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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
instructors to use to deliver the content.
• Lecture (for large sections) on page 4
• Company Clips (video) on page 5
• Group Work (for smaller sections) on page 7
Review and Assignments begin on page 8
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 18
Chapter 3: Ethics and Social Responsibility
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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
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, and vice versa. 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
3-3 Describe ethical behavior in business
Morals are the rules people develop as a result of cultural values and norms. 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. As members
of society, businesspeople are morally obligated to consider the ethical implications of their
Chapter 3: Ethics and Social Responsibility
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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.
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.
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
Chapter 3: Ethics and Social Responsibility
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© 2018 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 for mutual benefit. It is different from philanthropy, which is a specific, tax-
Key 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. Determinants of a Civil Society
4. Determinants of a Civil Society
5. Modes of Social Control
Chapter 3: Ethics and Social Responsibility
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Learning Outcomes and Topics
PowerPoint Slides
LO2 Explain the concept of ethical behavior
3-2 The Concept of Ethical Behavior
6. The Concept of Ethical Behavior
7. Ethics
8. Ethical Theories
9. Ethical Theories (continued)
LO3 Describe ethical behavior in business
3-3 Ethical Behavior in Business
10. Ethical Behavior in Business
11. Ethical Behavior in Business
12. Ethical Development Levels
13. Creating Ethical Guidelines
14. Ethics in Other Countries
LO4 Discuss corporate social responsibility
3-4 Corporate Social Responsibility
15. Corporate Social Responsibility
16. Exhibit 3.2: Stakeholders in a
Typical Corporation
17. Corporate Social Responsibility
18. Exhibit 3.3: The Pyramid of
Corporate Social Responsibility
LO5 Describe the arguments for and against social
responsibility
3-5 Arguments For and Against Social
Responsibility
19. Arguments for and against
Corporate Social Responsibility
20. Arguments for and against
Corporate Social Responsibility
21. Becoming a B Corp
22. Sustainability
23. Leaders in Social Responsibility
24. Leaders in Social Responsibility
LO6 Explain cause-related marketing
3-6 Cause-Related Marketing
25. Cause-Related Marketing
26. Cause-Related Marketing
27. Key Terms
28. Key Terms
29. Summary
Suggested Homework
• This instructor manual contains assignments on the Zappos video and the transglutaminase
case.
• This chapter’s online study tools include flashcards, visual summaries, practice quizzes,
Chapter 3: Ethics and Social Responsibility
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and other resources that can be assigned or used as the basis for longer investigations into
marketing.
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 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 or 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 when 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
Teaching Method
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?”
Chapter 3: Ethics and Social Responsibility
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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
affect 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 website 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 at 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.
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.
2. How is Zappos practicing CSR?
Zappos engages in CSR by partnering with charitable organizations for a wide variety of
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.
Chapter 3: Ethics and Social Responsibility
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In today’s social environment, the majority of families have 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.
Students’ answers will vary. Ethics refer to the moral principles or values that generally
2. Explain the difference between ethics and morals, and describe the relationship
between the two.
Students’ answers will vary. Ethics refer to the moral principles or values that generally
Application Questions
1. What are the differences between preconventional morality, conventional morality,
and postconventional morality? Give an example of each.
Chapter 3: Ethics and Social Responsibility
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Students’ answers will vary. Preconventional morality is childlike; it is calculating, self-
2. Describe at least three situations in which you would not purchase the products of a
firm even though it is very socially responsible.
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
4. Is sustainability a viable concept for America’s businesses?
Students’ answers will vary. Sustainability refers to the idea that socially responsible
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
Chapter 3: Ethics and Social Responsibility
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how firms try to be socially responsible. Limit your answers to one page, and provide a print-out
of the website you visited.
Setting It Up: Have the students choose a company, and find that company’s website on the
Internet. Once they get to the website, 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 read the 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 website 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: Did 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?
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 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
2. Does the Federal Trade Commission address this issue? Go to www.ftc.gov, and
Chapter 3: Ethics and Social Responsibility
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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 (FTC):
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 are given below.
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 allow Zappos to ingrain the importance of helping 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
