Normative Perspectives for Ethical and Socially Responsible Marketing
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Normative Perspectives for Ethical and Socially Responsible Marketing This article presents a normative set of recommendations
outcomes evaluated in terms of fairness or rightness on all
for elevating the practice of marketing ethics. The approach
marketplace parties—the purview of normative marketing
is grounded in seven essential perspectives involving multi-
ethics (Martin 1985; Laczniak and Murphy 1985, 1993). In
ple aspirational dimensions implicit in ethical marketing.
this manner—through the evaluation of marketing’s social
More important, each basic perspective (BP), while singu-
influences—marketing practice and marketing ethics are
larly useful, is also integrated with the other observations as
inextricably connected (Smith and Quelch 1993). As N. Craig
well as grounded in the extant ethics literature. This combi-
Smith (1993) insightfully observed, “Every marketing deci-
nation of BPs, adhering to the tenets of normative theory
sion implicitly if not explicitly, has ethical dimensions. postulation, generates a connective, holistic approach that
Accordingly, acting on values requires marketing managers
addresses some of the major factors marketing managers
to have a keen grasp of ethical considerations within a mar-
should consider if they desire to conduct their marketing
keting decision” (p. 14). This article is foremost about the
campaigns with the highest levels of ethics and social
ethical considerations that marketers should understand,
aspire to, and consider in order to improve the ethics of theiroperations within their firm and in society. Keywords: marketing ethics; ethical marketing; normative marketing theory; marketing norms and values;socially responsible marketingTHE ETHICAL INFLUENCE OF MARKETING ON SOCIETY
Kotler and Armstrong (2003), in their influential text-
Marketing culminates when people decide to satisfy their
book, captured this communitarian aspect extremely well
needs and wants by engaging in an exchange transaction
with their description of the societal marketing concept.
(Bagozzi 1975; Buzzell 1999). In this sense, much of mar-
Originally delineated in the 1970s (Kotler 1972), this idea
keting activity can be viewed as systematic sales outreach
holds that “organizations determine the needs, wants, and
by organizations to various members of the consumption
interests of target markets and then strive to deliver superior
community and by extension, to society (Preston 1968;
value to customers in a way that maintains or improves the
Webster 1974; Robin and Reidenbach 1987). When exchange
customers’ and the society’s well being” (Kotler and
occurs, there are its effects on the primary transacting
Armstrong 2003). Indeed, there can be little debate that the
parties, but also a residual shaping force on society often
marketing system operates in a broad social context. Basic
having ethical ramifications (Adler, Robinson, and Carlson
marketing textbooks (e.g., Perreault and McCarthy 2000)
1981; Jacobsen and Mazur 1995; Davidson 2003). We
have often represented this context as a set of “external envi-
believe this is equally true when the marketing process is
ronments” usually including the political, ecological, eco-
dynamically conceived as the “cocreation” of knowledge
nomic, social-cultural, and technological sectors, each of
about services between sellers and customers (Vargo and
which influences the actions of all business organizations in
some way. As illustrated in Figure 1, the aggregate market-
Regardless of exactly how exchange happens, every
ing system is shaped by society even as the marketing sys-
transaction has an impact, major to imperceptible, on soci-
tem also has an impact on society itself. From an external,
ety. The most common outcome measures of market trans-
analytic perspective, the main effects of transactions are
actions involve economic impacts such as the macro
economic but not exclusively so. At the firm or micro level,
measures of GDP and aggregate consumer spending, as well
Journal of Macromarketing, Vol. 26 No. 2, December 2006 154-177
as micro measures of sales and revenues at the company
level. But exchange, because it is social, also must have its
JOURNAL OF MACROMARKETING
B. Analysis ofthe micro / macroethicalness ofmarketingpractices
The Marketing
effectiveness andefficiency ofmarketing practices
TWO TYPES OF ANALYSIS IN THE MARKETING AND SOCIETY NEXUS
marketing managers (and other interested parties, such as
societal analysis, including a long-standing effort of ethical
academics) mostly engineer the effectiveness and efficiency
inquiry (Walton 1961; Alderson 1964; Patterson 1966; Bartels
of individual marketing practices and approaches. This
1967), but this approach has seemingly fallen out of the
“economic concern” is represented in Figure 1 by the larger
mainstream in recent years. Therefore, the “social-ethical
thought bubble, labeled “the analysis of the economic effi-
impact” dimension of marketing practice is represented in
ciency and effectiveness of marketing practices.” It is in this
Figure 1 by the decidedly smaller thought bubble, labeled
context marketers focus on the managerial appropriateness
“the analysis of ethics in marketing practices.”
of what they do and not so much on the degree of an action’s
In the tradition of the dichotomy popularized in the mar-
moral rightness. Academic and professional associations of
keting literature by Hunt (1976), ethical questions about
marketing practitioners refer to such analysis as refining the
marketing practices can be examined at the level of the indi-
science of marketing (Academy of Marketing Science
vidual firm (micro questions) or as they influence society in
2005). These economic-impact considerations, appropri-
a collective way (macro questions). Professional organiza-
ately so, are the ones particularly central to the pedagogy of
tions such as the American Marketing Association (AMA)
MBA programs when addressing marketing strategy.
likewise document ethical considerations as instrumental to
But consistent with the idea of marketing also influenc-
their purposes. Specifically, the AMA mission statement
ing societal well-being, it is also imperative to thoughtfully
(2004) includes as one of its central tenets, “To advance the
analyze the ethics of marketing practices. Even the most
thought, application and ethical practice [emphasis added]
cautious and traditional business theorists and practitioners
of marketing.” The Academy of Marketing Science (2005)
are willing to grant that business practice is both judged and
also commits its membership to “the highest of ethical stan-
constrained by social norms of behavior, and therefore, the
dards” in the pursuit of its mission to create and disseminate
considerable influence of social outcomes always weighs
marketing knowledge and further marketing practice.
heavily on business decisions (Elias and Dees 1997). For
Not surprisingly, the pragmatics of company goals, as
example, at the Harvard Business School, all MBAs now
well as the defined job responsibilities of individual man-
take a class titled, “Leadership and Corporate Accountability.”
agers, directs the majority of marketing outcome evaluation
The course premise (Badaracco 2005) reads in part:
toward various micro (firm-level) practices even as consult-
“Business leaders are responsible for efficiently allocating
ants and marketing academics further refine the theories that
resources and creating wealth. On the other hand, business
justify particular strategic approaches to marketing prob-
leaders are responsible for carrying out this task in ways that
lems. It is not so much that the consideration of ethics is
are legally, ethically and socially desirable. In every thing
actively opposed in organizations; rather, it is somewhat for-
they do . . . leaders must be attentive to both these objec-
gotten in the understandable quest to achieve economic and
tives. Neglecting either one can be perilous” (p. 1).
financial goals. Focus on various micro-level aspects of
As documented by Wilkie and Moore (2003), the mar-
marketing is predictable; one only needs to look at the cor-
keting literature has shown a rich and insightful tradition of
porate emblems on the employment contracts of managers
DECEMBER 2006
to understand this concentration (Aaker 2005; Day 1986).
article is to highlight many of the enduring moral questions
This preoccupation with the pragmatics of practice should
not preempt the importance of ethical and social evaluations
• What general dimensions do managers and academics need to
(i.e., the societal marketing concept) and the need for mar-
consider when challenged with issues regarding whether their
keting managers to also be attuned keenly to these moral
particular marketing practices are good or bad for society?
issues. As Day and Montgomery (1999) wrote of the mar-
• How can marketing managers begin to assess whether their
keting and society interface in assessing some of the funda-
products are sold, priced, distributed, and promoted in a
mental issues likely to challenge the marketing discipline in
fashion that can be designated as morally right and fair?
• What are the fundamental predispositions necessary for ren-
the early twenty-first century, “Unfortunately, some of the
dering judgments about whether various marketing prac-
consequences [of marketing] have not been positive for con-
tices, policies, and strategies are ethical or unethical?
sumers or for society at large. We hope that academic mar-
• What do marketing organizations aspiring to operate at the
keting will direct theoretical and empirical research toward
these issues . . . to inform public debate” (p. 12).
In providing the normative commentaries that address thesequestions, it is our intention to suggest elements for improvingethical practice as well as to challenge academics to further
NORMATIVE APPROACHES
test and refine these concepts. Along the way, various exam-
TO MARKETING ETHICS
ples of presumably unethical marketing practice are featured,
To this purpose, the set of basic perspectives (BPs)
but this utilization is intended more to illustrate these perspec-
offered below address the broader moral dimensions that
tives than to provide a detailed analysis of specific issues.
should ideally characterize the marketing and society inter-face even as firms each operate autonomously to serve their
THE NATURE OF THE ESSENTIAL BPS
outcomes. In that sense, ethical commentary in this articleapplies to the practices of all marketing organizations even
With an eye to the above purposes, seven BPs are described
as certain observations may be especially relevant to a par-
and explained. These are summarized in Figure 2. Together, the
ticular few companies or industries. Continuing the dichotomy
perspectives create a figurative and aspirational “star” for the
language of Hunt (1976), the approach taken here is inten-
analysis and improvement of marketing ethics. The BPs put
tionally “normative.” In other words, our perspective about
forward are interactive and integrative. Each BP is intended to
marketing ethics in this article is not mainly concerned with
be helpful taken by itself, but each approach also further
the positive details of what is, such as percentage of market-
nuances and informs the other BPs (as will be discussed below)
ing firms that currently have ethics codes or their extant
in order to create a gestalt of the elements useful for compre-
policies about honest reimbursement in sales rep expense
hending and bettering ethical behavior in marketing. The BPs
accounts. Rather, it is about the normative what can be, that
can assist committed marketers in evaluating the relationship
is, what marketing organizations ought to consider to better
of their marketing practices to society. Again, the approach
evaluate and improve their ethical behavior. The normative
pursued here is unapologetically normative; that is, the per-
tradition of marketing ethics has had numerous manifesta-
spectives delineated are prescriptive and inspirational in order
tions in the trade literature, especially in the form of assorted
to help interested managers and macro analysts sharpen their
“thou shalts” or “shalt nots” concerning various tactics in
thinking about the nature of ethical marketing practices and
marketing. But comprehensive theorizing that offers more
about how ethics might be better nurtured in the organization.
universal guidance has been conspicuously lacking in the
Appendix A delineates how the BPs discussed below conform
literature. In surveying such writing, Dunfee, Smith, and
to the elemental requirements of normative ethical theory pos-
Ross (1999) found only four frameworks in marketing ethics
tulation in business ethics (Bishop 2000).
research with a distinctly normative orientation. Those are
The individual BPs discussed below are not unique and
the following: Laczniak (1983), Williams and Murphy
represent a synthesis of the ethics literature. However, this
(1990), Reidenbach and Robin (1990), and N. Craig Smith
particular set of recommendations, applied to marketing and
(1995). These works will be linked to our formulations, as
linked together in the integrative manner described below,
appropriate, in the narrative below. True to the conception of
constitute a dynamic, comprehensive, connected perspective
normative ethical theory (Bishop 2000), our observations
that will enlighten and empower marketing executives com-
are intended “to advocate and establish guidelines” for better
mitted to ethical decision making. The BPs are grounded in
ethical marketing practice rather than attempting to report
theory where possible and are intended to provide insight
what practitioners say these presently are.
not only about the propriety of various marketing practices
At its core, this commentary lays out a set of BPs essen-
from an ethics standpoint but also about what highly ethical
tial for better understanding and improving the ethical role
marketing ideally can be. Our hope is that each perspective
of marketing in society, especially from the managerial
will stimulate commentary and, where appropriate, empiri-
standpoint of individual firms. The explicit purpose of the
cal validation as to its effectiveness when organizations try
JOURNAL OF MACROMARKETING A SUMMARY OF THE ESSENTIAL BASIC PERSPECTIVES (BPS) FOR EVALUATING AND IMPROVING MARKETING ETHICS
to live these ideals. In this way, normative marketing ethics
should seek to fully comprehend their societal influence and
connects back to positive marketing ethics, which describes
to ensure their marketing operations create a perceived and
the current state of affairs concerning the prevailing moral
real social benefit. People should never be treated merely as
practices of marketers. Positive marketing ethics has devel-
cogs in the marketing system, whether they are customers,
oped a rich tradition represented by tests of the now classic
employees, suppliers, distributors, or some other stake-
Hunt-Vitell model (1986) demarcating how marketing man-
holder. Marketers who ignore critical public opinion—the
agers actually make their ethical decisions. And, it is only in
articulated attitudes of the populous—or whose practices
knowing how managers approach ethical problems that one
overtly or covertly damage society place their firms in sub-
can begin to assess the gap between current practices and the
stantial ethical and financial jeopardy. Managers ought to
postulated ideals of normative marketing ethics. Therefore,
begin their deliberations about the ethical impact of market-
for the express purpose of animating the highest standards of
ing activities on society with this fundamental dictum of
ethical practice and drawing on fifty years of relevant litera-
“people first” as their guide if they hope to prosper in the
ture, the normative BPs (articulated below) have been for-
mulated. They are anchored in moral philosophy, business
At a casual level, that marketers should serve people
ethics research, corporate social responsibility frameworks,
seems a straightforward observation intuitively consistent
public policy thinking, religious values, legal guidelines,
with the revered marketing concept (Keith 1960; Levitt 1960,
and a modicum of utopian idealism about how marketing
1975). Yet this primary and complex BP requires some elab-
practices might be ethically improved from both an organi-
oration. Most marketing managers properly believe that the
zational and societal standpoint. It is with the crucial social
market is well served when business operations are structured
perspective in mind that we begin our discourse.
to cater to the customer (Drucker 1954; McKitterick 1957). As the erudite Professor Drucker (1954) observed, “Thereis only one valid definition of business purpose: to create
BP1—Societal Benefit: Ethical
a customer” (p. 37). In general, this orientation is also highly
Marketing Puts People First
useful to society and consistent with classical economic
The marketing system should always be of service to
theory because a system of mutually agreed-to exchanges
people. To make this happen, ethically concerned marketers
among producers and consumers leads to subsequent benefits
DECEMBER 2006
for many by allowing for the division of labor in our eco-
affirmation is essential to ethical marketing, the context of
nomic system (A. Smith 1776/1976). Indeed, perhaps the
marketing operations in the broader society is worth briefly
fundamental tenet underlying recommended marketing prac-
tice is to subscribe to the marketing concept, that is, to accept
In the aggregate, marketing firms collective foster the
the notion that most of marketing planning is driven by the
transactions necessary to maintain a system of complex
discovered needs and desires of consumers, and then to align
change in the economy. Individual firms possess the right to
organizational resources in a manner that creates sustainable,
participate in that socially beneficial commercial network
competitive advantage for the firm (Anderson 1982; Hunt
(i.e., to cocreate with consumers a service opportunity
whose value is realized through a mutual exchange process).
More important, however, consumer satisfaction is only a
From a U.S. perspective, the relegation of commerce to the
first-order understanding of what ethical marketing is about
private sector is rooted in the U.S. Constitution, article 1,
(Deshpande 1999). Substantial satisfaction for a particular
section 8. This is the so-called commerce clause, and it also
segment of consumers does not necessarily translate into net
gives the U.S. Congress the explicit power “to regulate
benefits for society. Clearly, the satisfaction of some con-
Commerce with foreign nations, and among several states,
sumers sometimes allows for dysfunctional second-order
and with Indian tribes” (Steiner 1975). Marketers encounter
effects or beyond. Tobacco marketing is the most obvious
similar regulatory potential when operating in global mar-
example. Smokers willingly pay for this product and are
kets as well (Schlegelmilch 1998). Therefore, when business
presumably satisfied in the short term. But recent social his-
firms each engage in their selected markets, they assume
tory has made clear the horrific long-term effects of this par-
economic risk in exchange for the possibility of proportion-
ticular product (e.g., Scheraga and Calfee 1996). From a
ate reward (i.e., profit). But the license to potentially profit
societal standpoint, it is at this second-order or even third-
comes with an obligation, implicit in commercial undertak-
order effect of marketing practice that ethical questions
ings, that marketing managers may not consider. Like Adam
Smith’s invisible hand, there exists an additional group of
Consider the following examples. The availability of easy-
unforeseen factors that weighs into business decisions.
to-get and aggressively marketed financial credit (a mostly
Kenneth Arrow (1973), Nobel laureate in economics, wrote
desirable characteristic in developed economies) can cause
about the economic system and captured this perspective
major problems among some in a college population not
sufficiently mature to handle debt or discerning enough toavoid the temptations of the attractive purchases that are eas-
There is still another set of institutions, if that is the right
ily obtained with a readily accessible credit card (Palmer,
word, I want to call to your attention and make much of.
Pinto, and Parente 2001). Similarly, consider the unintended
These are invisible institutions: the principles of ethics and
spillover of alcohol advertising to underage markets. Various
morality. Certainly one way of looking at ethics and moral-ity, a way that is compatible with this attempt at rational
ad campaigns, although legal, may plant images in young-
analysis, is that these principles are agreements, conscious,
sters that underscore a dysfunctional message of enhanced
or, in many cases, unconscious, to supply mutual bene-
sociability and personal attractiveness resulting from alco-
fits . . . the fact that we cannot mediate all our responsibili-
holic beverage consumption (Leiber 1997). In light of such
ties to others through prices, through paying for them,
possibilities, extant rules presently restricting alcohol adver-
makes it essential in the running of society that we have
tisements to programming with more than 50 percent adult
what might be called “conscience,” a feeling of responsibil-
audiences might seem arbitrary and not nearly restrictive
ity for the effect of one’s actions on others. (p. 309)
enough. And, many customers of all backgrounds respond toInternet spam solicitations and are matched with products
The major upshot of BP1 and our related commentary is
that deliver (more or less) what they promise. Yet the satis-
that marketing managers have an undeniable responsibility
faction of this minority does not eliminate the reality of most
to society for their decisions along with their employing
consumers being highly agitated by the growing presence of
organizations. For instance, Donaldson and Dunfee (1999)
spam advertising. Granting some (first-order) satisfied seg-
would connect social responsibility in marketing to an
ments of consumers, the second-order effects (or beyond) of
understood social contract between business and society that
certain debatable marketing practices, such as spam solicita-
implicitly ought to inform decision making. Because the
tions, can be socially troubling and disturbing to many and
license to engage in commerce constitutes a social contract,
has resulted in “can spam” legislation (Chang 2004). This
there is a social responsibility to see to it that the marketing
particular “fix” has thus far been ineffective.
decisions made by managers serving their employers do not
Marketing strategies work best and most ethically when
disadvantage society. Consistent with this view, society, via
they enjoy the support of society. Typically, marketers will
the law and evolving public opinion, is the final judge as to
earn that long-run support when most people feel (including
whether particular marketing activities, like those discussed
noncustomers) served by the implemented marketing prac-
above, individually and/or collectively, serve broader com-
tice (Lazer and Kelly 1973). Given our stipulation that societal
JOURNAL OF MACROMARKETING
According to BP1, the market system primarily is to be at
suppression of the telemarketing industry with state and fed-
the service of people. Hence, this proposition strongly sug-
eral “do not call” lists and the temperance of online market-
gests that persons (especially the consumers in a marketing
ing research with children through the Children’s Online
transaction) should never be viewed as merely a means to a
Privacy Protection Act [COPPA] regulations motivated by
profitable end. Those familiar with moral philosophy will
several unfortunate abuses of children’s privacy on the
recognize this decision rule as a marketing-oriented version
Internet (Lans-Retsky 2004). This discussion of legislation
of Immanuel Kant’s well-known categorical imperative,
as the solution to marketing excesses at the expense of all
second formulation (Kant 1785/1981; Bowie 1999). Marketing
parties leads to a necessary articulation of the distinction
practices violating this means-versus-ends proposition are,
between marketing ethics and marketing law.
at minimum, ethically suspect. Selling tactics that treat con-sumers as mostly means rather than ends likely include the
BP2—Two Realms: Ethical Expectations for Marketing Must Exceed Legal Requirements
• High-pressure selling tactics such as those in certain sectors
Ethical marketers must achieve a behavioral standard in
of the financial services or real estate industries (e.g., junk
excess of the obligations embedded in the law. Typically, the
bonds peddled by “boiler room” investment firms, sales of
law represents the lowest common denominator of expected
variable rate annuities to the older elderly, or various hardsell time-share condominium presentations)
behavior for marketing and business practice (Westing 1967;
• Coercion in the channel distribution, such as demands for
Carroll 1991). Ethical marketing organizations always
price concessions, by the channel partner having significant
should strive to exceed the legal minimums of social compli-
economic leverage (e.g., the periodic dealings of big box
ance. Thus, the law and ethics represent two-tiered layers of
retailers with their suppliers concerning slotting fees and
constraint impeding socially troubling marketing practices. It
• Over-the-top psychological approaches, such as the use of
is worth distinguishing more formally between these two
fear appeals in the sale of home security systems or elective
concepts—law and ethics—and their interconnected realms.
• The sexual exploitation of women (or other demographic
• Marketing law constitutes the baseline expectations upon
stereotyping) in magazine advertising for attention-etting
marketing by society. It is a black letter set of rules and regu-
lations that are codified over time to address the dynamics of
Price gouging in times of product shortage, such as in the
business practice that deals with the marketing function
aftermath of hurricanes or other natural disasters
(Welch 1980; Stern and Eovaldi 1984; Oswald 2002). Theformalization of restrictions by law typically lags public opin-
When marketers treat their stakeholders mainly as
ion and therein lays one danger of only relying on the law to
means, they flunk the test of placing people first (e.g.,
guide the boundaries of behavior. Obvious examples of mar-
Karpatkin 1999). The inability of marketers to adhere to the
keting laws and related regulatory oversight include antitrustlegislation, which modulates competition; the Federal Trade
dictum of never treating their consumer (and other stake-
Commission (FTC), which oversees sales and trading prac-
holders) as merely a means to an end, if sustained, will usu-
tices in the United States; the Consumer Product Safety
ally result in the invocation of the “iron law of social
Commission (CPSC), which specifies the safety standards for
responsibility”—an exercise by regulators that, from a cost
various products and dictates the removal of harmful products
standpoint, is often detrimental to the violating marketer or
from the marketplace; and the Food and Drug Administration (FDA). There has been a slow but steady increase in the reg-
perhaps all marketers. The iron law of social responsibility
ulation of marketing activities over the years (see Sprott and
posits that when entities, such as marketing organizations,
Miyazaki 2002). Even granting the existence of several ill-
have great economic power and do not exhibit proportion-
conceived business laws and regulations, when firms inten-
ate social responsibility, they will have their power propor-
tionally break the law, they are quite likely to be in ethicaltionately diminished (adapted from Davis, Frederick, and
jeopardy as well (Cohen 1995; N. Smith 1993).
• Marketing ethics encompasses the societal and professional
Blomstrom 1980). Usually, the diminishment of business
standards of right and fair practices that are expected of mar-
freedom takes the form of additional regulations.
keting managers in their oversight of strategy formulation,
A recent and powerful example of the exercise of this
implementation, and control. The most basic ethical stan-
“iron law” in the business environment is the promulgation
dards are often articulated in professional codes of market-
of the Sarbanes-Oxley Act (2002) to deal with the spate of
ing conduct. The Norms and Values statement of the AMA,revised in 2004, is presented in Appendix B. It represents a
business ethics scandals involving companies such as Enron,
useful, duty-based specification of marketer responsibilities
WorldCom, Adelphia, and Tyco (PricewaterhouseCoopers
that exceed those codified in law. It is illustrative of the
2003). Because a few CEOs, CFOs, and auditors did not dis-
expectations incumbent in the practice of marketing not cap-
charge their imputed social and ethical responsibilities, a
tured by law. While basic theories of ethics do not change
sweeping new set of costly regulations was enacted that
over time, the norms and values that are clearly embraced bysociety, or by a profession at any period in time, are subject
restricted the latitude of governance actions corporate officials
to slow shift. For example, in the early to mid-twentieth cen-
might take. Sectors of the marketing community have recently
tury, the operation of retail stores on Sundays in the United
experienced similar legislative backlash, as witnessed by the
States would have been perceived by many as unethical. DECEMBER 2006
may impose their singular solution upon marketers (Jennings2006). For instance, numerous ethical questions were raisedabout telemarketing practices prior to the institutionaliza-tion of do-not-call lists in various states’ legislation andeventually in federal law (Vence 2002). Similarly, sellers ofalcoholic beverages and tobacco products were asked totemper their advertising use of cartoon characters and “lovable”animals appealing to children, before the enactment of for-
mal regulations severely restricting such approaches on TVshows directed at children.
• Ethics implies assuming more duties than law. Normally,
ethics bestows a greater obligation of moral duty upon mar-
Responsibility
keting managers than merely conforming to the law. The
Professional and Moral
AMA Norms and Values statement (Appendix B), for exam-ple, delineates the basic moral standards expected of mar-keting professionals by society, but most of these are notinstitutionalized in laws. The Integrated Social Contractstheory approach to business ethics would characterize such
Baseline Expectations
guiding norms as creating moral free space for members of
of Society
a professional group (i.e., marketers), who then use thoseprecepts as a motivating behavioral cue (Dunfee, Smith, andRoss 1999). In contrast, marketing managers, who are pri-
FIGURE 3 THE RELATIONSHIP OF ETHICS AND THE LAW: ONE PERSPECTIVE
marily legal minimalists and thus seek to exclusively con-form only to the law, will likely exhibit a lower behavioralstandard. This lowered standard could easily jeopardizetheir company’s reputation and subject the organizations to
Clearly ethics and the law are connected, but they are not
negative consequences if society’s higher expectations are
the same (Halbert and Ingulli 1997). Understandably, many
not met by marketers who appear to be lax in their ethicaldischarge (see BP4).
questionable marketing practices are both illegal and uneth-ical. Examples would be price fixing as well as bait and
Adhering mainly to the law as the dominant guideline for
switch advertising. However, many other marketing tech-
judging the propriety of a marketing practice is often moti-
niques and strategies may not be illegal but could raise eth-
vated by the agency theory perspective of management
ical questions. For example, “ambush marketing”—creating
(DeGeorge 2006). According to the agency approach, man-
an ad campaign that mimics a competitor’s special event
agement acts solely as an agent of the stockholder and is
promotions for which they have paid sponsorship fees—is
responsible for maximizing investor return—the presump-
not illegal per se but generates spirited debate among ethi-
tive primary concern of shareholder groups. Shareholder
cists and practitioners concerning its inherent fairness
goals are conceived as predominantly financial, although the
(O’Sullivan and Murphy 1998). Finally, a few practices are
rapid growth of socially responsible investing (and other
illegal but not necessarily unethical. For instance, providing
developments such as the sustainable-economics move-
small “grease payments” in certain foreign markets, while
ment) seems to belie this viewpoint (Thompson 2004).
technically legislated against in these countries, may consti-
Consistent with agency theory, ethical actions are often per-
tute a business practice that is both commonplace and
ceived as discretionary if not required by law; ethics is seen
widely expected (Kaikati and Label 1980; Carroll and
as costly because it often requires expenditure of supple-
mentary organizational resources in order to achieve confor-
Figure 3 provides a useful way to envision the relation-
mance with social norms. This view was captured by Milton
ship of ethics and the law as it often applies to marketing
Friedman’s (1970) famous analysis of corporate social
practice. In this instance, the Y, or vertical, axis represents
responsibility: the social responsibility of business is to
moral and professional responsibility and the X, or horizon-
increase profits. In his classic work, Capitalism and
tal axis, represents societal expectations. An examination of
Freedom (1962), Friedman characterized social responsibil-
Figure 3 underscores the following two points:
ity as a subversive doctrine and wrote, “There is one and
only one social responsibility of business—to use its
Ethics embodies higher standards than law. Ethics is typi-
resources and engage in activities designed to increase prof-
cally the leading edge of regulation, thereby implying ahigher standard of professional/moral responsibility than
its so long as it stays within the rules of the game, which is
law and incorporating wider latitude of societal expecta-
to say, engages in open and free competition without decep-
tions. In this sense, ethics anticipates the dynamics of soci-
etal attitudes and opinions concerning marketplace fairness
In contrast to agency theory, adherence to an ethical per-
that eventually may be proscribed and embodied in the law.
spective in marketing management is most commonly driven
When an ethical issue is first called to the attention of mar-keters, there are likely to be several possible solutions to the
by stakeholder theory (Freeman 1984). This approach posits
problem. But as negative public opinion grows, regulators
that a firm has important responsibilities to other parties
JOURNAL OF MACROMARKETING
(e.g., employees, suppliers, distributors, the host commu-
formulator from responsibility for a dubious marketing
nity). These responsibilities extend beyond contractual
strategy. For example, the creators of a TV advertisement
obligations and, with some regularity, can supersede the imme-
that depicts an overweight child as a “pathetic loser” in a
diate objectives of investors and/or stockholders. Stakeholder
competitive contest or portrays a Hispanic man as a “work
theory is a normative theory of corporate responsibility
for food” gardener might claim that they did not intend to
because it asserts that ownership rights are not always pri-
perpetuate social stereotypes and thereby offend certain
mary and exclusive because business operates under an
audience segments. When receiving unexpected criticism,
implied social contract (see BP1) that grants certain rights to
creators of debatable marketing tactics commonly claim
other parties. The addition of these other stakeholders to the
ignorance of the offense or deny any intended slight, what-
calculation of required managerial responsibilities automat-
ever their true and original intention. Nevertheless, intent
ically restores a greater societal orientation into the debate
sometimes can be deduced with reasonable confidence by
about the propriety of marketing (and business) practices,
examining circumstance. For example, when me-too mar-
because it formalizes the consideration of their viewpoint as
keters attempt to closely emulate the colors or trademark of
a matter of expected protocol (Goodpaster 1991; Donaldson
a market leading brand, causing consumer confusion in the
and Preston 1995). The acceptance of stakeholder claims as
marketplace, the calculated intent seems to be relatively
central to an organization’s purpose has the effect of elevat-
clear-cut and logical. Similarly, if marketers of highly vio-
ing ethical examinations to a level of expectations that goes
lent video games consistently advertise on TV programs
significantly beyond legalistic minimums. Additional dis-
with the highest attainable number of young adolescent boys
cussion about the essential and enduring effects of recogniz-
as audience members (even when following industry guide-
ing stakeholders’ claims and the ethical posture of firms is
lines in only promoting these products on programs watched
by a majority of adults), the motivation behind such prac-tices seems arguably clear. In these instances of stereotypingin advertising, trademark caricature, and willfully targeting
BP3—Intent, Means, and End: Three Essential
a vulnerable market segment, probable marketer intent can
Components of Ethical Analysis
shed considerable light on the likely ethicalness of a partic-
When formulating marketing campaigns, marketers are
responsible for their intent, as well as the means and end of
The means (or method) of executing a marketing strategy
a particular marketing action. This essential perspective
is the second component of a marketing action that requires
requires some deliberate explanation. As analysts adjudicate
scrutiny to judge its ethical nature. Obviously, certain prac-
the ethical dimensions of a questionable marketing practice,
tices (e.g., predatory pricing) are explicitly forbidden by
that practice can, and usually should, be divided into three
law. However, an analysis of the specific means used in the
distinct components—the intent of the action, the means or
execution of a particular marketing strategy can provide use-
method by which the practice is implemented, and the end
ful insight into the ethical propriety of a debated marketing
or consequences of the strategy or tactic. The intention is
action. For instance, widely promoted product rebates,
what marketers want to happen, the means is how they carry
which then require multiple documentation (i.e., proof of
out the action, and the consequences are what actually hap-
purchase, Universal Product Code [UPC], retail seller veri-
pens. The quality of ethical analysis that is conducted,
fication, etc.) as well as an overly detailed set of confor-
whether internal or external to the firm, is improved by such
mance steps by the consumer to successfully execute that
a separate consideration because it allows marketing ana-
redemption, seem by their very method of administration to
lysts to sharpen their insight about how a particular market-
be ethically questionable (Grow 2005). Similarly, the por-
ing situation might be perceived. This approach forces
trayal in TV ads of pliant and submissive women easily
managers to focus not only on the outcomes of their deci-
available to those who drink a particular brand of beer (witness
sions (something that typically has their attention) but also
the numerous depictions of beer bimbos in past light-beer ad
on the process of how they make decisions (see also BP7).
campaigns) seems a means of promotional campaigning that
From the viewpoint of an outside party, there is little
at least raises ethical questions solely because of its method
doubt that the intent of a particular marketing action, in
of thematic execution (Lawton 2003).
terms of its ethical purity, is the most difficult element to
The third component to be addressed in assessing the eth-
judge because it requires evaluating the internal motivation
icalness of a questioned marketing action is its outcome.
behind a company’s particular actions or policy. From a
Because many outcomes have considerable overt visibility
legal standpoint, intention often involves judging what a
associated with them, the consequences of marketing
party could reasonably foresee might happen when taking
actions are probably the easiest components for outsiders to
a particular action or set of actions. Because many seller
judge when analyzing the acceptability of particular market-
motivations are hidden, the intent behind marketing strate-
ing actions and should always be considered.
gies or tactics can be rationalized ex post facto by the
One especially useful framework for judging the ethics of
decision maker in a manner that obscures or shields the
business practices based on this approach was advanced by
DECEMBER 2006
Garrett (1966), and it provides the theoretical basis for BP3.
proportion of an audience watching television might view
The straightforward pragmatism of his particular method of
ads for Viagra or other erectile dysfunction products and
analysis—the proportionality framework—holds consider-
could be offended by such advertising. However, such unin-
able appeal for decision-oriented marketing managers inter-
tended, negative side effects of marketing actions, if minor,
ested in applied ethics. Garrett’s principle of proportionality
are parts of the complexities of an advanced marketing
combines all the essential elements into one ethical decision-
system and can be tolerated from an ethical standpoint.
making rule that encompasses and refines BP3: marketers
In the last analysis, Garrett’s (1966) proportionality
are responsible for whatever they intend as a means or an
framework is still highly judgmental. For example, what
end. If both are good, they may act accepting a certain (i.e.,
constitutes a major negative outcome versus a minor nega-
minor) risk of side effects.
tive outcome from an ethical standpoint? Which side effects
According to Garrett (1966), with regard to side effect
are intended versus unintended? This entire approach rests
outcomes, marketers should avoid actions that result in a
on marketing decision makers being fairly sophisticated and
direct major negative outcome for another stakeholder. For
reflective in their ethical perceptions and moral intuitions.
example, a seller who rigs a bidding process in order to
Mascarenhas (1995) developed a diagnostic framework, tai-
secure a supply contract has caused a major negative harm to
lored to marketing settings that can provide some additional
other economic parties competing for the same business.
guidance for making precisely these types of judgments.
That is, others lose the chance at the contract because of a
While this three-component framework of intention, means,
patently unfair competitive practice. Shareholders lose the
and outcome is not a perfect system for judging the ethics of
opportunities presumptive in the profit margin of a lower bid.
a particular situation, when used in combination with other
The fact that the bid-selected product might well meet the
basic perspectives (see BP5), it can serve as a helpful, initial
buyer’s specifications and be perfectly instrumental for its
analytic, inherently recognizing that marketing decisions are
intended purposes does not negate the unethical outcomes to
multifaceted and complex and demand evaluation from dif-
other bidders caused by bid rigging the purchase process.
ferent standpoints to validate their propriety. The propor-
Marketing practices that intentionally cause (or are likely
tionality approach is also particularly useful in balancing the
to cause) a major negative outcome for stakeholders affected
claims of various stakeholders affected by marketing actions
by the transaction at focus should always be scrutinized for
their ethical propriety. Sometimes there are unintended sideeffects from marketing actions that are taken by sellers that
BP4—Marketing Managers Differ in Moral
also cause major or minor negative outcomes. If these side
Imagination and Development: Four Types
effects can be designated as major negative outcomes andthey are foreseeable, the action must always be subject to
Marketing organizations striving to improve their ethical
careful ethical evaluation. For example, suppose a marketing
aptitude should cultivate better moral imagination in their
firm has been successfully selling personal watercraft (jet
managers by hiring and training those who will likely under-
skis) to an increasing number of satisfied consumers when it
stand and appropriately apply moral reasoning. In most
comes to their attention that there has been an alarmingly
firms, the managers making marketing decisions will differ
high rate of injury among younger adolescents when they
in their ability to evaluate and resolve ethical issues. This is
operate the watercraft without parental supervision. This
because managers will possess varying levels of moral
outcome occurs despite the fact that the product has passed
development. Some marketing executives will have little
all industry safety standards and there is a warning label on
ethical sensitivity, while others will have the capacity for
the watercraft prohibiting the operation of the personal
significant moral imagination—that is, the character and
watercraft by drivers under 12 years old. In this instance, it
ability to morally reason to creative ethical solutions when
is probably unethical for the firm to go forward with further
encountering an ethical question (Werhane 1999). In other
sales without some further intervention (e.g., a mandatory
words, managerial quotients of moral sensitivity and capa-
water safety class for family buyers) because the major side
bility will not be the same, owing to different life experi-
effects of the product (a high rate of injury to minor opera-
ences and core values, as well as their basic human character
tors) is generating a significant or negative consequence for
(Hosmer 1994). Given this realistic state of affairs about
some stakeholders (family members of personal watercraft
critical ethical evaluations, organizations should seek to
understand the nature of these different personal moral apti-
It is true that almost any marketing action can have unin-
tudes and strive to instill an improved ethical reasoning
tended side effects. And, on occasion, win-lose situations are
inevitable such as when, for instance, a large retailer receives
Theoretically, this natural variance among managers is
a favorable zoning ruling to establish a new distribution cen-
best recognized by Kohlberg’s (1969) framework of moral
ter but environmental groups (technically secondary stake-
development. Business firms have the potential to use such
holders) continue to protest or call for company boycotts
thinking throughout their executive development programs
despite a ruling that favors the retailer. Similarly, some small
when seeking improved social responsiveness (James 2000). JOURNAL OF MACROMARKETING
While Kohlberg’s framework was formulated by studying
3. Moral strivers, our third type, are those marketing managers
the cognitive moral development of children, not managers,
who have progressed in their moral thinking and develop-
research evidence shows that training and instruction can
ment to the point where they are capable of considering and
improve the moral development of managers (Pennino
balancing multiple stakeholder claims when adjudicating
2002). Similarly, empirical evidence exists that managerial
what constitutes an ethical imperative. The empathy-for-others capacity is what distinguishes these moral strivers
moral styles vary greatly across organizations as well (Srnka
from egoistic managers since their ethical reasoning often
1999). The importance of perspectives such as Kohlberg’s
will be tempered by additional relevant factors such as orga-
depends on realizing that, in many instances, a firm’s ability
nizational loyalty (e.g., to coworkers and suppliers) and
to handle ethical issues is only as good as the capability of
other basic duties to society (e.g., written guidelines embod-
its managers. Case histories of how organizations handle
ied in industry or professional codes). Nevertheless, strivers
ethical challenges support the face validity of this approach
are still heavily dependent on company rules and policies in
(Pastin 1986; Boatright 1995). Recognizing managerial dif-
their assessment of moral situations. Some moral striver
ferences in moral imagination implies that, given directed
managers are susceptible to falling back on minimalist
training, managers can enhance their ethical skills. At the
expectations and reverting to an egoistic or legalistic
most basic level, inspired directly by Kohlberg, we would
approach in the absence of readily available guidance. Other
posit four broad types of marketing managers.
strivers really want to do the right thing, but prevailing orga-nizational concerns, such as signals from upper manage-ment, demands to meet financial objectives, or an uncertainty
1. Egoistic marketing managers are the least morally devel-
about proper norms, sometimes lead them to avoid the time-
oped and have a strong tendency to resolve moral situations
consuming work of ethical reasoning. Put another way,
based on their own immediate interests and consequences.
unless provided with some form of codified ethical guid-
Individuals at this comparatively undeveloped stage of
ance, strivers often lack the moral imagination to creatively
moral thinking give strong weighting to the incentives and
reason through the more complex ethical problems. This
sanctions that will affect only them. The language that char-
state of affairs helps provide an answer to the often asked
acterizes this managerial approach includes rationalizing
question, Why do seemingly good marketing managers
phrases such as the following: “everybody else does it”; “the
sometimes make unethical marketing decisions?
lawyers haven’t told us this is wrong”; “we were only fol-
4. Principled marketing managers, our fourth type, have
lowing orders” (Jennings 2003). Such managers respond
reached a high level of moral development. Managers who
mostly to organizational rewards and punishments, and their
attain this sophisticated state address their ethical problems
personal moral resolve is relatively immature because of
by regularly applying both prevailing ethical norms and
their preoccupation with personal or company gain. Marketers
applicable laws to the specific situation. Principled man-
at this unrefined stage of moral development will include
agers also have substantial moral imagination and therefore
individual egoists who will choose actions that benefit
are better able to foresee the ethical impacts of their market-
mostly themselves, given this sort of option. And unfortu-
ing decisions on others; they have developed the moral
nately, at the extremes, there may also be some “crooks” in
capacity to incorporate basic stakeholder claims, industry
this category—managers who know the actions being taken
norms, and legal constraints into their moral calculations;
are wrong, but who will choose to do them anyway because
they can creatively apply universal ethical principles—ones
of the probable personal payoffs involved. Surely, the pirate
they believe all fair-minded managers should follow given a
CEOs and CFOs who raided Enron, WorldCom, Tyco, and
similar set of facts or situations. One study found this group
Adelphia are of this corrupt category of manager (Murphy
to be in the minority (Drumwright and Murphy 2004). BP5
provides specific illustrations of such guiding principles.
2. Legalist marketing managers are the second type. They
overtly espouse the law as their guide in adjudicating thepropriety of any marketing action. As explained in BP2, they
Our executive training and development experience has
embrace predominately an agency approach to their mana-
shown that in a typical marketing organization, the moral
gerial duties. Legalists often perceive business as a game,
development of managers will vary, with most managers
with profits and return on investment (ROI)-type measures
being of the moral-striver type. This view is consistent with
the winning criteria; all tactics not expressly prohibited by
opinion polls of executives conducted over the years, where
law as “in play” regardless of consequences. Carr (1968)
the vast majority of executives assert that they try to do the
succinctly captured the essence of this perspective in his
right thing most of the time (Laczniak et al. 1995). Thus, a
famous article, “Is Business Bluffing Ethical?” He wrote:
common situation involves morally striving managers, who
“Our customs encourage a high degree of aggression in the
when facing an ethical question are guided by relevant laws
individual’s striving for success. Business is our main area
along with the specifically articulated ethical norms of their
of competition, and it has been ritualized into a game of
particular organization. In these cases, when ethical norms
strategy. But as long as a company does not transgress therules of the game as set by law, it has the legal right to shape
and values are well-defined, striver marketing managers will
its strategy without reference to anything but its profit”
be in a better position to apply company and industry guide-
(p. 149). This law-equals-morality approach certainly undercuts
lines to the ethical question at hand and then reason to an
the obligation of ethical reasoning for such managers. DECEMBER 2006
Many morally striving managers also might be described
corporate “good guy” leads to greater customer loyalty (e.g.,
as “seekers” because they are looking to do the ethical thing
Ben & Jerry’s ice cream), greater employee retention (e.g.,
but need training and organizational guidance to do so.
NML Financial Services), and better access to equity capital
When faced with difficult ethical questions, some marketing
(e.g., Google). But whether being the moral exemplar
managers, failing the availability or clarity of specific guide-
directly corresponds with economic reward is the subject of
lines from the organization, quickly revert back to the posi-
much debate (Cochran and Wood 1984; McWilliams and
tion of egoists or legalists constrained only by the limits
Siegal 2001). Good companies do not necessarily do best
of law in seeking personal or organizational advantage.
financially. But, avoiding major ethics scandals certainly
Accepting such easier approaches basically allows sidestep-
seems to mitigate major corporate punishments and their
ping the challenge of ethical analysis by adhering to mini-
associated costs (Johnson 2003). In other words, unethical
mal legal requirements or personal hubris. The strategic
companies seldom finish first, and often they do not survive,
implication of this discussion for organizations is that, if
as Enron and Arthur Andersen attest.
firms are trying to achieve better ethics, they should attempt
Commonly, one motivation for principled managers to
to articulate, communicate, and reinforce all those ethical
live out high ethical ideals comes from a highly developed
norms and values considered to be essential for their com-
ethical culture (Ottoson 1982). Such an ethical culture may
pany and industry sector (Murphy 1989). This will allow
be the result of the values of the company founder, or it may
managers who are strivers to have the necessary ethical
come from a longtime CEO who expects fair play and hon-
guidance and will decrease the tendency of some marketing
esty in all operations (George 2003). Corporate cultures that
managers to retreat back exclusively to legalistic or egoistic
are ethical do not just happen by chance; rather, they are the
thinking. A protocol useful for channeling the ethical decision-
result of a premeditated effort on the part of a corporation to
making process for managers is discussed in BP7.
explore their values, articulate them, and then train all employ-
The task of organizations serious about their ethical oper-
ees in the details and importance of living these company
ations is to try to minimize the number of egoistic managers
(sadly, the plain crooks [see Murphy et al. 2005] may bebeyond help with regard to ethics training) and to move
BP5—Five Essential Ethical Precepts
them at least to the striver level of moral thinking via ethics
for Enlightened Marketing
education. Furthermore, given the propensity of egoist man-agers to respond mainly to rewards and punishments, organ-
Marketers who aspire to operate on a high ethical plane
izations must strive to significantly reduce managerial
should articulate and embrace a core set of ethical princi-
opportunities to capture illicit rewards that might be gained
ples. A definitive distillation of the essential moral precepts
by engaging in unethical actions (Ferrell and Gresham
for evaluating marketing practice is as illusive as ranking
1985). Such opportunities are usually minimized through
business schools or creating the perfect Graduate Management
strong internal company compliance programs and a system
Admission Test (GMAT) exam. All marketing firms need to
of corporate governance with plenty of checks and balances.
reflect on the core values referenced in their company ethics
Incentives for organizations to reduce legal penalties if or
statements and then work to derive an appropriate list of
when they do transgress are provided by the Federal
sacrosanct ethical guidelines. However, five ethical princi-
Sentencing Guidelines for Organizations (FSGO) regula-
ples for assessing the propriety of marketing practice are
tions (LeClair, Ferrell, and Fraedrich 1998; Laczniak and
offered to stimulate debate and further the dialogue about
enhancing marketing ethics. An honest review and attempt
Principled managers, that is, those who have developed
to use these normative principles will go far in generating
ethical value systems and the capacity for consistently
the ethics conversation among managers and/or policy mak-
applying them, are also in the minority in most organiza-
ers necessary to improve marketing practices. Articulating
tions. Cultivating ethical managers, who are such moral
such an idealistic and normative set of principles is in con-
exemplars and who will always try to pursue what is morally
formance with the deontological (or duty-based) approach
right in their marketing decisions, is the ideal for those firms
to ethics that often characterizes professional codes of con-
aspiring to operate at a highest ethical plane. In confor-
mance with BP2, companies should insist that simply com-
These principles also might be considered a preliminary
plying with the law is not sufficient to achieve meritorious
answer to a question implied by BP4 and address ethical
corporate citizenship and ethical responsibility. It is often
issues concerning the rightness or fairness of various mar-
postulated that virtue is its own reward, but the pragmatic
keting tactics. Since marketing managers with moral imagi-
benefit of having principled managers—those who know the
nation are essential to ethical organizations, several principles
core values of the firm and always try to apply it in their
should be regularly integrated into their moral reasoning.
decisions—is that such leaders can embody essential moral
Ethical questions about marketing could be raised by
imagination and propel their organizations to the forefront
managers (e.g., Can I pad my expense account to recover
of enlightened social responsibility. Some argue that being a
gratuities incurred as part of my business travel?), customers
JOURNAL OF MACROMARKETING
(e.g., Is this price fair?), regulators (e.g., Should direct mail
particularly focusing on the integrity of marketing com-
sellers incur the cost of collecting the appropriate state sales
munications. Case law, as well as regulation concerning
tax?), the media, competitors (e.g., Should all material prod-
deceptive practices like those overseen by the FTC, is a use-
uct claims contained in advertising be substantiated on the
ful minimum for understanding the scope of this often com-
company Web site?), as well as other stakeholders. Just rais-
plex principle (Murphy and Wilkie 1990). This involves
ing an ethics question does not presuppose a practice is
considerations such as articulating the specific type of prod-
unethical. For example, many questions have been asked
uct claims that might mislead reasonable consumers.
about the practice of product “puffery,” that is, vigorously
However, the ethical rationale behind the principle of non-
exaggerating a product attribute for dramatic effect (Preston
deception is grounded more thoroughly in the theory of
1994). As an illustration, stating that a new model sports
virtue ethics (MacIntyre 1984; Williams and Murphy 1990).
coupe has an engine that “purrs like a kitten” would be a
The importance of nondeception is built on the supposition
product puff. Many analysts find most puffing tactics to be
that trust is the foundation of an efficient marketplace and
ethically defensible even though they usually raise some
that this characteristic is nurtured largely by ongoing mar-
keter honesty. Specifically, over time, consumers will not be
Of the five ethical precepts to be discussed, two of them
able to trust sellers or their brands if they are intentionally
(nonmalfeasance and nondeception) are regularly included
manipulated or deceived (Brenkert 1997). Deceptions such
in business codes of conduct. The other three principles
as the overselling of extended warranties that very likely are
(protection of vulnerable markets, distributive justice, and
not needed by consumers, “channel stuffing” by sales reps
stewardship) advocate an elevated level of ethical responsi-
in order to meet monthly sales quotas or quarterly division
bility that is likely to stimulate greater debate and challenge
revenue projections, overpromising the capabilities or deliv-
among marketing practitioners because they demand a much
ery of anticipated new products (e.g., vaporware), and the
higher threshold of required moral obligation.
abuse of word-of-mouth marketing (e.g., creating false or
The first essential ethical standard is the principle of non-
exaggerated buzz marketing) illustrate violations of this
malfeasance. This is a basic rule of professional ethics, and
it states that marketers should knowingly do no major harm
The third moral precept for marketing is the principle ofwhen discharging their marketing duties. This principle also protecting vulnerable market segments. Such uniquely vul-
helps operationalize the ethical concern regarding possible
nerable market segments would include children, the elderly,
negative outcomes of marketing actions discussed as part of
the mentally feeble, and the economically disadvantaged.
BP3. This precept finds its historical roots in the Hippocratic
Marketers must always take extraordinary care when engag-
Oath of physicians and serves as a fundamental expecta-
ing in exchanges with vulnerable segments (Brenkert 1998).
tion of responsible, professional business practice as well
The rationale undergirding this particular principle stems
(Drucker 1974). It has been embodied in various marketing
from the basic tenets of human dignity and is anchored in
codes of conduct. Similar to the legal concept of implied
the doctrines of all major religions (Murphy et al. 2005). For
product warranties, it underscores the unstated guarantee by
example, in 1965, a key document of the Roman Catholic
sellers to buyers that products and services offered are safe,
Church, currently being publicized on its fortieth anniver-
to the best knowledge of the marketer, if used as intended by
sary, contains the following admonition: “In the economic
the consumer. Thus, this principle demonstrates its value by
and social realms . . . the dignity and complete vocation of
enshrining the assurance of product safety into the practice
the human person and the welfare of society as a whole are
of ethical marketing. While the legal doctrine of strict lia-
to be respected and promoted. For the person is the source,
bility may, in some cases, result in financial liability for sell-
the center, the purpose of all economic and social life”
ers even when a marketer did not know that a product was
(Catechism of the Catholic Church 1994, 582). The impor-
harmful (Morgan 1989), the motivation behind the non-
tance of human dignity in U.S. culture is widely grounded in
malfeasance principle is to explicitly codify the ethical duty
a multiplicity of America’s Judeo-Christian religious tradi-
of marketers not to take premeditative action that could
tions (Camenish 1998; Pava 1998), and this concept persist-
cause customers a serious dysfunction (i.e., harm). Under
ently calls upon all members of society to be particularly
this principle, it seems that marketers of herbal health sup-
mindful of the most disadvantaged, exploited, or marginal-
plements, whose possible side effects have been widely
ized. Eastern religions have similar ethical precepts at their
questioned by the medical community, might be judged as
core (e.g., Rice 1999). In a marketing context, this principle
ethically delinquent for continuing to promote the sale and
compels providing special protections to those parties with
usage of such products. Dubious weight loss regimens and
depleted bargaining power in the marketplace (Alford and
artifacts would be subject to a similar charge.
Our second essential moral precept is the principle of
The most obvious differentiating characteristic of vulner-
nondeception. This principle states that marketers ought to
able segments might be low economic resources or leverage
never intentionally mislead or unfairly manipulate consumers.
(i.e., poverty), although vulnerability might also stem from
It is consistent with BP1’s notion of respecting people,
information deficits (e.g., the lack of appropriate consumer
DECEMBER 2006
education, financial literacy, or emotional maturity) or even
Following the thinking of Rawls, the difference principle
the lack of meaningful product choice (N. Smith 1990). The
calls upon marketers to refrain from engaging in marketing
moral force behind the vulnerable market principle is that
practices and strategies that further harm those market seg-
these market segments might be easily susceptible to
ments already in a vulnerable position. To be ethical under
exploitation by unscrupulous sellers who are in a position to
this corollary requires marketing approaches that improve or
manipulate the transaction. Marketers, understanding this,
are at least neutral to those consumers who are least well-
have the duty to avoid the potential exploitation of the weak.
off, that is, to those at the bottom of the marketplace pyra-
For example, the high interest rates charged by the rent-
to-own home furnishings sector are a poster child illustra-
A practical marketing manifestation of vulnerable mar-
tion of such abuse in the marketplace (Lacko, McKernan,
kets might stem from the so-called “digital divide” (Gordon
and Hastak 2002). Also firms that exploit the marketplace
2002). In this instance, various social commentators have
illiteracy of children (e.g., junk food in primary schools), the
suggested that the lack of computer access, training, and
depressed information-processing capability of the mentally
broadband Internet capability among low-income con-
feeble, or the economic desperation of the poor (e.g., payday
sumers has reduced their ability to avail themselves to vari-
loan stores) are likely violators of this principle regardless of
ous product options and price discounts made possible
the legality of these marketing practices.
through e-commerce. If one accepts the reality of the digital
A fourth essential moral precept for marketing is the prin-
divide, then market access of a significantly disadvantaged
ciple of distributive justice. This principle is closely related to
group (e.g., the poor) has been further reduced even though
the preceding one in the sense that it is focused on the macro
no single marketer may have acted unethically. This exam-
and systemic marketing effects directed at certain at-risk seg-
ple offers a further classic illustration of how the earlier dis-
ments of consumers (Laczniak 1999). It further addresses the
cussed second- or third-order effects of marketing can raise
issue of outcomes raised in the discussion of BP3. Specifically,
ethical questions from a societal standpoint (BP1). This spe-
the principle of distributive justice suggests that there is an
cific situation also implies a “collective” ethical responsibil-
obligation on the part of all marketing organizations to assess
ity among all marketers to help rectify the overall state of
the fairness of marketplace consequences flowing from their
affairs for these consumers. Precisely how that responsibil-
collective marketing practices. While individual firms may
ity is apportioned among various marketing firms is prob-
practice ethical marketing, differences among consumer seg-
lematic but not unsolvable. Proponents of distributive
ments affect their access to reliable information. Thus, some
justice, in the example at hand, would contend that the
segments of the market might be regularly left out or short-
greater the reliance of particular marketers on e-marketing
changed because of their lack of economic leverage due to
and e-commerce, the greater their ethical responsibility.
financial circumstances or the inequities caused by controls
Similar to the vulnerable markets principle, issues of dis-
over the channel of distribution. For instance, the principle of
tributive justice imply superordinate obligations for mar-
distributive justice likely would come into play if it turns out
keters who target consumer segments that may have already
that a supermarket chain allocates better cuts of meat, fresher
experienced negative marketplace outcomes because of the
produce, and newer health-oriented food items to outlets
secondary effects (or beyond) of marketing practices
located in more affluent areas. In such a situation, distributors
(Mascarenhas 1995). For example, the alcoholic beverage
controlling multiunit stores in various markets are contribut-
and distilling industries have special obligations to promote
ing to marketing injustices if that practice generates unequal
the moderate consumption of alcohol because of the social
purchase opportunities for certain segments on a systemic,
costs of alcoholism; similarly, the casino and gaming indus-
try has unique ethical obligations because of the societal
The theoretical foundation of the principle of distributive
consequences attributable to the dysfunctions of gambling
justice is sourced in theories such as that of philosopher
John Rawls (1971). Central to this discussion is the differ-
Finally, a fifth moral precept of enlightened marketing is
ence principle of Rawls, which can be usefully thought of as
the principle of stewardship. This principle reminds market-
a corollary to the previously discussed vulnerable market
ing managers of their social duties to the common good.
segment principle, as well as to justice in distribution. The
This principle also connects back to BP1 and its theme of
difference corollary would find marketing practices are
societal benefit because it reminds marketing managers of
unethical if, over time, they contribute to the further disad-
their responsibility to act for the betterment of their host
vantage of those segments of the market that are least well
environments and community. Specifically, following the
off in terms of information, economic resources, access to
principles of stewardship, marketers are obligated to ensuresupply, market literacy, and other factors essential to mar-that their marketing operations will not impose externalketplace transactions. This ethical dictum is likely to be highly
costs on society, especially the physical environment, that
controversial with many marketers because it represents a
result from their internal marketing operations. Employing
sort of affirmative action program for impoverished con-
illegal immigrants at reduced wages in order to control retail
sumer segments in the marketing system (Laczniak 1983).
store costs, knowing that incremental social cost accrues to
JOURNAL OF MACROMARKETING
the community (e.g., additional health care, education, and
of whom may have a contractual relationship with the mar-
law enforcement), is an example of this principle’s violation.
keting organization and are essential partners in the well-
The aesthetic pollution caused by the overuse of billboard
being of the firm. Host communities and the general public
advertising and other electronic signage in outdoor settings
are two additional and important secondary stakeholders.
is another clear example of such a marketing-imposed exter-
These latter two stakeholder groups have a vested interest in
nality. The stewardship principle particularly addresses
the social outcomes influenced by marketing operations.
environmental/ecological responsibilities incumbent on
The media, while sometimes included as a stakeholder,
organizations. It suggests that marketers have a moral obli-
might best be conceived as the “eyes and ears” of the host
gation to protect the environment via a socially sustainable
community and the general public. Continuing this physio-
pattern of consumption such that damages are not imposed
logical analogy, legal and political institutions that oversee
on the ecological system in a way that penalizes future gen-
competitive fairness and market regulations (and other con-
erations (Ottman 1993; Wasik 1996; Murphy forthcoming).
straints over business organizations) might be usefully char-
Such environmental imperatives are well established in var-
acterized as the mind-set of public sentiment (see BP1).
ious “model codes” of business operations such as the global
In theory, a stakeholder orientation is well accepted by
Caux Round Table (1992) and CERES (1989) operating
portions of the business community and, nominally at least,
guidelines. Such ideals are embodied in the sustainable
deemed to be extremely important. An examination of vari-
development movement that led Starbucks to purchase more
ous exemplary corporate values statements and codes of
coffee from local cooperatives in Latin America, and they
ethics gives prominent play to the role of stakeholders in
underlie the goals of the Kyoto (environmental) accords,
business operations (Murphy 1998). Certainly the discipline
although the United States is not a signatory to this latter
of marketing ascribes a great voice to customers as the focal
agreement. The principle of stewardship also suggests obli-
point of market planning and, via the marketing concept,
gations help their host communities when the opportunity
gives credence to the belief that the customer is the core
allows. Positive examples of organizations embracing the
concern of savvy marketing organizations. And in many
stewardship principle involve McDonald’s Corporation, in
companies, employees also are elevated to a first-level posi-
the early 1990s, eliminating nonbiodegradable polystyrene
tion as the experience at Southwest Airlines testifies. Sadly,
containers for many of its menu items and returning to more
it also happens that upper management sometimes extols
ecologically compatible (and higher cost) paper packaging
employees as being the company’s most important asset,
and General Electric’s current Eco-Imagination campaign to
even when they are not treated as such.
improve the environmental posture of the company. The
Actual business and marketing practice diverges from
AMA Statement of Norms and Values (2004) addresses fur-
stakeholder theory because, in a pragmatic world, share-
ther activities related to this principle under the rubric of the
holders are sometimes viewed as the only primary stake-
marketer’s duty of citizenship (see Appendix B).
holders that really matter (Carroll 1995). If a genuinestakeholder orientation is not truly central to marketingoperations, a long-term habit of ethical behavior becomes
BP 6—Six Basic Stakeholders: Embracing the Stakeholder Concept
The agency approach, defined previously, embodies the
The adoption of a stakeholder orientation is essential to
alternative perspective and suggests that management pri-
the advancement and maintenance of ethical decision mak-
marily serves in the interests of maximizing shareholder
ing in all marketing operations. A stakeholder orientation
value. Following this perspective of “investor return always
embodies the notion that marketing organizations operate in
comes first,” regularly advocated and embraced by financial
and on behalf of society. Failing the acceptance of a stake-
analysts, employees are not necessarily primary stakehold-
holder approach results in the default position that market-
ers but merely another element of production (i.e., human
ing activities exist mainly to maximize shareholder return,
capital) to be mixed and matched along with physical mate-
subject only to obeying the law (see BP2).
rials and capital assets. Neither are customers always pri-
In its broadest conception, a stakeholder is any group or
mary stakeholders, although they may help cocreate value;
individual who can affect, or is affected by, the achievement
instead, they can be perceived only as the means to a prof-
of the organization’s objectives (Laczniak and Murphy
itable end—the ethical miscalculation discussed in BP1.
1993). There are typically at least six basic stakeholder
Since the agency approach stipulates shareholders as the
groups for most organizations. Primary stakeholders are
exclusive stakeholder group of concern, suppliers and dis-
three groups in number: investors (or owners) along with
tributors are also open to financial pressure for concessions
customers and employees. These groups are primary
when economic leverage makes this possible. Employees
because they are typically necessary to the completion of
are downsized when they are perceived to be substitutable
successful exchange transactions in a complex marketplace,
for lesser cost technology, and the work of loyal, long-standing
and their claims normally trump those of other stakeholders.
employees is automatically outsourced if a better cost
Secondary stakeholders include suppliers/distributors, many
alternative for production or supply becomes available. DECEMBER 2006
According to this maximum-returns view, customers are not
(e.g., strenuous employment screening for the home health
viewed so much as “king” but rather as the subjects of ABC
care companies to protect the vulnerabilities of their ill
ranking—where less valuable “C” customers are ignored or
and/or elderly clients; special safety-testing procedures inthe toy manufacturing industry)
intentionally driven away because spreadsheet projections
• Supporting host communities (a secondary stakeholder)
indicate their future projected patronage will never be par-
with philanthropy and corporate volunteerism as company
ticularly profitable (Brady 2000). Recent marketing strategy
recommendations suggest that even loyal, easy-to-retain
• Taking the organizational steps necessary to build an ethical
customers are best ignored if the forecast future value of
marketing culture; that is, developing ethics codes, ethicstraining programs, ethical audits, and the commitment of top
their purchases is not likely to be sufficiently high (Nunes,
management to operate the firm with an abiding respect for
Johnson, and Breene 2004). When only shareholders and/or
owners matter, this approach inherently raises major ethicalquestions because it excludes societal concerns when man-
Ignoring a stakeholder orientation can be measurably
agers formulate marketing strategy. Therefore, investor-centric
damaging to the brand equity of company products, the abil-
mania can inhibit the organization’s ethical development.
ity of the organization to attract future managerial talent and
At times even owners, who are always defined to be among
equity funding, and even the survival of the corporation
primary stakeholders, are not well served by management.
itself. For example, Firestone’s failure to give proper atten-
This occurs when top officials hijack the organization by
tion to customer safety and to recall faulty brands of its tires
making it a tool of upper-level managers and/or administra-
on a timely basis led to the marked diminishment of the once
tors, such as when CEOs and CFOs pad their personal finan-
great Firestone brand and its financial control by Bridgestone
cial accounts in the form of kingly compensation, delivered
during the late 1980s. Remarkably, Firestone revisited such
via stock options, bonuses, deferred compensation pack-
mistakes a decade later (Ferrell, Fraedrich, and Ferrell 2005).
ages, or outright embezzlement. One need only to look at
Similarly, widespread sexual harassment of middle-level
the recent history of Sunbeam, Ahold, Parmalat, Health
employees by Astra Zeneca managers at U.S. facilities in the
South, and the New York Stock Exchange to find uncon-
mid-1990s created an understandable suspicion among future
scionable examples of organizations where the primary
female managers who might have considered developing a
stakeholders and/or owners were not well served by their
career at that organization (Maremont 1996). And the failed
executive leaders and Boards of Directors (Peterson and
self-understanding by public accounting house Arthur Andersen
that it needed to serve its primary stakeholders—investors
Implementation of a workable stakeholder concept is one
and the public—rather than the client managers, who dan-
of the greatest challenges facing organizations that desire to
gled lucrative consulting contracts, helped speed the demise
operate on a high ethical plane. It requires the thorny effort
of this historically distinguished accounting firm (Toffler and
of determining who exactly stakeholders are in particular
situations, what duty is owed them, and what power they
Establishing the delicate balance of stakeholder claims
hold to affect the future direction of the organization
involved in complex decisions is a subjective and judgmen-
(Mitchell, Agle, and Wood 1997). Implementing a true
tal weighting process that necessarily results in some win-
stakeholder orientation also depends on a decision-making
ners and some losers. The status of primary stakeholders
system that is flexible and adaptive. It must allow for the
(owners, employees, and customers) means exactly that;
systematic weighting and due consideration of likely out-
their claims and interests normally have primacy over those
comes on various stakeholder groups that result from partic-
of secondary stakeholders. Consistent with BP3, as long as
ular marketing decisions. Often the most effective stakeholder
only minor harms are involved and as long as burden is not
approaches (Clarkson 1998) involve using a specified
borne by the least advantaged (BP5), stakeholder trade-offs
decision-making regimen (see BP7), based on strong ethical
in favor of primary stakeholders—especially owners and/or
values (BP5) that minimize the likelihood of disadvantaging
investors—are to be expected. For example, the decision to
(i.e., causing major harm) relevant stakeholder groups
place a food distribution center in an outlying suburban area
(BP3). Also useful to such approaches is the specification of
may satisfy most primary stakeholders (such as sharehold-
core values that the organization stipulates will never be
ers, customers, employees) and yet alienate some in the host
violated in its operations anywhere. For example, such core
community, as the particular municipality might be trying to
restrict economic development to mostly residential estab-lishments. So be it. When marketing strategies are complex,
• Only pursuing marketing opportunities where the organiza-
seldom is every stakeholder a winner. But the ultimate point
tion has demonstrated technical competence
is that acceptance of the stakeholder approach internalizes
• Always adhering to the rule of law in all markets where the
into the fabric of the organization a moral sensitivity about
corporation operates and assuming this to be “the floor” of
the multipronged influences of marketing decisions on dis-
the more elevated and enlightened behavior that is expected
• Developing specific policies that address special ethical
parate groups—an essential point of examining marketing
questions peculiar to particular industry sectors of operation
JOURNAL OF MACROMARKETING
Assuming that managers have a reasonable degree of
moral awareness, ethical reasoning is next aided by the
Cultivated ethical awareness and sensitivity
application of an ethical protocol, that is, a process thathelps managers render an ethical judgment. Our suggestedapproach next unfolds with the framing of an ethical issue
(step 2). Specification of the particular ethical question isnecessary to effective moral reasoning whether a firm is inter-nally assessing its own marketing programs (i.e., microanaly-
Articulation of stakeholders in the decision
sis) or whether outside parties (e.g., public policy makers)are evaluating broader industry practices (i.e., macroanaly-sis). An illustration of ethical microanalysis in framing an
Selection of an ethical standard or standards
issue might be a petroleum services firm that questionswhether its proposed advertising campaign depicting a
racially diverse workforce should be implemented when, infact, the racial base of its employee group is quite homoge-nous. An example of macroanalysis in framing an ethical
Decision about the ethical issue or question
issue might involve a state regulatory agency questioningwhether quick-loan financial service outlets might be judgedas unfair in a U.S. economy where the annual prime rate has
been hovering around 4 percent but such organizations’monthly interest charge might approach 20 percent. It shouldbe understood that the formulation of an ethical questionA PROTOCOL FOR FORMULATING THE ETHI- does not imply that the questionable practice will necessar-CAL EVALUATION PROCESS IN MARKETING ily be deemed unethical. For example, the macro issue of
ORGANIZATIONS
whether all advertising is inherently unfair, because it nor-mally presents only positive attributes of a product or serv-ice, has been raised many times (Rotzell, Haefner, and
BP7—The Seven Steps of Moral
Sandage 1990). The vast majority of analysis finds the prac-
Reasoning for Marketing Managers
tice of advertising as a social institution to be ethically
Marketing organizations striving for exemplary ethical con-
defensible (Arrington 1982; Phillips 1997). But clearly, the
duct ought to delineate an ethical analysis protocol and train
beginning of an ethical reasoning process is the specification
their managers to follow it. The ability of managers to “ethi-
of the ethical question(s) to be evaluated.
cally” reason is the sine qua non of organizations seeking to
The third step in ethical analysis involves the articulation
operate on an elevated ethical plane (Moberg and Seabright
of stakeholders affected by a particular marketing practice
2000). One such protocol is charted in Figure 4. Moral rea-
(see BP6). For example, in the instance of the oil services
soning, of course, presupposes as its first step the ability of
company ad campaign, the stakeholder evaluations might
managers to be ethically aware. Such ethical perceptivity is
include the following queries: Is diverse employee represen-
important because moral questions in marketing cannot be
tation in the proposed ad campaign misleading to customers
addressed unless they are first recognized. For example,
when the actual employee base is quite homogeneous? Is
despite numerous governmental challenges to their aggressive
this campaign deceptive to future current and future share-
accounting practices in the years preceding the Enron collapse,
holders? Is it disrespectful to existing employees? Each
Arthur Andersen leadership did not seem to recognize that
stakeholder group is a separate constituency with potentially
they were sliding into an unethical abyss, lubricated by legal
different effects if the campaign is approved. Alternatively,
settlements via consent degree (nonadmission of guilt), when-
perhaps the advertising campaign simply captures meaning-
ever their client audits were questioned by the federal govern-
less “puffing” that mostly depicts a corporation that is hon-
ment (Byrne 2002). As discussed in BP4, the ethical sensitivity
estly desirous of being racially inclusive, at least in the ideal.
of managers is deeply affected by their personal moral devel-
The fourth step in the ethical reasoning process involves
opment. In addition, a manager’s ethical awareness and moral
the selection of an ethical standard or standards. Several eth-
imagination is a function of environmental factors such as the
ical theories or perspectives (or perhaps just one) will be cho-
corporate culture of the organization (see BP5), the extent to
sen for application to the pertinent ethical issue. Possible
which explicit ethical values have been articulated in a corpo-
standards include but are not limited to those already dis-
rate mission statement (see BP6), the level of commitment by
cussed. In the case of the short-term loan financial services
top executives to company integrity, as well as the presence of
industry, perhaps the initial evaluation standard selected will
ethical training opportunities for a firm’s employees. More
be minimalist—a legal one (i.e., are any existing laws being
will be said about some of these conditions later.
violated by the industries lending practices?); or alternatively,
DECEMBER 2006
a utilitarian standard might be applied (i.e., are the high rates
In the end, despite the many factors and complications in
of interest being charged by these short-term loan providers,
conducting ethical analysis, a decision needs to be made
embodying a high user cost, offset by the benefit to a segment
about the situation. This is the next to last step of the ethical
of consumers who otherwise would not have fast access to
reasoning process. The generic alternatives available are
credit?); or perhaps a justice standard is invoked (i.e., is a vul-
typically the following: the particular marketing practice is
nerable market segment being exploited for company profit?).
(1) acceptable and allowed to go forward, (2) the challenged
Ethical analysis comes next in our protocol, and it
strategy is amended in some fashion to make it ethical, or
involves applying the ethical standards to whatever ques-
(3) the practice is abandoned. For instance, in the case of the
tions have been framed (above) both regarding the ethical
earlier mentioned oil services firm, assuming that good-faith
issue and the foreseeable outcomes on stakeholder groups.
efforts are underway that aggressively seek to hire a more
The quality of this analysis, as noted previously, is likely to
diverse workforce, then the depiction of the multiracial work
be influenced by the moral thinking of the manager/evaluator
group in the ad campaign might fall into the realm of “puff-
and the applicable ethical standard. Also, the specific stake-
ing” and be ethically acceptable because the ads depict what
holder groups considered will have an important bearing on
the company soon hopes to become. In the situation of the
the process (BP6). The likely sophistication of ethical rea-
fast-loan financial services sector, policy makers may decide
soning provided by different types of managers has already
that the prevailing, compounded interest rates constitute an
been discussed in BP4. For firms seeking to have a strong
exploitation of consumers that is usurious, and therefore
ethical posture in the marketplace, such organizations likely
new industry regulations are required. To use the language
would desire principled managers conducting their ethical
of BP1, the “iron law of social responsibility” will be exer-
analysis. This advice is consistent with the dictum that
cised, and the quick-loan vendors will now be further legally
corporations always want seasoned executives with insight-
ful judgments at the heads of their units. In other words,
As a final step in the ethical reasoning process, market-
because good ethics should be important to an organization,
ing managers have the responsibility to monitor the out-
managers who are capable of sophisticated ethical reasoning
comes of their ethical decisions. By overseeing what has
ought to be making the judgments about relevant ethical
transpired in the marketplace resulting from an ethics-
issues. The engagement of principled managers will mini-
related policy, changes then can be made that shape future
mize the possibility of the organization making a costly
decision-making protocols. For example, an outcome that
ethical miscalculation because (1) they will recognize the
results in major unanticipated negative consumer experi-
ethical complexity of certain decisions, and (2) their presence
ences (e.g., a growing percentage of consumers perish from
in the company will contribute to a more ethical culture.
side impact auto accidents when driving without side
In general, we postulate that the greater the number of eth-
airbags) would necessitate future explorations of similar
ical standards applied to a given situation, the higher the
ethical questions. This follow-up might involve adjustments
probability of discovering an ethical concern. Furthermore,
such as a greater weighting of an affected stakeholder group,
the more stakeholder groups evaluated, the higher the likeli-
a change in the type of ethical standards applied to the situ-
hood of perceiving possible negative outcomes that require
ation, or possibly a deepened ethical analysis. Exactly how
further investigation (see again BP6). It is again imperative to
this entire calculus of adjusting the decision-making proto-
recognize that just because ethical concerns are voiced
col fits together is the realm of moral imagination (see
and/or potential negative outcomes from marketing practices
are uncovered, the proposed strategy will not necessarily bejudged to be unethical. Minor negative outcomes for somestakeholders, as well as unintended ones, regularly should be
ETHICAL LESSONS FROM THE BASIC
expected whenever marketing organizations make complex
PERSPECTIVE SET
marketing decisions (recall BP3). For instance, consider thehypothetical case of an automobile company deliberating
When addressed in isolation, the descriptions of the BPs
whether it has the ethical responsibility to install side airbags
discussed above raise many challenging questions. For
on every vehicle in its product line. A utilitarian analysis, for
example, with regard to BP1, if marketing should strive to
example, might indicate that the inclusion of side impact
serve society, how does one possibly establish society’s best
airbags will save a few additional lives, especially if the com-
interests? With regard to BP2, if ethical marketing requires
pany’s autos are involved in collisions with large SUVs. But
more than conformance to the law, from where does this
the decision to voluntarily install side airbags in all company
supplemental guidance derive? Concerning BP4, what values
models would also substantially increase consumer costs,
are likely to characterize highly principled marketing man-
thereby disadvantaging many price-sensitive consumers and
agers? From where do they originate? If stakeholder orienta-
perhaps causing them to switch to competitors whose current
tion of BP6 is to have pragmatic meaning, how should the
vehicles (also without side airbags) might afford them an
necessary balancing among stakeholder groups be conducted?
Within BP7, if an ethical reasoning process is essential to
JOURNAL OF MACROMARKETING
“good” marketing, how does an organization find and moti-
business practice (BP1 et al.). Jeffery Garten, former dean of
vate managers who can adhere to this rigorous process of
the Yale School of Management, has been an articulate
spokesperson for this viewpoint. Garten (2002) contended
Our point is that many of these questions can be
that while the current system of business education effec-
answered by considering the BPs as an integrative whole.
tively addresses best practices for operations at the firm
Philosophers sometimes refer to this process as moral
level, it does not sufficiently cover what society requires of
reflection. Illustrative of the insights such an exercise might
business leaders including questions of environmental pro-
tection, globalization, and public policy.
Students should be made increasingly aware of the
• The “best interests of society” so essential to BP1 can be
dimensions and provisions of various professional codes of
more systematically taken into account by adopting the
business conduct. The role of relativism and the attitude that
stakeholder orientation described in BP6.
• The fabric of higher ethical duties called for in BP2 can be
all marketing practices are flexible depending on circum-
addressed, we hope, by embracing the AMA Norms and
stance and personal opinion—views often expressed by
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