1. Copyright ©2009 by Cengage Learning Inc. All rights reserved 1 Prepared by Amit Shah Frostburg State University CHAPTER 3 Designed by Eric Brengle B-books, Ltd. Marketing Lamb, Hair, McDaniel 10 Ethics and Social Responsibility

2. Copyright ©2009 by Cengage Learning Inc. All rights reserved Ethical Behavior 2 LO 2 Ethics The moral principles or values that generally govern the conduct of an individual.

3. Copyright ©2009 by Cengage Learning Inc. All rights reserved Ethical Behavior in Business 3 LO 3 Morals The rules people develop as a result of cultural values and norms.

4. Copyright ©2009 by Cengage Learning Inc. All rights reserved Ethical Decision Making 4 LO 3 Influential Factors Extent of Problems Top Management Actions Potential Consequences Social Consensus Probability of Harm Time Until Consequences Number Affected

5. Copyright ©2009 by Cengage Learning Inc. All rights reserved Code of Ethics 5 LO 3 Code of Ethics A guideline to help marketing managers and other employees make better decisions.

6. Copyright ©2009 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 6 LO 3

7. Copyright ©2009 by Cengage Learning Inc. All rights reserved Corporate Social Responsibility 7 Sustainability LO 4 The idea that socially responsible companies will outperform their peers by focusing on the world’s social problems and viewing them as opportunities to build profits and help the world at the same time.

8. Copyright ©2009 by Cengage Learning Inc. All rights reserved Corporate Social Responsibility 8 LO 4 Stakeholders Employees Management Customers Local Community Suppliers Owners

9. Copyright ©2009 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 9 LO 5

10. Copyright ©2009 by Cengage Learning Inc. All rights reserved Arguments for Social Responsibility 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 10 LO 5

11. Copyright ©2009 by Cengage Learning Inc. All rights reserved Cause-Related Marketing 11 LO 6 Cause-Related Marketing Cause-Related Marketing The cooperative efforts of a “for-profit” firm and a ‘nonprofit” organization for mutual benefit.

12. Copyright ©2009 by Cengage Learning Inc. All rights reserved Cause-Related Marketing 12 LO 6 “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?