The theory of business and marketing ethical procedures.
Business ethics are a collection of morals and principles of correct conduct, which shape the decisions managers and directors within organisations make. Practicing ethics in marketing involves the intentional application of certain standards of fairness, or moral rights and wrongs, to marketing decision-making, behaviour, and practice in the organisation. This so-called ethical marketing can also be applied to other areas of the business, with the purpose of becoming an ‘ethical organisation.’
Within a market economy, a company could be expected to act in what it believes to be its own best interest with disregard for other individuals who may be affected by their actions. The sole purpose of marketing is to create a competitive advantage. An organisation will achieve this advantage by doing a better job than its competitors at satisfying the product and service requirements of its target markets. The firms, which develop a comparative competitive advantage, are able to satisfy the needs of both customers and the organisation.
As our economy has grown and hence become more successful at providing for needs and wants of the average individual, there has been greater focus on firms adhering to ethical values rather than simply providing products. There are two reasons why this change has come about. Firstly, when an organisation behaves ethically, customers develop more positive attitudes about the firm, its products, and its services. This creates a good reputation in the market and leads to positive branding. When marketing practices do not reach the standards that society considers acceptable, the market process becomes less efficient and is deemed un-ethical. Not employing ethical marketing practices may lead to dissatisfied customers, bad publicity, a lack of trust, lost business, or sometimes even legal action. Most organisations are thus extremely receptive to the needs and opinions of their customers and will always look for ways to protect their long-term interests.
Secondly, ethical abuse has frequently lead to pressure (social, governmental or political) for establishments to assume greater responsibility for their actions. Since abuses do occur, some people believe that questionable business practices should possibly be restricted or dealt with appropriately by the regulatory bodies or legislatively. As a result, consumer interest groups, professional associations, and self-regulatory groups exert considerable influence on marketing. Calls for social responsibility have also subjected marketing practices to a broad range of federal and state regulations intended to either protect consumer rights or to encourage trade.
In the United Sates of America, The Federal Trade Commission and other federal and state government agencies have the role of enforcing the laws and creating policies to limit unfair marketing practices. Obviously, regulation cannot be developed to cover every possible abuse, so companies and industry groups often develop codes of ethical conduct or rules for behavior to serve as a guide in decision-making and operational activity.
For a larger incite into the world of business ethics have a look at the search marketing group.