17/01/2013 Learning Objectives • Provide an understanding of the major social issues that companies need to address in the global marketplace in order to be considered socially Business Ethics Across Cultures responsible practitioners • Consider the use of codes of ethics by global companies to address issues relating to social Ethical practice responsibility • Demonstrate how corporate social responsibility and ethical practice can provide competitive advantage in the global marketplace 1 2 Definition of Ethics Consumer Sentiments about Business • A Business Week (Bernstein 2000) cover story describes Americans as "uneasy about Big Business" (145). Their Business Week /Harris Poll found that 72% of Americans say they believe that business has too much power over American life. • Ethics are the moral principles and values that • Furthermore, 66% of those polled agree that companies care more about making large govern actions and decisions with respect to what is profits than about selling safe, reliable, quality products. right or wrong. • In 1999, a worldwide survey found that two ‐ thirds of consumers surveyed wanted companies to contribute to broader societal goals (Isa 2003). • Business ethics is the systematic study of how moral standards are applied to business decisions, behavior • The 2002 Cone Corporate Citizenship Study found 89% of Americans agreeing that, and institutions. following the recent corporate scandals, “it is more important than ever for companies to be socially responsible.” • An ethical dilemma is a decision that involves the • Voice of the People Survey (n=36,000, 47 countries, 6 continents) conducted by Gallup International and Environics International found 43% of global companies and 52% of tradeoff between lowering one’s personal values in large national companies are not trusted to operate in the best interest of society. These exchange for increased organizational or personal rankings are among the lowest of 17 different types of social institutions. gain. 3 4 1
17/01/2013 Basic Ethical Reasoning Where do they come from? • Personal Moral Philosophy and Ethical Behavior are Derived From: 1. Definition of the Ethical Problem. – Societal Culture and Norms 2. Selection of an Ethical Standard. – Business Culture and Industry Practices 3. Application of Ethical Standard – Organizational Culture and Expectations 5 6 Classifying Marketing Decisions According to Ethical Test Ethical and Legal Relationships Is It Legal? Ethical Ethical Ethical I Ethical ‐ Legal Ethicality but illegal and legal II Ethical ‐ Illegal III Unethical ‐ Legal IV Unethical ‐ Illegal Unethical Unethical and illegal but legal I and IV Easy Unethical II and III Difficult Illegal Legal Legality 7 8 2
17/01/2013 Basic Rights of the Consumer Ethical Test (Cont) Benefit Cost Test Do the benefits exceed the costs to whomsoever they accrue? Safety Categorical Imperative Are you willing to allow everyone to practice the proposed action or do you want to be a special case? Light of Day Test Be Informed Right to What would be your reaction if the action were brought out into the open for public scrutiny? Do Unto Others Test Choose Golden Rule ‐ If you would like others to do the same to you ‐ passes the test Ventilation Test Seek out others views. Discuss the 5 tests with them. If others feel it is OK ‐ passes the test Be heard 9 10 Consequences Based Theories Three Ethical Theories/Approaches (Teleological) • Consequences Based • Derived from “Telos” – End of Purpose • Outcomes or Consequences are Key • Duty Based Types: • Managerial Egoism • Virtue Based • Utilitarianism 11 12 3
17/01/2013 Managerial Egoism Utilitarianism • Proper conduct is driven by the greatest good for • Managers act exclusively in their own self ‐ the greatest number of individuals. interest or that of their firm. • Attractive to Managers • Consequences for me, Benefits for me • Compatible with Traditional Business Ideology • Net Benefits Exceed Net Costs • Personal self ‐ interest or Organizational gain • Accommodates Complex Situations • Many Criticisms • Criticisms • Some even question whether is can be an ethical theory. 13 14 Duty Based Theories Virtue Ethics • Morality of aspiring to be a virtuous person. • Deontological from deon meaning duty. • Moral virtue is a character trait that is morally • Universal principles should guide all actions; tempered valued. with penalties. • MacIntyre defines virtue as acquired human • Actions are best judged as good standing alone without regard to consequences. qualities that enable persons to achieve “the • Suggests costs/benefits analysis is inappropriate in some good” in their chosen vocations. situations. • Means as well as ends should be morally evaluated. • Criticisms 15 16 4
17/01/2013 Individual and Organizational Moral Dimensions of Virtue Ethics Development • Virtues are Good Habits • They should be Practiced • Individuals • Appropriate Virtues are Discovered by Witnessing – Preconventional Stage and Imitating Behavior – Conventional Stage • Aristotle’s Golden Mean – Principled Stage • Core Virtues for Marketing: • Organizational – Integrity – Stage 1: Amoral – Fairness – Respect – Stage 2: Legalistic – Empathy – Stage 3: Responsive – Trust – Stage 4: Emerging Ethical • Criticisms – Stage 5: Developed Ethical 17 18 Improving Ethical Reasoning Seven Step Moral Reasoning Process 1. The Legal Test 2. The Duties Test 1. What is the moral core issue? – Fidelity Gratitude 2. Who are the parties involved? – – Justice 3. Who is/are morally responsible? – Nonmaleficence – Beneficence 4. What information do I need? 3. Special Obligations Test 4. Motives Test 5. What arguments can be brought forward? 5. Consequences Test 6. What is my/our conclusion? 6. Utilitarian Test 7. Rights Test (consumers’ rights) 7. How do I feel? 8. Justice Test 19 20 5
17/01/2013 Can Cause Bitterness in Organization Whistleblowing • Act of disclosing wrongdoing in an • Dissent ‐ Must speak out against others in organization organization • Like blowing a whistle to call attention to a • Breach of Loyalty ‐ Perceived as one who violates thief confidentiality and loyalty • Types • Accusation ‐ Singles out specific individuals as Internal threats to organization or the public External 21 22 Possible Retaliation Bribery • Fired – RBS/Halifax • A payment, usually to a public official, to • Blacklisted induce that person to either do something • Transferred to undesirable locations improper or to influence decisions or actions • Lifestyles, sex lives and mental stability questioned • Physical abuse and murder possible • Extortion ‐ same as bribery ‐ recipient of payment initiates transaction 23 24 6
17/01/2013 Whistleblower Case • International consulting firm ‐ designs and supervises construction of hydroelectric • Watch this video power generating systems • http://www.youtube.com/watch?v=tmV ‐ • Your proposal is far superior to any other aXr_3q0&feature=related technically lowest bid • To get job, must deposit $250,000 in official’s personal Swiss bank account 25 26 Corporate Social Responsibility Should you pay the money? • Foreign Corrupt Practices Act of 1997 • A company’s commitment to minimizing or eliminating any harmful effects and maximizing its long ‐ run beneficial impact on • Grease payment allowed society. • Standard Practice in most foreign countries – Mohr, Webb, and Harris Journal of Consumer Affairs (2001, 47) • Results in lost business opportunities for UK • Marketing Concept is the marketing philosophy that stresses consumer orientation, emphasizes long ‐ range profitability and companies suggests the integration of marketing and other organizational functions. • British tax payers may be used to pay bribe • BAE accused of secretly paying £1bn to Saudi • Societal Marketing Concept expands the marketing concept by focusing the decision maker’s attention not only on satisfaction of prince consumer needs, but also on the broader societal consequences of satisfying these consumer needs. 27 28 7
17/01/2013 Three Concepts of Social Responsibility Web based resources Societal responsibility • http://www.helium.com/items/1496496 ‐ ethical ‐ issues ‐ faced ‐ by ‐ marketers Stakeholder responsibility • http://wiki.answers.com/Q/What_are_the_et Profit hical_issues_in_marketing Profit General Responsibility Ecological Customers Employees public Responsibility environment • http://www.cyberessays.com/lists/ethical ‐ Owners/ Stockholders dilemmas ‐ faced ‐ by ‐ marketers ‐ in ‐ emerging ‐ Suppliers/Distributors markets/page0.html Public interest groups 29 30 8
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