Ethical Behavior in Marketing: What Are Marketing Ethics?

Definition of Ethical Behavior

Have you ever been in this situation? You arrive at your favorite amusement park and rush to ride the brand new, state-of-the-art roller coaster only to find a 3-hour wait? Are you tempted to jump ahead in the line? What prevents you from doing so? The answer is that it is, usually, your ethics. Ethics refers to the moral principles or values that generally govern the conduct of an individual or a group.

They can also be viewed as a standard of behavior. The gray area of ethics occurs when one person's standard is not the same as someone else's. Society's ethical standards are for people to follow the rules and not cut in line. In business, ethics are very important, as companies must follow the unwritten rules to protect employee rights, the environment, and their customers.

Business Ethics

Business ethics determine companies' everyday conduct. They include both laws and morals, which determine how an employee will act in the business world. Laws define the boundaries of what is legal and are the written guidelines that must be followed in society. Morals are the rules people develop as a result of cultural norms and values and are, traditionally, what employees learn from their childhood, culture, education, religion, etc. They are usually described as good or bad behavior. Would a salesperson have good morals if they pushed a product on a customer that they knew was not going to help them solve a problem?

Three Levels of Ethical Development

Psychologist Lawrence Kohlberg famously identified three levels of ethical development that individuals typically progress through. By looking at these stages, we can begin to talk about whether behavior is ethical and what its motivations might be. The first level of ethical development is called preconventional morality. This level of ethics is most childlike. The best example would be to think of how a toddler acts during a day. They're very self-centered and only driven by rewards or punishment, such as a lollipop or a time out. Most business people have already moved beyond this level of ethical development...well, hopefully.

The second level of ethical development is called conventional morality, which means behaving in accord with society's rules and expectations. This level is when a marketing manager would be concerned with breaking a law and how it could be viewed by outsiders. Another way to look at this is peer pressure or doing what others would do.

The last level is called postconventional morality and revolves around the idea that people are more concerned about how they view themselves and not what others may think. Internal pressure to behave correctly and follow a moral path is the central theme. A marketing manager who has reached a level of postconventional morality would not just consider the legal ramifications of a decision, but also how it could possibly hurt the environment or, potentially, the customer.

Factors in Ethical Business Decision Making

Ethical values are time and situation specific. There are many factors that companies will face in determining how to make the most ethical decision. The length of time between the decision and consequence, the size of the consequence, the probability of the consequence occurring, and the number of people that could be affected are all considerations in determining an ethical path. For example, if you do decide to cut in line at the amusement park, what would be your consequence? People could be angry at you in line, or park management could expel you from the park. What are the chances that you would be caught?

If a marketing manager knowingly allows a product to be placed into the market, and it could be of danger to children, the number of people injured could be very great. For example, when an international toy company sold products made of lead that ended up injuring many young children, they did not take into consideration the large number of customers who could be affected by an unethical decision.

Ethical Development in Business

Ethics can be taught in business by providing training to employees to develop a personal code of ethical conduct. Corporate training sessions can be created to show employees the appropriate way to act in a business environment. A second way to instill ethical development is to create rules and guidelines to follow. One example of a rule would be 'you're not allowed to accept gifts from customers or vendors.' Companies can also develop ethics in their employees through the development of moral character. Moral character is the development of trust, integrity, standards, loyalty, and good business habits.

Most companies choose the route of corporate ethical training and offer guidelines on business practices. Companies also publish a code of ethics depending on their industry and laws. It is not enough to just tell employees what is right or wrong, but to explain the gray areas and how they could deal with a situation if it arises.

Lesson Summary

Ethics refers to the moral principles or values that generally govern the conduct of an individual or a group. Business ethics determine companies' everyday conduct. Laws define the boundaries of what is legal and are usually easier to determine. Morals are the rules people develop as a result of cultural norms and values. Ethics can be taught in business by providing training to employees to develop a personal set of ethical conduct. There are three levels of ethical development. They are preconventional, conventional, and postconventional morality. The ways companies can manage ethics in their employees is to offer training and employee guidelines.