Code of Conduct in Marketing
Marketing ethics address codes of conduct that define acceptable behavior in the marketplace. Some unethical marketing activities are clear-cut attempts to mislead or take advantage of a situation, and others result from the pressure to meet performance objectives. Increasing numbers of employees recognize the presence of formal ethics and compliance programs in their organizations, and the presence of written codes of conduct in organizations rose 19 percentage points from 1994 to 2005, according to the National Business Ethics Survey conducted by the Ethics Resource Center, a nonprofit based in Arlington, Va.
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Ethical Norms
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The American Marketing Association is the largest marketing association in North America. It encourages all of its members to adopt the AMA's ethical norms and values by refining them to fit their specific industries or disciplines. The AMA's statement of ethics says that marketers must avoid causing harm, foster trust in the marketing system, avoid deception and embrace core ethical values.
Core Ethical Values
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The AMA's core ethical values include honesty, responsibility, fairness, respect, transparency and citizenship. The association describes these values this way: Honest marketers strive for truthfulness toward customers and stakeholders at all times. Responsible marketers accept the consequences of marketing decisions and strategies, strive to serve customer needs and avoid coercion with stakeholders. Fair marketers do their best to balance the needs of buyers and sellers by avoiding deceptive promotion and rejecting sales tactics that hurt customer trust. Respectful marketers acknowledge the basic human dignity of stakeholders and all demographic groups, and acknowledge marketing contributions made by others. Transparency encourages clear communication that enables constructive criticism from stakeholders and customers. Citizenship encourages fulfilling the economic, legal, philanthropic and societal responsibilities of the organization and its stakeholders.
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Ethics Programs on the Rise
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The Ethics Resource Center's 1994-2005 survey reported a rise in ethics training, ways to seek ethical advice, ways to report misconduct and actions taken to discipline employees who violated ethical standards. However, observable employee misconduct did not change much in the same time period. In 2005, 52 percent of employees surveyed observed at least one type of misconduct, and 36 percent observed two or more.
Culture Matters
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The ERC determined that the impact of formal codes of ethics depends on the ethical culture of the organization, and formal ethical codes have greater impact in organizations that have not yet developed strong ethical cultures. The ERC survey suggested that actions by leaders and coworkers significantly influence ethical culture. Employees were 50 percentage points less likely to observe misconduct when top management displayed ethics-related behavior; employee willingness to report misconduct increased 10 percentage points when coworkers displayed ethics-related behavior; and overall employee satisfaction with ethical programs increased by 32 percentage points when employees perceived that others were held accountable for their behavior.
Significance of Formal Ethics Programs
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The ERC found that employees in organizations with both formal ethics programs and strong ethical cultures were 36 percentage points less likely to observe misconduct than employees subject to full ethics programs but weak ethical culture. It found that only 1 percent of organizations with strong ethical cultures lacked formal ethics programs. The fact that the other 99 percent had these programs shows that they contribute to the strength of the ethical culture, and the ERC suggests that formal programs are an essential part of establishing an ethical culture.
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