CASE 17
Better Business Bureau: Protecting Consumers
and Dealing with Organizational Ethics
Challenges
CASE NOTES FOR INSTRUCTORS
This case asks the question: Who does the Better Business Bureau (BBB) represent? As students may
know by now, this is a question related to stakeholder theory. The BBB was created to reduce consumers’
fears of being taking advantage of by unethical or illegal businesses. It also created a channel for
consumers to voice their complaints and warn other consumers about problematic businesses.
To currently qualify for membership, an applicant firm completes an application, pays membership dues,
and provides evidence that it conforms to local BBB accreditation standards. The National Council of
Better Business Bureaus establishes minimum standards, but each local BBB can augment those
standards with stricter policies. To qualify for accreditation, a company must have been in business in the
local area for at least a year. There are some exceptions for branch offices of companies that have been in
business in the local area for more than a year or for business owners who ran the same BBB-accredited
business in another area. As part of the application process, a company or charity must supply detailed
information as to the nature and structure of the business. If the business requires a license to operate, the
company must prove that it has obtained all applicable state and federal licenses. The local BBB will ask
for contact information and employment histories for all principal owners and officers and for references
from entities such as banks, other businesses, and customers. A reliability report contains the following
information:
Case 17: Better Business Bureau: Protecting Consumers and Dealing with Organizational Ethics Challenges 125
• Customer complaint history, including the total number of complaints, complaints broken down
by type, and how many have been resolved
QUESTIONS AND DISCUSSION
1. Which is the National Advertising Division’s most important stakeholder, businesses or consumers?
Student’s answers may vary and should be supported by reasoning. Answers may include that
because the NAD was formed to incorporate self-regulation in developing a transparent marketplace
between businesses and consumers, both consumers and businesses are equally important. Enforcing
transparency serves to protect both stakeholders equally.
2. Do you believe the BBB can be truly impartial given its financial dependence on businesses?
Students will likely have a variety of opinions on this question. Instructors should steer the discussion
toward suggestions of how the BBB can improve its level of impartiality. Can students think of any
structural changes or gatekeeper-type organizations that would help the BBB maintain a neutral
position relative to consumers and to the businesses it represents? Membership dues represent the vast
126 Case 17: Better Business Bureau: Protecting Consumers and Dealing with Organizational Ethics Challenges
3. What actions would you take to ensure an ethical misconduct disaster such as the pay-for-play
scheme does not happen again?
Organizations such as the BBB, which report on the ethical conduct of other organizations, may fail
to develop their own ethics and compliance programs. One might argue that the Council of Better
ADDITIONAL RESOURCES