Chapter 5 Business and Social Responsibility 1

Chapter 5 Business and Social Responsibility

Section 5.2 Ethics and Social Responsibility

Marketing EssentialsMarketing Essentials

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SECTION 5.2SECTION 5.2

What You'll LearnWhat You'll Learn

The areas in which businesses are thought to have social responsibilities

The ways that business activities have impacted our environment

The definition of ethics and how marketers can make ethical choices

The meaning of consumerism and a brief history of the movement

The current trends and concerns in the workplace for employees

Ethics and Social ResponsibilityEthics and Social Responsibility

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Why It's ImportantWhy It's Important

You know the importance of being considerate of others in your daily life. As you move toward a career in adult life, you will want to understand the importance of ethics and social responsibility in the life of a business.

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Key TermsKey Terms

ethics

consumerism

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Apart from following the law, should businesses have any further social responsibility? Some businesses feel they should.

Marketing and Social Responsibility

Example: Ben & Jerry's Homemade, Inc. donates 7.5 percent of its pretax earnings to the disadvantaged and the needy.

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Environmental Issues

Socially responsible businesses follow the laws governing environmental issues and understand their roles in helping to preserve our natural resources.

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Conservation of our natural resources depends heavily on cooperation of business, government, and consumers. Most local governments require mandatory recycling of glass, plastic, and aluminum through local trash collection.

Conservation and Recycling

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Ethics are guidelines for good behavior. Ethical behavior is based on knowing the difference between right and wrong—and doing what is right.

Laws are made to address ethical concerns involving products or marketing. The following unethical practices are prohibited:

Business Ethics

bait-and-switch advertising price fixing selling unsafe products

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To make the right ethical choices, marketers must answer these three basic questions:

1. Is the practice right, fair, and honest?

2. What would happen if the product were

marketed differently?

3. What practice will result in the greatest good for the greatest number of people?

Business Ethics

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A socially responsible business will recall an unsafe product before the government forces them to do so.

Product Recalls

Example: McNeil Consumer Products pulled Tylenol products off store shelves after someone was fatally poisoned by a capsule that had been tampered with.

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Consumerism is the societal effort to protect consumer rights by putting legal, moral, and economic pressure on business. Consumerism's focus has changed over the years:

Early 1900s—product purity, product shortages, antitrust concerns, postal rates, and banking.

1930s to 1950s—product safety, labeling, misrepresentation, deceptive advertising, consumer refunds, and bank failures.

Consumerism

Slide 1 of 2

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Early 1960s—President John F. Kennedy signed the Consumer Bill of Rights, which stated that consumers have four basic rights:

To be informed and protected against fraud, deceit, and misleading statements, and to be educated in the wise use of financial resources

To be protected from unsafe products To have a choice of goods and services To have a voice in product and marketing

decisions made by government and business

Consumerism

Slide 2 of 2

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Telecommuting involves working at home, usually on a computer. Completed jobs are transmitted either by mail or by phone using a fax machine or a modem.

Workplace Trends

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Flextime allows workers to choose their own work hours. Possible arrangements include early start/early finish (7 a.m.-3 p.m.), late start/late finish (10 a.m.-6 p.m.), and even four-day workweeks (four 9- or 10-hour days followed by three-day weekends).

Workplace Trends

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Family leave is now legally required by federal law for large employers. Workers are entitled to up to 12 weeks of nonpaid family leave every two years. This allows people to cope with births, deaths, and family illnesses without fear of job loss.

Workplace Trends

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On-site child care is a benefit that has grown in popularity with the increase in two-income families. Some employers have expanded it to include on-site schools and on-site clinics for children who are ill. Where the benefit is provided in any form, it tends to reduce employee turnover.

Workplace Trends

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Help for the physically challenged is mandated by the Americans with Disabilities Act (1990). Employers must provide physically challenged people with the same job opportunities and work site accesses that others have. To make this possible, employers may have to alter their workplaces physically, change the way a job is done, or provide individual assistance.

Workplace Trends

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Health-care reform at the national level is an employee issue because so many Americans receive health insurance benefits through their jobs. Of the 37 million Americans who do not, virtually all who work are employed by small businesses or hold minimum-wage jobs. How to cover these people and how to hold the line on costs for those who have coverage are key issues in the national health-care debate.

Workplace Trends and Concerns

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Employee issues have been in the center of public interest since the 1990s.

Workplace Trends and Concerns

sexual harassment

computer privacy and security

employee monitoring

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5.2 ASSESSMENTASSESSMENT

Reviewing Key Terms and Concepts

1. What are some areas in which businesses are thought to have social responsibility?

2. In what ways have business activities impacted our environment?

3. Define the term ethics and explain how marketers can make ethical choices.

Slide 1 of 2

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5.2 ASSESSMENTASSESSMENT

Reviewing Key Terms and Concepts

4. Define consumerism and give a brief history of the movement.

5. What current trends are likely to improve the workplace for employees?

Slide 2 of 2

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5.2 ASSESSMENTASSESSMENT

Thinking Critically

How are business ethics related to personal ethics?