Chapter 3 ♦ Ethics and Social Responsibility 1
CHAPTER 3 Ethics and Social Responsibility
This chapter begins with the learning outcome summaries, followed by a set of lesson plans for you to use
to deliver the content in Chapter 3.
• Lecture (for large sections) on page 4
• Company Clips (video) on page 6
• Group Work (for smaller sections) on page 7
Review and Assignments begin on page 7
Review questions
Application questions
Application exercise
Ethics exercise
Video assignment
Case assignment
Great Ideas for Teaching Marketing from faculty around the country begin on page 15
2 Chapter 3 ♦ Ethics and Social Responsibility
LEARNING OUTCOMES
3-1 Explain the determinants of a civil society
Societal order is created through the six modes of social control. Ethics are the moral principles or values that
generally govern the conduct of an individual or a group. Laws come into being when ethical rules and guidelines
are codified into law. Formal and informal groups have codes of conduct that prescribe acceptable and desired
behaviors of their members. Self-regulation involves the voluntary acceptance of standards established by
nongovernmental entities. The media play a key role in informing the public about the actions of individuals and
organizations—both good and bad. An informed and engaged society can help mold individual and corporate
behavior.
3-2 Explain the concept of ethical behavior
Ethics are the standards of behavior by which conduct is judged. Standards that are legal may not always be ethical.
An ethics violation offends a person’s sense of justice or fairness. Ethics basically constitute the unwritten rules
developed to guide interactions. Many ethical questions arise from balancing a business’s need to produce profit for
shareholders against its desire to operate honestly and with concern for environmental and social issues.
Several ethical theories apply to marketing. Deontological theory states that people should adhere to their
obligations and duties when analyzing an ethical dilemma. Utilitarian ethical theory says that the choice that yields
the greatest benefit to the most people is the choice that is ethically correct. The casuist ethical theory compares a
current ethical dilemma with examples of similar ethical dilemmas and their outcomes. Moral relativists believe in
time-and-place ethics, that is, ethical truths depend on the individuals and groups holding them. Virtue ethics
suggests that individuals become able to solve ethical dilemmas when they develop and nurture a set of virtues.
3-3 Describe ethical behavior in business
Business ethics may be viewed as a subset of the values of society as a whole, with a foundation based on the
cultural values and norms that constitute a culture’s morals. The ethical conduct of businesspeople is shaped by
societal elements, including family, education, and religious institutions. Morals are the rules people develop as a
result of cultural values and norms. As members of society, businesspeople are morally obligated to consider the
ethical implications of their decisions. Ethical decision making can be grouped into three basic approaches. The first
approach examines the consequences of decisions. The second approach relies on rules and laws to guide decision
making. The third approach is based on a theory of moral development that places individuals or groups in one of
three developmental stages: preconventional morality, conventional morality, or postconventional morality.
In addition to personal influences, there are many business influences on ethical decision making. Some of the
most influential include the extent of ethical problems within the organization, top management’s actions on ethics,
potential magnitude of the consequences, social consensus, probability of a harmful outcome, length of time
between the decision and the onset of consequences, and the number of people affected.
Many companies develop a code of ethics to help their employees make ethical decisions. A code of ethics can
help employees identify acceptable business practices, be an effective internal control on behavior, help employees
avoid confusion when determining whether decisions are ethical, and facilitate discussion about what is right and
wrong.
Studies show that ethical beliefs vary little from country to country. However, there are enough cultural
differences, such as the practice of bribery or gift giving, that laws such as the Foreign Corrupt Practices Act
(FCPA) have been put in place to discourage and attempt to modify the current acceptance of such practices.
3-4 Discuss corporate social responsibility
Corporate social responsibility (CSR) is a business’s concern for society’s welfare. Responsibility in business refers
to a firm’s concern for the way its decisions affect society. Stakeholder theory says that social responsibility means
paying attention to the interest of every affected stakeholder in every aspect of a firm’s operation, including
employees, management, customers, the local community, suppliers, and owners. According to the pyramid of
corporate social responsibility, CSR has four components: economic, legal, ethical, and philanthropic. These are
intertwined, yet the most fundamental is earning a profit. If a firm does not earn a profit, the other three
responsibilities are moot.
Chapter 3 ♦ Ethics and Social Responsibility 3
3–5 Describe the arguments for and against social responsibility
Most businesspeople believe they should do more than pursue profits. Although a company must consider its
economic needs first, it must also operate within the law, do what is ethical and fair, and be a good corporate citizen.
Sustainability is the concept that socially responsible companies will outperform their peers by focusing on the
world’s social problems and viewing them as an opportunity to earn profits and help the world at the same time.
Social responsibility is growing, but it can be costly and the benefits are not always immediate. In addition, some
surveys report that consumer desire to purchase responsible products does not always translate to actually
purchasing those products. One branch of social responsibility is green marketing, which aids the environment and
often the bottom line of a business.
3-6 Explain cause-related marketing
Cause-related marketing is the cooperative effort between a for-profit firm and a nonprofit organization. It is
different from philanthropy, which is a specific, tax-deductible donation. Cause-related marketing is very popular
because it can enhance the reputation of the corporation and also make additional profit for the company. However,
consumers sometimes come to believe that every company is tied to a cause, resulting in consumer cause fatigue.
4 Chapter 3 ♦ Ethics and Social Responsibility
TERMS
behavioral norms
ethics
social control
casuist ethical theory
Foreign Corrupt Practices Act (FCPA)
stakeholder theory
cause-related marketing
green marketing
sustainability
code of ethics
moral relativism
utilitarian ethical
theory
corporate social responsibility (CSR)
morals
virtue
deontological theory
pyramid of corporate social responsibility
LESSON PLAN FOR LECTURE
Brief Outline and Suggested PowerPoint Slides:
Learning Outcomes and Topics
PowerPoint Slides
LO1 Explain the determinants of a civil society
3-1 Determinants of a Civil Society
1: Ethics and Social Responsibility
2: Learning Outcomes
3: Learning Outcomes
4: Determinants of a Civil Society
5: The Modes of Social Control
LO2 Explain the concept of ethical behavior
3-2 The Concept of Ethical Behavior
6: The Concept of Ethical Behavior
7: Ethical Behavior
8: Ethical Theories
LO3 Describe ethical behavior in business
3-3 Ethical Behavior in Business
9: Ethical Behavior in Business
10: Ethical Behavior in Business
11: Ethical Development Levels
12: Ethical Decision Making
13: Creating Ethical Guidelines
14: Ethics in Other Countries
LO4 Discuss corporate social responsibility
3-4 Corporate Social Responsibility
15: Corporate Social Responsibility
16: Corporate Social Responsibility
LO5 Describe the arguments for and against social
responsibility
3-5 Arguments For and Against Social Responsibility
17: Arguments For and Against Corporate
Social Responsibility
18: Corporate Social Responsibility
19: Sustainability
20: Green Marketing
LO6 Explain cause-related marketing
3-6 Cause-Related Marketing
21: Cause-Related Marketing
22: Cause-Related Marketing
23: Chapter 3 Video
Suggested Homework:
• This instructor manual contains assignments on the Zappos video and the transglutaminase case.
Chapter 3 ♦ Ethics and Social Responsibility 5
• This chapter’s online study tools include flashcards, visual summaries, practice quizzes, and other resources that
can be assigned or used as the basis for longer investigations into marketing.
6 Chapter 3 ♦ Ethics and Social Responsibility
LESSON PLANS FOR VIDEO
Company Clips
Segment Summary: Zappos
Zappos, the world’s largest online shoe retailer, discusses its commitment to social responsibility and to ethical
behavior. Developing employee activities and long-term relationships with charitable organizations allows Zappos
to ingrain the importance of helping the greater good into its organizational culture. Zappos culture also guides its
employees to make ethical decisions.
These teaching notes combine activities that you can assign students to prepare before class, that you can do in class
before watching the video, that you can do in class while watching the video, and that you can assign students to
complete on their own after watching the video.
During the viewing portion of the teaching notes, stop the video periodically where appropriate to ask students the
questions or perform the activities listed on the grid. You may even want to give the students the questions before
starting the video and have them think about the answer while viewing the segment. That way, students will be
engaged in active rather than passive viewing.
PRE-CLASS PREP FOR YOU:
PRE-CLASS PREP FOR YOUR STUDENTS:
• Preview the Company Clips video segment for
Chapter 3. This exercise reviews concepts for
LO1, LO2, and LO3.
• Review your lesson plan.
• Make sure you have all of the equipment
needed to show the video to the class, including
the DVD and a way to project the video.
• You can also stream the video HERE
• Have students familiarize themselves with the
following terms and concepts: corporate social
responsibility and sustainability.
• Review Zappos blog with those terms in mind:
http://blogs.zappos.com/
VIDEO REVIEW EXERCISE
ACTIVITY
Warm Up
Begin by asking students “What is corporate social responsibility (CSR)?” and
“What do businesses that want to be socially responsible need to consider?”
In-class Preview
• Segue into a discussion of corporate social responsibility.
• Review how ethical decision making and the economic/legal aspects of the
pyramid of corporate social responsibility can effect a business focused on
social responsibility.
Viewing
(solutions below)
1. Does Zappos have a societal marketing orientation, or is it just a company
that has a large amount of corporate giving? Explain.
2. How is Zappos practicing CSR?
Follow-up
• Send students back to Zappos blog. Have students write a brief paragraph
about how Zappos uses its Web site to demonstrate its corporate social
responsibility.
• Have students go to zappos.com. Have students look around and write a
brief paragraph discussing how customers would know that Zappos is a
socially responsible company by shopping on zappos.com. Ask students to
explain why they think Zappos pursued the strategy they did on their main
consumer site. Ask students to be prepared to share their research at the next
class meeting.
Chapter 3 ♦ Ethics and Social Responsibility 7
Solutions for Viewing Activities:
1. Does Zappos have a societal marketing orientation, or is it just a company that has a large amount of
corporate giving? Explain.
Students’ answers will vary but might consider that Zappos major goal of “delivering happiness” encourages its
2. How is Zappos practicing CSR?
Zappos engages in CSR by partnering with charitable organizations for a wide variety of causes, such as
LESSON PLAN FOR GROUP WORK
Class Activity – Corporate Social Responsibility
The work done by volunteers has long been an integral part of the social fabric of a community. In today’s social
environment, the majority of families has two wage earners or is headed by a single wage earner. This phenomenon
has reduced the number of persons who have time apart from work and family responsibilities to do volunteer work.
Habitat for Humanity is an example of an organization that relies on the donations of materials and labor by various
business organizations.
Have your students contact one of the organizations in your community that draws upon volunteers to accomplish
their goals. Find out what businesses encourage their employees to do volunteer work with this organization. Are the
corporate volunteers paid for their efforts, perhaps through designated volunteer days or hours? What do the
companies receive for their efforts to be good community citizens? How does the ability to perform volunteer work
on company time affect employee perception of the company?
REVIEW AND ASSIGNMENTS FOR CHAPTER 3
REVIEW QUESTIONS
1. It is sometimes said that ethics hold a person to higher standards than laws. Explain.
The laws address the lowest common denominator of socially acceptable behavior. Ethics refer to the moral
2. Explain the difference between ethics and morals and describe the relationship between the two.
Ethics refer to the moral principles or values that generally govern the conduct of an individual or a group.
APPLICATION QUESTIONS
1. What are the differences between pre-conventional morality, conventional morality, and post–
conventional morality? Give an example of each.
Pre-conventional morality is childlike; it is calculating, self-centered, and even selfish, based on what will be
2. Describe at least three situations in which you would not purchase the products of a firm even though it is
very socially responsible.
Student answers will vary. Quality, price, service, dependability, and location are all factors.
3. A firm’s only responsibility to society is to earn a fair profit. Comment.
Student answers will vary. There are several theories pertaining to corporate social responsibility. The newest
4. Is sustainability a viable concept for America’s businesses?
Sustainability refers to the idea that socially responsible companies will outperform their peers by focusing on
APPLICATION EXERCISE
Purpose: Many companies today are concerned with social responsibility. They may pursue philanthropic activities
and/or strive to be ethical. Your goal for this assignment is to evaluate how firms are being socially responsible.
Limit your answers to one page and provide a print-out of the Web site you visited.
Setting It Up: Have the students choose a company and find that company’s Web site on the Internet. Once they get
to the Web site, have them look for information that tells them about the firm’s efforts to be socially responsible.
They should look for things like news releases, company information, information about community programs, etc.
Have them look in their textbook and their notes to help them define what might be considered socially responsible
activities. Have them describe what they find and explain why they think the company is involved with the activities
they describe. Have the students answer the following questions: Do the activities described on the Web site seem
consistent with the company’s products? Why or why not? (For example, a shoe company may sponsor a race that
raises money to help prevent a disease. People who participate in the race may use that company’s running shoes
and therefore the race would be consistent with the company’s products.) Have the students evaluate how effective
they think the information they find is in terms of how it is presented, what impact it might have, and whether it will
help to sell the company’s products. Be sure they support any claims they make. Have the students answer the
following questions: Does the information they collected during this activity improve their evaluation of the
company? Would it influence their decision to buy the company’s product? Why or why not?
Chapter 3 ♦ Ethics and Social Responsibility 9
ETHICS EXERCISE
Jane Barksdale has designed a line of clothing targeted toward Hispanic Americans. The items are sold only by
catalog and on the Internet. She thinks that she can increase sales by claiming in ads that the firm is owned by a
Hispanic American and that all the company’s employees are Hispanic Americans. She is not Hispanic American
nor are most of her employees. She needs a high level of sales to pay her bank loan and remain in business.
Questions
1. Should Jane claim that she is Hispanic American? Explain your response.
Jane should not claim to be Hispanic American; this classifies as falsifying claims. To develop a personal set of
2. Does the Federal Trade Commission address this issue? Go to www.ftc.gov and search for guidelines for
small business advertising or e-commerce. What does Jane risk in making false claims in her ads?
Under the Fair Trade Commission Act
There are several risks that Jane would encounter by making false claims in her ads. The penalties that the FTC
imposes depend on the nature of the violation. The remedies that the FTC or the courts have imposed include:
A. Cease and desist orders. These legally-binding orders require companies to stop running the deceptive ad
VIDEO ASSIGNMENT: Zappos
Zappos, the world’s largest online shoe retailer, discusses its commitment to social responsibility and to ethical
behavior. Developing employee activities and long-term relationships with charitable organizations allows Zappos
to ingrain the importance of helping the greater good into its organizational culture. Zappos culture also guides its
employees to make ethical decisions.
1. At which level of the pyramid of corporate social responsibility is Zappos operating?
a. Level 1: economic responsibilities
b. Level 2: legal responsibilities
c. Level 3: Ethical responsibilities
d. Level 4: Philanthropic responsibilities
2. At which level of morality does Zappos appear to operate?
a. Preconventional
b. Post conventional
c. conventional
d. unconventional
3. Zappos employees are “driven” to participate in charitable activities and feel that giving back to the community
is something that they “must do.” This demonstrates what about Zappos employees?
a. Zappos employees operate at the preconventional level of morality.
b. Zappos employees focus on the ethical responsibilities of their jobs.
c. Zappos employees have morals that match Zappos values and norms.
d. Zappos employees follow the specifc Zappos code of ethics.
4. Zappos relationship with Goodie Two Shoes is an example of cause-related marketing.
a. True—Zappos uses its work with Goodie Two Shoes to spread information about Zappos to new
markets.
b. True—Goodie Two Shoes gets more donations from people who know Zappos donates shoes.
c. False—Zappos involvement with Goodie Two Shoes is considered corporate giving, not cause–
marketing.
d. False—Goodie Two Shoes is a for-profit organization, so any marketing is not considered cause-
related.
Chapter 3 ♦ Ethics and Social Responsibility 11
5. According to Rob, management action on ethics and social consensus is the major influence on employee
ethical decision making.
a. True—Rob says that Zappos culture is the main “ethical” guideline given to employees.
b. False—Zappos code of ethics is written for employee reference in decision making.
c. True—but the happiness hippie is a major factor in ethical decision making.
d. False—developing relationships with charities helps the employees develop strong codes of personal
ethics.
6. By emphasizing its Core Values to all its employees, and ensuring that everyone adheres to those values,
Zappos is
a. telling them that this is the code of ethics.
b. stressing the importance of adhering to those values, and, by extension, of making ethical decisions.
c. emphasizes how important discussing ethics is to Zappos.
d. demonstrating unconventional morality.
7. Zappos founders operate at the post-conventional level of morality.
a. True
b. False
8. Zappos uses a code of ethics to guide its employees to discuss what is right and wrong and ultimately make a
better decisions.
a. True
b. False
9. Would Zappos employees agree with the following statement from your textbook? “Businesses say they want to
be responsible citizens, but that’s often not their only reason for taking action…Networking opportunities is a
popular [reason].”
a. Yes, they would agree.
b. No, they would not agree.
10. Zappos as accompany concentrates most of its advertising dollars into green marketing initiatives, rather than
focusing on donating money to charity.
a. True.
b. False.
12 Chapter 3 ♦ Ethics and Social Responsibility
ANS: B
Zappos doesn’t use green marketing to drive business or simple donate money to charity. Zappos embodies the
sense of community by participating in socially responsible events, and encouraging employees to do so.
CASE ASSIGNMENT: Transglutaminase
In the wake of a national campaign focusing on ammonia-spritzed lean finely textured beef—otherwise known as
pink slime—media attention turned to another ethically questionable food-processing product. Transglutaminase, or
meat glue, is a white powder used to bind scraps of beef that would have otherwise been discarded. Composite
pieces of meat are coated in meat glue, reshaped, and resold as complete cuts of meat such as filet mignon steaks.
Because meat glue becomes transparent when cooked, it is virtually undetectable by the average consumer. While
the USDA ensures that meat glue is safe, California State Senator Ted Lieu believes that tighter regulations should
be placed on the additive: “They should look at not just whether the meat glue itself is harmful, but the entire
process of when you combine meats together.”
Filets and other pieces of meat sold commercially must be appropriately labeled if they contain
transglutaminase. However, the cuts of meat sold in bulk to restaurants and catering services often contain meat
glue—a detail that goes unmentioned on most menus. According to Dr. Betsy Booren, Director of Scientific Affairs
for the American Meat Institute, consumers should take responsibility for finding out where their food is coming
from. Senator Lieu contends that ethical restaurants and food service providers need to be transparent about their use
of food additives like meat glue and pink slime.
Amy Powell, “’Meat Glue’ Scandal: California Lawmaker Urges USDA to Investigate,” ABC News, May 2,
2012, http://abclocal.go.com/kabc/story?section=news/consumer&id=8646215 (Accessed May 3, 2012).
TRUE/FALSE
1. A restaurant’s decision whether to inform customers about its use of transglutaminase is an ethical issue.
2. If a butcher decides not to use transglutaminase because doing so provides the greatest benefit to the greatest
number of people, this exemplifies the deontological ethical theory
3. Even though transglutaminase is legal and will increase profits, a meat processing plant decides not to use it because
it could do more harm than good in the long run. This exemplifies a conventional morality.
4. Grocery store customers are stakeholders in the decision whether to sell meat that has been treated with
transglutaminase.
5. Economist Milton Friedman would likely argue that the country’s largest meat treatment facilities should form an
agreement not to use transglutaminase for the good of society.
MULTIPLE CHOICE
1. Which of the following reasons to use transglutaminase expresses a green marketing viewpoint?
a.
It reduces the amount of livestock that is needed, reducing industrial pollution.
b.
It saves meat producers millions of dollars a year.
c.
The USDA ensures that it is safe for human consumption.
d.
Most consumers don’t even notice it.
e.
It encourages consumers to take responsibility for their food choices.
2. Which of the six modes of social control is not relevant when discussing the ethicality of transglutaminase?
a.
Formal groups.
b.
Laws.
c.
Ethics.
d.
The media.
e.
None of these.
3. Which of the following might a virtue ethicist say when discussing the transglutaminase issue?
a.
“Companies never said they wouldn’t use transglutaminase, and it’s not illegal, so they should be
allowed to use it as they please.”
b.
“Consumers across America benefit when companies are required to label meats that contain
transglutaminase.”
c.
“In the past, the use of pink slime was deemed unethical, so that decision should stand here.”
d.
“Transglutaminase may be wrong under these circumstances, but it’s not necessarily immoral.”
e.
“I hope that the lawmakers who address this issue are of righteous and honorable character.”
4. Based on your reading of the case, where on the pyramid of corporate social responsibility does the responsibility to
label commercially sold transglutaminase-containing filets fall?
a.
Economic responsibility.
b.
Legal responsibility.
c.
Ethical responsibilities.
d.
Philanthropic responsibility.
e.
None of these.
5. Imagine that an organic meat processing plant collaborated with a nonprofit health advocacy organization on a series
of advertisements that instructed consumers how to check if their meat contained transglutaminase. This would be
an example of:
a.
Moral relativism.
b.
Corporate social responsibility.
c.
Band focus.
d.
Cause-related marketing.
e.
Sustainability.
Chapter 3 ♦ Ethics and Social Responsibility 15
GREAT IDEAS FOR TEACHING CHAPTER 3
Raymond F. Keyes, Boston College
EXPERIMENTAL COURSE IN MARKETING ETHICS
We are experimenting with a new approach for teaching marketing ethics in a way that will make it more interesting
and challenging for our marketing majors. In our Marketing Topics course we are experimenting with an approach
that may be the forerunner to a “Marketing Ethics and Creative Thinking” course—if the experiment is successful.
Toward the end, the experimental course focuses on two main topics: marketing ethics and creative problem solving.
• Marketing ethics: We begin by reviewing the traditional foundations of ethical reasoning followed by more
intensive study of selected current theories and relevant readings in the areas of business ethics and
marketing ethics. Against this background, we are using an experimental model for ethical decision–
making—a five step case analysis approach for ethical analysis of marketing situations and decisions. During
the semester we discuss cases and readings involving ethical problems in marketing. Finally, student teams
examine an ethical problem situation of their choice, gather and analyze relevant information on the problem,
lead a class discussion of their “case,” and prepare a written term paper on the results of the study.
• Creative problem solving: This portion of the course utilizes a more free-wheeling approach for stimulating
creative thinking. We begin by thinking about “thinking” and about the creative process. During the semester
we try a variety of exercises and techniques designed to enhance the creative dimensions of our problem-
solving and decision-making efforts.
• Merging the topics: The two topics, joined together in this seminar, provide interesting opportunities for
future business practitioners to develop their ethical decision making skills and to apply creative thinking in
the formulation of alternative courses of action in difficult ethical situations.
Chung-kue Hsu, Montclair State University
SEX ROLES AND PRODUCT CONSUMPTION
This exercise is designed to help students think critically about how sex roles may affect consumer perception or
even their actual consumption of certain consumer products or brands. Societies tend to assign a set of traits or
characteristics to males (e.g., aggressiveness, toughness) and anther set to females (e.g., tenderness, obedience).
Such a division in sex roles can also affect consumers’ perceptions and consumption of certain products or brands.
Traditionally, some products or brands are perceived as masculine (e.g., pocket knife, Marlboro cigarettes), while
others are perceived as feminine (e.g., hand lotion, Virginia Slim cigarettes). However, it is observed that the link
between sex roles and consumer products has gradually been eliminated for many products, while for other
products, the link still lingers.
This exercise requires each student to collect two print ads from magazines: one ad for a brand of consumer product
that illustrates a diminishing link between sex roles and the product and another that demonstrates an enduring link.
Students are asked to bring in the ads to class. The instructor can use these ads as examples to facilitate discussion
and ask if any other students disagree that the product in the ad is (or is not) linked to sex roles.
Randy Stuart, Kennesaw State University
A LESSON ON PACKAGING AND SOCIAL RESPONSIBILITY
16 Chapter 3 ♦ Ethics and Social Responsibility
This exercise was developed in conjunction with a university-wide community food drive and to reinforce the lesson
on packaging. To encourage participation, it was presented as an extra credit opportunity.
Have the students bring in three cans of the same type of food, (i.e., corn, peas, etc.), one manufacturer, one private
label/house brand, and one generic. Each can is worth 5 points. Have the students write a paper (one to three pages),
comparing and contrasting the packaging strategy of each can. The paper is worth 10 points. Encourage them to
address such topics as:
• Size and pricing
• Use of color
• What attracted them to each can
• What were the strong and weak points of each label
• Which package they think was the most efficient and effective and why
Due to the difficulty of finding generic merchandise in our market, the exercise was modified so that the students
who were unable to find generic merchandise could do the exercise with two manufacturers and one house brand.
Students who were able to find a can of generic food earned an additional 5 points.
Creative students were encouraged to make their own labels and discuss why their label was better than the rest.
This was also worth an additional 5 points.
The exercise was fun for all. It made the students take what was learned in class and apply it. Most importantly,
much food was donated to local food banks and the students received a lesson in social responsibility.
Nancy M. Carr, Community College of Philadelphia
SCENARIOS IN SALES MANAGEMENT:
ETHICAL ISSUES FOR CLASS DISCUSSION
Scenario I. As sales manager, you have noticed changes in salesman Mike lately. Mike used to be your “bright-eyed
and bushy-tailed inside salesman,” but now he seems tired all the time. You even caught him asleep at his desk
twice in the last week. You ask Mike if he is okay and he says wearily, “I’m adjusting to my wife leaving, but
Jeremy is only twelve and he was very close to his mother.” Monday the circles under Mike’s eyes are even darker
and he’s drinking lots of coffee. You ask about Jeremy. Mike says Jeremy’s teachers called on Saturday and all said
he had failed tests in subjects in which he had been getting an A or a B. You ask if Jeremy has anyone else he is
close to and Mike says, “Not since my mother died six months ago”. Meanwhile, Mike has not brought in any new
accounts and five of his major accounts have called you complaining that he is not returning phone calls. You are
sorry now that you ever held the division “Bring your spouse or significant other” cocktail party and even sorrier
that you casually introduced your thrice-divorced brother to Mike’s wife. You never dreamt that they would run off
together. You will never have another such party, but right now you are concerned about what to do about Mike.
Scenario II. You are very lucky to have two outstanding salespeople desiring the two straight commission sales
positions in your new company. Both have impressive past sales records, want a new challenge, and have the
confidence to desire straight commission pay. Their personal lives are quite different. Susan is from a wealthy
family and married a very successful man. Susan volunteers that she is childless by choice and says she wants to
show herself and the world that she can make it professionally, not just live off her father and husband’s money.
David is also married. He and his homemaker wife have six children and the last four are adopted special-needs
children. David was handling the medical expenses, saving for the children’s education, and remodeling an older but
larger home for his family when his wife was in an automobile accident that left her permanently bedridden and in
need of round-the-clock care. They have no family to help care for the children, so they also need household help.
You would like to give David a higher commission rate because of his circumstances. Would you do it?
Scenario III. A prospect calls the office and is looking for a property in the $300,000 price range. This is much
higher than most of the company’s prospects can pay. This excellent prospect quickly states that she is only willing
to work with a salesperson of her own race and religion. Foreign language is not an issue. The office uses a planned
Chapter 3 ♦ Ethics and Social Responsibility 17
rotation of “floor time,” which is the time when prospects are given to assigned salespeople. Granting the request
would seriously upset the office plan and personnel. What would you do?
Scenario IV. You have never had a sales trainee like Joe. When you arrive early in the morning, he is already there
working. He is thoughtful, courteous, and a real self-starter. The only problem is that Joe smells. Since you work
with the trainees individually, no one else is affected but you feel ill from Joe’s body odor. Much as you would like
to say something to him, Joe has told you, “I have been criticized all my life—first by my father who deserted me,
then by my aunt who got stuck with me, and then by teachers when they were not ignoring me.” Joe promises to
work hard and never give you reason to criticize him because he cannot take it anymore and any criticism will drive
him “over the brink.” You fear that Joe will truly go “over the brink” if you say anything to him.
Scenario V. You have been taking phone applications for counter positions in your doughnut shop. One applicant,
Cindy, is very well spoken and polite. You tell Cindy to come in after lunch when you will be in the shop. At 1:30
p.m., a car pulls up and a gigantic young woman gets out. She comes in and introduces herself as Cindy. She is so
nice, so qualified, but so fat. Cindy volunteers that she will have her seamstress make her uniforms because she
knows they do not come in sizes to fit a 260-pound, five-foot-three-inch woman. She tells you that she has no
medical problem—she is just fat. Meanwhile, you have vowed never to eat another doughnut and to drink your
coffee black and sugarless. You do not want to not hire such a nice person solely because of her weight. There are
no space problems with hiring Cindy, as your work area is large. You wonder if this fear of lost business is personal
or if Cindy’s size will really affect business. How do you find out? What do you tell nice, but morbidly obese, Cindy
if you decide not to hire her?