Businesses To Ignore Ethical Responsibilities Commerce Essay

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Nowadays, it is becoming increasingly difficult for businesses to ignore ethical responsibilities. In fact, businesses are faced with the problem of not only to produce quality goods at least cost but also to be responsible citizens in their day-to-day activities (Wood, 2002). Mauritius is today at crossroads since it is facing increasing competition in the sugar, textiles, tourism and financial sectors. Thus, it has to find innovative means to mobilize capital for investment and diversification purposes and also to retain its share of the traditional markets (The Mauritian Economy 2012 Outlook).

Indeed, Mauritius has been ranked first out of 48 countries in the sub-Saharan Africa in terms of good governance. This implies that Mauritius is implementing a code of ethics in relation to business (The 2012 Index of Economic Freedom). However, it should be noted that the topic of marketing ethics is one on which a research is necessary to undergo since this topic is becoming an important issue.

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A successful business will better serve its shareholders by focussing on the needs of its customers, employees, suppliers and the wider community (Singhapakdi and Vitell, 2007). The competitive market place implies that every organization has to continuously strive towards improvement in performance. Every day, there are new inventions, new technologies and developments in many fields. Hence traditional marketing strategies are becoming old-fashioned and new schemes are to be adopted for survival. In recent years, research dealing with business ethics and marketing ethics, in particular, has been quite broad, mostly in the perspective of marketing ethics research that addressed managerial ethics in various marketing situations (T.M. Jones, 1991). These characteristically involved the sale of goods and services along with salespersons' and company's behaviour in different selling situations.

Originally, companies based their marketing decisions largely on immediate company profit calculations. Then, they began to recognise the long run importance of satisfying consumer wants and this introduced the marketing concept. Now, they are beginning to factor in society's interests in their decision-making. Hence, the societal marketing concept calls for balancing all these three considerations.

Business Ethics

Since the 1990's, business ethics has become an increasing concern among larger companies. Business practices have come under increasing scrutiny in recent years as public awareness of interest in business activities has risen (Berry, 1992). Public accountability has become a requirement to the public as concerns over price-fixing, product safety, bribery, deceptive advertising and other issues have become prominent. In fact, marketing is often seen as the worst offender probably because it is the most visible of business and also because marketers do indeed behave less than ethically (Nixon B., 2001).

"Ethics is a branch of philosophy that, at its core seeks to understand and to determine how human actions can be judged right or wrong" (Richardson, 2005). Business ethicists ask "What is right and wrong, good and bad and harmful and beneficial regarding decisions and actions in organisational transactions?" Ethical "solutions" to business and organisational problems may have more than one alternative and sometimes no right solution may seem available.

Marketing Ethics

Marketing is a human activity directed at satisfying needs and wants through the exchange process (Kotler, 1991) while marketing ethics is the area of applied ethics which deals with the moral principles behind the operation and regulations of marketing. Of the many areas of management, marketing is undoubtedly one of the most controversial when it comes to the question of ethics (Nantel and Weeks, 1991). Marketing ethics is "the systematic study of how moral standards are applied to marketing decisions, behaviours and institutions" (Murphy et al, 2005). The real establishment of marketing and the principles that direct managers, marketing itself owns all features of ethical behaviour (Helfer, 2003). Marketing ethics addresses principles and standards that define acceptable conduct in the market place. Marketing usually occurs in the context of an organisation and unethical activities usually develop from the pressure to meet performance objectives (O.C Ferell, 2005).

Marketing is viewed as human conduct and is subject to academic analysis and public scrutiny. Indeed, there are two points of view on the study of ethics in marketing. The first is "Let the buyer beware." From this point of view, the rights of the seller are central. A company has little regard consumers' need and wants. The other point of view is "Let the seller beware." Here customer's satisfaction is taken to an extreme. Indeed, marketers must be aware of ethical standards and acceptable behaviour implying that must recognise the viewpoints of three key players namely the company, the industry and the society. As these three groups always have different need and wants, ethical conflicts are bound to arise.

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Ethics requires marketers to 'behave in accordance with the rules of moral philosophy' (Robin and Reidenbach, 1987). All organisations are confronted with significant threats from ethical misconduct and illegal behaviour from employees and managers on a daily basis. Marketers often work out schemes that seem legal but which are not so ethical that they result in scandals and legal entanglements (Isabelle Maignon, 2005). There is a need to identify potential risks and uncover the existence of activities or events that relate to wrongdoing. There must be an ethical plan and infrastructure to determine what is happening and to deal with issues like overbilling customers, deceptive sales methods, fraud and price fixing (Marjorie Kelly, 2005). Practicing ethics in marketing means deliberately applying standards of fairness, or moral rights and wrongs, to marketing decision making, behaviour, and practice in the organization.

In a market economy, a business may be expected to act in what it believes to be its own best interest. The purpose of marketing is to create a competitive advantage (Wiggins R.R, 1995). An organization achieves an advantage when it does a better job than its competitors at satisfying the product and service requirements of its target markets. Those organizations that develop a competitive advantage are able to satisfy the needs of both customers and the organization (H. Kurt Christensen, 2011). As our economic system has become more successful at providing for needs and wants, there has been greater focus on organizations' adhering to ethical values rather than simply providing products. This focus has come about for two reasons. First, when an organization behaves ethically, customers develop more positive attitudes about the firm, its products, and its services. When marketing practices depart from standards that society considers acceptable, the market process becomes less efficient and sometimes it is even interrupted. Not employing ethical marketing practices may lead to dissatisfied customers, bad publicity, a lack of trust, lost business, or, sometimes, legal action (Boddewyn, 1988). Most organizations are very sensitive to the needs and opinions of their customers and look for ways to protect their long-term interests.

Nowadays, consumers are becoming more conscious about ethics in marketing. In Mauritius, it can be seen that some firms are engaging in ethical practices as well as unethical practices so as to increase their profits at the expense of consumers. Thus, as ethics is becoming an essential phenomenon, the need for this research has come up.

Recent Scandals

In recent years, following a series of several business scandals such as unsafe products, environmental pollution and accounting frauds which have been discovered, corporate stakeholders have felt the need of a stronger association of business and ethics. Ethical problems are part of business life: the MCB/ NPF affair, Air Mauritius/ Rogers's scandal. As a response, many companies have implemented ethics programs and have begun to communicate their stance to their audiences. The struggle of establishing an ethical reputation may avoid customer agitation, attract new customers and high competent job candidates or enable companies to charge premium prices solely on the basis of their first class reputations (Schlegelmilch et al, 2005).

Unethical drug promotion practices in Pakistan.

In a report drawn upon the findings of a survey by a research scholar, where the focus of the study was to identify the intensity and trends of unethical drug promotions in Pakistan, taking into consideration doctors, health related institutions and the pharmaceutical industry, it has been deduced that both doctors and pharmaceutical companies are equally responsible for unethical drug promotion practices in Pakistan. But most interesting findings are, basically pharmaceutical companies are responsible for initiating these unethical drug wrongdoings in Pakistan. Now the doctors have become demanding and pharmaceutical companies are responsible to fulfill their ethical and unethical demands and this has become an acceptable norm. The monetary rewards, local and foreign visits in the name of scientific activities offered by the pharmaceutical companies are extensively used as a tool of promotion of their drugs. (http://journal-archieves16.webs.com/456-475.pdf)

GSK unethical practices

Recently, headlines about GSK seem to miss the human side of unethical pharmaceutical practices. The human damage and destruction is caused, when pharmaceutical monsters such as GlaxoSmithKline lie, deceive and cheat their consumers endangering their health and lives (Sibbald H., 2004). Two drugs in particular, Avandia and Paxil 'Seroxat', have harmed many tens of thousands of people; and in some cases these GSK drugs have caused gruesome deaths (McPhee, 2001). Drugs giant GlaxoSmithKline has agreed to one of the largest fines ever levied on a pharmaceuticals firm to settle a trio of disputes with the US governmen

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Nike's ethical dilemmas.

Nike has been accused of using child labour in the production of its soccer balls in Pakistan. Pakistan has a population of about 1 million and produce goods for export to international markets, principally sporting goods (PR Newswire, 1997). Exports from Sialkot brought income of almost US$ 385 million into the Pakistan economy in 1994. Sialkot is therefore one of the world's most central centres for the manufacture of sporting goods (Ludden D, 2001). Child labour is present in both in the export and the domestic sector in Sialkot (International Monitoring Association for Child Labour, 2003).The international media have reported this fact for several years but no action has been taken about it. In Pakistan child labour is forbidden, but the government do not do anything about it. Provision for education is very limited, due to the fact that very low priority is given to education in the national budgets (Faraz Azam, 1999).

Aims & Objectives

The purpose of this study is to primarily assess the importance relating to marketing ethics in the Mauritian society. Ethical marketing is advantageous but it appears to be neither a necessary nor a sufficient condition for successful growth and profitability. Certainly, the marketers' level of awareness and the importance of ethical marketing practices for a group of companies will be analysed throughout this project. The study is thus meant:

To see whether companies in Mauritius are accustomed with the concept of marketing ethics.

To find out if Ethics hold a vital position in the usual running of those companies.

To determine the companies' opinions about the implementation of ethics in Marketing.

To see whether companies apply special ethical concerns when selling to different target segments.

To discover any obstacles to ethical marketing.