Ethics are individual beliefs regarding what is bad and good or wrong and right. In the workplace, ethics usually has an effect on individual behavior. Social responsibility is the way that a business strives to balance the commit that it has to persons and groups in its social environment. The approaches to social responsibility and ethics include; the proactive stance, the accommodative stance, the obstructionist stance and the defensive stance (Giacalone & Thompson, 2006). There are various pricing strategies which businesses adopt so as to increase profits and customers. This paper will discuss the approaches to social responsibility and ethics, MKD’s case study, different pricing strategies and a situation of adopting a pricing objective and not profit maximization.
Approaches to social responsibility and ethics
A firm highly practices social responsibility when it takes a proactive stance. Corporate of this type takes the argument personally by favoring social responsibility. They usually see themselves being citizens of that society and they proactively seek for available opportunities so that they can contribute. When an organization adopts an obstructionist stance, it puts minimal efforts in solving environmental and social problems. According to Giacalone & Thompson (2006), if a business crosses the legal or ethical line which shows acceptable and unacceptable practices, it takes up a response of denying the action, or it tries to cover up the unacceptable actions. Firms that take a defensive stance try to comply with legal requirements only. It is the most consistent approach with firms that do not support corporate social responsibility. By taking an accommodative stance, a company meets the ethical and legal requirements and it also extends the same to certain areas. They voluntarily participate in the social programs (Giacalone & Thompson, 2006).
MKD Case Study
Q1.The managers’ behaviors might cover the following matters when dealing with the employees; working conditions, hiring, firing, honesty, respect, wages, and privacy. The three core issues are hiring, salaries and the employees working conditions. The managers hire employees with relevant experience in the particular areas as this will enable them to be highly productive and respect the set ethical standards. Regarding wages, they pay their employees well as per their qualifications. The managers provide comfortable working conditions so that the employees can get job satisfaction and they can be productive.
Q2.The timing of MKD’s response will determine the perceptions that the public might develop. For example, if they respond quickly, they will think that the company has a high social responsibility towards the environment but if the response is slow and it takes a lot of time they will think that MKD has no concern about the environment.
Q3.If the company decides to adopt an obstructionist stance, there is a high possibility that the managers will deny any responsibility regarding the matter when they are responding to the reports that the media is presenting. If they have an opportunity, they are likely to advise the ship’s captain to try as much as possible to move the ship from that area within a short period. The chances of complying with the environmental groups and the government of Belize’s demands are very minimal.
Q4.If MKD decides to take the defensive stance, they will have the responsibility of filing the necessary reports, and also they will have to perform any cleanup as per the legal requirements. However, the company has no obligation of exceeding certain actions as per the law requirements.
Q5.By adopting the accommodative stance, MKD has to respond to the environmental groups and government of Belize’s demands and also to the media reports. With this position, they are likely to take responsibility for the oil spill, and they will initiate the cleanup within a short period. They may even decide to make a certain amount of donation to the environmental groups or the local tourist bureau.
Q6. The situations could have been very different if MDK could adopt a proactive stance towards social responsibility from the initial stages. They could have given a direction to their ships not to come near the environmentally sensitive areas like the coast of Belize. They could stick to this even if the other areas could increase the costs and lengthen the routes. They could have also made installation of an extra equipment in their oil tankers so that they can easily prevent the leakages from occurring. Installing those tankers could also help them in detecting the leaks early in time before the damage takes place.
Pricing strategies for product
Pricing strategy is essential for businesses who have a plan for achieving success through finding price point of maximizing profits and sales. Different companies can adopt varying strategies depending on the set marketing objectives and goals. The premium pricing strategy involves establishing a slightly higher price than those of the competitors. The strategy can be effective when the product has uniqueness or when it is new to the market, and there is a discrete competitive advantage. Psychological pricing Involves the seller considering the price’s psychology and the price positioning in the marketplace (Schindler, 2012).
Penetration pricing strategy a design of capturing the market shares through entering into the market with a relatively low price when comparing with those of the competitors so as to attract potential buyers. The aim is to raise people’s awareness so that they try the product. Even if it creates losses at first, at the end there is a hope of creating awareness and increasing the market demand. Skimming pricing strategy is where an organization set a high price in the initial stages and then later lowers those costs so that the product can be available in the wider market. Its primary goal is skimming market profits layer by layer. Competition pricing strategy involves setting of the product’s price by comparing those of the competitors. In the real sense, a business has other options i.e., price higher or lower than the competitors or setting similar rates (Popescu & Wu 2007).
Bundle pricing strategy is where there is a reduction of prices of products that an organization gets in bundles. The common method is that of buying one item and getting a free one in return. The strategy is very common in most supermarkets. The strategy of product line pricing entails a business pricing varying products in a similar product range but at distinct price points (Schindler, 2012). Cost plus pricing strategy consist of the products’ production costs and a given among depending on the amount of profit they want to make. Despite the fact that the approach covers the cost of production, it does not consider the competitive advantage or the consumer demands (Schindler, 2012).
Adoption of a pricing objective
There are situations which can make an organization to adopt a pricing objective rather than maximizing the profits. A pricing objective is a goal in which sellers by pricing the products for the purpose of selling (Popescu & Wu 2007). For example, sometimes a business can value to establish the market share over creating instant profits. A company can decide initially to set a price which is relatively lower so as to attract customers to try that product. In this case, that firm prefers to defer the product profits to the future because they know that if the clients are aware of their products, they will continuously use the same product later.
Additionally, the company has an influence on the immediate want of competing in the marketplace through the ethical and social concerns and also through the firm’s image. A company goes for the pricing objective for its survival. It can be very evident in a situation where the can does not have enough customers to purchase its products, and it is facing intense competition. The firm sets the prices to cover the variable and fixed costs with an aim of ensuring that the company will stay in business forever (Popescu, & Wu, 2007).
In conclusion, the approaches to social responsibility and ethics govern a business in knowing the right action to take in certain circumstances. The pricing strategies help the firm to attract customer and also increase the company’s profits at the end.
References
Giacalone, R. A., & Thompson, K. R. (2006). Business social responsibility and ethics education: Shifting the worldview. Academy of Management Learning & Education, 5(3), 266-277.
Popescu, I., & Wu, Y. (2007). Dynamic pricing strategies with reference effects. Operations Research, 55(3), 413-429.
Schindler, R. (2012). Pricing strategies: A marketing approach. Thousand Oaks, Calif: Sage Publications, Inc.
