MORAL PHILOSOPHIES

1. Moral Idealism

2. Utilitarianism

Moral Idealism - considers certain individual rights or duties as universal, regardless of the outcome. For example: Consumer Bill of Rights - codified the “ethics of exchange” and gave consumers the right to safety, to be informed, to choose and to be heard.

Utilitarianism - focuses on the greatest good for the greatest number of people, assesses the costs and benefits of behavior. For example, inoculations. Some people do get sick from shots but most of the population is protected.

These moral philosophies relate to business with the concepts of:

1. Social Responsibility

Social Responsibility - the idea that organizations are part of a larger society and are accountable to that society for their actions.

1. Profit responsibility - companies have a simple duty to maximize profits for

owners or stakeholders.

2. Stakeholder responsibility - consumers, employees, suppliers, distributors. Do

no harm

3. Societal responsibility - a )preserve the environment and b) general public

a) Green Marketing - consists of marketing efforts to produce, promote, and reclaim

environmentally sensitive products.

b) Cause Marketing - occurs when the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of one of its products.

Firms will conduct a social audit.

Social audit - is a systematic assessment of a firm’s objectives, strategies and performance in terms of social responsibility.

Social audits increase as companies seek to achieve sustainable development

Sustainable development - involves conducting business in a way that protects the natural environment while making economic progress.

CONSUMER ETHICS AND SOCIAL RESPONSIBILITY

Consumers have an obligation to act ethically in the exchange process

Some consumers engage in unethical practices. The cost to marketers in lost sales

Theft prevention expenses is huge:

  • Fraudulent insurance claims: $10 billion annually
  • Downloading unauthorized music, movies, and software via the internet

$40 billion annually

  • Theft prevention packaging: $billions annually

ENVIRONMENTAL SCANNING

Ethics of Competition

Two kinds of unethical competitive behavior are most common:

1. Economic espionage

2. Bribery

Economic Espionage is the clandestine collection of trade secrets or proprietary information about a company’s competitors. The practice:

  • Is both illegal and unethical and carries serious criminal penalties
  • Includes: trespassing, theft, fraud, misrepresentation, wiretapping, searching competitors’ trash, and sometimes violations of employment agreements with noncompete clauses.

Bribery - giving and receiving bribes (when money is paid before an exchange occurs) or kickbacks (when money is paid after an exchange occurs) is considered unethical behavior in American business culture.

  • Are often disguised as gifts, consultant fees and favors
  • The practice is more common in business-to-business and government marketing than consumer marketing.
  • Is most common in industries experiencing intense competition or in countries in the earlier stages of economic development.

The prevalence of economic espionage and bribery in international marketing has prompted laws, such as the Economic Espionage Act (1996) and the Foreign Corrupt Practices Act (1997) to curb these practices.