Business Ethics Week 6-10

Reasons to ban deceptive and unfair marketing practices

(1) Protecting consumers from being cheated out of their money (2) protecting the integrity of fair competition in the marketplace

Criticisms against work-life balance practices

(a) creates assumption that work is undesirable (b) can be unfair to workers that lack the bargaining power to demand them, some workers carry the burden of parents that benefit from policies (typically low-pay, low-skill positions) (c) unfair to employers: If employers can hire sufficient workers without work-life balance policies, then forcing employers to do so is an unfair burden. Employees who demand greater workplace flexibility/leave policies should expect lower salaries/benefits/promotion opportunities. (d) It privileges those who already enjoy positions with relatively generous benefits: some jobs can be done with flexible work schedules or from home via telecommuting, but others cannot.

Harms of unfair/deceptive advertising

(commercial and economic): Consumers are harmed by deception when they end up purchasing a product that they might not otherwise have bought, often at a price higher than they might have otherwise paid.

Conventional view of work

**Work should be avoided whenever possible and endured when we must - Work is seen as something that must be endured. It's difficult, arduous, laborious. (Stud Terkel) - work/labor carry a negative connotation 2 common viewpoints: 1. There are higher and more meaningful human activities than work (contemplation and enjoyment of higher pleasures of art, politics, and culture). --> classical interpretation of work says humans are intellectual beings but work is physical. 2. Hedonistic interpretation of work: understands work as a necessary means for obtaining life's pleasures. (one works to buy things that will make one happy)... happiness = getting whatever one wants. So work = means for our ends (merely instrumental)

Common Threads Recycling Program (2005

**a partnership with customers to pursue the 4 classic R's (reduce, repair, reuse, and recycle) in the proper order: 1. Asked customers to pledge not to buy what they don't need or what won't last. In return, they promised to redouble their efforts to make useful, long-lasting products. 2. Asked customers to pledge to repair first before discarding/replacing what breaks. In return, they upsized their repair department staff to get the work done and turned around more quickly. 3. Asked customers to pledge to reuse/recirculate what they no longer use (set up a program witheBay to make it easier to resell products and introduce used products for sale). 4. 2011: began to accept the return of any worn-out Patagonia product ever made back for recycling or repurposing. 5. Fifth "r": to pledge mutually with the customer to reimagine a world in which we take from nature only what it can replace. a recycling program where Patagonia invite customers to send their worn-out Capilene underwear which Patagonia would then send to their polyester supplier in Japan to melt down, then re-extrude as new fiber

What does work mean?

- (verb): Work refers to activities that involve perseverance, discipline, toil, usually performed with the degree of seriousness and concentration. (It contrasts with being idle, relaxing, playing) - (noun): Work can refer to particular accomplishments (a work of art), any general undertaking or task (hw), or a job or employment. (book focuses on job/employment)

Recap

- Caveat Emptor: companies are only responsible when they explicitly promise their product is safe. - Negligence: We've moved away from that in the U.S.: we switched to looking at negligence - did the company do something that caused harm? That a reasonable person would have foreseen? OR did the consumer use the product properly? - Strict Product liability: where a company could not foresee the damages, so they do not assume FAULT but they DO ASSUME LIABILITY/pay for the damages

Groups can be vulnerable in both senses: often people can become vulnerable as consumers bc they are vulnerable in a more general sense.

- Elderly have vulnerability with respect to injuries/illness -> causes them to make consumer choices based on fear/guilt - Family member grieving over the death of a loved one -> might make choices in purchasing funeral services based on guilt/sorrow rather than considered judgment - Person w/ medical condition or disease faces anxiety fear -> may lead to uninformed consumer choices - Inner-city resident who is poor, uneducated, and chronically unemployed -> unlikely to weigh the full consequences of the choice of alcoholic beverage

Consumer autonomy is violated not when a consumer is made to behave in some way that they did not want, but when they do what they want, but those wants themselves have been manipulated.

- Exercise to understand how desires may be nonautonomous: after basic needs are met, people buy things for many reasons (desire to be fashionable, for status, to feel good, bc others are buying it, etc.) - Desires may originate here

How can that information be used?

- Facebook and Google sell your info to advertisers all the time; credit agencies sell your financial data to businesses doing a background check. It happens, but is it ethical?

Work has intrinsic and instrumental value

- Instrumental value: it gives you some sort of benefit (money). Money can be spent for various things. - Intrinsic value: valuable for its own sake.

Befriending the Ventura River

- Issue: Ventura River water was supposedly "dead." 2 dams had been built in the 40s so water diverted, but the only water left was from the sewage plant. They wanted to see if channeling the mouth would affect bird and wildlife. - Solution: Mark Capelli (shy 25yrold biology student) presented photos of the many birds, muskrats, water snakes, ells, and more he had found at the river. Development plan was defeated bc he proved wildlife would be affected - Lessons: grassroots efforts make a difference, a degraded habitat could be restored with effort, + nature lives everywhere, we need to help it thrive.

Defenders of marketing point out that marketing targets populations and not individuals

- Marketers cannot be held liable for decision made by individuals bc they may choose to not buy the marketed product. - its difficult to attribute any direct causal connection between marketing campaigns and an individual consumer's choice to buy a product. Can't "prove" causation - ○ Marketers cannot believe they causally influence consumer choice or else it would be fraudulent/unethical/manipulative

Patagonia (leader of sustainability movement)

- Mission statement: "...demands participation in the fight to save them, reverse the steep decline.." - Sustainable business practices: recycled materials, donate min. 1% profits to environmental causes, Common Threads Initiative (reduce, repair, reuse, reycle), Footprint Chronicals

Tension of work

- One one hand, work can be exalting, uplifting, and fulfilling - Other hand, work can be degrading, tedious, and troublesome

Intrinsic Reasons for working

- Psychic Goods: produces achievement, self-satisfaction, self-worth - Character Development: working allows one to develop one's character - to become better people in community (virtues like generosity) - Aristotle: we are social animals (work provides a social setting) - Work Fulfills various needs in Society: community needs things, work can provide those needs (doctors, police, etc.) - Work keeps us busy and socially engaged: it's good for us to be busy and engaged. Time and isolation = destruction.

External Values at stake

- There may be a very large market for something, but just because there is someone to sell it and buy it does not make it ethically legitimate (endangered species, children?) - Externalities: a cost associated with the exchange between buyer/seller that is not factored into the price of the product. - Ex: Tshirt: dye runs into local river, fish killed, locals harmed

3. External factors in the transaction

- What should not be jeopardized: social values like fairness, justice, health, and safety (shouldn't break the law even if its advantageous for parties in transaction). Ex: selling rhino horns, but they're endangered. "Just bc someone wants to buy something + someone is willing to sell it does not mean that that transaction is ethically legitimate" - Look at externalities: the costs not integrated within the exchange between buyer and seller (ex: environmental impacts of pesticides, tobacco, SUVs)

Ways businesses create a better work-life balance

- advise/require avoidance of email during weekend - create flexible work schedules - telecommuting and work-from-home days - workplace wellness programs (nutrition education, exercise, counseling services) - inc. vacation/personal leave time - time away during religious prayer or meditation

Value of work

- highly instrumental (provides income --> can attain other goods) - psychic goods: feelings of personal satisfaction, self-worth, achievement, self-esteem, happiness - Express character traits/virtues that make our lives worth living (Some people are industrious, motivated, earnest, active, and creative - character is made manifest through work) - provides social meaning: status, honor, respect, companionship, and camaraderie - lets people contribute to their community: nurses, day-care workers, social workers, police, military personnel - helps produce amazing work: art, music (products that are valuable in their own right)

The liberal model of work (middle)

- individual workers should be free to choose the ends of their work (conventional) - humans can be significantly influenced by their work and argue that we should make ethical assessments of work on the basis of how work affects workers - there should not be a universal/substantive norm as to what a person should be or how they should live (creative, sociable, etc.). Instead, people should decide what they want - the meaning/value of work should be left to the free choices of employee/employer bargaining - Only things that workers must receive are: autonomy, rationality, physical/mental health - AKA primary goods that are necessary to achieve whatever other goods and individual chooses to pursue

Defense of strict product liability (John McCall)

- its no more unfair to hold injured consumers accountable - its more appropriate to assign costs on businesses bc the costs are passed on, ordinarily through increase liability insurance costs, to those who stand to benefit from the product (product users and stockholders) - injuries are externalities that fairness requires to be internalized into the exchange: injuries should be paid for by those who benefit from the exchange, other users of the product, stockholders of the company

Advertising effects

- provide info to consumers, info that contributes to an efficient function of economic markets - they learn about products they want/need, get info to help them make responsible choices, are entertained - Marketing helps shape culture, + individuals who develop and are socialized within that culture

Gerald Dworkin: 2 conditions for autonomous desires/purchases

1. Authenticity: A desire is authentic if it is not renounced or rejected by the person who has it. A first-order desire is authentic as long as there is no second-order desire that repudiates it. 2. Independently accepted by the individual: If an individual does not or cannot rationally reflect upon the first-order desires, then the fact that he or she doesn't renounce it is not conclusive evidence that it is an autonomous desire.

3 major, unwelcomed implications of dependence effect

1. By creating wants, advertising had the law of supply and demand on its head. Rather than supply being a function of demand, demand turns out to be a function of supply 2. Advertising and marketing tend to create irrational and trivial consumer wants, distorting the entire economy. The "affluent" society is worse off than undeveloped economies bc resources devoted to contrived, private consumer goods were therefore denied to more important public goods and consumer needs. 3. By creating consumer wants, advertising and other marketing practices were violating consumer autonomy. - Consumers who thought themselves free because they were able to purchase what they wanted are not in fact free if those wants are created by marketing (manipulation)

Situations that added to the company's sense of responsibility and possibility

1. Climbing Clean 2. Befriending the Ventura River 3. Kids - child care 4. Environmental Giving 5. Getting our House in Order 6. Poisoning Our People 7. The Footprint Chronicles 8. Common Threads Recycling Program (2005)

2 Factors to Judge whether a Price is Fair to Consumers

1. Consumer freedom: the greater freedom a consumer has to walk away from a product, the less likely it is that the seller can set an unfair price. 2. Available competition: the greater the competition within a market, the less likely that unfair pricing can occur. If consumers have altern.s available, unfair pricing is less likely

3 options for who should be accountable for non-preventable harms

1. Consumers: "tough luck standard" - overly severe bc consumers suffer the injury and bear the financial costs 2. Society: commits us to a more socialized insurance system/more taxes (we'd be pressed to deny social accountability for all injuries and disease) 3. Producer: "strict product liability"

Natural Capitalism: 4 guiding principles for the redesign of business

1. Ecoefficiency: Productivity of natural resources must and can be dramatically increased 2. Biomimicry/closed-loop design: business should be redesigned to model biological processes. By-products formerly lost as waste and pollution must be eliminated, reintegrated into the production process, or returned as a benign or beneficial product to the biosphere. 3. Traditional models of business as a producer of goods should be replaced with a model of business as a provider of services. 4. Business must reinvest in natural capital

3 pillars/criteria of sustainability to judge sustainable practices

1. Economically: sustainable practices must be able to meet the "needs of the present w/o compromising the ability of future generations to meet their own needs" 2. Environmentally: they must do so w/o harming the ability of the biosphere to sustain life over the long term 3. Socially: they must address the real needs of people, particularly those hundreds of millions of people who lack adequate food, water, and other necessities

Problems with the Sustainability Approach

1. Efficiency and Market Advantage: if a company takes it upon themselves to be more environmentally sustainable, it may be less efficient in the way they make their product, there may be additional costs to making that product, and consumers will be charged more. If you're in a tight market, the other less environmental company can gain an advantage for not spending time, money, and efforts on producing environmentally friendly products.

General guidelines for ethical marketing

1. Ethically legitimate: marketing practices that seek to discover which consumers might already and independently be predisposed to purchasing a product 2. Ethically improper: Marketing practices that seek to identify populations that can be easily influenced and manipulated are not. Sales and marketing that appeal to fear, anxiety, or other nonrational motivations

3 Common aspects of the contemporary work scene

1. Few workers have significant choices and alternatives open to them in the workplace 2. Job mobility is now normalized 3. Growth in contingent work: more jobs are temporary, part-time, subtractors out of third paries - values/benefits of work are more conditional and uncertain.

Ways to regulate deception

1. For intended deception, FTC would have to determine the state of mind of the markets - looking at what can be reasonably expected to result from the practice 2. FTC could regulate marketing practices that actually do deceive people, but it may be "too strong or too weak a standard - too weak: ○ : it places the burden on consumers to take the initiative and come forth to prove the deception and oftentime when you are manipulated/deceived, you do not know you are being manipulated - too strong: it may well turn out that consumers are deceived by many relatively trivial marketing practices Solution: It might well be most reasonable to apply different standards to different products, marketing practices, and/or targeted markets.

4 Human Potentials that work can help fulfill

1. Freedom and autonomy in making choices/directing our lives 2. Developing our talents and exercising our creativity 3. Create their own society & culture, thereby creating their identities 4. Express our nature as social beings; prevent us from falling into a solipsistic and egocentric life.

Exemptions to strict product liability

1. If the product cannot be proven defective: you have to show that its defective in order to know it caused the injury 2. When consumer negligence causes the injury: then consumer would be negligent/causing injury by their actions - it's their fault 3. If their products are inherently dangerous (handguns, cigarettes, etc.): in these cases, the product itself is dangerous and using it dangerous.

Relationship between identity and one's work/job:

1. Job: one's self identity is independent of one's job. (working some random job during college like starbucks just to make money) 2. Career: when one develops a long term relationship between one's self and the activity with stages and advances over time. 3. Calling/Vocation: one's identity/activities and are inseparable - they go together. It's a place where one's strengths/passions meet some tangible need in the world.

Three General Marketing Concerns

1. Kantianism: To what degree are the participants respected as free and autonomous agents rather than being treated simply as the means to the end of making a sale? 2. Utilitarianism: To what degree does the transaction provide actual as opposed to merely apparent benefits? 3. Externals: What other values might be at stake in the transaction?

4 critical problems at the core of contemporary work experiences (both good/bad)

1. Lack of visions about what we do, and why we do it 2. Rise of workaholism in all classes of workers 3. "Work, spend, and debt syndrome": we work, we spend, and we are forced to work some more 4. Ethos of work and its influence on the ethical values of the worker

Problems with the free market Approach

1. Market failures in the form of externalities: cost associated with a market exchange/buying of some good/service. 2. First-generation problem: You don't always learn about these problems until it is too late - it's reactive and damage has already been done. Often we learn about market failures and thereby prevent harms only by sacrificing the first generation as a means of gaining information to know that there is a problem/market failure. (fishing populations) 3. Certain goods cannot be priced: there are certain things like scenic vistas, endangered species, that you cannot put a price on. You shouldn't allow markets to decide whether those kinds of things should be bought or sold. (mineral king)

2 conditions to ensure people are treated with respect in market situations:

1. Person freely consents to the transaction: must not be through threat/force, must not be taken advantage of bc they are in a vulnerable position of needing the product (needing drugs to live, children, elderly) 2. Consumers must be informed: deception/fraud obvi not ok, but sometimes consumers do not understand what they are purchasing (drugs, food with complicated labels, etc.)

Autonomy: 2 conditions

1. Person must freely consent to it: - Must not be threatened to buy it - Must be voluntarily buying the product (cannot be taken advantage of for needing the product - epipen). You need government regulations or protections to ensure you are voluntarily buying the product. 2. Person must be informed about what they're consenting to: - Cannot have any deception/fraud/lies keeping the truth form parties (bc it robs the people of their autonomy, using them as a means to your own ends)

The business case for sustainability

1. Sustainability is a prudent long-term strategy 2. The huge unmet market potential among the world's developing economies can only be met in sustainable ways 3. Significant cost savings can be achieved through sustainable practices 4. Competitive advantages exist for sustainable businesses 5. Sustainability is a good risk management strategy

Problems with the regulatory approach

1. The Regulatory approach underestimates the influence business can have on the law: lobbyists have immense power to pass laws in their interest groups (ex: regulation meant to curve pollution for SUVS, but lobbyists restrict it to only certain automobiles. Businesses have the power to get around the regulations) 2. The Extent of the Law Problem: If we rely on law to protect the environment, then environmental protection will only extent as far as the law extents. (ex: pass regulations on state legislature, but state next door doesn't have that regulation. Companies can up and move to locations that have less stringent laws, continuing their poor behavior + moving externalities elsewhere, losing local economy, etc.) 3. Economic Growth: the regulatory approach assumes that economic growth is environmentally and ethically benign (the more growth the better). BUT there are a lot of ways to increase profits within the parameters of law while still doing all kinds of harm. You can comply with the law and still be a pretty bad company

Difference between digital marketing and traditional marketing

1. Traditional marketing: had access to general demographic information about purchasing behavior based on such things as age, gender, and income, and, especially if the company had an existing relationship with a customer, they would also have specific identifying information such as name, address, and phone number. Digital marketing: has access to all this demographic information, plus such things as your present location, your search history, including how often you clicked on a pop-up ad, which blogs you read and which twitter feeds you follow, what website are most popular right now with people matching your demographics, when and how often you have responded to e-mail solicitations and robocalls, what website or ads you clicked on to bring you to this website, a history of your past shopping searches and purchases, and how often you return a product after purchasing it online

2 factors contributing to the explosion of personal information being available for marketers

1. Tremendous increase in mobile devices, smartphones, and tablets 2. The global popularity of social networks (Facebook, Twitter, LinkedIn) - these supply information to businesses through personal social media accounts - info gathered can be used to target potential customers AND be a commodity in itself (bought/sold/monetized by Google, FB, etc.)

3 concerns when approaching ethical issue in marketing

1. Utilitarianism: Does the transaction provide actual benefits to all parties? 2. Consumer autonomy: To what degree are market participants respected as free and autonomous agents rather than being treated simply as a means to the end of making a sale? 3. Values aside from exchange itself: What other values might be at stake in the transaction?

Problems with our conception of work in America:

1. We lack a vision about what we do and why we do it: we often think that work is primarily/only about making money, but work can transform us by developing our character, interact with other people, etc. 2. We have fallen into a trap of overworking: we continuously work more and more hours than our predecessors ever did. We don't spend enough time with leisure and play and rest. 3. Work-debt syndrome: In America, as we buy more and more things, we go into more and more debt, and we must work more to pay off that debt.

Adina Schwartz: some people may want to work routined, unchallenging, and boring jobs. Employers do not have a responsibility to eliminate such jobs bc...

1. as long as no one is forcing employees to work such jobs, as long as they are free from external constraint, employers have no responsibility to eliminate such jobs. 2. if employers do have a responsibility to eliminate such jobs, then they acknowledge that employee choice alone is not the final factor for determining what constitutes an ethical workplace. - an ethical workplace encourages and advances human goods to make reasoned and autonomous choices

Those who work have 3 large social roles to play:

1. citizens 2. customers 3. producers

Ways market failures can lead to serious environmental harm

1. environmental issues/externalities 2. when no markets exist to create a price for important social goods 3. Distinction between individual decisions and group consequences.

3 pricing situations where markets fail to ensure a fair price (disrespecting consumer autonomy and their relative freedom to accept a price)

1. price gouging 2. monopolistic pricing 3. price fixing

Climbing Clean

1972 Chouinard Equipment became largest supplier of climbing hardware in the U.S. -> increased popularity makes their reusable hard-steel pitons environmental villains. Instead, they used aluminum hocks that could be wedged in + removed w/o damage. - change was for moral (less damage to beautiful routes) and practical routes (people would climb less if it's not as pretty... hurt the business).

Poisoning Our People

1988: not yet changed the way they make their clothing Staff experienced headaches after the opening of their Boston store. They found that the ventilation system was faulty and off-gassing formaldehyde was poisoning the staff. (Formaldehyde could cause cancer of the nose, throat, nasal cavity etc.) - 1991: commissioned a study to assess environmental impacts of their 4 most commonly used fibers in clothes (cotton, polyester, nylon, and wool). - Solution: decided to make 100% organic cotton sportswear by 1996. Had to get farmers with organic methods and succeeded. -

What information can be known?

2 concerns: 1. ○ Consumers themselves often freely disclose a great deal of personal information that goes well beyond what is needed for a simple commercial transaction 2. ○ Businesses that collect this information use if for purposes that were never intended by or are unknown to the consumer.

When target marketing is unethical

Any time that a company uses consumer vulnerability or general vulnerability and exploits it in order to get you to buy their product is unethical because it preys on people's fears, anxiety, lack of ability to actually participate in a market exchange rationally, etc.

1. Sustainability is a prudent long-term strategy:

As the supply of resources needed to sustain human life declines and as demand for those resources increases while worldwide population and consumption increase, business will need to adopt sustainable practices to ensure long-term survival

Patagonia does not consider itself a sustainable company

Because they know they take more from nature than they can give. They see it as inappropriate until they learn how to "house, feed, clothe, and enjoy" themselves without interfering with natures capacity to regenerate itself and support a rich variety of life. - "Responsible" to Patagonia means to lead themselves to a place where business take no more from nature than what it can replace. - However, it makes a difference to do less harm. Lessoning harm makes it possible to begin restorative/regenerative practices

Getting our House in Order

By later 1980s, they realized the personal harm that people engaged in (flying on planes, printed great runs of catalogs, drastically remodeling buildings), but they did not recognize the harm created through clothes making. - Began to change production of catalogs: used high post-consumer-recycled content - Built new/remodeled old retail stores using VOC-free paint, recycled wood/wallboard, + energy-effcient lighting.

Caveat emptor approach

Caveat emptor means "buyer beware" in Latin and this approach suggests that the burden of risk of information shall be placed on the buyer. This perspective assumes that every purchase involves the informed consent of the buyer and therefore it is assumed to be ethically legitimate. - businesses are only responsible to upholds its end of the bargain (provide a good/service @ an agreed upon price. Unless they explicitly warrant the product as safe, the buyer is liable for any harms they suffer) - suggests that consumers who eat unhealthy foods or use opioids are liable for whatever harms they suffer as a result - problem: consumers do not always understand/judge products reasonably

difference between contract law and tort law

Contract law: only duties that a person owes are those that have been explicitly promised to another party. Tort law: we all owe other people certain general duties, even if we have not explicitly and voluntarily assumed them ("I owe others a general duty to not put them in unnecessary/avoidable risk")

Child Day Care

Created an on-site day care bc mothers wanted to be near their babies, breastfeed and comfort them - Pros and difference in the quality of the workday: (1) sight/sound of children playing makes the place feel more human and less corporate (2) presence of children make adults conscious of their mammal responsibilities (grownups first, employees second) (3) women could advance in the company due to childcare, maternal/paternal leave, + flextime policies - Lesson: the presence of kids and the intro of childcare taught them that if there is some quality about the workplace you love and don't want to lose, don't.

Utilitarianism

Economists often assume that consumers are benefited every time their preferences get maximized, but many purchases don't result in actual benefit (impulse buying)

Marketing recap

Ethically appropriate marketing practice targets preexisting and considered desires. Unethical marketing targets potential customers and the basis of their fears, anxieties to manipulate.

First-order and second-order desires

First-order desire: those wants that I just happen to have at any given time Second-order desire: a desire to have a certain desire

Negligence

Focuses on assigning blame for kinds of negligence

powerful motivators that manipulate people

Guilt, pity, a desire to please, anxiety, fear, low self-esteem, pride, and conformity

Attitude influences behavior

How employees think about work will influence performance, productivity, employee turnover, wages, benefits, and absenteeism

Sales

In sales, an individual salesperson deals with individual customers: thus, the causal connection between the consumer's choice and the sales activity can be evaluated much more directly than in mass marketing. (ex. Salesperson relying on fear = assume that intentions r to manipulate to buy) - Sales occur in a feedback situation: salesperson continuously receives direct/tacit feedback from the potential customer. They can then adjust sales pitch accordingly

The Responsibility Triangle

In society, there are 3 competing sets of interests (business, consumers, government) and you need all 3 to play a role in responsibility. 1. We need consumers to be responsible in how they buy goods/services from companies that try to be sustainable 2. We need businesses to step up and play a bigger part in protecting the environment and natural resources 3. We need the government to regulate transactions by making sure there are not massive negative externalities.

New Model of Business (1960s)

Instead of contract model, the burden shifted from what customers agreed to, to what producers were implicitly promising. - Law began to assume that by bringing goods/services to the market, producers were implicitly promising that their products were safe under normal use. - problems: manufactures escaped responsibility easily: they could avoid responsibility by expressly limit/deny any warranty

For how long and under what security conditions can that information be retained?

Issues of data security lead to a strong claim that business has an ethical obligation to prevent such security breaches and that harms that follow from them. - use the best available encryption and security technologies - business has a duty to notify consumers of such breaches immediately and informing them of steps that can be taken to mitigate any harms

Utilitarian concerns of pricing: Utilitarian concerns of pricing

Larger national chains can often sell the same products at lower prices than local smaller firms (but consumers are not always benefitted from lower prices) - Money spent with local businesses remains in the community to create more economic growth than money spent with national retailers - A consumer may benefit from lower prices BUT as a citizen, one might receive greater benefits by paying more for some consumer products and supporting local businesses.

Benefits to buying locally

Locally owned businesses are more likely to... (1) reinvest in their community, hire locally, rely on local suppliers, and use such local professional services as banking, legal advice, accounting firms, and advertising agencies. (2) offer personalized service and make greater contributions to local charities and community events than are national firms (3) remain loyal to the local community

Douglass McGregor (Theory Y of management)

Managers who use this approach trust their people to take ownership of their work and do it effectively by themselves. - workers see the many diveres values attained through work (survival, security, acceptance by others, association with others, friendship, self-esteem, status, respect, creativity, and self-development)

4 P's

Marketing includes 1. making the product 2. pricing the product 3. promoting the product 4. placing the product

Old thinking for business sustainability

Natural resources were thought of as unlimited, restricted only by the cost of extraction/processing. As long as business remained within law, they were free to operate with little thought to the natural environment. In 1990s, concept of sustainability was not corporate mainstream.

thermodynamics

Neither matter or energy can be created, it can only be transferred - Energy is lost at every stage of economic activity, the amount of usable energy decreases over time. "Waste energy" leaves the economic system continuously, so new low-entropy energy must constantly flow into the system (The only source for low-entropy energy is the sun)

Consumer vulnerability

One is vulnerable as a consumer when one is unable in some way to participate as a fully informed and voluntary participant in a market exchange. (Children, people with intellectual disabilities, etc.)

Environmental Giving

Patagonia donates/helps environment for 2 reasons: (1) they want to help (2) they believe they owe the earth a tax for the industrial impact of their business activities. - Began making regular donations of $1,000-$5,000 favoring little groups rather than NGOs; (1986) committed to annually donating 10% of profits to these groups; later, would give 10% of profits OR an annual 1% in sales - better one - Hosts "Tools for Grassroots Activists" teaching marketing, publicity, and lobbying skills to 75 selected participants from groups they work with - Deeply embedded grant giving culture: annual Grant council elections for who chooses groups/size of grants. - Run an environmental internship program - **2002: created 1% for the Planet - an alliance of companies pledging to give 1% or more of annual sales to environmental causes. (35 for specifics)

Evolution of business strategy toward biomimicry

Phase 1: "take-make-waste": business takes resources, make products out of them, and discards whatever is left over Phase 2: Life-cycle responsibility/cradle-to-grace - holds that business is responsible for the entire life of its products, including the ultimate disposal even after the sale business taking responsibility for it products from the "cradle to the grave". Cradle-to-cradle responsibility extends this idea and holds that business should be responsible for incorporating the end results of its products back into the productive cycle (incentivizes the redesign of products so they can be efficiently and easily be recycled)

Contractarian Answer/Caveat Emptor

Producer only owe those things promised to customers

3 common uses of the term responsibility for examining business's responsibility for its products

Responsibility as... 1. cause 2. liability (involves assigning blame/fault) - considers negligence 3. accountability (NO fault/blame) - strict product liability

2. The huge unmet market potential among the world's developing economies can only be met in sustainable ways.

Sheer size of the markets that need to serve people in need makes it impossible to meet demand with the environmentally damaging industrial practices of the 19th and 20th centuries.

4. The ethos and ethics of work

The "portrait" we paint of ourselves at work is how we are known to our selves and others. - the ethos of workplace/corporate culture influence the ethical norms and moral values of individual workers both on and off the job - Work is where we spend our lives, and the lessons we learn there, good or ill, play a part in the development of our moral perspective and how we formulate and adjudicate ethical choices - workplace serves as a metronome for human development and growth: individual workplace sets the agenda, establishes the values and dictates the desired outcome it expects from its employees

Standards for what constitutes deception is challenging

There is a primary ethical wrong with deception in the intent of the deceiver: Intending to deceive people in order to manipulate their buying behavior is to treat them as a mere means to one's own ends. Deceptive practices also lie in the harmful consequences to consumers, competitors, and overall market efficiency.

Patagonia's definition of meaningful work

To have meaningful work is to do something you love to do and are good at doing for a living. Meaningful work is also doing something that gives back to the world. - You find what you love best through trial-and-error or by accident. - Meaningful work: doing things you love to do - When companies take responsible actions that make work meaningful (small or large), it becomes cumulative and the company becomes smarter, more nimble, and potentially more successful

manipulation

To manipulate something is to guide or direct its behavior - It does not equate to control... it is more like a process of subtle direction or management - When I manipulate someone, I explicitly do not rely on his/her reasoned judgment to direct his/her behavior. Instead, I seek to bypass their autonomy - The more you know about the consumer's psychology (motivations, interests, desire, beliefs, dispositions, etc), the better you will be able to manipulate

Critiques of strict product liability

Unfair, costly, socially unwise - unfair: it holds producers responsible for things over which they had no control (bc there was no negligence involved/they couldn't have done anything differently) - costly: adds significant hidden costs to every consumer product and places domestic producers at a competitive disadvantage with foreign business - unwise: discourages product innovation and encourages frivolous/expensive lawsuits

Humans often follow the "means-ends" reasoning pattern

We do something (enroll in a course, accept a job, etc.) as a means to some other end (college degree, job, money, happiness.). We often work as a means to an end: money, prestige, and respect.

How can that information be obtained?

We might argue that consumers must be informed, and companies must receive their consent, whenever personal information is originally obtained. They ought to be informed... (a) that the information will be collected and stored; (b) how it will be used (c) when, how, and under what circumstances it will be shared with third parties (d) how it will be protected. - An opt-in rather than an opt-out standard would offer consumer's additional protection

General Vulnerability

When someone is susceptible to some specific physical, psychological, or financial harm that is relevant to the market exchange (elderly people who live alone, people who need certain drugs in order to survive, etc.)

Monopolistic pricing

When the seller prices a product to maximize his or her profits under the assumption that he or she does not need to worry about competition. - Ex: Microsoft's Windows operating system, gasoline, airline travel, and credit card interest rates

Work has 2 sides

Work can provide opportunities for valuable, meaningful, and uplifting human activity. Work can be dehumanizing, degrading, and depressive.

Career

a developing relationship between the self and the activity. A career suggests an ongoing activity that is defined in terms of wider social institutions that establish standards of achievement and advancement. The sense of development means that careers involve social status and self-esteem in ways that jobs do not.

Think Little

a man who is willing to undertake the discipline and the difficulty of mending his own ways is worth more to the conservation movement than a hundred who are insisting merely that the government and the industries mend their ways

The Footprint Chronicles

a mildly interactive mini-website that, in its first season, traced 5 Patagonia products geographically from design to fiber to weaving/knitting to dyeing to sewing to delivery at our Reno warehouse - an alternative to the corporate social responsibility report (CSR), a tol used to examine the comparative business practices and corporations - Calculated carbon emissions, energy use, waste, and distance traveled from origin to warehouse. - Idea being FC: examine P's full life and habits as a company; look beyond employees to the person who worked on Patagonia products on farms, mills, dye houses, factories, etc.; teach themselves more deeply about their business; bring to the surface unintended harmful consequences of making Patagonia clothes bc "customer had a right to know" (40-41) - Poor working conditions: decided they owed workers man things (high sewing standards, clean, well-lit factories, etc.)

Berry loves gardening

a person who gardens improves a piece of the world, produces something to eat, and becomes independent while doing so. He also enlarges the meaning of food and pleasure of eating - food is fresher, nutritious, less contaminated. He reduces trash problem, reuses wastes, perhaps gets pleasure out of it.

State of total consumption

a state of helpless dependence nothings and services and ideas and motives that we have forgotten how to provide ourself. Meaningful contact between ourselves and the earth is broken

Calling

an earlier tradition of work in which a person's identity and activities were "morally inseparable." Who you are is determined fully by what you do. Traditionally, professions like artisans, farmers, musicians - individuals thought of themselves as "called" to a life of medicine, military service, or teaching.

Dependence Effect (John Kennet Galbraith)

assertion holding that consumer demand depends upon what producers sell. Advertising and marketing were creating the very consumer demand that production then aimed to satisfy. - demand turns out to be a function of supply

5. Sustainability is a good risk management strategy:

avoiding future government regulaion is one benefits. Bc they set the standard for sustainable practices, firms will play a role in determining regulations when it comes, thus avoiding legal liability for unsustainable products. Also avoid consumer boycotts and not be seen as negligent

Economic model

business's only responsibility is the maximize profit within the law. - a business fills its role within a market system that serves the greater overall (utilitarian) good of optimally satisfying consumer preferences (i.e., more people get what they want) and respecting the property rights of business owners

The Sustainability Approach

company is in charge of protecting the environment - We have a problem in that there are biophysical limits to growth. The biosphere can produce resources indefinitely, and it can absorb waste indefinitely but only at a certain rate, so we need to tailor our economic decisions with this problem in mind. We can't continuously use resources at the rate we're using. We need to focus on sustainability (to meet the needs of the present without compromising the ability of future generations to meet their own needs) - main idea: businesses need to be playing a central role in thinking about how to be sustainable for themselves rather than relying on consumer demand or government to force them to do so.

The Free Market Approach

customers are in charge of protecting the environment - markets should be allowed to function as efficiently as possible. The best way for that to happen is if there is no intervention at all. Companies should be able to bring good/service to market and meet that consumer demand. Each party has something at play/stake. - co. job: maximize consumer preferences, give the consumer what they want. If the company does not meet the demand, they're not going to sell their product and the customers can walk away and buy the product from another company. - If consumers decided they wanted environmentally friendly products, a company would have to make environmentally friendly products in order to meet consumer demand - Sometimes there will be environmental costs to production if you're selling a product at a low cost (which is what your consumer wanted). Free market supporters would say that's fine because the job of the company is to meet consumer demand.

4 policy area of environmental consensus

eliminating pollution and wastes, for prudent use of resources, for preserving environmentally sensitive areas, and for biodiversity

Negligence/torts

failure to exercise reasonable care or ordinary vigilance that results in injury to another - 2 fundamental ethical precepts of negligence: (1) commission: doing something that one ought not to - speeding in a school zone (2) omission: failing to do something that one ought to have done - not inspect a product be sending it to market Problem: average consumer is not as smart as we might think - they're not reasonable (don't always read, understand, products or warning labels)

4. Competitive advantages exist for sustainable businesses

firms that are ahead of the sustainability curve will have an advantage serving environmentally conscious consumers and enjoy a competitive advantage attracting workers who will take pride and satisfaction in working for progressive firms.v

Strict product liability

focuses on the performance of the produce itself - in cases where there is no negligence. No fault

Strict product liability

focuses on the performance of the product itself (NOT actions of people involved) -> assigns responsibility to producers - product liability = product "accountability"

U.S. law has taken two general approaches to harmful products

forcing the responsible business to pay for damages, and establishing regulations to prevent harms from occurring - Products liability law provides the means to compensate consumers who have been harmed by a product, and provide the possibility for punitive damages to punish companies if their actions were especially egregious or reckless - Government regulation provides the standards aimed at minimizing or preventing harms from occurring in the first place.

The Regulatory Approach

government is in charge of protecting the environment - free markets are good in some respects but they cant account for everything. When we have problems of externality or companies exploiting the environment for profit, we can put laws in place that protect various goods and resources. Citizens should rely on the democratic process to establish and restrict what we as consumers can buy. (ex: Consumers getting sick from LA smog, went to local/state legislature to restrict pollution, not its more clean)

Bluesign Technologies

independent verification firm that has become one of their most important partners in the work to minimize environmental harm. - perform regular audits for members who agree to establish management systems to improve environmental performance in 5 key areas of production process (resource productivity, consumer safety, water emissions, air emissions, and occupational health and safety)

Work paradox

many of us hate it or are worn down/exhausted by it, yet we eagerly seeking it out/want it. - seen both as a means (vehicle to achieve success, status, stuff, and success) and an end in itself ("Protestant Work Ethic")

Protestant Work Ethic

myth where work is good... any work demonstrates integrity, responsibility, and fulfillment of duty. ("Not to work means you're a bum!) - work is one of the primary means by which adults find their identity and form their character - where we work, how we work, what we do at work and the general ethos and culture of the workplace indelibly mark us for life.

Anthropocentric conservation

nature is a resource to be used by human beings, but it ought to be used conservatively so that it can continue to provide resources for a long period. Problems: Many environmentalists would argue that some natural objects have an ethical standing in their own right and they should not be used or valued simply as resources for human use, emphasizing preservation rather than conservation; Others would argue that some natural areas should be preserved as natural wilderness areas and should not be developed for human use.

Ethical marketing appeal to...

one's agency, autonomy, ability to make a rational choice, interests, things that will help them with activities they're into, etc.

4 P's in Marketing

product, pricing, promotion, and placement

Indirect marketing

reaching a general audience through tv, radio, newspapers, magazines, direct mail, and billboards having to produce fairly generic content - Mass marketing seeks to prompt a product to the widest possible audient w/ the assumption that sales will incr. proportionally to # exposed to advertisement.

Federal Trade Commission (FTC)

regulates deceptive and unfair marketing practices

Goal of marketing

sale - the eventual exchange between marketer and consumer; to influence the buyer to complete a purchase.

3. Significant cost savings can be achieved through sustainable practices

savings on energy use and materials will reduce environmental wastes and spending wastes. Minimizing wastes makes sense on financial and environmental grounds.

Direct marketing

selling a product directly to an already inclined, targeted buyer - conduct demographic research on their audiences, thereby making their platform more attractive to specific advertisers. - Today, digital tech. allows markets to segment markets down to specific individuals - Do this through cell phone co.s, search engines, internet/cable providers, social networks that compile huge amounts of info on consumer behavior.

Circular flow mode

standard understanding of economic activity that explains the nature of economic transactions in terms of flow of resources from businesses to households. - Business produces goods/services in response to market demands of households - These goods/services are shipped to households in exchange for payments back to business - These payments are in turn sent back to households in the form of wages, salaries, rents, profits, interests. - These payments are used for labor, land, capital, and entrepreneurial skills used by business to produce goods/services 2 items worth noting: 1. natural resources are undifferentiated from the other factors of production 2. this model treats economic growth as not only the solution to all social ills, but also as boundless.

Sustainability

the ability to meet the needs of the present without compromising the ability of future generations to meet their own needs. - no economic activity could be sustained if we ignored the environmental context in which the activity occurs.

Digital/smartphone addiction

the compulsive use of digital technologies (when a person can't stop glancing at their phone or checking their social media account). - experience depression/anxiety akin to withdrawal symptoms when technology is removes - Critics say the digital marketing industry intentionally designs online platforms, aps, smartphones, and websites to reinforce this addictive behavior (using psychology/neuroscience)

Key lesson on cheaper products

the lowest, mutually acceptable, price alone is an insufficient basis for determining the ethical legitimacy of pricing policies. - When there are social costs involved in a transaction, costs not reflected in the price agreed upon by the two parties to the transaction, then the price agreed to would be neither fair nor socially beneficial.

3. The work, spend, and debt syndrome

the more we spend, the most debt we have, the more we depend on work to pay our bills - We are addicted to consumer goods (fruits of our labor) - Shopping is a leisure activity - Life is reduced to the hunt for consumer goods. The consumer culture makes it easy to accept the slow erosion of social, political, and moral standards, bc their passing is hardly noticed - we're too busy shopping

Commercial relationship

the relationship between a consumer and a business. Both parties voluntarily enter the relationship for mutual benefit: the consumer benefits from obtaining some goods and services, the business by receiving payment 4 questions to organize ethical analysis 1. What information can be known? 2. How can that information be used? 3. How can that information be obtained? 4. For how long and under what security conditions can that information be retained?

Privacy

the right to control personal information - Person A's right to control information X is a function of the relationship that exists between A and B

2. Workaholism and the decline of leisure

we have become obsessed with time, productivity, and success. Recreation, relaxation, idleness and renewal are on the decline. - being busy/overworked conveys self-worth, even status in America - workaholism is an addiction, but it is an addiction Americans praise, value, and brag about - C.K. Chesterton: leisure is no longer seen as a "noble habit of doing nothing" but as an opportunity to recover from exhaustion. We are harried.

1. Lack of Vision:

what we need: a vision of work that allows us to understand the paradox; vision of work that allows us to overcome the destructive dualism of the contemporary workplace. We need to see that money is never a sufficient reason for work; nor does money ever justify the immoral consequences of work. - along with material goods and services, work provides... 1. a chance to use our talents and abilities 2. an opportunity to overcome our natural egocentricity by working in conjunction with others

Predatory pricing

when a product is temporarily priced below the actual costs as a means of driving competitors out of business - Lower prices might be a tactic employed to drive out competition and, over the long term, will only result in higher prices. Thus, the (long-term) consumer interests are best served by restricting (short-term) low prices.

Price fixing

when companies or the government conspire to set the price of products or services instead of allowing the free market to set the prices

price gouging

when the buyer (at least temporarily) has few purchase options for a needed product and the seller uses this situation to raise prices significantly. - Ex: local hardware store doubling price of generator after hurricane

Job

work in which self-identity is INDEPENDENT of the activity. A job is simply a role that one steps into and out of as a means for earning money. Jobs have no meaning other than the instrumental value as a means for earning wages.

Instrumental Reasons for working

work is instrumentally good insofar as it allows us to obtain the things we need and want. - Needs (food, clothing, house) - Wants (snowboard, cigars, etc.)

Gini's Main Idea

work is more than simply a means to make money. Work transforms us, it does things to us (which is a good thing but may also be a bad thing) - We ought to find work that transforms us in good kinds of ways - We must reconceptualize what work is, what work does to us, what kind of work is meaningful, and how we relate to our jobs as individuals.

Human Fulfillment Model

work is the primary activity through which people develop their full potential as human beings. (somewhat the opposite of classical model). - teleological ethics: humans have a potential that they don't always fulfill; the good life is a life in which this potential is actualized. (HFM sees work as the process to reach full potential) - You develop good work habits that contribute to your character (diligence, perseverance, and concentration) - there is a reciprocal relationship between worker and job: Individual exercises control over their jobs, but jobs influence/shape individuals.

Utilitarian response to manipulation

would be more of a conditional critique of manipulation/deception depending on the consequences - Sometimes people use paternalistic manipulation to manipulate them for their own good. But even in such cases, there are unforeseen harms that can occur (you may erode bonds of trust and respect between persons, thus lessing overall happiness)

Kantianism response to manipulation

would have the strongest objections to manipulation and deception - Market exchanges that respect individual autonomy and freedom are ethically responsible practices, while those that violate autonomy are unethical - ethical: Persuading, asking, informing, and advising are means for influencing others that respect autonomy - these appeal to the rational decision-making abilities of the individual. - Unethical: Threats, coercion, deception, manipulation, and lying are unethical means because they violate autonomy. In these, you manipulate/deceive someone, treating them as a means to your own ends/object to be used rather than an autonomous person in their own right.

Not all jobs contribute to human development/potential

~ E.F. Schumancher: "bad work" is mechanical, artificial, divorced from nature, etc. ~ Karl Marx alienation concept: in capitalist system, workers are mere cogs in a machine. They lack control over the products and productiong ~ Pope John Paul II: work is an essential part of human nature. Humans are meant to be co-creators (made in the image of God the creator) in shaping the earth and using it to maintain their life on earth. ~ Gregory Baum: humans are creating the social and cultural world that socializes them, creates consciousness, attitudes, beliefs, values, interests

Defense against unethical manipulation can be used for marketing, but not sales

■ market claims that deception is unintentional/to general populations, BUT ■ sales rely on deception/appeal to nonrational dears, desires, dispositions of customers. If salesperson reasonably believes the customers is not fully autonomous in decision, they can stop