Business Ethics

Learning Activity # 1

Baby Needs a New Crib

An on-line retailer that sells home and children’s items, such as children’s furniture, clothing, and toys, was seeking a way to reach a new audience and stop the declining sales and revenue trends it was suffering. A market research firm hired by the retailer identified a new but potentially risky market: lower-income single parents. The new market seemed attractive because of the large number of single parents, but most of these households were severely constrained in terms of their monetary resources.

The research firm proposed that the retailer offer a generous credit policy that would allow consumers to purchase up to $500 worth of merchandise on credit without a credit check, provided they signed up for direct payment of their credit account from a checking account. Because these were high-risk consumers, the credit accounts would carry extremely high interest rates. The research firm believed that even with losses, enough accounts would be paid off to make the venture extremely profitable for the on-line retailer.

Should the retailer pursue this new marketing strategy? Why or why not?

Learning Activity # 2

Advertising and Children: Do We Need Special Rules?

It is widely believed that businesses reap the benefits of billions of dollars in revenue that can be attributed to consumer spending on behalf of children.  That children often influence the buying decisions of their parents has not been lost on businesses and in their advertising and marketing strategies, businesses realize that the way to the parents is frequently through their children. In older children who have access to funds, their spending has been a cash cow for businesses.  The influence of children on buying decisions and spending in their own right have led to some ethical questions in the way goods and services are advertised and marketed to children (for our purposes you may consider anyone 17 and under as the target group). 

The question of advertising and marketing to children has produced at least two schools of thought. There are some who believe that the advertising and marketing rules and laws that apply to everyone are sufficient to protect children.  The other school says children are a special category and deserving of special laws and rules aimed specifically to protect them from inappropriate forms of advertising and marketing efforts.

Which side of the debate is the more persuasive to you and why? If you believe there should be separate laws and rules, what would you include in such? If you believe existing rules and laws adequately protect children, explain why this is the case, providing specific examples  of how the general laws protect children. In your response, identify and discuss what you believe to be the ethical dilemma, and at least two related ethical issues. Are there any ethical theories that might support your position?