Session 7

The Ethics of Consumer

Production and Marketing
The Ethics of Job
Discrimination

Session 7
Chapter 6: The Ethics of Consumer
Production and Marketing
Chapter 7: The Ethics of Job
Discrimination

Chapter 6

Markets and Consumer Protection

Laissez faire or "market" approach
holds that consumers will
automatically be protected from injury
and other loss (e.g., due to product
breakdown) by the operations of free
and competitive markets thanks to
consumer sovereignty

Thanks to consumer sovereignty

Sellers must respond to consumer
demands.
product safety features consumers want
and are willing to pay for will be produced
producers will have to respond to consumer
demand for safer products or risk losing
customers to others who do

Markets and Consumer Protection

Consumers automatically will be
protected from injury by the
operations of free and competitive
markets
Sellers must respond to consumer demands.

Consumers protected by free

markets
But this system will work only when
markets have the seven characteristics
of a perfectly free market.
Market forces by themselves are not
enough to deal with safety, risk, and
value issues
Inadequate information
Consumer irrationality
Concentrated markets

Conclusion
"On balance . . . it does not seem
that market forces by themselves
can deal with all consumer concerns
for safety, freedom from risk, and
value."

Limitation
The world can't be made perfectly safe:
producers can't be expected to protect
people from extremes of ignorance and
foolishness
people who remove safety guards from
power tools
smoke while they're pouring gasoline into
their lawnmowers

Central Issue
Where does the
consumers duty to
protect their own
interests end and the
manufacturer's duty to
protect consumers'
interests begin?

Three theories
Contract view: places the greatest
responsibility on the consumer
Due care" places more
responsibility on the producer
Social costs view: places the most
responsibility on the producer

The Contract View of Businesss

Duties to Consumers
Relationship between business and
customers is a contractual relationship
The firms moral duties to the
customer are created by this
relationship

The Contract View of Businesss

Duties to Consumers
Contract theory
free agreement that imposes on the
parties the basic duty of complying
with the terms of the agreement

Moral constraints
Full knowledge of the
nature of the agreement
Neither party must
misrepresent facts
Neither is forced to enter
the contract under
duress or undue
influence

Moral Duties of a Business

The Duty to Comply: Firm has a moral
duty to provide consumers with a
product that lives up to the companys
claims

Reliability
Service Life
Maintainability
Product Safety

Reliability
Concerns whether the product will function
as the customer has been led to expect
Issue concerning devices containing many
interdependent components
the more interdependent components a product
incorporates, the greater reliability is demanded of each
component since the probability of the whole
functioning correctly is the product of the parts.
For example, a unit with four components each with a
10% chance of failing has a 34% chance of failing: .9 *
.9 * 9 * .9 = .66

Product Safety
The degree of risk associated with
using the product. Acceptable
known levels of risk is the operative
concept
no product is absolutely risk-free
the issue is what levels of risk are
acceptable or reasonable

Product Safety
A product is safe if its attendant risks are
known
and judged to be acceptable by the buyer
in view of the benefits the buyer has been led to
believe he or she will obtain from the product

Obligation of the seller: to provide a product

that involves only those risks he or she
represents it to the customer as having

National Product Safety Commissions

Checklist
A risk is unreasonable when
consumers do not know it exists
though aware of it, they are unable to properly
estimate its frequency or severity
consumers don't know how to cope with it and are
thus likely to incur harm unnecessarily
the risk could be eliminated at a cost the customer
would willingly pay
if he or she knew the facts
and had the choice

Duty of Disclosure
An agreement cannot bind unless both parties to
the agreement know what they are doing and
freely choose to do it.
The seller has a duty to inform the buyer of any
fact about the product that would affect the
customers decision to purchase the product.
Freedom depends on knowledge

Duty Not to Misrepresent

Misrepresentation renders
freedom of choice
impossible
An act is coercive if the
person would not have
freely chosen it if he or she
had known the truth

Duty Not to Coerce

The seller takes advantage of a buyers
fear or emotional stress to extract
consent to an agreement that the buyer
would not make if the buyer were
thinking rationally.

Duty Not to Coerce

Duty not to take advantage of gullibility,
immaturity, ignorance, or any other
factor that reduces or eliminates the
ability to make free rational choices

Problems with the Contractual

Theory
Unreality of the assumptions
Unrealistically assumes manufacturers make
direct agreements with consumers

Freedom of contract allows a

manufacturer to be released from
contractual obligations by explicitly
disclaiming that the product is reliable,
serviceable, safe

Problems with the Contractual

Theory
Buyers and sellers
meet as equals
Caveat Emptor
highlights inequality
between buyer and
seller

The Due Care Theory

Due to manufacturers advantaged
position, they have a duty to take
special "care" to ensure that
consumers interests are not harmed
by their products.

The Due Care Theory

Caveat vendor
Design
Production
Information

The Due Care Theory

Problems

How to determine
when one has
exercised enough
due care
May not know all the
risks
Appears paternalistic

Social Cost View

Manufacturers should pay the costs of any
injury sustained through any defect in the
product, even when the manufacturer
exercised all due care in the design and
manufacture of the product.
This is an attempt to come to grips with the
problem of allocating liability between two
morally innocent parties.

Social Cost Theory

Based on utilitarian argument, the manufacturer
should bear external costs that result from injuries;
this will ensure that product is not overproduced.
Problems: unfair because it violates the basic
canons of compensatory justice; encourages
carelessness of consumers; increases financial
burdens of manufacturers and insurance carriers

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Advantage of internalizing
costs
Internalizing these costs would lead to fairer
distribution of costs
Injury-related costs would be added to the cost of
the product
and hence spread out among all users: not borne
entirely by the few who are injured
more efficient use of resources

Advantage of internalizing costs

The market price reflects the true social cost of
producing and using the product
ensures the product won't be overproduced
which wastes social resources

Result: Safer products: if producers assume all the

risks, then they'll be highly motivated to eliminate
risks

Problems with the Social Costs View

Violates the basic principles of compensatory
justice that one is obligated to compensate
parties for consequences of one's acts only those
consequences that were foreseeable and
preventable.
Parties treated unfairly include manufacturers,
others who have to pay for unwanted safety
features, and insurance companies.

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Problems with the Social Costs View

Won't reduce the number of accidents
extra motivation for producers to make a
safer product will be offset by decrease in
motivation for users to use the product
safely and correctly
safer planes result in more pilot error

Problems with the Social Costs View

Life's Unfair: It seems there's no just

solution to the problem about

unforeseeable risks which the Social Costs
view tries to solve
Which of two partiesmanufacturer or
consumershould bear the expense for
injuries for which they were not responsible,
could not foresee, or could not prevent?

Whoever bears the cost, it's unfair.

ADVERTISING ETHICS

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RESPONSIBILITY FOR PRODUCTS:

ADVERTISING AND SALES
The goal of all marketing is the salethe eventual
exchange between seller and buyer.
A major element of marketing is sales promotion,
the attempt to influence the buyer to complete a
purchase.
Target marketing and marketing research are two
important elements of product placementseeking to
determine which audience is most likely to buy, and
which audience is mostly likely to be influenced by
product promotion.

RESPONSIBILITY FOR PRODUCTS:

ADVERTISING AND SALES
There are ethically good and bad ways of influencing
others.
Among the ethically commendable ways to influence
another are persuading, asking, informing, and advising.
Unethical means of influence would include threats,
coercion, deception, manipulation, and lying.
Unfortunately, often sales and advertising practices
employ deceptive or manipulative means of influence,
or are aimed at audiences that are susceptible to
manipulation or deception.

RESPONSIBILITY FOR PRODUCTS:

ADVERTISING AND SALES
To manipulate something is to guide or direct its
behavior.
Manipulation need not involve total controlin fact, it
more likely suggests a process of subtle direction or
management.
Manipulating people implies working behind the
scenesguiding their behavior without their explicit
consent or conscious understanding.
In this way, manipulation is contrasted with persuasion
and other forms of rational influence.

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RESPONSIBILITY FOR PRODUCTS:

ADVERTISING AND SALES
One of the ways by which we can manipulate
someone is through deceptionone form of which is
an outright lie.
We can also manipulate someone without deception.
The more one knows about psychologyyour
motivations, interests, desires, beliefs, dispositions,
and so forththe better able they will be to
manipulate your behavior.
Knowing such things about another person provides
effective tools for manipulating their behavior.

RESPONSIBILITY FOR PRODUCTS:

ADVERTISING AND SALES
Critics charge that many marketing practices
manipulate consumers.
Clearly, many advertisements are deceptive, and some
are outright lies.
We can also see how marketing research plays into
thisthe more one learns about customers psychology,
the more one will be to satisfy their desires, but the
more one will also be to manipulate their behavior.

Critics charge that some marketing practices target

populations that are particularly susceptible to
manipulation and deception.

ETHICAL ISSUES IN ADVERTISING

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ETHICAL ISSUES IN ADVERTISING

ETHICAL ISSUES IN ADVERTISING

ETHICAL ISSUES IN ADVERTISING

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ETHICAL ISSUES IN ADVERTISING

The general ethical defense of advertising reflects
both utilitarian and Kantian ethical standards.
Advertising provides information for market exchanges
and therefore contributes to market efficiency and to
overall happiness.
Advertising information also contributes to information
necessary for autonomous individuals to make informed
choices.

Each of these rationales assumes that the

information is true and accurate.

ETHICAL ISSUES IN ADVERTISING

The deontological tradition in ethics would have the
strongest objections to manipulation.
When I manipulate people, I treat them as a means to
my own ends, as objects to be used rather than
autonomous people in their own right.
Manipulation is a clear example of disrespect for
persons since it bypasses their rational decision-making.
Because the evil rests with the intention to use others
as a means, even unsuccessful manipulations are guilty
of this ethical wrong.

ETHICAL ISSUES IN ADVERTISING

The utilitarian tradition would offer a more conditional
critique of manipulation, depending on the consequences.
There can be cases of paternalistic manipulationin which
someone is manipulated for their own good. But even in such
cases, unforeseen harms can occur.
Manipulation tends to erode bonds of trust and respect
between persons.
It can erode ones self-confidence and hinder the
development of responsible choice among those
manipulated.

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ETHICAL ISSUES IN ADVERTISING

Because most manipulation is done to further the
manipulators own ends at the expense of the
manipulated, utilitarians would be inclined to think
that manipulation lessens overall happiness.
A general practice of manipulation, as critics would
charge, occurs in many sales practices, and can
undermine the very social practices that it is thought
to promote as the reputation of sales is lowered.

ETHICAL ISSUES IN ADVERTISING

A particularly egregious form of manipulation occurs when
vulnerable people are targeted for abuse.
Cigarette advertising aimed at children is one example that
has received major criticism in recent years.
Marketing practices targeted at elderly populations for such
goods and services as insurance (particularly Medicare
supplemental insurance), casinos and gambling, nursing
homes, and funerals, have been subjected to similar
criticisms.

ETHICAL ISSUES IN ADVERTISING

Marketing practices that seek to discover which consumers
might already and independently be predisposed to
purchasing a product are ethically legitimate.
Marketing practices that seek to identify populations that
can be easily influenced and manipulated, are not.
Sales and marketing that appeal to fear, anxiety, or other
non-rational motivations are ethically improper.

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Advertising Ethics
Primary function of
commercial advertisements
is to sell a product to
prospective buyers
Mass audience vs. Private
Message
Intended to induce audience
to buy sellers product

Social Effects of Advertising

What does the
advertiser intend the
effect of the
advertisement to be?

Social Effects of Advertising

What are the actual
effects of the
advertisement on
individuals and on
society as a whole?

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Effects on Desire
Does the advertisement
inform, or does it also seek
to persuade?
If it is persuasive, does it
attempt to create an
irrational and possibly
injurious desire?

Effects on Belief
Is the content of the
advertisement truthful?
Does the advertisement
tend to mislead those to
whom it is directed?

Advertising Ethics
And those forms of advertising which, without shame,
exploit the sexual instincts simply to make money or
which seek to penetrate into the subconscious
recesses of the mind in a way that threatens the
freedom of the individual...must be shunned. In the
competition to attract ever larger audiences and deliver
them to advertisers, communicators can find
themselves tempted--in fact, subtly or not so subtly--to
set aside high artistic and moral standards and lapse
into superficiality, tawdriness, and moral squalor.
Pontifical Council for Social Communication

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Chapter 7
The Ethics of Job Discrimination

Discrimination Defined
Discriminate - to distinguish one
object from another (may be
morally neutral)
Usually used in a negative sense
to refer to differentiation not
based on individual merit but
rather on prejudice or some other
negative attribute.

The Ethics of Job

Discrimination
Employment Discrimination - to
distinguish illicitly among people not on
individual merit but on the basis of
prejudice leading to a harmful or negative
impact on the interests of the employees
Religion
Sex
Racial group

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Arguments against
Discrimination
From a Utilitarian Perspective
Societys productivity will be optimized to
the extent that jobs are awarded on the
basis of competency
Discrimination based on irrelevant
characteristics (e.g., race, gender, etc.) is
inefficient and therefore contrary to
utilitarian principles

Arguments against
Discrimination
From a Rights Perspective
Discrimination is wrong because it violates
a person's basic moral rights.
Kant: People should be treated as ends, not
merely as means.

Everyone has a right to be treated as free

and equal.
Discrimination treats individuals as unequal.

Arguments against
Discrimination
From a Justice and Fairness Perspective
Rawls: In the original position, people would
choose equality of opportunity.
Discrimination arbitrarily limits some people's
opportunities.

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Arguments against
Discrimination
Discrimination differentiates among
individuals based on irrelevant
characteristics.
However, what counts as relevant?

Justice and Fairness

Discrimination denies equal opportunity to
compete for jobs
Violates principle of equality: everyone equal
in all respects relevant to the kind of
treatment in question should be treated
equally, even if they are dissimilar in other
non-relevant respects.

Discriminatory Practices
Recruitment Practices
Word of mouth
recruitment
Composition of workforce
Wording of classified ads

Screening Practices

Promotion Practices
Career tracks
Conditions of Employment
Wages
Discharge

Educational requirements
Tests
Job interview

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Sexual Harassment
Sexual Harassment
How do you define sexual
harassment?
Act
Hostile environment

Sexual Harassment
Sexual harassment is any unwelcome sexual
advance or conduct on the job that creates an
intimidating, hostile, or offensive working
environment.
In real life, sexually harassing behavior ranges
from repeated offensive or belittling jokes to a
workplace full of offensive pornography to an
outright sexual assault.

Unwelcome Conduct of a
Sexual Nature
Verbal or written
Comments about clothing, personal behavior, or a
persons body
sexual or sex-based jokes
requesting sexual favors or repeatedly asking a
person out;
sexual innuendoes
telling rumors about a persons personal or sexual
life

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Unwelcome Conduct of a
Sexual Nature
Physical:
Assault
impeding or blocking movement
inappropriate touching of a person or a persons
clothing
kissing, hugging, patting, stroking

Unwelcome Conduct of a
Sexual Nature
Non-verbal
Looking up and down a persons body
derogatory gestures or facial expressions of a
sexual nature
following a person

Visual
Posters, drawings, pictures, screensavers or emails
of a sexual nature

Laws on Sexual Harassment

Legal guidelines prohibit acts of sexual
harassment and conduct that creates an
intimidating, hostile, or offensive working
environment.
Legal guidelines state that an employer is
responsible for all sexual harassment engaged
in by its employees.
Regardless of employer's knowledge
Even if the employer forbade such practices

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Guidelines for evaluating your own

workplace behavior
Would you say or do it in front of your
spouse or parents?
Would you say or do it in front of a
colleague of the same sex?
How would you feel if your mother, wife,
sister, or daughter were subjected to the
same words or behavior?

Guidelines for evaluating your

own workplace behavior

Dont be a jerk at work!!

How would you feel if another man said or
did the same things to you?
Does it need to be said or done at all?

Affirmative Action
Programs designed to achieve a more
representative distribution of minorities
and women within a firm by giving
preference, in some way, to minorities
and women.

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Affirmative Action
Many firms have enacted policies
designed to achieve a more
representative workforce by giving
preference to minorities and women.
These programs are also used to rectify
the effects of past discrimination.

Affirmative action as
compensation
Compensatory justice demands that people
compensate those whom they have
intentionally and unjustly injured.

Affirmative action as
compensation
Affirmative action programs serve as a form
of reparation by which white males
compensate minorities and women for past
discrimination.

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Affirmative action as
compensation
However, the principle of compensation
demands that specific individuals compensate
only those whom they specifically have
wronged.
Affirmative action supporters counter that all white
males have benefited from past racial and gender
discrimination.
Also, they claim every minority and every woman
has been injured by past discrimination.

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