Page 65 - MARKETING & PUBLIC RELATIONS EBOOK IC88

1. Managements of organisations establish ethical standards through large and small policy
instructions. What the organisation does, will speak more loudly than what they say in policy
statements. Actions clarify what the organisation’s ethical standards are. In evolving these
standards and deciding on appropriate actions, the questions to be asked will be of the
following nature.

 Are the actions injurious to customers individually or society as a whole?
 Is public interest being held more valid than self interest?
 What is happening at pressure points viz., places where products are returned, complaints are
recorded, claims are being made, defects are reported, quality is checked, grievances are heard?
 Are control mechanisms based on trust or on coercion or on need to improve or to find fault?

2. A periodical audit regarding the organisation's performance on ethics would contribute to the
creation and maintenance of an ethical environment. Both corporate activities and individual
behaviours can be audited. The audit must be done by persons who have no direct responsibility
for operations and should report directly to the CEO or the Board of Directors.

3. The vigilance departments of Government and public sector organisations are aimed to
establish norms of proper behaviours. But like audit, they come into effect only after the events
have happened. When certain behaviour is detected and punished, the effect is to avoid such
behaviour or to prevent detection, because of fear. The effect is more powerful when the
inculcated values provide the momentum positively for ethical actions, instead of brakes for the
unethical.

4. LIMRA, the premier research organisation in life insurance marketing in the U.S. had found that
ethics in insurance selling consists mainly of putting the interests of the client first. This implies
that the advantages to the agents in terms of remuneration are not as relevant as the
advantages to the client from taking out the policy. This is nothing but the marketing
philosophy. The research study showed that such an approach benefits the agent in the
following ways

 Prospects, whose needs have been studied, and who have understood how the plans will meet
these needs, are more likely to purchase than those to whom such explanations have not been
made. Thus both business and earnings should improve
 Such business tends to stay in the books longer
 Because of the high level of satisfaction, the agent occupies a special place in the clients mind
and future business as well further references become easy
 There is no fear of the consequences of being harmful or unexpected

(C) SOCIAL RESPONSIBILITY

(a) Rationale

1. Organisations are creations of society, being granted the necessary resources and accepting the
outputs. They are citizens (members of society) and as citizens, they have a responsibility to the
society as a whole. This responsibility is different from the responsibility they have to the
stakeholders, like shareholders, customers, government, suppliers, etc. These stakeholders

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