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 Learning Outcomes 2 LO I LO 2 LO 3 Explain the determinants of a civil society Explain the concept of ethical behavior Describe ethical behavior in business

3. Copyright ©2009 by Cengage Learning Inc. All rights reserved Learning Outcomes 3 Discuss corporate social responsibility Describe the arguments for and against social responsibility Explain cause-related marketing LO 5 LO 6 LO 4

4. Copyright ©2009 by Cengage Learning Inc. All rights reserved Civil Society 4 Explain the determinants of a civil society LO I

5. Copyright ©2009 by Cengage Learning Inc. All rights reserved Civil Society 5 LO 1 Six Modes of Social Control Ethics Laws Formal and Informal Groups Self Regulation The Media Active Civil Society

6. Copyright ©2009 by Cengage Learning Inc. All rights reserved REVIEW LEARNING OUTCOME 6 LO I Explain the determinants of a civil society

7. Copyright ©2009 by Cengage Learning Inc. All rights reserved Ethical Behavior 7 Explain the concept of ethical behavior LO 2

8. Copyright ©2009 by Cengage Learning Inc. All rights reserved Ethical Behavior 8 LO 2 Ethics The moral principles or values that generally govern the conduct of an individual.

9. Copyright ©2009 by Cengage Learning Inc. All rights reserved Ethical Theories 9 LO 2 People usually base their individual choice of ethical theory on their life experiences Deontology Utilitarianism Casuist Moral Relativists Virtue Ethics

10. Copyright ©2009 by Cengage Learning Inc. All rights reserved REVIEW LEARNING OUTCOME 10 LO 2 Explain the concept of ethical behavior

11. Copyright ©2009 by Cengage Learning Inc. All rights reserved Ethical Behavior in Business 11 Describe ethical behavior in business LO 3

12. Copyright ©2009 by Cengage Learning Inc. All rights reserved Ethical Behavior in Business 12 LO 3 Morals The rules people develop as a result of cultural values and norms.

13. Copyright ©2009 by Cengage Learning Inc. All rights reserved Ethical Development Levels 13 LO 3 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

14. Copyright ©2009 by Cengage Learning Inc. All rights reserved Ethical Decision Making 14 LO 3 Influential Factors Extent of Problems Top Management Actions Potential Consequences Social Consensus Probability of Harm Time Until Consequences Number Affected

15. Copyright ©2009 by Cengage Learning Inc. All rights reserved Code of Ethics 15 LO 3 Code of Ethics A guideline to help marketing managers and other employees make better decisions.

16. 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 16 LO 3

17. Copyright ©2009 by Cengage Learning Inc. All rights reserved Ethical Guidelines and Training 17 LO 3 Exhibit 3.3

18. Copyright ©2009 by Cengage Learning Inc. All rights reserved REVIEW LEARNING OUTCOME 18 LO 3 Describe the role of ethics and ethical decisions in business

19. Copyright ©2009 by Cengage Learning Inc. All rights reserved Corporate Social Responsibility 19 Discuss corporate social responsibility LO 4

20. Copyright ©2009 by Cengage Learning Inc. All rights reserved Corporate Social Responsibility 20 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.

21. Copyright ©2009 by Cengage Learning Inc. All rights reserved Corporate Social Responsibility 21 LO 4 Stakeholders Employees Management Customers Local Community Suppliers Owners

22. Copyright ©2009 by Cengage Learning Inc. All rights reserved REVIEW LEARNING OUTCOME 22 LO 4 Discuss Corporate Social Responsibility Ethical Do what is right. Legal Obey the Law. Economic Be profitable. Philanthropic Be a good citizen.

23. Copyright ©2009 by Cengage Learning Inc. All rights reserved Arguments Against and For Corporate Social Responsibility 23 Describe the arguments for and against social responsibility LO 5

24. 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 24 LO 5

25. 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 25 LO 5

26. Copyright ©2009 by Cengage Learning Inc. All rights reserved REVIEW LEARNING OUTCOME 26 LO 5 Arguments for and against social responsibility

27. Copyright ©2009 by Cengage Learning Inc. All rights reserved Cause-Related Marketing 27 Explain cause-related marketing LO 6

28. Copyright ©2009 by Cengage Learning Inc. All rights reserved Cause-Related Marketing 28 LO 6 Cause-Related Marketing Cause-Related Marketing The cooperative efforts of a “for-profit” firm and a ‘nonprofit” organization for mutual benefit.

29. Copyright ©2009 by Cengage Learning Inc. All rights reserved Cause-Related Marketing 29 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?

30. Copyright ©2009 by Cengage Learning Inc. All rights reserved REVIEW LEARNING OUTCOME 30 LO 6 Explain cause-related marketing