29 February 2012
ETHICS – PHILOSOPHY (ETHICS PHIL 143)
Is it erroneous to utilize office equipment to facilitate your children or spouse do schoolwork? Is a $50 gift to a customer objectionable? A person cannot exist on this planet, live a daily life, pursue a career, or raise children without being faced with such constant ethical dilemmas and choices of varying degrees of significance. The extents to which we each develop our own moral compass and execute decisions ultimately decide the level of success and/or resistance we have in leading our lives. Ethics, as defined by Dessler (p.553), refers to:
“..the principles of conduct governing an individual or a group.”
For the most part ethics is a systematic set of rules we live by which follow our morality or collection of values we have established. We establish these values based on what we are taught which lessons are adapted to the environment and the culture we live in. How well our individual set of values fit with the culture within we live, dictates how well our lives are lived personally, socially, and in business.
Ethical decisions are always concerned with two essential elements: normative judgments, and morality. Normative judgment involve that any thing is bad or good, right or wrong, superior or inferior. “That`s a great place to spend upcoming holiday!” will be termed as normative judgment while “we will spend our holidays at this place” is categorized as non-normative statement. As for as Morality is concerned, moral standards are society`s accepted standards of behavior which must be followed by everyone otherwise it may result in punishable actions taken by authoritative or legislative bodies. Examples of breaching moral standards include lying, murder or slashing.
Fatefully it is not always lucid that what is ethical and what is not. It is a general practice that what seems to be legal and allowed by company policies is mistakenly categorized by employees as ethical. Using law as a guide does not necessarily leads to ethical decisions. Dismissal of a 39-year old employee with 20years term without notice or cause may be legal but it may be viewed by some as unethical. Dessler (p.554) quotes words of Patrick Gnazzo, vice president for business practices at United Technologies Corp., who elucidate it this way:
“Don`t lie, don`t cheat, and don`t steal. We were all raised with essentially the same values. Ethics means making decisions that represent what you stand for, not just what the laws are.”
I have spent the past twenty years in the marketing companies, working my way from market research specialist, to advertising agency executive, to my current position as a marketing manager. The most vital principles for the successful marketing efforts are being customer-oriented and to be honest with the clients or customers on which the company`s victory depends. I can recall an example of The Body Shop which marketed its whole range of products on the basis of ethical message in order to associate its image with justified practices. My success in developing business and relationships with clients has been to adhere firmly to ethical business practice. This has enabled me to develop trust with my clients and stand-out from my competition.
The most fundamental experience I have gained in my life is through the employers for which I have worked. Almost every year each of these companies hold ethics training for the employees. These courses are put-on by the in-house or external legal counsel. These courses cover industry specific topics where ethics can and are violated, explaining the cause-and-effect of such actions. As continuously stated by Paine in the Harvard Business Review article, a culture of ethics must reside at the cultural level of an organization in order that individuals of an organization can recognize ethical business practice. As she states,
“Many people resist acknowledging the influence of organizational factors on individual behavior – especially on misconduct – for fear of diluting people`s sense of personal moral responsibility. But this fear is based on false dichotomy between holding individual transgressors accountable and holding “the system” accountable. Acknowledging the importance of organizational context need not imply exculpating individual wrongdoers. To understand all is not to forgive all.”
The most prominent reason why ethics code fails to perform their role within workplace is due to the organizational culture which has been defined as “the characteristic values, traditions, and behaviors a company`s employees share” (Dessler, p.559). What the boss does or what acts he perform sends clear signals to employees regarding acceptable and unacceptable behaviors within the workplace, thus what ethical policy of the company says is of least importance unless and until that policy is embraced by all senior executives as well.
The companies I worked at often reveals their culture and shared values to outsiders through the use of certain symbols and behaviors including, ceremonial events, success stories, written and spoken commands, office layout, organizational structure, ethics code, etc. For instance, if a firm is having a shared value: “customer is always right” then this value is found to be reflected in the behaviors of managers and employees of that firm as well. The founder of JetBlue Airlines, David Neelman is often found to be helping out passengers at the gate or handling luggage up into the plane because he wanted all employees to follow the message that, “we`re all in this together”. Similarly, my employers also took the same route to clarify their expectation with respect to the values they want their subordinates to follow.
In my industry the most available areas for unethical practice are financial interests, invasion of privacy and counterfeiting competitors` actions, misinforming customers through advertising, price wars, and marketing tactics by pharmaceutical companies. The financial aspect is a good case-in-point as this temptation to turn the tables towards personal gain exists in nearly every business and every aspect of life. The companies involved in marketing products and services solely focus on maximizing stockholder wealth rather than having a close eye on enhancing customer value. Such overlooking of stakeholders, particularly customers, is imprudent but is considered normal by marketers.
The invasion of privacy is the most prominent ethical danger component in the market research. It has now become a common practice among marketing companies to track every single thing related to customer no matter if it can be known by interfering into their personal life. Even competitors` actions, past financials, or confidential documents are forged & tracked by every possible way in order to beat the competition. A slight variation in name or changing the products` name while keeping bottle shape and color same as that of competitor`s, or copying competitors` product features outright – all are commonly practiced by experts for the sake of short-term publicity and profits.
Apart from that, I have also exposure to a concrete experience concerning ethics that is advertising content and layout for promoting products or services that is cleverly modified by the companies in order to dupe the customers and increase sales. For instance, tobacco in 1940s and 50s was heavily advertised as promoting health so as to market it in a beautiful wrapper. I have also experienced working for such advertisements that create negative impressions on youth or children triggering them to involve in notorious activities but are considered essential to create hype. Furthermore, attack ads are also frequently used in this area where competitors` products are shown with negative images in order to project company`s own product with advantages.
Regarding price experiences, companies involve intensively in the price wars by reducing their prices in relation to competitors ultimately reaching nowhere at the end with zero profits. The aim is to win or snatch the customer from competitor by luring him through price reductions. Other experiences concerning ethics include marketing by pharmaceutical companies in which physicians are offered attractive packages in return for prescribing marketed medication rather than a cheaper one that might be better for patient.
I cannot say that adhering to a strict ethical conduct of business is something that I have always accomplished. I believe I was raised with good values and those values came with me as I entered my working life. However, in my youth those values were applied towards my studies, sports, my interaction with friends and neighbors, and to some small extent work. It wasn`t until I was introduced to business and organization that I was presented with the spectrum of ethics as it applied towards day-to-day business and organizational culture. It was during this time that I was exposed to varying interpretations of ethical business practice. Along the way either under the tutelage of a boss or in developing my skills in client development that I have learned what ethics and the application of them in business means to me personally.
There is always a balance between doing what is right and making an organization successful. In too many cases it seems that organizations will take the path of quickest results. I have learned that a long-term objective of cultivating business relationships through trust and open transaction reaps the greatest benefits. While in the short-term the profits may not be as lucrative as a short-term approach, such as, following a product oriented approach and neglecting the customers` perspective, does not cultivate a long-term relationship with a client. Along the way I have learned that a long-term relationship is cultivated through honesty and market oriented approach in which customer is the starting point of every effort, and as a result the long term profits of the organization where I work will benefit.
When it comes to lucrative profits, I have developed a clear cut market oriented approach that is delivering what is being dictated by market or customer irrespective of the fact that the deal is profitable or thrashing. I feel it is important to overlook self-interest and focus on customers interests which will definitely result in an elevated share price because customer is the major drive behind company`s success. This is also evident by the fact world`s most ethical companies are also the most profitable ones. The graph below shows how the publicly traded world`s ethical companies stack up against S&P 500 (Business Review):
This shows that investments in ethical practices can prove to be lucrative for marketing companies.
INVASION OF PRIVACY & COUNTERFEITING COMPETITORS` ACTIONS:
I have developed an understanding that intrusion into customers` personal life result only in disgrace and shame. To become customer oriented, it is essential to converse with them openly in a friendly way in order to create a long-term relationship. For instance, pizza hut has a customer database that is sorted by customer name, frequency of visit, the meals they order frequently, etc. This database is used by marketers wisely to project what customer will like to have in their next visits or calling them by their name while placing an order. All these tactics can help build an honest relationship with customers without invasion of privacy. Secondly, it is quite important to track competitor`s actions at every stage but I believe that every marketer should know the basic principle of marketing that competitive advantage is achieved by being unique and offering commendable customer service rather than simply copying competitors` strategies and/or policies to deceit customers. However, I learned that it is also important to be cognizant of my competitors` actions so as to keep pace with dynamic changes taking place all around but to a limited extent.
MISINFORMING CUSTOMERS THROUGH ADVERTISING CONTENT:
I have learned that explaining the exact truth a change is required is important in cultivating a trusting relationship explaining what the options are, not just the options that I am prejudiced to, but also the options which I feel will benefit the client, from their perspective. I feel it is important to review the options and weigh the costs from the perspective of the client, not just the options which will prove most lucrative to my position. When the client and I choose the best option for advertisement content and layout, it is then important that I make only the profit margin which was agreed to at the conception of the advertisement.
Secondly, although I believe it is very essential to fulfill customer requirements while designing the advertisement layout but ethical values should not be compromised at any cost. I developed an understanding that a strong ethical image is developed by communicating the real picture of the product rather than deceiving the customers.
I observed that it`s not ethical to involve in price wars. Having our own pricing strategy will surely lead my company to competitive advantage. The best thing I have learned is that collaborating with competitors and pricing the products at the same price as that of competitor`s results in a win win situation for my company. Secondly, I have learned that opting for either price skimming or price penetration strategy assist my company to convey a professional image to our customers that we work strategically for designing our marketing efforts not just follow the competition.
MARKETING TACTICS BY PHARMACEUTICAL COMPANIES:
I learned that deliberate marketing tactics that are used by various pharmaceutical companies result only in fake & replica publicity that become extinct after some time. I believe that having strong ethical values is very important while marketing medications or drugs to physicians to have a long-standing relationship. The long term relationship characterized by honesty and trust will only foster when physicians will have discretion in prescribing their own medicine or the marketed one. The use of foolhardy marketing tactics like offering holiday trips or monetary packages creates a disgraceful impression on physicians ultimately resulting in poor treatment for patients as well. This will obviously deteriorate the doctor patient relation. In this line, my way of working is totally different. I believe that drugs need to be marketed on the basis of its true curing nature and other features while correctly informing and assuring physicians of the treatment results.
It has been this honest and market-oriented philosophy that I have developed during my career which I believe has provided the best success in developing client trust. When the client has trust, they choose to hire me and my organization again on future projects. It is this long-term relationship which best rewards the financial goals of an organization as well. It seems the more I practice and apply the application of honesty and market-oriented marketing efforts, the more frequently I receive positive responses from my clients.
In the text Organizational Behavior, ethics is defined as,
“….the study of moral issues and choices. It is concerned with right versus wrong, good versus bad, and the many shades of gray in supposedly black-and-white issues. Moral implications spring from virtually every decision, both on and off the job. Managers are challenged to have more imagination and the courage to do the right thing to make the world a better place.”
I spent the first four years of my college education in the marketing field, and since then have developed a career in marketing management. Both of these experiences involved learning and application of marketing strategies & tactics, advertising, promotion, selling efforts etc, but neither delved much into ethical behavior and the role that this behavior would play in the development of my career.
As my role has advanced in my career, and I have taken the senior representative role on projects, I have discovered it is increasingly important to be transparent in my actions. It has become evident to me that if any action I take needs to be hidden from anyone associated with my projects then the action is not truly ethical. As covered in my concrete experience, my experience and witnessing of ethical breaches comes at the application of market research, advertising content, financial interests, price wars, & marketing tactics by pharmaceutical companies.
In the view of reflective observation, I have developed a Golden Rule to lead my personal life ethically. This rule is “to act in a way that you would want others to act toward you.” As for as professional life is concerned, my way of working is to take a TV test and practice professional ethics before being involved in any action concerning ethics. The TV test is about asking a simple question to one, “Would I feel comfortable explaining this action on television to general public?” and professional ethics orders me to take only those actions that would be viewed as proper by an objective panel of my professional colleagues. Such ethical marketing practices have enabled me to build a strong and long-term relationship with my customers characterized by the elements of trust and honesty because I believe that being dishonest to one`s customers or other stakeholders is enough for a person to be failed marketer.
Conceptually, I have developed an understanding that as marketers we must do not harm our stakeholders. We should avoid taking detrimental actions and adhere to highest ethical standards so as to craft the best position in the consumers` mind. Additionally, I learned that we must foster trust in the marketing system by being committed to fair and just dealings in areas of pricing, product design, communications, market research, etc. That will eventually contribute to the efficacy of the exchange process of my company.
Furthermore, it is very important to embrace ethical values to set an example for my subordinates. Embracing ethical values implies more than just verbally giving the instructions. I learned that as a successful marketer I have to be straightforward in dealing with customers and stakeholders, I must admit the penalties of my marketing verdicts and stratagem I have to balance fairly the buyers` needs with that of sellers` interests, to revere the basic human self-respect of all stakeholders, to be transparent in my marketing operations, and most importantly, to execute the financial, lawful, humanitarian, and societal responsibilities that serves stakeholders.
All these concepts and ideas concerning ethics can be summed up to five core values: honesty, responsibility, fairness, respect, transparency, and citizenship. Hollender & Fenichell (2004, p.29) defines the concept of ethical behavior and Customer Social Responsibility as:
“… An ongoing commitment by business to behave ethically and to contribute to economic development when demonstrating respect for people, communities, society at large, and the environment. In short, CSR marries the concepts of global citizenship with environmental stewardship and sustainable development.”
It essentially implies that in order to build relationships and boost customer confidence in the veracity of my company`s marketing efforts, I have to affirm these above core ethical values from the core of my heart.
Adam Smith states in his Theory of Moral Sentiments (1784, p.140):
“Man ought to regard himself, not as something separated and detached, but as a citizen of the world, a member of the vast commonwealth of nature and to the interest of this great community, he ought at all times to be willing that his own little interest should be sacrificed.”
Therefore, I learned that self-interest alone should not be the guiding force that rules the business. It is essentially important to ignore my personal interest and carry on with that of buyers` interest. The problem intercepts this idea because company demands elevated bottom line not just the customer interest. In this line, my understanding dictates that there should be a balancing line between seller and buyer interest. I always believe to follow the win-win situation that can benefit both, my own efforts as well as that of my customers. This scenario wins more and more customers and clients for me that ultimately result in more of profits for my company.
My level of understanding enabled me to develop a notion of pricing the product strategically rather then relying on intense price wars. I believe that price send a signal to buyer regarding the quality of the product. Fixing the price too high will lead to no demand from my customer while fixing it too low to penetrate the market, there will be no profits. Also, competitor`s reactions are also to be gauged extensively so as to decide on whether to price higher or lower than competitors. Finally, cost is the figure that is the least that can be charged. Therefore, price must be set cautiously in accordance with the customers` demand, competitors` reaction and prices, and lastly the cost involved in marketing operations.
Additionally, I developed an understanding that the price must justify the quality and value that my product offers to customer. If product is priced too high and is not priced according to market situation (demand, competitors and cost) then it will be an unethical practice whereas in other case, pricing too low or the lowest that can be charged, customers can associate the low price with low quality image as is the common human psyche. Therefore, price must be set in accordance to products` true features and must be in line with the ethical values that my company embraces.
INVASION OF PRIVACY & COUNTERFEITING COMPETITORS ACTIONS:
My concrete experience and reflective observation concludes that it is quite essential for a successful marketer to keep pace with dynamic technological, environmental factors and ever-changing consumers` tastes and preferences. The literal concept says: “sleep with the customer.” Acting professionally, my concepts and ideas also spells out the same that I have to closely scrutinize the competitors as well as consumers actions so as to stand-out from the competitors. However, caution is necessary in the extent to which competitors & consumers` actions are being closely examined.
MISINFORMING CUSTOMERS THROUGH ADVERTISING CONTENT:
A long term relationship with customers is fostered by embracing ethical values at the core of heart and practicing them in personal as well as professional life. Honesty is the pre-requisite of trust and honesty requires marketers to communicate their offerings to their customers in a fair manner. My professional ethics stand out on the notion that whatever the channel of communication or promotion being used, information about the product features and performance must be delivered accurately & truthfully in line with ethical standards.
MARKETING TACTICS BY PHARMACEUTICAL COMPANIES:
The marketing discipline of pharmaceutical companies is characterized by a fallacy that promoting drugs through deep discounts, frequently offering free samples, enticing doctors through free air tickets for holiday trips, or offering other monetary temptations to doctors and physicians in return for prescribing the marketed drugs to their patients, will result in elevated sales and profits for the company. From an ethical perspective, these practices do not fulfill my idea of TV test and professional ethics test explained above. However, some people still consider them to be legal because promotion and marketing tactics are the important phases of marketing efforts but on a serious note, my relationship with physicians stand out on the basis of trust and honest marketing and due to this reason my clients prefer to prescribe my company`s drugs more.
In a nutshell, my reflective observations conclude on the idea that marketing efforts in all the areas must be used openly & truthfully together with market-driven philosophy and long-term considerations rather than mistakenly using immoral short-cuts for the sake of winning fake publicity.
I think it is natural, as a human being, to apply what we have learned to other aspects of our life. I suppose since I spend the largest portion of my time at work, in relation to any other single aspect of my life, I have learned the most about ethical values through my interactions at work. So, considering what I have learned about ethics and embracing the strong ethical values and applying them to other aspects of my life, I have been able to transcend those values to the other aspects of my life specifically, my personal relationships.
I have taken my learned ability to embrace and practice ethical values and applied it in my personal relationships. It is in these relationships that we are confronted with varying degrees of ethical dilemmas and different choices concerning ethics the most. I have changed how I chose to solve and react to these dilemmas being presented to me by others. Often my friends ask me for favors that seem to be reasonable in their opinion but are actually not in line with ethical standards and values. Before I had developed understanding of adhering to ethical values, I used to accept such favors. Although I did not want to break my own ethical standards, I had to give my acceptance so as to honor my friendship and promises. Later on, I realized that such kinds of things are inferior and immoral, ethical and moral judgments should be my first and foremost priority because ethical values represent what I stand for. These values show that I respect my self-esteem more than anything else.
Consequently, I learned that such kind of values have strengthened my personal relations more resulting in a large social network. It left a positive impression on my personality and encouraged my friends as well to change their thoughts and perspectives regarding immoral actions because a person is known by his or her friends. However, problem arises in handling such kind of situation in which we have to say NO to our close relations for any wrongful act. We don`t want to lose our friendship as well as we cannot compromise on our ethical values as well. So how to make people change their thoughts & how to handle such situations can lead to a new great cycle of observation with active experimentation through my professional relationships.
Similarly, while interacting with strangers, I used to keep my ethical values at the side and deal with them in a strict manner no matter what the situation is. It`s probably because we have an innate fear of being cheated by unfamiliar person. From my professional life and active experimentation of ethical values in my personal life, I learned that ethical values should be embraced and practiced for all not just for relatives or for oneself. Its similar to Holistic Marketing concept in which whole chain of operations involved in the company from suppliers to producers to marketers to distributors are to embrace company`s brand in the same fashion and at all the time. Similarly, ethical values should also be embraced, practiced, improved and applied in the same fashion for all people whether relatives, friends, or oneself. There has to be no discriminatory practices because being fair and just is the fundamental basic of ethics.
It is these understandings about ethical values, mentioned above, that I now use to maintain and develop personal relationships. I am a shy person by personality, taking a more reactive approach towards practicing ethical values. The business development nature of my job has developed my ethical values towards a more proactive approach. I have learned to apply my ethical and moral values in my personal interactions and changed the way I approach people in my personal life. I find that my personal relationships are much more rewarding as a result and the people in my life actually seek me out for conversation and advice.
The development of the ethical values discussed above encompasses all the aspects of ethics, including honesty, responsibility, transparency, fairness, respect, citizenship, customer-oriented, and developing and maintaining personal and professional relationships. By combining the concrete experience we gain in everyday life and in our careers, observing and reflecting on past ethical behaviors and the outcomes they provided, then forming an abstract opinion of these experiences we can form an analysis of our own ethical values at personal interactions.
Once we have taken this analysis and applied Kolb`s stages of learning to determine where we fall short, we can begin to work at honing our application of ethical behavior and practice deliberate active experimentation to all forms of ethics we encounter in our daily routine.
Stages for Improving ethical values/behaviors/standards
Stages for Improving ethical values/behaviors/standards
Learn ethics by experience reflect on what we have learned reach a conclusion concerning where our ethics` understanding and moral values lie determine what we need to improve on and start the cycle again by applying our new understanding of ethics. It is through this active cycle that we continue to improve our ethical values.
Business Review. US Business Scores Big on World`s Most Ethical Companies List. 21 March, 2012. Web. 23 September, 2012.
Cravens, David. & Piercy, Nigel. Strategic Marketing. 10[th] ed. Boston: McGraw-Hill/Irwin, 2012. Print.
Dessler, Gary. Human Resource Management. 11[th] ed. USA New Jersey: Prentice Hall, 2007. Hardcopy.
Hollender, Jeffrey. & Fenichell, Stephen. What Matters most: Business, Social Responsibility, and the end of the era of greed. Manhattan: Random House Business Books, 2004. Print.
Kinicki, Angelo, and Robert Kreitner. Organizational Behavior: Key Concepts, Skills, & Best Practices. 4th ed. Boston: McGraw-Hill/Irwin, 2009. Print.
Kolb, David A. Learning Style Inventory. Version 3.1 Boston: Hay Group , 2005. Print.
Pain, Lynn Sharp.”Managing for Organizational Integrity”.The Harvard Business Review. March-April. 2004. Print.
Smith, Adam. The Theory of Moral Sentiments (Indianapolis: Liberty Fund, 1984), p. 140. Print.
29 February 2012