Marketing, the core-Berkoweitz-Chapter 4

Kickback:

When money is paid after an exchange occurs.

Business cultures

"comprise the effective rules of the game, the boundaries between competitive and unethical behavior, [and] the codes of conduct in business dealings." • Business culture affects ethical conduct both in the exchange relationship between sellers and buyers and in the competitive behavior among sellers

Societal Responsibility

- Refers to obligations that organizations have to preserve the ecological environment and the general public.

Ethics of Competition

- Two kinds of unethical competitive behavior are most common: (1) economic espionage and (2) bribery.

Profit Responsibility

- companies have a simple duty to maximize profits for their owners or stockholders

Triple-bottom line

- to simultaneously improve the state of people, the planet, and profit.

5 steps for social audit

1. Recognition of a firm's social expectations and the rationale for engaging in social responsibility endeavors. 2. Identification of social responsibility causes or programs consistent with the company's mission. 3. Determination of organizational objectives and priorities for programs and activities it will undertake. 4. Specification of the type and amount of resources necessary to achieve social responsibility objectives. 5. Evaluation of social responsibility programs and activities undertaken and assessment of future involvement.

Kind of Espionage

1. Dumpster diving 2. Elicitation 3. Electronic interception 4. Traditional theft 5. Insider treason

There are at least 4 possible reasons the state of perceived business ethical conduct is at its present level:

1. increased pressure on business people to make decisions in a society characterized by diverse value systems 2. The growing tendency for business decisions to be judged public with groups with different values and interest 3. The public's expectations of ethical business behavior have increased. 4. Ethical business conduct may have declined

Cause Marketing

Tying the charitable contributions of a firm directly to sales produced through the promotion of one of its products.

Utilitarianism

A personal moral philosophy that focuses on the "great- est good for the greatest number. By assessing the costs and benefits of the consequences of ethical behavior. If the benefits exceed the costs, then the behavior is ethical. If not, then the behavior is unethical. This philosophy underlies the economic tenets of capitalism and, not surprisingly, is embraced by many business executives and students

Traditional theft

Breaking into a company facility to copy corporate files or stealing an executive's luggage or laptop computer. Install burglary systems at company facilities; executive should hand carry sensitive information.

Elicitation

Business and scientific seminars, international trade shows, and unsolicited telephone calls all present opportunities for eliciting sensitive company information. Since company personnel may not know whom they are talking to, they are instructed to be careful about divulging information.

Consumer Ethics and Social Responsibility

Consumers also have an obligation to act ethically in the exchange process and the use and disposition of products. • Some consumers engage in unethical practices, such as fraud, providing false information, and piracy. • Consumers act illegally toward each other by engaging in online auction fraud, in which consumers misrepresent their goods to others. • Research on unethical consumer behavior indicates that these acts are rarely motivated by economic need. Instead, consumers believe that: o They can get away with the unethical behavior and it is worth doing. o The act is justified since "everybody does it." • Consumers purchase, use, and disposition of environmentally sensitive products relate to social responsibility because they: o Are sensitive to ecological issues. o May be unwilling to sacrifice convenience and pay potentially higher prices. o Lack the knowledge to make informed decisions dealing with the purchase, use, and disposition of products.

Ethics of Exchange

Ethical exchanges between buyer and seller should result in both parties being better off after a transaction.

A person's moral philosophy is:

Learned through the process of socialization with friends and family and by formal education. It is also influenced by the societal, business, and corporate culture in which a person finds him- or herself.

Dumpster diving

Picking through corporate garbage to find valuable information. If an item is proprietary or sensitive, shred or burn it before discarding it.

Electronic interception

Snooping conducted via telecommunications or computer intrusions using hardware available at any electronics vendor. Hire an electronics security consultant to identify possible sources of intrusions. Transmit data by mail, the safest route.

Insider treason

Spying conducted by company employees.Employees should be alert to suspicious behavior.

Current Perceptions of Ethical Behavior

There has been a public outcry about the unethical practices of businesspeople. Public opinion polls show: o The U.S. government is viewed as less trustworthy than corporations. o Advertising practitioners, telemarketers, and car sales people are thought to be among the least ethical occupations.

Bribe:

When money is paid before an exchange occurs.

Ethical Behavior of Top Management and Co-Workers

Workers sometimes violate ethics codes because of how they perceive the behavior of top management and co-workers. • Many executives have been rewarded for engaging in ethically troubling behavior. • Some employees who have refused to engage in unethical behavior have been punished or received a diminished status in the firm.

Ethics

are the moral principles and values that govern the actions and decisions of an individual or group.

Green marketing

consists of marketing efforts to produce, promote, and reclaim environmentally sensitive products.

Whistle-blowers

employees who report unethical or illegal actions of their employers

Your Personal Moral Philosophy and Ethical Behavior

ethical choices are based on the personal moral philosophy of the decision maker

Sustainable development

involves conducting business in a way that protects the natural environment while making economic progress. Companies that show societal responsibility have been rewarded for their efforts. Research shows that these companies: o Benefit from favorable word-of-mouth among consumers. o Typically outperform less responsible companies on financial performance.

Codes of Ethics

is a formal statement of ethical principles and rules of conduct. Ethics codes and committees address

Social audit

is a systematic assessment of a firm's objectives, strategies, and performance in terms of social responsibility and consists of five steps:

Moral idealism

is personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome.

Economic espionage

is the clandestine collection of trade secrets or proprietary information about a company's competitors

Social responsibility

is the idea that organizations are part of a larger society and are accountable to that society for their actions.

Corporate culture

is the set of values, ideas, and attitudes that is learned and shared among the members of an organization.

Consumer Bill of Rights that codified the ethics of exchange between buyers and sellers, which were the right to:

o Safety The U.S. Consumer Product Safety Commission checks the safety of 15,000 consumer products. o Be informed Marketers have an obligation to give consumers complete and accurate information about offerings. This right applies to the solicitation, protection, and disclosure of consumers' personal information over the Internet and subsequent use by marketers. This right has spawned federal legislation, such as the Children's Online Privacy Protection Act (1998) and other self-regulation. o Choose Freedom of choice in the form of practices by firms that do not limit the availability of new product to consumers. Such as supermarkets demanding slotting fees or free goods to stock items on their shelves. o Be heard Consumers should have access to public-policy makers to make complaints about offerings. • The Do Not Call Registry limits unsolicited telemarketing calls.

Caveat emptor

or "let the buyer beware."

Culture

refers to the set of values, ideas, and attitudes that are learned and shared among the members of a group.

Laws

society's values and standards that are enforceable in the courts.

Stakeholder Responsibility.

• Focuses on the obligations an organization has to those who can affect achievement of its objectives (consumers, employees, suppliers, and distributors). • Arose out of criticism of the profit responsibility view. • Failure to consider a company's broader constituencies can have negative consequences.

Difference between Ethics and Laws

• This distinction can sometimes lead to the rationalization that if a behavior is within reasonable ethical and legal limits, then it is not really illegal or unethical. o Often, actions that are technically legal could be viewed as unethical. o Sometimes actions considered to be ethical may not be seen as legal.