ethical issues in marketing essay

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Ethical Issues in Marketing: Steering Clear of Pitfalls

Avoid marketing pitfalls with a proactive approach to ethical issues. Discover how to align your strategy with integrity for lasting success.

Entrepreneurs, marketers, and business owners know the importance of promoting products and services effectively. However, in pursuing profit, it's easy to overlook the ethical considerations underpinning marketing strategies.

How often have companies stretched the truth, exaggerated claims, or targeted vulnerable demographics to boost sales? These practices might yield short-term gains, but they can also lead to long-term damage to brand reputation and company values .

So, how does one navigate this ethical minefield and ensure that marketing efforts are practical and morally sound? The ethical responsibility extends beyond merely complying with regulations to ensure that marketing efforts are fair and respectful and do not exploit vulnerabilities for commercial gain.

By understanding and addressing these challenges, businesses can build stronger relationships with consumers and contribute positively to society while achieving their business objectives.

Ethical marketing refers to applying moral principles and values in marketing practices, ensuring that businesses engage in fair, honest, and responsible behavior towards customers, society, and the environment.

It encompasses various aspects, including truthfulness in advertising, transparency, respect for consumer privacy, and fair treatment of all stakeholders.

Common ethical faced by businesses in marketing include:

• Truthfulness and transparency: This involves ensuring that marketing messages and advertisements are accurate, honest, and not misleading. Deceptive practices such as false claims and exaggerated impractical underlying consumer trust can lead to reputational damage.
• Targeting vulnerable demographics: Businesses must be mindful of not exploiting or manipulating vulnerable groups such as children, older people, or individuals with limited financial literacy. Targeting graphics inappropriately can cause ethical harm to both individuals and society.
• Privacy and data protection: With the proliferation of digital marketing channels, businesses must respect consumer privacy and handle personal data responsibly. This involves obtaining consent for data collection and safeguarding sensitive information.
• Environmental responsibility: Ethical marketing extends to the environmental impact of products and promotional activities. Businesses should minimize their carbon footprint, reduce waste, and promote sustainable practices throughout their supply chain.

Trust is a cornerstone of brand-consumer relationships. Consumers today are increasingly vigilant and vocal about unethical marketing practices by companies. Instances of exploitation, false advertising, or disregard for societal values can quickly spread through social media and online platforms.

When consumers perceive a brand as unethical, they are less likely to engage with its products or services, resulting in lost sales and market share. Building and maintaining trust requires consistent adherence to organizer adults and transparent communication.

Key ethical marketing practices

Ethical marketing strategy encompasses a range of principles and actions that prioritize honesty, transparency, authenticity, and responsibility towards consumers and society. These practices align with moral values and contribute to building trust, enhancing brand reputation, and fostering long-term customer relationships.

Transparency and honesty are foundational principles of ethical marketing. Businesses should ensure that advertising and promotional messages accurately represent their products or services. This includes providing clear and truthful information about product features, benefits, pricing, and any limitations or risks associated with their use. 

Another core value of ethical marketing is authenticity, which involves being genuine, sincere, and authentic to one's values and brand identity. Brands that prioritize authenticity build deeper connections with customers who appreciate their integrity.

Some well-known examples of successful ethical marketing are:

• Patagonia: The outdoor apparel company Patagonia has built its brand around environmental sustainability and ethical manufacturing practices. Their "Don't Buy This Jacket" campaign encouraged consumers to think critically about consumption and waste while promoting the brand's commitment to quality, durability, and responsible production.
• TOMS Shoes: Through its "One for One" business model, TOMS Shoes pledged to donate shoes to a child in need for every pair purchased. This socially conscious initiative not only differentiated TOMS from competitors but also appealed to socially conscious consumers, who valued the brand's commitment to positively impacting communities around the world.

These examples demonstrate that ethical marketing can be both socially responsible and commercially successful. By aligning their values with those of their target audience and prioritizing transparency and authenticity, brands can create meaningful connections with consumers while also driving business success.

Ethical marketing has become more than a moral obligation—a business's strategic imperative. Ethical decision-making in marketing can reap several benefits that contribute to a company’s long-term success and sustainability.

Let's explore three key advantages of ethical marketing: enhancing brand credibility and trustworthiness, building a loyal customer base, and gaining a competitive edge in the market.

Enhance brand credibility and trustworthiness

Ethical marketing practices bolster a brand's credibility and trustworthiness in the eyes of consumers. When businesses consistently practice ethical marketing and communicate transparently with customers, they establish themselves as trustworthy partners. This trust forms the foundation of solid and enduring relationships between the brand and its audience.

Build a loyal customer base

Ethical marketing resonates deeply with consumers who value integrity and social responsibility. By aligning their values with those of their target audience, businesses can attract and retain loyal customers who prioritize ethical considerations in their purchases. A loyal customer base drives repeat business and revenue and serves as a powerful advocacy network.

Gain a competitive edge in the market

Ethical marketing can serve as a powerful differentiator in today's crowded marketplace, where consumers have many choices. Businesses prioritizing ethical decision-making set themselves apart from competitors and appeal to socially conscious consumers. By demonstrating a genuine commitment to ethical values and practices, companies can capture market share and establish themselves as leaders in their industry.

Implementing ethical marketing strategies requires a comprehensive approach encompassing guidelines for developing and maintaining ethical practices.

Businesses should establish clear guidelines and standards for ethical marketing practices, including honesty, transparency, respect for consumer privacy, and social responsibility. These guidelines should be communicated effectively to all employees and stakeholders, ensuring a shared understanding of ethical expectations and responsibilities.

Regular review and updates to these guidelines are essential to adapt to evolving ethical challenges.

Employee training plays a crucial role in promoting ethical behavior within an organization. Training programs should educate employees about ethical principles, provide practical examples and case studies, and empower them to make ethical decisions in their day-to-day work.

Fostering a company culture that values integrity, accountability, and ethical conduct from top leadership down to frontline employees is essential. Employees who feel encouraged to act ethically are more likely to uphold ethical standards in their interactions with customers, suppliers, and other stakeholders.

Businesses can leverage various tools and resources to assist them in ethical and responsible practices. As AI technologies play an increasingly prominent role in marketing, ensuring ethical AI use is paramount.

Businesses should prioritize AI ethics by incorporating ethical frameworks into designing, developing, and deploying AI-powered marketing tools and algorithms.

Industry associations, nonprofit organizations, and academic institutions also offer resources, training programs, and certification courses focused on ethical marketing practices. These resources provide valuable insights, best practices, and support for businesses seeking to navigate ethical challenges effectively.

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Industry standards and regulations

Industry standards and legal regulations provide essential guidance for ethical marketing practices, emphasizing principles such as honesty, transparency, and fairness.

Organizations like the American Marketing Association (AMA) and the International Chamber of Commerce (ICC) have established codes of ethics and guidelines to promote responsible marketing communications.

Alongside these standards, legal regulations such as the Federal Trade Commission (FTC) Act and the General Data Protection Regulation (GDPR) impose requirements to protect customer data and ensure fair competition.

Compliance with these standards and regulations is crucial for businesses, as non-compliance can lead to reputational damage, legal penalties, and loss of customer trust.

Moreover, ethical lapses, conflicts of interest , and data bias in marketing can undermine trust and credibility, necessitating careful consideration and mitigation strategies. Marketers must ensure that their decisions and actions are driven by the best interests of consumers and stakeholders rather than personal gain or organizational interests.

Engage your audience with ethical messaging

By showcasing corporate social responsibility initiatives and incorporating ethical storytelling into marketing campaigns , businesses can connect with consumers more deeply, aligning with their values and concerns. This enhances brand reputation and fosters trust and loyalty among customers. 

Leveraging Mailchimp's suite of tools and services can further amplify ethical business practices. From audience segmentation and personalized messaging to social media management and analytics, Mailchimp offers comprehensive solutions to help businesses deliver impactful ethical messaging across multiple channels.

By harnessing the power of ethical storytelling with Mailchimp's innovative tools, companies can differentiate themselves in the marketplace, drive engagement, and ultimately achieve success while positively impacting society. 

Essay on Ethics and Marketing

Introduction.

Ethics in the various areas of business is a complex and contentious topic that has been a subject of extensive debate for many years. The biggest challenge for businesses is finding the right balance between making money and doing what is right. Businesses endeavor to satisfy their clients’ needs while at the same time achieving efficient profit levels. Marketers find it tough to apply ethics in marketing a product that has harmful effects. Marketers often influence human desires and conduct, driving their purchase of various goods and services that they may or may not need. The end result is either a good or bad feeling on the part of the consumer or marketer. There are ethical issues that arise with the kind of methods that marketers use to get people to buy the commodities that they may be offering (Schlegelmilch, 1998). For instance, someone marketing cigarettes may try to use other attributes that may be false to divert attention away from their harmful effects and potential customers to buy the product. There are those who even use fear while some may capitalize on people’s ignorance to influence their behavior. Such behavior is unethical. Important to note is the fact once a consumer finds out the truth, the outcome might be the spread of a negative perception about the product among consumers. Ethical marketing is the key to long-term profitability. This paper examines existing literature on the topic of ethical marketing.

Literature Review

Hunt and Vitell (1986), in their article, “A General Theory of Marketing Ethics,” make an attempt at explaining the decision-making process as a situation that has an ethics component in them. In their analysis of studies of marketing practices, their findings indicated that most managers viewed their marketing practices as ethical despite some being clearly unethical. A good example of such unethical practices can be seen in a case of an automobile safety feature. An automobile manufacturer may develop a device that reduces traffic injuries by about 50%. However, the device might have some cost implication that would move the prices of their cars up resulting in some loss in sales to the advantage of the firm’s competitors. For this reason, the automobile maker may opt not to include the device in their cars not unless the relevant authorities make it a requirement for all car manufacturers.

When Hunt and Vitell (1986) posed the question on whether the company’s actions were ethical or not to a sample group to determine their reaction, they found that perceptions varied depending on one’s occupation. However, they could not clearly determine the main reason for the difference in perceptions. Those in executive positions were less likely to term the automaker’s move as unethical. A mere 51% agreed that the actions of the firm were unethical. 76% of housewives found the situation as being unethical. The huge difference leaves a lot to be desired.

A huge proportion of the research on marketing is fragmented and scattered. Research on ethical marketing also suffers some serious setbacks. Due to the absence of a guiding model, instead of past empirical research on the subject producing scholarly light, it has created more emotional heat. Hunt and Vitell’s research develops an ethical marketing theory intended to guide empirical research.

Crane and Matten (2010) tackle the subject of ethics in business. According to them the subject of ethics is important for many reasons. One of them is that the power that companies wield in the society is greater now that it has ever been before. They can impact the society immensely. The malpractices that they engage in can cause grievous harm to the environment, individuals, and communities. Stakeholder interests increasingly inform the decision of businesses to be ethical in conducting their activities. The investment of resources into the pursuit of ethics varies from one organization to the next depending on the size and type of organization. Crane and Matten (2010), note that small organizations allocate little resources compared to large ones. Large organizations also tend to employ a more formal approach to the management of ethics. At the center of ethical decisions is profitability concerns that tend to put a limit on the resources that companies are willing to spend on the ethics management. Most organizations use the subject of ethics to market their businesses and ensure their prominence. Such a tool is community social responsibility (CSR) where companies take part in initiatives that benefit the communities in the markets that they serve (Murphy & Laczniak, 1981). Stakeholders require that the ethical measures a firm takes make sense. For this reason, large corporations tend to base their ethical decisions on rational, widely understandable and systematic argument that they can manage to defend, justify, and elaborate to the affected stakeholders. Crane and Matten posit that there are two extreme positions to ethical theories. The two are ethical absolutism and ethical relativism. The book “Business Ethics: Managing corporate citizenship and sustainability in the age of globalization,” by Crane and Matten (2010) conducts an in-depth analysis of various theories and their relevance to the decision-making process.

“Ethical Marketing and the New Consumer,” a book by (Arnold, 2009) is also very resourceful when it comes to an exploration of the subject of ethics in marketing. Arnold (2009) holds the view that perception about ethics is often subjective. Each individual may have their own thoughts on what they find as being ethical. When one genuinely considers the impact of their actions, they begin to develop a sense of who they are and their moral code. Such conceptualization is influenced by the environment in which one lives. When it comes to any business, ethics is rooted in the ethos. A firm first determines its beliefs, its level of preparedness to tell the truth and whether it has the potential of delivering to its clients (Tadajewski & Brownlie, 2008).

Arnold (2010), in his book, he posits that getting things right from the start in relation to ethics is the surest way to building a strong foundation for the future. The author is highly critical of the move by many businesses to use the green bandwagon to market their products without conducting due diligence on the viability of such options. Many of the firms tend to end up wasting a significant proportion of their resources to campaigns aimed at making their brands appear more ethical. The book’s primary agenda is to help brand and marketing managers to avoid the trap of greenwash or other situations that may be worse serving to damage their brand’s reputation. It also offers useful marketing guidance for eco-ethical businesses. Prominent in the author’s work is his challenge to the assumption that going green is being ethical. Arnold (2009) presents sample cases involving issues of ethical marketing and some of the outcomes to illustrate the role of ethics in the success of a business. The book calls for self-evaluation on the part of firms before they choose to engage in any ethical marketing to avoid unnecessary waste of funds. The best point to start is the identification of the ethos. The ethos should inform the firm’s actions as it is more powerful than any advertisement that the entity may think of using to attract customers.

Marketing ethics in any organization calls for leadership from the top that is based on principles and purposeful actions among them planning of standards and their implementation, as well as, transparency and persistent effort aimed at improving the organization’s ethical performance. Ferrell C, Fraedrich and Ferrell L (2012), showcase several examples of cases of ethical concern and survey results that help paint a clear picture of the issues that are vital to business ethics. In their approach to ethical leadership and ethical decision-making, they consider emerging trends that determine the most relevant aspects (Murphy et al., 2005). For today’s companies, the ability to acknowledge and handle complex issues is of significant priority. Ethics contributes to employee commitment, customer satisfaction and trust, ethical culture, increased profits, and investor loyalty (Ellis et al., 2011). Their perception of the company as having an ethical culture influences their attitude towards it positively. The firm’s products get better reviews from customers in the market.

Implications and Gap Analysis

Current and past research offer deep insight into the subject of ethical marketing. However, there is still no universal model agreed upon to serve as a guide in conducting research on the issue. Many of them address the issue from a descriptive point of view. Empirical research is still not well explored. Future research needs to focus on ways of conducting empirical research to allow for a deeper analysis that can be backed by statistics and various derivatives. However, such research will only be possible after the development of ethical marketing models that guide empirical studies.

Evidently, current literature on the ethical marketing depicts the central role of ethics in the success of any company. Ethics is personal in nature, meaning that the perception of what is ethical may vary from one entity to the next. A business’ ethos carries with it great value than any other form of advertisement. Companies that have strayed away from a focus on their ethos and lost the understanding of who they are have in some cases wasted huge amounts of money on market promotion initiatives that do not bear meaningful results. One such is the green bandwagon that has seen companies implement green initiatives to appear ethical. Self-awareness is the most important step to building strong ethics in marketing. There lacks a universal model that would offer guidance on carrying out empirical research, a factor that has curtailed such studies. There is a need for increased investment into ethical marketing research if businesses hope to enjoy long-term profitability.

Arnold, C. (2009) Ethical Marketing and the New Consumer. Wiley; 1st edition.

Crane, A. and Matten, D. (2010) Business Ethics: Managing corporate citizenship and sustainability in the age of globalization, 3rd Edition: Oxford University Press.

Ellis, N., Fitchett, J., Higgins, M., Jack, G., Lim, M., Saren, M. and Tadajewski, M. (2011) Marketing: A Critical Textbook, Sage Publication.

Ferrell, C., Fraedrich, J. and Ferrell, L. (2012). Business Ethics: Ethical Decision Making and Cases. 9th Edition, South-Western College

Hunt, S.D. and Vitell, S. (1986), “A General Theory of Marketing Ethics,” Journal of Macromarketing, pp. 5-16.

Murphy, P.; Laczniak, G., Bowie, N. and Klein, T. (2005). Ethical Marketing, Pearson Prentice Hall.

Murphy, P.E., and Laczniak, G.R.(1981). “Marketing Ethics: A Review with Implications for Managers, Educators, and Researchers.” In Enis, B.M. and Roeing (Eds), Review of Marketing, AMA, pp. 251-256.

Schlegelmilch, B. (1998). Marketing Ethics: An International Perspective. International Thomson Business Press.

Tadajewski, M. and Brownlie, D. (2008). Critical Marketing –  Issues in Contemporary Marketing , John Wiley & Sons: West Sussex, UK.

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• Ethical Marketing Principles

Ethical Marketing Principles, Benefits, and Examples

Table of Contents

Introduction, 1. honesty and transparency, 2. fairness and respect, 3. maintaining user privacy, 4. accountability, 5. sustainability, benefits of ethical marketing, examples of ethical marketing.

Ethical marketing is an approach to promoting a product, service, or brand that aligns with one’s values and morals. It involves being honest, transparent, and fair in promotional activities, respecting user privacy, being accountable for mistakes, and incorporating sustainability into business practices. In this blog post, we will explore the principles of ethical marketing, discuss its benefits, and provide real-life examples of companies that embrace ethical marketing.

Principles of Ethical Marketing

Ethical marketing is based on a set of principles that guide how businesses promote their products or services. While the specific principles may vary depending on individual values and definitions of ethics, there are five common themes that are often associated with ethical marketing:

Honesty and transparency are essential principles of ethical marketing. This means avoiding misleading, inflated, or untrue claims in all aspects of the marketing process, including the production and delivery of goods and services, employment practices, and the value proposition of the product. Ethical marketers prioritize data privacy, avoid pressure tactics, and refrain from using dark patterns in user experience design. They also choose suppliers, partners, and platforms that align with their morals and values.

Fairness and respect are subjective principles that can vary from one organization to another. However, a common interpretation of fairness and respect in ethical marketing is to avoid belittling competitors or engaging in name-shaming to attract customers. Ethical marketers focus on presenting the true capabilities of their products or services and refrain from making false promises. They also avoid running ads on their competitors’ brand names, instead relying on educational content to convert prospective customers.

Maintaining user privacy is a crucial aspect of ethical marketing. It encompasses both honesty/transparency and fairness/respect. Ethical marketers prioritize user privacy by avoiding the use of cookies or tracking unless necessary. They also refrain from retargeting tactics in their marketing campaigns. By respecting user privacy, ethical marketers demonstrate their commitment to responsible data practices and build trust with their audience.

Accountability is another principle of ethical marketing. It involves open communication and taking ownership of mistakes. Ethical marketers understand the importance of admitting and rectifying errors promptly. By practicing accountability, they demonstrate integrity and build trust with their customers. Conversely, failing to take accountability for mistakes can lead to reputational damage and loss of consumer trust.

Sustainability is a principle that involves embedding environmental and socially responsible values into a business’s products and practices. Ethical marketers prioritize sustainability by adopting eco-friendly manufacturing processes, sourcing materials responsibly, and supporting fair trade practices. Companies like Apple, Patagonia, Market Lane Coffee, and Marou Chocolate are examples of businesses that embrace sustainability as a core value.

Ethical marketing offers several benefits for businesses that embrace this approach:

Building Trust : Ethical marketing builds trust among potential customers. By being honest, transparent, and accountable, businesses demonstrate integrity and reliability, which are essential for establishing long-term relationships with customers.

Positive Publicity : Ethical marketing can lead to positive publicity. When businesses prioritize ethics and act in socially responsible ways, they often attract media attention and positive mentions from influencers. This can increase brand visibility and enhance reputation.

Backlinks and SEO : Ethical marketing practices can also result in backlinks from reputable websites. When businesses are recognized for their ethical initiatives, they may receive positive mentions and coverage from authoritative sources. These backlinks can improve search engine rankings and increase organic traffic.

To provide a more comprehensive understanding of ethical marketing in practice, let’s explore four real-life examples of companies that embrace ethical marketing:

https://ethicalmarketer.org : Ethical Marketing at Ahrefs takes a unique approach. They prioritize honesty and transparency by avoiding overselling the utility of their toolset. They focus on providing valuable educational content to their audience and refrain from forcing product pitches. Ahrefs also demonstrates accountability by openly acknowledging mistakes and making necessary improvements. Additionally, they engage in philanthropic initiatives such as donation matching and sponsorships to give back to the community.

Marou Chocolate : Marou Chocolate is a Vietnamese-based bean-to-bar chocolate brand that exemplifies ethical marketing. They maintain transparency throughout their chocolate-making process, working closely with Vietnamese cacao farmers and overseeing production to ensure quality and fair trade practices. Marou Chocolate publishes detailed reports on their sourcing process, supporting small cacao producers, and their commitment to sustainability.

Patagonia : Patagonia, an outdoor clothing label, is known for its commitment to environmental sustainability. Their mission statement, “We’re in business to save our home planet,” reflects their dedication to ethical marketing. Patagonia incorporates sustainability into every aspect of their business, from using recycled materials in their products to donating a portion of their profits to environmental organizations.

Market Lane Coffee : Market Lane Coffee, an Australia-based specialty coffee roaster and retailer, is committed to fairness, transparency, and sustainability. They prioritize ethical sourcing practices, ensuring coffee farmers receive fair compensation for their work. Market Lane Coffee provides detailed information about their sourcing process and supports initiatives that promote sustainable coffee production.

Ethical marketing is a multifaceted approach to promoting products, services, and brands in a way that aligns with one’s values and morals. It encompasses principles such as honesty, transparency, fairness, respect, user privacy, accountability, and sustainability. Embracing ethical marketing can lead to benefits like building trust, positive publicity, and backlinks from reputable sources. Real-life examples from companies like Ahrefs, Marou Chocolate, Patagonia, and Market Lane Coffee demonstrate how ethical marketing can be practiced in various industries. By prioritizing ethics, businesses can establish strong relationships with customers and contribute to a more sustainable and responsible marketplace.

This blog post was written by https://ethicalmarketer.org.

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2.5: Ethical Issues in Developing a Marketing Strategy

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Learning Objectives

By the end of this section, you will be able to:

• Explain the importance of ethical marketing.
• Describe key ethical considerations in strategic planning.
• Discuss examples of ethical companies.

The Importance of Ethical Marketing

Marketing ethics are essentially the moral guidelines that allow companies to scrutinize their marketing strategies and actions. It means that a marketer has an obligation to ensure that all marketing activities adhere to core ethical principles, such as integrity and honesty—both internally and externally. 78

As we’ll see below, ethical marketing is a crucial factor in an organization’s overall growth over time, and it produces many benefits:

• Customer Loyalty. Every company wants customers who keep coming back to buy their products and services. Companies have learned over time that, with the adoption of common-sense ethics in marketing, they can more easily earn the trust of consumers. 79
• Improved Credibility. Look beyond customers when considering this factor and think in terms of the respect and credibility an ethical company earns with its investors, competitors, and other parties.
• Brand Enhancement. Consumers, competitors, investors, and others have begun to look beyond product features and pursue brands that consider the three Ps of sustainability—people, planet, and profits.

Millennials and Generation Z: Purchases Follow Beliefs

During the American Industrial Revolution in the early 1900s, the United States saw the rise of iconic business enterprises like Ford , US Steel , J.P. Morgan , Union Pacific Railroad , and many others. Some (a few) gave generously to charitable causes. Others made their wealth using unscrupulous means, exploiting labor and using questionable business practices.

Corporate social responsibility (CSR) is the concept that a company should integrate social and environmental concerns into its business operations and practices. It didn’t begin to take hold in the United States until the 1970s. In 1971, the Committee for Economic Development released a policy statement declaring the concept of a “social contract” between business and society, wherein the business has an obligation to constructively serve the needs of society. 80 This concept was further fueled in part by President George H. W. Bush’s call for a “thousand points of light.” 81 The bottom line is that CSR changed business as usual. Today, Fortune Global 500 firms spend approximately $20 billion on CSR initiatives each year, and companies take public positions on diversity, inclusion, education, and the environment. 82

We are witnessing an evolution in consumer expectations as consumers begin to vote with their wallets. Millennials (those born between 1981 and 1996) and Generation Z (those born between 1997 and 2012) are now the biggest global generation, making up 65 percent of the world’s population, 83 so it stands to reason that, as these generational cohorts enter their prime spending years, many companies have begun to focus their marketing efforts on this segment of the population. What marketers have discovered is that millennials and Zoomers (aka Gen Z) engage with brands differently than older generations like Generation X (born between 1965 and 1980) and the baby boomers (born between 1946 and 1964). They’re more likely to steer clear of mass-market branded products in favor of smaller, eco-friendly brands. They are the most likely to make buying decisions on values and principles. For example, consider some statistics from a First Insight report that shows that 62 percent of both millennials and Zoomers are willing to spend more for sustainable products, compared with only 54 percent of Gen X and 39 percent of Baby Boomers. 84

Nielsen, the information, data, and marketing firm, surveyed over 30,000 consumers in 60 countries to find out what influences and affects their buying habits. The results were somewhat amazing:

• 66 percent of global consumers are willing to pay more for sustainable products. 85
• 73 percent (nearly three out of four) of millennials indicated that they would be willing to pay extra for sustainable goods. 86

What implications does this have for marketing to these generations? The bottom line is that CSR is more than just a buzzword for these generational cohorts. To make an impact, companies need to use their resources to show—not just tell—these younger generations how business enterprises are making an impact through authenticity and transparency.

Key Ethical Considerations in Strategic Planning

It’s no secret that the primary goal of marketers is to increase growth by creating and maintaining customers. However, sometimes pursuing that growth to satisfy shareholder goals to the exclusion of other groups (like customers) has led to high-profile ethical dilemmas. Let’s consider a few:

According to a Gallup poll in 2021, approximately 6 percent of US adults report that they have used e-cigarettes within the past week 87 despite health warnings about vaping. The sale and distribution of e-cigarettes is banned or regulated in a growing number of countries much to the dismay of vaping aficionados. Where do you draw the line? Is vaping a matter of personal choice, or are people influenced by the marketing efforts of e-cigarette producers like Juul ?

Consider the ethical implications behind this. Should e-cigarette manufacturers sell customers what they crave, or should they tailor their offerings based on what health experts say? Who gets to make that choice? Does the decision fall to the consumer, the producer, a public watchdog group, or the federal government?

Consider another ethical issue. During the first decade of the new millennium, Toyota vehicles experienced problems with unintended, uncontrolled acceleration that prompted over 6,200 complaints to the National Highway Traffic Safety Administration and were linked to more than 89 deaths over the next five years. 88 Early on, Toyota blamed driver error. Later, it issued recalls to address floor mats that pinned down accelerators in some cases. But the company hid a flawed gas pedal design and lied to regulators, Congress, and the public for years about the sudden acceleration problem, ultimately leading to a fine of $1.2 billion by the Justice Department, which contended that Toyota’s efforts to conceal the problem and protect its “corporate image” led to a series of preventable fatalities. The settlement is being called the largest criminal penalty imposed on a car company in US history. 89

Could these situations have been avoided with a stronger ethical focus and an eye toward the greater good? It all starts with the strategic planning process, which can be used to build “good” into the core of the organization.

Broader Participation

As pointed out in Marketing and Customer Value, an organization must consider all parties that it might impact, including investors, communities, governments, customers, employees, and suppliers. In the context of corporate social responsibility, this means that leaders of companies must create value for all of these groups while simultaneously producing a fair return for shareholders or owners.

Organizational and Individual Values

When considering organizational and individual values, the marketer needs to ask (and answer candidly) the following questions:

• Does the organization’s mission reflect current activities that are focused on the triple bottom line?
• Does the organization’s vision statement lead to outcomes that contain elements of social good?
• Do the organization’s values reflect respect for one another, the community, and the environment?
• Are those values authentic, and do members of the organization live by them daily?
• Has the organization included goals and objectives that refer specifically to elements of social good?

These questions can help inform the organization’s activities as it works through the strategic planning process. Thoughtful analysis and design at this stage can build strong organizations that not only deliver profits but also produce positive social outcomes for all parties.

Ethical Marketing

• First Online: 08 September 2023

Cite this chapter

• Dilip S. Mutum   ORCID: orcid.org/0000-0002-9857-1164 5 &
• Ezlika M. Ghazali   ORCID: orcid.org/0000-0001-7824-4433 6  

Part of the book series: CSR, Sustainability, Ethics & Governance ((CSEG))

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The importance of ethical concerns in marketing and businesses has grown significantly over time. Most academic sources have emphasised how marketing practices are seen as unethical and unfavourable. We emphasise that to close the “ethics gap” between what society expects of marketers and what they really provide, marketing ethics must take into account cross-cultural practises and concerns as globalisation continues to alter the structure of enterprises. The chapter then examines the various marketing ethics codes. Finally, we talk about unethical marketing techniques and their consequences.

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Mutum, D.S., Ghazali, E.M. (2023). Ethical Marketing. In: Consumers, Society and Marketing. CSR, Sustainability, Ethics & Governance. Springer, Cham. https://doi.org/10.1007/978-3-031-39359-4_4

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Marketing , Pages: 3

Ethical Issues in Marketing

Ethical Responsibility, Ethical and Legal Issues

Ethical responsibility refers to a business’s duty not to harm society. Through ethical responsibility, businesses stay mindful of their daily operations so that such operations do not affect the welfare of their customers and community members. On the other hand, ethical issues occur when an activity, decision, or operational scenario conflicts with organizational or societal ethics. Legal issues refer to matters relating to intellectual property rights, business structure, employee welfare, and shareholder matters. Ethical and legal issues apply to businesses in a myriad of ways. For instance, businesses are encouraged to avoid deceptive advertising since it can harm consumers. The legal aspect also applies in business since those businesses that promote deceptive marketing messages are liable to legal penalties if they cheat. Pfizer has an internal code of conduct that promotes ethical responsibility by its employees. The guideline encourages employees to act with integrity and ask questions concerning medical and legal compliance measures.

The Triple Bottomline (TBL) Model

According to Slaper and Hall (2011), the triple bottom line (TBL) maintains that businesses should focus on social and environmental sustainability as much as they focus on their profits. The triple bottom line maintains that instead of businesses focusing on one bottom line, they should focus on three bottom-line aspects: profit, planet, and people. Therefore, the TBL gauges a business’s commitment to corporate social responsibility and its effect on the environment over time. On the one hand, the profit aspect of the TBL not only refers to how much money the business makes but is also mindful of whether the profits are made ethically. The financial well-being of a business is also judged based on its ability to pay its vendors and suppliers.

The people aspect encourages businesses to focus beyond traditional priority parties- investors and shareholders and take care of their people. In this case, the people refer to employees, vendors, and customers. This group of individuals is not financially invested in the business but plays a crucial role in its success (Slaper & Hall, 2011). For instance, Pfizer should focus on the welfare of its employees by offering social and financial incentives, which will go a long way in encouraging them to perform better. Finally, the planet’s bottom line is concerned with the impact of business on the environment. To that end, a company like Pfizer may choose to use eco-friendly distribution mechanisms for its products instead of using an aircraft that is potentially damaging to the environment.

The Influence of Customers on a Company’s Ethical Profile

According to Parıltı et al. (2015), customers play a significant role in influencing the ethical standards of a business. In particular, reputation has quite an impact on the pharmaceutical industry. Customers and most healthcare providers consider the reputation of the company from whom they are about to purchase (Goldstein & Turner, 2011). To that end, healthcare providers will avoid companies marred with scandals or questionable ethical issues. Pfizer actively participates in public policy formulation to ensure its customers and the general public access to quality medicines and healthcare.

Value of Communicating Ethical Behavior to the Public

The modern economic environment demands that companies communicate their ethical issues to the public to ensure customers get an accurate marketing message. This is due to the obvious mistrust between manufacturers and consumers since consumers feel that manufacturers use unsatisfactory procedures, yet they lie about what they actually do (Parıltı et al., 2015). Therefore, businesses are encouraged to leverage ethical marketing to influence customers. For instance, Pfizer can communicate about the side effects of its products to gain customers’ trust.

The Influence of Ethical Issues on Legal Issues

Parıltı et al. (2015) aver that ethical issues in business seriously threaten a business’s legal compliance. Some ethical issues that align with Pfizer’s core values may include diversity, governance, and compliance. While some ethical issues do not impact a business’s legal compliance, some have legal implications. Two of the most notable ethical issues in Pfizer’s human resource segment are discrimination and harassment. The U.S. has strict laws protecting employees from discrimination and harassment; hence, failing to curb such behaviour may lead a firm to legal liability.

Goldstein, K., & Turner, P. (2011). Corporate Reputation Management in the U.S. Pharmaceutical Industry . https://www.instituteforpr.org/wp-content/uploads/Rep-Management-in-the-US-Pharma-Industry-April-2011.pdf

Parıltı, N., Külter Demirgüneş, B., & Özsaçmacı, B. (2015). Ethical Issues In Marketing: An Application For Understanding Ethical Decision Making. İktisadi ve İdari Bilimler Dergisi , 36 (2), 275. https://doi.org/10.14780/iibd.22226

Slaper, T. F., & Hall, T. J. (2011). The triple bottom line: What is it, and how does it work? Indiana Business Review ,  86 (1), 4-8.

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6.4 Ethical Issues in Marketing Research

Learning outcomes.

By the end of this section, you will be able to:

• 1 Describe ethical issues relating to marketing research.
• 2 Discuss ways to avoid unethical research practices.

The Use of Deceptive Practices

In marketing research, there are many potential areas of ethical concern. Each day people share personal information on social media, through company databases, and on mobile devices. So how do companies make sure to remain ethical in decisions when it comes to this vast amount of research data? It is essential that marketers balance the benefits of having access to this data with the privacy of and concern for all people they can impact.

Too many times, we have heard about the lack of ethical decision-making when it comes to marketing research or personal data. Companies are hacked, share or sell personal information, or use promotion disguised as research. Each of these can be considered unethical.

Link to Learning

The insights association.

There is an organization devoted to the support and integrity of quality marketing research. This organization, called The Insights Association (IA) , “protects and creates demand for the evolving insights and analytics industry by promoting the indisputable role of insights in driving business impact.” 21 Having a solid understanding of ethical practices is critical for any marketing professional. Become familiar with terminology, responsibilities, enforcements, and sanctions of the IA’s code of standards and ethics .

First, let’s look at some deceptive practices that might be conducted through research. The first is representing something as research when it is really an attempt to sell a product. This is called sugging. Sugging happens when an individual identifies themselves as a researcher, collects some data, and then uses the data to suggest specific purchases. 22 According to the Insights Association Code of Marketing Research Standards, researchers should always separate selling of products from the research process. 23

Other deceptive research practices include using persuasive language to encourage a participant to select a particular answer, misrepresenting research data subjectively rather than objectively while presenting the results, and padding research data with fabricated answers in order to increase response rate or create a specific outcome.

Invasion of Privacy

Privacy is another concern when it comes to marketing research data. For researchers, privacy is maintaining the data of research participants discretely and holding confidentiality. Many participants are hesitant to give out identifying information for fear that the information will leak, be tied back to them personally, or be used to steal their identity. To help respondents overcome these concerns, researchers can identify the research as being either confidential or anonymous.

Confidential data is when respondents share their identifying information with the researcher, but the researcher does not share it beyond that point. In this situation, the research may need some identifier in order to match up previous information with the new content—for instance, a customer number or membership number. Anonymous data is when a respondent does not provide identifying information at all, so there is no chance of being identified. Researchers should always be careful with personal information, keeping it behind a firewall, behind a password-protected screen, or physically locked away.

Breaches of Confidentiality

One of the most important ethical considerations for marketing researchers is the concept of confidentiality of respondents’ information. In order to have a rich data set of information, very personal information may be gathered. When a researcher uses that information in an unethical manner, it is a breach of confidentiality . Many research studies start with a statement of how the respondent’s information will be used and how the researcher will maintain confidentiality. Companies may sell personal information, share contact information of the respondents, or tie specific answers to a respondent. These are all breaches of the confidentiality that researchers are held accountable for. 24

Although we hear about how companies are utilizing customers’ data unethically, many companies operate in an ethical manner. One example is the search engine DuckDuckGo . The search industry generates millions of pieces of user data daily; most of the providers of searches capitalize on this data by tracking and selling this information. Alternatively, DuckDuckGo has decided NOT to track its users. Instead, it has built its business model on the fact that no user information is stored—ever. Ethically, DuckDuckGo offers users private searches, tracker blocking, and site encryption. In an industry that is continuously collecting and selling personal search information, DuckDuckGo is the exception. There is no concern with being hacked because no data is collected. 25

Companies with a Conscience

The Gallup Organization is a market research firm that specializes in understanding market sentiment (see Figure 6.11 ). Every year among its numerous polls, Gallup completes an assessment of the honesty and ethical approach of different professions. In the 2021 survey, nursing was the top profession regarding these two measures. 26

Gallup’s research led additional findings about the state of ethics for businesses. “Ethical standards need to be at the core of an organization’s purpose, brand and culture.” 27 But what about Gallup’s own ethical standards? Gallup is “a global analytics and advice firm that helps leaders and organizations solve their most pressing problems.” 28 In order to be proficient and well-informed on the variety of topics Gallup investigates, it must hold itself and its employees to a high ethical standard.

Gallup completes multiple polls and research continuously. In order to meet the high standards of its public, Gallup must perform these practices in an ethical manner. Each step of the research process is completed with diligence and intention. For those reasons, Gallup is recognized for its ethically backed data. Gallup is a global leader in market insights and has locations in seven cities within the United States and an additional 27 locations internationally. According to Chuck Hagel, former Secretary of Defense of the United States, “Gallup is truly an island of independence—it possesses a credibility and trust that hardly any institution has. A reputation for impartial, fair, honest and superb work.” 29

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Ethics in Marketing

Ethical issues relating to marketing concepts are sometimes hard to understand, especially regarding pricing. Business researchers have argued that one of the essential factors when making decisions in the market is pricing a product. Businesses that engage in ethical pricing strategies tend to gain more profits, and at the same time, they earn a good reputation from customers. Notably, once a company starts to engage in unethical pricing, such as hiking the prices of products and services, the company risks losing its most valuable customers (Siham, 2013). Most companies that get involved in overpricing their products usually aim to make more profits at the expense of their customers. In this case, the company’s top management and investors tend to reap more benefits while consumers cannot purchase products at a higher price.

Ethical Issues or Questions

Various ethical problems arise when it comes to the pricing of products. The first ethical problem is pricing fixing or collusion at its worse. Pricing fixing refers to a settlement “between a group of people on the same side of a market to buy or sell a good or service at a fixed price” (Guo, 2012, para 9). When these groups of people get into a competition for consumers, prices tend to go down. There are four types of price-fixing. The first type is an agreement to raise prices whereby the competitors agree to increase a commodity’s prices by a particular amount (Guo, 2012). The next type, freeze prices, states that governments can fix prices by setting price freezes mostly to avoid inflation in the country. Horizontal price-fixing involves competitors of a similar product agreeing to either lower, raise or stabilize prices. Most of the time, a horizontal agreement is illegal according to antitrust laws.

Additionally, vertical price-fixing involves businesses in the supply chain that agrees to raise lower and stabilize prices by forcing retailers to sell products using a predetermined or suggested retail price. Price fixing is illegal as it undermines and disrupts normal laws of demand and supply. As such, monopolies businesses get the upper hand over their competitors. Such actions impose higher prices on products without the customer’s knowledge. They may also reduce incentives to innovate and make it hard to enter the market (Guo, 2012). In 1890, the American government passed the Sherman Act to help deal with collision issues in pricing.

Another ethical problem that arises when pricing products is bid rigging or favoritism. In this case, one party is promised a contract or favored for a specific bid even though it seems like most multiple parties will get an equal opportunity to submit the bid. The government has been following keenly on the issues of bid-rigging as it hurts consumers a lot. In this situation, the best producers do not receive contracts. Price discrimination or anti-favoritism is another type of ethical problem in pricing whereby a business may sell the same commodity at different prices to different consumers (Guo, 2012). There are situations where businesses may also hide lower prices for products if there are customers with a higher willingness to pay. The next pricing issue is price skimming, whereby businesses first sell a product at a higher price and then gradually reduce the price.

One company that has experienced controversies regarding the ethical problem of pricing is Bausch Health Company. The company raised the drug prices to boost profits for executives and investors. For instance, Bausch raised prices of Cuprimine and Syprine drugs from five hundred dollars to twenty-four thousand dollars for a thirty-day supply (Pollack & Travernise, 2015). Before changing to this new name, Bausch Health Company was known as Valeant pharmaceuticals. MilanPanic founded the organization in 1959 as ICN pharmaceuticals, leading the company for 47 years.

In 2003, the company was renamed to Valeant Pharmaceuticals after its owner was ousted from the company (Osman, 2021). Later in 2015, there were a series of acquisitions, among them Bausch and Lomb, which created valuable companies in Canada. During this period, the company was led by CEO Michael person and McKinsey, who took the role in 2009. Pearson had an aggressive acquisition strategy that helped him to appease shareholders. As such, he had a clinical leadership style that meant he would scarf up smaller companies. There was no need for investing in R and D. In 2015, the US Securities and Exchange Commission began to investigate Valeant for price-fixing issues. As a result of price-fixing, the company began to experience plummeting stock prices by more than 90 percent (Osman, 2021). The company also faced challenges with debt, which surpassed more than thirty billion dollars, leading CEO Pearson to leave the company.

Stakeholders Involved in Making the Decision

Bausch, formally known as Valeant pharmaceutical, involved a few shareholders in the decision for price-fixing that led to the company’s controversies. Some of these shareholders were the then CEO Michael Pearson, McKinsey and Co., and Philidor mail order pharmacy. Valeant’s ties with Philidor were the major source of improper revenue recognition. Valeant had established and funded Philidor, and within a short time, the sales of drugs through Philidor began to grow to account for a significant portion of Valeant’s US business (Nast, 2016). The company failed to disclose to investors that it had a relationship with the mail-order pharmacy for some time. Under Valeant’s leadership, the company began to adjust its disclosures threshold to avoid mentioning that it intended to buy Philidor in its acquisition files. According to research by the Security exchange commission, Valeant wrongly attributed the impact of rising prices drug Glumetza used for treating diabetes. Glumetza was just one of the drugs the company had raised its prices, leading to confrontations with the congress. Due to the company’s price-fixing actions, the company was charged $45 million to settle United States charges since it had misled investors by failing to account for revenue it had channeled through a mail-order pharmacy (Pollack & Travernise, 2015). In addition to the fee, Michael Pearson and other main executives were also required to pay civil penalties to settle down security exchange commission claims.

Additionally, Bausch had become that company that buys a lot of other companies to make a lot of profits. Since the company had to continue buying a lot to thrive, it was in a debt crisis. The company also found itself hiking the price of most common drugs such as Cuprimine, an action that highly rewarded the company’s investors, making it one of the most popular health stocks on Wall Street. Valeant had a habit of buying existing drugs and raising prices aggressively instead of developing new drugs. The company raised its drug prices more than five times compared to its competitor companies (Pollack & Travernise, 2015). Such actions also led to the intervention of lawmakers who called for efforts to control rising drug prices for most pharmaceuticals. Valeant is an example of a pharmaceutical engaged in unethical pricing issues around the industry for so long. The United States does not control drugs’ prices, which makes most pharmaceuticals manufacturers rely on steady and outsize prices increases to bolster their revenues and profits. These actions of pricing fixation to raise the prices of most drugs have become rampant and are considered unethical and immoral. According to research, there is a new model in which pharmaceutical companies buy the rights to a drug and then drastically raise the price (Relias Media, 2016).).

Ethical Theory Explaining Price Fixation

One of the most applied theories of ethics in marketing and businesses is the utilitarianism theory. The theory states every action and decision concerning the actions should produce the greatest good for the greatest number of people. In this case, good refers to the net benefits for most people who are part of that action. Most scholars of this theory argue that moral choices should be based on the good of many people (Murphy et al., 2016). When it comes to marketing, managers do not weigh the pros and cons of alternative economic and managerial actions. Notably, utilitarian theory aims to help individuals and businesses avoid actions that only fulfill their self-interests and desires. For instance, in the case of Bausch company dealing with pharmaceutical drugs, their actions did not yield benefits for a greater number of people. The corporation was only benefitting its investors by overpricing drugs to make a lot of profits. It is essential to understand that these companies have the right to profit from their investments, but they are not entitled to make an excessive profit from their consumers. Such actions are immoral and unethical and only aim to do more harm to consumers.

As the world is becoming a global village, companies serving global markets should understand the importance of pricing their commodities since pricing is essential in determining whether a product will be sold (Mandal, 2021). Company leaders who participate in unethical pricing of their commodities tend to violate the ethical laws that state the need to avoid not harming consumers. The actions of selling overpriced drugs may leave some patients going out without treatment for many days or acquiring low-quality drugs that cannot treat their ailments. Patients are required to take drugs as prescribed by physicians without seeking out other alternatives. There is a need to consider the ethical implications of overpricing products at the expense of patients and consider whether they need to introduce legislation that will make price gouging an illegal activity. Additionally, bioethicists need to encourage congress on why it is essential to regulate the drug industry because most patients do not benefit from overpriced drugs. Although sometimes it is hard for pharmaceutical companies to balance between making profits and serving the needs of patients, they should consider the greater good of saving the lives of those who are sick.

Additionally, price-fixing does not permit the necessary competition within the capitalist market as it creates an environment where only a few people control the market. In this case, the greatest good for many people is not achieved as only a few people determine the dynamics of the market. This strategy punishes most businesses by only benefitting a few. The greatest good for people can only be achieved by practicing the utilitarianism theory and allowing a free competitive market. The legal environment in the US has shifted in recent years, with the Sherman antitrust act proving to be the most relevant legislation. It allows this practicing unethical price-fixing behavior to be prosecuted. Like any other theory of ethical reasoning, utilitarianism has its problems. The most fundamental question about utilitarianism is who decides what the greatest good should be. There are many options that constitute the nature of real benefits that pertain to decision-making (Murphy et al., 2016). Also, although the philosophy is all about the end justifying the means, it is sometimes difficult balancing between the need to benefit many people and the corporation participating in the sales of products.

Several Alternatives and an Ethical Analysis

Marketing organizations should strive to have ethical conduct and protocol that every manager follows. Moral reasoning becomes the first step for the ability of managers to become ethically aware of their decisions. For instance, in the case of the Bausch company, if the CEO had moral reasoning for their actions, he would not have led the company to act unethically by overpricing drugs. Ethical marketing should always strive for honesty and fairness, and unethical practices will not guarantee more profits in the long term, putting the company at more risk.

The first course of alternative to consider more ethical in terms of pricing is implementing a system that will allow agreeing upon a price for a pharmaceutical product when introduced into the market. Such action will allow the pharmaceutical company to make money needed to advance its business while keeping its prices reasonable for patients requiring medication (Relias Media, 2016). The action calls for balancing between the need to make profits and benefit consumers. As such, both the consumers and the company will be contented without harming any party in the process. The aim of this action should align with the ethical standards of maximizing benefits and minimizing risks (Siham, 2013). Every ethical marketing strategy should benefit more people while creating as little or no harm as possible. The aim should be to make an overall positive impact on consumers purchasing drugs at this pharmaceutical company. The government should also cover all costs for patients dealing with severe illnesses. When the government takes part in covering patients’ costs and contracts with pharmaceutical pricing, it will make the pharmaceutical system more ethical.

The second course of action for the Bausch Company to consider is the financial burden on patients. Bausch Company only considered its shareholders the reason why it overpriced drugs. The company was also found to be compensating vast amounts of money to its CEO. It would be easier if the company set aside some more money for research and development to advance the production and manufacturing of new drugs. Such a move will accelerate more production of drugs to avoid purchasing from third-party dealers and then selling the drugs at a higher price. Also, the production of new drugs would require much more innovation to produce drugs of high quality and faster to avoid delays.

Another most effective alternative course of action is to respond meaningfully to consumers’ concerns. In the case of Valeant, pharmaceutical consumers have been complaining of hiked drug prices. It would be morally right for the company to consider the greater good of its actions. The company’s top priority should be its customer’s needs and not the needs of its shareholders. It is always essential to seek to protect the rights of consumers without harming them. Pricing is one of the primary factors that can determine whether a business will succeed or not (Smith, 2016). The decision to make consumers favorable prices relies on the managers and the executive team. It is worth noting that most ethical abuse that has affected marketing across all business are associated with manager. Managers should have a common language for ethics that enables communication within the different organizations to tackle the most fundamental problem of pricing products. According to Chonko and Hunt (2018), managers play a bigger role in unethical behaviors, leading to short-term benefits. Therefore, there is a need for managers in any organization to take up their part seriously while addressing unethical behaviors in their companies

Making and Justifying a Decision

The best decision, in this case, is to balance the need to make profits for the company and sell drugs at a favorable price. These actions will promote the greater good for a majority of the people, who are mostly the consumers. Notably, by doing so, the company will follow the utilitarianism theory to make decisions for its actions. Balancing between the need to make profits and benefit consumers will require the company’s relevant stakeholders to have the same moral imagination and development. Any leader in an organization striving to improve their ethical standards should cultivate better and higher moral standards. Sometimes, shareholders differ in their abilities to evaluate and resolve problems. The first most essential moral to consider is to avoid being egoistic. Most managers and business leaders lack the moral tendency to resolve moral issues due to their egoistic behaviors (Murphy et al., 2016). Such managers focus on their self-interest and make more profits rather than the greater good of many people. Notably, it is worth noting that the best ethical behaviors have an overall improvement and success for any business in terms of performance and profits (Ferrell & Fraedrich, 2021). Therefore, such managers need to focus on their egoistic behaviors and consider the benefits that accrue to most people. It is evident with the Bausch Company when it focused more on improving its shareholder’s interest instead of looking into the issues of consumers, mostly the patients.

Chonko, L. B., & Hunt, S. D. (2018). Reflections on ethical issues in marketing management: An empirical examination.  Journal of Global Scholars of Marketing Science ,  28 (1), 86-95

Ferrell, O. C., & Fraedrich, J. (2021).  Business ethics: Ethical decision making and cases . Cengage learning.

Guo, V. (2012).  Pricing ethics: 5 ethical issues in pricing strategies [+Avoiding them] . Pricing Strategy Driven by Data. https://www.priceintelligently.com/blog/bid/164830/5-must-know-pricing-strategy-ethics-issues

Mandal, P. C. (2021). Pricing and ethical issues for global markets.  International Journal of Business Strategy and Automation ,  2 (2), 1-15. https://doi.org/10.4018/ijbsa.20210401.oa1

Murphy, P. E., Laczniak, G. R., & Harris, F. (2016). Ethics in Marketing (2nd Edition). Taylor & Francis. https://mbsdirect.vitalsource.com/books/9781317235644

Nast, C. (2016).  Inside the Valeant scandal . The New Yorker. https://www.newyorker.com/magazine/2016/04/04/inside-the-valeant-scandal

Osman, J. (2021).  A Buried Scandal, Shedding Of Assets, And Forthcoming Spinoff Means Substantial Upside For Bausch Health . Forbes. https://www.forbes.com/sites/jimosman/2021/04/28/a-buried-scandal-shedding-of-assets-and-forthcoming-spinoff-means-substantial-upside-for-bausch-health

Pollack, A., & Tavernise, S. (2015).  Valeant’s drug price strategy enriches it, but infuriates patients and lawmakers (Published 2015) . The New York Times. https://www.nytimes.com/2015/10/05/business/valeants-drug-price-strategy-enriches-it-but-infuriates-patients-and-lawmakers.html

Relias Mmsedia. (2016).  Drastic surge in drug prices: ‘Unethical and immoral’ . Relias Media | Online Continuing Medical Education | Relias Media – Continuing Medical Education Publishing. https://www.reliasmedia.com/articles/139464-drastic-surge-in-drug-prices-unethical-and-immoral

Sihem, B. (2013). Marketing mix-an area of unethical practices?.  British Journal of Marketing Studies ,  1 (4), 20-28.

Smith, A. G. (2016).  Price gouging and the dangerous new breed of Pharma companies . Harvard Business Review. https://hbr.org/2016/07/price-gouging-and-the-dangerous-new-breed-of-pharma-companies

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Essay On Ethical Issues In Marketing

Type of paper: Essay

Topic: Business , Advertising , Products , Marketing , Company , Competition , Customers , Ethics

Words: 2500

Published: 12/31/2019

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Ethical Issues in Marketing

Introduction Marketing is an essential function in any business. Marketing without ethics would result in unmoral business. Faced with conflicting pressures, marketing managers may make compromises that include unethical business. Often, such decisions can be rationalized: an inadequately tested product has to be brought to market quickly to beat competition and payments via a third party to organized crime may protect the company's employees as well as its distribution channels (Smith & Quelch, 1996)

Identify ethical issues in marketing

The four P's of marketing: product, price, promotion and placement involve several ethical issues. Product, for example, raises obvious concerns about product safety, but the social impact of some products has drawn moral criticism. Aside from alcohol and tobacco, which are frequent targets of complaints, objections have been raised about unhealthful foods, gas-guzzling SUVs, and poor-value financial products aimed at the poor. Ethical issues about price gouging, predatory pricing (which undercuts the competition unfairly), price discrimination (charging more to some customers than others), misleading prices (such as pricing that makes it difficult for consumers to make comparisons from an unrealistic regular price), and price fixing (working with competitors to keep prices high) involve questionable profit techniques and possible market manipulations, which might be criticized by market analysts. Finally, placements raise ethical issues about anticompetitive practices such as controlling the channels of distribution and paying so-called slotting allowances for shelf space in stores, and so called gray marketing, which is the diversion of goods outside officially sanctioned channels (Boatright, 2007).

According to Durif et. al (2008), ethics is a crucial issue for an organization and is famous for its being unavoidable, unclear definition and characteristic many forms. As Durif et. al (2008) notes, marketing is overly paradoxical when it comes to ethical considerations especially because marketing is always aimed at creating a specific impact on the consumer’s perception of a product of service. Moreover, marketing is also the most commonly used scapegoat for ethical challenges in business hence subjecting it to incessant criticisms (Dufir, 2008). Admittedly there are various ethical issues of consideration in marketing Falsity and puffery are perhaps the most commonly encountered ethical issues in marketing; while false advertisement is the act of using misleading or confusing advertisement to better positive perception of a product, puffery is the use of exaggeration in advertisement (Ferrell, Fraedrich & Ferrell, 2011). For instance, in a shaving product advert it was claimed that the moisturizing strip on the shaving razor was “six times smoother” than a competitor’s while showing a man rubbing down his face with his hands (Ferrell, Fraedrich & Ferrell, 2011). When one of the competitor tool the company that sponsored the advert to court, it was ascertained that the statement actually meant that only the moisturizing strip was six times smoother and not the shave as was depicted in the advert (Ferrell, Fraedrich & Ferrell, 2011). This examples depicts both falsity and puffery in marketing; falsity in the sense that the “six times smoother” implies the moisturizing strip on the razor rather than the shave as could be seen from the advert and puffery in the sense that a one shave cannot be justifiably described as smoother than another. Subliminal advertisements in which certain cues are always used in an attempt to make consumers perceive a given product being advertised in a different way is yet another ethical issue of consideration in marketing. The use music to accompany adverts is a common practice in marketing where a certain type of music, most commonly distinct and able to create peculiar feeling if associated with the product being advertised, is used to boost the consumer’s perception of the product being advertised Sutherland (2007). For instance, an energy drink advert might be accompanied with a breathtaking musical performance. The breathtaking musical performance in such an advert is considered a subliminal message which, according Sutherland (2007), is capable of influencing the mood and causing a familiarity with the product being advertised. Other ethical issues that are also common in marketing include; pricing (for instance, charging higher prices than firms with similar products while claiming superiority), Manipulation of data, Purchasing (reciprocity in the selection of suppliers) and Bribery.

These ethical issues in marketing management are further shown by Survey findings of Chonko and Hunt, which are outlined below:

Rank Issues (with Illustrations) Frequency

Bribery (gifts from outside vendors, “money under the table” payment of questionable commissions)

Fairness (manipulation of others, unfairly placing corporate interests over family obligations, inducing customers to use services not needed, taking credit for work of others)

Honesty (misrepresenting services and capabilities, lying to customers to obtain orders)

Prices (differential pricing, meeting competitive prices, charging higher prices than firms with similar products while claiming superiority)

Product (products that do not benefit consumers, product and brand infringements, product safety, exaggerated performance claims)

Personnel (hiring, firing, employee evaluation)

Confidentiality (temptation to use or obtain classified, secret, or competitive information)

Advertising (misleading customers, crossing the line between puffery and misleading)

Manipulation of data (distortion; falsifying figures or misusing statistics or information, internally and externally)

Purchasing (reciprocity in the selection of suppliers) (3)

Ethical issues in promotion, such as the case of Volvo’s "Bear Foot" Misstep have caused a lot of criticism to many companies. In a television ad Volvo showed a monster truck riding atop the roofs of cars lined up in its path. The truck was named "Bear Foot" because of its oversized, six-foot tires, which crushed every car except a Volvo station wagon. The scene of devastation around the still standing Volvo illustrated the company's advertising message of strength and safety. The TV and print ads both appeared in October 1990 and received immediate critics for their effectiveness. In response, Volvo admitted having reinforced that the Volvo, however, charges of deceptive advertising were still made. The idea for the ad came from a monster truck rally in Vermont in which a Volvo was the only survivor of a similar stunt. In re-creating the scene at a Texas arena, the production crew employed by the advertising agency Scali, McCabe, solves reinforced the roof of the Volvo with lumber and steel and partially sawed through the roof supports of the other cars. When word leaked out, the attorney general of Texas began an investigation that led to a lawsuit for consumer fraud. Volvo quickly settled the suit by running corrective ads and by reimbursing the state of Texas for the cost of investigation and the legal fees incurred. Scali, McCabe, solves also resigned its Volvo account, which generated $40 million a year in revenues. In apologizing for the ads, Volvo insisted that the company was unaware of the rigged demonstration but defended the rigging all the same (Soares,1991). The reasons for the alterations to the cars, the company explained, were to enable the production crew to conduct the demonstration and to film it safety and to allow the Volvo to withstand the repeated runs of the monster truck that were required for filming. The claim being made was not false: Volvo engineers had determined that the roof could withstand the weight of a five-ton monster truck. The mistake was in not revealing to consumers that the ad was not an actual demonstration but a dramatization of the event in Vermont.

Looking at the advert critically, this was yet another case of deceptive advertising as there is no Volvo designed to withstand pressure a “Bear Foot” as was being depicted in the advert hence the advert was unethical with regards to marketing. Claiming that the “Bear Foot” advert was a dramatization rather than an actual advert was also misleading; people expect see dramatizations in movies and not in adverts. Notably, this was not the first time that Volvo and Scali, McCabe, solves had been criticized for questionable ads (Soares,1991). The year before, an ad was produced that showed a large truck driving over a Volvo with the tagline "How well does your car stand up to heavy traffic?" This ad was similar to one from the 1970s showing a Volvo withstanding the weight of six other Volvos stacked one on top of another. In both ads, jacks supported the Volvo on the bottom(Soares,1991). The reason for the jacks, according to the company, was that the ads were intended to show only the strength of the main body; no claim was being made about the tires and suspension system, which, in any event, could not withstand such a load. The tires would blow out and the suspension system would collapse. Firestone in the case of Steel-belted radial 500 tire, Audi in the case of the 5000-S model, A.H Robbins in the Dalkon Shield case, and Ford in the case of the Ford Pinto. Owners of Audi 5000-S model complained that the cars lunged put of control when they shifted into drive or reverse. Audi blamed the drivers. This led to slumping Audi sales in the late 1986 and 1987, as well as to low company credibility (Weinstein, 1987). Audi took steps to rebuild its image and boost sales by a combination of cash incentives and other programs, as well as a 30 million, six-month media campaign (Moskal, 1988a). Critics contend that Audi didn’t correctly manage the crisis, and Audi owners were angered by the company's insensitivity and its position of blaming drivers for the problem. In the case of the Ford-Firestone Brawl, for almost 100 years, Firestone Tire and Rubber Company had supplied tires to Ford Motor Company. This business relationship, which came from the close friendship of Harvey Firestone and Henry Ford at the beginning of the automotive age, was being strained by a dispute between these longtime partners over problems with the Firestone tires installed on Ford's popular Explorer Sports Utility Vehicle (SUV). By 2001, 203 deaths and over 700 injuries had resulted from rollovers in the Ford Explorers after the tread of Firestone tires separated. The showdown came at a meeting on May 21, 2001, when three senior Ford executives flew to Firestone's Nashville, Tennessee, headquarters to discuss the cause of these tragic incidents with Firestone's Chief executive John Lampe. Both Ford and Bridgestone/Firestone had long been aware of safety problems with the Ford Explorer equipped with Firestone tires. Initial tests showed that it was tipping when cornering or changing lanes and could also roll over in the event of a tire failure. Soon after the Ford Explorer hit the market in March 1990, both Ford and Firestone received reports of tire failure followed by rollovers. The first complaints came from the Middle East and Venezuela, where rough road conditions weren’t uncommon. Reports of tire failure in the United States involving Firestone tires came largely from Florida, Texas, Arizona, and other warm-weather states. By the time of recall, it was evident that whatever the design flaws in the Ford Explorer and the Firestone ATX tires, the combination of an Explorer equipped with Firestone ATX tires, was a dangerous product. Firestone executives insisted that its tires were safe (Davidson & Goodpaster, 1986b). In testimony to Congress, Mr. Lampe noted that there had been 16,000 rollovers of Explorers and that the tire failure had been the cause of less than 10 percent of those accidents. Jacques Nasser, the CEO of Ford, countered by releasing data showing that during a five year period, Firestone tires on 1996 Explorers were involved in 30 deathly accidents per million tires produced while Explorers equipped with Goodyear tires were involved in only three deathly accidents per million tires produced, one-tenth the number (Davidson & Goodpaster, 1986b). It soon became apparent that each company was interpreting the data differently and using them to place responsibility on the other. John Lampe handed the Ford executives a letter severing all relations between Firestone and the Ford. The next day, Ford announced the company would replace 13 million Firestone tires at a cost of $3 billion. Jacques Nasser was surprised that Firestone would walk away from $7.5 billion in annual sales, which was 40 percent of Bridgestone/Firestone's global revenues. The relationship between Harvey Firestone and Henry Ford that kept on for a century came to an end. Firestone has also been inducted in other ethical issues involving tire defects, Firestone first argued that there was no hard data to support the contention that its steel belted radial 500 tire was defective (Davidson & Goodpaster, 1986b). Five years after it started receiving complaints from its dealers- after several investigations by the National Highway Traffic Safety Administration, congressional hearings, legal complications; after years of vigorous defending the safety of the tire; and after 41 deaths and more than 65 injuries were linked to the product- Firestone recalled approximately 10 million of its steel-belted radial 500 tires. Firestone estimated that the after-tax cost of the recall was approximately $135 million which was 125 percent of its after tax earnings of $110 million (Davidson & Goodpaster, 1986b). Firms are usually hesitant to pull products, because recalls are often extremely expensive in terms of the cost of withdrawal or modification, bad reputations, and a signal of quality problems. It has to be noted that product recalls affect security prices (Hartman, 1987)

Unethical work can cause a lot of problems and it can be said that ethical and effective marketing managers have respect and concern for the welfare of those affected by their decisions (Smith & Quelch, 1996). Managers who remain silent or fail to incorporate their "official" ethics policies into day-to day management practice run the risk that they, their employees, and other stakeholders will be involved in questionable practices. By supporting a competitive system that respects the principles of the common moral system and the right of providing accurate and correct information, supports management, the competitive market and the company itself. (Paine, 1996)

Reference List

Boatright, John R, 2007. Ethics and the Conduct of Business New Jersey. Pearson Prentice Hall. Davidson, Dekkers l., and Kenneth E. Goodpaster, 1983b. Managing Product Safety: The Case of the Firestone 500." Harvard Business School Case #383-130. Durif, F, Graf, R., Hamel, A., Labbe, A., & Nadeau, A., 2008. Ethics In Marketing: Ideology Or Strategic Philanthropy? The case of American Apparel. Innovative Marketing , 4(2), 63-69. Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2013). Business ethics: ethical decision making and cases. Mason, OH, South-Western/Cengage Learning. Hartman, Raymond S.1987. Product Quality and market efficiency: The effect of product recalls on resale prices and firm valuation" Review of Economics and Statistics (Netherlands) 69, no.2, pp. 367-72 Irwin Weinstein Fannie (1987) "One foot in the Junkyard." Advertising Age 52. p.92 Moskal, Brian S. 1988a. Can Audi make it back? Industry Week 236, no. 3, pp. 49-50 Paine, Lynn S. 1996. Ethics in Marketing: Corporate Policy and the Ethics of Competitor Intelligence Gathering. Chicago. pp. 279. Smith, Craig N & Quelch John A. 1996, Ethics in Marketing: Chicago. Soares, E. J. (1991). Promotional feats: the role of planned events in the marketing communications mix. New York, Quorum Books. Sutherland, M, 2008. Ethics in marketing: ideology or strategic philanthropy? Subliminal Advertising, Like the Energizer Bunny, Just Keeps Going and Going. Max Sutherland’s Web, 1, 1-3.

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Ethics and the marketing authorization of pharmaceuticals: what happens to ethical issues discovered post-trial and pre-marketing authorization?

Rosemarie d. l. c. bernabe.

1 Faculty of Health and Social Sciences, University of South-Eastern Norway, Kongsberg, Norway

2 Centre for Medical Ethics, Institute of Health and Society, University of Oslo, Oslo, Norway

Ghislaine J. M. W. van Thiel

3 Julius Center for Health Sciences and Primary Care, University Medical Center Utrecht, Utrecht, The Netherlands

Nancy S. Breekveldt

4 Dutch Medicines Evaluation Board, Utrecht, The Netherlands

Christine C. Gispen

Johannes j. m. van delden, associated data.

The inspection reports, integrated inspection reports, Day 150, and Day 180 data that support the findings of this study are available from the database of the Dutch Medicines Evaluation Board (MEB). Because of the sensitivity of the sources, the data may only be accessed with the permission of the MEB or similar European regulatory body.

In the EU, clinical assessors, rapporteurs and the Committee for Medicinal Products for Human Use are obliged to assess the ethical aspects of a clinical development program and include major ethical flaws in the marketing authorization deliberation processes. To this date, we know very little about the manner that these regulators put this obligation into action. In this paper, we intend to look into the manner and the extent that ethical issues discovered during inspection have reached the deliberation processes.

To gather data, we used the Dutch Medicines Evaluation Board database and first searched for the inspections, and their accompanying site inspection reports and integrated inspection reports, related to central marketing authorization applications (henceforth, application/s) of drugs submitted to the European Medicines Agency (EMA) from 2011 to 2015. We then extracted inspection findings that were purely of ethical nature, i.e., those that did not affect the benefit/risk balance of the study (issues related to informed consent, research ethics committees, and respect for persons). Only findings graded at least major by the inspectorate were included. Lastly, to identify how many of the ethically relevant findings (ERFs) reach the application deliberation processes, we extracted the relevant joint response assessment reports and reviewed the sections that discussed inspection findings.

From 2011 to 2015, there were 390 processed applications, of which 65 had inspection reports and integrated inspection reports accessible via the database of the Dutch Medicines Evaluation Board. Of the 65, we found ERFs in 37 (56.9%). The majority of the ERFs were graded as major and half of the time it was informed-consent related. A third of these findings were related to research ethics committee processes and requirements. Of the 37 inspections with ERFs, 30 were endorsed in the integrated inspection reports as generally GCP compliant. Day 150 joint response assessment reports and Day 180 list of outstanding issues were reviewed for all 37 inspections, and none of the ERFs were carried over in any of the assessment reports or list of outstanding issues.

None of the ethically relevant findings, all of which were graded as major or critical in integrated inspection reports, were explicitly carried over to the joint assessment reports. This calls for more transparency in EMA application deliberations on how ERFs are considered, if at all, in the decision-making processes.

Several documents from the European Medicines Agency (EMA) speak of the place of ethics in the regulatory processes involved in a marketing authorization application (henceforth, application) [ 1 – 4 ]. One of these is the document, Points to consider on Good Clinical Practice (GCP) inspection findings and the benefit-risk balance where the mandate of regulators in terms of the place of these ethical issues in the evaluation process is explained as follows:

GCP inspection findings – even if not directly influencing the benefit-risk balance —will still be important if they raise serious questions about the rights, safety and well-being of trial subjects and hence the overall ethical conduct of the study. It is an obligation of clinical assessors, rapporteurs and the CHMP also to assess the ethics of a clinical development programme, and major ethical flaws should have an impact on the final conclusions about approvability of an application. Consequently, ethical misconduct could result in rejection of the application [ 4 ]. ( italics mine ).

In a previous publication, we identified the types of ethical issues that pharmaceutical regulators encounter post-marketing through inspection reports [ 5 ]. In this publication, we discovered that based on 2008–2012 inspection reports comprising of 112 medicinal products and 288 clinical trial sites, inspectors frequently and regularly encounter ethically relevant findings (ERFs). Specifically, "At least major ERFs were present in almost all medicinal products with ERFs. The categories with the highest number of ERFs were protocol issues, patient safety, and professionalism issues." Also, "on average, there were 7.54 major and 2.95 critical ERFs per medicinal product application, although ERFs can increase to 30 major and 12 critical" [ 5 ]. For more information on what inspectors consider as major and critical ERFs, the reader is directed to consult our article entitled, “Ethics in clinical trial regulation: ethically relevant issues from EMA inspection reports” [ 5 ]. Though it is fair to assume that at least some of the ERFs that “directly influence the benefit-risk balance” of an investigational medicinal product submitted for marketing authorization application would be carried over to the succeeding regulatory deliberation processes, we cannot make the same assumption about GCP inspection findings that do “not directly influence the benefit-risk balance.” The latter remains unknown and, as such, we know very little about the manner that “clinical assessors, rapporteurs and the Committee for Medicinal Products for Human Use (CHMP)” fulfill this obligation of “assessing the ethics of a clinical development programme.” To respond to this need, it is the goal of this article to look into the manner and extent that ethical issues that do not affect benefit-risk balanced and were discovered during inspection have reached the deliberation processes, i.e., how “major ethical flaws” have impacted “the final conclusions about (the) approvability of an application.”

Before we elaborate on our methodology, it is imperative that we quickly go through the European centralized procedure for authorizing medicinal products, which we have outlined in Fig.  1 .

European centralized procedure for authorizing medicinal products [ 6 – 8 ]

As can be seen from Fig.  1 , the request for GCP inspections and the eventual circulation of the integrated inspection report to the CHMP happens between Day 120 and Day 180. All inspection reports and integrated inspection reports are submitted to the CHMP for the latter’s consideration. Figure  2 provides the details leading to the circulation of the integrated inspection report.

Process of inspection activities related to CHMP request [ 2 , 3 ]

Given the centralized procedure outlined above, to understand the extent to which ethical issues have reached the application deliberation processes, we searched for inspection reports, integrated inspection reports, Day 150 joint assessment reports, and Day 180 List of Outstanding Issues .

To gather data, we used the Dutch Medicines Evaluation Board database and first searched for inspections, and their accompanying site inspection reports and integrated inspection reports, related to central application of drugs submitted to the EMA from 2011 to 2015. For the list of drugs processed for central marketing authorization, we used the European public assessments report database [ 9 ].

Inspection findings include both scientific and ethical issues. To determine which issues to extract, we used the following system. In another publication, we extracted the ethical issues from GCP inspection reports and came up with the following classifications of ethical issues: informed consent, monitoring and oversight, patient safety, professionalism and or qualification issues, protocol compliance or protocol issues, research ethics committees, and respect for persons [ 5 ]. It can be observed that the issues in some of the classifications can both be scientific and ethical. An ethical issue can also be a scientific issue when it could affect the benefit-risk balance of a scientific evaluation of an application [ 4 ]. The following classifications have this dual characteristic: monitoring and oversight, patient safety, professionalism and or qualification issues, protocol compliance or protocol issues. Since we wish to investigate the impact of an ethical issue that is not a scientific issue, we shall look at the issues under the following classifications only: informed consent, research ethics committees, and respect for persons. The former three classifications coincide with the list of ethical issues that may trigger a “for cause” inspection as stated in the document, Points to consider for assessors, inspectors and EMA inspection coordinators [ 1 ]. We used another of our publications [ 10 ] to define the scope of informed consent ( IC ), research ethics committees ( REC ), and respect for persons.

Even within the latter three categories, since we are testing how far purely ethical issues identified in inspections reach the evaluation processes, we excluded inspection findings that may influence the benefit-risk balance evaluation. For example, one of the issues identified as likely to influence benefit-risk evaluation is “inadequate reporting of adverse events and other safety endpoints.” If we look at the definition of respect for persons, patient safety is an aspect of its definition and inadequate reporting of (severe) adverse events a concrete example. Because this finding is likely to affect benefit-risk evaluation, i.e., it is clearly both a scientific and an ethical issue, it was excluded from our analysis.

The GCP deviation findings from inspection reports that were graded by the inspectors as either major or critical and that may be categorized under IC, REC, and/or respect for persons were extracted (henceforth ethically relevant findings, ERFs ). We used the integrated inspection reports to validate if the inspection findings still hold after the evaluation of the responses of the responsible parties on the initial inspection reports (see Fig.  2 ) and if the gravity rating remains the same. In case of a discrepancy, we followed the integrated inspection reports. The conclusion from the integrated inspection reports were extracted.

Next, to identify how many ERFs reach the evaluation of the application, the relevant joint response assessment reports (specifically the documents “overview” and “clinical”) and the list of outstanding issues (see Fig.  1 ) were extracted. We reviewed the sections where these assessment reports discussed the inspection findings and identified if and how these ERFs were considered in the evaluation processes and how the issues ultimately affected the decision on the application.

To avoid privacy and confidentiality issues, the results are on an aggregated format.

From 2011 to 2015, 390 applications were processed, of which 65 had inspection reports and integrated inspection reports accessible via the database of the Dutch Medicines Evaluation Board. Of the 65, we found ERFs in 37 (56.9%). These findings are summarized in Table ​ Table1 1 .

Grading and quantity of ethically relevant findings

As can be seen from Table ​ Table1, 1 , the majority of the ERFs were graded as major and half of the time it was IC-related. A third of these findings were related to research ethics committee processes and requirements.

Of the 37 inspections with ERFs, 30 were endorsed in the integrated inspection reports as generally GCP compliant. Table ​ Table2 2 presents the mean, mode, minimum, and maximum ERF values in all inspections, endorsed inspections (the 30 inspections), and not-fully-endorsed inspections (the remaining 7 inspections).

Mean, mode, minimum, and maximum ERF values grouped according to all inspections, endorsed inspections, and non-endorsed inspections

From Table ​ Table2, 2 , we see that there is a difference in terms of the average number of ERFs and the maximum number of ERFs per inspection between the endorsed and the non-endorsed inspections. Non-endorsed inspections have higher values on both counts than endorsed inspections in terms of total number of ERFs, major ERFs, and critical ERFs. This means that the non-endorsed inspections have more and graver ERFs than the endorsed inspections.

In all the 30 endorsed inspections, the gravity ratings were retained and the corrective and preventive action (CAPA) proposals of the sponsors and investigators to address the ERFs were accepted by the inspectors. Note that CAPAs would in most instances be preventive, i.e., changes can be made only for future trials. Seven of the inspections were not fully endorsed as GCP compliant, partly due to ERFs.

Of the seven not-fully-endorsed inspection cases, three were declared non-GCP compliant with the consequence that (part of) the data were not endorsed for use for the assessment of an application. One was declared non-GCP compliant but data were still endorsed for use during assessment. In three cases, data were endorsed for use for assessment, but the inspectors expressed lingering concerns about ERFs and required a better approach from the sponsor in the future.

Day 150 joint response assessment reports and Day 180 list of outstanding issues were reviewed for all 37 inspections, and none of the ERFs were carried over in any of the assessment reports or list of outstanding issues. Table ​ Table3 3 summarizes these results.

In our study, we wanted to see how many of the ethical issues that were not likely to affect the scientific validity of the study and that were discovered during inspection have reached the evaluation processes for centralized applications of drugs. We did this by investigating how many of the ERFs from integrated inspection reports were reflected in Day 150 and Day 180 joint assessment reports. Our results are straightforward: of the 77 ERFs found in 56.9% of all inspections from 2011–2015, none of the ERFs were factored in, i.e., none of them were mentioned at all as factors to consider in either Day 150 joint response assessment reports or Day 180 list of outstanding issues. This means that though these ERFs may have been discussed internally, none of these were explicitly carried over to the joint assessment reports. Whether or not the inspections were endorsed was not a factor in the uptake of ERFs in Day 150 and Day 180 assessments. This is disturbing especially for the seven inspections where the inspectors did not guarantee general GCP compliance of the trial sites, three of which lingering concerns about ERFs were expressed by the inspectors. Overall, and based on inspection and assessment reports, this means that the mandate obliging clinical assessors, rapporteurs and the CHMP to also “assess the ethics of a clinical development programme, and major ethical flaws should have an impact on the final conclusions about approvability of an application” [ 1 ] have yet to be actualized or at least seen as factors explicitly considered during the assessment of an application. With that said, some considerations are worth mentioning.

First, it is unclear what standards inspectors use to declare that the inspected sites were generally GCP compliant in spite of major/critical ERFs. Major/critical issues are defined as “conditions, practices or processes that might adversely/adversely affect the rights, safety or well-being of the subjects and/or the quality and integrity of data” [ 11 ]. If major/critical ERFs at the very least have the possibility of affecting the rights, safety, or well-being of the subjects, how were these weighed and factored in the conclusion that the sites were generally GCP compliant? At the time of writing, we know of no EMA document that speaks about this process. Thus, there is a need for a transparent structure on grading standards as well as guidelines on the place of minor/major/critical findings in application decision-making.

Second, though the grading of critical/major/minor is used by the inspectors, it is not clear in EMA documents if the assessors should use the same grading system. Whether inspectors and assessors should and in fact use the same grading system is an area for future research.

Third, ERFs are best addressed early, and not during application deliberations when “damage” has already been done. This may mean encouraging preventive measures at the design stage of clinical trials, widening the capacity of research ethics committees to monitor approved clinical trials, reviewing sponsor responsibility in actively pursuing ethically compliant trials, and/or more active collaboration between RECs and drug regulators in terms of approving and monitoring clinical trials, among others.

Fourth, inspection reports provide a lot of insight on ethical and scientific matters such as the ethical acceptability of the elements of a pharmaceutical clinical trial which eventually becomes a basis for an application, integrity of the clinical trial data based on which pharmaceutical products are provided marketing authorization, among others. This should be sufficient reason for drug regulatory agencies to make them more accessible, if not public. This is a concern that was earlier made by Dal-Re, Kesselheim, and Bourgeois [ 12 ] in an opinion piece calling for the publication of inspection reports by drug regulatory bodies. Dal-re and colleagues correctly point out that doing so is part of these regulatory bodies’ public health mandate. It also allows for (a) individual assessment of “trial quality in publication decisions”; (b) provides more inputs for systematic reviews; and (c) provide means for clinical trial sponsors to correct mistakes and ensure participant safety [ 12 ].

Fifth, we saw above the EMA position that GCP issues, even those that do not affect the benefit-risk balance so long as these issues raise “serious questions about the rights, safety, and well-being of trial subjects” should have an “impact on the final conclusions about approvability of an application” [ 4 ]. In our study, we found that this is not (yet) the case. Unfortunately, we found no EMA document that elaborates on how ethical issues should affect application evaluation processes and no other publication to our knowledge engaged these issues, except ours. In an earlier publication [ 13 ], we proposed a 4-step procedure in evaluating ERFs, with sanctions depending on the evaluation of the gravity and magnitude of the ERF. However, it still remains to be seen how ERFs that do not affect the risk–benefit balance of an application such as the ones we dealt with in this manuscript should be evaluated by assessors and how such an assessment should impact the assessment process. This is work for future research.

None of the ethically relevant findings, all of which were graded as major or critical in integrated inspection reports, were explicitly carried over to the joint assessment reports. This means that from the vantage of these joint assessment reports , none of the ethically relevant findings seemed to have reached or impacted the application deliberation processes. This calls for more transparency in EMA application deliberations, specifically on how ERFs are considered in the decision-making processes.

Acknowledgements

The views expressed by the authors are their personal views and may not be understood or quoted as being made on behalf of or reflecting the position of the Dutch Medicines Evaluation Board.

Abbreviations

Authors’ contributions.

RDLCB downloaded the data, processed, and interpreted the data. She wrote all the drafts as well. GJMWT, NSB, CCG, and JJMD discussed the interpretation results and contributed to the various drafts. All authors have read and approved the manuscript.

This project was funded by the Dutch Medicines Evaluation Board. The funding body had no role in the design of the study and collection, analysis, and interpretation of data and in writing the manuscript.

Availability of data and material

Ethics approval and consent to participate.

Ethics approval was waived according to Dutch Medical Research Involving Human Subjects Act.

Consent for publication

Not applicable.

Competing interests

RDLC Bernabe received funds from the Dutch Medicines Evaluation Board for this project. CC Gispen and NS Breekveldt worked/works for the Dutch Medicines Evaluation Board. GJMW van Thiel and JJM van Delden have no competing interests to declare.

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

• Essay Editor

McDonald's Ethical Issues & Unethical Marketing Practices

1. ethical issues at mcdonald's.

There are numerous ethical issues from the McDonald's brand. For the purpose of this report, the business practices of McDonald's will be the focus of ethical analysis. The difference between the practices and the brand exists in the reality of business activity. McDonald's has engaged in many unethical business practices. This report will detail a few, involving the exploitation of children in marketing, race to the bottom pricing strategies, and the damage on the environment. McDonald's has been criticized for the employment of children in the production of their toys. The company has a history of cutting costs in areas which are detrimental to the community. In many instances, this has been at the expense of children. This strategy effects a veil of advertising and PR which is disproportionate to the actual good to society. An instance of this found McDonald's Australia paying for advertisements on children's textbooks, in a time when they were closing down their Ronald McDonald House Charity for children. The recent closing of McDonald's UK head office and the sacking of 200 employees also points to a segment of the marketing which disproportionately affects its target. The children employed to work in the head office will have lost their jobs to an advertising campaign designed to bring the parents and the children themselves into the store. An employment campaign of this nature is likely one of several efforts to knife-edge into the future market. Step changes in corporate strategy such as this are likely to have been caused by a declining brand image in Western markets and are indicative of strategies which will further employ damaging employment practices in the third world. This point is reinforced by the large increase of advertising in third world countries and the increase of corporate PR in countries where McDonald's has been faced with litigation.

1.1. Exploitation of Workers

So having workers in any company is the most important part, and fair treatment with them is the basic requirement. McDonald's is facing an issue regarding their policy regarding the workers. As McDonald's is the world's largest food chain and successful all over the world, they are earning huge profits. It has been found that the low wages they are giving to their workers are not enough to maintain their lives because McDonald's does not give them fair wage rates. Respess (2006) states that McDonald's sets the wage rates by keeping in mind the local wages, and if the government says to follow the rule of minimum wages, they do not follow it directly and use their own technique. Due to the low wages, McDonald's has also been accused of paying wages below the poverty line in some countries. This is the biggest unethical issue raised by McDonald's. Because of the low wage rates, McDonald's has also been accused of employing child labor. They recruit workers under 18 and give them part-time jobs so that they can pay them less money. The minimum age for work should be 18, but McDonald's recruits under 18 workers by using fake documents for the local stores. Foster (2003) The most recent issue about the UK-based McDonald's company workers was about the zero-hour contracts. In these contracts, workers have no fixed work pattern and no job security. They have to be on the call of the employer and work whenever required. This type of contract is discrimination against the workers, and many workers have raised the issue and also protested against McDonald's. McDonald's also does not provide training to the workers and directly asks them to start working and learn during the work. [...]

1.2. Environmental Impact

McDonalds has been under scrutiny over the last decade for its impact on the environment and in particular the Amazon rainforest. The main concern with McDonalds and the rainforest is the soy used in chicken feed. Soy is a crop that can be grown in a sustainable manner and even provide a better financial return than cattle farming, however in Latin America soy production is associated with deforestation and use of the rainforest lands to grow crops for animals in Europe. McDonalds uses a significant amount of soy for chicken feed in Europe and animal products in Europe is now the fastest growing sector of soy consumption in the world. McDonalds is indirectly responsible for the clearing of a large amount of tropical rainforests simply because of the sheer size of its market share. In response to criticism and mounting evidence of a link between McDonalds and rainforest destruction, McDonalds commissioned two reports through the University of Michigan School of Natural Resources to investigate the link between McDonalds and tropical deforestation. The first in 1986 found no direct link between McDonalds and rainforest destruction, however the methodology and findings of the report have been heavily criticized. The author of the report cut ties with the University of Michigan and now admits the study was mainly a PR exercise. The second report resulted in a partnership between McDonalds and the WWF to develop sustainable sources of soy. This project has been perceived as a positive step however it does not address the fundamental issue that McDonalds and other large corporations are using vast amounts of soy and simply moving other farmers and cattle ranchers to clear new land.

1.3. Animal Welfare Concerns

Due to the large volume of animals used in the fast food industries, there is particular concern for the way in which these animals are treated. Fast food companies use a large variety of animal products, including beef, pork, chicken, and eggs. McDonald's is the largest purchaser of beef in the UK and is one of the biggest global purchasers of beef from rainforest regions, which are often linked to deforestation and displacement of indigenous communities. The majority of animals used in the fast food industry are intensively reared and are subject to conditions which are cause for ethical concern: animals suffer due to overcrowding, lack of natural light, unclean living conditions and no form of mental stimulation. This is particularly true of chickens, the vast majority of which are bred to reach full size in just 6 weeks. These animals often suffer severe leg and heart problems as a result of their unnaturally rapid growth and are likely to experience prolonged pain and suffering. McDonald's has made some improvements in the conditions animals it uses, such as sourcing a small percentage of cage-free eggs, but it refuses to release information on its current levels of animal suffering or to set meaningful targets for improvement. The company has a policy of continuous auditing and improvement, which it sees as a more effective agent for change in the industry as a whole. However, there is a significant lack of transparency on these issues in most host countries and there is little tangible evidence that the company is solving industry-wide problems.

2. Unethical Marketing Practices by McDonald's

McDonald's has faced severe criticism for its unethical marketing practices, especially towards children. With the growing epidemics of childhood obesity, it is crucial to scrutinize the marketing strategies of companies that offer high-fat and calorie foods, which are linked to being a contributing factor. Studies have shown that the food and beverage industry influences the choices of children and youth not only through traditional media but also through new media forms such as the internet, cell phones, and DVDs. McDonald's stands as one of the largest fast-food companies, and its largest market is with children. Over 40% of the children asked their parents to go to McDonald's at least once a week, and with toys being the bait, 15% of those were successful. This is supported by the fact that the toy is the most important factor when a child determines his/her meal choice at McDonald's. Advertisements featuring toys with Happy Meals are not only a deceptive tactic to appeal to kids, but it is also a means of building a long-term relationship with kids who will eventually become adult consumers. This tactic can be classified as unethical, as the company is not taking into consideration what is best for a child and is instead enticing them with an item that could further their unhealthy eating habits. McDonald's has also made misleading nutritional claims to promote its unhealthy food to children. The company had a website called McWorld, which featured interactive games and character sites such as Ronald McDonald and Birdie. The website was purged in 2013 after a successful lawsuit from the Center for Science in the Public Interest (CSPI), which argued that the site was using games and character sites to mask the fact that the food was unhealthy. This was a manipulative strategy to redirect children from the true nutritional questions about McDonald's food and not something that children should be learning from a young age.

2.1. Targeting Children with Advertising

In July 2001, McDonald's racked up more negative publicity when it was disclosed that they planned to give away toys with "Happy Meals" and had involved advertisers and media firms to develop a campaign designed to appeal to children as young as one or two. A 2007 Federal Trade Commission report concluded that no progress had been made by the food industry in improving the marketing of "better-for-you" products to children and adolescents. Of the $1.6 billion in advertising to youth, only $281 million was spent to promote healthier food. On June 22, 2011, McDonald's announced that it would become the first fast food chain to nationally advertise a meal that meets the recommended nutrition criteria for children. The new meal is called a "Happy Meal" and is to be advertised as such. The new meal will consist of a smaller portion of French fries (1.1 ounces), apple slices, and a choice of milk or juice and the option of a hamburger or chicken McNuggets. This move by McDonald's is an attempt to sell food that is more nutritionally sound to a demographic that is becoming more and more obese. This is a step in the right direction for the company to be aiming to provide healthier food options to children. However, in 2012 the new meal didn't seem to be helping with business. CEO of McDonald's Jim Skinner was quoted saying, "It's tough to do the right thing." This referred to the struggles of trying to get children to consume healthier food that they do not want to eat. On December 10, 2013, McDonald's had announced that they will be replacing the kids advertised soda with a healthier option of milk or juice for the same price. This new promotion could be seen as derived of the best intentions for children but in the end it is nothing but an opportunity for McDonald's to increase the sales of their milk and juice beverages. This increase in profits on such pure and harmless product could be seen as unethical. In 2018, the kid's meal will go through another transformation to be comprised of a choice of a hamburger, cheeseburger or 4 piece chicken McNuggets. The meal will also have a kids sized fries and a choice of drink: milk, chocolate milk or apple juice. McDonald's aims to have at least 50 percent or more of the kids meal options listed on their menu board be 600 calories or less. The new options present less of a selection for a healthier choice as the meals before. With the selection of the chocolate milk, the meal can still far exceed the 600 calorie limit that is intended to be controlled. This is a paradox to the effort to promote healthier meals for children.

2.2. Misleading Nutritional Claims

This marketing strategy initially began in 2004 in the UK, where McDonald's wanted to dispel the myth that their food was unhealthy. They initiated an advertising campaign using press and TV to inform the public of the changes they had made in the way they prepared their food including the use of vegetable oil in cooking their fries and the opening of a McFitness gym in an attempt to show the public that they could eat at McDonald's and still maintain a healthy lifestyle. But the real effects of this campaign were learned in May 2005 when McDonald's revealed a pre-tax loss of £119.4m, which it blamed on the costs of closing outlets and scaling back on future openings. This was surely due to the drop in custom as a direct result of their attempt to convince the public that their food was healthy. But the real evidence of misleading the public comes from a specific example of manipulating the facts. In 2002 McDonald's distributed a nutrition leaflet in Farmington, USA schools in which it suggested that, as part of a healthy diet, an adult should consume between 1800 and 3000 calories a day. With the majority of McDonald's meals containing over 400 calories, it is clear that they were trying to indirectly inform the public that their unhealthy food is part of a healthy diet. This is a classic example of McDonald's trying to influence consumer choice through the use of manipulative advertising techniques.

2.3. Manipulative Advertising Techniques

★ "Get the stars with us and see where it leads you to," "Collect all characters and get free Shrek™ with every Happy Meal®." Do these lines seem to be very innocent and attractive, ones which can find space in a conversation between two kids? Well, this advertisement was one of the several others, which McDonald's used in order to attract children under 13. When asked, McDonald's responded that using the movie Shrek™ was not a promotional tie-in aimed directly towards children under 12; rather, it was designed to reach a wider audience. (7) However, evidence shows that the movie was in fact aimed towards young children, and it is wrong to use toys to promote a movie to children if the movie was not intended for them. This exemplifies the inaccuracy and misleading quality often found in the advertisements of McDonald's and its effect on children's desires. At a young age, children are not able to differentiate between advertising and actual information and thus their desires based on the advertisements are very strong. (3) It has been found that young children's spending money has risen dramatically in the past few decades and much of it is spent on McDonald's food purely because of the toys and movie promotion tie-ins. (4) This has a massive effect on the diets of children because it promotes high consumption of McDonald's food in order to collect all the toys. So strong was this influence that once when McDonald's offered its option of Bagel Sandwich instead of fries, as kids' advertised meal, it received numerous complaints from its adult customers. They wanted to have the bagel sandwiches too, but instead for boosting adult sales, it had a reverse effect and gave McDonald's a stronger appeal towards children. (2)

2.4. Influence on Consumer Choices

McDonald's promotes its unhealthy food to consumers using various advertising and marketing strategies. As a result, several consumers are deceived into purchasing McDonald's products. With their worldwide marketing and advertising, and the hiring of in-store "mentors" of company-designed behavior and dress, McDonald's aims to develop the preference for their brand in the minds of children at a young age, so they will be lifetime customers. Using characters such as Ronald McDonald, McDonald's can quickly establish a connection with children. Joe Camel, a cartoon character used to market cigarettes to children, is to the tobacco industry what Ronald McDonald is to the fast-food industry. Under pressure, due to the rise of childhood obesity and other health-related issues, McDonald's has revealed that it will reduce its marketing to children. However, it has failed to provide clear details of what it will do, leading some to believe that this move is just a public relations stunt and that it will not significantly affect its use of marketing which appeals to children. This "Ronald McDonald Factor" has a large effect on consumer choices, with children often having a major influence on what their parents purchase. In addition to targeting children, the McDonald's corporation has attempted to change the definition of consumer choice. "New Choices" is an ad campaign designed to inform consumers of McDonald's non-burger products. Its aim is to make McDonald's out to be a healthy and diverse range of food. This campaign is a failure as salads and other healthier options are often neglected in favor of the popular high-fat items, and some items listed in the ad became no longer available. This advertising attempt has not only shown to be manipulative, but has also failed to match the claims being made. By changing the logos of its healthier food items, to the logos of its more popular items such as placing the Filet-o-fish logo on a cheeseburger, McDonald's has attempted to give its customers a false sense of nutritional value in their regular high-fat purchases. Any change of item logos has been denied by McDonald's to be a deliberate act. However, it is difficult to believe this to be a mere coincidence given the extent of the change and gradual nature of the process.

3. Corporate Social Responsibility Efforts by McDonald's

At its core, McDonald's corporate social responsibility efforts aim to give back to the community and consider the approach and ultimate aim of its philanthropic efforts, which can certainly be debated. According to McDonald's own literature, their main philanthropic venture is the Ronald McDonald House Charities (RMHC), which provides a home-away-from-home for nearly 6,000 families of ill or injured children who must travel to receive treatment at a hospital more than 357.9km from their home. At a glance, this charity seems to be an incredibly noble cause and undoubtedly helps numerous families in their time of need. However, a legitimate criticism can be made of the RMHC program implying a distinct marketing motive behind the program in that the 'goodwill' generated from this program will ultimately affect the McDonald's brand favorably, leading to increased sales. The clearest example of this is the global 'Give a Hand' campaign in which RMHC donation boxes were placed in McDonald's stores worldwide, simultaneously with Happy Meal sales in which a percentage of profits were donated to the RMHC. No matter the motive, it is clear that RMHC has indeed made a significant positive social impact and is a source of community pride for McDonald's employees and customers. McDonald's should be credited for their positive move to sustainable fish sourcing after heavy criticism from groups such as Greenpeace regarding the detrimental environmental impacts of fast food chains. By 2011, McDonald's had become a member of the Marine Stewardship Council and had committed to sourcing all fish for their European stores from sustainable MSC sources. This pledge was fulfilled ahead of schedule in 2010 with McDonald's European outlets sourcing 100% of fish products from sustainable sources. This move successfully addressed and rectified a major unethical practice and is a testament to McDonald's commitment to responsible corporate citizenship in response to public concerns. In recent years, there is evidence of program implementation and continuous improvement of McDonald's employee welfare practices. A major step was the introduction of an employee-driven program titled 'Voices of McDonald's Crew', which led to a global survey, identification of best practices, and ultimately the establishment of an optimal first-job experience for McDonald's crew. A major best practice and positive move was the European 'Generation D' program in which McDonald's set out to raise its employer attractiveness and image to the Millennial generation. Programs like these show continuous improvement of McDonald's employee welfare through internal assessment and acting on employee feedback. It is important to consider that while sometimes identified as 'low-skilled', McDonald's employs a large and diverse workforce. As such, while it is clear McDonald's employee welfare practices have improved, there continues to be criticism and accusation from activist groups regarding McDonald's treatment of its employees. In conclusion, McDonald's corporate social responsibility efforts are multifaceted and ongoing and continue to evolve with the changing needs and concerns of society. Evaluation of CSR programs is a subjective process with varied stakeholder opinion, and as a brand with global impact, McDonald's CSR programs and the suitability thereof will continue to be a topic of public debate and academic discussion.

3.1. Philanthropic Initiatives

At present, McDonald's has adopted several philanthropic initiatives in an attempt to show its commitment towards social responsibility. It has been involved in several acts of charity, the most commendable being its alliance with the Ronald McDonald House Charities and the Best of McDonald House Charities. This was established to help parents of sick children by providing home-away-from-home facilities, which enable families to stay together, helping sick children to cope better and also speed up their recovery. This was initiated in 1974 and since then, has expanded globally to become one of the world's leading organizations to improving the health and well-being of children. The charity has shown that McDonald's is truly committed to aiding social causes, as it has contributed over $165 million annually and also donated most of the money and time to executing the programs for the betterment of these children. Another initiative of McDonald's and perhaps lesser known, is its involvement in education through scholarships. It has increased the accessibility of education by offering scholarships to students who are active participants in their community and display leadership qualities. There are currently 10 national scholarships in the USA with different eligibility criteria and also the J.N. Adam Memorial Scholarship in Canada. This money is typically used by students for tuition fees and also helps ease the financial burden on parents or the students themselves. This idea of aiding education is one of the best ways to progress society and McDonald's has set an example with this initiative.

3.2. Sustainable Sourcing Practices

Sustainable sourcing is an act of making environmentally friendly and conscious. One of McDonald's major efforts in sustainably sourcing their products is using "certified happy meal toys". These toys are made of bio-plastics and can compost once they are thrown away in the trash. The packaging that these toys come in is made from recycled, FSC certified or controlled wood products. Another action that McDonald's has taken to sustainably source their products is their purchasing of Rainforest Alliance Certified McCafe espresso. In addition to this, they have stated that by 2020 they will be purchasing a significant amount of sustainable beef from verified suppliers. Finally, McDonald's has promised to purchase 100% verified deforestation-free packaging by 2020. This will ensure that the paper and board used for packaging have been verified to not be linked to deforestation. These efforts have been a great improvement to McDonald's image and are moving them towards contributing to a healthier and happier world. This demonstrates corporate social responsibility by a company seeking to build self-regulation into their business model.

3.3. Employee Welfare Programs

McDonald's is known for their unique employee assistance program. This has been created to help any employee who may be facing financial hardship or emotional distress. This can be related to personal or job-related issues. The program is available 24/7 and is completely confidential. If qualifying for assistance, employees or family members may receive financial aid, counseling or referral service. This is a very beneficial resource for employees who are in need of any of these services and has the potential to drastically improve a situation. To ensure that the health and safety of their employees is up to an acceptable standard, McDonald's has used a risk management index developed by the National Safety Council (US) to identify at-risk operations and/or markets. This index will be used as a tool to measure safety performance and set expectations to reduce risk and injuries at the workplace. By identifying at-risk areas, managers and employees are able to use the resources available to improve safety and health. Reducing injuries and incidents means providing a safer working environment. An initiative called "Safety Solutions" has been created to identify and share effective safety practices in McDonald's restaurants.

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