Ethical Challenges for Global Corporations around the World

Ethical Challenges for Global Corporations around the World

Introduction

Global business environment creates many challenges and threats for modern businesses. Marketing management can bring administrative skills to bear in solving social problems. This will require revamping of both business-action forces and society’s viewpoint of business. Marketing leaders are now being challenged, by public concern for many market situations, to sharpen their vision and take a major role in resolving some of the problems of social change. The government on its own has not been too successful in meeting such problems as adequate housing and jobs for the hard-core unemployed, and is turning to business. Some activities previously considered purely governmental activities are now in the marketing domain of private enterprise and through creativity and innovation may prove to be economically profitable. Social profit can be consonant with corporate profit. Increased social involvement can be achieved by blending government and business perspectives in the desire to maintain a business climate and also “do the right thing.” This requires the acceptance of new social commitments and responsibilities on the part of business. Yet the indispensable role of business and marketing in securing social progress and in improving the quality of life has not been widely studied or understood. Marketing executives are confronted with a crisis of legitimacy.

Global Challenges

Social Differences and Morals

The influence of marketing transcends the strict sale of products and services. Since marketing has a profound effect on our culture, it should augment society and stimulate social progress. It must have standards of taste, conduct, and integrity that extend well beyond legal minimums-it must become more responsible and socially aware (Pogge and Horton, 2008). Thus it appears that the social role of marketing will be sharpened by the increasing public concern for responsible business actions, by greater awareness of the social implications of management decisions, by rising social expectations, and by better educated, trained, and more socially concerned managers who perform marketing functions. Marketing executives, in the long run, have no alternative but to act in a socially responsible manner (Barnes et al, 2003).

Government Regulations and Global Corporation

Many marketing executives seem to be altering their viewpoint of government roles — from the traditional perspective of government intervention being inherently undesirable and wrong to a recognition of the necessity of a government role in business as a regulator, arbitrator, stimulator, customer, and even partner (Pogge and Horton, 2008). This orientation is embodied in the concept of a new, socially conscious capitalistic or market system. And in fact, there seems to be a feeling today among many young people that government and not business is where the action is. In fact, some of our laws may not foster the acceptance of social obligations by business. For example, if socially responsible action requires concerted cooperation by several companies, the antitrust laws may be violated. What may be in the best social interest may, therefore, be illegal. Some exceptions are being considered. The collaboration and cooperation of several insurance companies in aiding the reconstruction of the core areas of cities; the combination of resources of several competitors to attack air pollution problems; and the encouraging of manufacturers to standardize parts, packages, and products are examples. There have been discussions about limiting the amount that can be spent on advertising for a product, of controlling trading stamps, and of investigating various promotional schemes and merchandising activities. Such actions pose serious questions about marketing’s social role (Barnes et al, 2003).

Cultural and National Differences

Global corporations have to deal with cultural differences and cultural values of consumers. In spite of the increased role of cultural management, consumers undoubtedly have many justified complaints. They are entitled to products that work; protection of health and safety; warranties that are clear and warrant; information that facilitates intelligent choice; and packages and communications that do not deceive (Pogge and Horton, 2008). Surely “consumerism” will have some beneficial results. It may improve the position of groups of consumers and lead to the elimination of some undesirable marketing practices. However, it can also result in other undesirable consequences such as more limited consumer choices, stifling of initiative, development of cumbersome bureaucratic structures, limiting innovation and competition, presenting a misleading picture of the accomplishments of business, and responsible business action. Sometimes consumerism merely results in political gain and not in the improvement of marketing imperfections that should be the true objective of government action. There exists a tendency among some: interested in promoting “consumerism” to see business as the villain with governmental agencies as the protective shield. The relative effectiveness of the marketing system in satisfying consumer wants and needs as compared with other economic systems, and the great freedom of buyer-seller relationships that it promotes, are often forgotten as attention is centered on an extremely small proportion of market transactions that involve intentional business abuse (Jennings, 2008).

Marketing Ethics

Thus the question of how a marketing executive ought to behave in conflict situations is difficult to handle. The basic problem of marketing ethics is one of personal commitment-whether the executive is trying to do what is right and avoids doing what is wrong (Jennings, 2008). Second, there is the problem of standards or norms by which to judge an action. It indicates that decisions may be based on mores (which change through time), natural law, or divine law; that it is indeed difficult to obtain universal agreement on norms of ethical behavior; and that the application of different norms can lead to conflicting results. A major ethical problem for marketing executives is the lack of objective standards by which to judge actions. Moral and ethical principles’s and generalizations are fine as abstract guides and rules, but executives encounter difficulties in trying to apply them to specific situations, to the challenges of handling concrete problems of moral perplexity. A code of relative marketing ethics or situation ethics, ethics applicable to particular sets of circumstances and reflecting the individuals involved in a decision, may govern in certain decisions. Permanent, objective, ethical standards are not available (Pogge and Horton, 2008). What was deemed ethical at the turn of the century need not be today, and today’s ethical decision may be tomorrow’s unethical solution. There is no absolute, impersonal, or easy approach to many ethical marketing questions. We do require a better understanding of individual and corporate responsibility in our modern industrialized society with its group actions and decisions and inextricable interrelationships. In instances involving deceptive or unsavory practices such as fraudulent advertising and misleading pricing practices, the ethical issues and kinds of actions that ought to be taken are clear (Pogge and Horton, 2008)

Conclusion

Global marketing ethics appears to be in a new phase of development, one emphasizing its contributions to the social system. It is progressing from the entrepreneurial and decision focus to that of social concern and hence, a more professional orientation. Marketing is becoming more conscious of ethical considerations and societal responsibilities — its humanistic domain. Although such questions have been raised, marketing decisions and problems are inextricably intertwined with ethical issues. This is evidenced in such issues as truth in advertising, price fixing, price discrimination, a variety of sales and merchandising tactics, incomplete marketing information, truth in lending, branding and labeling decisions, and implied product warranties. Ethics is the discipline dealing with what is right and wrong, with moral duties and obligations, with a set of moral principles.