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Chapter 3: Ethics and Social Responsibility

Copyright Cengage Learning 2013All Rights Reserved

Introduction to

Designed & Prepared by Laura RushB-books, Ltd.

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Learning OutcomesLO1 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

LO2

LO3

LO4

LO5

LO6

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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

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Ethical Theories

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People usually base their individual choice of ethical theory on their life experiences

• Deontology

• Utilitarianism

• Casuist

• Moral Relativists

• Virtue Ethics

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Ethics and Morals

• Good or Bad

• Foundation of ethical behavior

Morals and Business Behavior

• Examine the consequences

• Stress the importance of rules

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Ethical Development Levels

PreconventionalMorality

ConventionalMorality

PostconventionalMorality

MoreMature

MoreChildlike

• 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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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

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Code of Ethics

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Code of Ethics- A guideline to helpmarketing managers and other

employees make better decisions.

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Creating Ethical Guidelines

• Helps identify acceptable business practices

• Helps control behavior internally

• Avoids confusion in decision making

• Facilitates discussion about right and wrong

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Sustainability

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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.

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Corporate Social Responsibility: Stakeholders

• Employees

• Management

• Customers

• Local Community

• Suppliers

• Owners

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All Rights Reserved

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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

LO5 Copyright Cengage Learning 2013All Rights Reserved

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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

LO5 Copyright Cengage Learning 2013All Rights Reserved

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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?

LO6 Copyright Cengage Learning 2013All Rights Reserved