Ethical Considerations
in Business-to-Business
Marketing
A Poem by R.W. Grant
• You’re gouging on your prices if you
charge more than the rest.
• But it’s unfair competition if you think
you can charge less.
• A second point that we would make to
help avoid confusion:
• Don’t try to charge the same amount:
• That would be collusion!
Ethics vs. Social Responsibility
BUSINESS
SOCIAL
ETHICS
RESPONSIBILITY
Moral principles and
Obligations a business
standards that guide
assumes to have for
behavior in the world of society, including
business
economic, legal, ethical,
and philanthropic
Corporate Social Responsibilities
• Legal
– Play by the rules of the game
• Economic
– Be profitable
• Ethical
– Do what is right, just, and fair; avoid harm
• Philanthropic
– Contribute resources to community; improve
quality of life
Differing Moral Philosophies
• Deontology
– The action itself matters. No “gray” areas.
• Teleology
– The outcome matters. Level of harm caused.
• Egoism
– The outcome related to “ME” matters.
• Relativism
– Everything is relative. All actions are im/moral
within their own context.
Typical Actions that are Considered
Unethical in B-t-B Marketing
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Collusive bidding
Restrictive conditions in specifications
Artificial stimulation of demand
Verbal/actual sabotage of competitive
products
• Padding orders and shipments
• Obscure contract clauses buried in small
type
Typical Actions that are Considered
Unethical in B-t-B Marketing
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•
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Overselling
Promising more than can be delivered
Lying
Failing to keep confidences
Bribes
Gifts
Entertainment
Myths about Business Ethics
• Ethics is a personal, individual affair.
– We do not operate in a vacuum.
• Business and ethics do not mix.
– Business is a human activity.
• Ethics in business is relative.
– Contradicts everyday experience.
– I.e., just because this society practiced slavery, did that
make it right?
• Good business means good ethics.
– Basically says that ethics do not provide solutions to
business problems.
Why Ethics are Necessary in Business
Decisions
• Rarely are facts & viewpoints in perfect
correlation.
• Good and evil exist simultaneously
• Knowledge of consequences are limited
• Existence of multiple stakeholders exposes
us to competing & conflicting claims.
• Multiple stakeholders use conflicting ethical
arguments
• Human reasoning is imperfect
Quick Ethical Tests
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Is it right?
Is it fair?
Who gets hurt?
Would you be comfortable if your
decision was reported on the front page of
your hometown newspaper?
• What would you tell your child to do?
Other Quick Ethical Tests
• Do unto others as you would have them do
unto you.
• Use your intuition (gut-feel).
• Are the ends really worthwhile?
• Does the action you are planning to take really
make good common sense?
• Is the decision compatible with your selfconcept at its best?
Federal Legislation to Protect
Competition
• Sherman Act 1890
– no monopolies
• Clayton Act 1914
– no price discrimination
• FTC Act 1914
– no unfair competition
• Wheeler-Lea 1938
– no false advertising
• Robinson-Patman Act 1936
– no price discrimination to resellers
To Protect the Consumer
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Meat Inspection Act 1906
Wool Products Labeling (1940): % of wool
Cigarette Labeling (1965)
Truth in Lending (1968)
Consumer Product Safety (1972)
Nutrition Labeling and Education Act (1990)
Regulatory Agencies
• FTC: no false/deceptive advertising
• FDA: no harmful drugs/products
• ICC: rates of interstate RR, trucking –
dissolved
• STB: regulates motor carriers, railroad
• EPA: pollution
• FCC: regulates wire, radio, TV broadcasts