Defining ethics (and arguing semantics)

Let’s lay down an appropriate marker and start with the individual’s worth ethic:
Typically we view this as the person’s way of working, and what they deem to be appropriate behaviour. So ethics can be translated into values, conduct and responsibilities.

Then there’s a business’ ethics: These are the values that complement the organisation’s vision and mission, and underpin the brand’s strategy. They are the brand’s moral compass that directs staff on what is acceptable and appropriate for the brand.

These values are driven by senior management. They can be explicit in terms of their articulation at board level and on various governance and consumer reports. But even where they are not formally introduced to staff, or indeed suppliers, they are implicitly evident in every function of the business including marketing. Furthermore, studies show that individuals emulate senior management behaviour, which they believe is what is expected of them, even if it contradicts their own morals.

So ethical marketing then, is based on the organisation’s and the brand’s ethics - regardless of whether they are communicated or discrete.

But here’s the rub:

Logic dictates that the most effective marketing is that which aligns the brand’s values to those of the customer. And customer and market oriented businesses, enjoy better performance, profitability and sustainable competitive advantage (Slater & Narver, Webster, and Hunt & Morgan respectively). So it follows that at a time when the customer is looking for greater integrity and honesty, these are the Utopian values that today’s brands should emulate to succeed. (A possible logic applied to the latest RaboDirect posters perhaps?)

Ultimately, I have two critical points I want to make here:

1. ethics is about behaviour, it’s what you do not what you say
2. ethics are lived through people, so they must be defined and communicated throughout the value chain and not just in the boardroom.

The metrics of ethics

You know the adage: “If you can’t measure it, how do you know it works?” Well ethics is no exception. But the metrics are as diverse as the definitions.

CSR is one of the antecedents of economic performance (McGee 1998) and can be used to strengthen corporate image and “ultimately economic/financial performance” (with the reverse also holding true). But ethics goes further than CSR. Much further:

An organisation’s ethics should be enshrined in every aspect of its activity from product to customer to supplier to staff. They should be embedded in every business function (especially marketing) within the organisation, so that everyone involved is aware of your position from an ethical and values perspective.

By articulating and communicating your organisation’s ethics, it should be possible to review and to manage how they affect each area of the business.

For example, ethical companies tend to be more customer oriented, and therefore measuring consumer behaviour is one option. Evaluating marketing performance is another. And as companies with communicated ethics and values have greater staff commitment, then measuring staff performance and loyalty are other metrics to consider.

Then there’s Anmbler, Kokkinaki & Puntoni’s (2004) model that covers off three significant bases, all of which present tangible aspects of the business that can be measured:
• Relationships: with consumers, stakeholders, shareholders, employees and suppliers
• Economics: profit, sales, company/brand value, market share
• Social opportunities: cost benefit analysis and social RoI
The FTSE4Good Index also offers in its criteria a list of elements that can be measured with regard to ethical behaviour.

And the lists go on.

The key point in all of this is that ethics should not be viewed as intangible, a ‘nice but not need to have’, or a CSR tick box. Ethics are a real and measurable part of doing business today.

So if you are an advocate of making the effort to clarify, define and enshrine ethics in your organisation, then you need to also ensure you include some metrics. Only then can you truly realise the value of ethics. And equally as important, only then can you really bring the board and management with you.

Walking the ethical talk - step by step

Too often ethics are seen only in the context of the ubiquitous green policies, community programmes and CSR report. And while these are ethical issues, it is often the smaller actions of an organisation that speak ethical volumes.

Consider the measurements that ethical indexes such as the Swiss Covalence Ethical Quotation System and Ethisphere.com use to rate companies: consumer communication, dealing with complaints, distribution and marketing. Because it is the everyday implementation of these areas that show a brand to be walking the talk… or not…

 For example:
Is it ethical if an airline charges obligatory extras that the consumer is only made aware of when they’re half way through the purchasing process?

Is it ethical that a food label can carry unsubstantiated health claims, or nutritional information for “portion” sizes that do not equate to likely product consumption - the 200ml kids smoothie label that cites a 100ml portion and the King size chocolate bar or soft drink that cites a portion as being half the product.

Is it ethical for a restaurant or hotel to claim it is “family friendly” when the catering and the pricing is anything but?

Ethics can be widely and unconsciously disregarded in the smallest of ways. But the accumulative effect of these apparently minor misdemeanours can be far reaching.

Today’s consumers want to feel good about the choices they make. They may have roomier purses but they also have time to consider how they spend their reduced disposable income. And it is not so much the price but the value and values that that price and the product infer that concerns consumers.

So brands that want to engage with today’s consumers need to get their values in order and their ethics in line.

Schools - the final marketing frontier

It’s back to school and traffic is the least of parents’ worries. Even where there are no school fees there’s still all manner of paraphernalia to cost, including the ongoing outlay of requests from the school for support, fundraising events, etc.

And whilst the government claims intellectual capacity can overthrow recessionary adversity, it ironically hampers the source of that intellect – our education system – through ongoing cutbacks. The result is that school principals focus on frugal efficiency, and parents are increasingly asked to supplement depleting resources.

But couldn’t the private sector help? And indeed doesn’t the private sector have a duty to look after its future customers and employees, enact its corporate citizenship, and plug this financial gap?

I am not suggesting a ‘free for all’ invite to companies to take marketing advantage of the situation. Because in the absence of formal guidelines, what’s to stop a company offering schools much needed resources in return for blatant PR, branding, and the ubiquitous proofs of purchase.

But just as an organisation’s corporate compassion should influence its values and activities, so too its ethical position should drive how such activities are implemented. By this I mean due consideration should be given to all parties concerned, identifying and protecting each group’s vulnerability. Activities should be based on mutual respect and trust. And most importantly, the motivation and metrics of the activities should be objectively reviewed and clearly defined… and put in writing.

There may be no formal guidelines to commercial activities in schools. But there are plenty of ideas out there (from which my own freely available guidelines are drawn – http://www.sheenahorgan.com/).

So companies cannot be excused for acting as if its open marketing season in schools. But nor too should they be closed to the many mutual benefits of considering a school programme.

Collective Responsibility

Ask yourself: “What do you or your organisation do when a social issue like obesity or marketing to children, is raised?” The typical knee jerk reaction is to point the finger: At other brands; at industry; at parents; at schools; at politicians; at anyone other than yourself.

If ethics is about exercising good judgement for the greater good, then it follows that if we all act responsibly then this collective responsibility will generate behaviour and actions that address issues such as these.

If there is something – however small – that an organisation, brand or individual can do, then it is our civic duty to do so. Passing the buck is not acceptable. And ignorance, in this multi media age, is not excusable.

Being responsible is more than a CSR page in the annual report. And more than donating to charity. It is about questioning your morals and values, and embedding them in your actions. For a business, that also means immersing your supply chain in these values. And codifying these so that your staff actually know what is deemed ethically appropriate for the business.

For an individual, it’s about retaining your own inherent morals and ethics, even and especially at work. Because individual decisions can be employer-focused and still ethically sound. And where they’re not, the organisation must address this.

Whatever way you look at it, acting responsibly is ultimately about doing good. And in times of recession and consumer disillusionment, doing good, is now good for business too.

So the bottom line is… the bottom line. Because no man is an island. Even in Ireland.