewing them as opportunities to build profits and help the world at the same time. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Corporate Social Responsibility 21 Stakeholders Employees Management Customers Local Community Suppliers Owners Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Review Learning Outcome 22 LO 4 Discuss Corporate Social Responsibility Ethical Do what is right. Legal Obey the Law. Economic Be profitable. Philanthropic Be a good citizen. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Arguments Against and For Corporate Social Responsibility 23 Describe the arguments for and against social responsibility. LO 5 Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Arguments Against Social Responsibility Businesses should focus on making a profit and leave social and environmental concerns to nonprofits Businesses don’t 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 24 Copyright 2012 by Cengage Learning Inc. All Rights Reserved

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 25 Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Review Learning Outcome 26 LO 5 Arguments for and Against Social Responsibility Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Cause-Related Marketing 27 Explain cause-related marketing. LO 6 Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Cause-Related Marketing 28 The cooperative efforts of a “for-profit” firm and a “non-profit” organization for mutual benefit. Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Cause-Related Marketing 29 “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? Copyright 2012 by Cengage Learning Inc. All Rights Reserved

Review Learning Outcome 30 LO 6 Explain Cause-Related Marketing Copyright 2012 by Cengage Learning Inc. All Rights Reserved