Chapter 3 Concept of Ethical Behavior The moral principles or values that generally govern the conduct of an individual or a group Ethical Behavior in Business Morals rules people develop as a result of cultural values and norms o Involve good and bad Three levels of Ethical development o Preconventional Morality most basic level is childlike calculating self centered and even selfish o Conventional Morality moves from an egocentric viewpoint toward expectations of society loyalty and obedience to organization o Postconventional Morality represents the morality of the mature adult people are concerned about how others might see them Ethical Decision Making Factors o Extent of Problems o Top Managements Actions o Potential Magnitude or Consequence o Social Consensus o Probability of harmful outcome o Length of time between action and consequence o Number of people affected Ethical Guidelines o Code of Ethics guideline to help marketing managers make better decisions o Advantages Help employees identify their firm recognizes as acceptable business practices Helps control behavior internally Avoids confusion in decision making Facilitates discussion about right and wrong Ethics in Other Countries foreign officials o FCPA prohibits US corporations from making illegal payments to o Has been criticized for putting US business at disadvantage o Encourages some countries to implement their own anti bribery laws Corporate Social Responsibility business concern for social welfare Pros Right thing to do have resources to fixing social problems prevents gov Cons takes focus away from profit business execs spend shareholder money on regulation can be profitable environmental initiatives Pyramid of CSR o Economic Responsibilities Be profitable o Legal Responsibilities Obey the Law o Ethical Responsibilities Be ethical do what is right o Philanthropic Responsibilities Be a good corporate citizen Sustainability socially responsible companies will outperform their peers by focusing on worlds social problems Growth of Social Responsibility is growing around the world o UN Global Compact is doing more to make sure firms are CSR Cause Related Marketing Cooperative efforts of for profit firms and nonprofit firms for mutual benefit Generates good public relations Make sure not using a cause to sell more product
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