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Marketing in the 21st Century
Marketing in the 21st Century

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2.2 Ethical theories

The next step is to use ethical theories to understand these moral issues. An ethical theory is a systematic way of approaching ethical questions from a particular philosophical perspective. Western moral philosophy has developed a number of ethical approaches.

Three ethical theories are commonly used in the consideration of marketing ethics: utilitarianism, deontology and virtue ethics. Each may lead to a different conclusion when applied to the same ethical dilemma.


Utilitarianism is concerned with the consequences of the decision. The quality of a marketing decision or action is assessed by looking at the consequences of implementing that decision. In deciding whether it is unethical the decision-maker will need to:

  • assess the likely costs and benefits for each stakeholder
  • make a decision based on what action produces the greatest benefit for all concerned.

This approach to ethical decision making is often used in public policy decisions where policy makers have to take the course of action that is likely to produce the greatest overall benefit for the greatest number of stakeholders (for example, all inhabitants of a region).

In our example, BAE Systems is faced with a dilemma. If it pays the bribe it wins the contract, ensuring the growth and survival of the organisation. However, paying it may be illegal and by doing so, BAE Systems perpetuates corruption in an African state that ultimately ensures its citizens suffer from misappropriation of their money. Yet not paying the bribe may result in redundancies and how would these affect employees’ families?


Deontology is concerned not so much with the consequences of action but whether the underlying principles of a decision are right. According to this view ethically good decisions are made by adhering to key ethical principles such as honesty, truthfulness, respecting the rights of others, justice and so on.

Applying this theory to BAE Systems raises a number of issues. Bribery tends to be illegal so by paying a bribe BAE Systems makes everyone in the organisation indirectly implicit in an illegal act. Also if a bribe is paid, where does the money go? Does it reinforce the status of a corrupt section of the wealthy and avoid payment of taxes? In this example, a few people would benefit from the bribe to the detriment of the wider majority of Tanzanian citizens.

Virtue ethics

Virtue ethics views marketing ethics from the perspective of the moral integrity of the individual(s) involved in making the decision. A morally good decision is one that is based on the virtuous character of whoever is making the decision. Moral virtues include honesty, courage, friendship, mercy, loyalty and patience.

In our example, BAE Systems’ payment of the bribe lacks any virtue (effectively reinforcing corruption in Tanzania) and little courage (paying bribes may appear to be unofficial organisation policy).

It should be clear that making ethical judgements rarely involves clear decisions. Depending on the viewpoint, different ethical principles may well lead to different decisions. Often it is appropriate to look at an ethical question using different theories before making a decision.

Managers in public sector organisations will often have to make difficult decisions about which stakeholder needs to satisfy when limited budgets mean not all needs and expectations can be met fully. In many public sector and internal marketing contexts the customer or stakeholder has relatively little say over the kind of service they receive. Thus, questions of an unequal distribution of power are more acute in not-for-profit and internal marketing where one or both parties to an exchange are often locked into existing arrangements and cannot walk away if they are dissatisfied with what they are receiving.

Further information

Finally, if you feel that BAE Systems is in a difficult situation consider this news clip from Aljazeera. The outcome described in this clip raises serious ethical issues about the extent to which organisations can use their external environment to protect themselves.

If you are reading this course as an ebook, you can access this video here: Aljazeera on Britain's dropping of BAE Systems fraud inquiry [Tip: hold Ctrl and click a link to open it in a new tab. (Hide tip)]

Having reached the end of this section you should be able to provide a good overview of what marketing offers an organisation and be able to indentify if your organisation is marketing focused.

By engaging with the market, organisations are exposed to situations and decisions that raise ethical issues. Often the correct ethical decision is not always apparent.

In conclusion marketing is about satisfying customer needs whilst making a profit.

A good example of an organisation that has consistently delivered added value to its products and customers and epitomises what marketing is, is Apple Inc. Watch this short video clip of Steve Jobs, co-founder of Apple, introducing the first iPod. What is interesting is how he carefully describes the logic for his product and the added value it offers customers while eliminating direct competition. This is an example of a true marketing genius.

One factor that has contributed to Apple’s success is understanding exactly what its customers want. But how do we define a customer and how does it differ from a client or consumer? These questions are addressed in the next section.

When you are ready, please move on to Section 3 Brand Basics