1. B2B MKTG Chapter 14 Business Ethics and Crisis Management
2002 Edition
Vitale and Giglierano
Chapter 14
Business Ethics and Crisis Management
Prepared by John T. Drea, Western Illinois University

2. What is the Societal Marketing Concept?
It is when an organization focuses on meeting its organizational goals by understanding customers and delivering customer satisfaction more effectively than competitors and in a way the considers the well-being of society – not knowingly doing harm.

3. Societal Marketing Touches All Parts of an Organization
Recruiting
Hiring
Training
Retaining of
Personnel
Contractual
Relationships
With Suppliers
And Service
Providers
Environmentally
Sound Decisions

4. Some Societal Marketing Issues
Management creates the mission statement, but it may not define ethics as they are viewed throughout the entire organization.
Frontline employees should not be asked to adhere to a different ethical standard than those embraced by management.
Maintaining ethical consistency throughout an organization is an individual responsibility of managers and those they manage.
Reward systems need to support ethical behavior.

5. Natural Law, Positive Law, and Situational Ethics
Individual moral standards that are derived from a higher, universal source
Positive Law
A man-made standard of behavior derived from what is legal.
The use of flexible standards that are justified by “the greater good” – circumstances influence the determination of what is ethical.
Situational
Ethics

6. Exhibit 14-1 Situational Ethics: Ethical Lapse or Convenience
How many times have you heard these justifications
for less-than-exacting ethical behavior?
“But everyone else does it!”
Implies that statistics are a valid basis for ethical behavior.

7. Exhibit 14-1 Situational Ethics: Ethical Lapse or Convenience
How many times have you heard these justifications
for less-than-exacting ethical behavior?
“This is the way we’ve always done it.”
Either “it” was not previously significant or nobody has been caught yet.

8. Exhibit 14-1 Situational Ethics: Ethical Lapse or Convenience
How many times have you heard these justifications
for less-than-exacting ethical behavior?
“I was just following orders.”
This implies that the individual does not have the power of free choice or an internal ethical standard. Being told to do something illegal or unethical does not make it okay to do it.

9. Exhibit 14-1 Situational Ethics: Ethical Lapse or Convenience
How many times have you heard these justifications
for less-than-exacting ethical behavior?
“It is considered standard practice in that market.”
This is often a rationalization for bribes, questionable gratuities, or other attempts to inappropriately influence a situation.

10. Ethical Decisions Arise in Many Areas
Ethics in Product Announcements
Ethics in Product Capability Claims
Ethical Decisions Arise in Many Areas
Ethics in Obtaining
Competitive Information
Other questionable practices:
Paying bribes to foreign officials
Charging exorbitant prices when shortages exist
Taking promotional money without performing the activities
Posing as a customer to obtain information
Favoring one distributor over another.

11. Circumstances that Are a Win for A and B
Mutually Exclusive
Three-Party
Value Network
Common
Ground
Common
Ground = C
Common
Ground = E

12. Exhibit 14-5 Layers of Pauchant and Mitroff’s Crisis Management Model
Level one: Character of people in the organization – willingness to take responsibility and take corrective action.
Level two: Culture existing in the organization – supports appropriate preparation and response actions.
Level three: Organizational structure – crisis management structure in which all stakeholders are represented.
Level four: Plans and mechanisms for dealing with crises – crisis management team has fully prepared plans, disseminated them, and trained people in key roles.

13. Four aspects of crisis preparation
Establish effective structures for
planning and handling crises
Assessing operational elements
that produce risks/reducing risks
Planning to minimize damage
and isolate the effects
Inoculation against negative public
attention that occurs during a crisis

14. Exhibit 14-6 Six Types of Crises
External economic attacks (boycotts, hostile takeovers)
External information attacks (rumors, copyright infringement)
Breaks (product recalls, defects, security problems)
Psycho (terrorism, sabotage, sexual harassment)
Occupational health diseases (injury/death in the workforce)
Megadamage (major environmental accidents, plant closings)