Different Ways of Solving Ethical Problems - Case Study Example

Critically Evaluate the View That Whilst Ethical Reasoning Frameworks Provide Different Ways of Solving Ethical Problems, From an Ethical Point of View Some Frameworks Are Better Than Others Table of Contents Table of Contents 2 Overview 3 Ethics in Marketing 3 Theories of Ethical Marketing 4 Teleological Theory or Consequentialism 4 Deontological Theory or Duty Based Theory 6 Kant’s Categorical Imperative 7 Theory of Virtue 8 Stakeholder Theory 9 Critical Analysis of Ethical Theories 12 Limitations of the Theories 12 Comparison and Contrast between Theories 14 Ethical Theories in the Practical Context 17 Conclusion 19 References 20 Bibliography 23 Overview In the words of Hunt and Vitell ethics is defined as “inquiry into the nature and grounds of morality where the term morality is taken to mean moral judgments, standards and rules of conduct” (Parsa & Lankford, n.d.). Hunt and Vitell had developed a theory on ethical marketing in the late 1980s. The theory was known as “General Theory of Marketing Ethics”. Most of the ethical theories are classified as deontological or duty based and teleological or consequentialist theory. Deontological evaluation depends on the deontological norms. Teleological evaluation is dependent on the probable consequences. The teleological and deontological evaluations lead to the ethical judgments and which finally result in the intentions (Antoine & Green, n.d.). Ethics in Marketing Marketing is a field where the maximum ethical controversies arise. Example of certain unethical marketing practices is marketing of products that have adverse affect on health like tobacco, false advertising and selling products that have a short life span to take the advantage of before time repurchasing. Often the privacy of people is intruded on the pretext of surveys for marketing research. Telephone selling is done in the disguise of surveys. Companies offer discounts and price cuts after raising the original price so that the customer is actually paying the same or even paying more. Differential pricing which is resorted to by companies is unethical. At times sales people resort to false claims about the product or talk bad about the competitor to influence the customer’s purchase. The practice of selling products which are banned in one’s own country to foreign countries is totally unethical (Nantel & Weeks, 1996). Theories of Ethical Marketing Teleological Theory or Consequentialism According to the teleological theory if the ratio of good consequences to bad consequences is high then such a code of conduct would be considered moral (Smith, 2010). Teleologists are mainly concerned with the consequences of human behaviour and actions. Egoists believe that decisions should be made keeping in mind individual interest (Parsa & Lankford, n.d.). The individual interests vary from person to person. Utilitarianism believes in doing well to the maximum number of people (Smith, 2010). It believes in acting in a way with the aim that the ratio of goodness to evil is very large (Parsa & Lankford, n.d.). It is very difficult to determine the greater benefit of greater number of people as is said by the utilitarian theories. A country may place a ban on the marketing of harmful pesticides in one’s own country and allow the marketing of the pesticides in other countries. The concern for the well being of people of one’s own country has been given more importance but it is not necessary that this welfare is for the greater number of people. A company may sell a new product which may turn out to have adverse affect on the health in the future. In such a case it is not possible to know the future consequences. Deontological Theory or Duty Based Theory The deontological theories believe that right moral conduct is one in which moral duties are integrated with consequences that are not of prime importance. The deontological theories talk about the individual rights. Immanuel Kant was a proponent of deontological theory (Smith, 2010). In the context of marketing deontological theories state that consumers should not be treated just as the means to earn profit rather a humanitarian approach should be held. The employees should be treated fairly. The management should not resort to unfair means like bribery. A deontological approach considers advertising to children unethical since they do not have the reasoning ability but yet certain health products can be marketed to children and cannot be considered unethical. A deontological approach also considers comparative advertising as unethical. Kant’s Categorical Imperative Immanuel Kant’s theory believed that people have an inherent moral worth. Kant’s moral theory is also known as ‘respect for persons’ theory. Kant’s moral principle was known as categorical imperative. There are two formulations of the categorical imperative. The first formulation says that people should be treated as ends in themselves and not as a means to our own ends. People should be treated as if they have an inherent value. The second formulation says to act on the maxim of universal law. The maxim refers to a general motivation to act in a particular way (Bellevue, n.d.). Theory of Virtue Virtue ethics is a part of normative ethics. It stresses on virtues rather than duties as in deontology or consequences of actions as in consequentialism. Virtue ethics is based on the concept of practical wisdom, virtue and eudaimonia (Stanford Encyclopedia of Philosophy, n.d.). Companies want to be perceived by customers as possessing certain virtues. They want their customers to view them as ethical, responsible and want to be trusted as a brand. The different ethical theories are distinguished on the basis of relativism. The extent to which universal rules of morality are rejected by an individual is known as relativism. Non relativistic individuals abide by universal principles on morality while making their judgments. The degree to which an individual is concerned about other’s welfare is known as idealism. Idealists believe that correct actions can help in getting desired consequences. Forsyth had evolved taxonomy on moral philosophies based on idealism and relativism dimensions (Bas & Et. Al., 2001). Forsyth’s Taxonomy has been explained in the table below: Table: Forsyths’ Taxonomy on Moral Philosophies High Idealism and High Relativism Situationists: They do not follow moral codes and personally evaluate the actions. They are sceptic, idealistic and relativistic. High Idealism and Low Relativism Absolutists: They abide by the moral codes. They believe that their ethical decisions should not adversely affect others. These people are the deontologists. Low Idealism and High Relativism Subjectivists: They do not follow the moral codes. Their judgments are influenced by their personal values and not by universal codes. These people are the ethical egoists. Low Idealism and Low Relativism Exceptionists: They abide by the moral codes. They believe that optimal outcomes cannot be achieved for all. These people are the teleologists and the utilitarian. (Bas & Et. Al., 2001). Stakeholder Theory Stakeholder theory is an extension of the old concept on which businesses are based whereby businesses are solely concerned with making money. The stakeholder theory has been referred to as a heuristic device whose intention is to extend the management’s vision beyond profit making to incorporate the interests of non stock holding groups (Orts & Strudler, 2002). A company’s business operation has impact on the society, the environment, the employees, customers and many other stakeholders. Every person does not have a monetary interest in the company. Companies try to contribute to the society through their social responsibility acts and try to adopt environment friendly practices. Figure 1: Integration of Theories with the Environment (Hunt & Hansen, 2007). Critical Analysis of Ethical Theories Limitations of the Theories Consequentialist Theory It is extremely difficult to predict the outcome of actions. The consequentialist theories have a tendency to provide more importance to economics over ethics. The perspective of different people on happiness varies. Moreover ends cannot always justify means especially if the means are against moral ethics (Pennstate College of Engineering, 2010). Utilitarianism The major flaw associated with utilitarianism is in future prediction. Human beings can never be sure about future outcomes. This uncertainty may result in an unethical image for the utilitarian because what he had believed as the welfare of all may not turn out to be so. The utilitarian does not have a common scale for comparing various outcomes. Material and non material gains cannot be compared. An individual may be forced to give up his own rights for the benefit of the maximum number of people. If the variables that determined the original decision of the utilitarian change suddenly then the decision also changes. The utilitarian rules at times conflict each other (Rainbow, 2002). Virtue Theory The definition of virtues has not been dealt with clearly. Virtues have been talked about in the context of the social setting which may result in morality becoming to relativistic (Pennstate College of Engineering, 2010). The major limitation of this theory is that there is no criteria to decide what virtues should one actually possess. A person’s moral values may change over time (Rainbow, 2002). Deontological Theory The duties that are talked about in the deontological theories do not have any rational basis. A person may consider performing a certain action as his duty but the rationale behind choosing that task as his duty is not known. At times there are conflicts in the duties of different individuals. An individual may resort to an action that does not result in the well being of others. It is not known that how a person should behave in conflicting situations (Rainbow, 2002). Comparison and Contrast between Theories Consequentialism Virtue Theory Deontological Theories Stakeholder Theory General Description An act is considered ethical if it results in the best consequences. The best outcome is that which results in happiness. An act is considered right if it is what a person of virtues or a virtuous agent would do in a similar situation. An act is right if it is done according to certain rule or duty. The rule is based on rationality. Stakeholder theory tries to extend the purpose of businesses beyond money making. It tries to incorporate the interest of the non stockholders. Practical Reasoning It deals with how a person can get what he wants to get. It deals with what virtues a person should develop. It deals with how to decide on what is rationality. It deals with how companies should operate with the aim that they are responsive to their non shareholders. Rationale The rationale behind this theory is getting what one wants to get. The rationale behind this theory is developing those desires which would be considered best. The rationale behind this theory is taking decision based on reasons. The rationale behind these theories is to indulge in businesses that provide benefit even to non shareholders. Central theme The central issue is what one should do to have preferred consequences. The central issue is what characteristics one wants to possess. The central issue is what one should do in compliance with his duties. The central issue is how companies can ensure that all stakeholders benefit. Quality Required There is just one virtue required. Many traits of a typical virtuous person are required. The main virtue is a positive attitude in performing one’s duties. The main quality is empathy and responsiveness towards all stakeholders. Criteria for evaluation The prime criteria for evaluation are the consequences. The virtuous agents are evaluated The acts are evaluated. The actions are evaluated. Kant’s Theory The Kant’s theory is only applicable to rational humans and not to non-humans or humans who suffer from brain malfunctioning. The theory is incapable of resolving conflicts between imperfect and perfect duty and between perfect duties. A shrewd person may distort the meaning of maxim of universalization and use it to his advantage (Pecorino, 2000). Ethical Theories in the Practical Context In 1982 several people died from consuming cyanide laced Tylenol capsules. Tylenol was a popular pain killer manufactured by Johnson and Johnson. Johnson and Johnson adopted a utilitarian approach and carried out immediate recall of their products considering the health of maximum number of people. They suffered losses amounting to $100 million. Enron Corporation was an energy company that went bankrupt in 2001. Enron is a company that had not abided by business ethics by misrepresenting the financial condition of the company. Satyam, an Indian software company also failed in meeting up to the ethical standards. Enron and Satyam had not considered their stakeholders. The duty of every business is to abide by the law. The actions of these two companies were against deontological theory. Ford had manufactured a new car ‘pinto’. The company knew that the fuel system design was defective in the new car. They conducted a cost benefit analysis and decided on not upgrading the car. This led to many accidents of the pinto car. Ford had given more importance to cost over the life of people. They had conducted a risk benefit analysis and had abided by the law but their action could not be considered as ethical. Their attitude was against consequentialism. This is because they did not consider the outcome of their actions. The airlines industry works on the principle of utilitarianism to a certain extent. People who travel in the business class pay a much higher fare than those who are travelling in the economy class. The additional amenities they are provided cannot justify the exceedingly high fare. The high price is charged from the people who can afford to pay it with the aim that lower prices can be charged from the people who travel in economy class. The taxation policy in many countries whereby the people who earn more income pay more tax is also based on this theory (Shukla, 2010). Conclusion The various theories on ethical marketing further reinforce the fact that companies should abide by ethics in their marketing activities. Companies in their intention of earning profits often forget their ethical obligations. According to consequentialism theory companies before indulging in any new activity should analyse the probable consequences. Companies should also be aware of their duties to the society, the employees, the customers and all other stakeholders. This is in accordance with the deontological theory. The theory of virtue talks about the ideal virtues a company should possess. Companies should ensure ethical operation in all their activities. This will ensure their long term success. References Antoine, G. & Green, R. D., No Date. Theoretical Framework. Marketing Ethics from the Consumers’ Perspective: A Theoretical View. [Online] Available at: http://rwahlers.iweb.bsu.edu/abd2009/Papers/p09_antoine_green.pdf [Accessed December 21, 2010]. Bas, K. & Et. Al., 2001. Personal Moral Philosophy. The Moral Philosophy of Sales Managers and Its Influence on Ethical Decision Making. [Online] Available at: http://misweb.cbi.msstate.edu/~COBI/faculty/users/tbarnett/JPSSM.pdf [Accessed December 21, 2010]. Bellevue College, No Date. Categorical Imperative. Kant’s Moral Theory. [Online] Available at: http://personal.bellevuecollege.edu/wpayne/kant.htm [Accessed December 21, 2010]. Hunt, S. D. & Hansen, J. M., 2007. Overview of the Hunt– Vitell Model. Understanding Ethical Diversity in Organizations. [Online] Available at: http://sdh.ba.ttu.edu/OrgDyn07%20Ethics.pdf [Accessed December 21, 2010]. Nantel, J. & Weeks, W. A., 1996. Ethics and Marketing Practices. Marketing Ethics: Is There More to It Than The Utilitarian Approach? [Online] Available at: http://kimtech.uni.cc/superior/MBA/5th%20Semester/Thesis/articles/marketing%20ethics.pdf [Accessed December 21, 2010]. Orts, E. W. & Strudler, A., 2002. What is a Stakeholder? The Ethical and Environmental Limits of Stakeholder Theory. [Online] Available at: http://www.hu.mtu.edu/~rgay/Fall07/Air%20Midwest/ethics_environmental.pdf [Accessed December 21, 2010]. Parsa, F. & Lankford, W. M., No Date. Introduction. Business Students Views of Ethics: A Situational Analysis. [Online] Available at: http://www.westga.edu/~bquest/1998/ethics.html [Accessed December 21, 2010]. Pecorino, P. A., 2000. Problems with Kant’s Theory. Ethics. [Online] Available at: http://www.qcc.cuny.edu/socialsciences/ppecorino/intro_text/Chapter%208%20Ethics/Categorical_Imperative.htm [Accessed December 21, 2010]. Pennstate College of Engineering, 2010. What Are the Limitations or Problems With Consequentalist Theory? Ethical Theories. [Online] Available at: http://www.engr.psu.edu/ethics/theories.asp [Accessed December 21, 2010]. Rainbow, C., 2002. Ethical Theories. Descriptions of Ethical Theories and Principles. [Online] Available at: http://www.bio.davidson.edu/people/kabernd/Indep/carainbow/Theories.htm [Accessed December 21, 2010]. Smith, N. C., 2010. Laying Foundation for an Emerging Field: A Commentary on Shelby Hunt’s Research on Marketing Ethics. Faculty and Research Working Paper. [Online] Available at: http://www.insead.edu/facultyresearch/research/doc.cfm?did=45029 [Accessed December 21, 2010]. Shukla, I., 2010. Utilitarianism Examples in Business. Utilitarianism Examples. [Online] Available at: http://www.buzzle.com/articles/utilitarianism-examples.html [Accessed December 21, 2010]. Stanford Encyclopedia of Philosophy, No Date. Preliminaries. Virtue Ethics. [Online] Available at: http://plato.stanford.edu/entries/ethics-virtue/ [Accessed December 21, 2010]. Trinity, 2001. A More Detailed (But Very Tentative) Comparison. Ethical Theories Compared. [Online] Available at: http://www.trinity.edu/cbrown/intro/ethical_theories.html [Accessed December 21, 2010]. 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The Impact of the Alcohol Warning Label on Drinking During Pregnancy. Journal of Public Policy and Marketing. Read More