1. Ethics and Social Responsibility
Lamb, Hair, McDaniel
Chapter 3 Ethics and Social Responsibility
CHAPTER 3
Ethics and Social Responsibility
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2. Chapter 3 Ethics and Social Responsibility
Ethical Behavior
The moral principles or values that generally govern the conduct of an individual or a group.
Example:
There is no law for “cutting in line.”
Cutting in line would anger most other people.
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3. Ethical Behavior in Business
Chapter 3 Ethics and Social Responsibility
Ethical Behavior in Business
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.
Morals involve “good” and “bad” as well as “deviant” behaviors
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4. Ethical Development Levels
Chapter 3 Ethics and Social Responsibility
Ethical Development Levels
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
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5. Dell: An Ethics Case Beyond the Book
Chapter 3 Ethics and Social Responsibility
Dell: An Ethics Case
Documents from a lawsuit revealed that Dell shipped over 11.8 million faulty computers between 2003 and 2005.
An internal investigation revealed extensive problems, but Dell tried to cover up the problem, telling its sales team not to mention bring it up.
Dell at times used faulty components to fix broken computers.
Dell took a $300 million charge to fix the computers, but only in response to stakeholder demands.
What level of ethical development is Dell operating?
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6. Ethical Decision Making
Chapter 3 Ethics and Social Responsibility
Ethical Decision Making
Influential Factors
Extent of Problems
Top Management Actions
Potential Consequences
Social Consensus
Probability of Harm
Time Until
Consequences
Number Affected
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7. Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Biz Flix
Jaws
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8. Creating Ethical Guidelines
Chapter 3 Ethics and Social Responsibility
Creating Ethical Guidelines
A Code of Ethics:
Helps identify acceptable business practices
Helps control behavior internally
Avoids confusion in decision making
Facilitates discussion about right and wrong
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9. Ethics in Other Countries
Chapter 3 Ethics and Social Responsibility
Ethics in Other Countries
Foreign Corrupt Practices Act (FCPA)
Prohibits U.S. corporations from making illegal payments to foreign officials.
Has been criticized for putting U.S. businesses at a disadvantage.
Has encouraged some countries to implement their own anti-bribery laws.
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10. Chapter 3 Ethics and Social Responsibility
Sustainability
Socially responsible companies will outperform their peers.
It is in business’s best interest to find ways to attack society’s ills.
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11. Pyramid of Corporate Social Responsibility
Chapter 3 Ethics and Social Responsibility
Exhibit 3.1
Pyramid of Corporate Social Responsibility
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12. Arguments Against Social Responsibility
Chapter 3 Ethics and Social Responsibility
Arguments Against Social Responsibility
Businesses should focus on making a profit and leave social and environmental concerns to nonprofits.
Milton Friedman argued that the free market, and not companies, should decide what is best for the world—socially responsible companies are using shareholders’ money to further their own agendas.
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13. Growth of Social Responsibility
Chapter 3 Ethics and Social Responsibility
Growth of Social Responsibility
According to a recent study, the percentage of firms that consider social responsibility factors when making business decisions:
Brazil
62%
54%
Canada
Australia
52%
47%
United States
India
38%
35%
China
Mexico
26%
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14. Cost of Ignoring Social Responsibilities
Chapter 3 Ethics and Social Responsibility
Cost of Ignoring Social Responsibilities
Some surveys indicate that consumers would be willing to pay more for a socially responsible company’s product.
Making false claims about social responsibility can be especially costly.
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15. Chapter 3 Ethics and Social Responsibility
Green Marketing
The development and marketing of products designed to minimize negative effects on the environment or improve the environment.
Environmentally aware customers pay more for products
Companies must try to educate customers of environmental benefits
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16. Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
OPINION QUESTION Jane Barksdale has designed a line of clothing targeted toward Hispanic Americans. The items are sold only by catalog and on the Internet. She thinks that she can increase sales by claiming in ads that the firm is owned by a Hispanic American and all the employees are Hispanic Americans. She is not Hispanic American nor are most of the employees. She needs a high level of sales to pay her bank loan and remain in business. Should she claim that she is Hispanic American?
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17. Assignment Case Vermont Teddy Bear Case Get in groups of 5-7 students
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Assignment
Vermont Teddy Bear Case
Get in groups of 5-7 students
Answer the questions associated with the case
Case