Social Responsibility and Ethics in Marketing
Social responsibility refers to an organization's obligation to maximize its positive impact and minimize its negative impact on society. It deals with the total effect of all marketing decisions on society. Although social responsibility is a positive concept, most organizations embrace it in the expectation of indirect long-term benefits.
Marketing citizenship involves adopting a strategic focus for fulfilling the economic, legal, ethical, and philanthropic social responsibilities expected of organizations by their stakeholders, those constituents who have a stake, or claim, in some aspect of the company's products, operations, markets, industry, and outcomes. At the most basic level, companies have an economic responsibility to be profitable so they can provide a return on investment to their stockholders, create jobs for the community, and contribute goods and services to the economy. Marketers are also expected to obey laws and regulations. Marketing ethics refers to principles and standards that define acceptable conduct in marketing as determined by various stakeholders, including the public, government regulators, private-interest groups, industry, and the organization itself. Philanthropic responsibilities go beyond marketing ethics; they are not required of a company, but they promote human welfare or goodwill. Many firms use cause-related marketing, the practice of linking products to a social cause on an ongoing or short-term basis. Strategic philanthropy is the synergistic use of organizational core competencies and resources to address key stakeholders' interests and achieve both organizational and social benefits.
Three major categories of social responsibility issues are the natural environment, consumerism, and community relations. One of the more common ways marketers demonstrate social responsibility is through programs designed to protect and preserve the natural environment. Green marketing refers to the specific development, pricing, promotion, and distribution of products that do not harm the environment. Consumerism consists of the efforts of independent individuals, groups, and organizations to protect the rights of consumers. Consumers expect to have the right to safety, the right to be informed, the right to choose, and the right to be heard. Many marketers view social responsibility as including contributions of resources (money, products, and time) to community causes such as the natural environment, arts and recreation, disadvantaged members of the community, and education.
Whereas social responsibility is achieved by balancing the interests of all stakeholders in the organization, ethics relates to acceptable standards of conduct in making individual and group decisions. Marketing ethics goes beyond legal issues. Ethical marketing decisions foster mutual trust in marketing relationships.
An ethical issue is an identifiable problem, situation, or opportunity requiring an individual or organization to choose from among several actions that must be evaluated as right or wrong, ethical or unethical. A number of ethical issues relate to the marketing mix (product, promotion, price, and distribution).
Individual factors, organizational relationships, and opportunity interact to determine ethical decisions in marketing. Individuals often base their decisions on their own values and principles of right or wrong. However, ethical choices in marketing are most often made jointly, in work groups and committees or in conversations and discussions with coworkers. Organizational culture and structure operate through organizational relationships (with superiors, peers, and subordinates) to influence ethical decisions. Organizational, or corporate, culture is a set of values, beliefs, goals, norms, and rituals that members of an organization share. The more a person is exposed to unethical activity by others in the organizational environment, the more likely he or she is to behave unethically. Organizational pressure plays a key role in creating ethical issues, as does opportunity, conditions that limit barriers or provide rewards.
It is possible to improve ethical behavior in an organization by hiring ethical employees and eliminating unethical ones, and by improving the organization's ethical standards. If top management develops and enforces ethics and legal compliance programs to encourage ethical decision making, it becomes a force to help individuals make better decisions. To improve company ethics, many organizations have developed codes of conduct, formalized rules and standards that describe what the company expects of its employees. A marketing compliance program must have oversight by a high-ranking organization member known to abide by legal and common ethical standards; this person is usually called an ethics officer. To nurture ethical conduct in marketing, open communication and coaching on ethical issues are essential. This requires providing employees with ethics training, clear channels of communication, and follow-up support throughout the organization. Companies must consistently enforce standards and impose penalties or punishment on those who violate codes of conduct.
An increasing number of companies are incorporating ethics and social responsibility programs into their overall strategic market planning. To promote socially responsible and ethical behavior while achieving organizational goals, marketers must monitor changes and trends in society's values. They must determine what society wants and attempt to predict the long-term effects of their decisions. Costs are associated with many of society's demands, and balancing those demands to satisfy all of society is difficult. However, increasing evidence indicates that being socially responsible and ethical results in valuable benefits: an enhanced public reputation (which can increase market share), costs savings, and profits.