ethics and csr international marketing

social criticism of marketing

• high prices

• deceptive practices

• high pressure selling 

• shoddy or unsafe products

• planned obsolescence

• poor service

marketing ethics

are broad guidelines that everyone in the organization must follow that cover distributor relations, advertising standards, customer service, pricing, product development, and general ethical standards

laws are:

codes of conduct stiupulating how members of a society are required to act and are enforced by relevant governance agencies such as policie and courts

doing business internationally:

home country ethics or laws → the global corporation management → host country ethics or laws

ethical philosophies

• ethical relativism 

• ethical absolutism/imperialism

• ethical universalism

ethical relativism

the theory that morality is relative to the norms of one’s culture

ethical absolutism/imperialism

a situation where a code of ethical behavior or attitude is imposed on another community or society

ethical universalism

ethical nature of action is independent of cultural settings

corruption and bribery — variations on a theme

• bribery

  • lubrication

  • subordination

• agent’s fees

bribery

voluntarily offered oayment by someone seeking unlawful advantage

lubrication

involves a relatively small sum of cash, a gift, or a service given to a low-ranking official in a country where such offerings are not prohibited by law.

• The purpose of such a gift is to facilitate or expedite the normal, lawful performance of a duty by that official.

subordination

generally involves giving large sums of money - frequently not properly accounted for - designed to entice an official to commit an illegal act on behalf of the one offering the bribe

agent’s fees

when a businessperson is uncertain of a country’s rules and regulations, an agent may be hired to represent the company in that country

major international marketing ethical problems

• traditional smalle scale bribery

• large scale bribery

• questionable commisions to channel members

• gifts/favors/entertainment

• pricing

• products/technology

• illegal/unethical activities in host country 

traditional small scale bribery

small sums to foreign official in exchange for facilitating some official duty or to speed routine government actions (grease payments, lubrication)

large scale bribery

to allow a violation of law or to influence policy directly or indirectly (political contribution; subordination)

questionable commisions to channel members

unreasonably large commisions of fees paid to channel members, e.g., sales agents, consultants

gifts/favors/entertainment

includes lavish gifts, call girls, personla travel at teh company’s expense, gifts received after completion of transaction

pricing

unfair differential pricing, questionable invoicing, pricing to force out local competition, dumping products at price well below that in home country

products/technology

includes products and technology banned for use in home country but permitted in host country

illegal/unethical activities in host country

e.g., polluting environment, maintaining unsafe working conditions

corporate social responsibility

• ideally functions as built-in, self0regulating mechanism

• practice of companies going beyond legal obligations to actively balane commitments to investors, customers, other companies

• sustainable and societal marketing

steps of social responsibility (bottom to top)

• economic: maximizing stakeholder wealth and/or value 

• legal: abiding by all laws and government regulations

• ethical: following standards of acceptable behavior as judged by stakeholders

• philantrophic: “giving back” to society