OUTCOMES OF SOCIAL RESPONSIBILITY INVOLVEMENT EXPECTED BY EXECUTIVES Sunday, Dec 7 2008 

POSITIVE OUTCOMES:

  1. Enhanced corporate reputation and goodwill.
  2. Strengthening of the social system in which the corporation functions.
  3. Strengthening of the economic system in which the corporation functions.
  4. Greater Job satisfaction among all employees.
  5. Avoidance of issues with government regulations.
  6. Greater job satisfaction among executives
  7. Increased chances for survival of the firm.
  8. Ability to attract better managerial talent.
  9. Increased long term profitability.
  10. Strengthening of the pluralistic nature of American Society.
  11. Maintaining or gaining Customers
  12. Investor Preference for socially responsible firms
  13. Increased short term profitability

 

NEGATIVE OUTCOMES:

  1. Decreased Short term profitability
  2. Conflict of economic or financial and social goals.
  3. Increased prices for consumers
  4. Conflict in criteria for assessing managerial performance
  5. Disaffection of stock holders.
  6. Decreased Productivity
  7. Decreased Long term profitability
  8. Increased Government Regulation
  9. Weakening of the economic system in which the corporation functions.
  10. Weakening of the social system in which the corporate functions.

 

STAKEHOLDERS:

 

SOCIAL OBLIGATIONS OF THE MANAGERS TO VARIOUS STAKEHOLDERS :

  1. STOCKHOLDERS: To increase the value of the organization.
  2. SUPPLIERS : To deal with them fairly
  3. BANKS & LENDERS: To replay debts
  4. GOVERNMENT AGENCIES: To abide laws.
  5. EMPLOYEES & UNIONS: To provide safe working environment and to negotiate fairly with union representatives.
  6. CONSUMERS: To provide Safe Products
  7. COMPETITORS: To compete fairly and to refrain from restraints of trade.
  8. LOCAL COMMUNITIES & SOCIETY: To avoid business practices that harm the environment.

ETHICS OF CONSUMER PRODUCTION AND MARKETING – Theories and Definitions Tuesday, Dec 2 2008 

How far must manufacturers and their representatives go to make their products and services completely safe?

WHAT Is the relationship between a business and its customers? a contract, or is there more to it than that?

Hos does the fact that companies usually know more about their products than their customers IMPACT their duty to protect customers from injury or harm?

What responsibility do businesses have for customer injuries no one could reasonably have foreseen or prevented?

What about customer’s privacy – what obligations do companies have?

 

MARKET APPROACH TO CONSUMER PROTECTION:

Consumer safely is seen as a good that is most efficiently provided through the mechanism of the free market whereby sellers must respond to consumer demands.

PROBLEMS WITH THE ASSUMPTION OF FULL INFORMATION:

 

  • Many products are too complex for consumers to understand
  • Markets cannot provide consumers with product information.

 

FREE RIDERS:

individuals who enjoy the benefits of a good without paying their share of its costs.

RATIONAL UTILITY MAXIMIZER:

A person who has a well defined and consistent set of preferences, and who knows how personal choices will affect those preferences.

PROBLEMS WITH THE ASSUMPTION OF RATIONAL UTILITY MAXIMIZATION:

 

  • Few people are good at estimating probabilities.
  • People are irrational and inconsistent when weighing choices.
  • Many consumer markets are monopolies or oligopolies.

 

CONTRACT VIEW OF THE FIRM’S DUTIES TO ITS CUSTOMERS:

The view that the relationship between a business firm and its customers is relationship, and the firm’s moral duties to the customer are those created by this contractual relationships.

RELIABILITY:

The probability that a product will function as the consumer is led to expect that it will function.

SERVICE LIFE:

The period of time during which the product will function as effectively as the consumer is to led to expect it to function.

MAINTAINABILITY:

The ease with which the product can be repaired and kept in operating condition.

PRODUCT SAFETY:

The degree of risk associated with using a product.

MORAL DUTIES TO CONSUMERS UNDER CONTRACTUAL THEORY:

 

  • Duty to comply with express and implied claims of reliability, service life, maintainability, and safety.
  • Duty of disclosure
  • Duty not to misrepresent
  • Duty not to coerce

 

DUE CARE THEORY OF THE MANUFACTURER’S DUTIES TO CONSUMERS:

The view that because manufacturers are in more advantaged position, they have a duty to take special care to ensure that consumers’ interests are not harmed by the products that they offer them.

CAVEAT EMPTOR:

Let the buyer take care.

CAVEAT VENDOR:

Let the seller take care.

 

AREAS OF PRODUCER RESPONSIBILITY ACCORDING TO DUE CARE THEORY:

 

  • Design
  • Production
  • Information

 

SOCIAL COSTS VIEW OF THE MANUFACTURER’S DUTIES TO CONSUMERS:

The view that a manufacturer should pay the costs of any injuries sustained through any defects in the product, even when the manufacturer exercised all due care in the design and manufacture of the product and has taken all reasonable precautions to warn users of every foreseen danger.

 

  • Manufacturer should pay the costs of all injuries caused by defect in a product even if exercised due care.
  • Argues that injuries are external costs that should be internalized.

 

STRICT LIABILITY:

A legal doctrine that holds that manufacturers must bear the costs of injuries resulting from product defects regardless of fault.

CRITICISMS OF THE SOCIAL COST VIEW:

 

  • Unfair to manufacturers since it forces them to compensate unforeseeable injuries.
  • Assumption that adherence to the social cost view will prevent accidents is false.
  • Leads to successful consumer lawsuits in cases where manufacturers took all due care.

 

COMMERCIAL ADVERTISING:

Communication between a seller and potential buyers that is publicly addressed to a mass audience and is intended to induce members of this audience to buy the seller’s products.

 

  • Public communication aimed at mass audience
  • Intended to induce members of its audience to buy the Sellers’s products
  • Succeeds by creating a desire for the seller’s product or a belief that a product will satisfy a pre existing desire.

 

PRODUCTION COSTS:

The costs of the resources consumed in producing or improving a product.

SELLING COSTS:

The additional costs of resources that do not go into changing the product, but are invested instead in getting people to buy the product.

DECEPTIVE ADVERTISING:

 

  • Is a function of the author’s intent to make the audience believe what is known to be false.
  • OR a function of The media’s communication of the false message.
  • OR a function of The audience’s vulnerability to deception.

 

RIGHT TO PRIVACY:

The right of persons to determine what, to whom, and how much information about themselves will be disclosed to other parties.

PSYCHOLOGICAL PRIVACY:

Privacy with respect to a person’s inner life.

PHYSICAL PRIVACY:

Privacy with respect to a person’s physical activities.

IMPORTANCE OF PRIVACY:

 

  • Protects individuals from interference, shame, embarrassment, hurting loved ones, self-incrimination
  • Enables the development of personal relationships,professional relationships, distinct social roles and self determination.

Customer and Consumer Behaviour Friday, Nov 21 2008 

The study of consumer behaviour enables the marketers to fully understand and be able to predict the consumer behaviours. It deals with not only with what the customer buy, but also with why, when, where, how, and how often they buy it.

Consumer Research is the Methodology that is used to study Customer and Consumer behaviour and it takes place at every stage/phase of the consumption process: before, during, and after the purchase.

The foundation fo the consumer behaviour is the Marketing Concept. Marketing Concept is the business orientation that evolved in the second half of the last century and is picking up more and more in the current environment. Marketing Concept was the evolution of the industry over the earlier concepts of production and product.

The 3 major strategies tools fo marketing are Market Segmentation, Targeting, and Positioning.

The Marketing Mix consists of a company’s products and services offering(S) to customers and the pricing, promotion and distribution methods needed to accomplish the deal.

The Professional Marketers make the customers the core of the company’s culture and ensure that all employees view any interaction with the customers as a part of a Customer Relationship and not just a Transaction. The Top 3 drivers of successful relationships between marketers and customers are customer value, high levels of customer satisfaction, and building a  structure for customer retention.

Consumer behaviour is multi disciplinary, i.e it is based on various theories and concepts about people that have been developed by scientists in such diverse disciplines as economics, cultural anthropology, social psychology, sociology and psychology.

Consumer behaviour has to be an integral part of strategic market planning. 

Contact for further inputs:

MANAGEMENT INNOVATIONS

managementinnovations2020@gmail.com;   manojonkar@gmail.com;  91-9375970812