Ethics and Social Responsibility LO1 The concept of ethical behavior Ethics the moral principals or values that generally govern the conduct of an individual or a group Standard of behavior by which conduct is judged Consists of those unwritten rules we have developed for our interactions with one another LO2 Ethical behavior in business Morals the rules people develop as a result of cultural values and norms A socializing force that dictates what is right and wrong Morality and Business Ethics o Usually consist of a subset of major life values learned since birth acquired through family educational and religious institutions o Preconventional morality most basic level is childlike calculating self centered and even selfish based on what will be immediately punished or rewarded o Conventional morality expectations of society loyalty and obedience to the organization or society become paramount o Postconventional morality that of a mature adult less concerned about how other might see them and more concerned about hw they see and judge themselves over the long run Ethical decision making o Factors that tend to influence ethical decision making and judgments 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 o Office of Congressional Ethics OCE created by congress to establish a more ethical congress Ethical guidelines o Code of Ethics a guideline to help marketing managers and other employees make better decisions o The AMA code of ethics highlights three general norms and six ethical values o Ethics training Ethics in other countries o Ethical beliefs vary very little from culture to culture o Certain practices Ex Bribes are far more acceptable in some places than in others o Foreign Corrupt Practices Act FCPA 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 LO3 Corporate social responsibility Corporate social responsibility CSR a business s concern for society s welfare Sustainability the idea that socially responsible companies will outperform their peers by focusing on the worlds social problems and viewing the as opportunities to build profits and help the world at the same time Total CSR has 4 components o Economic o Legal o Ethical o Philanthropic Pyramid of corporate social responsibility portrays economic performance as the foundation for the other three responsibilities Growth of social responsibility o United Nations Global Compact UNGC the world s largest global corporate citizenship initiative The cost of ignoring social responsibilities o Implementing a program for CSR can reap significant o Many companies are looking to increase awareness of dividends their CSR Green Marketing o Green marketing the development and marketing of products designed to minimize negative effects on the physical environment or to improve the environment Very few customers make their buying decisions based primarily on the environmental qualities of a product
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