lOMoARcPSD

Corporate Social Responsibility - Lecture notes - Lectures Notes Lecture 1 - 6

Corporate Social Responsibility (Universiteit van Amsterdam)

Verspreiden niet toegestaan | Gedownload door Reem BouZeineddine (meaperfect@hotmail.com)

lOMoARcPSD

Corporate Social Responsibility - lectures

Lecture 1
Friedman (1970): the social responsibility of business is to increase its profits. That means:
- Use resources and capabilities to increase profits for shareholders
- Stay within the rules of the game
- Fiduciary responsibility of employees to owners, i.e. shareholders
So:
- CSR activities are equal to theft
- Equal to imposing tax
- Unless, there is a business case, e.g. increase goodwill, retain employees
Differences between business ethics and CSR:
Ethics: good or bad conduct according to moral standards
CSR: integrating economic, social and environmental targets in one strategy
Business ethics is a key tool for CSR. Sustainability is a key goal for business ethics.
Drivers of CSR:
- Civilization, developing moral
- Deregulation, more market
- Increasing size and economic power of companies
- Increasing ecological impacts
- Increasing expectations towards companies
- Globalization
- Communication technologies
- Increasing CSR market
Motivation for responsible or ethical behavior:
- Profit
- Reputation
- Anticipating legislation
- Competition
- Developing new markets
- Cost reduction
- Professional and industry standards
- Culture
- Moral standards
Relevance of stakeholders:
- Stakeholders define the ethical issues
- Stakeholders define the standards
- Primary stakeholders: employees, customers, investors, shareholders, government,
communities
- Secondary stakeholders: media, trade associations, special interest groups

Verspreiden niet toegestaan | Gedownload door Reem BouZeineddine (meaperfect@hotmail.com)

lOMoARcPSD

Business ethics: the study of business situations, activities, and decisions where issues of
right and wrong are addressed.
Morality: is concerned with the norms, values and beliefs embedded in social processes
which define right and wrong for an individual or a community
Ethics: is concerned with the study of morality and the application of reason to elucidate
specific rules and principles that determine right and wrong for any given situation.
Ethical theories: the rules and principles you can use to determine right and wrong.
Ethics rationalizes morality, to produce ethical theory, that can be applied to any
situation.
Why is business ethics important?
- Power and influence of business in society
- Potential to provide major contribution to society
- Potential to inflict harm
- Increasing demands for stakeholders
- Lack of business ethic education or training
- Continues occurrence of ethical violations
- Evaluating different ways of managing business ethics
- Interesting and rewarding
Ethical impacts of globalization:
- Stakeholders: globalization provides potential for greater profitability, but also greater
risks. Lack of regulation of global capital markets, leading to additional financial risks
and instability.
- Employees: corporations outsource production to developing countries in order to
reduce costs in global marketplace. This provides jobs but also raise the potential for
exploitation of employees through poor working conditions.
- Consumers: global products provide social benefits to consumers across the globe,
but may also meet protests about cultural imperialism and westernization.
Globalization can bring cheaper prices to customers, but vulnerable consumers in
developing countries may also face the possibility of exploitation by MNCs.
- Suppliers and competitors: suppliers in developing countries face regulation from
MNCs through supply chain management. Small scale indigenous competitors
exposed to powerful global players.
- Civil society (NGOs, etc.): global business activities brings the company in direct
interaction to local communities with possibility for erosion of traditional community
life; globally active pressure groups emerge with aim to police the corporation where
governments are weak and tolerant.
- Government and regulation: globalization weakens governments and increases the
corporate responsibility for jobs, welfare, maintenance of ethical standards, etc.
Globalization also confronts governments with corporations from different cultural
expectations about issues such as bribery, corruption, taxation, and philanthropy.

Verspreiden niet toegestaan | Gedownload door Reem BouZeineddine (meaperfect@hotmail.com)

lOMoARcPSD

Sustainability: the long-term maintenance of systems according to environmental, economic

and social considerations.
Sustainable development is development that meets the needs of the present without
compromising the ability of future generations to meet their own needs.
There are three dimensions of sustainability:
1. Economic sustainability: sufficient cashflow and persisten above average return.
2. Environmental sustainability: use natural resources at a rate below natural production,
do not cause emissions beyond the capacity of the natural system, do not degrate
eco-system
3. Social sustainability: add value to communities, increase human capital, foster
societal capital

Lecture 2
Can a corporation have social responsibilities? Milton Friedman argued against this notion.
He said corporations dont have social responsibilities. Three main arguments:
1. Only human beings have a moral responsibility for their actions
2. It is managers responsibility to act solely in the interests of shareholders
3. Social issues and problems are the proper province of the state rather than corporate
managers
Arguments against Friedman. Why do corporations have social responsibilities?
- Business reasons (enlightened self-interest)
o Extra and/or more satisfied customers
o Employees may be more attracted/committed
o Pre-empt legislation
o Long-term investment which benefits corporation
- Moral reasons:
o Corporations cause social problems
o Corporations should use their power responsibly
o All corporate activities have some social impacts
o Corporations rely on the contribution of a wide set of stakeholders in society,
not just shareholders.
Carrolls four-part model of corporate social responsibility:
Corporate social responsibility: includes the economic, legal, ethical and philanthropic
expectations placed on organizations by society at a given point of time.

1.
2.
3.
4.

Philanthropic responsibilities
Ethical responsibilities
Legal responsibilities
Economic responsibilities

(desired)
(expected)
(required)
(required)

Verspreiden niet toegestaan | Gedownload door Reem BouZeineddine (meaperfect@hotmail.com)

lOMoARcPSD

Differences between CSR in the US and elsewhere in the world exist with respect to all CSR
levels:
- Economic responsibility: focus in the US on shareholders/France has extensive
responsibility for employees; India has tradition of investment in the local community
- Legal responsibility: state seen in Europe as key enforcer of rules/elsewhere
government seen with more skepticism (e.g. corrupt, interfering with liberty)
- Ethical responsibility: wide range of local ethical values and preferences; expectations
vary
- Philanthropic responsibility: Europe tends to compel giving via legal
framework/elsewhere (e.g. US, India, China) companies are expected to share their
wealth.
Stakeholder theory of the firm theory developed by Edward Freeman (1984).
Stakeholder: any group or individual who can affect, or is affected by, the achievement of the
organizations objectives.
According to Friedman, businesses should only be run in the interests of their owners.
Others have a legitimate claim on the corporation:
- Legal perspective: stake in corporation already protected legally in some way
- Economic perspective: externalities (outside contractual relationships) and agency
problem (short term interests of owners vs. long term interests of managers,
employees, customers etc.
Saliency: the degree to which a firm positively responds to a specific stakeholder request.
A distinction can be made on the basis of:
1. Power: relative access to resources for the stakeholder group with respect to the firm
being targeted
2. Legitimacy: degree to which there is a general perception of assumption that a
stakeholders actions are desirable, proper or appropriate
3. Urgency: the degree to which a specific stakeholder request calls for immediate
action
There are different forms of stakeholder theory (Donaldson & Preston, 1995):
1. Normative stakeholder theory: attempts to provide a reason why corporations should
take into account stakeholder interests
2. Descriptive stakeholder theory: attempts to ascertain whether (and how) corporations
actually do take into account stakeholder interests
3. Instrumental stakeholder theory: attempts to answer the question of whether it is
beneficial for the corporation to take into account stakeholder interests.
Normative ethical theories: theories that propose to prescribe the morally correct way of
acting.
Descriptive ethical theories: theories that seek to describe how ethical decisions are actually
made in business.
Traditional ethical theories: generally offer a certain rule of principle which one can apply to
any given situation. These theories can be differentiated into two groups:
1. Non-consequentialist ethics
2. Consequentialist ethics

Verspreiden niet toegestaan | Gedownload door Reem BouZeineddine (meaperfect@hotmail.com)

lOMoARcPSD

Egoism: an action is morally right if the decision-maker freely decides an action to pursue
either their (short-term) desires or their (long-term) interests
- Adam smith: pursuit of individual interest morally acceptable as invisible hand of
market creates benefit for all
- Relies on free competition and good information
- enlightened egoism
- However, markets do not function perfectly
Utilitarianism: an action is morally right if it results in the greatest amount of good for the
greatest number of people affected by the situation
- Also called the greatest happiness principle
- Based on cost-benefit analysis
Problems with utilitarianism:
- Subjectivity: this has led to refinement of the theory
o Act utilitarianism (the individual act): looks to single actions and bases the
moral judgement on the amount of pleasure and the amount of pain this single
action causes
o Rule utilitarianism (general rules): looks at classes of action and asks whether
the underlying principles of an action produce more pleasure than pain for
society in the long run
- Issues around quantification and distribution of utility
Ethics of duties: categorical imperative (Kant)
- Maxim 1: consistency act only according to that maxim by which you can at the
same time will that it should become a universal law: if everyone would behave like
that
- Maxim 2: human dignity act so that you treat humanity, whether in your own
person or in that of another, always as an end and never as a means only: show
some respect
- Maxim 3: universality act only so that we will through its maxims could regard as
universally lawgiving (would others agree?): dont tell anyone please...
Ethics of rights and justice:
Natural rights: certain basic, important entitlements that should be respected and protected in
every single action.
- Based on consensus about nature of human dignity
- Strongly based in western view of morality
Justice: the simultaneously fair treatment of individuals in a given situation with the result that
everybody gets what they deserve
- Fair procedures (procedural justice)
- Fair outcomes (distributive justice)
There are some limitations of these traditional theories:
- Too abstract
- Too reductionist
- Too objective and elitist
- Too impersonal

Verspreiden niet toegestaan | Gedownload door Reem BouZeineddine (meaperfect@hotmail.com)

lOMoARcPSD

Too rational and codified

Too imperialist

Therefore, there came alternative perspectives on ethical theories.

1. Approaches based on ethics and responsibility
o Feminist ethics: an approach that prioritizes empathy, harmonious and healthy
social relationships, care for one another, and avoidance of harm above
abstract principles. Key elements:
Relationships: decisions taken in context of personal human
interrelations
Responsibility: active taking of responsibility, rather than merely
having it
Experience: learn and develop from experience
2. Approaches based on procedures of norm generation
o Discourse ethics: aims to solve ethical conflicts by providing a process of
morn generation through rational reflection on the real-life experiences of all
relevant participants. Key elements:
Ultimate goal of ethical issues in business should be the peaceful
settlement of conflicts
Different parties in a conflict should sit together and engage in a
discourse about the settlement of the conflict, and ultimately provide a
situation that is acceptable to all
Ideal discourse criteria
3. Approaches based on empathy and moral impulse
o Postmodern ethics: locates morality beyond the sphere of rationality in an
emotional moral impulse towards others. It encourages individual actors to
question everyday practices and rules, and to listed to and follow their
emotions, inner convictions and gut feelings about what they think is right
and wrong in a particular incident of decision-making.
o Postmodern business ethics emphasizes:
Holistic approach
Examples rather than principles
think local, act local
Preliminary character
Crane and Matten argue that for the practical purpose of making effective decisions in
business:
- Not suggest one theory or one approach as the best or true view of a moral dilemma
- Suggest that all these theoretical approaches throw light from different angles on one
and same problem
- Complementary rather than mutually exclusive

Lecture 3
Motivation/principles Action = non-consequentialist ethics (Duties, Rights&Justice)
Action Outcomes = consequentialist ethics (Egoism, Utilitarianism)

Verspreiden niet toegestaan | Gedownload door Reem BouZeineddine (meaperfect@hotmail.com)

lOMoARcPSD

Major normative theories:

Consequentialist:
- Egoism: Adam Smith
- Utilitarianism: Jeremy Bentham & John Stuart Hill
Non-consequentialist:
- Ethics of duties: Immanuel Kant
- Rights & Justice: John Locke & John Rawls
Descriptive business ethical theories seek to describe how ethics decisions are actually
made in business, and what influences the process and outcomes of those decisions.
The main factors in ethical decision making:
- Concerned with decision about right and wrong
- Decision will have an effect on others
- There are alternative actions possible
- It is perceived as ethically relevant by one or more parties
Analysing an ethical/CSR-issue:
- What is the CSR issue?
- Who are the main stakeholders, what are the stakes?
- What are the management options? What are the potential impacts and results?
- Evaluate using different ethical theories
- Evaluate from a business perspective
- Decide
So, the stages in ethical decision-making are:
Recognize moral issue make moral judgement establish moral intent engage in
moral behavior.
In other words: I can see there is an issue I do not approve I want to change I am
acting.
Influences on ethical decision-making.
There are two broad categories: individual and situational
1. Individual factors: unique characteristics of the individual making the relevant
decision.
o Given at birth
o Acquired by experience and socialization
2. Situational factors: particular features of the context that influence whether the
individual will make an ethical or unethical decision
o Work context
o The issue itself, including:
Intensity
Ethical framing
These factors have impact on the stages in ethical decision-making as described above.
Examples of individual influences on ethical decision-making:
- Age and gender (0)
- National and cultural characteristics (++)

Verspreiden niet toegestaan | Gedownload door Reem BouZeineddine (meaperfect@hotmail.com)

lOMoARcPSD

Education and employment (+)

Psychological factors (+)
o Cognitive moral development
o Locus of control
Personal value (+)
Personal integrity (+)
Moral imagination (+)

Examples of situational influences on ethical decision-making:

- Issue related:
o Moral intensity (+)
o Moral framing (0)
- Context-related:
o Rewards (+)
o Authority (+)
o Bureaucracy (+)
o Work roles (0)
o Organizational culture (+)
o National context (0)
People from different cultural backgrounds are likely to have different beliefs about right and
wrong, different values, etc. and this will inevitably lead to variations in ethical decisionmaking across nations, religions and cultures.
Hofstede was influential in shaping our understanding of these differences, our mental
programming. His 5 dimensions are:
- Individualism/collectivism
- Power distance
- Uncertainty avoidance
- Masculinity/femininity
- Long-term/short-term orientation
Levels of cognitive moral development
1. Pre-conventional
a. Obedience and punishment: individuals define right and wrong according to
expected rewards and punishments from authority figures
b. Instrumental purpose and exchange: individuals are concerned with their own
immediate interests and define right according to whether there is fairness in
the exchanges or deals they make to achieve those interests.
2. Convential
a. Interpersonal accord, conformity and mutual expectations: individuals live up
to what is expected to them by their immediate peers and those close to them.
b. Social accord and system maintenance: individuals consideration of the
expectations of other broadens to social accord more generally, rather than
just the specific people around them.
3. Post-conventional

Verspreiden niet toegestaan | Gedownload door Reem BouZeineddine (meaperfect@hotmail.com)

lOMoARcPSD

a. social contract and individual rights: individuals go beyond indentifying with others
expectations, and assesses right and wrong according to the upholding of basic
rights, values and contracts of society.
b. Universal ethical principles: individuals will make decisions autonomously based
on self-chosen universal ethical principles, such as justice, equality, and rights,
which they believe everyone should follow.
Business ethics management is the direct attempt to formally or informally manage ethical
issues or problems through specific policies, practices and programmes.
Typical components of business ethics management:
- Mission or values statements
- Code of conduct
- Hotlines, special staff, consultants
- Risk management
- Stakeholder dialogue
- Auditing and reporting
Codes of ethics are voluntary statements that commit organizations, industries, or
professions to specific beliefs, values, and actions and/or set out appropriate ethical behavior
for employees.
There are 4 main types of ethical codes:
- Organizational or corporate codes of ethics
- Professional codes of ethics
- Industry codes of ethics
- Programme and group codes of ethics
Prevalence of codes and ethics:
- Increasingly common
- Substantial rise in usage
- Almost all large US firms have a code of ethics
- Was less prevalent in Europe
Global codes of ethics: can organizations devise one set of principles for all countries in
which they operate?
- Consider some examples
o Gift giving in Japan vs. the UK
o Equal opportunity commitments in India vs. UK
- MNEs should be guided by 3 principles:
o Respect for core human values
o Respect for local traditions
o Belief that context matters when deciding right and wrong
- Global codes should define minimum ethical standardso E.g. OECD Guidelines for Multinational Enterprise, UN Global Compact
Areas of assessment:
- Ethical: often a focus on internal management systems

Verspreiden niet toegestaan | Gedownload door Reem BouZeineddine (meaperfect@hotmail.com)

lOMoARcPSD

Environmental: impact on natural environment

Social: broader remit, often including impact on stakeholders
Sustainability: focus on triple bottom line

Social accounting is the voluntary process concerned with assessing and communicating
organizational activities and impacts on social, ethical, and environmental issues relevant to
stakeholders.
Why do organizations engage in social accounting?
There are both practical and moral reasons. Four main issues:
- Internal and external pressure
- Identifying risks
- Improved stakeholder management
- Enhanced accountability and transparency
Disincentives for social accounting:
- Perceived high costs
- Insufficient information
- Inadequate information systems
- Lack of standards
- Secrecy
- Unwillingness to disclose sensitive or confidential data
UN Global Compact
Human rights
1. Businesses should support and respect the protection of internationally proclaimed
human rights
2. Businesses should make sure that they are not complicit in human rights abuses
Labour standards
3. Businesses should uphold the freedom of association and the effective recognition of
the right to collective bargaining
4. The elimination of all forms of forces and compulsory labour
5. The effective abolition of child labour
6. The elimination of discrimination in respect of employment and occupation
Environment
7. Businesses should support a precautionary approach to environmental challenges
8. Undertake initiatives to promote greater environmental responsibility
9. Encourage the development and diffusion of environmentally friendly technologies
Anti-corruption
10. Businesses should work against all forms of corruption, including extortion and
bribery.

Lecture 4
Corporate governance: the process by which shareholders seek to ensure that their
corporation is run according to their intentions. It includes processes of goal definition,
supervision, control and sanctioning.

Verspreiden niet toegestaan | Gedownload door Reem BouZeineddine (meaperfect@hotmail.com)

lOMoARcPSD

In the narrow sense it includes shareholders and the management of the corporation as the
main actors. In a broader sense it includes all actors who contribute to the achievement of
stakeholder goals inside and outside the corporation.
The crucial problem in corporate governance is the separation of ownership and control.
Peculiarities (=merkwaardigheden) of corporate ownership:
- Fragmented ownership
- Divided functions and interests
There is a principal-agent relation with corporate governance.
Principal = shareholder
Agent = manager
seeks remuneration, power, esteem etc.
Principal

Agent
seeks profits, rising share price, etc.

Features of agency relations:

- Inherent conflict of interest
- Informational asymmetry
The solution to this is executive accountability and control.
There is a board: a separate body of people that supervises and controls management on
behalf of shareholders.
There is a dual structure of leadership:
- Executive directors: are actually responsible for running the corporation
- Non-executive directors: are supposed to ensure that the corporation is being run in
the interests of the shareholders.
The Anglo-Saxon has the single-tier board.
The European model has the two-tier board (lower tier = executive directors, upper tier =
supervisory board)

Ethical investment: the use of ethical, social and environmental criteria in the selection, and
management of investment portfolios, generally consisting of company shares.
SRI = sustainable and responsible investing.
The main concerns with the SRI movement are:
- Quality of information: most information is provided by firms themselves and is difficult
to verify
- Dubious criteria: e.g. also companies who produce oil
- Too inclusive
- Strong emphasis on returns
Friedman: the social responsibility of business is to increase its profits.
That means:
- Use resources and capabilities to increase profits for shareholders
- Stay within the rules of the game

Verspreiden niet toegestaan | Gedownload door Reem BouZeineddine (meaperfect@hotmail.com)

lOMoARcPSD

Fiduciary responsibility of employees to owners, i.e. shareholders

Why is there a tension between doing good and doing well?

The dominant paradigm is the theory of the firm as a nexus-of-contracts: the single aim of the
firm is wealth creation. Maximizing shareholder wealth also maximizes social welfare:
providing employment, goods and services, paying taxes, etc.
There are two concerns about social initiatives:
1. Misappropriation of corporate resources: diverting them from rightful claimants
2. Misallocation of resources: companies are not good at solving social misery; this is
the task of the government
Ambec & Lanoie speak of a win-win rhetoric:
Satisfying various stakeholder groups is instrumental for financial performance. Most studies
find a positive relationship between social/environmental performance and financial
performance. A positive win-win relation strengthens the shareholder value model.
Management of human resources: an ethical problem between rights and duties.
Humans are treated as important and costly resource. Consequently, employees are subject
to a strict managerial rationale of minimizing costs and maximizing the efficiency of the
resource.
Employees have 8 rights as stakeholders of the firm:
1. Right to freedom from discrimination
(equal opportunities, affirmative action, reverse discrimination, sexual and racial
harassment)
2. Right to privacy
(health and drug testing, work-life balance, presenteeism, electronic privacy and data
protection)
3. Right to due process
(promotion, firing, disciplinary proceedings)
4. Right to participation and association
(organization of workers in works councils and trade unions, participation in the
companys decisions)
5. Right to healthy and safe working conditions
(working conditions, occupational health and safety)
6. Right to fair wages
(pay, industrial action, new forms of work)
7. Right to freedom of conscience and speech
(whistleblowing)
8. Right to work
(fair treatment in the interview, non-discriminatory rules for recruitment)
An employee also has duties as stakeholders of the firm:
1. Duty to comply with labour contract
(acceptable level of performance work quality, loyalty to the firm)
2. Duty to comply with the law
(bribery = corruptie)
3. Duty to respect the employers property

Verspreiden niet toegestaan | Gedownload door Reem BouZeineddine (meaperfect@hotmail.com)

lOMoARcPSD

(working time, unauthorized use of company resources for private purposes, fraud,
theft, embezzlement)
Discrimination in the business context occurs when employees receive preferential treatment
on grounds that are not directly related to their qualifications and performance in the job.
Managing diversity is a prominent feature of contemporary business.
Reverse discrimination: in some cases people suffer from reverse discrimination because
policies prefer certain minorities. Justification for reverse discrimination:
- Retributive justice: past injustices have to be paid for
- Distributive justice: rewards such as job and pay should be allocated fairly among all
groups.
Stronger forms of reverse discrimination are illegal in many European countries.
Right to healthy and safe working conditions is one of the very first ethical concerns for
employees. There is a network of health, safety and environmental regulation (HSE). The
main issue here is enforcement and implementation. Newly emerged HSE issues relate to
changing patterns of work.
The ethical issues are in context of:
- Excessive working hours and presenteeism:
o Thought to impact the employees overall state of physical and mental health
o Presenteeism: phenomenon of being at work when you should be at home
due to illness or even just for rest and recreation.
- Flexible working patterns: non-standard work relationships
o Part-time work, temporary work, self-employment and teleworking
o Less secure legal status for periphery workers
o Potential for:
Poorer working conditions
Increased insecurity
Lower pay
Exclusion from training and other employment benefits
The freedom of conscience and freedom of speech in the workplace are normally guaranteed
by governments. There are situations in business where freedom of speech might face
certain restrictions, for example speaking about confidential matters related to the firms
R&D, marketing or accounting plans:
- This is usually unproblematic, since most rational employees would find it in their own
best interests to comply with company policy
- Some cases where those restrictions could be regarded as a restriction of employees
rights
Different cultures will view employee rights and responsibilities differently. This means that
managers dealing with employees overseas need to first understand the cultural basis of
morality in that country. This raises the question of whether it is fair to treat people differently
on the basis of where they live. Two views:
- Relativism: view of ethics must always be relative to the historical, social and cultural
context
- Absolutism: ethical principle must be applicable everywhere

Verspreiden niet toegestaan | Gedownload door Reem BouZeineddine (meaperfect@hotmail.com)

lOMoARcPSD

Some yardsticks for ethical decision-making:

- Start with human rights as a basic compass for providing direction
- Differences in the treatment of employees on a global scale depend on the relative
economic development of the country in which the practice is taking place.
The race to the bottom:
Many critics argue that MNCs play a role in changing standards in countries. Globalization
allows corporations to have broad range of choice of locations. Developing countries
compete to attract foreign investment. Large investors tend to choose the country with most
preferable conditions (lowest level of legislation and social provision for employee). This
leads to race to the bottom in environmental and social standards
Work-life balance:
- Increasing incursion of working hours into social life
- Growing pressure for longer hours
- Most notable amongst professionals
- Healthy work-life balance is difficult to maintain
- Some solutions:
o Sabbatical schemes
o Home-based teleworking
Social benefits
Economic benefits
Ecological advantages

Lecture 5
Ethical issues with consumers
Commonplace argument is that businesses are best served by treating their customers well.
So, why are there continued ethical abuses of consumers and poor reputation of marketing
and sales professions? Examples of organizations accused of treating customers in a
questionable manner are:
- Multinational drug companies
- Fast food and soft drink companies
- Banks and credit card companies
Consumer rights can be seen as:
- Inalienable entitlements to fair treatment when entering into exchanges with sellers
- They rest upon the assumption that consumer dignity should be respected, and that
sellers have a duty to treat consumers as ends in themselves, and not only as means
to the end of the seller.
Ethical issues:
- Marketing management
o Product policy
Product safety (right to safe and efficacious products)
Fitness for purpose
o Marketing communications

Verspreiden niet toegestaan | Gedownload door Reem BouZeineddine (meaperfect@hotmail.com)

lOMoARcPSD

Deception
Misleading claims (right to honest and fair communications)
Intrusiveness
Promotion of materialism
Creation of artificial wants
Perpetuating dissatisfactions
Reinforcing stereotypes
o Pricing
Excessive pricing (right to fair prices)
Price fixing
Predatory pricing
Deceptive pricing
o Distribution
Buyer-seller relationships (right to engage in markets)
Gifts and bribes
Slotting fees (right to make a free choice)
Marketing strategy
Targeting vulnerable (right to be free from discrimination)
Consumers (right to basic freedoms and amenities)
Consumer exclusion

Objections that marketing communications:

- Are intrusive and unavoidable
- Create artificial wants
- Reinforce consumerism and materialism
- Create insecurity and perpetual dissatisfaction
- Perpetuate social stereotypes
Consumer sovereignty: customer is king. This has 3 elements:
- Consumer capability: freedom from limitations in rational decision making
- Information: availability and quality of relevant data
- Choice: opportunity for switching
Sustainable consumption:
- Linear flow of resources
Extraction manufacture distribution consumption disposal
- Circular flow of resources
Ethics of negotiation
There are some popular negotiation actions, which can be challenged on ethical grounds:
- Lies
- Deception
- Weakening the opponent
- Non-disclosure
- Information exploitation
- Change of mind
- Distraction
- Maximization

Verspreiden niet toegestaan | Gedownload door Reem BouZeineddine (meaperfect@hotmail.com)

lOMoARcPSD

the ethical problem of race to the bottom: lower costs are often accompanied by sweatshop
conditions:
- Poorer labour conditions
- Less environmental protection
- Lower attention to health and safety
Civil society
It is seen as the third sector:
- State sector (government)
- Market sector (business)
- Civil society sector (NGOs, pressure groups, charities, unions, etc.)
There are different NGO tactics:
1. Indirect action: sometimes criticized for providing misleading information
2. Violent direct action: often illegal, tends to generate the most publicity. Is this action
civil at all?
3. Non-violent direct action:
o Demonstrations and marches
o Protests
o Boycotts
o Occupations
o Non-violent sabotage and disruption
o Stunts
o Picketing
Government
Unlike many other stakeholders, government in principle represents an entire community
since it is elected by the citizens of a certain town, region, country or even continent. There
are elected representatives of citizens interests.
The main source of ethical problems around government stems from fiduciary relation to
society in general. Government has a bipolar situation, it is between business and society.

Lecture 6
Individual factors that influence on ethical decision making:
- Personal values: significant influence; some empirical evidence citing positive
relationship
- Personal integrity: significant influence likely, but lack of inclusion in models and
empirical tests
- Moral imagination: a new issue for inclusion with considerable explanatory potential
- Locus of control: limited effect on decision-making, but can be important in predicting
the apportioning of blame/approbation.

Verspreiden niet toegestaan | Gedownload door Reem BouZeineddine (meaperfect@hotmail.com)