EthicsinMarketing
Internationalcasesandperspectives
Secondedition
WrittenandeditedbyPatrickE.Murphy,GeneR.LaczniakandFionaHarris
Firstpublished2017 byRoutledge
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LibraryofCongressCataloginginPublicationData
Names:Murphy,PatrickE,1948-author|Laczniak,EugeneR,author|Harris,Fiona J(FionaJane),1967-author
Title:Ethicsinmarketing:internationalcasesandperspectives/writtenandeditedby PatrickEMurphy,GeneRLaczniakandFionaHarris
Description:Secondedition|NewYork:Routledge,2016|Includesbibliographical referencesandindex
Identifiers:LCCN2016029976|ISBN9781138648081(hardback:alkpaper)|ISBN 9781138648098(pbk:alkpaper)|ISBN9781315626642(ebook)
Subjects:LCSH:Marketing--Moralandethicalaspects|Marketing--Casestudies Classification:LCCHF5415M83482016|DDC174/4--dc23LCrecordavailableat https://lccnlocgov/2016029976
ISBN:978-1-138-64808-1(hbk)
ISBN:978-1-138-64809-8(pbk)
ISBN:978-1-315-62664-2(ebk)
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VisittheeResources:wwwroutledgecom/Ethics-in-Marketing-International-Cases-and-Perspectives/Murphy-LaczniakHarris/p/book/9781138648098
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TotheLaczniakandCarollofamilieslivinganddeceased GRL
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Contents
Cover Title
Copyright Dedication
Contents
Listoffigures,tables,boxesandappendices
Listofcasecontributors
Preface
Acknowledgments
PARTIBackground
1Foundationalperspectivesforethicalandsociallyresponsiblemarketingdecisions
2Advancedperspectivesforethicalandsociallyresponsiblemarketingdecisions
3“Preservingtheventure”asamplecasestudywithframeworksandethicalanalysis
PARTIIShortcases
4Justafriendlyrequest
TERRILRITTENBURG
5Goingalongtogetalong RAYMONDFKEYES
6CasasBahia
CHRISSYGOLDEN
7DiscountDrugstore:nogiftsallowed?
GENERLACZNIAK
8Referencepricesinretailing:whatisafaircomparison? FIONAHARRIS
9DrugtestinginIndia
NICHOLASJ.C.SANTOS
10StarbucksChina:theworld’spriciestcupofcoffee PEILUCHEN
PARTIIIIntermediatecases
11SuperiorServices:shouldshortskirtssellsoftware? LORILEPPCORBETT
12ToughDecisions:somethingtosnackon BRENDAND.MURPHY,PATRICKE.MURPHYANDSTACEYL.MEADER
13Ayoungpharmacist’sdilemma:questionabletransactions
BARBORAKOCANOVAANDVERONIKAVOSYKOVA 14PETA
KARINBESENBAECKANDHALEYROSENBACH
15Zaraandfastfashion
SARAHEIDE,ELIZABETHSADLERANDSARAHTONTI
16TheCo-operativeBankoftheUK FIONAHARRISANDSARAHTONTI
17Counterfeitsinonlineretailing:howtheyaresoldandwhatcanbedonetofight back
BARBARASTÖTTINGERANDJULIAGSCHWENDNER
18MontenegroElectronics,Ltd. GENERLACZNIAK
PARTIVLongcases
19TheCoca-ColaCompany:theskinnyonabigfatproblem
MARSHELRAPUZZI
20Auchan(France)
GEERTDEMUIJNCK
21TOMSShoes:OneforOnemovement
ROBERTMEARA,MATTHEWTERILLIANDJENNIFERSAWAYDA
22Facebookinthedevelopedanddevelopingworld
EVAMARIEDSCHULTE
23VISAandFIFA:everywhereyouwanttobe?
BRIANRLEVEYANDJAMESMATAKOVICH
Index
Listoffigures,tables,boxesandappendices
Figures
11Asummaryoftheessentialbasicperspectivesforevaluatingandimprovingmarketingethics
1.2Therelationshipofethicsandlaw
13Fourtypesofmarketingmanagers
21StakeholdersforSouthwestAirlines
2.2Aprotocolforformalizingtheethicalevaluationprocessinmarketingorganizations
23Themarketingmanagementprocess
Tables
21Virtueethicsandmarketing
4.1SCIPCodeofEthicsforCIprofessionals
151Zarastoresinselectedcountries
221Keyacquisitions
22.2Timeline
Boxes
1.1AmericanMarketingAssociationStatementofEthics
21Moralmaximsformarketing
Appendices
1Illegalmarketingpractices
2Religion-basedapproachestomarketingethics
3MilestonesindataprivacyregulationsintheUnitedStates
4MilestonesindataprivacyregulationsintheEuropeanUnion
Foundationalperspectivesforethicalandsocially responsiblemarketingdecisions
Fiveyearsago,whenwepreparedthefirsteditionofthisbook,wecommentedextensivelyonthefalloutfrom thefinancialethicsscandalsofthefirstdecadeofthetwenty-firstcenturyInparticular,attheoutsetofthe 2000s,thetechnology“bubble”hadburstshowingthepurportedvalueofmanyInternet-relatedcompaniesto havebeengreatlyinflatedMoredramatically,in2007–2008,ahousing“bubble”centeredintheUSA dramaticallycrateredHousing,itturnedout,wasbuilton“easycredit”andwashyper-leveragedbycomplex andover-valuedmortgage-basedsecuritiesthatfinancialinstitutionshadbroadlyperpetuatedThesubsequent economicroutledtoa“GreatRecession”intheUSaswellasEuropeand,forawhile,theglobalbanking systemteeteredoncollapseWhilemanyobserversconsideredboththeseeventstobeethicalfailuresofthe financialsystem,wepointedoutbackthenhowmarketingactionshadalsobeencentralcauses,especiallythe aggressivepackagingandsellingofhomeloanstothosewhocouldnotaffordthemaswellasthe financializationandsaleofmortgage-basedsecuritiesWhile“bigbanks”werequicklybailedoutbythe economicguaranteesoftheirgovernments,middle-classpeoplelostconsiderablesumsofmoneyfromthe markeddeclineintheirhomes’value,thedownturnintheirretirementsavingsaccountsandthelossofjobs duetoafalteringeconomyTragically,theyhaveyettofullyrecoverConsumersintheUSandEurope remaininastateofconsiderablediscontent
Asweapproachtheendoftheseconddecadeofthetwenty-firstcentury,wewishwecouldreportthat lessonsofpastyearshavebeenlearnedandthatbusinessandmarketingethicsacrosstheworldaremuch improvedUnfortunately,thatisnotthecaseWhilemostmarketersstrivetodotherightthing(aswediscuss inthischapter),therearestilltoomanybreechesofethics,manyofwhichflowfrommarketingconnected practices
Forexample,inamajorscandalthatbrokein2015,Volkswagen(VW),theGerman-headquarteredglobal manufacturerofautomobiles,wasfoundtohavebeensystematicallydeceivingconsumersaboutengine emissionsformanyyears1Thecompanyinstalledcomputerized“cheatware”ontheirdieselautomobilesto makeitlooklikethesecarscouldpassvariousgovernment-mandatedemissionstests,wheninfactthevehicles werepollutingtheenvironmentatupto40timesthestipulatedlimitsThatacompanymightbetemptedto “rig”itsproductperformancemeasureswasnotsomuchasurpriseastheextensivenatureoftheduplicitous interventionbyVWaswellasthelargenumberofexecutivesandemployeeswhomusthaveknownthatthe violationswereoccurringAsof2016,VWdieselsaleshavebeenbannedintheUSformanymodels, Volkswagen'smarketsharehasplungedduetothehorriblepublicity,manyVWexecutiveshavebeensacked and,accordingtooneestimate,thissadepisodecouldcostthecompany48billiondollars(U.S.)inassorted penaltiesbeforeeverythingplaysout.2
NotallmarketingethicsscandalsareasdramaticastheVWone,butifagivenconsumerisavictimofa dubiousmarketplacetransaction,herfrustrationisequallyhighThecurrentlandscapeofmarketingethics,in termsofhowsomecompaniestreattheirconsumers,isnotaparticularlyprettyone.Inonerecentanalysisof howsomemarketersabuseandexploittheircustomers,thefollowingexamplesweredocumented:3
On-linemarketersregularlyextractvaluablepersonalinformationfromtheirclients;dataextraction oftenoccurssurreptitiouslyaidedbyobliqueagreementformsanddifficulttotakeadvantageofoptoutproceduresOnceincontrolofthecustomerinformation,toooftenmarketersdonotprotectthe datafilesadequatelyortheysellthemtootherswhodonotinsureitssafety,and/ortheydonot provideredressmechanismsforincorrectinformationMostoftheinformationgatheredendsupinthe
handsofdataaggregators,whocreateenhancedconsumerprofilesavailableforadditionalre-sale Marketersexploitmegatrendssuchasenvironmentalsustainabilityandhealthynutritionby “greenwashing”productclaimssuchas“natural”and“organic”orbyexaggeratingthewellnesseffects ofunprovenitemssuchasherbalsupplementsForexample,Cokerecentlypromotedtheecological advantagesofapartiallyplant-basedplasticbottlebutahigh-rankingconsumer-protectionofficial foundthatitexaggeratedtheproduct'senvironmentalbenefitswithoutofferingproof.4
Intheairlineindustry,wheremanyconsumersdesireanintegratedpackageofairlineservices,sellers haveunbundledtheirofferingstothefrustrationofmanycustomersie,thereareoftenseparatefees forcheckedbags,meals,earlyboarding,aisleseats,headphones,extraleg-roomandmanyother dimensionsthatarethenleveragedtomaximizetheamountofcustomerrentextractedInmany smallermarkets,consumersarealsowithoutbasicchoiceastowhichcarriertoflyIrishRyanAir onceevenproposedsellingstandingroomticketstotravelersaswellaschargingflyersafeetousethe restroomonshortflights
Eachofthesesituationsisatoddswithauthenticcustomer-orientationWhereasthemarketingactions describedarearguablylegal,theyalsocanbeshowntobeunethicalaccordingtoseveralstandardsof professionalpracticethatwillbediscussedinthenexttwochapters.Wemustrealizethatethics(andits transgression)alwayshaspersonal,organizational,andsocietalimplicationsSincetheshadyactivities occurringintheseorganizationswereundertakenbyindividuals,thepersonalethicsofmanagersarecalled intoquestion.Theparticularcorporateculturealsomayhaveencouragedandoftensupportedunethical actionsasintheVWcaseThus,organizationalethicsispertinenttogoodmarketingpracticeThesocietal implicationsarerelevantaswellInthecaseofthehousingbubble,theeconomiesoftheUS,WesternEurope andmuchofthedevelopedworldwobbledonthebrinkofimplosionandhaveyettofullyrecover,alldueto theactivitiesofafewpowerfulandunethicalbusinessfirmsWhatseemsclearisthataninter-connectedness ofworldwideeconomyandvirtuallyinstantaneouscommunicationaboutmisdeedsthroughtheInternetmakes acommitmenttoethicsagrowingimperativeasmarketersmovetowardthethirddecadeofthenewcentury.
Withthisbrieftouroftwenty-firstcenturyethicalfailingsinmarketingasourbackdrop,thischapterbegins withadefinitionofmarketingethicsthatservesasthefoundationforallthatfollowsThecoreofourmessage isaroundseven“basicperspectives”forethicalandsociallyresponsiblemarketing.Eachofthesenormative approachesisexplainedanddiscussedinsomedepthInordertomakethismaterialdigestible,thischapter examinesthefirstfourperspectivesandthesecondchapterfocusesonthefinalthreenormative recommendations.
Ethicalmarketingdefined
Inanearlierbookonthistopic,weindicatedthatethicsdealswiththemoralityofhumanconductWewent ontosaythat:
Marketingethicsisthesystematicstudyofhowmoralstandardsareappliedtomarketingdecisions,behaviors,andinstitutions5
Thefactthatmarketingethics,likelegalandmedicalethics,isanappliedfieldconstitutesanimportantaspect ofthedefinitionMarketingdecisionspertaintoahostofspecificissueslikesellingcigarettestoteenagers, violence-themedproducts,pricingatalevelthatgougesunsuspectingconsumers,advertisingthatmanipulates viewersandsoonThebehaviorgovernedbyethicalprinciplesinvolvesallpersonnelinvolvedinmarketing topmanagement,theCMO,sales,distribution,customerservice,advertisingandpublicrelationsFinally, marketingethicsissuesariseininstitutionsofseveraltypes:SMEs(smallandmedium-sizeenterprises),MNCs (multinationalcorporations),NFPs(nonprofitorganizations)andotherNGOs(non-governmental organizations)
Ourapproachhereisconsistentwiththeabovedefinition,butsubtlydifferent,becausewetakeprimarilya normative,prescriptiveapproach.Therefore,ourdefinitionemphasizestheidealstowardwhichmarketingand marketersshouldaspire:
Ethicalmarketingreferstopracticesthatemphasizetransparent,trustworthy,andresponsiblepersonaland/ororganizationalmarketing policiesandactionsthatexhibitintegrityaswellasfairnesstoconsumersandotherstakeholders
Becauseethicsoftendealswithsubjectivemoralchoices,thequestionbecomeswhatmoralstandardsoughtto beappliedtowhichethicalquestionsinmarketingForexample,isitproperforanadvertisingcopywriterto useablatant(butlegal)sexualstereotyping,whichmightinvolvetheobjectificationofwomen,whenthe agencyhasdemonstratedthatsuchappealssellmoreofaclient'scosmeticsproducts?Cynicsclaimissueslike thesetendtogeneratemuchdisagreementand,thus,illustratethefutilityofdealingwiththe“always subjective”ethicsareaHowever,asweshallrepeatedlyshowinthefollowingpages,inmanyindustriesandin manysituations,thereisagreatdealmoreconsensusaboutwhatisacceptedbythemajorityofstakeholdersas ethically“proper”thanmanycasualobserverssuspect
Weseeethics,orthestudyofmoralchoice,ashavingtwodimensionsFirst,ethics,viaitsfoundationin moralphilosophy,providesmodelsandframeworksforhandlingethicalsituations,ie,variousapproachesto ethicalreasoning.Typicallysuchmodelshelpdescribethebehaviorofmarketersinfacingethicalsituations. Forinstance,ethicsleadsustoconsiderwhetheronemightjudgethemoralappropriatenessofmarketing decisionsbasedontheconsequencesforvariousstakeholdersoronthebasisoftheintentionsheldbythe decision-makerwhenaparticularactionisselected.Often,differingapproachesleadustosimilarconclusions aboutthe“ethicalness”ofaspecificactivityUnfortunately,differentapproachessometimesleadtodivergent conclusionsInChapter1,wesetouttodiscussthefundamentalapproachestoanalyzingmarketingethicsand weexplainwhatrationaleliesbehindthewaymanagersactuallydealwithethicalproblemsanapproach sometimescalledpositiveordescriptiveethics
Theseconddimensionofethicsaddressesthequestion:“Whatisthe‘right’thingtodo?”Thisisthe normativeaspectofmarketingethics.Whenpeoplesaythatsomeoneisactingethically,theyusuallymeanthe personisdoingwhatismorallycorrectTheunderpinningsforunderstandingwhatoneoughttodocome mostlyfromourindividualvaluesTheseareshapedbyourfamily,localcommunity,religioustraining,life experience,andpersonalfeelingsabouthowweshouldtreatotherpeople.Aprominentmanageronce remarkedthatsomeoftheelusivenessaboutwhatconstitutesanethicalpersoncouldbeovercomeiftheword trustweresubstitutedforethics;thatis,ethicalmarketingmanagersaretrustworthyinthattheycanalwaysbe countedontotrytodotherightthing.SuchmanagershavedevelopedwhattheGreekphilosopherAristotle andothershavecalledpracticalwisdom
Itisalsocorrecttoobservethatethicsisasubjectwherepeoplecannotsayanythingofsubstancewithout revealingquiteabitabouttheirownvalues.Throughoutthischapterandthenext,wewillmakenormative judgmentsaboutvariousmarketingpracticesWhilesomeofourevaluationsmaycausedebateand disagreement,ourmajorpurposeistoincreasestudents’andmanagers’sensitivitytotheethicalquestions whichregularlyoccurinmarketingandtoassisttheminmakingmoreconsistentlyethicaldecisions
Normativeapproachestoethicalmarketing6
Tothisend,thesetofbasicperspectives[BPs]offeredbelowisaboutthebroadermoraldimensionsthat shouldideallycharacterizethemarketingandsocietyinterfaceevenasfirmsoperateasautonomous,economic unitsInthatsense,thesocialandethicalcommentaryofthischapterappliestothepracticesofallmarketing organizationsevenascertainobservationsmaybeespeciallyrelevanttoaparticularfewcompaniesor industriesOurperspectiveaboutmarketingethicshereisnotmainlyconcernedwiththedescriptivedetailsof “whatis”suchaspercentageofmarketingfirmsthatcurrentlyhaveethicscodesortheirextantpoliciesabout themisrepresentationinsalesreps’expenseaccounts.Rather,itisaboutthenormative“whatshouldbe,”that is,whatmarketingorganizationsoughttoconsiderinordertobetterevaluateandimprovetheirethical behaviorOurobservationshereareintended“toadvocateandestablishguidelines”forbetterethical marketingpracticeratherthanattemptingtoreportwhatpractitionerssaysuchactivitiespresentlyare.
Thediscussionbelowlaysoutasetofbasicperspectives[BPs]essentialforbetterunderstandingand improvingtheethicalroleofmarketinginsocietyanduponsociety,especiallyfromthemanagerialstandpoint ofindividualfirms.Theexplicitpurposeistohighlightmanyoftheenduringmoralquestionsfacingmarketers
suchas:
Whatgeneralfactorsdomanagersneedtoconsiderwhenchallengedwithissuesregardingwhether theirparticularmarketingpracticesare“good”or“bad”forsociety?
Howcanmarketingmanagersbegintoassesswhethertheirproductsaresold,priced,distributedand servicedinafashionthatcanbedesignatedasmorally“right”and“fair?”
Whatarethefundamentalpredispositionsnecessaryforrenderingjudgmentsaboutwhethervarious marketingpractices,policies,andstrategiesare“ethical”or“unethical”?
Whatpoliciesandactionsdomarketingorganizationsaspiringtooperateatthehighestethicallevel needtoaddressintheircompanies?
Inansweringthesequestions,byprovidingcommentariesaboutthem,itisourintentionbothtosuggestthe basicelementsforimprovingethicalpracticeaswellastochallengestudentstoconsidertheseperspectivesin thecaseswhichfollowlaterinthebook
Thenatureoftheessentialbasicperspectives
Sevenbasicperspectives[BPs]aredescribedandexplainedThesearesummarizedinFigure11Together,the perspectivescreateafigurativeandaspirational“star”fortheanalysisandbettermentofmarketingethics.The BPsarebothinteractiveandintegrativeEveryBPisintendedtobehelpfultakenbyitself,buteachapproach alsofurtherinformstheotherBPsinordertocreatea“Gestalt”oftheelementsusefulforimprovingethical behaviorinmarketing.TheBPscanaidcommittedmarketerstomoreclearlyevaluatetherelationshipoftheir marketingpracticestosociety
WhiletheindividualBPsposedherearenotunique,thisparticularsetofrecommendations,appliedto marketingandlinkedtogetherintheintegrativecombinationdescribedbelow,constituteadynamic, comprehensive,connectedperspectivethatwillinformmarketingexecutivescommittedtoethicaldecision makingandwillhelpstudentsbetterunderstandthechallengestheymayfaceintheirfuturecareersDrawing uponmanyyearsofrelevantstudy,theBPsareanchoredinmoralphilosophy,businessethicsresearch, corporatesocialresponsibilityframeworks,publicpolicythinking,religiousvalues,legalguidelines,anda modicumofutopianidealismabouthowmarketingpracticesmightbeethicallyimprovedfroman organizationalandsocietalstandpoint.Itiswiththiscrucialsocialperspectiveinmindthatwebeginour discourse
Figure11Asummaryoftheessentialbasicperspectivesforevaluatingandimprovingmarketingethics
Source:GLaczniakandPMurphy,“Normativeperspectivesforethicalandsociallyresponsiblemarketing,”JournalofMacromarketing26(2) (2006):157ReprintedwithpermissionbySAGEPublicationsLtdAllrightsreserved©[2006]
BP1SocietalBenefit:ethicalmarketingputspeoplefirst
Themarketingsystemshouldalwaysbeofservicetopeople.Tomakethishappen,ethicallyconcerned marketersshouldseektofullycomprehendtheirsocietalinfluenceandstrivetowardcreatingmarketing operationsthathaveaperceivedandrealsocialbenefitPeopleshouldneverbetreatedmerelyascogsinthe marketingsystem,whethertheyarecustomers,employees,suppliers,distributorsoranyotherstakeholder. Marketerswhoignorepublicopinionthearticulatedattitudesofthepopulousandwhosepracticesovertlyor covertlydamagesociety,placetheirfirmsinsubstantialethicalandfinancialjeopardyManagersoughtto begintheirdeliberationsabouttheethicalimpactofmarketingactivitiesonsocietywiththisfundamental dictumof“peoplefirst”iftheyhopetoprosperinthelongrun
ThereareseveralreasonsforthisFirst,thatmarketersshouldservepeopleseemsastraightforward observationintuitivelyconsistentwiththereveredmarketingconceptAfundamentaltenetunderlying principledmarketingpracticeistosubscribetothemarketingconcept;thatis,toacceptthenotionthat marketingplanningisdrivenbythediscoveredneedsanddesiresofconsumersandtoalignorganizational resourcesinamannerthatcreatessustainable,competitiveadvantageforthefirminservingtheseconsumers Customersatisfaction,however,isonlyafirstorderunderstandingofwhatethicalmarketingis.Asecond reasonforkeepingperson-centerednessatfocusisthatsatisfactionforaparticularsegmentofconsumersdoes notnecessarilytranslatetonetbenefitsforsocietyClearly,thesatisfactionofsomeconsumersallowsfor dysfunctionalsecond-ordereffectsorbeyond.Tobaccomarketingisthemostobviousexample.Smokers willinglypayforthisproductandarepresumablysatisfiedintheshorttermButsocialhistoryhasmadeclear thehorrificlong-termeffectsofthisparticularproductAnotherexampleisaggressivelymarketedcreditcards tocollegestudents,whomaynotbesufficientlymaturetohandledebtordiscerningenoughtoavoid temptationsoftheattractivepurchasesthatareeasilyobtainedwithreadilyaccessiblecreditAndanother instanceofunintendedspilloverinvolvesalcoholadvertisingtounderagemarketsTrafficfatalities,addiction, exploitivesexualconduct(i.e.,rape)andlargeinsurancesettlementsareallsocietalimpactsofsuchpractices. Fromasocietalstandpoint,itisfromthesesecond-orderoreventhird-ordereffectsofmarketingpracticethat
ethicalquestionsoftenemerge.
AccordingtoBP1,themarketsystemistobeprimarilyattheserviceofpeopleThus,thisproposition stronglysuggestsathirdreason:thatpeople(especiallytheconsumersinamarketingtransaction)should neverbeviewedasmerelyameanstoaprofitableendThosefamiliarwithmoralphilosophywill recognizethisdecisionruleasamarketingorientedversionofImmanuelKant'swell-knowncategorical imperativeitssecondformulation.7Marketingpracticesviolatingthis“meansversusends”propositionare,at minimum,ethicallysuspectSellingandpromotionaltacticsthattreatconsumersasmostlymeansratherthan endslikelyinclude:
Webmarketersthatstripcustomers’informationwhentheysurftheirwebsites,andsellthedatato othervendorswithouttheconsumers’knowledge
Coercioninthechanneldistribution,suchasdemandsforpriceconcessions,bythechannelpartner havingsignificanteconomicleverage[eg,thedealingsofpowerfulretailerswithdevelopingcountry manufacturersorevenhomecountrysuppliers,suchassmall,family-ownedbusinesses]
“Overthetop”psychologicalapproaches,suchastheutilizationoffearappealsinthesaleofhand gunstoseniorsordubiouscosmeticsurgicalproceduresforwomen
Thesexualexploitationofgenderorethnicstereotyping(orotherdemographicdisparagement)in magazine,television,andwebadvertisingforattentiongettingpurposes
Pricegougingintimesofproductshortage,suchaswhenman-madeornaturaldisastersoccurlikeoil spills,earthquakes,hurricanes,ortsunamis.
Afourthreasonwhymarketersshouldplacepeopleatthecenteroftheiractionsistolivetruetouniversally accepteddictumssuchasthe“dignityoftheperson”thatiscentraltoalmostallreligioustraditionsThis approachstatesthateachandeveryperson,irrespectiveofeconomicandsocialposition,hasinherentdignity andshouldbetreatedfairlyinallroles(eg,consumer,employee,businesspartnerormemberofthelarger society)Theexamplesnotedabovesuchascoerciveselling,pricegougingofdisastervictims,andadvertising exploitationviolatetheprincipleofhumandignity.
Whenmarketerstreattheirstakeholdersmainlyasmeans,theyflunkthetestofplacingpeoplefirstThe inabilityofmarketerstoadheretothedictumofnevertreatingtheirconsumer(andotherstakeholders)as merelyameanstoanend,ifsustained,willusuallyresultintheinvocationofthe“ironlawofsocial responsibility”anexercisebyregulatorsthat,fromacoststandpoint,isoftendetrimentaltotheviolating marketerorperhapsallmarketersTheironlawofsocialresponsibilitypositsthatwhenentities,suchas marketingorganizations,havegreateconomicpoweranddonotexhibitproportionatesocial responsibility,theywillhavetheirpowerproportionatelydiminished8Usually,thediminishingof businessfreedomtakestheformofadditionalregulations,addingcoststotheaveragemarketingtransaction, includingthoseofhonestmarketers
BP2EthicalExpectationsforMarketingMustExceedLegalRequirements:tworealms
Ethicalmarketersmustachieveabehavioralstandardinexcessoftheminimumobligationsembeddedin thelawTypically,thelawrepresentsthelowestcommondenominatorofexpectedbehaviorformarketing andbusinesspracticeSometimes,thispositionisdescribedas“thelawbeingthefloor”ofacceptableconduct Ethicalmarketingorganizationsshouldalwaysstrivetoexceedthelegalminimumsofsocialcompliance.Thus, thelawandethicsrepresenttwotieredlayersofconstraintimpedingsociallytroublingmarketingpracticesIt isworthdistinguishingmoreformallybetweenthesetwoconceptslawandethicsandtheirinterconnected realms
Marketinglawconstitutesthebaselineexpectationsuponmarketingbysociety.Itisablackletterset ofrulesandregulationsthatarecodifiedovertimetoaddressthedynamicsofbusinesspracticethat dealswiththemarketingfunctionTheformalizationofrestrictionsbylawtypicallylagspublic opinion.Obviousexamplesofmarketinglawsandrelatedregulatoryoversightincludeanti-trust legislation,whichmodulatescompetition;theUSFederalTradeCommission(FTC)whichoversees
salesandmarketingpracticesintheU.S.A.;theAdvertisingStandardsAuthoritywhichistheU.K.’s independentregulatorofadvertisingacrossallmedia;theEuropeanUnion'sMisleadingand ComparativeMarketingCommunicationsRegulationsof2012;andtheUSConsumerProductSafety Commission(CPSC),whichspecifiesthesafetystandardsforvariousproductsanddictatesthe removalofpotentiallyharmfulproductsfromtheUSmarketplaceEvengrantingtheexistenceof someill-conceivedbusinesslawsandregulations,especiallyintheinternationalarena,whenfirms intentionallybreakthelaw,theyarequitelikelytobeinethicaljeopardyaswell.Muchofthetime whatisillegalisalsounethical.Appendix1providesalistofillegalmarketingpracticesinmostofthe developedworld
Marketingethicsencompassthesocietalandprofessionalstandardsof“rightandfair”practicesthat areexpectedofmarketingmanagersintheiroversightofstrategyformulation,implementationand controlThemostbasicethicalstandardsareoftenarticulatedinprofessionalcodesofmarketing conductTheAmericanMarketingAssociation(AMA)StatementofEthics(includingexplicit discussionofethicalnormsandvalues)ispresentedinBox1.1.Itrepresentsauseful,duty-based specificationofmarketerresponsibilitiesthatexceedthosecodifiedinlawandisillustrativeofthe expectationsincumbentinthepracticeofmarketingnotcapturedbylawWhilebasictheoriesof ethicsdonotchangeovertime,thenormsandvaluesthatareclearlyembracedbysociety,orbya professionatanyperiodintime,aresubjecttoslowshiftForexample,inthemidtwentiethcentury, theoperationofretailstoresonSundaysintheUSwouldhavebeenperceivedbymanyasunethical Box1.1AmericanMarketingAssociationStatementofEthics
Ethicalnormsandvaluesformarketers
Preamble
TheAmericanMarketingAssociationcommitsitselftopromotingthehigheststandardofprofessional ethicalnormsandvaluesforitsmembers(practitioners,academicsandstudents)Normsareestablished standardsofconductthatareexpectedandmaintainedbysocietyand/orprofessionalorganizations Valuesrepresentthecollectiveconceptionofwhatcommunitiesfinddesirable,importantandmorally properValuesalsoserveasthecriteriaforevaluatingourownpersonalactionsandtheactionsofothers Asmarketers,werecognizethatwenotonlyserveourorganizationsbutalsoactasstewardsofsociety increating,facilitatingandexecutingthetransactionsthatarepartofthegreatereconomyInthisrole, marketersareexpectedtoembracethehighestprofessionalethicalnormsandtheethicalvaluesimplied byourresponsibilitytowardmultiplestakeholders(eg,customers,employees,investors,peers,channel members,regulatorsandthehostcommunity)
Ethicalnorms
Asmarketers,wemust:
1DonoharmThismeansconsciouslyavoidingharmfulactionsoromissionsbyembodying highethicalstandardsandadheringtoallapplicablelawsandregulationsinthechoiceswe make
2.Fostertrustinthemarketingsystem.Thismeansstrivingforgoodfaithandfairdealingsoasto contributetowardtheefficacyoftheexchangeprocessaswellasavoidingdeceptioninproduct design,pricing,communication,anddeliveryofdistribution
3.Embraceethicalvalues.Thismeansbuildingrelationshipsandenhancingconsumerconfidence intheintegrityofmarketingbyaffirmingthesecorevalues:honesty,responsibility,fairness, respect,transparencyandcitizenship
Ethicalvalues
Honesty–tobeforthrightindealingswithcustomersandstakeholdersTothisend,wewill:
Strivetobetruthfulinallsituationsandatalltimes
Offerproductsofvaluethatdowhatweclaiminourcommunications.
Standbehindourproductsiftheyfailtodelivertheirclaimedbenefits
Honorourexplicitandimplicitcommitmentsandpromises
Responsibility–toaccepttheconsequencesofourmarketingdecisionsandstrategiesTothisend,we will:
Strivetoservetheneedsofcustomers
Avoidusingcoercionwithallstakeholders
Acknowledgethesocialobligationstostakeholdersthatcomewithincreasedmarketingand economicpower
Recognizeourspecialcommitmentstovulnerablemarketsegmentssuchaschildren,seniors,the economicallyimpoverished,marketilliteratesandotherswhomaybesubstantially disadvantaged
Considerenvironmentalstewardshipinourdecision-making
Fairness–tobalancejustlytheneedsofthebuyerwiththeinterestsofthesellerTothisend,wewill:
Representproductsinaclearwayinselling,advertisingandotherformsofcommunication;this includestheavoidanceoffalse,misleadinganddeceptivepromotion
Rejectmanipulationsandsalestacticsthatharmcustomertrust
Refusetoengageinpricefixing,predatorypricing,pricegougingor“bait-and-switch”tactics.
Avoidknowingparticipationinconflictsofinterest
Seektoprotecttheprivateinformationofcustomers,employeesandpartners
Respect–toacknowledgethebasichumandignityofallstakeholdersTothisend,wewill:
Valueindividualdifferencesandavoidstereotypingcustomersordepictingdemographicgroups (eg,gender,race,sexualorientation)inanegativeordehumanizingway
Listentotheneedsofcustomersandmakeallreasonableeffortstomonitorandimprovetheir satisfactiononanongoingbasis.
Makeeveryefforttounderstandandrespectfullytreatbuyers,suppliers,intermediariesand distributorsfromallcultures
Acknowledgethecontributionsofothers,suchasconsultants,employeesandcoworkers,to marketingendeavors
Treateveryone,includingourcompetitors,aswewouldwishtobetreated
Transparency–tocreateaspiritofopennessinmarketingoperationsTothisend,wewill:
Strivetocommunicateclearlywithallconstituencies.
Acceptconstructivecriticismfromcustomersandotherstakeholders
Explainandtakeappropriateactionregardingsignificantproductorservicerisks,component substitutionsorotherforeseeableeventualitiesthatcouldaffectcustomersortheirperceptionof thepurchasedecision
Discloselistpricesandtermsoffinancingaswellasavailablepricedealsandadjustments.
Citizenship–tofulfilltheeconomic,legal,philanthropicandsocietalresponsibilitiesthatserve stakeholdersTothisend,wewill:
Strivetoprotecttheecologicalenvironmentintheexecutionofmarketingcampaigns Givebacktothecommunitythroughvolunteerismandcharitabledonations.
Contributetotheoverallbettermentofmarketinganditsreputation Urgesupplychainmemberstoensurethattradeisfairforallparticipants,includingproducers indevelopingcountries.
Implementation
WeexpectAMAmemberstobecourageousandproactiveinleadingand/oraidingtheirorganizationsin thefulfillmentoftheexplicitandimplicitpromisesmadetothosestakeholders.Werecognizethatevery industrysectorandmarketingsub-discipline(eg,marketingresearch,e-commerce,Internetselling, directmarketing,andadvertising)hasitsownspecificethicalissuesthatrequirepoliciesand commentary.AnarrayofsuchcodescanbeaccessedthroughlinksontheAMAwebsite.Consistentwith theprincipleofsubsidiarity(solvingissuesatthelevelwheretheexpertiseresides),weencourageall suchgroupstodevelopand/orrefinetheirindustryanddiscipline-specificcodesofethicstosupplement theseguidingethicalnormsandvalues.
Source:https://archiveamaorg/archive/AboutAMA/Pages/Statement%20of%20Ethicsaspx,accessedonMay17,2016Reprintedwith permission
Clearlyethicsandthelawareconnected,buttheyarenotthesame.Understandably,manyquestionable marketingpracticesarebothillegalandunethicalAsshowninAppendix1,illegalandunethicalexamples wouldbepricefixingaswellas“baitandswitch”advertisingHowever,manyothermarketingtechniquesand strategiesmaynotbeillegalbutcouldraiseethicalquestions.Forexample,“ambushmarketing”creatingan advertisingcampaignthatmimicscompetitorpromotionsforwhichtheimitatorhasnotpaidsponsorshipfees tothemajorsportingeventliketheWorldCuporOlympicgamesisnotillegalperse,butthestrategy generatesspiriteddebateamongethicistsandpractitionersconcerningitsinherentfairnessFinally,afew practicesareillegalbutnotnecessarilyunethicalForinstance,providingsmall“greasepayments”incertain foreignmarkets,whiletechnicallylegislatedagainstinthesecountries,mayconstituteabusinesspracticethat isbothcommonplaceandwidelyexpected9
Figure12providesausefulwaytoenvisiontherelationshipofethicsandthelawasitoftenappliesto marketingpractice.Inthisinstance,theY,orvertical,axisrepresentsmoralandprofessionalresponsibilityand theX,orhorizontalaxis,representssocietalexpectationsAnexaminationofthisfigureunderscorestwobasic points:
EthicsembodieshigherstandardsthanlawEthicsistypicallytheleadingedgeofregulation, therebyimplyingahigherstandardofprofessional/moralresponsibilitythanlawandincorporating broaderlatitudesofsocietalexpectationsInthissense,ethicsanticipatesthedynamicsofsocietal attitudesandopinionsconcerningmarketplacefairnessthateventuallymaybeprescribedand embodiedinthelaw.Forinstance,numerousethicalquestionswereraisedabouttelemarketing practicespriortotheinstitutionalizationof“donotcall”listsinvariousUSjurisdictions,and eventuallyinFederallawTheheavysugarcontentofcertainsoftdrinkswasquestionedasunethical longbeforesuchproductswerebannedincertainmunicipalitiesandschoolsystems.Similarly,sellers ofalcoholicbeveragesandtobaccoproductswereaskedtotempertheiradvertisinguseofcartoon charactersand“lovable”animalsappealingtochildren,beforetheenactmentofformalregulations restrictingsuchapproaches.Thus,forthosewhoclaimthattheonlyagreeduponcodeofmoralityis
theexistinglaw,itshouldbepointedoutthatthelawisdynamicandthatchangestoitareoften drivenbyslowlyshiftingethicalandsocialnorms
EthicsimpliesassumingmoredutiesthanlawNormally,ethicsbestowsagreaterobligationof moraldutyuponmarketingmanagersthanmerelyconformingtothelawTheAMAStatementof Ethics(Box11),forexample,delineatesthebasicmoralstandardsexpectedofmarketingprofessionals bysociety,butmostofthesearenotinstitutionalizedinlawsTheIntegratedSocialContractsTheory approachtobusinessethics(discussedfurtherinChapter2)wouldcharacterizesuchbasichypernormsascreatingandconstraininga“moralfreespace”formembersofaprofessionalgroup(i.e., marketers),whothenusethosepreceptsasamotivatingbehavioralguide.10Thatis,genuinelyethical marketerswillstriveforaleveloftruth,honesty,andtrustthatgoesbeyondthebaselineofthelawIn contrast,marketingmanagerswhoareprimarilylegalminimalists,andseektoexclusivelyconform onlytothelaw,willlikelyexhibitalowerbehavioralstandardthatcouldjeopardizetheircompany's reputationandsubjecttheirorganizationstonegativeconsequencesifthehigherexpectationsof societyperceivesuchmarketerstobelaxintheirethicaldischarge(seeBP4)
Marketers,then,mustabidebythelaw,butBP2arguesthatthisisnotenoughThosecompaniesthatview themselvesasethicalmarketersaspiretoahigherstandard.Asnotedbelow,somecompaniesandtheir managersattemptonlytomeettheletterofthelawinthefirm'smarketingpracticesHowever,because expectationsofmarketinghavebeenraisedduetogreatermediascrutiny,consumeradvocateandbusiness watch-dogblogs,webelievethattakingapurelylegalisticapproachtoissuesconfrontingmarketingisselfdefeatingTobesuccessfulinthelongrun,itisourpositionthatethicalmarketersmustembraceapproaches thatfallintheupperrightcornerofFigure12
BP3Intent,MeansandEnds:threeessentialcomponentsofethicalanalysis
Whenformulatingmarketingcampaigns,marketersareresponsiblefortheirintentaswellasthemeans andoutcomesofaparticularmarketingactionThisessentialperspectiverequiressomedeliberate explanation.Asanalystsadjudicatetheethicaldimensionsofa“questionable”marketingpractice,thatpractice can,andusuallyshould,bedividedintothreedistinctcomponentstheintentoftheaction,themeansor methodbywhichthepracticewasimplemented,andtheendoroutcomesofthestrategyortacticThe intentioniswhatmarketerswanttohappen,themeansishowtheycarryouttheaction,andtheconsequences oroutcomesarewhatactuallyhappenThequalityofethicalanalysisthatisconducted,whetherinternalor externaltothefirm,isimprovedbysuchseparateconsiderationbecauseitallowsmarketinganalyststo sharpentheirinsightabouthowaparticularmarketingsituationmightbeperceivedbysocietyThisapproach forcesmanagerstofocusnotonlyontheoutcomesoftheirdecisions(somethingthattypicallyalreadyhas theirattention),butalsoupontheprocessofhowtheymakedecisionsandwhy

Source:GLaczniakandPMurphy,“Normativeperspectivesforethicalandsociallyresponsiblemarketing,”JournalofMacromarketing26(2) (2006):160ReprintedwithpermissionbySAGEPublicationsLtdAllrightsreserved©[2006]
Fromtheviewpointofanoutsider,thereislittledoubtthattheintentofaparticularmarketingaction,in termsofitsethicalpurity,isthemostdifficultelementtojudgebecauseitrequiresevaluatingtheinternal motivationbehindacompany'sparticularactionsorpolicy.Sincemanysellermotivationsarehidden,the intentbehindmarketingstrategiesortacticscanberationalizedexpostfactobythedecision-makerina mannerthatobscuresorshieldstheformulatorfromresponsibilityforadubiousmarketingstrategyFor example,thecreatorsofanInternetpop-upadthatdepictsanoverweightchildasa“patheticloser”ina competitivecontest,orportraysanimmigrantmanasa“workforfood”gardener,mightclaimthattheydid notintendsuchusagestobeperceivedassocialstereotypesthatmightoffendcertainaudiencesegments Whenreceivingunexpectedcriticism,formulatorsofdebatablemarketingtacticscommonlyclaimignoranceof theoffenseordenyanyintendedslight,whatevertheirtrueandoriginalintentionwasNevertheless,incertain instances,intentcanbededucedwithreasonableconfidencebyexaminingcircumstanceForexample,when “metoo”marketersattempttocloselyemulatethecolorsortrademarkofamarket-leadingbrand(anapproach frequentlypracticedinUSdrugstorechainswiththeirprivatestorebrands),causingconsumerconfusionin themarketplace,thecalculatedintentseemstoberelativelyclear-cutandlogicalSimilarly,ifmarketersof highlyviolentvideogamesconsistentlyadvertiseonTVprogramswiththehighestattainablenumberofyoung adolescentboysasaudiencemembers(evenwhenfollowingindustryguidelinesinonlypromotingthese productsonprogramswatchedbyamajorityofadults),themotivationbehindsuchpracticesseems demonstrablyclearIntheseinstances(ie,stereotypinginadvertising,trademarkcaricature,willfully targetingavulnerablemarketsegment),probablemarketerintentcanshedconsiderablelightuponthelikely “ethicalness”ofaparticularmarketingaction
Themeans(ormethod)ofexecutingamarketingstrategyisthesecondcomponentofamarketingaction thatrequiresscrutinytojudgeitsethicalnature.Obviously,certainpractices(e.g.,predatorypricing)are explicitlyforbiddenbylawHowever,ananalysisofthespecificmethodutilizedintheexecutionofa particularmarketingstrategycanprovideusefulinsightintotheethicalproprietyofadebatedmarketing action.Forexample,highlypromotedproductrebates,whichthenrequiremultiplepurchasedocumentation (ie,proofofpurchase,UPCcode,retailsellerverification,etc)aswellasanoverlydetailedsetof conformancestepsbytheconsumerinordertosuccessfullyexecutethatredemption,seembytheirvery methodofadministrationtobeethicallyquestionable.Similarly,theportrayalinTVadsofpliantand submissivefemaleseasilyavailabletothosewhodrinkaparticularbrandofbeer(witnessthenumerous depictionsof“beerbimbos”incertainadcampaigns)seemsameansofpromotionalcampaigningthatatleast raisesethicalquestions,duetoitsmethodofthematicexecution.
Thethirdcomponenttobeaddressedinassessingtheethicalnessofaquestionedmarketingactionisits outcomeBecausemanyoutcomeshaveconsiderableovertvisibilityassociatedwiththem,theconsequencesof marketingactionsareprobablytheeasiestcomponentforoutsiderstojudgewhenanalyzingtheacceptability ofparticularmarketingactions,andshouldalwaysbeconsidered
AnillustrationofquestionablemeansandendsiscapturedbythecompetitionbetweenUberandLyft,two ofthemostpopularride-sharingservices.AcoupleofyearsagoUberemployeesanddriversplacedover5,000 boguscallstoLyftdriversThesefakerequestsdecreasedthenumberofLyftdriversontheroad,thereby creatingashortageofsupplyfromthatfirmandbenefitedUberTheextensivenessofthispracticeiscaptured bythefollowing:“OneLyftpassenger,identifiedbysevendifferentLyftdriversasanUberrecruiter,placed andthencancelled300ridesinatwo-weektimeperiodThatuser'sphonenumberwastiedto21other accounts,foratotalof1524cancelledrides.”11Sointhisexample,boththemeansandoutcomesofthis practice,subsequentlyabandonedaftermuchnegativepressforUber,wouldbejudgedasunethical
Oneespeciallyusefulframeworkforjudgingtheethicsofbusinesspracticesbasedonthisapproachwas advancedbyThomasGarrettanditprovidesthetheoreticalbasisforBP3.Thestraightforwardpragmatismof hisparticularmethodofanalysistheproportionalityframeworkholdsconsiderableappealfordecisionorientedmarketingmanagersinterestedinappliedethics12Theprincipleofproportionality,adaptedfrom Garrett,combinesalltheessentialelementsdiscussedaboveintooneethicaldecisionmakingrulethat encompassesandextendsBP3:MarketersareresponsibleforwhatevertheyintendasameansoranendIf bothareethically“good,”theymayact,acceptingacertain(ie,minor)riskofsideeffects
AccordingtoGarrett,withregardtoside-effectoutcomes,marketersshouldnevertakeactionswhichresult inadirectmajornegativeoutcomeforanotherstakeholderForexample,asellerwhorigsabiddingprocess viabriberyinordertosecureacontracthascausedamajornegativeharmtootherstakeholders,ie, competitorswholoseachanceatfairlywinningthecontract,shareholderswhoforegotheopportunities presumptiveinahigherprofitmargin,societywhichisdeprivedoflowercostandeven-handedbusiness practices
Marketingpracticeswhichintentionallycause(orarelikelytocause)amajornegativeoutcomefor stakeholdersaffectedbythetransactioninquestionarealmostalwaysunethical.Sometimesthereare unintendedsideeffectsfrommarketingactionsthataretakenbysellersthatalsocausemajororminor negativeoutcomesIfthesesideeffectscanbedesignatedasmajornegativeoutcomesandtheyareintentional, theactionmustalwaysbesubjecttocarefulethicalscrutiny.Forexample,supposeasalesrepofa pharmaceuticalfirmhasbeenproperlyprovidingexperimentaldrugstoaresearchhospitaltobeusedin scientificstudiesInthecourseofthesalesprocess,supposefurtherthatthesalesreplearnsthatthe unapproveddrugsarebeingdispensedtoahandfulofpatientsthatarenotpartoftheresearchstudy.Insuch aninstance,itisprobablyunethicalforthesalesreptogoaheadwithfurtherdrugprovisionsbecausethe possible(major)sideeffectsoftheprotocol(whilelegalinitspurporteduseforexperimentaltreatments)could producesignificantnegativeconsequencesforotherstakeholders(i.e.,thepatients).
ItistruethatalmostanymarketingactioncanhaveunintendedsideeffectsForexample,somesmall proportionofanaudiencewatchingtelevisionmightfindadsforerectiledysfunctionorindigestionproducts asbeingoffensive.However,suchunintended,negativesideeffectsofmarketingactions,ifminor,arepartof thecomplexitiesofanadvancedmarketingsystemandcanbetoleratedfromanethicalstandpoint
Inthelastanalysis,theproportionalityframeworkdescribedaboveisstillhighlyjudgmentalForexample, whatconstitutesamajornegativeoutcomeversusaminornegativeoutcomefromanethicalstandpoint? Whichsideeffectsareintendedversusunintended?Thisentireapproachrestsuponmarketingdecision-makers beingfairlysophisticatedandreflectiveintheirethicalperceptionsandmoralintuitionsWhilethethree componentframeworkofintention,means,andoutcomeisnotaperfectsystemforjudgingtheethicsofa particularsituation,whenusedincombinationwithotherbasicperspectives(seeBP5inChapter2),itcan serveasahelpfulanalytic,inherentlyrecognizingthatmarketingdecisionsaremultifacetedanddemand evaluationfromdifferentstandpointsinordertovalidatetheirproprietyTheproportionalityapproachisalso particularlyusefulinhelpingbalancetheclaimsofvariousstakeholdersaffectedbymarketingactions(seeBP6 alsoinChapter2)becauseitasksmarketerstoarticulateafullrangeofintentions,means,andoutcomesbefore proceedingwithsignificantmarketingactions
BP4MarketingManagersDifferinMoralImaginationandDevelopment:fourtypes
Marketingorganizationsstrivingtoimprovetheirethicalaptitudeshouldcultivatebetter(ie,higher) moralimaginationintheirmanagersandemployeesItisimportanttorecognizethatinmostfirmsthe managersmakingmarketingdecisionswilldifferintheirabilitytoevaluateandresolveethicalissues.Thisis becausemanagerswillpossessvaryinglevelsofmoraldevelopmentSomemarketingexecutiveswillhave lowerethicalsensitivities,whereasotherswillhavethecapacityforsignificantmoralimaginationthatis,the characterandabilitytomorallyreasonwithcreativeethicalsolutionswhenencounteringanethicalquestion13 Inotherwords,managerialquotientsofmoralsensitivityandcapabilitywillnotbethesame,owingto differentlifeexperiencesandpersonalcorevaluesaswellastheirbasichumancharacterThisindividualistic stateofaffairs,ie,thelikelydifferencesamongmanagersintheirabilitytoengageincriticalethical evaluations,impliesthatorganizationsshouldseektounderstandthenatureofthesedifferentmoralaptitudes andstrivetoinstillanimprovedethicalreasoningcapacityamongtheirmanagers.
Theoretically,thisnaturalvarianceamongmanagersiswellrecognizedbyKohlberg'sframeworkofmoral development14Businessfirmshavethepotentialtoutilizesuchmodelsthroughtheirorganizational developmentanddesignprogramsforimprovedsocialresponsivenessSimilarly,managerialmoralstylesvary greatlyacrossorganizationsaswell.TheimportanceofperspectivessuchasKohlberg'sdependuponrealizing that,inmanyinstances,afirm'sabilitytohandleethicalissuesisonlyasgoodasthecapabilityofits managersSignificantly,recognizingmanagerialdifferencesinmoralimaginationimpliesthat,giventraining
andexperience,managerscanenhancetheirethicalskills.Atthemostbasiclevel,wewouldpositfourbroad typesofmarketingmanagers:
Egoisticorrelativisticmarketingmanagersaretheleastmorallydevelopedandhaveastrongtendency toresolvemoralsituationsbasedontheirownimmediateinterestsandconsequences(theegoistic type)orlocalizednormstodeterminewhatisrightandwrong(relativists).Individualsatthis comparativelyundevelopedstageofmoralthinkinggivestrongweightingtotheincentivesand sanctionsthatwillaffectonlythemTheytendtoheavilyrelyonrulesandauthoritysuchastheforce oflaworthelikelihoodoforganizationalsanction.Thelanguagethatcharacterizestheegoist/relativist managerialapproachincludesrationalizingphrasessuchas:“everybodyelsedoesit;”“thelawyers haven'ttoldusthisiswrong;”“wewereonlyfollowingorders”15Suchmanagersrespondmostlyto organizationalrewardsandpunishmentsandtheirpersonalmoralresolveisrelativelyundeveloped becauseoftheirpreoccupationwithpersonalorcompanygainPersonsatthisunrefinedstageof moraldevelopmentwillincludeindividualegoists,whowillchooseactionsthatbenefitmostly themselvesTherelativistsareoftentimesmostapparentinaninternationalsettingwherethemanager fromadevelopedcountrywillfollowthemorelaxstandardsofadevelopingcountryAnd unfortunately,attheextremes,theremayalsobesome“crooks”inthiscategorymanagerswhoknow theactionsbeingtakenareclearlywrong,butwhowillchoosetodothemanywaybecauseofthe calculatedpersonalorcompanypayoffsinvolvedExecutiveswhodidnotactquicklytoovercomethe problemswithTakataairbags,GeneralMotors’failingengineswitchesandFIFAbriberypractices wouldlikelybeviewedasthiscategoryofmanager
LegalistmarketingmanagersarethesecondtypeTheyovertlyespousethatthelawistheirguidein adjudicatingtheproprietyofanymarketingaction.Legalistsoftenperceivebusinessasagame,with profitsastheonlywinningcriterionandalltacticsnotexpresslyprohibitedbylawas“inplay” regardlessofconsequencesThesesortsofmanagersbelievethataslongastheydonottransgressthe rulesofthegameassetbylaw,theyhavethelegalrighttoshapemarketingstrategywithout referencetoanythingbutitsprofitimpactThis“lawequalsmorality”approachcertainlysimplifies thechallengeofethicalreasoningforsuchmanagersItappearsthatinrecentyears,thelegalistgroup hasbeengrowing.Forinstance,anincreasingnumberofMBAgradswhotakeaprimarilyfinancial andnarrow(minimalist)perspectivetowardtheirmanagementresponsibilitiesseemtofinditsafeto espousesuchpositions
Moralstrivers,ourthirdtype,arethosemarketingmanagerswhohaveprogressedintheirethical thinkinganddevelopmenttothepointwheretheyarecapableofconsideringmultiplestakeholders, whenadjudicatingwhatconstitutesmoralproprietyThe“empathyforothers”capacityiswhat distinguishesthesemoralstriversfromegoisticmanagersbecausetheirethicalreasoningoftenwillbe temperedbyadditionalfactorssuchasorganizationalloyalty(eg,toco-workersandsuppliers)aswell asotherbasicdutiestosociety(eg,writtenguidelinesembodiedinindustrycodesoroneslikethe AMA'sseeBox11)Nevertheless,striversarestillquitedependentuponcompanyrulesandpolicies intheirassessmentofmoralsituations.Somemoralstrivermanagersaresusceptibletofallingbackon minimalistexpectationsandrevertingtoanegoisticorlegalisticapproachintheabsenceofreadily availableguidanceOtherstriversreallywanttodotherightthingbutprevailingorganizational factors,suchastimepressures,demandstomeetshort-termobjectives,oranuncertaintyaboutproper moralnorms,sometimesleadthemtoavoidthetime-consumingworkofethicalreasoningPut anotherway,unlessprovidedwithsomeformofcodifiedethicalguidance,striverslackthemoral imaginationtocreativelyreasonthroughthemorecomplexethicalproblems.Thisstateofaffairshelps provideananswertotheoftenaskedorganizationalquestion:“Whydoseeminglygoodmarketing managerssometimesmakeveryunethicaldecisions?”
Principledmarketingmanagers(typefour)havereachedahighlevelofmoraldevelopment.Managers whoattainthissophisticatedstateaddresstheirethicalproblemsbyregularlyapplyingbothprevailing ethicalnormsandapplicablelawstothesituationatfocusPrincipledmanagersalsohavesubstantial moralimaginationandthereforearebetterabletoforeseetheethicalimpactsoftheirmarketing decisionsonothers;theyhavedevelopedthemoralcapacitytoincorporatebasicrights,industry norms,andlegalconstraintsintotheirmoralcalculations;theycancreativelyapplyuniversalethical
principlesonestheybelieveallfairmindedmanagersshouldfollowgivenasimilarsetoffactsor situationsThiscategoryofmanagershastwocommonalitieswithMaslow'swell-knownHierarchyof NeedsBeingattheself-actualization(highest)stage,theseindividuals“arestronglyethical,have definitestandards,andtheydorightanddonotdowrong”16And,liketheclassicself-actualizers,few managers(unfortunately)reachthisstage
Ourexecutivetraininganddevelopmentexperiencehasshownthatinatypicalmarketingorganization,the moraldevelopmentofmanagerswillvary,withthemajoritybeingofthe“moralstriver”typeThisviewis consistentwithopinionpollsofexecutivesconductedovertheyears,wheremanagersandbusinessestrytodo therightthingalmostallofthetime.Thus,themostcommonorganizationalsituationinvolvesmorally strivingmanagers,whowhenfacinganethicalquestion,areguidedbyrelevantlawsalongwiththe specificallyarticulatedethicalnormsoftheirparticularorganizationand/orindustryInthesecases,when ethicalvaluesarewelldefined,strivermarketingmanagerswillbeinapositiontoapplycompanyandindustry guidelinestotheethicalquestionathandandreasontoanethicalevaluation
Manysuchmorallystrivingmanagersalsomightbedescribedas“seekers”becausetheyarelookingtodo theethicalthingbutneedorganizationalguidanceinordertodosoWhenfacedwithdifficultethical questions,sometimesmarketingmanagers,absenttheavailabilityorclarityofspecificcompanyguidelines, revertbacktothepositionof“legalists”andareconstrainedonlybythelimitsoflawand/orpersonalhubris, andthussidestepthechallengeofethicalanalysisStrategically,iffirmsaretryingtomanagebetterethics, theyshouldattempttoarticulate,communicate,andreinforcethoseethicalnormsandvaluesconsideredtobe essentialfortheircompanyandindustrysectorThistypeofactionbytheCEOandChiefMarketingOfficer willallowlowerlevelmanagerswhoarestriverstohaveavailabletherequiredethicalguidanceandwill decreasethetendencyofsomemarketingmanagerstoregresstolegalisticoregoisticthinking.
Thetaskoforganizationsseriousabouttheirethicaloperationsistotrytominimizethenumberofegoistic orrelativistmanagers(sadly,theplaincrooksmaybebeyondhelpwithregardtoethicalformation)andto movethematleasttothestriverlevelofmoralthinkingviaethicseducationandtraining17Giventhe propensityofegoistmanagerstorespondmainlytorewardsandpunishments,theorganizationalchallenge hereistosignificantlyreducetheiropportunitytocaptureillicitrewardsthatmightbegainedbyengagingin unethicalactionsSuchopportunitiesareusuallyminimizedthroughcorporatecodeswhichareenforced, stronginternalcompanycomplianceprogramsandasystemofcorporategovernancewithmanychecksand balances
Principledmanagers,ie,thosewhohavedevelopedethicalvaluesystemsandthecapacityforconsistently applyingthemare,aspreviouslystated,theminorityinmostorganizationsObviously,cultivatingmanagers whoaresuchmoralexemplarsandwhowillalwaystrytopursuewhat'sethicallyrightintheirmarketing decisions,istheidealforthosefirmsaspiringtooperateatthehighestethicalplaneInconformancewithBP2, companiesmustberesolutethatmerelycomplyingwiththelawisnotsufficienttoachievemeritorious corporatecitizenshipandethicalresponsibility.Itisoftensaidthatvirtueisitsownreward,butthepragmatic benefitofhavingprincipledmanagersthosewhoknowthecorevaluesofthefirmandalwaystrytopractice themintheirdecisionsisthatsuchleaderscanembodyneededmoralimaginationandpropeltheir organizationstotheforefrontofenlightenedsocialresponsibility.Somearguethatbeingacorporate“good guy”leadstogreatercustomerloyalty(eg,Ben&Jerry'sandLego),greateremployeeretention(eg,NML FinancialServices)andbetteraccesstoequitycapital(eg,Unilever)Butwhetherbeingthemoralexemplar directlycorrespondswitheconomicrewardisthesubjectofmuchdebate.Goodcompaniesdonotnecessarily dobestfinanciallyBut,avoidingmajorethicsscandalscertainlyseemstomitigatesignificantcorporate punishmentsandtheirassociatedcosts
Commonly,onemotivationforprincipledmanagerstoliveouthighethicalidealscomesfromacohesive ethicalcultureSuchanethicalculturemaybetheresultofthevaluesofthecompanyfounderoritmaycome fromanenlightenedCEOwhoexpectsfairplayandhonestyinalloperations18Corporateculturesthatare ethicaldon'tjusthappenbychancebutratheraretheresultofapremeditatedeffortonthepartofa corporationtoexploretheirvalues,articulatethemfrequently,andthentrainallemployeesinthedetailsand importanceoflivingthesecompanyideals19
Figure1.3showsacomparisonofthefourtypesofmanagersintermsoftheirfrequencywiththe
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