Transcript Chapter 1
Lamb, Hair, McDaniel 2011-2012 CHAPTER 3 Chapter 3 Copyright ©2012 by Cengage Learning Inc. All rights reserved 1 © Quayside/Shutterstock.com Ethics and Social Responsibility Learning Outcomes LO 1 Explain the concept of ethical behavior LO 2 Describe ethical behavior in business LO 3 Discuss corporate social responsibility Chapter 3 Copyright ©2012 by Cengage Learning Inc. All rights reserved 2 The Concept of Ethical Behavior Explain the concept of ethical behavior LO1 Chapter 3 Copyright ©2012 by Cengage Learning Inc. All rights reserved 3 Ethical Behavior The moral principles or values that generally govern the conduct of an individual or a group. Example: • There is no law for “cutting in line.” • Cutting in line would anger most other people. LO1 Chapter 3 Copyright ©2012 by Cengage Learning Inc. All rights reserved 4 Ethical Behavior in Business Describe ethical behavior in business LO2 Chapter 3 Copyright ©2012 by Cengage Learning Inc. All rights reserved 5 Ethical Behavior in Business LO2 Chapter 3 Ethics The moral principles or values that generally govern the conduct of an individual. Morals The rules people develop as a result of cultural values and norms. Morals involve “good” and “bad” as well as “deviant” behaviors Copyright ©2012 by Cengage Learning Inc. All rights reserved 6 Ethical Development Levels More Childlike Preconventional Morality Conventional Morality More Mature LO2 Chapter 3 Postconventional 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 Copyright ©2012 by Cengage Learning Inc. All rights reserved 7 Beyond the Book Dell: An Ethics Case Chapter 3 • Documents from a lawsuit revealed that Dell shipped over 11.8 million faulty computers between 2003 and 2005. • An internal investigation revealed extensive problems, but Dell tried to cover up the problem, telling its sales team not to mention bring it up. • Dell at times used faulty components to fix broken computers. • Dell took a $300 million charge to fix the computers, but only in response to stakeholder demands. What level of ethical development is Dell operating at? Copyright ©2012 by Cengage Learning Inc. All rights reserved 8 Ethical Decision Making Influential Factors Extent of Problems Probability of Harm Top Management Actions Time Until Consequences Potential Consequences Number Affected Social Consensus LO2 Chapter 3 Copyright ©2012 by Cengage Learning Inc. All rights reserved 9 Creating Ethical Guidelines A Code of Ethics: © iStockphoto.com/Steve Cady • Helps identify acceptable business practices • Helps control behavior internally • Avoids confusion in decision making • Facilitates discussion about right and wrong LO2 Chapter 3 Copyright ©2012 by Cengage Learning Inc. All rights reserved 10 Ethics in Other Countries Foreign Corrupt Practices Act (FCPA) • Prohibits U.S. corporations from making illegal payments to foreign officials. • Has been criticized for putting U.S. businesses at a disadvantage. LO2 Chapter 3 • Has encouraged some countries to implement their own anti-bribery laws. Copyright ©2012 by Cengage Learning Inc. All rights reserved 11 Corporate Social Responsibility Discuss corporate social responsibility LO3 Chapter 3 Copyright ©2012 by Cengage Learning Inc. All rights reserved 12 Sustainability • Socially responsible companies will outperform their peers. • It is in business’s best interest to find ways to attack society’s ills. LO3 Chapter 3 Copyright ©2012 by Cengage Learning Inc. All rights reserved 13 Exhibit 3.1 Pyramid of Corporate Social Responsibility LO3 Chapter 3 Copyright ©2012 by Cengage Learning Inc. All rights reserved 14 Arguments Against Social Responsibility • Businesses should focus on making a profit and leave social and environmental concerns to nonprofits. • Milton Friedman argued that the free market, and not companies, should decide what is best for the world— socially responsible companies are using shareholders’ money to further their own agendas. LO3 Chapter 3 Copyright ©2012 by Cengage Learning Inc. All rights reserved 15 Growth of Social Responsibility • According to a recent study, the percentage of firms that consider social responsibility factors when making business decisions: LO3 Chapter 3 Brazil Canada 62% 54% Australia United States India 52% 47% 38% China Mexico 35% 26% Copyright ©2012 by Cengage Learning Inc. All rights reserved 16 Cost of Ignoring Social Responsibilities • Some surveys indicate that consumers would be willing to pay more for a socially responsible company’s product. • Making false claims about social responsibility can be especially costly. LO3 Chapter 3 Copyright ©2012 by Cengage Learning Inc. All rights reserved 17 Green Marketing • The development and marketing of products designed to minimize negative effects on the environment or improve the environment. – Environmentally aware customers pay more for products – Companies must try to educate customers of environmental benefits LO3 Chapter 3 Copyright ©2012 by Cengage Learning Inc. All rights reserved 18 Beyond the Book Chapter 3 Videos Chapter 3 Method – Social Responsibility, Ethics, and the Marketing Environment Does method have a societal marketing orientation, or is it just a market-oriented company that integrates a number of environmental practices into its operation? Explain http://www.cengage.com/marketing/boo k_content/1439039429_lamb/company_c lips/ch03.html Copyright ©2012 by Cengage Learning Inc. All rights reserved 19