Chapter 3 Ethics and Social Responsibility Ethics the moral principles or values that generally govern the conduct of an individual or a group 3 2 Ethical Behavior in Business Morals are the rules people develop as a result of cultural values and norms Ethical development has 3 levels o Pre conventional morality most basic level childlike egocentric o Conventional morality moves away from an egocentric viewpoint toward the expectations of society o Post conventional morality mature adult what will this action do in the long run Things that influence ethical decision making o Extent of ethical problems within the organization top management s actions on ethics potential magnitude of the consequences social consensus probability of a harmful outcome length of time between the decision and the onset of consequences number of people to be affected Code of ethics a guideline to help marketing managers and other employees make better decisions o Advantages of ethical guidelines help employees identify what their company recognizes as acceptable behavior effective internal control on behavior avoid confusion when determining if an action is ethical developing this guideline starts discussion about what is right and wrong Foreign Corrupt Practices Act FCPA a law that prohibits US corporations from making illegal payments to public officials of foreign governments to obtain business rights or to enhance their business dealings in those countries 3 3 Corporate Social Responsibility Corporate social responsibility a business s concern for society s welfare Pyramid of corporate social responsibility a model that suggests corporate social responsibility is composed of economic legal ethical and philanthropic responsibilities and that the firm s economic performance supports the entire structure Sustainability the idea that socially responsible companies will outperform their peers by focusing on the world s social and environmental problems and viewing them as opportunities to build profits and help the world at the same time United Nations Global Compact UNGC world s largest global corporate citizenship initiative Green marketing the development and marketing of products designed to minimize negative effects on the physical environment or to improve the environment 3 4 Cause Related Marketing Cause related marketing the cooperative marketing efforts between a for profit firm and a nonprofit organization
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