How Ethics Influences Company Decisions (Essay Sample)

Ethics in Marketing
Ethics is defined by The Cambridge Dictionary as ‘a system of accepted beliefs that control behavior, especially such a system based on morals.’ The term originated from the Greek word ethos which means morals. As defined by the same dictionary, a moral is the difference between right and wrong. It is difficult to decide on whether one is acting ethically or unethically due to the different views of ethics thus the complexity of defining the term.
How ethics influences company decisions
Organizations develop their own code of ethics which makes up the ethical climate of the organization (Jermain, 2002). The ethical climate does not only influence behavior and how organizations respond to ethical issues but it also influences decision making within the organization. The code of ethics is a document containing corporate values, ethics, and rules of practice about employee, customer, shareholder, and environmental responsibility (Jermain, 2002). Business ethics influences organizational decisions such as pricing of products. Since company’s marketing strategies should not infringe on such company values as honesty and transparency, pricing decisions should be made based on what is ethical (Creyer, 1997). Setting exceedingly too low prices so that competitors can be driven away from the market is illegal but it is difficult to determine whether the motive behind the price decrease is that of driving away competitors or the company is trying to attract more customers. Setting exceedingly too high prices is unethical. For instance, in 2016, Mylan, a pharmaceutical company was under huge criticism from the public and the government over their outrageously increasing drug prices (Duhigg, 2017). Mylan’s EpiPen device used to control allergies created public outrage which led to an investigation by the congress over its prices that increased by about 500% within the past seven years.
Ethical issues such as market research, advertising, and puns and deceptions influence marketing planning. For instance, when conducting market research, invasion of privacy can occur in the event that the research is not conducted in an ethical manner (Silver, 2013). This may result in standardizing which could lead to unfavorable results. The audience influences marketing planning in that no population within a specified target market can be discriminated against (Williams & Curtis, 2007). Discrimination occurring based on sexual identity, race, and color is considered unethical. In Thailand, a promotion by the Unilever Company for its product Citra was observed to be giving scholarships to students with fairer skin and this led to the termination of the promotion (Hodal, 2013). The information and contents of advertising, marketing campaigns, and promotional content should all be true, sincere, and honest. Any exaggerations made can have damaging effects to the organization and this will be regarded as unethical.
Case studies
The Volkswagen Company in 2014 was found to have fitted most of their diesel vehicles with a ‘defeat device’ (Gates, Ewing, Russell, & Watkins, 2015). The US emissions standards require that all diesel car manufacturers must have software installed inside the car which will clean the diesel exhaust. With Volkswagen, the software could work only when the car was being tested for emissions and shut off when the car was being normally driven so that fuel economy and performance could be improved. As a result, these vehicles released nitrogen oxide to the environment which was about 40 times the acceptable amount which can cause severe harm to the environment (Gates, et al., 2015). Exxon Mobil was in 2007 accused of misleading the public by running false advertising campaigns (Goldenberg, 2015). The company released commercials with the message that they were aware of global warming and they were taking steps to lessen its impact. Apparently, Exxon Mobil paid off scientists to deceive the public on the impact global warming has on humans. The company further paid off scientists arguing that carbon dioxide emissions do not harm the environment.
In its defense, Exxon Mobil claimed that carbon dioxide is not an environmental pollutant but is crucial for life (Goldenberg, 2015). Volkswagen on the other hand responded to the ethical claims by first apologizing to the public and recalling over 11 million cars that had been fitted with the faulty software. Volkswagen’s CEO Martin Winterkorn resigned immediately followed by a step down of the company’s top executives. In addition, the company’s heads of brand development, Audi research and development, and Porsche research and development were suspended (Zhou, 2016). The company has been taking necessary steps to correct their mistake as well as coping with the damages to their corporate image.
Consumerism
Consumerism is ‘a modern movement for the protection of the consumer against useless, inferior, or dangerous products, misleading advertising, unfair pricing, etc.’ (Dictionary.com, 2017). Customer ethics influences marketing planning in that proper measures have to be put in place to prevent against any form of damages that may be caused by consumers. For instance, customers who take part in claiming any insurance policies which might neither be genuine or registered shou