MARKETING STRATEGY The Pyramid of Social Responsibility

O.C. FERRELL • MICHAEL D. HARTLINE

Marketing Ethics and

Social Responsibility

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Potential Ethical Issues in Marketing Ethics, Social Responsibility,

and Marketing Performance
•  Firms that are ethical and socially
responsible are rewarded with greater
marketing performance.
•  Having a strong ethical climate:
–  Increases employee commitment
–  Is conducive to a strong market orientation
–  Creates trust among a firm’s stakeholders
–  Increases customer loyalty

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MORALITY AND BUSINESS ETHICS MORALITY AND BUSINESS ETHICS

•  Developing an ethical base for business and personal
conduct
–  Examine consequences of a particular act
•  Who is helped or hurt?
•  How long lasting are the consequences?
•  Greatest good for the greatest number?
•  Developing an ethical base for business and personal
conduct
–  Create personal universal decision rules
•  Always treat others as you would like to be treated.
•  It is wrong to lie, bribe, or exploit.
•  If it is against the law, it should not be done.
•  What would your mom think if she knew what you
decided?
•  Picture your actions in the headlines.

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 Corporate Actions ETHICS AND THE CONSUMER

•  Avoiding unreasonable pressure on employees to

perform.
•  Communicating clearly what is expected of
employees.
•  Employing an “Ethics Officer” to advise
employees on ethical dilemmas.
•  Rewarding only ethical performance.
•  Consumers also have ethical responsibilities
in dealing with organizations.
•  The rise in shoplifting, vandalism, consumer
fraud and other abuses indicates serious
problems.

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Are you an angel? Sustainability – The New Buzz

•  Shoplifting •  “Green Marketing” and “Environmental
•  Switching price tags Responsibility” have evolved into the concept of
•  Returning used clothing “Sustainability.”
•  Returning products you damaged •  Sustainability is about meeting the needs of our
generation without compromising the ability of
•  False coupon redemption future generations.
•  Damaging merchandise (for discount)
•  A sustainable enterprise makes decisions that
•  Copyright violation (books, music, software…) contribute to financial success, but also consider
impact on the world and long-term consequences.

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Triple Bottom Line Aspects of Sustainability

•  Coined by John Elkington •  Ecology; Economics; Social Justice
•  Challenge companies to consider: •  Some Major Issues:
–  Economic/profit aspects –  Conservation and climate change
–  Environmental costs –  Globalization
–  Corporate reform
–  Social costs
–  Human and labor rights
–  Population growth and health
–  Social and environmental justice
–  Trade and organic farming

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© 2005 Thomson Learning, Inc.

 Systems Theory
Economic Systems Social Systems
Money, Trade, Corporations Religion, Culture, Aesthetics
“Corporate Responsibility” Political Systems “Individual/Group Behaviors”
Government, Legal
“Regulation & Incentives”

Environment System
Goal: Survival
(Sustainability)

• Economic, Political, and Social Systems interact to:

1) Ensure survival of the Environment System
2) Enhance quality of life (economically & socially)

• Science & technology form the backbone of progress.

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What Can We Do? What Can We Do?

•  Business: •  Government:
–  Find ways to practice sustainability while adding –  Provide appropriate incentives to encourage R&D,
production, and purchasing of responsible products.
value for customers.
–  Regulate where necessary.
–  Be proactive.
–  Direct investment in sustainable building/infrastructure

•  Consumers:
–  Vote with your dollars (and actual votes)!
–  Practice what you preach and believe.
•  Science:
–  Provide innovative ways to develop sustainable, quality
products and improve biodegradability and recycling.
–  Develop clean energy options.

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Resources Resources
•  The Sustainability Revolution: Portrait of a •  Hot, Flat, and Crowded: Why We Need a
Paradigm Shift, by Andres R. Edwards, New Society Green Revolution—and How It Can Renew
Publishers, 2005 American, by Thomas Friedman, FSG Books,
–  Explains development of sustainability movement; includes
multiple frameworks/principles; has an extensive list of
2008
resources (web sites & articles) –  Fantastic book about our current situation and
•  Green to Gold, by Esty & Winston, Yale University what can be done about it
Press, 2006
–  How smart companies use environmental strategy to
innovate, create value, and build competitive advantage

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That’s All Folks!

Questions?
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© 2005 Thomson Learning, Inc.