1. 1 Chapter 3: Ethics and Social Responsibility Copyright Cengage Learning 2013 All Rights Reserved Introduction to Designed & Prepared by Laura Rush B-books, Ltd.

2. 2 Learning Outcomes LO 1 Explain the determinants of a civil society Explain the concept of ethical behavior Describe ethical behavior in business Discuss corporate social responsibility Describe the arguments for and against social responsibility Explain cause-related marketing LO 2 LO 3 LO 4 LO 5 LO 6 Copyright Cengage Learning 2013 All Rights Reserved

3. 3 Civil Society Six determinants of social control: 1. Ethics 2. Laws 3. Formal and Informal Groups 4. Self Regulation 5. The Media 6. Active Civil Society LO 1 Copyright Cengage Learning 2013 All Rights Reserved

4. 4 Ethical Theories 4 People usually base their individual choice of ethical theory on their life experiences Deontology Utilitarianism Casuist Moral Relativists Virtue Ethics LO 2 Copyright Cengage Learning 2013 All Rights Reserved

5. 5 Ethics and Morals Good or Bad Foundation of ethical behavior Morals and Business Behavior Examine the consequences Stress the importance of rules LO 3 Copyright Cengage Learning 2013 All Rights Reserved

6. 6 Ethical Development Levels 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 LO 3 Copyright Cengage Learning 2013 All Rights Reserved

7. 7 Factors Influencing Ethical Decision Making Extent of ethical problems Top-management actions Potential magnitude of consequences Social consensus Probability of harm Time between decision and consequences Number affected by the decision LO 3 Copyright Cengage Learning 2013 All Rights Reserved

8. 8 Code of Ethics 8 Code of Ethics- A guideline to help marketing managers and other employees make better decisions. LO 3 Copyright Cengage Learning 2013 All Rights Reserved

9. 9 Creating Ethical Guidelines Helps identify acceptable business practices Helps control behavior internally Avoids confusion in decision making Facilitates discussion about right and wrong LO 3 Copyright Cengage Learning 2013 All Rights Reserved

10. 10 Sustainability 10 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. LO 4 Copyright Cengage Learning 2013 All Rights Reserved

11. 11 Corporate Social Responsibility: Stakeholders Employees Management Customers Local Community Suppliers Owners 11 LO 4 Copyright Cengage Learning 2013 All Rights Reserved

12. 12 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 LO 5 Copyright Cengage Learning 2013 All Rights Reserved

13. 13 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 LO 5 Copyright Cengage Learning 2013 All Rights Reserved

14. 14 Cause-Related Marketing 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? LO 6 Copyright Cengage Learning 2013 All Rights Reserved