This is a lecture for MBA students in China on marketing ethics. It is an introduction to the subject, which attempts to relate theory to practice. The latter half concentrates on the nature of ethics itself. It draws upon Kant. The contrast between ethics and science is made at some length because this is the first step students must take if they are to discover ethics. Hence, the slides deal with the nature of evidence and the aims of questioning.

1. Business Ethics
(for MBA Marketing Course)
Dr Robert Shaw
School of Management
Guangdong University of Foreign Studies
Saturday 10 May 2014, 2 pm

2. Today
1. The questions asked
2. What is business ethics?
a. What is ethics?
b. What is “business”?
3. Western theories
a. Of business & society
b. Of ethics
4. Business ethics in China
(Annex: Thoughts on case studies in business ethics)

3. Questions asked
1. What is business/marketing ethics?
2. How do companies do it?
3. Does business/marketing ethics go against
profit maximization?
4. At least, tell me what benefits will my
company/organization gain by sticking to the
ethical principles.

4. Questions asked
4. What are the costs of being ethical? Nowadays
many Chinese SMEs are merely striking for
survival. Isn’t it too unrealistic?
5. Isn’t business ethic more of a concern of
government? What can a company do to make a
change?
6. I am not the big boss in my organization.
What can I do to make a difference?

5. Questions asked
All the questions assume:
1.A neoliberal perspective
2.A purpose for the MBA
3.What the discipline of business ethics is

6. Questions asked
About the answers:
1.Personal response
2.You should develop your own views
3.We should discuss (argue) these things

8. A few more
questions
1. What is “social responsibility” ?
2. What is “mutual respect” ?
3. What is “integrity” ?

9. What is ethics? Four topics
1. Facts & values
2. Scope of ethical decision-making
3. Moral autonomy
4. The use of theory

10. Breaking free
Types of hegemony
•Global
•Political
•Religious
•Community
•Science / technology

11. Immanuel Kant
1. German
2. Died 1804
3. Theory of moral autonomy
4. Basic theory of the west
today

13. Königsberg

17. Russia invades Königsberg

20. What can we know?
1. There are three ways we can think:
a. Scientific approach
b. Aesthetic approach
c. Ethical approach
2. These ways seek to answer different kinds of
questions

21. Modern science begins:
Galileo 伽利略
1564 – 1642
Italian 意大利人
Mathematics, Pisa
数学家，皮艾萨市
Professor, Padua
教授，帕多瓦市
1592
1609 Telescope 望远镜

22. Sister Maria Celeste 玛莉修女
Convent at aged 13
13岁进入修道院
124 letters
124封信
伽利略的女儿

23. 23
1609 Telescope
望远镜， 1609年

24. 24

28. 28

29. 29

30. Isaac Newton
1664, 22 years-old
Trinity College, University of Cambridge
Questiones quædam Philosophiæ
(Certain philosophical questions)
Amicus Plato amicus Aristoteles magis amica veritas
Plato and Aristotle are my friends, but truth is a better friend
Truth and authority – now an issue again

32. 32

35. Newton’s optics 牛顿光学
1666
Where is truth?真理在
哪?

37. Isaac Newton –questions about his work
艾萨克·牛顿-关于他著作的问题
William Blake 1804
威廉·布雷克（英国诗人和画家）
British Library London
大英图书馆，伦敦

38. Science Ethics
Question How are things?
What happened?
What will happen?
What ought to I do?
What sort of person should
I become?
Time Explains the past
Predicts the future
Now!
Laws or rules Essential Elusive
Methods Incremental
Developmental
Holistic
Irreducible
Outputs Laws
Facts
Decisions
Actions
Development On-going Static
Mode Descriptive Prescriptive

39. Moral autonomy
1. The moral person / leader / manager is
EITHER Heteronomous – follows rules of others
OR Autonomous – independent in
thought and action
2. If you are morally autonomous, you
a. Make your own decisions
b. Do so rationally
c. Have strength-of-will, act as you decide

40. The use of theory
1. Assume we have moral autonomy, on what basis
should we make our moral decisions
2. Western theories generally taught in MBA:
a. Aristotle, virtues, codes of ethics
b. Hedonism
c. Utilitarianism
d. Deontology

41. Stoicism
or
Cynicism
Virtue
Ethics
Deontology Utilitarianism
Basic idea How to survive
in bad times
How to make
people behave
according to
rules
Individual people are
most important.
Act for the reasons.
Consider the
outcome/results/consequence of
your options.
Focussed on Your survival Behaviour Intentions Results
Underlying
The world is bad People should
idea
show good
character
There are higher
values to which we
should aspire.
Happiness (in some form or other) is
the goal.
Everyone is important.
Business
situations
The employee in
a difficult
position.
Company control
of staff.
Genuine attempts to
do the right thing.
Companies policy
Attempts to do what is best for
everyone .
Government
Theorists Greeks but not
in the original
form. Derived
works okay.
Aristotle Kant Bentham
J S Mill
Sources Your textbook
can be cited in
this particular
case. But try to
find something
beyond that.
Anything by
Jonathon Barnes
is good.
Quote Aristotle.
Quote Kant
Or works about Kant
Quote Bentham
University College London website
on Bentham
Mill is clear

42. Western ethics
– a tradition of 2,500 years
Parmenides & Kant – rationality
Aristotle – flourishing & codes of ethics
Kant –moral autonomy & deontology
Bentham & Mill –utilitarianism

44. School of Athens
Raphael, Sistine Chapel, 1511
1-Plato,
2-Aristotle,
3-Socrates,
4-Xenophon,
5-Æschines,
6-Alcibiades,
7-Zeno,
8-Epicurus,
9-Federico Gonzaga,
10-Averroes,
11-Pyhthagoras,
12-Francesco,
13-Heraclietus,
14-Diogenes,
15-Archimedes,
16 -Zoroaster,
17-Ptolemy,
18 Raphael.

45. What is “business”?
1. Decision-making in business effects many people
and groups (stakeholders)
2. Convergence of lines of reasoning (case studies
always come back to the same issues, the big
theoretical debates)
3. The topics in business ethics courses have changed

46. Traditional business ethics topics
The subject business ethics appeared in the 1960s
Employee dishonesty
Codes of conduct
Fair working conditions - health and safety
Respect for other cultures
Honesty in marketing
Monitoring email
Taking and giving bribes
Child labour in foreign countries
Whistle blowing
Workplace rights - drug testing, surveillance
Corporate social responsibility

47. New topics
Social justice –distribution of wealth
Economic theory – neoliberalism
Reasonable profit
Capitalism & socialism & democracy
Corporations & morality
The effect of technology on society
Ethics of cyberspace
Human rights
Social marketing
Animal rights
Open access to data/science/government information

48. Allegations about marketing
campaigns
1. Stereotyping
2. Subliminal messages
3. Exploiting culture
4. Vulnerable targets
5. Minimal legal compliance

49. The new business ethics
Business Ethics is now about Leadership
Public policy
Economics
Social theory
Political theory
Methods of critical analysis
Draws upon the discipline
of philosophy

50. What can you do?
Make yourself into a LEADER
1.Be well informed
2.Learn to be critical-minded
3.Learn to be open-minded
4.Be autonomous
5.Participate

54. Western theory - business/society
1. Goals of a business
2. Milton Friedman & The Chicago School
3. Neo liberalism

55. The goal of business
1. The goal of business is to make a profit
Net shareholder value
2. Contribute to society
The long view
Not this 
(goals within a business)

56. The worlds
dumbest idea
1. Ideas have many origins
2. Milton Friedman
3. The goal of business is to make a profit
4. Social responsibility is the role of government, not
business

57. Milton Friedman
1. 1912-2006
2. American economist & statistician
3. University of Chicago
4. New York Times, September 13, 1970
www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html
5. Newsweek columns influential, 1966-1984
6. Profits + markets = neo liberal philosophy

59. The Chicago School of Economics
1. Friedman from 1946
2. Produced several Nobel Prize winners
3. New York Times, September 13, 1970
www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html
4. The goal of business is to make a profit
5. Social responsibility is the role of government, not
business

62. Global economic crisis

64. Business ethics in China
1. Business ethics with Chinese characteristics
2. Alternative theorists
3. Ethics in China is a tradition of contention – there
is no settled Chinese way or theory

66. Corruption
Politicians and the
public expect business
practitioners to be
honest, to obey the law,
to be concerned about
the environment and the
national interest
There are spectacular
examples of failure in
the West and in China

67. Illegality

68. The challenge – new responsibilities
Their first democratic labour union elections 2012
All-China Federation of Trade Unions 中華全國總工會

70. HRM model

71. 71
Western concerns in business decision-making

72. 72
Chinese concerns in business decision-making

73. Alternative theorists

74. Thank you.

75. Case study methods
Thoughts for MBA students on case
studies
(applies to all management subjects, not
just business ethics)

76. Case studies may
1. Describe what companies did
2. Ask for the students opinion
3. Gives an official viewpoint
4. Confront moral/ethical dilemmas
Student gives own opinion
Student applies theory

77. Case studies may
1. Describe what companies did GOOD FUN
2. Ask for the students opinion POINTLESS
3. Gives an official viewpoint DANGEROUS
4. Confront moral/ethical dilemmas
Student gives own opinion PERHAPS
Student applies theory DO ETHICS !

78. Case study technique
Ethical dilemma (who, when, what)

Options for analysis

Ethical theory

Apply the theory to the options

Draw conclusions

79. Ten steps
1. State the ethical dilemmas that the case
involves
2. Select the decision-maker you will focus on
3.Describe the decision options for the
dilemma
4. List the stakeholders
5. Say how each stake holder is affected by the
decision, positively and negatively

80. Ten steps to produce a case study
6. Say why you are going to use a particular
ethical theory
7. Outline the ethical theory you are going to
apply to the case
8. Systematically apply the ethical theory to
the options
9. Draw conclusions based on the application
of the ethical theory
10. State the limitations of the analysis

81. Case study 1
Made in China

83. I don’t buy anything which has ‘Made in China’ written on it. I just don’t. I used to
earlier when I got tempted by the low cost of stuff from China. But that was then. I’m
much wiser now. After having heard of all the stories of their toys, rubber products
and now milk products I just hate the sight of a ‘Made in China’ label.
Although I’ll admit here that stuff made under the known brand names like Lenovo or
HP or some such company having their own plant in China are still okay though there
are a few exceptions to this too (remember ‘Made in China’ Barbie dolls which were
recalled).
But apart from the quality of items which come out of China is hugely suspect. Take
their $1 watches which don’t last for more than a week to their bathroom slippers
which has a whole lot of chemicals (check the picture) to their milk products which is
killing and maiming their own kids. What’s their problem? Why can’t they make good
stuff? Why can’t they ensure quality of their items? These are quite pertinent
questions. Wouldn’t you say? Lets try and find out.

84. First, let’s admit that it’s a communist state. Some of you guys will say - so what? I’ll
explain. Because it is a communist state till very recently individual enterprise was
not permitted in the country. Most of the stuff that was produced was under the
watchful eyes of the state. And the state ensured quality of stuff being made.
But ever since their economy started opening up and individual enterprise was
permitted they did not have any means of checking the quality of all the stuff being
produced. Their people hurriedly put up millions of small factories with the help of
easy loans which were now available to them.
Their only goal was to make money. And so they started producing stuff which was
pretty cheap so that the demand for their items would be huge. They did not care for
the quality of their own stuff. They just wanted their profits. The Chinese government
couldn’t care less either as whole lot of money was coming to the country. And so you
have cheap Chinese stuff flooding the world market which is of very low quality.

85. This is where the question of ‘Business Ethics’ comes up. In any other country which
has always promoted capitalism the companies in those countries aim to build not
just their products but their brand name as well. And to do that they have to make
good stuff which actually wins over the trust of the consumers. Take for instance any
stuff being marketed under the label of Spencers. I’m sure the company takes lot of
pride in the quality of their stuff and likewise. And so a consumer buys their items
with a blind faith in the quality of those items. This is what Business Ethics is all
about. The onus of maintaining the quality of goods is on the company. The
governments also do their bit by way of having checks at various levels.
Now compare this with China. Out of all those millions of companies do you know the
name of any one Chinese company leave aside having faith in their product? At least I
don’t. In fact I can see you guys nodding your heads. You see till such time these
companies try and make decent stuff with a better quality management system in
place they cannot build consumer confidence in their products.
Their strategy of making cheap and low quality stuff will soon backfire as the
consumers worldwide have started realizing the worth (and ill effects) of goods made
in China. These companies will have look beyond short term returns which will take a
dip when their goods start competing with the rest of the world.

86. There is something else which needs to be talked of over here. Let the Chinese do
what they want. Why can’t the other governments check the quality of stuff coming
into their countries? Why can’t they make it mandatory for all these Chinese
companies to get their stuff evaluated before they’re allowed into the markets? I know
it cannot be for Chinese companies alone. So let them make it mandatory for
everyone. And their laboratory guys can also make decent money for checking their
stuff. Quite simple actually. Wouldn’t you say? Tell me.

87. Case study 2
Real estate marketing

88. Case Study:
Ethical Marketing
and Advertising
1. Jason Davis, a well known estate agent is approached
in January by Hill Properties to arrange the sale of a
small Central London office block - "Hill House".

89. 2. Jason informs Hill Properties that according to his
estimates, the selling price should be around £1.2M. The
general view of his colleagues in the firm is that the
most he is likely to sell the property for is £1M but he
does not disclose this view to his clients.

90. 3. Hill Properties are impressed by the estimated sales
price and by Davis's sales pitch, which involves
commissioning a glossy brochure and an extensive
national advertising campaign, both at the clients' cost.
His company is appointed sole agent in February. At the
clients' demand, the property is placed on the market
for £1.5M. Jason does not object.

91. 4. Jason produces a sales sheet describing the property
in a very positive light although he has not checked
many of the facts. However, he includes a large print
disclaimer from any liability for misrepresentation. He
has been informed in the past by his solicitors that such
a disclaimer would ensure that he could incur no
liability to any purchaser for any damages arising from
misrepresentation.

92. 5. Jason discovers that a rival agent is also trying to sell
another office block of the same calibre to this potential
buyer and immediately drops broad hints about the
unsuitability of the other property and about the
unreliability of the other agent. (Only some of his
comments are in fact valid.) As a result, negotiations on
the purchase of "Hill House" progress. A selling price of
£1.2M is agreed in principle and the solicitors for the
two parties start dealing with the documentation.

93. 6. The buyer drags out the negotiations on the details
over a period of two months involving Hill Properties in
considerable legal fees and loss of interest. Jason
"encourages" the negotiations along by hinting to the
buyer that it may be possible to "shave off" something
from the price as the sale negotiations progress. During
this time Jason is approached by various other potential
purchasers, but they are informed that the property is
under offer.

94. 7. The two sides finally meet to sign the sale agreement
in June. Out of the blue, the buyer refuses to sign unless
£200,000 is "shaved-off" the purchase price. Hill
Properties are shocked by the tactics but realise that
they will be unable to put the property back on the
market to find another buyer until the autumn, causing
serious cash flow problems. Reluctantly, they agree to
sell at £1M.

95. 8. Jason subsequently receives two crates of vintage
champagne from the buyer for having helped them
obtain the property. They are pleased with the price they
have paid.

96. Answer: The Jewish Perspective
Jason, as an expert in real estate, is expected to be totally honest
and forthcoming with his clients who are the vendors of the
property. He has a responsibility to tell his clients the consensus
view of the property value.
Whether or not a legal liability exists, Jason must describe the
property honestly and while he certainly may put the best spin on
the property, he must be certain of his facts and be scrupulously
honest about what he says concerning it.
It is clearly prohibited for Jason to spread untruths concerning
rivals.
He must maintain his client's best interests uppermost in all his
actions.

97. Case study 3
Marketing manager

98. You are a marketing section manager in a medium
sized American company.
Your company is a telemarketer.
You have 9 people working for you (7 men and 3
women).
Business is good and you want to appoint two more
staff.
You need people to telephone prospective clients and
sell your products.
You sell exercise books, pens and other stationary.

99. The advertisement
Job Description:
Location: Parsippany, NJ
Compensation: 30-35K plus a significant bonus structure
Hours are flexible!
In search of a full time telemarketer for a client in the
Parsippany, NJ area. This position features flexible hours and
a significant bonus structure!
Must have telemarketing experience and a proven sales
record. Successful candidates are aggressive, possess a
pleasant phone manner, and able to secure their own leads
based on referrals. Apply for this great opportunity today!
You can view all of our jobs online at
http://www.appleone.com/?sc=11&id=844292

100. You advertise and get 23 good applications.
You decide to interview 5 of them.
Write the list of criteria you would apply to make the
selection.