Important Ethical Behavior In Marketing Research example essay topic

I. EXECUTIVE SUMMARY Sarah Norton is an MBA student who specializes in market research. She has one semester left until graduation and is working as a graduate assistant. She is a person with very high ethical values and she is very religious. She looks for a job in Hammonsville, where she wants to stay. She starts working for the Wise Research Corporation, a field research services company.

They have offices in Dallas, Hammonsville and Tulsa. She travels to Dallas to start her training for the job and finds out that the company's behavior to the different stakeholders is very unethical. Sarah, a very ethical person with high values, finds herself in a big dilemma - should she stay with the company or better, resign from the job even though she quit her graduate assistantship. In the situation analysis, environmental, cultural and political trends are discussed. The economy in general is not in a growing stage and the ethical behavior in business is not sufficient. Nevertheless, there is a growing trend to increase ethical behavior, and many companies and associations develop a code of ethics for their business or industry.

In the second part of the paper, the problems appearing from the situation are discussed. Unethical behavior and it's impact on the stakeholders of the company lead to Sarah's decision whether to resign form the job or not. In the third part, a solution is presented which is the resignation from the job. A justification of the chosen solution follows and also an implementation strategy. II.

SITUATION ANALYSIS A. Environment 1. Economic conditions and trends The economic conditions are important in this case because they are not favorable to find a job; especially not for lower managers like MBAs just graduating from college. The American industry is in the process of downsizing. In Appendix one, unemployment figures are provided, and show see that unemployment was very high in the years 1994/1995.2. Cultural and social values and trends Unethical behavior is becoming more and more common in business life.

One can observe unethical behavior every day by simply watching the news. This results from the following developments: "u the high value society places on economic success "u profit share being the sole objective "u intense competition between departments, people or companies "u management being concerned with the "letter of law" rather then with "the spirit of law"u ambiguous corporate policies regarding ethical behavior "u inadequate controls allowing people to get away with behaving unethically "u business leaders failing to comprehend the public's ethical concern "u the "let the buyer beware" custom prevails (Greenberg J., Baron R.A. (2000) p. 31). Since these trends in industry have created a very unsatisfying condition, business leaders are trying to increase morale values in business life and many companies develop a code of ethics, a mission about ethical behavior or an organizational culture with high ethical standards. 3. Political and legal issues In the field of market research there is a code of professional ethics developed by the Market Research Association (MRA). However there is no nationwide standard for collection and handling of data for market researchers.

This Code of Ethics is provided in Appendix II. 4. Summary of environmental opportunities and threats The economy in general is not in a growing stage and the ethical behavior in business is not sufficient. Nevertheless, there a returning trend to move to a more ethical behavior, therefore many companies and associations develop a code of ethics for their business or industry. There is no nationwide standard for ethical matters in market research and no law for ethical behavior. The Code of Ethics of the MRA is the only attempt to set some ethical rules how to operate a marketing research company. B. Industry 1.

Classification and definition of industry Opinion and marketing research is a multi-billion-dollar industry dedicated to providing valuable information to companies, which focus on sales and services. Opinion and marketing research: "u helps manufacturers to identify, to understand and to meet consumer needs and wants "u saves the consumer money by providing data to companies to help them reduce the costs associated with new product failures. "u assists manufacturers and service providers to improve the quality and usefulness of the products and services. Consumers make their opinions on products, services and issues by answering questions of market researchers. The consumer can influence manufacturers to incorporate consumer opinion into products, services and procedures.

About 72 million Americans are interviewed in an opinion and marketing research study yearly (web). The case tells us that outside research suppliers are a growing industry. Wise Research is such an industry. 2.

The Code of Ethics and the responsibilities of the marketing research industry The Marketing Research Industry Association writes industry the following about ethics in the marketing research industry: "Research knowledge and the value of research are communicated to both the business community and the public at large, while complying with applicable federal, state and local laws, regulations and ordinances. MRA (Marketing Research Association) expects members to follow principles of honesty, professionalism, fairness and confidentiality to guard the interests of the public and our clients in order to promote good business practices. MRA's Code of Data Collection Standards consists of the responsibilities of respondents, clients, and data collectors not only to each other, but also to the general public and business community. All MRA members must sign and adhere to the Code of Data Collection Standards. The standards are enforced, and complaints of alleged unethical behavior may be filed against an MRA member who is suspected to have violated the Code" (web). This Code of Ethics is applicable for members of the MRA.

It shows how important ethical behavior in marketing research is. The book "Marketing Management" by J. Paul Peter and James H. Donnely Jr. also talks about ethical behavior in the marketing research sector. Peter and Donnely base their ethical Responsibilities on Gilbert A. Churchill Jr. "market research: Methodological Foundations". They trace the ethical responsibilities to three different groups: respondents, clients and employees.

Responsibilities to respondents are: "u Preserving respondent anonymity "u Avoiding mental stress for respondents "u Avoiding questions detrimental to respondents "u Avoiding the use of dangerous equipment or techniques "u Avoiding deception of respondents "u Avoiding coercion of respondents. The responsibilities to clients are: "u Providing confidentiality "u Providing technical integrity "u Providing administrative integrity "u Providing guidance on research usage. And last the responsibilities to the employees are "u Creating an ethical work environment "u Avoiding opportunities of unethical behavior (p. 41). 3. Summary of the industry analysis The market research industry is very unique and provides important information to the different industries selling products and services to consumers.

They normally work with a very high standard of ethical behavior; the MRA summarized these ethics in the Code of Ethics. C. Firm 1. Description of the company Wise Research is a market research company. It's business is field research in shopping malls which categorizes it as a field research company. Field research companies do data collection on research projects. Wise Research has been operating in this business for 25 years and has several subsidiaries.

These subsidiaries are all mall research offices. The head office and two other offices are located in Dallas, TX, one is located in Tulsa, OK and one is located in Hammonsville, MI. The office in Hammonsville has exited for 10 years. The company is involved in fieldwork, although they do not generate questionnaires or analyze the collected data. The core competence of Wise Research is to collect data for other marketing research firms, and these firms provide the information to their clients.

One can conclude from the descriptions of the company that it does not have a mission statement, a philosophy or a particular strategy concerning organizational culture and ethical behavior. There is no marketing budget and the office personnel recruits the clients. The lack of ethical behavior of Wise Research leads to a severe damage of their reputation in the long run and to any marketing efforts. Clients will realize in a post purchase evaluation that the data delivered by Wise Research is manipulated and not valid. 2. Financial condition One can assume that the financial situation is not very good since we learn from the case that benefits promised to employees are paid with a delay.

This happens to Cindy, the office supervisor in Dallas. Also, the management discourages employees from talking about their salaries. Another evidence for a poor financial situation is that Sarah is told that she could make $25,000 a year with a 40-hour week, which is not true. The company owns no computers; this indicates that they only possess very few assets. The company does not have a marketing budget. 3.

Management philosophy and managerial climate The case does not say anything about the management philosophy, but is does talk about the behavior of the management, which drastically influences the organizational culture and climate. The behavior of the management is very unethical. They force their employees to fake organizational figures and they also put a substantial pressure on the employees. They take advantage of personal situations of their employees (such as in the case of Cindy - she desperately needed a job, they paid her less money than other employees) and this gives management an image of dishonesty to employees and to clients. Their behavior is also very informal; the interview with Sarah indicates this.

4. Organizational structure The owner of the company, Bill Wise, is also the president. His wife Karen works for the company too. The headquarters of the company is in Dallas, and there are four more offices.

The offices work with very uneducated staff. Every office has a local manger who carries the responsibility. The office managers communicate directly with the owners of the company. 5. Organizational culture The organizational culture and also the organizational climate are influenced by the managerial climate. Climate and culture are two different subjects, but they are associated.

Hofstede (1998) states in an article "Attitudes, values and organizational cultures" the following about climate and culture: "Climate derives from sociology, culture from anthropology, and this affects the methods by which they are studied; climate is more closely linked with individual motivation and behavior than culture, which resides entirely at the organizational level; climate has an evaluative connotation and partly overlaps with satisfaction; cultures can be different without one being objectively better than the other. [... ] Climate can fruitfully be seen as a subset of culture" (p. 496). The organizational culture of Wise Research is very unethical and this is lived and enforced by the management. The organizational climate is very poor because of the bad managerial climate.

6. Sarah's job According to Bill and Karen Wise, Sarah's job has the following work conditions: the pay is $11 a hour, and she can earn $25,000 a year with a time per week of 40 hours. The benefits are health insurance premiums at the same level as the Dallas employees. The Missouri employees normally do not get health insurance benefits. One week of vacation was offered after one year of employment. Performance reviews are held after three and nine months.

Raises are only given after performance reviews. 7. Summary of the condition of Wise Research The condition of Wise Research, especially in a long-term consideration is very poor. The financial situation is poor, there are no marketing activities at all and the behavior of the management plus the organizational climate and culture is unethical. The management might consider it's unethical behavior as strength for the company to generate profit in the short run, but after some time the different stakeholders of the company will find out and switch to the competition. D. Sarah Norton - the new employee 1. Sarah's personality Sarah Norton is 32 years old and she was brought up in Missouri by a morally strong family.

The values in her education were religion coupled with high moral standards. She is respected and liked by family, friends, and colleagues. She never tries to convince other people to share her views in moral standards, ethics or religion. She has one younger sister and a boyfriend in Hammonsville and she is very close with them. 2. Location Sarah lives in the city of Hammonsville, Missouri.

Hammonsville has about 150,000 inhabitants. Hammonsville is the town where she wants to work since her sister and her boyfriend Jeff live there. The city of Hammonsville does not have many opportunities to work as a market researcher, because a small town like this does not contain many industries that need market research. 3.

Education and work experience Sarah started to work after graduating from high school for the state of Missouri. She worked in the professional registration office of the "Board of Healing Arts". The office is operated in a very professional manner, and this is what Sarah liked most about her work there. After a couple of years in the job, Sarah decided to get a college degree in marketing and management. She went to Hammonsville State University because she wanted to be near her sister.

While studying she worked at the local state vocational rehabilitation office. She also worked at a restaurant, for which she had been responsible in the absence of the owner. People liked her at work because she has a positive work ethic; she is intelligent and has strong moral values. She graduated from the university (double major) with honors.

Since she wants to work in the field of marketing research, she worked in many research projects to get experience. She learned how important the ethical handling of data is, and she knows the Code of Ethics by the Marketing Research Association. In 1994 she started her MBA with a specialization in market research. She works as a graduate assistant and is responsible for five more graduate assistants in the marketing department.

In 1995 she decides to look for a job. 4. Summary of Sarah's characteristics Sarah is a very skilled, educated person with high moral, ethical values and a religious attitude. She is intelligent, has a lot of project experience in marketing research as well as a good college education.

Unfortunately she has not graduated from her MBA program yet. She is not flexible in choosing her workplace since she wants to stay in Hammonsville with her boyfriend and her sister.. PROBLEMS FOUND IN SITUATION ANALYSIS A. Statement of primary problems 1. Evidence of problems Sarah Norton applies for a job at Wise Research after reading their job advertisement in the newspaper. After two interviews she gets hired and is sent directly to Dallas for on the job training. During the first week of training, Sarah understands that the company's treatment of employees and customers is very unethical.

She realizes that she is very unhappy with the situation and she needs to make the decision if she wants to stay with the company or not. These are the different problems I found in the situation analysis: Ethical Issues: Professionalism "u The company operates in a very unprofessional way. The job advertisement is placed in the Hammonsville News Monitor, on Sunday, July 9th, 1995. It doesn't say the name of the company, nor does it give any specific job requirements. It only gives a reference to details about an entry-level management position. Instead of an address a PO-Box is named. "u The following interview is not very professional either.

Sarah meets Mr. and Mrs. Wise in a hotel room in Hammonsville, without knowing that she was going to meet Mrs. Wise too. The interview is very informal and the clothing of the Mr. and Mrs. Wise is not appropriate for a business interview. The office facilities are not shown to Sarah. "u The second interview is as informal as the first one. "u The training process also shows a high level of un professionalism. Sarah receives an Airport Pick up from the son of Mr. and Mrs. Wise. He invites her for lunch and behaves in a very informal manner and tries to impress Sarah with different statements. He also tries to discover contents of about the phone call Sarah made earlier to the Hammonsville office to find out more about the job.

Even though she does not respond to the question he tries several times. Also, he has only a very little understanding of the research process and is not able to answer her questions. "u There are no computers in the company. "u The knowledge of the interviewers and other staff of the company about the data collection process is on a very low level. Ethical issues: Organizational culture "u Before the interview Sarah called the company to find out more about what they are doing and the local manager reacts very irritated when he hears that she is invited for a job interview. It tells us that the manger does not know what is going on in the company and that the communication is bad.

Later in the interview she learns form Bill and Karen Wise that this local mangers was laid off and that she is hired to replace him. As a matter of fact, he is still at the company and he does not know yet, that he will be laid off. "u Another indicator of unethical organizational culture in the company shows the fact that Sarah is asked not to tell anybody why she is at the company when she starts her training. The other employees are told she is an auditor. Because of this, she has to be at the company first in the morning so that no one can see her clock in. "u More evidence of dishonesty is shown by the information that actual working time in the company is 37, 5 hours, not 40 as said in the interview. This decreases Sarah's annual salary and she does not earn the promised amount. The dishonesty to employees and different treatments of employees show the low level of organizational culture.

For example the company pays Cindy less than Sarah even though they have more or less the same job. Management took advantage of Cindy's situation when she was hired and her raise of salary was delayed. "u Another incident gives information about the organizational culture: one of the interviewers is supposed to be laid off because this interviewer talked to somebody else in the company about her salary. The management initiates this lay off. The employee is in a very bad financial and social situation that does not impress the management at all. After begging to keep the job, the interviewer is allowed to stay. Ethical issues: The Code of Ethics The Code of Ethics is shown as Appendix II.

There are several actions by Wise Research, which interfere with The Code of Ethics by the MRA. Reports about how many interviews are completed per hour are manipulated so that these reports show the exact number required. With this method Wise Research manipulates the figures regarding how many potential interviewees were screened. Wise Research uses family members and relatives of the interviewers to answer survey questions if they run out of time. They use these relatives several times with different names, so that the clients cannot find out.

This affects the validity of the data. Legal issues The data collection process described above is not only very unethical but also illegal. The clients of Wise Research do not get the valid data they pay for and this is a violation of the law. The decisions made by the clients based on the invalid data might be wrong and they could lose a lot of money. There is also a violation of the use of the employee handbook, since only the supervisors get to see it and not the other employees. If an employee violates a rule of the employee handbook he gets penalized, even though he or she possibly does not know the particular rule.

Sarah's Misery Since Sarah was raised with very high moral values, she is very religious, reliable and she suffers a lot from the problems described above. She is very upset with this situation and she is really happy when she sees her boyfriend she can talk to. She finds herself in the dilemma where she has to decide whether she wants to support a company, which operates in such an unethical way, or if she wants to resign. 2.

Effects of problems The effects of the problems are the impacts of the unethical behavior on the different stakeholders. All the above actions concerning ethical and legal matters have an impact on the companies's stakeholders. The five different stakeholders of a company are its shareholders, its employees, its customers, its suppliers and partners and the community at large, such as governments and regulators, pressure groups, media and academia, trade bodies and competitors (Stone, H., Washington-Smith, J. (2002), pp. 59-60). The shareholders, the employees and the customers are generally affected the most by unethical actions. In this case we get the information that employees of the company are scared of the management, and it's unethical actions.

This especially affects the supervisors such as the supervisor in Hammonsville and Cindy, the supervisor in Dallas. They have more information about the unethical behavior than the other employees, because it is them who have to fake and manipulate the figures. The supervisors feel very uncomfortable with what they do, and we get the information that Cindy already refused to do some unethical things. The managers are in the dilemma if they should stand up against the management and do what their consciences is telling them. On the other side they, are afraid of loosing their job. The customers of the company do not know yet about the manipulated data.

They still base their decisions on the data they purchase from Wise Research. They get betrayed and do not receive what they are paying for. If one of the customers finds out, Wise Research most likely will become bankrupt. As soon as the public knows about the incidents, all the customers will look for a more ethical company to buy their data from. Maybe some stakeholders will sue Wise Research. The reputation of a company is defined as the company's ability to meet its stakeholder's expectations (Stone, H., Washington-Smith, J. (2002), pp. 58).

If the reputation of a company is ruined once, it is very difficult if not impossible to overcome this obstacle. Many companies had these problems, especially concerning environmental matters, and they spent millions of dollars to overcome this reputation; many without any success. So we can say that all the effects on the different stakeholders also affect Sarah's situation: she has to make the decision if she wants to stay with the company or not. If she stays with the company, she is part of an organization which is about to loose its good reputation. She might loose her good reputation also, since she is part of that company, and people do not distinguish who are the ethical and the unethical in such a company. All the above listed problems and effects will be part of her evaluation as well as the pay and the benefits she was promised.

IV. STRATEGIC ALTERNATIVES FOR SOLVING PROBLEMS A. Description of strategic alternative I Alternative one for Sarah Norton is to stay on with Wise Research and go for the job. As we learn from the case, she really likes her coworkers and the interviewers and they respect her because of her winning personality and knowledge. Also she really wants to work in a marketing research company. If she stays with the company she will get more experience in the marketing research field and she can also prove herself and try to change some of the things going on in the company.

We know that the Hammonsville office has problems, so if Sarah were capable to solve these problems and get the business running well it would be a very self-fulfilling task for her. She really wants to stay in Hammonsville, since she wants to be with her boyfriend. If she goes for the job, she can stay in Hammonsville while working in the field she always wanted to work in and earn a decent amount of money. The case says that Sarah is very motivated, dedicated, hard working and intelligent.

She is very religious and her behavior has always been ethical. She knows about the Code of Ethics by the Marketing Research Association and she also thinks that it is important. If she stays with Wise Research she would find herself in a very unethical situation, which will cause an internal dilemma for her. She could also simply refuse to do something unethical, but if she does so, she might lose her job.

As shown in the case, the employees do not really have a choice about the unethical behavior. Either they do it (it doesn't matter if they like to do it or not) or they get threatened. We can assume that she would not be happy with this decision in the long run. B. Description of strategic alternative II The other alternative she has, is to quit to job immediately. With this decision she is back at the point were she started when she was looking for a job. So it does not put her in a worse situation than she was in before. She can go back to university and finish her MBA, which would be a very wise decision.

We can assume that it would be difficult to finish the MBA while working full time. Also as much as we know about the behavior of the management, it is very unlikely that she will get support of the company to finish her studies. She can look for another job with a company she really likes to work for. The organizational culture and climate of a company is very important for the motivation of the employees and also for their performance and their job satisfaction. Several theories in the field of organizational behavior prove this. If she quits the job, she can escape the ethical dilemma she was thrown into.

There is a huge gap between her ideas of an ethical and religious behavior and the company ideas. If she resigns from the job, she has to give up something she has already started. She was really looking forward to work with the company and she gave up her GA position for the job. She had made a decision and it is always difficult to revise decisions. Also the job is what she was looking for, concerning the field of work. As shown in the situation analysis the economy is not in a growing state and it is not easy to find a job for MBA graduates.

Because of this fact, Sarah decided some years ago to go back to college after finishing her undergraduate studies. The city of Hammonsville, were Sarah really wants to stay, does not offer many jobs for MBA students either. So finding another job in the field of marketing research and in Hammonsville might be very difficult. C. Description of strategic alternative The third alternative she has, is to postpone the decision. She could finish her training in Dallas and wait to get more information about the company and their organizational culture and behavior. In my opinion, this does not really help to solve the problem because at the end of the week she still has the two alternatives discussed above: stay with the company or quit the job. V. SELECTION OF STRATEGIC ALTERNATIVE AND IMPLEMENTATION A. Statement of selected strategy The selected strategy should be to contact people she knows, people she can trust and talk about her alternatives.

This could be her boyfriend (as already described in the case), her family, or even better one of her professors. According to my opinion after evaluating the different alternatives, the situation and the problems shown in the case, it would be the best to resign from the job and go back to university. On top of that she should talk about these unethical business practices to other people, maybe the Marketing Research Association to end these unethical practices of this company. Moralities are a high value in the western societies but unethical behavior will not end, if people do not stand up against it. To resign from the job would also mean go back to the university and finish the MBA program.

Maybe she can get her graduate assistantship back, if she talks to the supervisor. Since her behavior was always very reliable and ethical, the university will surly be pleased to have her as an employee again. B. Justification for selection of strategy Why resign from the new job? Unethical behavior is no long-term strategy. In the long run people, in this case stakeholders such as the public and customers, will find out about it and the company will lose its reputation and customers.

If Sarah stays with the company her reputation will suffer too and it might be quite difficult for her to find another job. Because she has a very good education, social skills and high values, so she is something like the perfect employee. It would be a fatal mistake to risk losing this reputation because of this job. Even in times when the state of the economy is not so favorable (as shown in the situation analysis) a person like Sarah should be able to find a job in the area she wants to work in. She has to do some more research about all the different companies in Hammonsville and what exactly they do, if she wants to stay in the area. So far, she just assumes that it will be difficult to find a job there.

The only justification to stay with the company is the argument that she wants to finish what she begins. This argument is not valid in my eyes; it is just a little bit more inconvenient to start the job search all over again. C. Description of implementation strategy The implementation of the strategy is quite simple in this case. The very next morning, she should go to see Mr. and Mrs. Wise and tell them that she wants to resign from the job and also give them the reasons why. She should not believe them anymore if they somehow try to convince her to stay, since she learned before that telling the truth is not one of there strengths. VI.

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