CH3 - LHM_ch03_28-45.qxp 1/4/07 2:53 PM Page 28 CHAPTER...

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3 CHAPTER Social Responsibility, Ethics, and the Marketing Environment Learning Outcomes LO 1 Discuss corporate social responsibility 2 Describe the role of ethics and ethical decisions in business 3 Discuss the external environment of marketing, and explain how it affects a firm 4 Describe the social factors that affect marketing 5 Explain the importance to marketing managers of current demographic trends 6 Explain the importance to marketing managers of multiculturalism and growing ethnic markets 7 Identify consumer and marketer reactions to the state of the economy 8 Identify the impact of technology on a firm 9 Discuss the political and legal environment of marketing 10 Explain the basics of foreign and domestic competition Social Responsibility, Ethics, LHM_ch03_28-45.qxp 1/4/07 2:53 PM Page 28
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CHAPTER 3 Social Responsibility, Ethics, and the Marketing Environment 29 If business people do have a social responsibility other than making maximum profits for shareholders, how are they to know what it is? —Milton Friedman (1912–2006) Corporate Social Responsibility Corporate social responsibility is a business’s concern for society’s welfare. This concern is demonstrated by managers who consider both the long-range best inter- ests of the company and the company’s relationship to the society within which it oper- ates. The newest theory in social responsibility is called sustainability . This refers to the idea that socially responsi- ble companies will outperform their peers by focusing on the world’s social problems and viewing them as opportunities to build profits and help the world at the same time. It is also the notion that companies cannot thrive for long (i.e., lack sustainability) in a world where billions of people are suffering and are desperately poor. Thus, it is in business’s interest to find ways to attack society’s ills. Another view is that business should focus on making a profit and leave social and environ- mental problems to nonprofit organizations and government. Economist Milton Friedman believed that the free market, and not companies, should decide what is best for the world. 1 Friedman argued that to the degree that business executives spend more money than they need to—to purchase delivery vehicles with hybrid engines, pay higher wages in developing countries, or even donate company funds to charity—they are spending sharehold- ers’ money to further their own agendas. Better to pay dividends and let the shareholders give the money away, if they choose. Total corporate social responsibility has four components: economic, legal, ethical, and philanthropic. 2 The pyramid of corporate social responsibility portrays economic performance LO 1 corporate social responsibility business’s concern for society’s welfare sustainability the idea that socially responsible companies will outperform their peers by focusing on the world’s social problems and viewing them as opportunities to build profits and help the world at the same time pyramid of
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This note was uploaded on 05/26/2011 for the course MARK 3000 taught by Professor Emmelhainz during the Spring '07 term at University of Georgia Athens.

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CH3 - LHM_ch03_28-45.qxp 1/4/07 2:53 PM Page 28 CHAPTER...

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