Transcript Chapter 3 - ResearchGate

marketing strategy
O. C. Ferrell
Michael D. Hartline
Marketing Ethics
and Social
Responsibility in
Strategic Planning
C H A P T E R
The Auto Industry Tries to Go Green
• Car manufacturers have gone to great lengths to promote
hybrid cars.
• These cars are generally much more expensive to develop and
produce. Do corporations have a social responsibility to
develop environmentally friendly cars? Why or why not?
Beyond the Pages 3.1
3-2
The Role of Ethics and Social
Responsibility in Marketing Strategy
• Grown in importance recently
– Due to firms having problems in this area
• Have become necessities due to:
– Stakeholder demands
– Changes in Federal law
• Improve marketing performance and profits
• Are important to development of marketing strategy
3-3
Discussion Question
• Why is marketing ethics a strategic consideration
in organizational decisions? Who is most
important in managing marketing ethics: the
individual or the firm’s leadership? Explain your
answer.
3-4
Dimensions of
Social Responsibility
• Social Responsibility
– A broad concept that relates to an organization’s
obligation to maximize its positive impacts on society
while minimizing its negative impacts
• Marketing Ethics
– Principles and standards that define acceptable marketing
conduct as determined by the public, government
regulators, private interest groups, competitors, and the
firm itself
3-5
Marketing Strategy in Action
• R.J. Reynolds has been accused by critics of using its
“Joe Camel” cartoon character, to target children for
cigarette consumption.
• How has society acted to protect children from
advertising such as this? What obligations do
companies have to protect children?
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The Pyramid of
Corporate Social Responsibility
Exhibit 3.1
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Social Responsibility
• Includes:
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–
–
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Economic responsibility of making a profit
Legal responsibility of obeying laws and regulations
Ethical responsibility to uphold principals and standards
Philanthropic responsibility to increase the firm’s
positive impact on society
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Marketing Ethics and Strategy
• Requires that organizations and individuals accept
responsibility
• Can lead to violations of public trust
• Involves complex and detailed decisions in gray areas
• Deals with experiences and decisions made at work
• Comes into play anytime individuals feel manipulated or
cheated
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Potential Ethical Issues in Marketing
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•
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•
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Overall Issues
Product Issues
Pricing Issues
Distribution Issues
Promotion Issues
See Exhibit 3.2 in Text
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Government Regulation of
Marketing Activities
Exhibit 3.3
3-11
The Challenges of Being
Ethical and Socially Responsible
• Business decisions involve complex decisions in which
correctness may not be clear cut
– e.g. Internet privacy, protecting trademarks and brand names
• Ethical conflict may emerge from an inconsistency
between personal values and the values held by members
of the work group
• Ethical issues can develop into legal problems
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Types of Misconduct
Observed in Organizations
Exhibit 3.4
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Discussion Question
• Why have we seen more evidence of widespread
ethical marketing dilemmas within firms today?
Is it necessary to gain the cooperation of
marketing managers to overstate revenue and
earnings in a corporation?
3-14
Deceptive Practices in Marketing
• Deceptive Communications and Promotion
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Fraud or any false communication
Exaggerated claims or statements
Ambiguous statements
Product labeling issues
Selling abuses
• Regulating Deceptive Marketing Practices
– Typically regulated by:
• The firms themselves
• Industry and trade associations
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Organizational Determinants of
Marketing Ethics & Social Responsibility
• Ethical Decision Making
– Determined by an individual’s background and business
colleagues
– Affected by personal values, opportunity for unethical
behavior, and exposure to others
– Intricately tied to the firm’s culture and ethical climate
– Can only be improved by planning and structure
– Likely to occur when modeled by a strong leader
3-16
Ethical Climate
• Part of a corporate culture that relates to an
organization’s expectations about appropriate conduct
– The character component of an organization
– Sets the tone for ethical decisions
– Determines whether or not an individual perceives an issue to
be an ethical issue
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Codes of Conduct (1 of 2)
• Codes of Conduct (Codes of Ethics)
– Formal statement that describes what an organization expects
of its employees
– Not an effective means of controlling ethical behavior unless
integrated into daily decision making
– Not effective unless the code has support of top management
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Codes of Conduct (2 of 2)
•
•
Codes must reflect management’s desire for
compliance with values, rules, and policies
Codes should have six core values:
1.
2.
3.
4.
5.
6.
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Trustworthiness
Respect
Responsibility
Fairness
Caring
Citizenship
Codes will not resolve every issue encountered in daily
operations
Codes can help managers deal with ethical dilemmas
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Key Considerations in Developing and
Implementing a Code of Ethical Conduct
Exhibit 3.5
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Texas Instruments’
“Ethics Quick Test”
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Is the action legal?
Does it comply with our values?
If you do it, will you feel bad?
How will it look in the newspaper?
If you know it’s wrong, don’t do it!
If you’re not sure, ask.
Keep asking until you get an answer.
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Market Orientation
• Market Orientation
– The development of an organizational culture that effectively
and efficiently promotes the necessary behaviors for the
creation of superior value for buyers and, thus, continuous
superior performance of the firm.
– Strongly tied to ethics and social responsibility
– Means fostering a sense of cooperation and information
exchange
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Stakeholder Orientation
•
Stakeholder Orientation
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–
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The degree to which a firm understands and addresses
stakeholder demands
Strongly tied to ethics and social responsibility
Comprised of three activities:
1. Generation of stakeholder groups data and assessment
of firm effects on these groups
2. Distribution of this information throughout the firm
3. Responsiveness as a whole to this intelligence
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Connecting Ethics & Social Responsibility
to Marketing Performance
• Strong ethics causes employees to be:
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–
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Motivated to serve customers
Committed to the firm
Committed to high quality standards
Satisfied with their job
• Can lead to trust among firm’s stakeholders
• Is so important that it can have major negative impacts
on firms that don’t uphold ethical standards
3-24
Discussion Question
• What is the relationship between marketing ethics
and organizational performance? What are the
elements of a strong ethical compliance program
to support responsible marketing and a successful
marketing strategy?
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The Connection Between
Ethics and Strategic Planning
• Typically done through ethical compliance programs or
integrity initiatives
• Vested in the marketing plan
• Based on an understanding of:
– 1) Risks associated with misconduct
– 2) Ethical and social consequences of strategy
– 3) Values of organizational members and stakeholders
• Manifested through actions … not just words
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