Marketing Ethics and Social Responsibility Dr. Ananda Sabil Hussein 3-1.
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Transcript of Marketing Ethics and Social Responsibility Dr. Ananda Sabil Hussein 3-1.
Marketing Ethics and Social ResponsibilityDr. Ananda Sabil Hussein
3-1
The Role of Ethics and Social Responsibility in Marketing Strategy
Grown in importance recentlyDue to firms having problems in this area
Have become necessities due to:Stakeholder demandsChanges in Federal law
Improve marketing performance and profits
Are important to development of marketing strategy
3-2
Dimensions ofSocial Responsibility
Social Responsibility A broad concept that relates to an organization’s obligation
to maximize its positive impacts on society while minimizing its negative impacts
Marketing Ethics Principles and standards that define acceptable marketing
conduct as determined by the public, government regulators, private interest groups, competitors, and the firm itself
3-3
The Pyramid of Corporate Social Responsibility
3-4Exhibit 3.1
Social Responsibility Includes:
Economic responsibility of making a profit Legal responsibility of obeying laws and regulations Ethical responsibility to uphold principals and standards Philanthropic responsibility to increase the firm’s positive
impact on society
3-5
Marketing Ethics and Strategy
Requires that organizations and individuals accept responsibility
Can lead to violations of public trust
Involves complex and detailed decisions in gray areas
Deals with experiences and decisions made at work
Comes into play anytime individuals feel manipulated or cheated
3-6
Potential Ethical Issues in Marketing
Overall Issues
Product Issues
Pricing Issues
Distribution Issues
Promotion Issues
3-7See Exhibit 3.2 in Text
The Challenges of Being Ethical and Socially
Responsible
Business decisions involve complex decisions in which correctness may not be clear cut e.g. Internet privacy, protecting trademarks and
brand names
Ethical conflict may emerge from an inconsistency between personal values and the values held by members of the work group
Ethical issues can develop into legal problems
3-8
Types of MisconductObserved in Organizations
3-9Exhibit 3.4
Deceptive Practices in Marketing
Deceptive Communications and PromotionFraud or any false communicationExaggerated claims or statementsAmbiguous statementsProduct labeling issuesSelling abuses
Regulating Deceptive Marketing PracticesTypically regulated by:
The firms themselves Industry and trade associations
3-10
Organizational Determinants of Marketing Ethics & Social
Responsibility
Ethical Decision MakingDetermined by an individual’s background
and business colleaguesAffected by personal values, opportunity for
unethical behavior, and exposure to others Intricately tied to the firm’s culture and
ethical climateCan only be improved by planning and
structureLikely to occur when modeled by a strong
leader 3-11
Ethical Climate
Part of a corporate culture that relates to an organization’s expectations about appropriate conductThe character component of an
organizationSets the tone for ethical decisionsDetermines whether or not an individual
perceives an issue to be an ethical issue
3-12
Codes of Conduct (1 of 2)
Codes of Conduct (Codes of Ethics)Formal statement that describes what an
organization expects of its employeesNot an effective means of controlling
ethical behavior unless integrated into daily decision making
Not effective unless the code has support of top management
3-13
Codes of Conduct (2 of 2)
Codes must reflect management’s desire for compliance with values, rules, and policies
Codes should have six core values:1. Trustworthiness2. Respect3. Responsibility4. Fairness5. Caring6. Citizenship
Codes will not resolve every issue encountered in daily operations
Codes can help managers deal with ethical dilemmas
3-14
Key Considerations in Developing and Implementing a Code of Ethical
Conduct
3-15Exhibit 3.5
Texas Instruments’“Ethics Quick Test”
Is the action legal?
Does it comply with our values?
If you do it, will you feel bad?
How will it look in the newspaper?
If you know it’s wrong, don’t do it!
If you’re not sure, ask.
Keep asking until you get an answer.3-16
Market Orientation
Market OrientationThe development of an organizational
culture that effectively and efficiently promotes the necessary behaviors for the creation of superior value for buyers and, thus, continuous superior performance of the firm.
Strongly tied to ethics and social responsibility
Means fostering a sense of cooperation and information exchange
3-17
Stakeholder Orientation
Stakeholder Orientation The degree to which a firm understands and
addresses stakeholder demands Strongly tied to ethics and social responsibility Comprised of three activities:
1. Generation of stakeholder groups data and assessment of firm effects on these groups
2. Distribution of this information throughout the firm
3. Responsiveness as a whole to this intelligence
3-18
Connecting Ethics & Social Responsibilityto Marketing Performance
Strong ethics causes employees to be: Motivated to serve customers Committed to the firm Committed to high quality standards Satisfied with their job
Can lead to trust among firm’s stakeholders
Is so important that it can have major negative impacts on firms that don’t uphold ethical standards
3-19
The Connection BetweenEthics and Strategic Planning
Typically done through ethical compliance programs or integrity initiatives
Vested in the marketing plan
Based on an understanding of: 1) Risks associated with misconduct 2) Ethical and social consequences of strategy 3) Values of organizational members and
stakeholders
Manifested through actions … not just words3-20