Please enable JavaScript.
Coggle requires JavaScript to display documents.
Session 16: Ethical Issues for Marketing in a Global Context - Coggle…
Session 16: Ethical Issues for Marketing in a Global Context
Reading 24 Notes
"Globalisation - ethical issues"
Ethical issues for marketing in a global context
(Crane and Matten, 2016)
Differing standards of consumer protection
The exporting of consumerism and increase in cultural homogenisation
The targeting of marketing at lower-income consumers in developing countries.
Geographical segregation of business operations.
Differing standards of consumer protection
Some companies take advantage of differences in the legal regulations to market their offerings where there are fewer constraints on their activities.
There may also be less consumer protection from socially objectionable advertising where standards bodies are self-regulatory and lack resources
compared with the powerful industry lobbies (Karnani, 2007).
Can happen in any country but prominently in developing.
Exporting consumerism and increasing cultural homogenisation
There is criticism that global marketing involves exporting not only goods and services to other parts of the world, but the transmission of the values embedded in them and therefore
encourages the spread of consumerism.
Loss of national culture.
There is an impact on consumer wellbeing.
Oliver James (2007) argued that an obsessive spiral of consumerism made people more likely to succumb to depression, anxiety and addictions – a phenomenon he has dubbed as ‘affluenza’ – and that this was spreading to the rest of the world.
Globalisation has led to cultural homogenisation at the expense of local cultures.
World becoming more as one identity rather than having individual cultures.
Crane and Matten (2016) highlight the similarity of shops and products offered on high streets in cities around the world and the dominance of global brands in entertainment and sport, with concern
focusing on the aggressive tactics of some multinational corporations (MNCs) that have squeezed out local providers and the role of international marketing activities in exporting consumerism.
Increasing affluenza and decreasing prices have stimulated consumption of goods such as clothing (Morely, et al., 2006).
Traditional forms of clothing being lost for global brands and fashion trends.
Clothing shopping becoming a way to construct consumers' self identity and being seen as an enjoyable leisure activity (Rajput et al., 2012).
Concerns about consumerism and overconsumption of disposal goods.
"the throwaway society"
E-waste
Covers all items of all types of electrical and electronic equipment and its parts that have been discarded by the owner as waste without the intention of re-use (Step, 2014)
Accounts for a high proportion of global non-recyclable waste and contains hazardous elements
for people and the environment
Technology has been rapidly adopted in Asia, but most Asian countries are poorly equipped to deal with the mounting levels of toxic e-waste that is processed by both professional companies and informal workers (Romann, n.d.)
Has been argued that the world would not be able to support the burden of everyone consuming to the level that the majority enjoy in developed countries (Durning, 1992) and that the developed
countries consume more than their share (Buchholz, 1998)
More sustainable consumption also demands that more attention be paid to product life spans (Cooper, 2002).
Sustainable consumption in the short-term include making products less harmful to the environment, product recapture (through recycling,
refurbishing or re-manufacturing), product leasing and product sharing (Crane and Matten, 2016)
Targeting Lower-Income Consumers in Developing Countries
Two key concerns...
Marketing products beyond the reach of low-income consumers perpetuates dissatisfaction.
Exclusion from targeting can also increase the gap between the affluent and the poor with respect to vital issues such as health
Consumers are better able to pay for them
(Petryna et al., 2006). However, targeting vulnerable populations in which levels of consumer protection may be lacking raises important ethical
issues.
Low-income consumers might be exploited.
Do not have the same choices open to them as more affluent consumers. They may also
not have the level of education or information to make informed decisions about consumption and use of certain products.
Consumer vulnerability has been conceptualised as powerlessness in the marketplace that negatively affects consumers’ personal and social self-perceptions (Baker et al., 2005).
Prahalad and Hammond (2002, p. 48), among others, argued that ‘by stimulating commerce and development at the bottom of the economic pyramid, MNCs could radically improve the lives of billions of people and help bring into being a more stable, less dangerous world’.
Prahalad and Hammond asserted instead that poor communities had a large aggregate buying power, often bought luxuries, paid more for them than middle-class consumers and that there were plentiful examples of people successfully harnessing technology for a range of purposes.
Range of barriers such as poor
infrastructure and connectivity and corrupt intermediaries.
Criticism of Prahalad and Hammond’s (2002) arguments included accusations of ‘corporate “poor washing” (i.e. purporting to act responsibly
with respect to the poor), through which an agenda for boosting profits is packaged as a poverty antidote’ (Mittal and Wallach, 2004, pp. 6 and 8).
Geographical Segregation of Business Operations
Separates geographically some of the causes and effects of the scope of a business’ operations.
Consumers might be impacted indirectly,
however, whether or not they are aware of it, by the loss of manufacturing jobs in their home country. Consumers also downplay the negative effects
of their consumption behaviour (Kilbourne and Pickett, 2008).
Not easy to ascertain the ethical credentials of products and services. Many goods have components from a range of sources and others
have long and complicated supply chains that even the companies themselves struggle to monitor.
Large MNCs have taken advantage of national boundaries on government control to reduce the tax they pay without violating the laws in
different countries.
Fuelled calls for greater corporate accountability (Crane and Matten, 2016).
Reading 25 Notes
"Globalisation and Corporate Social Responsibility"
Corporate Social Responsibility (CSR)
Is about corporations taking responsibility for the conduct and impact of their businesses’ (Harris, 2011, p. 30).
3 Main Perspectives
It is the right thing for corporations to do –
the moral argument
It is expected of corporations –
there are pressures on corporations to demonstrate CSR.
It is in corporations’ interests to engage in CSR –
enlightened self interest
Strategic Corporate Responsiblity (SCR
) - he
downgrading of a corporation’s responsibilities to ‘a mere market opportunity to achieve competitive advantage’ (Maak, 2008, p. 356).
High-profile brands have had rep damage from...
The widespread use of long, complicated supply chains
Production by subcontractors in developing countries
The highly competitive markets
The many potentially damaging effects of production processes on social wellbeing, human health and the environment.
Debates about CSR
Can a corporation be regarded as a moral agent?
It determines whether corporations can be
held morally responsible.
Central to this debate have been arguments
relating to intentionality and the attribution of blame and punishment (Moore, 1999):
Intentionality has been argued to be attributable to corporations on the basis that they have an internal decision structure, consisting of a hierarchical chart indicating the corporation’s internal levels and
positions of power together with a corporate policy specifying decision rules (French, 1979).
Membership of a corporation has been reasoned to involve accepting shared responsibility and consequently shared blame (Moore, 1999).
In law corporations can be criminally liable – as can individuals and senior officers in a corporation (Moore, 1999).
Treating corporations as moral agents was more convincing and reflected the reality of most people’s ways of viewing the world.
The Nature of CSR and Corporations Responsiblity
Debate about the nature of CSR surrounds the extent to which CSR is discretionary.
Some say CSR is discretionary, some say its an essential commitment to ethical principles.
CSR reporting of many corporations and is also known as the 3Ps – ‘people, planet and profits’
(Elkington, 2004).
Commonly-cited set of responsibilities are economic, legal and ethical responsibilities (Carroll, 1991; Schwartz and Carroll, 2003).
‘It is how a company carries out its mainstream business operations that determine whether or not it is socially responsible.’ (Marsden 2001, p. 46).
Accomplishing CSR
3 Perspectives on How Best to Accomplish CSR
(Goodpaster and Matthews, 2001)
Corporate morality is best achieved through the market system (i.e. by corporations focusing on being profitable).
Drawback
- There is variation in the level of government regulation around the globe.
Governments also cannot always be relied upon to act disinterestedly. They have to balance a range of interests, and democratic governments have to
please the majority of voters, who may not be well-informed about social and environmental matters.
Government intervention is needed to ensure moral behaviour by corporations with corporations’ responsibilities being limited to political and legal compliance.
Drawback
- Leaving corporations to self-regulate their responsibilities is subject to
similar limitations. Corporations may also find that their interests sometimes conflict with those of other groups, as happened in the oil industry in
Nigeria, which raised human rights’ issues (Amao, 2011). The sheer size and power of some multinational corporations and corporate lobbying are also of concern.
Regional variations in perspective on who bears responsibility and how it is handled have been identified (Crane and Matten, 2016)
Look at page 206 in Block 2 book for differences between Europe, North America and Asia.
Corporations should manage their social responsibilities themselves.
Drawback
- relying on market forces to eliminate organisations that ignore their
responsibilities depends on consumers’ ability to discriminate between them in their purchasing decision-making
There is a notorious gap between consumers’ ethical purchase intentions and their actual behaviour (Alwitt and Pitts, 1996).
Three stakeholders (consumers, government and corporations) could be seen as having a role to play and the tensions between the three approaches mighthelp to ensure that all three parties maintain a focus on CSR (Harris, 2011).
As Murphy (2009, p. 247) noted: ‘While corporations bear significant responsibility for their activities, other parties also must assume theirs’.
Civil society also can act as a fourth mechanism for constraining business where its activities are detrimental to public welfare (Karnani, 2007).
Non-government organisations (NGOs), the media and campaign groups play a role in monitoring corporations’ activities and bringing attention to
bear on ethical transgressions