Transcript Slide 1

Chapter 4
Social Responsibility
and Ethics in Marketing
Objectives
• Understand concept and dimensions of social
responsibility
• Define/describe importance of marketing ethics
• Familiarize self with ways to improve ethical
decisions in marketing
• Understand role of social responsibility and
ethics in improving marketing performance
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The Nature of Social
Responsibility
Social responsibility – an organization’s
obligation to maximize its positive
impact and minimize its negative impact
on society
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100 Best
Corporate
Citizens
Copyright © Houghton Mifflin Company. All rights reserved.
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Dimensions Of
Social Responsibility
 Social Responsibility
 Marketing/Corporate Citizenship
 Stakeholders
 Marketing Ethics
 Cause-Related Marketing
 Strategic Philanthropy
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Marketing Citizenship
The adoption of a strategic focus for fulfilling
the economic, legal, ethical, and philanthropic
social responsibilities expected by
stakeholders.
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Pyramid Of
Corporate Social Responsibility
Source: From Archie B. Carroll, “The Pyramid of Corporate Social Responsibility: Toward the Moral Management of
Organizational Stakeholders,” adaptation of Figure 3, p. 42. Reprinted from Business Horizons, July/Aug. 1991.
Copyright © 1991 by the Foundation for the School of Business at Indiana University. Reprinted with permission.
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Marketing Ethics
Principles and standards that define
acceptable marketing conduct as
determined by various stakeholders.
BBB Code of Advertising
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Cause-Related Marketing
The practice of linking products to a
particular social cause on an ongoing or
short-term basis.
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Strategic Philanthropy
The synergistic use of organizational core
competencies and resources to address
key stakeholders’ interests and achieve
both organizational and social benefits.
IBM - Overview | Corporate Community Relations
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Social Responsibility Issues
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Green marketing
The specific development, pricing,
promotion, and distribution of products that
do not harm the natural environment.
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Europe’s Eco-Label
EUROPA - Environment - Ecolabel - Latest News
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Corporate Goals For
The Natural Environment
 Eliminate concept of waste
 Reinvent concept of a product
 Make prices reflect the cost
 Make environmentalism profitable
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Marketing Ethics
Ethical Issue – An identifiable problem,
situation, or opportunity requiring a
choice among several actions that must
be evaluated as right or wrong, ethical or
unethical.
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Sample Ethical Issues
Related to the Marketing Mix
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The Nature of Marketing Ethics
• Individual Factors
• Organizational Relationships
• Opportunity
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Factors in Ethical Decision-Making
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Organizational Culture
A set of values, beliefs, goals, norms, and
rituals that members of an organization share.
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Types And Incidences
Of Observed Misconduct
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Improving Ethical
Conduct In Marketing
• Codes of conduct
• Ethics Officers
• Implementing Ethical and
Legal Compliance Programs
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Top Management & Ethics
• Talk about importance of ethics
• Inform employees
• Keep promises
• Model ethical behavior
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Reasons For Not
Reporting Ethical Misconduct
Source: From National Business Ethics Survey, “How Employees View Ethics in Their Organizations 1994-2005,”
Ethics Resource Center 2005, p. 29. © Ethics Resource Center, Washington, DC. Reprinted with permission.
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Codes of Conduct
Formalized rules and standards that describe
what the company expects of its employees
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Ethics Officers
Create/enforce code
Meet with, discuss
code, and advise
organization members
Toll-free hotlines
Salaries Of Ethics Officers
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Implementing Ethical &
Legal Compliance Programs
• Open communication & coaching
• Ethics training
• Clear channels of communication
• Follow-up support
• Enforce standards and impose penalties
• Part of overall marketing strategy
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Audit Of Control Mechanisms
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Challenges Of Ethical and
Socially Responsible Behavior
 Introduction/adaptation of new products
 More user-friendly
 Transparency/openness
 Management responsibility
 Predict long-term effects
 Balancing society’s demands
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Social Responsibility
and Ethics Improve Performance
$ Consumers want to buy from
company associated with cause
$ Company’s citizenship
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