A Detailed Look at Comparative Business Ethics & Social Responsibility

This essay provides a comparative analysis of business ethics and social responsibility, addressing ethical dilemmas such as the 'Nag Factor' in marketing to children and insider trading. It examines the ethical implications of marketing strategies that manipulate children, referencing the perspectives of Susan Linn and Lucy Hughes. The analysis employs ethical frameworks like deontology, utilitarianism, virtue ethics, and justice as fairness to evaluate the morality of these practices. Furthermore, the essay discusses a case of insider trading by a manager, Martina, and assesses the legality and ethicality of her actions using descriptive and normative ethics, utilitarianism, deontology, libertarianism, egalitarianism, virtue approach, and stakeholder theory. The essay concludes that both manipulating children through marketing and engaging in insider trading are unethical and detrimental to society and stakeholders.

Comparative business ethics & Social
Responsibility

Table of Contents
Question 1.............................................................................................................................................2
Question 2.............................................................................................................................................3
References.............................................................................................................................................6
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Question 1
The videos show how the marketing of products manipulating the children to buy their
product. This clip turns between Susan Linn (professor of Psychiatry at Harvard's Baker
Children's Center) and Lucy Hughes (a marketing executive at Initiative Media). She is also
known as the co-founder of "The Nag Factor". The Nag Factor is a scientific study which
shows how parents are being nagged by their children for help in buying any product, such as
toys, foods and game parlour (HowManyKnow). As per Hughes, 20%-40% purchases would
not have made if the children have not nagged their parents. Professor Linn is against the
industry that spends $12 billion/year to market to children. She compared the marketing
strategy of yesteryears to the strategy of today. The question arises here, is it ethical? While
Professor Linn condemned it, Lucy says she does not know, as it is her job to sell products.
Deontology
The advertising and marketing society has gone so far today. As Lucy said she does not know
whether it is ethical or not, she is just doing her job. She must follow a way that can reduce
the chance of nagging. The Nag Factor is literally controlling the children to buy the
products. Professor Linn said it is not wrong making these things for children; it’s not bad to
sell toys directly to the children as well. But the way of marketing they have chosen is not
ethical. The marketers of USA always use Nag Factor to reach the children so they will put
pressure on their parents for purchasing the product (Fisher).
Utilitarianism
The marketers are focusing on selling their products and for that, they are relying on nag
factor. But they are not thinking about the consequences of it. Today, maximum parents see
themselves fighting a battle in the cereal aisle (Weiss). Identified logos and characters
influence children to force their parents to purchase that product including low nutritional
foods and beverages. The marketers are using television ads and the favorite cartoon
characters of children to influence them for nagging. The Nag Factor is a habit of children,
who are being targeted by marketers’ messages, to unrelentingly request advertised items
(Fisher, Lovell and Valero-Silva). It is affecting the health of children as they are being
influenced towards the marketing and consumption of junk food. The marketers need to
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understand that the Nag Factor is unethical and it should not be used as a weapon to sell their
product.
Virtue
Lucy conducted a study on nagging, she asked the parents to put a diary and note every single
nagging done by their children. This study was not to help parents from nagging but it was to
help corporations to nag children for their products more effectively. She does not even
bother about whether the Nag Factor is ethical or not, she is just doing her job (Geulincx et
al.). She does not care how The Nag factor affecting children and their parents. It is not
possible to prevent advertising messages from reaching children, but it can be used to
promote healthy eating instead of junk food. Lucy is unethical unless she changes her mind
and starts focusing on the prevention of The Nag Factor.
Justice as Fairness
Nagging cannot be considered as a positive behaviour. It is making a bad impact on society.
Parents are being harassed by their children and the children are nagging for unhealthy foods.
Lucy is not doing anything to prevent The Nag Factor even knowing that it might not be
ethical. She is also aware of the impact that the Nag Factor is making on the society. Instead
of preventing she is influencing it which is not ethical. As per the survey, 20%-40%
purchases are being made because the children are nagging their parents (Jeurissen and Rijst).
The marketers are using The Nag Factor to increase their sales and profit. They might have
used the same strategy to promote healthy food which makes a positive impact on society.
Question 2
The action of Martina is considered to be illegal because she sold of her stock of Frobisher
after receiving an advanced notice. The action of Martina is unethical because selling or
buying shares based on the material non-public information is considered to be insider
trading. It means Martina carried out an illegal way for trading the shares on the stock
exchange for his own benefit through having confidential information. Descriptive ethics
states what individuals think about wrong and right. In the case, Martina carried out the
activity without thinking of its consequences on the organization and its stakeholders
(Murthy). Martina has depicted a selfish nature which led to the fall in the share price of
Frobisher which is unethical. Normative ethics is also a significant aspect of moral ethics or
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philosophy which is concerned with morally what is wrong and right. Martina is unethical
because despite being a manager and major shareholder of the organization, she carried out
insider trading. Martina should have followed the moral standards in order to avoid the
negative impact on the organization and stakeholders.
The utilitarianism is the ethical theory that identifies wrong and right by focusing on the
result. The theory holds that the ethical choice should produce the greatest good for the
greatest number. The action of Martina depicted that it was not good for the organization and
stakeholders. The decrease in the value of the shares led to the decline in the value of
Frobisher. Apart from this, other shareholders, employees and managers are also affected due
to the action was taken by Martina (Rothlin and McCann). The share price drop leads to the
decrease in the return on the shares which are being held by the shareholders. The managers
and employees faced problems in managing the processes of the business due to the decline
in the value of the organization. There were no benefits and costs were very high for the
stakeholders. The utilitarianism states that the sum of total benefit should be higher than the
sum of total costs for a given action. The theory counts interests equally for everyone but
doesn’t protect equally for everyone (Vallabhaneni).
Martina should have taken actions on the basis of moral frameworks but it does not mean that
it would have resulted in the best outcome. However, the actions should e for the benefits of
others and not affecting others. The deontological theories are different from the utilitarian
theories. The deontological theories aim at the objective of the greatest happiness and
examine any act that assists in achieving the goal (Shaw). The deontology actions are judged
always independently of their result. It means that the action can be morally not right but it
may unintentionally lead to the appropriate outcome. However, the actions need to be taken
on the basis of the interests and welfare of the associated stakeholders. The actions of Martine
are not considered to be ethical. Martine carried out insider trading because she was engaged
in a trade which benefited her by getting information associated with the organization which
was not yet made public.
The interests of all the stakeholders need to be taken into account. Libertarianism theory
states that each and every individual has the right to live his or her life but the rights of others
should also be respected. The egalitarianism states that equality needs to be maintained and
there should be no partiality. Virtue approached need that people should develop good habits
in order to ensure that the ethical and moral rules are being followed. The theory directs an
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individual to act appropriately and for the benefit of the society (Thomas). The stakeholder
theory states that the value of the shareholder needs to be maximized. The theory wants that
interests need to be balanced and respect should be given to the stakeholders. The action of
Martina was illegal because it was insider trading. The action is unethical because it affected
both the organizations and stakeholders. The use of confidential information was illegal
which should not have been carried out by Martina. The interests and values of the
stakeholders were affected due to the action was taken by Martina (Barcalow).
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References
Barcalow, Emmett. Moral Philosophy. 5th ed. Belmont, Calif., U.S.A.: Thomson/Wadsworth,
2007. Print.
Fisher, C. M, Alan Lovell, and Néstor Valero-Silva. Business Ethics And Values. 3rd ed.
Upper Saddle River, NJ: FT Prentice Hall, 2006. Print.
Fisher, C. M. Business Ethics And Values. 8th ed. Harlow: Pearson Education Limited, 2012.
Print.
Geulincx, Arnold et al. Ethics. 3rd ed. Leiden: Brill, 2006. Print.
HowManyKnow. "The Nag Factor." YouTube. N.p., 2012. Web. 30 Nov. 2018.
Jeurissen, Ronald, and Maaike van der Rijst. Ethics & Business. 4th ed. Assen: Koninklijke
Van Gorcum, 2007. Print.
Murthy, C. S. V. Business Ethics. 3rd ed. Mumbai [India]: Himalaya Pub. House, 2010. Print.
Rothlin, Stephan, and Dennis McCann. International Business Ethics. 7th ed. Berlin:
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Shaw, William H. Business Ethics. 8th ed. Boston, MA: Cengage Learning, 2017. Print.
Thomas, Rosamund M. Business Ethics. 6th ed. Bury St. Edmunds: Ethics International
Press, 2011. Print.
Thompson, Mel. Ethics. 2nd ed. Blacklick, OH.: McGraw-Hill, 2006. Print.
Vallabhaneni, S. Rao. Corporate Management, Governance, And Ethics Best Practices. 11th
ed. Hoboken, N.J.: Wiley, 2008. Print.
Weiss, Joseph W. Business Ethics. 10th ed. New York: Berrett-Koehler Publishers, 2014.
Print.
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