Chapter 18 Ethics and Socially Responsible Marketing

Chapter 18 - Ethics and Socially Responsible Marketing Chapter 18 Ethics and Socially Responsible Marketing Multiple Choice Questions Using profit as the sole guide for corporate action can lead to: A increased short-run and long-run profitability B short-term profits but long-term loss of customers C long-term profitability but short-term losses D increased corporate social responsibility E an increased customer base in the long run Using profit as the sole guide for corporate action will lead to short-term profits but long-term loss of customers Firms should balance their priorities of making a profit and keeping their customers Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Easy Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-01 The Scope of Marketing Ethics Which of the following should be of paramount importance to marketers? A Profitability in the long run B Maintaining consumer trust C Profitability in the short run D Meeting targets of unit sales E Interaction with the development team Maintaining consumer trust should be of paramount importance to marketers If customers feel that a company is not acting responsibly, they will no longer support it by purchasing its products 18-1 Chapter 18 - Ethics and Socially Responsible Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Easy Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-01 The Scope of Marketing Ethics Which of the following statement is NOT true about ethical issues associated with marketing decisions? A Marketers and sales professional tanks poorly in rating of the most trusted professions B Customers pay attention to issues related to corporate ethics and social responsibility C Many executives believe that creating an ethical climate should be firm's number one priority D Generally speaking, customers not trust professionals E Customers are skeptical of marketing As illustrated in Exhibit 18.1, customers trust level varies for various professionals Nurses, pharmacists, medical doctors, and teachers are trusted professions and advertising practitioners, car salespeople, and telemarketers are among the least trusted professions Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-01 The Scope of Marketing Ethics Which of the following refers to a branch of ethical study that examines ethical rules and principles within a commercial context? A Business ethics B Ethical climate C Corporate social responsibility D Consumerism E Moral mentor metric Business ethics is the branch of ethical study that examines ethical rules and principles within a commercial context It also examines various moral or ethical problems that might arise in a business setting, and any special duties or obligations that apply to persons engaged in commerce 18-2 Chapter 18 - Ethics and Socially Responsible Marketing Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-01 The Scope of Marketing Ethics Special duties or obligations that apply to persons engaged in commerce fall under: A business ethics B ethical climate C corporate social responsibility D consumerism E moral mentor metric Special duties or obligations that apply to persons engaged in commerce fall under business ethics Firms need to follow business ethics to maintain customer trust Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-01 The Scope of Marketing Ethics Deceptive advertising and promotion of inferior products are examples of unethical practices related to: A environment B marketing C marketplace D finance E labour Deceptive advertising and promotion of inferior products are examples of unethical practices related to marketing Marketing ethics deals with societal issues, global issues, and individual customer issues 18-3 Chapter 18 - Ethics and Socially Responsible Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Easy Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-01 The Scope of Marketing Ethics The use of sweatshop labour is an issue most closely associated with: A global marketing B internal and controllable marketing C individual consumers D locational privacy E media The use of sweatshop labour is an issue most closely associated with global marketing An ethical approach requires firms to avoid using sweatshop labour Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-01 The Scope of Marketing Ethics Which of the following is an example of individual consumer issue? A Child labour B Environmental pollution C Violation of a foreign exchange act D Sweatshop labour E Deceptive advertising Deceptive advertising is an individual consumer issue Misleading a consumer through deceptive advertising is an unethical practice 18-4 Chapter 18 - Ethics and Socially Responsible Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-01 The Scope of Marketing Ethics Which of the following professions is often singled out as the root cause of a host of ethical concerns? A Management B Finance C Marketing D Administration E Research and development Marketing ethics refers to those ethical problems that are specific to the domain of marketing Because the marketing profession often is singled out among business disciplines as the root cause of a host of ethical concerns (e.g., unethical advertising or the promotion of shoddy products), anyone involved in marketing activities must recognize the ethical implications of his or her actions Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-01 The Scope of Marketing Ethics 10 The set of values within a marketing firm or in the marketing division of any firm that guides decision making and behaviour is referred to as: A corporate social responsibility B accuracy of representation C ethical climate D explicit rules E legal provision Having a set of values that guides decision making and behaviour helps in creating an ethical climate in a marketing firm, or in the marketing division of any firm It is necessary that all employees of the firm adhere to these values 18-5 Chapter 18 - Ethics and Socially Responsible Marketing Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-03 Creating an Ethical Climate in the Workplace 11 Which of the following is the first step in the process of creating a strong ethical climate within a marketing firm? A Conducting an ethical retreat seminar B Establishing a contractual system C Having a set of values that guides decision making D Developing explicit rules for transactions E Establishing a system of control Within a marketing firm, the first step in the process of creating a strong ethical climate is having a set of values that guides decision making Everyone within the firm must share the same understanding of these values and how they translate into the business activities of the firm, and they must share a consistent language to discuss them Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-03 Creating an Ethical Climate in the Workplace 12 Which of the following is true about creating an ethical climate in a workplace? A It presumes employees to be exclusively responsible for their ethical conduct B It requires a set of explicit rules and implicit understandings that govern all the transactions of a firm C It involves enforcing the ethical values of the top management on unwilling employees D It involves developing different interpretations of the company's stated ethical values E It requires training employees to forgo their personal goals and prioritize the firm's goals Creating an ethical climate in a workplace requires rules and checks to ensure ethical standards in all the transactions of a firm It is necessary that both the top management and the employees cooperate to create an ethical environment in a workplace 18-6 Chapter 18 - Ethics and Socially Responsible Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-03 Creating an Ethical Climate in the Workplace 13 Lawrence has recently joined a publishing company As part of his initial training, he attends a session on marketing ethics Through the session he learns that the basic starting point for creating a strong ethical climate within a marketing firm is having a(n): A ethical retreat seminar B set of values that guides behaviour C contractual system D firm social commitment strategy E set of explicit rules to guide its corporate social responsibility programs The basic starting point for creating a strong ethical climate within a marketing firm is having a set of values that guides behaviour The top management of the firm should be committed to follow these values in all its transactions Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-03 Creating an Ethical Climate in the Workplace 14 To create an ethical climate in a workplace, what must occur after employees understand the company's values? A Conducting an ethical retreat seminar B Establishing a contractual system C Identifying the issues D Developing explicit rules for transactions E Establishing a system of control After employees understand the values of their company, it is necessary to develop explicit rules for transactions This point of reference helps employees to adhere to appropriate ethical practices 18-7 Chapter 18 - Ethics and Socially Responsible Marketing Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-03 Creating an Ethical Climate in the Workplace 15 Almost every organization includes values and ethics in its mission statement, but the establishment of an ethical business climate primarily requires: A clearly stated regulatory requirements B legal training for labourers C weekly reminder seminars D commitment from senior management E cooperation from competitor management The establishment of an ethical climate within an organization primarily requires commitment from senior management The commitment from the management motivates workers to be ethical and responsible Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-03 Creating an Ethical Climate in the Workplace 16 Establishing an ethical business climate requires all employees to be dedicated to that goal because: A their career prospects solely depend upon their ethical decisions B managers rarely enforce values unless employees ask them to so C customers are only vaguely interested in a firm's ethical standards D employees lack the visionary scope to understand the ramifications of unethical behaviour E the roots of ethical conflict often are the competing values of individuals The employees of a firm should be dedicated to the cause of establishing an ethical business climate because the roots of ethical conflict often are competing values of individuals The employees should make an effort to align their values along with the values of the firm 18-8 Chapter 18 - Ethics and Socially Responsible Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-03 Creating an Ethical Climate in the Workplace 17 Once the explicit rules and implicit understandings that govern all the transactions of a firm are in place, there must be: A a system of controls that rewards appropriate behaviour and punishes inappropriate behaviour B a discussion on the necessity of following ethical practices in business C weekly reminder seminars to enforce guidelines D commitment from customers to accept these rules E cooperation from competitors to avoid conflicting outcomes Once the explicit rules and implicit understandings that govern all the transactions of a firm are in place, there must be a system of controls that rewards appropriate behaviour and punishes inappropriate behaviour This ensures that the firm's values are followed in practice Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-03 Creating an Ethical Climate in the Workplace 18 The Canadian Marketing Association's Code of Ethics is designed mainly to: A promote marketing in Canada and overseas B establish and maintain standards for the conduct of marketing C catch deceptive marketers and inform the public of them D establish legal procedures relating to deceptive marketing E establish an association for marketers to share their experiences The Canadian Marketing Association (CMA) Code of Ethics and Standards of Practice (the "Code") is designed to establish and maintain standards for the conduct of marketing in Canada 18-9 Chapter 18 - Ethics and Socially Responsible Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-03 Creating an Ethical Climate in the Workplace 19 One of the reasons that people act unethically is because: A people are innately corrupt B they must choose between conflicting outcomes C everyone acts unethically D they believe that their actions will not lead to negative consequences E people rarely understand the consequences of unethical actions One of the reasons that people act unethically is because they must choose between conflicting outcomes Each person's understanding of ethical dilemmas influences his or her reaction to a conflicting situation Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-04 The Influence of Personal Ethics 20 Howard, the sales manager of a real estate company, is not able to meet the sales target for the current quarter However, he is confident that the sales for the next quarter will improve Which of the following actions indicates Howard's lack of personal ethics? A He calls a team meeting and asks the team to double its efforts to meet the sales target in the next quarter B He devises an incentive scheme to increase sales and to encourage his team C He inflates the sales figures for the current quarter so that it looks better for his branch and himself D He sends an email to the regional manager apologizing and explaining the reason he was unable to meet the sales target E He calls a team meeting to brainstorm and figure out why sales targets were not met for the current quarter Howard's act of inflating the sales figures for the current year so that it looks better for his branch and himself indicates his lack of personal ethics By inflating the sales figure, Howard gives priority to his image than the larger interests of his company 18-10 Chapter 18 - Ethics and Socially Responsible Marketing True / False Questions 94 Using profit as the sole guideline for corporate action is the primary purpose of a business FALSE Using profit as the sole guideline for corporate action will lead to short-term decisions that will cause long-term losses to a firm A firm needs to balance its priorities of profit and customer trust to achieve its long-term goals Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-02 Ethical Issues Associated With Marketing Decisions 95 One of the reasons marketers are frequently singled out for criticism is because they interact directly with people TRUE One of the reasons marketers are frequently singled out for criticism is because they interact directly with people This makes it extremely important that marketers follow ethical marketing practices 18-50 Chapter 18 - Ethics and Socially Responsible Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-02 Ethical Issues Associated With Marketing Decisions 96 The process of creating a strong ethical business climate begins with employee acceptance FALSE The process of creating a strong ethical business climate begins with having a set of values that guides decision making and behaviour It is necessary that everyone in a firm share the same understanding of these values Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-03 Creating an Ethical Climate in the Workplace 97 To avoid ethical dilemmas, the long-term goals of a firm should be aligned with the shortterm goals of each individual within the firm TRUE To avoid ethical dilemmas, the long-term goals of a firm should be aligned with the shortterm goals of each individual within the firm This ensures satisfaction for the individual and benefit for the firm in the long run Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-04 The Influence of Personal Ethics 98 Firms with strong ethical climates tend to be more socially responsible TRUE Firms with strong ethical climates tend to be more socially responsible A firm requires commitment from both the top management and employees of a firm for it to be socially responsible 18-51 Chapter 18 - Ethics and Socially Responsible Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-02 Distinguish between ethics and social responsibility Topic: 18-03 Creating an Ethical Climate in the Workplace 99 An employee is generally expected to be socially responsible in order to fall within the norms of corporate ethical behaviour FALSE Being socially responsible is generally considered beyond the norms of corporate ethical behaviour An employee who follows ethical principles within an organization does not necessarily have to be socially responsible Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-02 Distinguish between ethics and social responsibility Topic: 18-05 Corporate Social Responsibility 100 Canadian government made tobacco companies to contribute to Canadian Cancer Society from their profit This is an example of corporate social responsibility FALSE CSR is a voluntary activity If government made companies to it, it won't be considered as CSR Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-02 Distinguish between ethics and social responsibility Topic: 18-05 Corporate Social Responsibility 101 Acting in a socially desirable manner by taking actions that benefit society provides a company with only intangible benefits FALSE Companies earn both tangible and intangible benefits by acting in a socially desirable manner It makes good business sense to take actions that benefit society 18-52 Chapter 18 - Ethics and Socially Responsible Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-02 Distinguish between ethics and social responsibility Topic: 18-05 Corporate Social Responsibility 102 Being a socially responsible corporation implies that the firm is committing its time and resources to projects in the community which may not directly relate to generating profit TRUE Being a socially responsible corporation implies that the firm is committing its time and resources to projects in the community which may not directly relate to generating profit It does not guarantee that individuals within the corporation follow ethical principles Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-02 Distinguish between ethics and social responsibility Topic: 18-05 Corporate Social Responsibility 103 When companies embrace corporate social responsibility, their appeal is limited to their shareholders FALSE When companies embrace corporate social responsibility, they appeal not only to their shareholders but also to their key stakeholders The stakeholder categories include the company's employees, customers, marketplace, and society Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-03 Describe consumerism and explain how it fosters ethical and socially responsible business practices Topic: 18-05 Corporate Social Responsibility 104 A company that its employees not act ethically cannot be socially responsible FALSE Ethical business practices and corporate social responsibility programs are different 18-53 Chapter 18 - Ethics and Socially Responsible Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-03 Describe consumerism and explain how it fosters ethical and socially responsible business practices Topic: 18-05 Corporate Social Responsibility 105 The first step in ethical decision making is identifying the shareholders and gathering information FALSE The first step in ethical decision making is identifying the issue It helps in charting out a proper course to solve the issue Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 18-04 Identify four steps in ethical decision making Topic: 18-07 A Framework for Ethical Decision Making 106 During ethical decision making, the objective of choosing a course of action is to weigh the various alternatives in order to generate the best solution for the stakeholders TRUE During ethical decision making, the objective of choosing a course of action is to weigh the various alternatives in order to generate the best solution for the stakeholders At this stage, the advantages and disadvantages of all alternatives are analyzed and established Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-04 Identify four steps in ethical decision making Topic: 18-07 A Framework for Ethical Decision Making 107 Marketers of a firm can introduce ethics at the beginning of the planning process by simply including them in the evaluation criteria FALSE Marketers of a firm can introduce ethics at the beginning of the planning process by simply including them in the firm's mission statement Some firms use mission statements that include ethical precepts for shaping the organization 18-54 Chapter 18 - Ethics and Socially Responsible Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-05 Outline how ethics and social responsibility can be integrated into a firm's marketing strategy Topic: 18-07 A Framework for Ethical Decision Making 108 It is important for a company's values to be consistent with those of its primary target market TRUE It is important for a company's values to be consistent with those of its primary target market Failing in this will lead to charges of unethical behaviour and will harm the company's interests Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-05 Outline how ethics and social responsibility can be integrated into a firm's marketing strategy Topic: 18-05 Corporate Social Responsibility 109 It is possible to have more than one right answer to ethical dilemmas TRUE It is possible to have more than one right answer to ethical dilemmas One should use ethical reasoning to evaluate the options and choose the most appropriate one Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-05 Outline how ethics and social responsibility can be integrated into a firm's marketing strategy Topic: 18-07 A Framework for Ethical Decision Making 18-55 Chapter 18 - Ethics and Socially Responsible Marketing Short Answer Questions 110 Why are marketers more likely to be singled out for criticism about unethical behaviour than other business professionals? Provide examples to support your answer Unlike other business functions, such as accounting or finance, people in marketing interact directly with the public Because they are so much in the public's eye, it should not be surprising that marketing and sales professionals sometimes rank poorly in ratings of the most trusted professions Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-01 The Scope of Marketing Ethics 111 What short-run versus long-run ethical dilemma employees in a firm often face? How they avoid it? The employees in a firm are often faced with the dilemma between doing what is beneficial for them and possibly the firm in the short run and doing what is right and beneficial for the firm and society in the long run To avoid these ethical consequences, the long-term goals of the firm must be aligned with the short-term goals of each individual within the firm 18-56 Chapter 18 - Ethics and Socially Responsible Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-04 The Influence of Personal Ethics 112 What is required of a firm before it can align personal and corporate goals? To align personal and corporate goals, a firm needs to have a strong ethical climate, explicit rules for governing transactions, including a code of ethics, and a system for rewarding and punishing behaviour Aligning personal and corporate goals is crucial for employees in a firm to avoid ethical dilemmas Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-04 The Influence of Personal Ethics 113 Describe corporate social responsibility Describe a company who practice CSR Corporate social responsibility (CSR) describes the voluntary actions taken by a company to address the ethical, social, and environmental impacts of its business operations and the concerns of its stakeholders Firms with a strong ethical climate tend to be more socially responsible Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 18-02 Distinguish between ethics and social responsibility Topic: 18-05 Corporate Social Responsibility 114 What companies earn from acting in a socially desirable manner? Companies earn both tangible and intangible benefits for acting in a socially desirable manner because it just makes good business sense to take actions that benefit society 18-57 Chapter 18 - Ethics and Socially Responsible Marketing Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 18-02 Distinguish between ethics and social responsibility Topic: 18-05 Corporate Social Responsibility 115 Identify the two factors that have driven the trend toward greater corporate social responsibility in Canada Consumerism—a social movement aimed at protecting consumers from business practices that infringe upon their rights—and enhanced environmental awareness and activism are two key factors that have been driving the trend toward greater corporate social responsibility in Canada Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 18-03 Describe consumerism and explain how it fosters ethical and socially responsible business practices Topic: 18-06 Consumerism, Ethics, and Socially Responsible Practices 116 Who are the key stakeholders in a firm? The key stakeholders in a firm are its employees, customers, the marketplace, and society at large These categories need to be appropriately addressed when a company embraces corporate social responsibility Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 18-03 Describe consumerism and explain how it fosters ethical and socially responsible business practices Topic: 18-06 Consumerism, Ethics, and Socially Responsible Practices 117 Jennifer, who was recently appointed as her firm's chief ethics officer, wants to make sure her company is making ethical decisions What are the activities Jennifer is likely to engage in? The first step in ethical decision making is to identify the issues, following which Jennifer must gather information and identify stakeholders This is followed by a brainstorming session to evaluate the different alternative courses of action A course of action, which will generate the best solution for the stakeholders, will be chosen after weighing the alternatives 18-58 Chapter 18 - Ethics and Socially Responsible Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-04 Identify four steps in ethical decision making Topic: 18-07 A Framework for Ethical Decision Making 118 How might a firm's choice of target market for its products lead to charges of unethical behaviour? Sometimes a firm's choice of target market and how it pursues it can lead to charges of unethical behaviour While determining what aspects of a product, service, and overall marketing effort are important to a particular group of consumers, marketers should choose the appropriate strategy for its target group Groups may be responsive to a firm's efforts and still not represent an appropriate target market; thus the firm can serve this market but should not Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-05 Outline how ethics and social responsibility can be integrated into a firm's marketing strategy Topic: 18-10 Implementation Phase 119 During the implementation phase, in what way might sourcing decisions be a problem area for firms? Charges that firms use sweatshop labour to produce their goods have been made against many well-known companies Firms are responsible for ensuring that the workers in the factories that produce their goods are treated fairly and paid a living wage 18-59 Chapter 18 - Ethics and Socially Responsible Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-05 Outline how ethics and social responsibility can be integrated into a firm's marketing strategy Topic: 18-10 Implementation Phase 120 How is an ethical climate created in a workplace? Provide an example The process of creating a strong ethical climate within a marketing firm (or in the marketing division of any firm) includes having a set of values that guides decision making and behaviour Everyone within the firm must share the same understanding of these values and how they translate into the business activities of the firm, and they must share a consistent language to discuss them Once the values are understood, the firm must develop a set of explicit rules and implicit understandings that govern all the firm's transactions Top management must commit to establishing an ethical climate, but employees throughout the firm also must be dedicated because the roots of ethical conflict often are the competing values of individuals Each individual holds his or her own set of values, and sometimes those values result in conflicts between employees or even within them Once the rules are in place, there must be a system of controls that rewards appropriate behaviour—that is, behaviour consistent with the firm's values—and punishes inappropriate behaviour Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-03 Creating an Ethical Climate in the Workplace 121 How can a company improve its reputation for corporate social responsibility? Corporate social responsibility describes the voluntary actions taken by a company to address the ethical, social, and environmental impacts of its business operations and the concerns of its stakeholders For a company to act in a socially responsible manner, the employees within the company must also maintain high ethical standards and recognize how their individual decisions lead to the collective actions of the firm Firms with strong ethical climates tend to be more socially responsible Ideally, firms should implement programs that are socially responsible, and employees should act in an ethically responsible manner 18-60 Chapter 18 - Ethics and Socially Responsible Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-02 Distinguish between ethics and social responsibility Topic: 18-05 Corporate Social Responsibility 122 Explain a firm's corporate social responsibility in terms of its stakeholder categories When a firm embraces corporate social responsibility, it appeals not only to its shareholders but also to its key stakeholders including its own employees, its customers, the marketplace, and society at large Employees: Perhaps the most basic corporate social responsibility to employees is to ensure a safe working environment, free of threats to their physical safety, health, or well-being In addition to focusing on employees, more and more firms realize that happy employee families make happy and productive employees Consequently, firms are focusing their efforts on outreach programs aimed at their employees' families Customers: Especially as changes in the marketing environment emerge, a firm must consider the effects on the customers who currently patronize it and future customers whom it is targeting Corporate social responsibility programs must take such shifts and trends into account and react to them quickly Corporate social responsibility often increases consumer awareness of the firm, which can lead to better brand equity and sales in the long run Marketplace: When one firm in the industry leads the way toward corporate social responsibility, its partners and competitors often have no choice but to follow—or run the risk of being left behind In either case, the initiating firm enjoys an advantage by gaining a reputation for being on the cutting edge of corporate social responsibility efforts Society: Firms expend considerable time and energy engaging in activities aimed at improving the overall community and the physical environment Companies cannot ignore societal demands that they act responsibly A firm that fails to so causes damage to all the stakeholders, as well as itself 18-61 Chapter 18 - Ethics and Socially Responsible Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-03 Describe consumerism and explain how it fosters ethical and socially responsible business practices Topic: 18-05 Corporate Social Responsibility 123 Explain the process of choosing a course of action in ethical decision making in a firm Provide one example By using an ethical framework, decision makers will include the relevant ethical issues, evaluate the alternatives, and choose a course of action that will help them avoid serious ethical lapses The objective of choosing a course of action is to weigh the various alternatives and choose a course of action that generates the best solution for the stakeholders by using ethical practices The management of the firm will rank the alternatives in order of preference, clearly establishing the advantages and disadvantages of each It is also crucial to investigate any potential legal issues associated with each alternative Of course, any illegal activity should immediately be rejected To choose the appropriate course of action, marketing managers will evaluate each alternative by using a process something like an ethical decisionmaking metric 18-62 Chapter 18 - Ethics and Socially Responsible Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-04 Identify four steps in ethical decision making Topic: 18-07 A Framework for Ethical Decision Making 124 How can ethics be integrated at each stage of the strategic marketing planning process? • Planning phase: Marketers can introduce ethics at the beginning of the planning process simply by including ethical statements in a firm's mission statement Some firms use mission statements that include ethical precepts for shaping the organization • Implementation phase: The values stated in the mission statement should remain consistent with the values of the company's primary target market Even big companies with years of marketing experience and good ethical standards can make mistakes or bad decisions Hence, marketers should always be vigilant Once the strategy is implemented, controls must be in place to be certain that the firm has actually done what it has set out to • Control phase: Like any activity in the control phase of the strategic marketing planning process, managers must be evaluated on their actions from an ethical perspective Systems must be in place to check whether each potentially ethical issue raised in the planning process was actually successfully implemented Systems used in the control phase must also react to change Firms that respond in the first few hours of a crisis with an organized plan and compassion for those affected suffer fewer long-term negative effects on their reputation, credibility, and level of trust among consumers 18-63 Chapter 18 - Ethics and Socially Responsible Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18-05 Outline how ethics and social responsibility can be integrated into a firm's marketing strategy Topic: 18-08 Integrating Ethics into Marketing Strategy 125 Research shows that Canadian customers are willing to pay a premium price for chickens labeled "grain-fed", and "hormone-free" By regulations in Canada, all chickens are given a feed that consist of 85% grain Furthermore, it is forbidden to use hormones in raising poultry in Canada Therefore, both labels are stating the obvious Jeff is a marketing manager of a large poultry in Ontario He believes using those two labels on their products is legal and if the company doesn't charge a premium price, it would be ethical as well He argues that the company doesn't lie about the product and doesn't charge customers more! Do you agree with Jeff? Use Canadian Marketing Association's Code of Ethics to explain your answer Student answers will vary This practice is not "illegal" as the company doesn't break any law! Students' discussions should focus on marketing ethics The ethical norms and values for marketers discussed in exhibit 18.2 is the best framework to answer this question Markets are responsible for the content of their marketing communications and must by clear and truthful In this case, the poultry is misleading customers by giving them reasons to believe their product is superior to the competition; which is not true According to CMA code of ethics, marketers must not misrepresent a product and must not mislead by statement or manner of demonstration or comparison Based on this framework, Jeff decision to go with the labels in a hope to sell more should be considered as an "unethical practice" Accessibility: Keyboard Navigation Blooms: Analyze Difficulty: Difficult Learning Objective: 18-01 Identify why marketers should be concerned about ethics Topic: 18-03 Creating an Ethical Climate in the Workplace 18-64 ... Objective: 18- 05 Outline how ethics and social responsibility can be integrated into a firm's marketing strategy Topic: 18- 09 Planning Phase 18- 49 Chapter 18 - Ethics and Socially Responsible Marketing. .. practices 18- 24 Chapter 18 - Ethics and Socially Responsible Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 18- 02 Distinguish between ethics and. .. recognition and brand image 18- 29 Chapter 18 - Ethics and Socially Responsible Marketing Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 18- 05 Outline how ethics