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Chapter 3: Ethics and Social Responsibility

Prepared and Designed by Laura Rush, B-Books Ltd.

Copyright Cengage Learning 2012 All Rights Reserved

Learning Outcomes
LO1 Explain the determinants of a civil society

LO2
LO3 LO4 LO5 LO6

Explain the concept of ethical behavior


Describe ethical behavior in business Discuss corporate social responsibility Describe the arguments for and against social responsibility Explain cause-related marketing
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Civil Society

Explain the determinants of a civil society.

LO1

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Civil Society
Six determinants of social control: 1. Ethics 2. Laws 3. Formal and Informal Groups 4. Self Regulation 5. The Media 6. Active Civil Society

LO1

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Explain the Determinants of a Civil Society

Review Learning Outcome

LO1

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Ethical Behavior

Explain the concept of ethical behavior.

LO2

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Ethical Theories
People usually base their individual choice of ethical theory on their life experiences

Deontology
Utilitarianism Casuist Moral Relativists Virtue Ethics

LO2

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Explain the Concept of Ethical Behavior

Review Learning Outcome

Ethical conflicts for business owners, managers, customers, workers, and the communities can sometimes be resolved through the reliance on ethical theories such as deontology, utilitarianism, casuist, moral relativism, and virtue ethics.

LO2

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Ethical Behavior in Business

Describe ethical behavior in business.

LO3

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Ethics and Morals


Good or Bad Foundation of ethical behavior

Morals and Business Behavior Examine the consequences Stress the importance of rules

LO3

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Ethical Development Levels


More Childlike Preconventional
Morality
Based on what will be punished or rewarded Self-centered, calculating, selfish Moves toward the expectations of society Concerned over legality and the opinion of others Concern about how they judge themselves Concern if it is right in the long run
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Conventional Morality

More Postconventional Morality Mature LO3

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Factors Influencing Ethical Decision Making


Extent of ethical problems Top-management actions Potential magnitude of consequences Social consensus Probability of harm Time between decision and consequences Number affected by the decision

LO3

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Code of Ethics

Code of Ethics- A guideline to help marketing managers and other employees make better decisions.

LO3

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Creating Ethical Guidelines


Helps identify acceptable business practices Helps control behavior internally

Avoids confusion in decision making


Facilitates discussion about right and wrong

LO3

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LO3

Describe the Role of Ethics and Ethical Decisions in Business

Review Learning Outcome

LO3

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Corporate Social Responsibility

Discuss corporate social responsibility.

LO4

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Sustainability
The idea that socially responsible companies will outperform their peers by focusing on the worlds social problems and reviewing them as opportunities to build profits and help the world at the same time.

LO4

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Corporate Social Responsibility: Stakeholders


Employees Management Customers Local Community Suppliers Owners

LO4

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Review Learning Outcome


Discuss Corporate Social Responsibility
Philanthropic Be a good citizen. Ethical Do what is right. Legal Obey the Law.

Economic Be profitable.
LO4
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Arguments Against and For Corporate Social Responsibility

Describe the arguments for and against social responsibility.

LO5

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Arguments Against Social Responsibility


Businesses should focus on making a profit and leave social and environmental concerns to nonprofits Businesses dont have the expertise to deal with social issues and doing so may interfere with the primary goals of their firms

The expense of social responsibility may damage the country in the global marketplace
LO5
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Arguments for Social Responsibility


It is the right thing to do
Business should police itself to avoid government intervention Small companies can prosper and build shareholder value as they tackle social problems
LO5
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LO5

Review Learning Outcome


Arguments for and Against Social Responsibility
Against On the other hand: the job of the corporation is to maximize profits for stockholders Businesses are better suited to produce goods and services and not be involved in welfare services If global competitors dont have to be socially responsible, they will have lower costs and can compete more effectively in the global marketplace

For On the one hand: Its the right thing to do Government will create new regulations and levy fines if firms arent socially responsible It can enhance a companys profitability

LO5

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Cause-Related Marketing

Explain cause-related marketing.

LO6

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Cause-Related Marketing
Five Questions to Ask Before Participating in a Cause-Related Marketing Program Is this company committed? How is the program structured?

Who does the program benefit?


How will the organization that benefits use my money?

Is the program meaningful to me?

LO6

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LO6

Review Learning Outcome


Explain Cause-Related Marketing

Can enhance for-profit corporations reputation and raise profits


Cause-related marketing: Cooperative effort between for-profit and non-profit organizations

Non-profit receives financial support and publicity for cause

LO6

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Chapter 3 Company Clip


This video segment shows the all-natural household cleaner company, Method, through yet another lens - that of corporate social responsibility (CSR) and sustainability. http://www.cengage.com/marketing/book_con tent/9781111821647_lamb/videos/ch03.html

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