1. Ethical Decision Making & Social Responsibility

2. Ethics ä The moral evaluation of decisions based on commonly accepted principles of behavior; the evaluation results in an action being judged right or wrong.

3. The Pyramid of Social Responsibility

4. Potential Ethical Issues in Marketing

5. Factors Affecting Ethical Decision Making ä Moral Values ä deontology ä teleology ä Opportunity ä codes ä policies ä rewards/punishment ä Significant Others ä management ä peers

6. Suggestions for Improving Ethical Behavior ä Offer training programs which independently and explicitly address specific treatment of ethical issues. ä Limit the opportunity to engage in unethical behavior by providing a well- developed structure and system of checks and balances, including explicit penalties for unethical behavior. ä Let employees know what penalties the company imposes on those who engage in unethical behavior. ä Recognize how the behavior of co-workers and superiors can influence the behavior of other employees in the organization. ä Develop a code of ethics or ethical policies that are widely communicated and enforced (see next slide). ä In larger organizations, develop an ethics committee to address new issues and help establish and evaluate existing codes and policies. ä Eliminate the “bad apples”. ä Source: Ferrell, O.C. and Gareth Gardiner (1991), In Pursuit of Ethics, USA: Smith Collins.

7. Key Considerations in Developing and Implementing a Code of Ethical Conduct

8. Frequency of Misconduct and Penalties Under the FSGO

9. Social Responsibility ä Social responsibility is an organization’s obligation to maximize its positive impact and minimize its negative impact on society. ä Community Relations ä Green Marketing

10. Understanding Social Responsibility and Ethics in a Global Business Environment ä Self-Reference Criterion ä unconscious reference to one’s own cultural values, experiences, and knowledge as a basis for decisions ä Foreign Corrupt Practices Act ä makes it illegal for U.S. companies to pay bribes to foreign officials, candidates, or political parties ä bribery vs extortion vs lubrication ä International Environment ä no international law ä local practices condone a certain behavior ä favored company is one that “does what is necessary”

11. Tough-Minded Management and Social/Ethical Responsibility ä Continuum of Managerial Authority ä The Tough-Minded Manager: ä Accepts that risks must often be taken and that conflict is inevitable in making tough choices; ä Understands that short-run losses may be inevitable and unavoidable to achieve long-run success; ä Believes that the best long-run approach to business is integrity; ä Is aware that ethical problems may arise in the workplace, and of how ethical decisions are usually made in the workplace; ä Has reached a level of moral development where economic self-interest is not paramount, and where persona ethical values are important; ä Has learned that trust is the glue that holds business relationships together; ä Believes strongly that maintaining self-esteem and self-respect outweighs material gain. ä Source: Ferrell, O.C. and Gareth Gardiner (1991), In Pursuit of Ethics, USA: Smith Collins.

12. Integrating Ethics & Social Responsibility into Marketing Strategy ä A Planning Model