Business Ethics Lecture 5-05-02 - 2024

Ethics in Marketing
Dr. Elena Tikhaya

[email protected]
[email protected]
Course Outline
• The role of ethics in marketing

• Ethical standards
• The principles of socially responsible marketing
False Marketing costs Millions
• There's a big difference between pushing the truth and
making false claims
• Peddling mediocre products, using claims
like "scientifically proven" with "guaranteed results”
• Crossing the line may cost millions and lead to a
damaged reputation
• Business Insider France:
www.businessinsider.fr/us/false-advertising-scandals
Activia and Red Bull
• Dannon paid $45 million for claiming that Activia Yogurt
has “Special bacterial ingredients” and it is "clinically"
and "scientifically" proven to boost your immune system
and able to help to regulate digestion
• Red Bull said it could “Give You Wings” and paid $13
million
New Balance, Hyndai and KIA
• New Balance said its shoe could help wearers “burn
calories” and burnt out $2,3 million
• Over advertising “cars power” cost $85 million
BEAUTIFUL LIERS
• L'Oreal claimed its skincare products were "clinically
proven" to "boost genes” escaped the fine
• Olay showed former model Twiggy looking wrinkle-
free — and a whole lot younger than her then-60 years
60 years before….
Marketing ethics
Marketing ethics addresses principles and
standards that define acceptable conduct
in the market place
• Marketing usually occurs in the context

of an organization, and unethical
activities usually develop from the
pressure to meet performance objectives
• Some obvious ethical issues in

marketing involves clear cut attempts to
deceive or take advantage of a situation
Ethics in marketing research
• MRA – Marketing Research Association
• CASRO – Code of Standards and Ethics for Survey Research
• AMA – American Marketing association
• Ethical principles of research: privacy and confidentiality, honesty in

collecting and presenting data, responsibility of researcher
• Interesting Reading:
• 1. “From Intentions to Action. A Theory of Planned

Behavior ”, Ajzen, I. 1985, Journal of Business Ethics
• 2. “Ethical Desicion Making and the Law”, Libby, B.,
Agnello, V, 2000, Journal Business Ethics
Marketing Ethics & Consumer Rights
• AMA has established a codes of ethics to provide
guidelines for ethical conduct. It says, in part, that,
“Marketers shall uphold and advance the integrity,
honor and dignity of the marketing profession, by
being honest in serving consumers, clients,
employees, suppliers, distributors, and the
public…”
ETHICAL VALUES
• Honesty: to be truthful and forthright dealing

with customers and stakeholders
• Responsibility: to accept the consequences of
marketing decisions and strategies
• Fairness: to try to balance justly the needs of
the buyer with the interests of the seller
• Respect: to acknowledge the basic human
dignity of all stakeholders
• Openness: to create transparency in
marketing operations
• Citizenship: to fulfill the economic,

legal and societal responsibilities that serve
stakeholders in a strategic manner
Evolution of Ethics and Marketing
• Early 1900s: Caveat Emptor

–A Latin phrase meaning “let the buyer beware” - what you see is what you get,… not
what you expected
–Belief that competition in the marketplace corrects abuses
• 1962, Kennedy’s Consumer Bill of Rights

Consumer Bill of Rights (1962)
The Consumer Bill of Rights (1962)

is a law that codified (standardized what
was not previously written down) the
ethics of exchange between buyers and
sellers. It includes the buyers rights:
(1) to safety
(2) to be informed
(3) to choose
(4) to be heard
Example of Responsible Marketing
• https://www.youtube.com/watch?v=9EXeweMO520
Ethics and AI
Course Outline
• Artificial Intelligence
• Main issues of AI
• Open Discussion
Ethics of AI
• AI is any kind of artificial computational system
that shows intelligent behavior ( complex
behavior that is conductive to reaching goal)
• Machines that have feelings, thinking and power
of creation
“What will happen to society, politics and daily life
when non-conscious but highly intelligent algorithms
know us better than we know ourselves?”
Potential Risks
• The field of ethical study in AI and robotics is very young,
we do not have enough data to analyze
• Ethics of AI is a branch of ethics of technology specific to
AI
• Robot Ethics refers to the morality on how humans
design and use robots
• “Robot rights” together with human and animal rights
robots should also be granted rights, such as the right to
exist and perform its own mission
• A new field of study called “Human-Robot Interaction”
(HRI)
Artificial Intelligence
• Robot Sophia speaks at Saudi Arabia's Future
Investment Initiative
https://www.youtube.com/watch?v=dMrX08PxUN
Y
Main Issues of Artificial
Intelligence
1. Unemployment: what happens after the “end of
jobs”? An experiment with income randomly
distributed.
2. Inequality: how do we distribute the wealth
created by machines?
3. Humanity: how do machines effect our behavior
and interaction?
4. ….What else?
Main Issues of Artificial Intelligence
4. Tech addiction is the new frontier of human

dependency
5. Artificial Stupidity: how can we guard against
mistakes?
6. Security: how do we keep safe from
adversaries?
7. Robot rights: how do we define the humane
treatment?
Robot Rights
https://www.youtube.com/watch?v=gvcbOSAkF2M
8 Ethical questions in AI
 Bias: Is AI fair?
 Liability: Who is responsible for AI?
 Security: Who is responsible for AI?
 Human Interactions: Will we stop talking to one another?
 Employment: Is AI getting rid of jobs?
 Wealth Inequality: Who benefits from AI?
 Power & Control: Who decides how to deploy AI?
 Robot Rights: Can AI suffer?
The Ethical Mind
Course Outline
• “The Ethical Mind”, 2007, H. Gardner, HBR
• In-class paper discussion
Neuroscience revealing the
answers
• The study of the brain and its impact on behavior
Time to repair relationships
• Professor of cognition and psychology at Harvard
University
• Among 100 most influential public intellectuals in the
world
Question 1
• “If you’re running a large company, don’t expect
the public to like you”…
• Think about the possible causes of this saying
Question 2
• How do you understand the term “multiple
varieties of intelligence”?
• Core insights on ethical mind came from dozens
of years of research
Question 3
Five Types of Mind
Explain the essence of the following types of mind
and give examples of their failures:
• 1. Disciplined Mind
• 2. Synthesizing mind
• 3. Creating Mind
• 4. Respectful Mind
• 5. Ethical Mind
Questions 4
Where is the beginning?
• Ethical mind is more community focused
• Ethical actions are a “win-win” solution
• How does the ethical mind develops?
Question 5
Luxury Behavior
• Companies operate in intense pressure and need
to cut corners
• Individuals want to succeed by whatever means
• Is ethical behavior a luxury type of behavior?

Question 6
Costs of an Ethical Mind
• Does ethical mind cost more for businesspeople
than it costs for other professionals?
Question 7
Don’t crack under pressure
• Why is it necessary from time to time to conduct
a self audit of ethical behavior?
• How to stand up to pressure? Give an example
Question 8
Importance of an Outside Feedback
• What are the counselors to speak the truth?

Question 9
Sorting out
• How companies may “sort out the wheat from
the chaff”?
Question 11
Sorting out
• If you have to speak truth to the power, how do
you grid yourself for that task?
“If you are not prepared to resign or be fired for

what you believe in, then you are not a worker, let
alone a professional. You are a slave ”

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Ethics in Marketing

Dr. Elena Tikhaya

• The role of ethics in marketing

• Marketing usually occurs in the context

• Some obvious ethical issues in

• Ethical principles of research: privacy and confidentiality, honesty in

• 1. “From Intentions to Action. A Theory of Planned

• Honesty: to be truthful and forthright dealing

• Citizenship: to fulfill the economic,

• Early 1900s: Caveat Emptor

• 1962, Kennedy’s Consumer Bill of Rights

The Consumer Bill of Rights (1962)

4. Tech addiction is the new frontier of human

• Is ethical behavior a luxury type of behavior?

• What are the counselors to speak the truth?

“If you are not prepared to resign or be fired for

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