Marketing Ethics
Marketing Ethics
Ǡ Prepared and written by Dr. Linda Ferrell,
University of Wyoming
M
arketing ethics addresses principles and standards that define acceptable conduct in the marketplace. 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 involve clear-cut attempts to deceive or take advantage of a situation. For example, two former senior executives with Ogilvy
& Mather Advertising were sentenced to more than a year in prison for conspiring to overbill the government for an ad campaign warning children about the dangers of drugs. The executives were also required to perform 400 hours of community service, pay a fine, and draft a proposed code of ethics for the advertising industry.1 The requirement to draft a code of ethics implies that the court viewed the executives’ wrongdoing as a lapse of ethical leadership in the advertising industry. Obviously, misrepresenting billing on accounts is a serious ethical issue which can evolve into misconduct with severe repercussions. The overbilling in this case was to benefit the advertising agency’s bottom line.
The Ethics Resource Center (www.erc.org) reported in its most recent National
Business Ethics Survey that “one in two employees witnessed at least one specific type of misconduct.”2 At least 52 percent of employees observed at least one type of misconduct in the past year, while the percentage of employees willing to report the misconduct dropped by 10 percentage points between 2003 and 2005.3 This may explain the increase in corporate whistle-blowing reports to the Securities and Exchange
Commission. Even with a regulatory requirement that public companies have an anonymous and confidential means of reporting misconduct under Sarbanes Oxley and the
Federal Sentencing Guidelines for Organizations, companies are likely to learn about the ethical misconduct in marketing at the
Ǡ Prepared and written by Dr. Linda Ferrell,
University of Wyoming
M
arketing ethics addresses principles and standards that define acceptable conduct in the marketplace. 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 involve clear-cut attempts to deceive or take advantage of a situation. For example, two former senior executives with Ogilvy
& Mather Advertising were sentenced to more than a year in prison for conspiring to overbill the government for an ad campaign warning children about the dangers of drugs. The executives were also required to perform 400 hours of community service, pay a fine, and draft a proposed code of ethics for the advertising industry.1 The requirement to draft a code of ethics implies that the court viewed the executives’ wrongdoing as a lapse of ethical leadership in the advertising industry. Obviously, misrepresenting billing on accounts is a serious ethical issue which can evolve into misconduct with severe repercussions. The overbilling in this case was to benefit the advertising agency’s bottom line.
The Ethics Resource Center (www.erc.org) reported in its most recent National
Business Ethics Survey that “one in two employees witnessed at least one specific type of misconduct.”2 At least 52 percent of employees observed at least one type of misconduct in the past year, while the percentage of employees willing to report the misconduct dropped by 10 percentage points between 2003 and 2005.3 This may explain the increase in corporate whistle-blowing reports to the Securities and Exchange
Commission. Even with a regulatory requirement that public companies have an anonymous and confidential means of reporting misconduct under Sarbanes Oxley and the
Federal Sentencing Guidelines for Organizations, companies are likely to learn about the ethical misconduct in marketing at the