Business and Marketing Ethics

Foundations of Business and Marketing Ethics

As the business marketplace globalizes, it is essential for marketers to develop a code of business ethics that reaches across national boundaries as well. Every country and every culture has its own ethical foundations, beliefs, lifestyles, and choices. No one rule applies to every country.

As far as situational ethics go, some would say that each of us generally knows what is right and what is wrong. Others, such as international actor Ben Kinglsey, have said "The hard part is knowing what's right … once you know that, doing it is easy. You have no other choice".

There are a number of philosophical guidelines to choose from when charting questions of ethic and morality in marketing. Author Mark Twain, in a cynical assessment of marketing's promotional powers, wrote "Advertising is the rattling of a stick in a swill bucket". Pope John Paul II spoke specifically about marketing in 1991 when he observed that marketers "speak of it as part of their task to 'create' needs for products and services – that is to cause people to feel and act upon cravings for items and services they do not need. … This is a serious abuse, an affront to the human dignity and the common good when it occurs in affluent societies. But the abuse is still more grave when consumerist attitudes and values are transmitted by communications media and advertising to developing countries, where they exacerbate socio-economic problems and harm the poor".

For other guidelines on conducting ethical marketing, we can turn to the musings of Jeremy Bentham, who advocated individual and economic freedom; Immanuel Kant, who argued that experience must be processed by reason; John Rawls, who proposed social justice is determined in fair agreement by everyone as equals; or Niccolò Machiavelli, who suggested that bad things can be justified by good ends. Ethical theories may range from Utilitarianism, which calls for the "greatest good for the greatest number," to Deontology, which says we should do "what is right, though the world should perish".

Towards a more practical end, international business behaviors are frequently governed by governmental and industry regulations requiring that marketers:

There are several areas that marketing regulations are especially sensitive to:

For example, prior to 1996, Belgium Germany, Italy, and Luxemburg prohibited comparative marketing (e.g., Coca Cola is better than Pepsi). However, in 1996, the European Commission allowed comparative marketing and advertising throughout the E.U. under certain conditions:

1. it is not misleading;
2. it does not create confusion in the market between competitors; and
3. it does not discredit or denigrate competitors.

Many countries, including the United States, place limits on if or when tobacco and alcohol products may be advertised, while also imposing regulations governing marketing campaigns targeting children.

 This text was adapted by Saylor Academy under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License without attribution as requested by the work's original creator or licensor.

Codes of Ethics Governing Businesses and Marketers

The Illinois Institute of Technology's Center for the Study of Ethics in the Professions provides a large database of codes of ethics and other related resources for a large number of professional fields. Among some of the codes most relevant to business and marketing professionals are:

1. American Marketing Association (http://www.marketingpower.com/AboutAMA/Pages/Statement%20of%20Ethics.aspx)

Ethical Norms and Values for Marketers:

2. Better Business Bureau (http://mbc.bbb.org/business-code-of-ethics/)

Business Code of Ethics:

Business Ethics and Trust

A primary aim of ethical business behavior is to engender public trust – both of the business environment on the whole, as well as individual companies operating within the marketplace. Some research has shown businesses can do a better job of this. For example, a Golin/Harris survey found that trust in American companies is dropping. By a margin of seven to one, survey respondents said we have a crisis of confidence and trust in the way business is done in the United States. Among the industries scoring the lowest returns in public trust:

Only ten business/industries in the survey were ranked as positive or neutral public regard. Among those were:

The survey also asked Americans "What are the most critical actions that companies you don't trust should do to earn your trust?" The recommendations Americans list to win trust for business include:

It is interesting to note that these objectives boosting public trust are often achieved through marketing, advertising and PR – the very industries not held in very high regard according to the survey results.

Discussion Board Topics on Ethical Issues

After reviewing the materials above, please post and respond to the following topics on the course discussion board. Feel free to start your own related posts, and respond to other students' postings as well.

1. What ethical issues do you feel are most often faced by business and marketing professionals?
2. What are some practical examples of business ethics you have seen done well and poorly?
3. What did ethical guidelines might best apply to your own standards of conduct?

Posting and responding on the discussion board should take 3 hours to complete.

Summary