Chapter 3: Ethics and Social Responsibility
Prepared by David Ferrell, B-books, Ltd.
Designed by Eric Brengle, B-books, Ltd.
Copyright 2012 by Cengage Learning Inc. All Rights Reserved 1
Learning Outcomes
2
LO1
LO2
LO3
Explain the determinants of a civil society
Explain the concept of ethical behavior
Describe ethical behavior in business
Copyright 2012 by Cengage Learning Inc. All Rights Reserved
Learning Outcomes
3
Discuss corporate social responsibility
LO5
LO6
LO4
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Describe the arguments for and against social responsibility
Explain cause-related marketing
Civil Society
4
Explain the determinants of a civil society.
LO1
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Civil Society
5
Six Modes of Social Control
Ethics
Laws
Formal and Informal Groups
Self Regulation
The Media
Active Civil Society
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Review Learning Outcome
6
Explain the Determinants of a Civil Society
LO1
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Ethical Behavior
7
Explain the concept of ethical behavior.
LO2
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Ethical Behavior
8
EthicsEthics
The moral principles or values
that generally govern the
conduct of an individual.
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Ethical Theories
9
People usually base their individual choice of ethical theory on their life experiences
•Deontology
•Utilitarianism
•Casuist
•Moral Relativists
•Virtue Ethics
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Review Learning Outcome
10
LO2
Explain the Concept of Ethical Behavior
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Ethical Behavior in Business
11
Describe ethical behavior in business.
LO3
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Ethical Behavior in Business
12
Morals – The rules people develop as a
result of cultural values and norms.
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Ethical Development Levels
13
PreconventionalMorality
ConventionalMorality
PostconventionalMorality
MoreMature
MoreChildlike
• 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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Ethical Decision Making
14
Influential Factors
Extent of Problems
Top Management Actions
Potential Consequences
Social Consensus
Probability of Harm
Time UntilConsequences
Number Affected
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Code of Ethics
15
Code of Ethics- A guideline to helpmarketing managers and other
employees make better decisions.
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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
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Ethical Guidelines and Training
17
Exhibit 3.3
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Review Learning Outcome
18
Describe the Role of Ethics and Ethical Decisions in Business
LO3
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Corporate Social Responsibility
19
Discuss corporate social responsibility.
LO4
Copyright 2012 by Cengage Learning Inc. All Rights Reserved
Sustainability
20
The idea that socially responsible companies will
outperform their peers by focusing on the world’s social
problems and reviewing them as opportunities to build
profits and help the world at the same time.
Copyright 2012 by Cengage Learning Inc. All Rights Reserved
Corporate Social Responsibility
21
Stakeholders
Employees
Management
Customers
Local Community
Suppliers
Owners
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Review Learning Outcome
22
LO4
Discuss Corporate Social Responsibility
EthicalEthicalDo what is right.Do what is right.
LegalLegalObey the Law.Obey the Law.
EconomicEconomicBe profitable.Be profitable.
PhilanthropicPhilanthropicBe a good citizen.Be a good citizen.
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Arguments Against and For Corporate Social Responsibility
23
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 don’t 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
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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
25Copyright 2012 by Cengage Learning Inc. All Rights Reserved
Review Learning Outcome
26
LO5
Arguments for and Against Social Responsibility
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Cause-Related Marketing
27
Explain cause-related marketing.
LO6
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Cause-Related Marketing
28
The cooperative efforts of a
“for-profit” firm and a
“non-profit” organization
for mutual benefit.
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Cause-Related Marketing
29
“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?
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Review Learning Outcome
30
LO6
Explain Cause-Related Marketing
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