Chapter 04 – Ethical and Social Responsibility in Marketing
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b. Expectations regarding future change.
2. Do you suspect that the decisions made with regard to the construction of the well
were ethical but illegal, ethical and legal, unethical but legal or unethical and illegal?
Why?
Answers:
3. How would you characterize BP’s approach to corporate social responsibility?
Answer:
4. Can BP repair its reputation? What actions would you recommend BP take in the
future—from well construction to public relations—following this experience?
Answers:
Chapter 04 – Ethical and Social Responsibility for Sustainable Marketing
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Epilogue
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ICA 4-1: IN-CLASS ACTIVITY
What Is Ethical and What Is Not: A Survey of Your Opinions
Learning Objectives. To have students (1) move from an abstract understanding of
ethical dimensions of marketing to actual situations they may experience as working
professionals and (2) demonstrate the differences in opinions regarding what is and is not ethical.
Nature of the Activity. To have students complete a survey in which they are asked to
indicate their opinion about whether particular business and marketing practices are unethical.
The comparison of student responses generates enthusiastic discussion and provides a vehicle for
linking Chapter 4 to familiar business practices.
Estimated Class Time and Teaching Suggestions. This activity takes about 30
minutes. There are various ways in which this activity may be taught. You can distribute the
student survey manually to each student in hard copy, distribute it electronically, or even load the
questions in a survey tool such as Survey Monkey or Qualtrics to send to students. The survey
can be tabulated and discussed in the same class period or the data collected in one period and
the results discussed in the next class period.
Materials Needed.
• Copies for each student, either in hard copy or electronically, of the:
– “What Is Ethical and What Is Not Survey” handout.
– “Comparison of Answers on Ethics Questionnaire Given by Sales Representatives
and Students” handout.
• A calculator to calculate the percentages obtained from the survey if the results are to
be tabulated during the class period.
Steps to Teach this ICA.
1. Pass out copies of the “What Is Ethical and What Is Not Survey” to students.
2. Ask students to complete the survey by circling the number that corresponds to how
they feel about whether each sales situation or practice listed represents an ethical
dilemma.
3. Collect the “What Is Ethical and What Is Not Survey” and tabulate the responses for
each question.
4. Summarize the results of the “Comparison of Answers on Ethics Questionnaire Given
by Sales Representatives and Students” Handout during the current or next class
period. Some time might be spent highlighting those questions that most students
think can or cannot be asked.
Chapter 04 – Ethical and Social Responsibility for Sustainable Marketing
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5. Discuss the results with students. There will be a broad range of student opinions
regarding what is unethical. In addition, the summary form allows comparison of the
students’ opinions with those from a survey of sales representatives.
Marketing Lessons.
1. Students view situations and practices from different perspectives, leading to
differences in opinions about whether they are unethical.
2. The more general the situation, the greater the percentage of salespeople (and usually
students) who felt it posed an ethical question. For example, more respondents view
allowing personality differences to influence the terms of a sale as being unethical
than asking purchasers for information about competitors.
3. Many companies lack corporate policies about many of these situations and practices.
This makes it difficult to educate and train salespeople to handle these situations in a
consistent fashion.
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WHAT IS ETHICAL AND WHAT IS NOT SURVEY: HOW DO YOU FEEL ABOUT THE
FOLLOWING SALES SITUATIONS OR PRACTICES?
Instructions: Assume you are a field sales representative for a large corporation. For each situation or
practice listed below, circle the number corresponding to whether you feel it presents an ethical question.
Situation or Practice
Does the situation/practice
present an ethical question?
Definitely
Yes
Probably
Yes
Maybe
Yes
Maybe No
Probably
No
Definitely
No
1. Allowing personalities—liking for one purchaser and disliking
for another—to affect price, delivery, and other decisions
regarding the terms of sale.
1 2 3 4 5
2. Having less competitive prices or other terms for buyers who
use your firm as the sole source of supply than for firms for
which you are one of two or more suppliers.
1 2 3 4 5
3. Making statements to an existing purchaser that exaggerates
the seriousness of his problem in order to obtain a bigger
order or other concessions.
1 2 3 4 5
4. Soliciting low priority or low volume business that the
salesperson’s firm will not deliver or service in an economic
slowdown or periods of resource shortages.
1 2 3 4 5
5. Giving preferential treatment to purchasers who higher levels
of the firm’s own management prefer or recommend.
1 2 3 4 5
6. Giving physical gifts, such as free sales promotion prizes or
“purchase-volume incentive bonuses,” to a purchaser.
1 2 3 4 5
7. Using the firm’s economic power to obtain premium prices or
other concessions from buyers.
1 2 3 4 5
8. Giving preferential treatment to customers who are also good
suppliers.
1 2 3 4 5
9. Seeking information from purchasers on competitors’
quotations for the purpose of submitting another quotation.
1 2 3 4 5
10. Providing free trips, meals, or other entertainment to a
purchaser.
1 2 3 4 5
11. Attempting to reach and influence other departments (such as
engineering) directly rather than go through the purchasing
dept. when such avoidance increases the likelihood of a sale.
1 2 3 4 5
12. Gaining information about competitors by asking purchasers.
1 2 3 4 5
Source: Adapted from Alan J. Dubinsky, Eric N. Berkowitz, William Rudelius, “Ethical Problems of Field Sales Personnel,” MSU
Business Topics (Summer, 1980), p. 14.
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COMPARISON OF ANSWERS ON ETHICS QUESTIONNAIRE
GIVEN BY SALES REPRESENTATIVES AND STUDENTS HANDOUT
Respondents Replying “Definitely Yes” (1) or “Probably Yes” (2)
Situation or Practice
An Ethical Question?
Sales Reps
Rank
Percent-
age
Rank
Percent-
age
1. Allowing personalities to affect decisions
1
52%
_____
______
2. Having less competitive prices for firms for which
you are the sole source of supply.
2
50%
_____
______
3. Making statements to a purchaser that
exaggerates the seriousness of his/her problem.
3
49%
_____
______
4. Soliciting low-priority business that won’t be
serviced in an economic slowdown or periods of
resource shortages.
4
42%
_____
______
5. Giving preferential treatment to purchasers
recommended by firm’s own management.
5
41%
_____
______
6. Giving physical gifts to a purchaser.
6
39%
_____
______
7. Using the firm’s economic power to obtain
concessions from buyers.
7
37%
_____
______
8. Giving preferential treatment to customers who
are also good suppliers.
8
36%
_____
______
9. Seeking information from purchasers on
competitor’s quotations to submit a new
quotation.
9
34%
_____
______
10. Providing free trips, luncheons, or dinners to a
purchaser.
10
34%
_____
______
11. Attempting to reach and influence other
departments directly rather than go through the
purchasing department.
11
29%
_____
______
12. Gaining information about competitors by
asking purchasers.
12
27%
_____
______
Source: Adapted from Alan J. Dubinsky, Eric N. Berkowitz, William Rudelius, “Ethical Problems of Field Sales Personnel,” MSU
Business Topics (Summer, 1980), p. 14.
Chapter 04 – Ethical and Social Responsibility in Marketing
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ICA 4-2: IN-CLASS ACTIVITY
The Ethics of Competitive Intelligence 1
Learning Objectives. To enable students to collect vital information about competitors
in a legal and ethical way and to demonstrate the opportunities and threats that information may
present so that organizations can take pre-emptive or responsive marketing actions.
Nature of the Activity. To have students determine whether the competitive intelligence
behavior scenarios described are ethical, legal, unethical, and/or illegal.
Definition. The following marketing terms are referred to in this in-class activity (ICA):
• Competitive Intelligence: According to Fuld & Company, “This phrase refers to
legally and ethically collected information on a rival that has been analyzed to the
point where you can make a decision.”2
Estimated Class Time and Teaching Suggestions. This ICA takes about 10 minutes.
You can have every student evaluate each scenario or create student groups to discuss each
scenario or make various student groups responsible for responding to one particular scenario.
Steps to Teach this ICA.
1. Give the following mini-lecture about competitive intelligence and Fuld & Company.
“Before competitive intelligence is gathered, an organization must identify the legal
restrictions based on the countries within which it operates and establish ethical
guidelines based on industry norms and its organizational policies. According to Fuld
& Company, the leader in business and competitive intelligence, many people
responsible for competitive intelligence within their organizations were not aware of
the Economic Espionage Act (1996) or other laws related to trade secret or
information collection as well as their own organizations’ policies on the subject.
Recently, Fuld & Company surveyed over 100 competitive intelligence professionals
regarding four hypothetical intelligence-gathering scenarios to assess whether the
behavior described was normal, aggressive, unethical, or illegal.”3
2. Have students respond to the following five competitive intelligence-gathering
scenarios. For each scenario, read the description, ask two or three students whether
this behavior is normal, aggressive, unethical, or illegal and their rationales. Finally,
read the conclusion developed by Fuld & Company.
• Scenario 1: Documents Left Behind at a Hotel. You become aware that your
competitor has its board meeting at a certain hotel, so you drop by that hotel
toward the end of the day to see what documents someone had left behind.
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• Scenario 2: Airplane Conversation. You are sitting in an airplane and overhear
a competitor state to his friend information that appears to be confidential.
Neither individual knows who you are or that you overheard them.
Conclusion: The scenario is legal and ethical.
• Scenario 3: Trade Show and Badge Removal. You are attending a trade show.
You take off your badge that identifies you as a competitor, and you then
approach a booth. You tell the representative that you have an interest in the
product.
• Scenario 4: Entering a Private Suite. You are attending a trade show. You take
off your badge that identifies you as a competitor, and you then enter a private
suite that is labeled “For Clients of Company X Only.”
• Scenario 5: Dumpster Diving. A contractor hired by Procter & Gamble went
through the trash outside Unilever’s Chicago office and obtained classified
information on a Unilever hair care product. When P&G found out about the
incident conducted on its behalf, it informed Unilever.
Chapter 04 – Ethical and Social Responsibility in Marketing
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Connect Application Exercises
Application Exercise 1: Concepts of Social Responsibility
Activity Summary: In this click and drag activity, students identify the differences between
societal responsibility, stakeholder responsibility, and profit responsibility. Students are provided
with vignettes from Starbucks, Yoplait, Stonyfield Farms, Tylenol, a pizzeria, and a doctor’s
office which each provide an example of social responsibility in marketing. The examples are
then matched with societal, stakeholder, or profit responsibility.
Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)
Topic: Corporate Social Responsibility
Learning Objective: LO 04-03 Identify factors that influence ethical and unethical marketing
decisions.
AACSB: Ethics
Blooms: Analyze
Difficulty Level: 2 Medium
Follow-Up Activity: Instructors could ask students to review the annual reports for firms in
different industries such as Starbucks, Patagonia, Coca-Cola, Facebook, AstraZeneca, Ford
Application Exercise 2: Toyota: Building Cleaner, Greener Cars
Activity Summary: In this 7-minute video case, students learn about Toyota’s business
philosophy, the “Toyota Way,” Toyota’s environmental vision, the Prius, Toyota’s strategic
partnerships, and its vision for its future. After watching the video, students are presented with
five questions covering the topics of green marketing, cause marketing, social audit, and the
types of social responsibility.
Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)
Topic: Corporate Social Responsibility
Learning Objective: LO 04-03 Identify factors that influence ethical and unethical marketing
decisions.
AACSB: Ethics
Blooms: Understand
Difficulty Level: 2 Medium
Follow-Up Activity: Instructors could ask students to visit Toyota’s website
Chapter 04 – Ethical and Social Responsibility for Sustainable Marketing
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Application Exercise 3: iSeeit! Video Case: Ethical Marketing & Organization Mission
Activity Summary: In this straightforward whiteboard animation video, ethics, moral principles,
and social responsibility are explored in the context of a prospective employee deciding between
two job offers; one at Home Springs bottled water and another at Big Box Co. After watching the
3-minute video, students are asked five follow-up questions related to ethics, morals, and social
responsibility.
Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)
Topic: Ethical Decision Making, Corporate Social Responsibility
Learning Objectives LO 04-02 Identify factors that influence ethical and unethical marketing
decisions.
LO 04-03 Identify factors that influence ethical and unethical marketing
decisions.
AACSB: Ethics
Blooms: Understand, Apply
Difficulty Level: 2 Medium
Follow-Up Activity: Instructors could ask students to place themselves in the case. Ask students
to consider the following questions: What level of importance do you place on the firm’s level of
Application Exercise 4: Ethical Marketing Behavior
Activity Summary: In this click and drag activity students read six unethical behavior scenarios
including dumpster diving, hacking, non-compete violations, bribes, and kickbacks. Students are
then asked to classify the behavior as an example of either economic espionage or corruption.
Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)
Topic: Ethical Decision Making
Learning Objective LO 04-02 Identify factors that influence ethical and unethical marketing
decisions.
AACSB: Ethics
Blooms: Understand, Apply
Difficulty Level: 2 Medium
Follow-Up Activity: Students could be asked to research and share real-world examples of
unethical behavior in competition including examples of economic espionage and corruption.