More Related Content Similar to Socially Responsible Marketing (20) More from Teaching Excellence (20) Socially Responsible Marketing2. © 2014 Berlin Asong. All rights reserved. 2
I. Whatarefirmsoftencriticisedof?
i. Understandthelinkbetweenthosecriticismsandthesubjectofethics.
II. Howshouldfirmsrespondtothosecriticism?
i. Throughethics?
ii. Understandingthechallenges toethicaldecision-making.
III. WhatisGreenMarketing?
i. Isgreenmarketingafad?
IV. WhatisCorporateSocialResponsibility(CSR)?.
i. UnderstandthedriversofCSR.
ii. DofirmsbenefitfromengaginginCSRactivities?
3. © 2014 Berlin Asong. All rights reserved. 3
30minutes
What criticisms do
organisations face nowadays?
Alternatively,what criticismsdo marketersfacenowadays?
4. © 2014 Berlin Asong. All rights reserved. 4
1
CorporateTaxEvasion
Picture source: www.ecumenicalnews.com
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Picture source: metro.co.uk
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STPaul’sCathedral,London
CorporateGreed
2
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Source: Northattan (2011). Retrieved from http://northattan.com/wp-content/uploads/2011/11/IMG_93111.jpg
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(L-R) Mr. Jeffrey K. Skilling, former President and CEO of Enron Corporation; Dr. Robert Jaedicke,
Board of Directors Chairman of Audit and Compliance Committee of Enron Corporation; and Mr.
Herbert S. Winokur, Jr., Board of Directors Chairman of the Finance Committee of Enron
Corporation, during the Oversight and Investigation Subcommittee hearing.
ENRONGuilty of accounting
embellishment & fraud.
"Rogue" Bosses
9. © 2014 Berlin Asong. All rights reserved. 9
WorldCom Accounting Scandal Revealed: 3.8 billion in mislabelled expenses had been used to inflate
cash flow and hide losses in 2001 and early 2002. Shown is former Worldcom CEO Bernard Ebbers,
Worldcom
"Rogue" Bosses
10. © 2014 Berlin Asong. All rights reserved. 10
BernardMadoff’s
ponzischeme.
"Rogue" Bosses
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Wasthe2008-2009
GlobalFinancialCrisiscaused
bycorporategreed?
13. © 2014 Berlin Asong. All rights reserved. 13
ConsumerismAggressivepromotionglamorisesmaterialism.
3
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Companies are often criticised for
creating artificial needs.
Doyouactuallyneedanotherpairofshoesorthatexpensiveshoes?
15. © 2014 Berlin Asong. All rights reserved. 15
Thrown foods
Source: WRAP (2012). Retrieved from www.wrap.org.uk/content/pictures
Consequences of materialismand artificialneeds:
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IntheUK,familyhouseholdthrows
£680offoodayear.
Source: WRAP (2012). Retrieved from www.wrap.org.uk/content/pictures
Source: The Telegraph (2012). Retrieved from
www.telegraph.co.uk/finance/personalfinance/consumertips/household-
bills/9268980/Families-waste-680-of-food-a-year.html
17. © 2014 Berlin Asong. All rights reserved. 17
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debts
Consequences of materialism
and artificial needs:
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Obesesocietylinked
tohighcarbproducts.
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Childobesityoftenlinkedto
highcarbproductsandpastimes
thatdiscourageactivelifestyle.
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Internet connection is required.
Source: BBC, 2013
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Source: BBC, 2013
Click slide to watch video.
Internet connection is required.
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Picture source: http://news.mcdonalds.com/press-releases/mcdonald-s-
launches-new-global-packaging-designs-nyse-mcd-975617
McDonald’s launches new
packaging with QR codes, to
help diners make informed
dieting choices.—Jan. 2013
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Exploitation
of workers.
4
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Underpaidworkers
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Toyota Recalls, 2010.
Providing customers
with defective products
or poor services.
5
31. © 2014 Berlin Asong. All rights reserved. 31
February2013horsemeat
scandal in Europe.
Source: gawker.com
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Misleadingnutritionallabels
E.g. falsely claiming a product is
an organic or fair-trade product.
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Fanciful,expensivepackaging
6
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Deceitful packaging
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Usingexcesspackaging
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Highly priced products
and services beyond the
buying reach of many.
7
38. © 2014 Berlin Asong. All rights reserved. 38
The poor pay for the same pricey
products and services as the rich.
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Barclays fined £290m
for rigging LIBOR rate.Source: www.guardian.co.uk/business/2012/jun/27/barclays-chief-bob-diamond-bonus-fine
FormerBarclaysCEOBobDiamondresignedamidliborscandal
3 July 2012
Source: insurance-center.org
Price-fixing
40. 40© 2014 Berlin Asong. All rights reserved.
Deceptive, unethical
& aggressive promotions.
8
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Skechers USA Inc. fined
$40 millionformisleadingadvertising claims.
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SkechersDeceivedConsumerswithShoeAds
Source: BloombergBusinessweek (2012). Retrieved from www.businessweek.com/ap/2012-05/D9UPVNB00.htm
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Source: adpressive.com
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Is it insulting?
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Unfriend10friends,getafreewhopper
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Give up
your friends
for a burger?
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body figure & size.
Stereotype
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9
Land pollution
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Airpollutionfrom
industrialwastelike
carbonemissions.
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BPoilspill
intheGulf
ofMexico
of2010.
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Depletion
ofnatural
resources.
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“Makingmore
beerbutusing
lesswater:we've
setourselvesa
targettoreduce
ouraverage
wateruseper
hectolitreofbeer
by25%by2015”. Picture: cervejaavecesar.blogspot.com
SABMiller
62. © 2014 Berlin Asong. All rights reserved. 62
“We are active in
taking steps to discourage
irresponsible drinking”.
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Cultural imperialism
by foreign brands:
erodingnationalandsub-cultures.
10
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Americanisation of cultures
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Unauthorised used
ofconsumers’
privatedetails.
11
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Whatarethepossible
impactofthese
criticismsonorganisations(assumingtheywere
aimedatyourfirm)?
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Legalfines
Consumerboycotts
Reputationaldamage
Unnecessarydistractions
Lossofshareholderwealth
Unsustainablebusiness
Customerexodus
Lossofjobs
Etc.
AdverseImpact
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Howdoyou
respondtothese
criticisms?
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ethics.
Organisationsmust
operatewithinacceptable
74. 74
Ethics are values that an individual
uses to interpret whether an action or
behaviour is acceptable or appropriate.
© 2014 Berlin Asong. All rights reserved.
Peter Stanwick & Sarah Stanwick (2013), “Understanding Business Ethics”. 2nd edition. Sage publication, p. 3
75. © 2014 Berlin Asong. All rights reserved. 75
It is the studyof
morality.
76. © 2014 Berlin Asong. All rights reserved. 76
It is the Study of
right&
wrong
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What’s right & wrong is
sometimes not clear-cut.
For example…
78. © 2014 Berlin Asong. All rights reserved. 78
Is it right or wrong for
McDonald’s to profit from
selling high carb meals
often linked to obesity and
heart-related diseases?
79. © 2014 Berlin Asong. All rights reserved. 79
Is it right or wrong for
companies to use bio-fuel
made from corn when 9 million
people (5 million are children)
die each year of hunger?
80. © 2014 Berlin Asong. All rights reserved. 80
Yahoo CEO Scott
Thompson stepped
down after it was
revealed he doesn’t
have a computer
science degree as
stated in his CV.
RightorWrong?
May 2012
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He lied to get a job
he “can do so well”.
It could be argued…
So what?
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Hehastheskillstodo
hisjob,butnolongerhas
thetrustorintegrityofhis
employees&shareholders.
A counter-argument could be…
83. © 2014 Berlin Asong. All rights reserved. 83
SkyNewsadmitshackingemails
butsaysitwas'inthepublicinterest'
Source: The Independent (2012). Retrieved from www.independent.co.uk/news/uk/crime/sky-news-admits-
hacking-emails-but-says-it-was-in-the-public-interest-7621831.html
84. © 2014 Berlin Asong. All rights reserved. 84
Sky News argues its
action is morally right because
it helped solve a crime.
Hackinginto someone’s emailis a criminaloffence.
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Is office
romance a
good thing or
bad thing?
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From where does
society get its sense
of right & wrong?
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Fromwheredolawmakers
orpolicymakersknowwhat
isgood&bad?
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Laws
Religion
Traditions
Common
Sense
Experience
Beliefs
EthicsReferenceSet
Peopleturntobeliefs,
religion,laws,experience,
traditions &commonsense
whenmakingethicaldecisions.
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Laws
Religion
Traditions
Common
Sense
Experience
Beliefs
EthicsReferenceSet
However,beliefs, religion,
laws,experience,traditions
&commonsense canspur
behaviourswhichcanbe
considered immoral.
95. © 2014 Berlin Asong. All rights reserved. 95
What is right and
wrong is subjective.
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What is right and wrong
is not universally binding.
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Whatisrightandwrong
can be complex.
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LEVELS OF ETHICS
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InternationalEthics
NationalEthics
OrganisationEthics
Occupational
Ethics
PersonalEthics
Levels of Ethics
100. © 2014 Berlin Asong. All rights reserved. 100
InternationalEthics
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National Ethics
102. © 2014 Berlin Asong. All rights reserved. 102
OrganisationalEthics
103. © 2014 Berlin Asong. All rights reserved. 103
Occupational Ethics
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Personal Ethics
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InternationalEthics
NationalEthics
OrganisationEthics
Occupational
Ethics
PersonalEthics
LevelsofEthics
Sometimes,
makinganethical
decisionwould
requirethe
decision-makerto
considerthe
implicationsof
twoormorelevels
ofethics.
106. © 2014 Berlin Asong. All rights reserved. 106
Thepracticesofmyfirm
contradictmypersonal
valuesandbeliefs.
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Is your “personal ethics”
aligned with the ethics
of your country?
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The practice of
developing & marketing
products or services with
environmental & people
considerations.
111. MARKETING MIX
© 2014 Berlin Asong. All rights reserved. 111
Marketing
Mix
Product
Price
Place
Promotion
People
Physical
Layout
Process
Planet
112. MARKETING MIX
© 2014 Berlin Asong. All rights reserved.
Planetary
Considerations
Product
Price
Place
PromotionPeople
Physical
Layout
Process
112
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Is green
marketing
a fad?
114. © 2014 Berlin Asong. All rights reserved. 114
It’s likely not a
fad because…
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Greenpractices
havebeenaround
forseveralcenturies.
1
Saha, M. & Darnton, G. (2005), “Green Companies or Green Con-panies: Are Companies Really Green, or
Are They Pretending to Be?”, Journal of Business and Society Review, vol. 110, no. 2, pp. 118-157
116. © 2014 Berlin Asong. All rights reserved. 116
humansnurtured
theenvironmentto
ensurefoodsupplies.
117. 117© 2014 Berlin Asong. All rights reserved.
The size of the
global green consumer
market is growing.
2
118. 118© 2014 Berlin Asong. All rights reserved.
Almost 5000organisationspublishedcorporate
responsibilityreportsin2010.
3
Corporate Register (2011), “Corporate Responsibility Reporting Awards ‘11”, Corporate Register, pp. 4-5
119. © 2014 Berlin Asong. All rights reserved. 119
Makingmorebeerbutusingless
water:we'vesetourselvesatargetto
reduceouraveragewateruseper
hectolitreofbeerby25%by2015.
120. © 2014 Berlin Asong. All rights reserved. 120
In 2008, we achieved a 15.5%
reduction in waste disposed to landfill.
121. 121© 2014 Berlin Asong. All rights reserved.
Leads to increased
sales and earnings.
4
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Toyota’sPriushasbeenasuccesswithover
3 millionunitssoldworldwidesinceitwentonsalesin1997.
123. 123© 2014 Berlin Asong. All rights reserved.
KraftFoodshas
cutitsannualuseof
fuelto680,000litres.
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Source:McDonald’s(2008)
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Somearesceptical
aboutthebenefitsof
greenmarketing.
Why?
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Green products and
services are expensive than
theirnon-greencounterparts.
1
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Few shoppers
make buying decisions
on green credentials.
2
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Productsorservices
that carry false
eco-friendly claims.
3
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Limited evidence
supporting eco products or
services sell more than non-
eco products or services.
4
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Afirmoughttoachieve
social goalsbeside
itsprofit-makinggoal.
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Whatarethese
social goals?
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Consumers
Employees Investors
Suppliers/distributors
Communities
Government/Regulators
Organisation
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Why firms
tend to aim for
financial profit?
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Profit is a measure of
shareholders’ wealth.
1
Howwellshareholders’cashisused.
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2
It’s a measure
of managerial
competence.
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The firm needs
to stay solvent.
3
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Whyaskfirmstoadoptsocialgoals?
what led to this
idea of CSR?
142. © 2014 Berlin Asong. All rights reserved. 142
Negative consequences
of globalisation.
1
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STPaul’sCathedral,London
Globalactivism
aimedatcorporate
establishmentfuelledby…
2
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“Excessive”
executive pay.
145. © 2014 Berlin Asong. All rights reserved. 145
Eventslikethe2008-2009
GlobalFinancialCrisis.
146. © 2014 Berlin Asong. All rights reserved. 146
(L-R) Mr. Jeffrey K. Skilling, former President and CEO of Enron Corporation; Dr. Robert Jaedicke, Board of Directors
Chairman of Audit and Compliance Committee of Enron Corporation; and Mr. Herbert S. Winokur, Jr., Board of Directors
Chairman of the Finance Committee of Enron Corporation, during the Oversight and Investigation Subcommittee hearing.
ENRONGuiltyofaccounting
embellishment&fraud.
Corporate crimes
147. © 2014 Berlin Asong. All rights reserved. 147
WorldCom Accounting Scandal Revealed: 3.8 billion in mislabeled expenses had been used to inflate
cash flow and hide losses in 2001 and early 2002. Shown is former Worldcom CEO Bernard Ebbers,
Worldcom
150. © 2014 Berlin Asong. All rights reserved. 150
Americanisation of cultures
151. © 2014 Berlin Asong. All rights reserved. 151
Carbon emissions
152. © 2014 Berlin Asong. All rights reserved. 152
BPoilspill
intheGulf
ofMexico
of2010.
153. © 2014 Berlin Asong. All rights reserved. 153
Wideninggap
betweenthe
poorandrich.
Source: asiantrendsmonitoring.com
Slums and luxury apartments exist side by side in Downtown Dhaka.
155. © 2014 Berlin Asong. All rights reserved. 155
Depletion
ofnatural
resources.
156. © 2014 Berlin Asong. All rights reserved. 156
Laws have failed to
provide satisfactory guide
to moral behaviour.
3
157. © 2014 Berlin Asong. All rights reserved. 157
So, the firm benefits
from incorporating
social goals?
159. © 2014 Berlin Asong. All rights reserved. 159
SustainabilityArgument
Meetingtheneedsofpresentgeneration
withoutcompromisingtheabilityoffuture
generationstomeettheirownneeds.
— Norwegian Prime Minister Gro Harlem Brundtland, 1980s
160. © 2014 Berlin Asong. All rights reserved. 160
Does your firm act
in ways that undermine
the capacity of people to
survive in the future?
161. © 2014 Berlin Asong. All rights reserved. 161
Does the firm act in
ways that hinder its capacity
to survive in the future?
162. © 2014 Berlin Asong. All rights reserved. 162
How do we
ensure the firm survives
in the future?
163. © 2014 Berlin Asong. All rights reserved. 163
Kraft Foods supporting cocoa farmers in
Ghana through training and equipment provision.
164. © 2014 Berlin Asong. All rights reserved. 164
ReputationalArgument
Toattracttalentedpeopleforwork
165. © 2014 Berlin Asong. All rights reserved. 165
Tobuycustomerloyalty
Source: Bonini, McKillop, & Mendonca 2007
167. 167© 2014 Berlin Asong. All rights reserved.
Almost 5000organisationspublishedcorporate
responsibilityreportsin2010.
Corporate Register (2011), “Corporate Responsibility Reporting Awards ‘11”, Corporate Register, pp. 4-5
AreasonwhyfirmshaveembracedCSRis
becauseofthepositiveimpactoncorporateimage.
168. © 2014 Berlin Asong. All rights reserved. 168
However,theveracity
oftheclaimsinCSRreports
hasbeenquestioned.
169. © 2014 Berlin Asong. All rights reserved. 169
License-to-operateArgument
Through CRS, the
firm obtains& renews its
permission to operate.
170. © 2014 Berlin Asong. All rights reserved. 170
MoralArgument
It’s simply the
right thing to do.
171. © 2014 Berlin Asong. All rights reserved. 171
New-marketopportunityArgument
CSR can present
opportunities for new ideas
(newproducts,services,orbusinesses).
172. © 2014 Berlin Asong. All rights reserved. 172
“CSRcanbeasourceofopportunity,
innovation,andcompetitiveadvantage.”
— Porter & Kramer (2006) Strategy & Society, HBR
173. © 2014 Berlin Asong. All rights reserved. 173
Toyota’sPriushasbeenasuccesswithover
3 millionunitssoldworldwidesinceitwentonsalesin1997.
174. © 2014 Berlin Asong. All rights reserved. 174
CSR
CASE against
175. © 2014 Berlin Asong. All rights reserved. 175
Afirmisaprofit-makingunit;
CSRderailsthefirm
fromitsgoaltomake
moneyforitsowners.
1
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...goesagainstthis.
177. © 2014 Berlin Asong. All rights reserved. 177
managersareeconomicagents.
178. © 2014 Berlin Asong. All rights reserved. 178
Socialgoals
aretheprovince
ofgovernments,
notfirms.
2
Source: rnw.nl
Former US President Bill Clinton in Haiti following the 2010 catastrophic earthquake.
179. © 2014 Berlin Asong. All rights reserved. 179
Byachievingeconomic
goals,thefirmindirectlyhelps
societyachievesocialgoals.
3
Throughtaxationrevenue;staffemployment;&
productsorservicesthatimpactconsumerlives.
180. © 2014 Berlin Asong. All rights reserved. 180
CSRisexpensive;bad
useofshareholder’smoney.
4
181. © 2014 Berlin Asong. All rights reserved. 181
Dofirmsthatengage
inCSRactivitiesoutperform
thosethatdon’t?
5