TheoriesVirtue EthicsVirtue ethics is distinct from both uti.docx

Theories
Virtue Ethics
Virtue ethics is distinct from both utilitarianism and deontology
. Rather than focusing on the
consequences of the act we wish to evaluate, or the reason or rul
e that guides the action, we
look at the character of the person performing the act. Virtue et
hics, thus, seeks to determine
not what makes an act good but what makes a person virtuous.
Deontology
Rather than looking at the consequences of an act, deontology l
ooks at the reason for which an act is done, and the rule accordi
ng to which one chooses to act. Deontology doesn't deny that
acts have consequences; rather, it insists that those consequence
s should not play a role in our moral evaluation of such acts.
Definition of Deontology
Utilitarianism is sometimes called a consequentialist theory bec
ause it evaluates whether an act is right or wrong in terms of the
act's consequences. In contrast to consequentialist theories, a n
umber of different approaches suggest distinct ways of evaluati
ng the morality of an act.
Perhaps the most famous of these is deontology. Coming from t
he Greek deon, which means
"duty," deontology (sometimes referred to as duty ethics) focuse
s on what we are obligated to do as rational moral agents. It is p
articularly important to see that the deontologist does not say th
at actions do not have consequences; rather, the deontologist ins
ists that actions should not be evaluated on the basis of the actio
n's consequences.
Utilitarianism
A natural way to see whether an act is the right thing to do (or t

he wrong thing to do) is to look at its results, or consequences.
Utilitarianism argues that, given a set of choices, the act we
should choose is that which produces the best results for the gre
atest number affected by that choice.
We should also see that part of this calculation is to minimize p
ain or suffering; a choice that maximizes utility may often be on
e that produces the least harm, given the options available. Utili
tarianism is the theory that
people should choose that which maximizes the utility of all tho
se who are affected by a given act.
At thispoint, however, we see the basic utilitarian principle and
how to apply it. Now we can start to make it a bit more precise.
According to utilitarianism, one should always act in a way that
produces the greatest good for the greatest number of people rel
ative to any other way one
might act, or act in a way that maximizes the utility of all affect
ed by an act, relative to any alternative to that act.
Perspectives
Emotivism
Emotivism offers a perspective on our ethical claims that elimin
ates much of the traditional
kind of argument based on reason. Emotivism, instead, sees our
moral evaluations as simply
the expression of whether we respond to a given act by liking it
or not liking it. Something is
good, on this view, if it is something about which we feel good;
something is wrong if it is
something about which we feel bad.
Definition of Emotivism
Emotivism is a noncognitive theory of ethics because it denies,
among other things, that moral claims can appeal to "facts." Rat
her, emotivism, as the name indicates, simply says that moral
claims express an emotional response, or an attitude, we may ha
ve toward a given kind of

behavior. Emotivists insist that there is a significant difference t
hat we should recognize between moral
claims and other kinds of claims.
Ethical Egoism
Egoism—specifically ethical egoism—
argues that our moral evaluations should be made in terms of ou
r desires and goals. Something that promotes what I want is reg
arded as right; something that interferes with what I want, or
prevents me from reaching my goals, is regarded as wrong.
Definition of Ethical Egoism
A position that contrasts sharply with the classic ethical theorie
s of utilitarianism, deontology, and virtue ethics—
and most religions—
is called ethical egoism. The literal meaning of "ego" comes fro
m the Greek word for "self," or "I," and that notion is at the cen
ter of egoism: I do what I want to do in order to increase my
own happiness, my own pleasure. Simply put, I know what I wa
nt, and something is good, or
right, if it helps me to obtain that desire (and bad, or wrong, if i
t interferes with my doing so). If doing something promotes my
own happiness or helps me reach my desired goals, I should do
it. That is the fundamental principle of ethical egoism.
Ethical egoism, obviously enough, is an approach to ethics, but
it should be noted that another kind of egoism, psychological eg
oism, needs to be kept distinct from ethical egoism.
Relativism
The view of ethical relativism regards values as determined by
one's own ethical standards,
often those provided by one's own culture and background. Rath
er than insisting that there are moral absolutes, moral claims mu
st be interpreted in terms of how they reflect a person's viewpoi
nt; moral claims are then said to be "right in a given culture" or
"wrong for a given society."
Definition of Relativism
Have you ever ended an argument by simply agreeing to disagre

e? Relativism is the idea that
one's beliefs and values are understood in terms of one's societ
y, culture, or even one's own
individual values. You may disagree with someone and believe
your view is superior, relative to you as an individual; more oft
en, relativism is described in terms of the values of the
community in which one lives.
The economy is driven by the exchange of goods and services—
the purchase and sale of products. In some cases, these products
are tangible items that we can see and feel, like cell phones,
medications, vehicles, and baseballs. In other situations, the
product might be a service—such as lawn care, massage
therapy, or a legal consultation. The American economy, in
2012, showed a gross domestic product (the value of goods and
services produced) of $13.5 trillion (Federal Reserve Bank of
St. Louis, 2013).
A number of laws govern business practices, including
everything from marketing and advertising to packaging to
liability issues regarding consumer harm. Regulatory agencies
also exist to oversee commerce: the National Transportation
Safety Board (NTSB); the Federal Trade Commission (FTC);
the Federal Communications Commission (FCC); and the
Bureau of Alcohol, Tobacco, and Firearms (ATF) are examples.
Product liability—determining who is responsible when a
consumer is harmed—is a primarily legal issue. This chapter
will focus more directly on the ethical issues that arise in
business practices. Because trade ultimately occurs between
individuals (companies are made up of people, just as
consumers are persons), moral reasoning is clearly applicable in
guiding decisions and actions. This chapter will explore several
moral concerns that arise in the relationship between businesses
(producers and sellers) and their customers.
9.1 The Issue: Design Flaws in Products
The Ford Pinto is a classic example of a product with a design

flaw.
In 1968, the Ford Motor Company began producing a new
subcompact car called the Pinto. This vehicle was designed and
developed on an abbreviated timeline in order to get to market
as quickly as possible. The Volkswagen Beetle was extremely
popular, and Ford executives also feared that Japanese
manufacturers would dominate the subcompact market if they
did not get something on the market soon. With this in mind,
the Pinto was designed and developed in about half the time that
is spent on most vehicles. During its 10-year production, Ford
sold over 2.3 million Pintos.
The vehicles had safety problems, however. In May 1972, the
problem was first identified when a Pinto driven by Lily Gray
was struck from the rear by another car. The fuel tank in the
Pinto exploded, killing Gray and severely injuring her
passenger, Richard Grimshaw. Several other instances of fuel
tank explosions involving Pintos were reported; in one such
case, a van traveling at about 55 miles per hour rear-ended a
Pinto stopped on the side of the highway. The Pinto exploded,
killing all three women inside as well as the van's driver. In
total, the National Highway Traffic Safety Administration
(NHTSA) determined that 27 people died as a result of the
faulty fuel tank design in the Pinto; another 24 suffered severe
burn injuries.
The Manufacturer Perspective
Without minimizing the seriousness of injury and death, it must
be recognized that new technologies introduce new risks. Any
product can cause harm, especially when that product is misused
in some way. This is why products have warning labels that
remind consumers not to use an electrical appliance near water
(in the sink or the bathtub, for example), why ladders and
elevators list the maximum weight they are designed to safely
support, and so forth.
The only way to completely avoid being harmed by a product is
to avoid the use of that product. The point here is not to be

overly simplistic, but to recognize that benefits are offset by
risks. I could walk to work (approximately 7 miles), but it
would take a long time, it would be tiring, and it would be
especially inconvenient when the weather isn't ideal (too hot,
too cold, too wet, etc.). In order to complete the journey more
quickly and in greater comfort, I can drive my car. When I
choose to do so, I must accept the risks involved in driving. To
put it simply: To receive the benefits of personal transportation,
consumers assume the risk.
Additionally, 27 deaths among 2.3 million vehicles (the number
of Pintos sold by Ford) is far lower than the number of deaths
caused by rear-end collisions in other car models where the fuel
tank did not explode (rear-end collisions account for nearly one-
third of all motor vehicle collisions.) The specific design of the
Ford Pinto may have introduced a new risk, but there is no clear
indication that it increased the likelihood of death from a rear-
end collision. To put a different way, had Ford corrected the
fuel tank issue, it might have prevented explosions but would
not necessarily have increased the chances of its passengers
surviving a rear-end collision.
None of these arguments are intended to suggest that the fuel
tank design was not an important factor. They do, however,
suggest that the design issues may not be as important in overall
passenger safety as they initially appear. This point is
underscored by the fact that in many of the accidents involving
a Ford Pinto, the driver of the vehicle that struck the Pinto was
under the influence of alcohol or drugs. For example, consider
an accident in August 1981, which killed three women in a
Pinto. In that case, the victims were struck by a vehicle driven
by a man with open beer bottles, marijuana, caffeine pills, and
other illegal drugs in the car with him.
When these factors are taken into consideration, the bulk of the
fault lies not with the design of the Pinto itself, but with those
who caused the collisions (especially if they were illegally
operating their own vehicle). Had those people never rear-ended
the Pintos, the fires would not have occurred. Should liability

fall on the company for a possible design flaw in the car when
the driver directly responsible for the collision is at fault?
A company should be responsible for a product that harms
consumers when used as intended. When a product meets
existing safety regulations, it is not clear that it is fair to hold
the manufacturer responsible for harm caused when the product
is misused (in the case of the Pinto, the misuse stemmed from
the drivers of the cars who collided with Ford's product).
The Consumer-Safety Perspective
Products should be safe to use under normal conditions. We
might grant that an injury caused by a misuse of the product is
not necessarily a flaw in the product's design. However,
consumers can appropriately demand that products be safe in all
situations in which their use might be reasonably expected.
In the case of the Ford Pinto, those who argue for the
consumer's rights acknowledge it is true that vehicles are not
designed to be run into from the rear. (It isn't clear that any
automobile manufacturer specifically sells cars designed to be
used in a demolition derby!) But, given that nearly one-third of
all vehicle crashes involve rear-end collisions, it is reasonable
to expect that cars will be involved in those accidents. Because
of this, manufacturers do have an obligation—to public safety—
to ensure that their vehicles are as safe as possible when such
collisions occur. The fact that the Ford Pinto was designed and
produced far more quickly than other vehicles suggests, at the
very least, that thorough safety testing was not conducted. For
this reason, it is appropriate to hold the manufacturer liable for
a defect that should have been foreseen.
The claim that deaths caused by the faulty fuel tank design were
no greater than those involving rear-end collisions in other
vehicles may also be challenged. The use of a product does
involve the acceptance of risk. The question, however, is
whether otherwise avoidable risks were introduced because of
the product itself.
In the post-Pinto era, the discovery of such a defect often
results in a product recall. Sometimes one of the regulatory

agencies demands it; frequently, a manufacturer will issue a
voluntary recall when a problem has been identified. For
example, in July 2013, Mitsubishi Motors issued a recall on
2013 Outlander Sport vehicles manufactured during a single
week in January 2013; the stabilizer link on the front of the
vehicle was found to be welded incorrectly, increasing the
likelihood that it would become detached. The result of such a
failure could be damage to the tire (resulting in a loss of
control) or to the brake line (meaning that the driver would have
difficulty stopping). The manufacturer agreed to perform repairs
on these vehicles free of charge (Safercar.gov, 2013).
Product Recalls
Products are recalled by manufacturers either voluntarily, at the
request of a regulatory agency, or by order of such an agency.
Examples of product recalls include:
medications that have adverse side effects;
foods that are found to cause health problems or that contain
previously unidentified allergens;
products (such as vehicles or toys) that have been shown to
break and cause physical harm to the user; and
products whose design reveals that unintended harm may be
caused to consumers (for example, clothing that presents a
choking hazard for children).
In some cases, a company may choose to recall a product
because of other reasons, related to moral issues or to the
company's image. For example, in January 1999, Disney
recalled approximately 3.4 million copies of the home video
version of The Rescuers because a background image, showing
a topless woman, had been inserted into two frames of the
movie. While Disney maintains that the image was not inserted
by one of its own animators— but was introduced in
postproduction processing—Disney issued the recall because of
its commitment to provide trustworthy family entertainment.
Companies generally issue recalls on products—to either repair
or replace the product, or to issue a refund to the consumer—
whenever dangers are recognized. In the case of the Ford Pinto,

the company was faulted for failing to exercise such diligence
for financial reasons. Ford estimated that the costs of recalling
and repairing all of the vehicles (11 million cars, 1.5 million
light trucks—not exclusive to the Ford Pinto) with questionable
fuel tank designs would have topped $137 million, whereas the
costs associated with deaths and injuries in those vehicles
(recognizing that not all of them will be involved in rear-end
collisions) was closer to $50 million. Thus, this widely
publicized cost analysis suggested that for the company, it was
less expensive to leave potentially unsafe vehicles on the road
than to attempt a recall.
From a safety standpoint, the cost of a recall should not be a
deciding factor, because human lives cannot be reduced to a
monetary value. Consumers should be able to trust that the
products they purchase and use are designed in such a way that
will not pose a threat under conditions that, while not "normal,"
should nevertheless be expected as reasonable occurrences.
(That is, while it is not expected that drivers will seek to be
involved in rear-end collisions, it is known that such accidents
occur relatively frequently, so a reasonable expectation exists
that a vehicle would be safe in such a "reasonably expected"
event.) Thus, in the consumer advocate view, companies bear
the moral responsibility to ensure that their products may be
safely used. A failure to design a safe product—or to recall and
repair or replace a defective product once a safety hazard is
known—represents a failure of the company to uphold its
ethical obligations to both individual consumers and to society
as a whole. While manufacturers are not responsible if a person
intentionally misuses a product, it is their job to make sure that
consumers understand how a product can be used safely.
Product Tampering
Thus far this chapter has examined two views of manufacturer
liability with respect to defective products. There is one more
aspect of this issue to consider: product tampering. Who is
responsible if an otherwise safe product was tampered with after
its manufacture, but before its purchase by a consumer? Further,

how should liability be divided between the manufacturer of the
product (who created a product that could be tampered with
before its sale) and the distributor (the store in which the
product was sold, which placed compromised products on its
shelves)?
Product tampering arises most often with foods and
medications. This might seem strange, in light of the packaging
that we now find, particularly with medicines. The bottle of
medicine is sold inside a sealed box; the cap of the medicine
bottle itself is covered by a clear plastic film which must be
removed; once the cap is removed, the opening of the bottle is
covered by a seal, generally made of cardboard or foil.
Not long ago, this was not the case. Bottles of aspirin were on
display on the shelves, not enclosed in boxes. The cap of the
bottle might have had a child safety device but there was no
seal once that childproof cap had been removed, only a piece of
cotton stuffed into the neck of the bottle.
Safe packaging became a concern in the early 1980s, fueled by a
situation involving Tylenol pain relievers. In September 1982,
parents gave a Tylenol capsule to a 12-year-old girl living in the
Chicago area. Hours later, the girl, Mary Kellerman, was dead.
That same morning, in another Chicago suburb, Adam Janus
died. While the family was still mourning his loss, Janus's
brother and brother-in-law both died. What was the connection
between these deaths and three others (a total of seven in the
Chicago area)? Each victim had taken Extra Strength Tylenol.
A police investigation revealed that the victims' capsules had
been laced with potassium cyanide. The capsules came from
bottles of Tylenol produced at different plants and purchased at
different drug stores, a fact that prompted the suspicion—still
believed to be true, though the case remains unsolved—that
someone had tampered with the product after it reached the
store shelves.
A direct consequence of the Tylenol poisonings was that
companies introduced tamper-evident packaging. The Food and

Drug Administration now requires such packaging, especially
for over-the-counter medications. The goal of such packing is
not to guarantee that tampering cannot occur: The packaging is
not referred to as tamper-proof, or even tamper-resistant.
Instead, the goal of tamper-evident packaging is to help
consumers identify products that may have been compromised,
so that potential buyers can avoid those items.
The packaging used for over-the-counter medication is designed
to alert consumers if the product has been tampered with.
The ethical claim in situations like this is that manufacturers
should be responsible not simply for creating safe products, but
also for safely delivering those products to consumers. If a
manufacturer fails to package a product in such a way that the
customer cannot be reasonably assured that the product has not
been made unsafe after the manufacturing process was
completed, then it could be argued that the company bears at
least some of the responsibility for enabling such tampering to
occur.
On the other hand, companies are themselves victims when
product tampering occurs because the product (and brand name)
will be affected by adverse publicity. Corporate executives will
be seeking to determine how to protect themselves (against
potential legal liability) and save the product. Apart from these
legal considerations, the company bears a moral responsibility
to act in the best interests of the consumers. Instead of simply
identifying themselves as victims, companies have the ability—
and the obligation—to take positive steps to ensure public
safety.
Johnson & Johnson reacted quickly after the Tylenol tampering
in Chicago. Once a connection was made between the deaths
and Extra Strength Tylenol capsules, the company issued a
national recall of the medication, with some estimates
suggesting a cost of over $100 million to the company. Many
would argue that this is one of the best examples of appropriate
ethical conduct by a company, because this recall was issued
voluntarily, before the Food and Drug Administration was even

involved in the case.
9.2 The Issue: Working Conditions
Companies exist to make a profit. That is, simply stated, the
primary purpose for which a company is founded. The owners
of the company are providing some type of product or service
designed to meet a need in the marketplace; by meeting that
need, the company receives income.
Economically, the profit earned by a company consists of
revenue (income) minus expenses (including the costs of raw
materials, labor, packaging, shipping, and so forth). To increase
profits, the company must increase revenue (by charging a
higher price or selling more products—or both), or decrease
expenses (by finding cheaper raw materials, streamlining
production, or lowering labor costs). What limits, if any, should
exist on what a company might ethically do to increase its
profits? The first section of this chapter discussed the ethics
involved in changes to product safety (whether in the design of
the product itself or in safe packaging practices). In recent
years, a cost-cutting measure that has come under intense
scrutiny concerns the use of cheap labor in developing
countries. Often referred to as sweatshops, these factories may
place workers in unsafe environments and fail to pay decent
wages. This practice enables companies to keep manufacturing
costs extremely low, substantially boosting profits. But at what
cost?
Price and Prestige
When targeting customers, a company may employ different
strategies. One, perhaps the most widely used method, is to
keep prices low to sell more products. However, if the price is
set too low, then the implication is that the product isn't as
valuable. Instead of being seen as a bargain, the product will be
regarded as inferior.
Because of this, companies may often opt for premium pricing,
where the price of the product is set higher than that of similar
products. This strategy targets a smaller segment of the

consumer market—focusing on those willing and able to pay
more—by offering them the prestige of owning a "top of the
line" product.
The premium-pricing strategy can create a competitive
advantage for a company. After all, statistics show that the
Android operating system is used by more people than the iOS
(for iPhone) on their mobile devices and that Apple sells less
than 25% of smart phones in the worldwide market (McCracken,
2013). Even so, the Apple iPhone continues to be the "standard"
against which all other phones are measured. By using a
premium-pricing model, most people think that the Apple
iPhone is the most popular smartphone on the market.
In the same way, many companies have tried to make their
carryout coffee cups resemble those of Starbucks. Carrying a
cup of Starbucks coffee is not a statement about one's love of
coffee so much as it is a status symbol (the fact that the
individual can afford to splurge on Starbucks each morning)
(Vanek-Smith, 2008). Starbucks has used the premium-pricing
strategy successfully
Given that companies seek to maximize profits, is it misleading
to create a brand image that justifies a higher price, when the
product does not clearly offer features that justify the additional
expense (compared to products offered by competitors)? Or is
the marketplace driven solely by supply and demand, leaving
companies free to price products at whatever level can sustain
sales and profits?
The Business Perspective
From a business perspective, foreign labor represents a difficult
but inescapable necessity. After all, consumers demand lower
prices; to meet this demand, companies must keep
manufacturing costs as low as possible. If production were
moved back to domestic locations, labor costs and other
expenses related to production would increase, meaning that the
price of the product would have to go up in order to maintain
profitability. As long as some companies choose to use foreign
labor, all companies in the marketplace find themselves hard-

pressed not to follow suit; to fail to do so means that they
cannot compete in that market.
The difficulty in maintaining profitability is compounded by the
fact that some industries are vulnerable to changing trends.
Perhaps fashion is the best example of one such industry. Styles
change quickly from one season to the next, and a company's
ability to adapt quickly to a changing market will be evident in
its profitability. It is expensive to reconfigure production lines
and retrain employees. To keep pace with shifting customer
desires, companies benefit by establishing production facilities
in locations where equipment and labor are both cheap and
where trainable workers are plentiful.
Both of these reasons—competitive edge and speed to market—
speak to the corporation's market benefit. However, sweatshop
labor is not just an isolated business decision based on
productivity concerns. These corporations are owned by
stockholders, investors who choose to invest in the company
because of its profitability—meaning that they will share in
those profits. And the more money these stockholders earn, the
more money that flows through the economy—money that is
spent on goods and services produced by other companies.
Thus, it might be argued that keeping a company profitable is
important on a social scale because the profitability of
corporations affects the economy as a whole
Most importantly, however, the issue of sweatshops has to be
understood in terms of cultures and regional conditions. Those
who argue that sweatshops are unacceptable are basing their
claim on the labor standards of a developed country. Those
opposed to sweatshop labor point out that American workers,
for example, would not be willing to accept the working
conditions present in those factories. The wages paid to those
workers do not represent a living wage that enables employees
to provide even the most basic food, clothing, and shelter
needed by their families.
This argument, say those who support the foreign-labor model,

is tempered by the fact that the demand for jobs in these regions
is often so high that applicants line up outside these factories
hoping to get hired. While the working conditions are not
acceptable from the point of view of workers in more developed
countries, for these people it is far better than anything else
available. Working conditions should be judged against cultural
standards within a region, not those of First World countries.
When judged by the standards of the workers in these countries,
so-called sweatshop conditions do more than measure up—they
often exceed local standards.
The argument might be framed in a different way. Local market
conditions are expected to determine appropriate compensation
for American workers; employees working in Dallas, Texas, for
example, are able to maintain a particular standard of living for
less than employees in New York, New York, would have to
spend in order to maintain that same living standard. (See, for
example, the cost-of-living calculator available at
www.salary.com). Because the cost of living varies between
locales, companies are justified in providing different rates of
pay for employees working in those locations, enabling
employees to enjoy comparable standards of living.
If this is extended to the foreign workers, companies are able to
provide a comparable standard of living for those employees at
far less expense; the local economies are such that employees
require significantly less compensation. By comparison to
others in the area, the workers are not being unfairly
compensated. Thus, from the company's perspective, labor
conditions, employment rates, and cost of living information are
necessary to making an informed judgment about what might be
considered appropriate.
The Humanist Perspective
The primary argument against sweatshops is based on human
rights: People have a right to work in places that are clean,
healthy, and safe. Furthermore, workers deserve a living wage
in return for their labor. Workers employed in sweatshops are
treated little better than slaves. They must work long hours and

receive no paid leave, even for medical emergencies, which
encourages them to continue working even when they pose a
health hazard to other employees. These workers are paid a
salary that often fails to represent even a basic subsistence.
Those in favor of sweatshops argue that these workers are still
better off than they would be with no source of income. This
response belies the fact that the hardships of laborers are being
exploited for the company's benefit. It may be unrealistic to
require that conditions be exactly the same as what would be
expected in an American manufacturing plant, given cultural
differences. But those who criticize sweatshops insist that
workers deserve to be treated with appropriate respect and
dignity, regardless of the culture in which they are employed.
Just as a human life cannot be gauged by how much it costs to
make products safer, neither can human dignity be measured in
terms of labor conditions, especially when the laborers have no
choice in the matter.
One argument against outsourcing is that it takes jobs away
from Americans.
This is particularly true, argue opponents of sweatshop
conditions, when the profits earned by companies utilizing them
continue to soar. The CEO of Nike—which has long been
criticized for using sweatshops—made over $6 million in 2007;
the company's advertising budget that year was $678 million.
Human rights advocates claim that just 1% of this advertising
budget would be sufficient to pay a living wage to every one of
the factory workers (DoSomething.org, n.d.). Clearly, the
companies are making enough money to change the poor
working conditions, if they wanted to do so. The fact that the
companies continue to rake in massive profits at the expense of
laborers who barely earn a living wage, say human rights
supporters, indicates that the companies do not truly care about
their employees. While companies exist to make money, they
are designed to do so by providing for all of the employees
involved in the production of those goods and services. To fail

to provide adequately for the employees indicates that the
company is failing to uphold the moral obligations it possesses
with regard to its employees.
The other argument often used against companies employing
cheap foreign labor is the fact that American jobs are being sent
overseas. It is true that U.S. workers would have to be paid
more and be provided with better working conditions (as U.S.
culture and law demands). These factors increase the company's
expenses and cut into its profits—potentially resulting in job
losses for those same American employees. But paying more
American workers would boost the economy (and thereby
enable companies to raise prices), as more people would have
money to spend. Instead of isolating large profits in the hands
of relatively few corporate stockholders, wealth would be
distributed more equally, which, argue the proponents of
domestic labor, would have a greater positive impact on the
economy as a whole.
9.3 The Issue: Marketing and Advertising Practices
In a 2011 Super Bowl advertisement, reality TV star Kim
Kardashian is shown dumping her personal trainer for a pair of
Shape-Up toning shoes, sold by Skechers. In other
advertisements for this product, consumers were told that the
shoes enabled them to shape and tone their bodies while going
about their everyday tasks—losing weight and gaining muscle
tone without ever actually exercising.
The Federal Trade Commission (FTC) takes particular interest
in claims made by companies selling products related to health
and fitness. In this instance, as in many others, the FTC
determined that the claims being made by Skechers were
unproven, and in a May 2012 ruling, the company was assessed
$40 million in fines (a record amount at that time). The
Skechers case points to a particular problem with the marketing
campaigns companies use to sell their products.
Deceptive or misleading advertising practices raise concerns
when companies suggest that products can deliver results or
performance that goes beyond what the product is actually

capable of producing. Marketing practices can be questionably
ethical in other ways, however, including the following:
the use of customer, celebrity, and expert (doctor or scientist)
testimonials;
dubious claims about pricing;
fictitious customer reviews (especially for online retailers); and
inappropriate humor or suggestive content.
Companies may choose to risk using any of these methods for a
variety of reasons. The ethical issues involved, however,
demand investigation.
The Marketing Perspective
Advertisements are used to create consumer demand, thereby
helping a company sell products.
The goal of marketing, simply stated, is to help a company sell
products. To achieve this end, advertisements are created with
the hope of instilling in consumers a desire for a product or
service. The greater the consumer demand for an item—whether
it be a pair of shoes, a particular brand of spaghetti, a business
service, or a certain person in a political office—the more
effective the marketing campaign has been. In a competitive
marketplace, this goal is achieved when the product is able to
appeal to consumers in a way that no other product can match.
But exactly how marketers may ethically pursue those goals
presents some grounds for discussion.
Beneficial Claims
Advertisers frequently rely on tactics like the Skechers fitness
claim. If studies do in fact suggest that Skechers shoes help
people lose weight and tone muscle while going about their
everyday routines, such information represents a clear benefit—
one that no other shoe manufacturer can claim. When a company
finds experts—doctors or scientists, for example—who are able
to support these claims, it helps customers recognize the
benefits that are available from the product.
Good marketing strategies do not involve intentional deception.
And because the Federal Trade Commission is quick to ban
advertising that contains obviously false claims once they are

identified, companies generally do not make claims without
some basis in fact. Marketers contend, however, that customers
potentially benefit by knowing about a product's advantages as
early as possible so that those customers can reap the benefits.
In other words, from a marketing viewpoint, using the results of
a study—even when the results might still be murky or not fully
substantiated—to show the link between a product and potential
benefits is just good business.
Testimonials and Endorsements
Along these same lines, advertisements often feature
testimonials from satisfied customers as a means of convincing
like-minded consumers of the advantages of buying. FTC
guidelines require customer testimonials to come from actual
consumers who are giving their honest opinion about the
product; additionally, the customers included in advertising
should be representative of customer views as a whole. (That is,
if a company sells a new product to 500 customers, 495 of
whom were displeased with the product but five of whom really
liked it, the company would be violating FTC guidelines with a
commercial that showed only the five customers who liked the
product, because those five individuals do not fairly represent
the customer base.)
Celebrity spokespeople are often used in advertising, as well.
People admire celebrities, adopt them as role models, and want
to be like them. Learning that a particular celebrity uses a
product and finds it beneficial gives consumers a reason to use
the product as well—to become more like the person they
admire. In all types of customer testimony— whether from
typical customers or celebrity endorsers—marketers are seeking
to help consumers achieve their own goals. From the marketing
perspective, then, no ethical lines are crossed when a company
truthfully shares information about a product that has helped
other people achieve similar goals.
As society becomes increasingly technological, advertising that
is clearly deceptive is on the decline. After all, more consumers

check the content of advertisements, even using mobile devices
to verify claims while they are standing in a store. Thus,
consumers themselves serve as watchdogs when it comes to
advertising—and they share the information they find
(concerning both good products and those that fail to live up to
their claims) widely through their social networks. In such an
environment, marketers are careful to only make claims that can
be substantiated, giving consumers a reason to believe that
advertising claims are reliable and trustworthy.
Emotional Responses
Another widespread practice in marketing campaigns is the use
of humor or sentimentality, seeking to create an emotional
reaction. In the United States, commercials for beer often utilize
humor in an attempt to make a connection between the brand
and the fun that people will have while using those products.
Other products might use humor simply as a way to make a
brand name stick in a consumer's mind. A notable example of
this approach (which has drawn mixed reviews) is Kmart's
advertising campaign, launched in April 2013. To let customers
know about the free shipping available from Kmart's online
store, the company commissioned a commercial in which
customers talk about the ability to "ship my pants" (as well as
other items). Following this, another Kmart ad touted fuel
savings ("big gas savings") at their gas stations. The humor in
these advertisements was intended to catch people's attention
and bring positive publicity to the brand.
Sentimental messages aim to accomplish the same result.
During the 2013 Super Bowl, carmaker Chrysler ran two
separate 2-minute commercials. One focused on the American
farmer and featured a voiceover by radio legend Paul Harvey. In
the other commercial, an Oprah Winfrey narrative honored
military personnel who were serving away from home. A third
commercial, this time from brewing giant Anheuser-Busch,
featured one of the famous Budweiser Clydesdale horses being
reunited with the man who trained him as a colt. Each of these
commercials sought to create an emotional attachment between

the corporate brand and the consumer. All three received high
marks in consumer rankings; the commercials were effective in
creating favorable emotional responses.
From a marketing perspective, no ethical lines are being crossed
through these practices. Product claims that can be supported
are offered; testimonials help customers understand the benefits
of the product for people to whom they can relate; and humor or
sentiment may be used to convey feelings that the consumer can
expect to enjoy when using the product. Thus, advertisers seek
to create a demand for a product, which, from their perspective,
does not rely on deception or misrepresentation.
The Consumer Perspective
Historically, the Latin phrase caveat emptor—"let the buyer
beware"—ruled the marketplace. The idea contained here is that
the purchaser of a product bears the responsibility for checking
to be certain that the product is worth the expense. When it
comes to marketing claims, is it in fact the consumer's
responsibility to determine whether the product will achieve the
desired results?
In modern law, the doctrine of caveat emptor still applies to
most personal transactions. Most people who buy a used car
from an individual (not a dealer), or a house, or something at a
garage sale recognize that the sellers are not responsible for the
condition of the purchase the same way that a manufacturer
would be. They are selling the product "as is," and it is the
buyer's responsibility to ensure that the product is worth what is
being paid for it.
From the point of view of a retail consumer, however,
companies have a greater responsibility toward the buyer
precisely because they have control over the design, production,
manufacturing, and—most importantly—marketing of the
products they sell. They know the product more fully than does
the consumer. Because of this, companies are responsible for
claims that are made concerning their goods and services.
The fact that marketing claims are often based on information

unavailable to the consumer serves as the basis for one of the
chief criticisms of modern marketing. When a doctor or
scientist endorses a particular product, the average consumer
has no way of knowing whether that spokesperson is connected
to the development of that product in some way. Is this an
independent researcher, or did this person conduct research that
was funded by the company? In the case of the Skechers
advertisements, for example, it turned out that one of the
studies the company used to support its claims came from a
chiropractor who happened to be married to a Skechers
marketing executive. Serious issues of complicity can arise
when so-called expert testimony amounts to inside information
that consumers are not able to substantiate on their own.
Online retailers attempt to alleviate some of this concern by
allowing for customer reviews on their websites. The difficulty,
however, lies in the knowledge that the company has the power
to remove any customer reviews it chooses; it can also post
favorable reviews that sound like customer testimonials even
though they were written by company personnel. The same sorts
of issues arise with paid celebrity spokespersons; if they are
paid for their endorsement, why should consumers be expected
to believe that celebrities are truly endorsing the product based
on their own experience?
All of these are concerns for the consumer, who has no means
of verifying the content being encountered through the
advertisement. Without more information, customers are at the
mercy of what marketers want them to hear about a product,
which increases the possibility that deception may occur.
The same can be said for the use of emotional appeals—whether
humorous or sentimental. Most people would agree that they
don't like it when someone gets them to do something by
making them feel guilty if they refuse. This can occur between
friends or family members quite easily. Because of the
relationship we share with the person, we will often go along—
even though we may resent being "guilted" into compliance.

With marketing, emotional appeals—some would say
manipulation—become even more suspect. The Chrysler Super
Bowl auto commercials did not even appear to be
advertisements until the very end. Nonetheless, the ads leave
consumers feeling a sentimental attachment to the images in the
commercial, which have little to do with the actual products or
brands being advertised.
Consumers often do make purchasing decisions based on a
company's image and reputation. In the case of sweatshop labor,
many consumers choose to boycott clothing brands that engage
in such practices. Since the company is using unethical
employment practices, the customer chooses not to support the
company through his or her purchases. In this respect, what the
company represents does influence the buying decision.
Some would point out that Chrysler Corporation does support
American military personnel serving abroad, so associating the
brand with that support is not problematic. Jeep (a Chrysler
brand) has funded Operation SAFE Return, a program designed
to generate community support for military personnel and their
families (see
http://www.chryslergroupllc.com/community/Pages/MilitarySup
port.aspx and http://www.jeep.com/en/operation_safe_return/).
The commercials' implied claim, however, is that Chrysler is
more supportive than other automobile manufacturers; true
patriots will drive Dodge Ram pickups and Jeeps. The company
cannot substantiate such a claim. Critics would argue, then, that
Chrysler's commercials are misleading, playing on
sentimentality and emotion that is not clearly connected to the
product. In that regard, the message is deceptive.
Marketing is big business. Some estimates are that about 10% of
the cost of a product lies in the marketing and advertising
budget. Companies do act wrongly, though, when they create
advertisements that are deceptive in any way. This can happen
through unsubstantiated claims, false testimony, or through
emotional appeals that inaccurately depict the product and its
contribution to society. Marketers can also easily offend

consumers through the use of crude humor, harming the brand
image through negative publicity.
9.4 The Issue: Customer Tracking and Profiling
Using technology, retailers can determine which displays attract
attention, how much time a person spends inside a store, what
items are most popular, and other shopping trends.
In the fall of 2012, Seattle-based clothing retailer Nordstrom
began using software called Euclid, which enabled the company
to track customer movements through the store using the Wi-Fi
signal on the customer's cell phone. The data collected by the
Euclid system told the store which items consumers looked at,
how much time they spent at each counter, and whether the
customer actually bought any of the items. (In May 2013,
Nordstrom stopped using the Euclid software; they had posted
signs in their stores notifying customers of their use of tracking
software, and received a number of complaints. It was, at least
in part, because of these complaints that the department store
chose to stop tracking the in-store customers [Clifford & Hardy,
2013]).
Other stores using similar technology are going even further,
coupling this tracking data with video surveillance, which can
relay additional information—gender, approximate age, and
even customer moods via facial-recognition software. With this
technology, the stores can target specific ads to customers at the
point of sale, based on their gender and mood.
This type of customer tracking and profiling is common online.
(Most people who have done an online search have noticed how
the pop-up advertisements on webpages they are visiting are for
the same type of item for which they were searching.) The
ability to profile customers and market directly to their interests
and needs generates more revenue. The Euclid service, for
example, seeks to help retailers generate sales by providing data
that helps determine which window displays are most effective
(drawing in more customers, as opposed to those who just walk
by), as well as by providing data on the time a customer spends
inside the store (because the longer a customer is in a store, the

greater the likelihood that they will make a purchase) (Cohan,
2013). But at what point has the customer's privacy been
violated through the data that is being collected, stored, and
analyzed?
The Seller Perspective
Online retailers have long used customer tracking on their
websites. This enables them to know what products customers
viewed, so they can watch customers shop. They have an
understanding of which items are popular—or which items will
lead customers to look at related items. The ability to track
customers provides valuable information for the store in
designing its website and the way it presents information to
customers.
Such tracking practices also enable a company to provide
beneficial information to the customer, based on what the
customer is doing. When someone views items on a store's
website, the site will sometimes offer "recommendations," or
links to items viewed by other customers who were looking at
the same product. This information provides valuable assistance
to consumers as they compare different products on the website.
Thus, it benefits both customers and retailers.
How Software Tracks Customers Online
When an online customer visits a company's website, the
Internet protocol address is registered in the site database;
often, the media access control address (which is unique to each
device) is also recorded. This information enables the database
to recognize when a customer returns to the online site, and it
will remember items that the customer was looking at on
previous visits.
Profiles based on Internet searches are well established. (After
all, how do companies like Google and Yahoo!, which offer a
free search engine, make money? The bulk of their revenue
comes through customer profiles, enabling companies to market
their products to specific types of individuals.) Most online
consumers accept the fact that their search history is being
recorded and analyzed, whether or not they think about it.

Without software like Nordstrom's Euclid, physical (or brick-
and-mortar) stores lack this ability. Understanding how
customers travel through the stores, which displays catch
customers' eyes, and the amount of time that customers spend in
stores represents valuable information to retail establishments.
As just one example, floor managers can adjust their displays to
attract more sales, and they can make sure that the store has
more staff available during peak shopping times.
This information is not merely helpful to the company; it
benefits the customer as well. For example, suppose a customer
visits a store and spends time looking at overcoats. Not finding
exactly what she wants within her price range, she leaves the
store without making a purchase. But the next day, she might
receive a coupon on her phone that offers a 20% discount on
overcoats at that store. The coupon targets the customer's need,
providing a direct benefit. If the practice results in positive
benefits for the customer, does that help to justify the tracking?
For some consumers, it might. Others may be suspicious,
wondering about the "coincidence" of receiving a coupon (by
text message) for the product they were considering the
previous day.
While some customers may feel as though they are being spied
upon by these tactics, companies are quick to point out that they
are shopping in a public place. They should expect that people
are able to see where they are, which products they are
considering, and what kinds of purchases they make. Stores
already analyze purchase receipts to see what items are often
bought together. (That is why grocers stock vanilla wafers next
to the bananas, because there is a clear correlation between
those two items, as sales have demonstrated.) The data gathered
by tracking customer movements in the store simply adds an
additional level of information, which is helpful to both
consumers and companies alike.
The Customer Perspective
More consumers are turning to search engines (such as

DuckDuckGo and Ixquick) that offer privacy. Independent
research has found that a majority of users continue to use
Google Search, but that an increasing number of online
customers (nearly three-fourths) do not like their searches being
recorded or having information targeted to them based on that
history. Others are concerned that information available to them
will be filtered according to their search history, meaning that
they no longer have access to all of the content available. Only
28% of those surveyed like the targeted advertisements that are
based on their searches (Burt, 2012).
What all of this indicates is that, while online search histories
are widely used, most consumers do not like them. In many
cases, they feel that recording searches is a violation of privacy,
especially since companies build complex profiles of individual
consumers based on the data. In other cases, they fear that the
information gathered might be used in unintended ways (for
example, being scrutinized by potential employers as a part of a
background check). In still other instances, customers are
dissatisfied with the information being presented to them based
on the profile that has been developed, and they wonder what
information has been filtered out.
Thus, online retailers might be thought to have an advantage in
their ability to profile customers and determine habits. But this
does not mean that the customers value the fact that data is
collected in this way. They certainly do not want to be tracked
in a physical store, where their movements are being recorded
(including how much time they may have spent in the restroom).
The complaints received by Nordstrom, mentioned earlier, are
an example of this; the customer backlash against the use of
tracking software was one of the reasons that led the department
store to discontinue the practice. (Much of the discomfort
consumers feel, however, may be based on expectations—they
don't expect their physical location to be tracked for marketing
purposes [Greenfield, 2013]. From the consumer perspective,
privacy issues may arise when stores are found to be doing
something unexpected.)

The heart of the issue, from a consumer perspective, is a
concern regarding how personal information is utilized. When a
company begins targeting customers based on gender, age, and
other personal data, the concern is that the company knows
more about the consumer than is needed; the only value is for
the company to target specific advertisements to that customer
in the hopes of selling products. When this kind of tracking
goes to the level of analyzing mood, the company is seeking to
know more about the consumer than many consumers feel that it
should. At the very least, this tactic is similar to sentimental
advertisements in that it wants to lure the customer into a
purchase based on something that is unrelated to the product
itself. At worst, this tracking represents a form of subliminal
messaging, where the company is targeting messages that will
appeal to customers—even if those customers are unaware of
the impact their mood is having on their purchasing decisions.
Thus, targeted marketing at this level borders on being
deceptive and manipulative, raising questions as to whether it is
ethical.
9.5 Applying the Theories
We have seen that there are a number of different areas in
which corporations arguably should deal with customers
responsibly. Most of these involve legal guidelines. All can be
viewed from the economic perspective of the business— whose
goal is to earn the greatest profit possible. But what would an
ethical analysis of these issues reveal? Let us begin by recalling
the first example explored in this chapter.
The Ford Pinto was introduced in 1968 and was produced for 10
years. During that time, the Ford Motor Company sold over 2.3
million vehicles of this model. The design, however, was
flawed, specifically in the rear of the car. The result was that
the fuel tank would sometimes rupture, possibly exploding,
when the car was hit from the rear. Since vehicles can be
expected to be involved in rear-end collisions, this seems to be
a significant design flaw, compromising the safety of the
passengers.

Ford ultimately recalled the cars, but only after pressure from
the National Highway Transportation Safety Administration
(NHTSA). It did not voluntarily recall the vehicle to make
repairs, even as some estimated that those repairs would cost
$11 or less per vehicle. Was Ford acting ethically in refusing to
recall the model?
Utilitarian
Utilitarians always base ethical decisions on the end results,
taking everyone affected into account. Thus, from this
perspective, the economic impact on the company should be
included in the deliberation. The cost of repairing all vehicles
using the flawed fuel tank design, estimated at $367 million, is
significant, especially considering the fact that only a handful
of those should be expected to actually malfunction and cause
harm to consumers.
If we were to stop here, the utilitarian argument might seem to
favor Ford's decision. The argument needs to be more complete,
however. It must take into account the psychological impact on
Ford Pinto owners when they learn that the car they are driving
might be defective—and won't be repaired. This could easily
spill over into consumer wariness toward Ford's other models,
as questions arise as to whether those cars share the same
defective design. All of these potential consequences need to be
considered in determining which actions will bring about the
greatest good for everyone involved.
When comparing outcomes, consider that no amount of
corporate profit can offset the loss of a human life, especially
when it could have been avoided. Utilitarianism is a hedonistic
theory, measured in terms of pleasure and pain. Even those who
stand to make profits by refusing the repairs cannot be pleased
when their refusal results in the death of a consumer. The best
outcome is not measured in dollars; this is not an economic
decision. Ethics has to look at how the decision will ultimately
affect individuals.
Based on this reasoning, utilitarians will argue that Ford should
have repaired the problem, despite the great financial cost to the

company, and that it should have done so voluntarily (instead of
waiting to be forced by the NHTSA). This would have meant
lower profits for a few individuals, while providing safety and
peace of mind to millions of consumers. The greater good, in
this instance, demanded action.
Deontological
Deontologists ignore consequences; the financial cost of a
decision certainly plays no part in determining whether the
decision is morally right. Instead, logic and reason need to be
applied, founded upon principles, to determine what should be
done.
Recall from Chapter 1 that deontologists will apply a "universal
rule test": Would it be morally acceptable for everyone, in
similar circumstances, to act in this way? Another way of
thinking about this principle would be to ask, "Would I want to
be treated this way, were the situation reversed?" This is
another way of assessing the respect for human dignity upon
which the deontological perspective is founded.
In this case, we can easily imagine that the owners and
executives of Ford Motor Company would not want to drive
vehicles made by another manufacturer, which had such a
defect. Since they would not want to be treated in such a
manner, they should not treat their own customers in that way.
To refuse to correct the error amounts to violating the universal
rule test. Instead of respecting the human dignity of their
consumers, they are placing those customers in danger in order
to enjoy more profits for themselves. Such a decision fails on
principle.
Conclusions
Different ethical perspectives use different criteria for
determining whether something is right or wrong. Utilitarians
look at consequences, whereas deontologists look at the
principles involved. These are very different ways of assessing
a situation, with very little overlap in thinking.
This does not mean, however, that utilitarians and deontologists

will always disagree about what should be done. There will
often be agreement—as in this case—but each perspective offers
its own reasons for the decision. The point is that knowing what
those utilizing a particular ethical perspective will say about a
situation tells us nothing about the conclusion that will be
drawn from a different viewpoint. Each viewpoint must reach a
decision based on the types of reasons on which that theory is
based.
It is difficult to justify Ford's reasoning from an ethical
perspective. Their decision seems to have been based on
financial considerations alone, and the ethical issues involved—
the lives and well-being of their customers—were overlooked.
With both the utilitarian and the deontological assessments (or
with those of other moral theories that might be employed), it is
important to note that these moral perspectives are not only
useful in assessing past events. The primary point of moral
reasoning is to help people understand which actions are right
or wrong so that the correct action can be chosen. Thus, instead
of simply assessing Ford's actions after the fact, those involved
in these decisions could have considered their decision from
these moral perspectives before a decision was reached—
allowing moral considerations to guide and shape their chosen
course of action.
Because it is impossible to see the future, seeking to apply
moral theories in this way can sometimes be tricky. This is
especially true, perhaps, with a utilitarian perspective, which is
based on the consequences: While we might predict what will
happen if a certain action is performed, it is impossible to know
for certain what results will be realized. If the goal is to act
ethically, though, this must be done as fully and accurately as
possible. Failing to consider the likely outcomes (in the case of
utilitarianism), or failing to think about the principles upon
which a decision is based (in the case of deontology or duty
ethics), means that the moral implications of a decision are

being ignored—and acting ethically, when it happened, would
be nothing more than a happy coincidence.

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