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Chapter08-EthicsandMarketing

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8-

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Copyright?McGraw-HillEducation.Allrightsreserved.NoreproductionordistributionwithoutthepriorwrittenconsentofMcGraw-HillEducation.

IMChapter8:

EthicsandMarketing

ChapterObjectives

Afterreadingthischapter,youwillbeableto:

?1. Applyanethicalframeworktomarketingissues.

?2. Describethethreekeyconcernsofethicalanalysisofmarketingissues.

?3. Describethreeinterpretationsofresponsibilityandapplythemtothetopicofproductsafety.

?4. Explaincontractualstandardsforestablishingbusiness’responsibilitiesforsafeproducts.

?5. Articulatethetortstandardsforestablishingbusiness’responsibilitiesforsafeproducts.

?6. Analyzetheethicalargumentsforandagainststrictproductliability.

?7. Discusshowtoevaluatebothethicalandunethicalmeansbywhichtoinfluencepeoplethroughadvertising.

?8. Explaintheethicaljustificationforadvertising.

?9. Tracedebatesaboutadvertising’sinfluenceonconsumerautonomy.

10. Distinguishethicalfromunethicaltargetmarketing,usingmarketingtovulnerablepopulationsasanexample.

11. Discussbusiness’responsibilitiesfortheactivitiesofitssupplychain.

12.Explainhowmarketingcancontributetowardamoresustainablebusinessmodel.

OpeningDecisionPoint

DigitalMarketing

ThisnewDecisionPointcanbeusedtointroducestudentstoawiderangeofethicalissuesinmarketing,fromdeceptionandunfairness,toconsumerprivacyandconsumerautonomy.Thisexamplereplacesthecaseofpharmaceuticalmarketingfrompreviouseditions(althoughwehavekeptseveralofthekeypointsfromthepharmaceuticalcasesasexampleselsewhereinthischapter.Digitialmarketingraisesmoretimelyexampleforstudentsandinourexperiencesgetsthemtomoreeasilyreflectontheissuesfromtheirownexperiences.

Discussionquestionsthatareaimedatraisingsomeoftheseissuesatthestartofthechapter:

U.S.courtssometimesusethe“expectationofprivacy”astestforlimitinggovernmentalmonitoring.Thus,forexample,thepolicecanmonitoryourbehaviorwithoutawarrantwhenyouareinapublicplace,butnotwhenyouaretalkingonyourphone.Whatexpectationsofprivacydoyouhavewhenyouaresurfingtheweb?OrderingsomethingfromAmazonorNetflix?SpendingtimeonFacebook?

Physicallystalkingsomeonecanbeacrime.Arethereparallelsbetweenphysicallystalkingsomeone,andregularlymonitoringtheiractivitiesontheweb?Howaretheysimilar?Howaretheydifferent?

Moston-linetrackingisdonethroughtheuseof“cookies,”smallfilesstoredonacomputerormobiledevicethatprovidesinformationaboutpastbrowsinghistory.Shouldconsumershavearighttoopt-outorshouldtheirexplicitconsentberequiredbeforecookiesareinstalled?

Informationaboutyouron-linebehaviorisacommoditythatcanbeboughtandsold.Whoshouldownthispersonalinformation?

Introduction

DefinitionofMarketing:Somebelievethattheverypurposeofbusinessisfoundwithinthemarketingfunction.

Marketingscholar,TheodoreLevitt,explainsthepurposeofbusinessasfollows:“Thepurposeofabusinessistocreateandkeepacustomer.Todothat,youhavetoproduceanddelivergoodsandservicesthatpeoplewantandvalueatpricesandunderconditionsthatarereasonablyattractiverelativetothoseofferedbyothers.”

TheAmericanMarketingAssociationdefinesmarketinginawaythatalsosuggeststhatitisattheheartofbusinessactivity,stating:“anorganizationalfunctionandasetofprocessesforcreating,communicating,anddeliveringvaluetocustomersandformanagingcustomerrelationshipsinwaysthatbenefittheorganizationanditsstakeholders.”

Theconceptofanexchangebetweenasellerandabuyeriscentraltothemarketeconomyandisthecoreideabehindmarketing.

Marketinginvolvesallaspectsofcreatingaproductorserviceandbringingittomarketwhereanexchangecantakeplace.

Marketingethics,therefore,examinestheresponsibilitiesassociatedwithbringingaproducttothemarket,promotingittobuyers,andexchangingitwiththem.

Considerations:

Evenbeforeaproductiscreated,aproducermightfirstconsiderwho,ifanyone,isinterestedinpurchasingit.

Theproductmightthenberedesignedorchangedinlightofwhatislearnedaboutpotentialbuyersfrommarketresearch.

Oncetheproductisreadyformarket,theproducermistdecidedonapricethatwillbemutuallyacceptable.

Theaskingpriceshould,atminimum,betheproductioncostplussomereasonableprofit.

However,theproducermightconsiderwhothebuyersareandwhattheycanafford,howmuchpricemightinfluencefuturepurchases,howthepricemightaffectdistributorsandretailers,andwhatcompetitorsarechargingbeforesettlingonaprice.

Theproducermightalsoconsideradvertisingtheproducttoattractnewpotentialpurchasersandpromotetheproductamongbuyers.

Lostproductionthatresultsfromthetriptothemarketshouldalsobeconsidered.

Producersmightbemoreconcernedwithcashflowthanprofitandthereforemaybewillingtoaskapricethatisbelowproductioncosts.Themightalsoconsiderwhereandunderwhatconditionstheproductissold.

Throughoutthisentireprocess,theproducermightconductmarketresearchtogatherinformationandusethatinformationinproduction,pricing,promotionandplacementdecisions.

The“FourPs”ofMarketing:Allofthefactorsconsideredandeachdecisionmadethroughoutthisprocessareelementsofmarketing.Thefourmainelementstoconsiderwhenmarketingtoconsumersare:product,price,promotion,andplacement.

EachoftheFourPsraisesimportantethicalquestions:

Product:Whatresponsibilitiesdoproducershaveforthequalityandsafetyoftheirproducts?Whoisresponsibleforharmscausedbyaproduct?Aretheresomeproductsthatshouldnotbeproduced,ordoesconsumerdemanddecideallproductionquestions?

Price:Istheconsumer’swillingnesstopaytheonlyethicalconstraintonfairpricing?Shouldtheabilitytopaybeafactorinsettingprice?Doallcustomersdeservethesameprice,orcanproducersdiscriminateinfavorof,oragainst,someconsumers?Whateffectswillpricehaveoncompetitors?Onretailers?

Promotion:Aredeceptiveormisleadingadsethical?Whatethicalconstraintsshouldbeplacedonsalespromotions?

Placement:Istheinformationgatheredinmarketresearchthepropertyofthebusinessthatconductstheresearch?Whatprivacyprotectionsshouldbeofferedformarketingdata?Isitethicaltotargetvulnerablepopulationssuchaschildrenortheelderly?Whatresponsibilitiesdoesaproducerhavewhenmarketinginforeigncountries?Whatresponsibilitiesdoproducershavetoretailers?Tocompetitors?Tosuppliers?

Marketing:AnEthicalFramework

*ChapterObjective1AddressedBelow*

EthicalFramework:Thesimplemodelofasingleexchangebetweentwoindividualsisausefulwaytointroduceanethicalframeworkformarketingethics.Thisframeworkwillassistthedecisionmakerinarrivingatanethicaldecision,butwillnotpointtothe“correct”decisionbecauseitmerelyidentifiesrights,responsibilities,dutiesandobligations,causesandconsequences.

*Reference:Table8.1–EthicalIssuesinMarketing:AFramework*

Thissimplesituationinwhichtwopartiescometogetherandfreelyagreetoanexchangeisprimafacieethicallylegitimate.

Therights-basedethicaltradition(describedinChapter3)wouldseeitasupholdingrespectforindividualsbytreatingthemasautonomousagentscapableofpursuingtheirownends.

Thistraditionpresumesthateachindividualwillabidebyfundamentalprinciples.

Theutilitarianethicaltraditionwouldtakethetwoparties’agreementasevidencethatbotharebetteroffthentheywerepriortotheexchangeandthusconcludethatoverallhappinesshasbeenincreasedbyanyexchangefreelyenteredinto.

Thisassessmentisonlyprimafaciebecause,likeallagreements,certainconditionsmustbemetbeforewecanconcludethatautonomyhas,infact,beenrespectedandmutualbenefithasbeenachieved.

Wewouldneedtoestablishthattheagreementresultedfromaninformedandvoluntaryconsent,andthattherewasnofraud,deception,orcoercioninvolved.

Whentheseconditionsareviolated,autonomyisnotrespected,andmutualbenefitisnotattained.

Evenwhensuchconditionsaremet,othervaluesmayoverridethefreedomofindividualstocontractformutuallybeneficialpurposes.

Forexample,thefreedomofdrugdealerstopursuemutuallyagreeableendsisoverriddenbysociety’sconcerntomaintainlawandorder.

*ChapterObjective2AddressedBelow*

Itwillbehelpfultokeepthreemainconcernsinmindasweapproachanyethicalissueinmarketing:

Therights-basedethicaltraditionwouldasktowhatdegreetheparticipantsarerespectedasfreeandautonomousagentsratherthantreatedsimplyasmeanstotheendofmakingasale.

Theutilitariantraditionwouldwanttoknowthedegreetowhichthetransactionprovidedactualasopposedtomerelyapparentbenefits.

Everyethicaltraditionwouldalsowonderwhatothervaluesmightbeatstakeinthetransaction.

Overall,thethreeissuestoconsiderare:1)thedegreetowhichindividualsfreelyparticipateinanexchange;2)thebenefitsandcostsofeachexchange;3)othervaluesthatareaffectedbytheexchange.

RespectinMarketing:Itisnotalwayseasytodetermineifsomeoneisbeingtreatedwithrespectinmarketingsituations.

Oneconditionofrespectisthatthepersonmustfreelyconsenttothetransaction.

Transactionsunderthethreatofforcearenotvoluntaryandthereforeareunethical.But,therearemanydegreesofvoluntariness.

Forexample,themoreconsumersneedaproduct,thelessfreetheyaretochooseandthereforethemoreprotectiontheydeservewithinthemarketplace.

Example:ThemajorityofcomputerusersdonotevenchoosetheWindowsoperatingsystem,itistheironlyoption.

Moredramaticexamplesofpricegouging,price-fixing,andmonopolisticpricingclearlyraisetheissueoffreedominmarketing.

Practicesaimedatvulnerablepopulationssuchaschildrenandtheelderlyalsoraisequestionsofvoluntariness.

Anadequateanalysisofmarketingethicschallengesustobesensitivetomanywaysinwhichconsumerchoicecanbelessthanfullyvoluntary.

*Reference:“RealityCheck-ImpulseBuying”*

**TeachingNote:Akeyquestiontoask,andagainstwhichtochallengetheabovetheories,iswhatresponsibilitydowehavefortheimpactofourcommunications,asindividualsandascorporationsorotherinstitutionsofsociety?Isthereanydifference?Instructorsmaywishtoaskstudentstotakealookatafewofthekeyissuesrelatingtoresponsibilityanditssourcesinordertoexplorethepossibleanswer.Facultymightaskstudentstoconsider,aswell,howthemoraltheoriestheyhaveexploredwouldresolvethischallenge.Facultycouldusethemovie“ThankyouforSmoking”(

/trailers/fox_searchlight/thankyouforsmoking/trailer/

)oradvertisements/communicationsat

.

InformedConsent:Asecondconditionforrespectrequiresthatconsentbevoluntaryaswellasinformed.

Informedconsenthasreceivedagreatdealofattentioninthemedicalethicsliteraturebecausepatientsareatadistinctinformationaldisadvantagewhendealingwithhealthcareprofessionals.

Outrightdeceptionandfraudclearlyviolatethisconditionandareunethical.

Aconsumer’sconsenttopurchaseaproductisnotinformedifthatconsumerisbeingmisledordeceivedabouttheproduct.

Seriousethicalquestionsshouldberaisedwhenevermarketingpracticeseitherdenyconsumersfullinformationorrelyonthefactthattheylackrelevantinformationorunderstanding.

Thecomplexityofmanyconsumerproductsandservicescanmeanthatconsumersmaynotunderstandfullywhattheyarepurchasing.

Whilesomebusinessesclaimthat“aninformedconsumerisourbestcustomer,”manyothercompaniesviewuninformedconsumersastargetsforquickprofits.

AllegedBenefitsofMarketExchanges:

Economistscommonlyassumethatconsumersbenefit,almostbydefinition,whenevertheymakeanexchangeinthemarketplace.However,manypurchasesdonotresultinactualbenefit.

Example:Manymarketingtechniquesthatpromoteimpulsebuyingandsimilarconsumerbehaviorcannotbejustifiedbyappealtosatisfyingconsumerinterestssincethesepurchasescanleadtoover-spendingandevenbankruptcy.

Marketingmaysuggestthatconsumerscanbuyhappiness,buttheever-increasingnumberofindividualbankruptciessuggeststhatconsumerscannotpurchasehappiness.

Studiesprovideevidencethatgreaterconsumptioncanactuallyleadtounhappiness,aconditionthatsomecall“affluenza.”

*Reference:“RealityCheck-ImpulseBuying”*

Bothpartiestothemarketingexchangearenotbenefitedinsituationsinwhichonepartyisinjuredbytheproduct.

Unsafeproductsdonotfurthertheutilitariangoalofmaximizingoverallhappiness.

Consumersarenotbenefitedifthedesiresthattheyseektosatisfyinthemarketaresomehowcontrivedormanipulatedbytheseller.

OtherValues:Anethicalanalysisofmarketingmustconsidervaluesotherthanthoseservedbytheexchangeitself.

Primarysocialvaluessuchasfairness,justice,health,andsafetyarejustsomeofthevaluesthatcanbejeopardizedbymarketingpractices.

Example:Abankthatofferslowermortgageratesinaffluentneighborhoodsthanitdoesininner-cityneighborhoodsmightbeinvolvedonlyindealsthataremutuallybeneficialsincetheydonot,infact,sellmortgagesintheinner-city.Suchcontractswouldviolatethesocialnormsofequaltreatmentandfairness.

Justbecausesomeonewantstobuysomethingandsomeoneiswillingtosellitdoesnotmeanthetransactionisethicallylegitimate.

Thereisamarketforchildrenandorgansandbodypartsandendangeredspecies,butthesearedefinitelynotethicallylegitimatemarkets.

Anadequateethicalanalysisofmarketingmustask“whoelsemightbeaffectedbythetransaction?”

How,ifatall,aretheinterestsoftheseothersrepresented?

Whatsocialgoodsarepromoted,andwhicharethreatened,bymarketingthisproduct?

Truecosts:Anadequateethicalanalysisofmarketingmustconsiderexternalities,thosecoststhatarenotintegratedwithintheexchangebetweenbuyerandseller.

Externalitiesshowthatevenifbothpartiestotheexchangereceiveactualbenefitsfromtheexchange,otherpartiesexternaltotheexchangemightbeadverselyaffected.

Example:ConsidertheenvironmentalorhealthimpactofmarketingproductssuchasSUVs,pesticides,andtobacco.

**TeachingNote:Again,ifwearetoconsidertheobligationthatamarketingprofessionalmightowetosociety,perhapsweshouldfirstdeterminethenatureofthatresponsibilityandthenwecanbegintojudge.

Aremarketingprofessionalsobligatedtocontributetosociety(oreven/atleastconsiderit)?

Domarketingprofessionalhavespecialresponsibilitiestovulnerablegroupsofconsumers,e.g.,children,theelderly?

Whatdoesitmeanfortheirwork(ads,othercommunications)tobe“effective?”

Towhatstandardsdoyouholdthem?

Towhatstandardsdoyouholdus?

i.e.letthe“perceiver”bewarewithregardtodeception(laterdiscussion)

ResponsibilityforProducts:SafetyandLiability

*ChapterObjective3AddressedBelow*

EthicalResponsibilityforProductsandServices:Businesshasanethicalresponsibilitytodesign,manufacture,andpromoteitsproductsinwaysthatavoidcausingharmtoconsumers.

Responsibilityhasseveralmeanings:

Inonesense,responsibilityistobeidentifiedasthecauseofsomething.

Inanothersense,responsibilityinvolvesaccountability.

Athirdsenseinvolvesassigningfaultorliabilityforsomething.

Example:HurricaneSandywasresponsiblefor(caused)thedamageinNewYork,butcannotbeheldresponsible(accountableforpayingforthedamages),norcanitbefaultedforit.

Inothersituations,suchasanautomobilecrash,acarelessdriverwouldbeidentifiedasthecauseoftheaccidentandheldaccountablebecausehe/shewasatfault.

*Reference:“RealityCheck–CaveatEmptorinBuyingDrugs?

ThisisoneplacewherewebringtheOpeningDecisionScenariofromlastedition’spharmaceuticalcaseintothischapter.Prescriptiondrugsareagoodtestcaseforhowfarsocietyoughttogoinrespectingconsumersovereigntyandtheneedtobalancesafetywiththefreedomtochoose.

Bothlawandethicsrelyonasimilarframeworkwhenevaluatingcasesinwhichbusinessproductsorservicescauseharminthemarketplace.

Thefocusformuchofthediscussionofbusiness’sresponsibilityforproductsafetyisonassigningliability(fault)forharmscausedbyunsafeproducts.

Thelegaldoctrineofstrictliabilityisethicallycontroversialexactlybecauseitholdsabusinessaccountableforpayingdamageswhetherornotitwasatfault.

Inastrictliabilitycases,nomatterhowcarefulthebusinessisinitsproductorservice,ifharmresultsfromuse,thebusinessisliable.

ContractualStandardsforProductSafety

*ChapterObjective4AddressedBelow*

CaveatEmptorApproach:Thestandardofcaveatemptor,or“l(fā)etthebuyerbeware,”understandsmarketingonasimplemodelofacontractualexchangebetweenabuyerandaseller.

Thisperspectiveassumesthateverypurchaseinvolvestheinformedconsentofthebuyerandthereforeitisassumedtobeethicallylegitimate.

Buyershavetheresponsibilitytolookoutfortheirowninterestsandprotecttheirownsafetywhenbuyingaproduct.

Fromthisperspective,businesshasonlytheresponsibilitytoprovideagoodorserviceatanagreed-uponprice.

Thesocialcontractmodelholdsthatallethicalresponsibilitiescanbeunderstoodwithinacontractualmodel,andtheonlydutieswehavearethosethatwehavefreelytakenonwithinasocialcontract.

Individualcontractsandpromisesarethebasisofethicalduties.

Theimplicationofthiswithinthebusinesssphereisthatunlessasellerexplicitlywarrantsaproductassafeandpromisestobeliableforharmssufferedbythebuyer,thenbuyersareliableforanyharmstheysuffer.

Eventhissimplemodeofcontractualmarketexchangeplacesethicalconstraintsontheseller.

Sellershaveadutynottocoerce,defraud,ordeceivebuyers.

Consumerswhowereinjuredbyaproductthatwasdeceptivelyorfraudulentlymarketedwouldhavelegalrecoursetorecoverdamagesfromtheseller.

Courtsrecognizeanimplicitpromise,orimpliedwarranty,thataccompaniesanyproductthatismarketed.

“Impliedwarrantyofmerchantability,”holdsthatinsellingaproductabusinessimplicitlyoffersassurancesthattheproductisreasonablysuitableforitspurpose.

Evenwithoutaverbalorwrittenpromiseorcontract,thelawholdsthatbusinesshasadutytoinsurethatitsproductswillaccomplishtheirpurpose.

Howfardoesthisdutyreach?SeetheRealityCheck“The‘Cause’ofObesity,FreeChoiceandMarketingtoChildren”foradiscussionofthisduty.

ImpliedEthics:Theethicsimplicitwithinthecontractapproachassumesthatconsumersadequatelyunderstandproductswellenoughthattheycanreasonablybeexpectedtoprotectthemselves.

Consumersdon’talwaysunderstandproductsfullyandtheyarenotalwaysfreetochoosenottopurchasesomethings.

Ineffect,theimpliedwarrantystandardshiftstheburdenofprooffromconsumerstoproducersbyallowingconsumerstoassumethatproductsweresafefornormaluse.

Producerswereimplicitlypromisingthattheirproductsweresafeundernormaluse.

Theethicalbasisforthisdecisionistheassumptionthatconsumerswouldnotgivetheirconsenttoapurchaseiftheyhadreasontobelievethattheywouldbeharmedbyitwhenusedinanormalway.

Iflawwillholdbusinessliableforimplicitpromises,aprudentbusinesswillseektolimititsliabilitybyexplicitlydisowninganypromiseorwarranty.

Manybusinesseswillissueadisclaimerofliabilityorofferanexpressedandlimitedwarranty.Mostcourtswillnotallowabusinesstocompletelydisclaimtheimpliedwarrantyofmerchantability.

TortStandardsforProductSafety

*ChapterObjective5AddressedBelow*

Theuseofanimpliedwarrantysolvedonesetofproblemswiththecontractlawapproachtoproductliability.

Consumerswouldnotneedcomplexcontractsinordertoprotectthemselvesfromallpossibleharmsthatproductsmightcause.

Ifweholdbusinessliableforonlythosepromisesmadeduringthemarketexchange,thenastheconsumergetsfurtherseparatedfromthemanufacturerbylayersofsuppliersandretailers,theremaybenorelationshipatallbetweentheconsumerwhogetsharmedandtheultimatemanufacturerordesignerwhowasatfault.

*Reference:“RealityCheck–Snapchat

Thisrecentcasecanbeusedtoraisequestionsofcontributorynegligenceandforeseeabilityinassessingbusinessliabilityforharmscausedbytheirproducts.Studentsmightbeaskedtoplaytheroleofjurorsinalegalsuitbroughtinthiscase.Studentsshouldconsideringthefollowingquestionswhenassessingthisscenario:

Whatfactswouldyouwanttoknowbeforedecidingthiscase?

Whatalternativeswouldajuryfaceindecidingthiscase?

Whoarethestakeholdersofyourdecision?Whatistheimpactofeachalternativeoneachstakeholderyouhaveidentified?

Whatrightsanddutiesareinvolved?

Howwouldyoudecidethecase?Isitmostlyamatterofconsequences,orarethereimportantprinciplesinvolved?

Negligence:Aconceptfromtheareaoflawknownastorts,providesasecondavenueforconsumerstoholdproducersresponsiblefortheirproducts.

Underacontractmodel,theonlydutiesthatapersonowesarethosethathavebeenexplicitlypromisedtoanotherparty.

Theethicalperspectivethatunderliestortlawholdsthatwealloweotherpeoplecertaingeneralduties,evenifwehavenotexplicitlyandvoluntarilyassumedthem.

Ioweotherpeopleageneraldutynottoputthematunnecessaryandavoidablerisk.

Example:AlthoughIhaveneverexplicitlypromisedanyonethatIwilldrivecarefully,Ihaveanethicaldutynottodriverecklesslydownthestreet.

Negligenceisacentralcomponentoftortlawandinvolvesatypeofethicalneglect.Specificallyitreferstoneglectingone’sdutytoexercisereasonablecarenottoharmotherpeople.

Manyoftheethicalandlegalissuessurroundingmanufacturers’responsibilitiesforproductscanbeunderstoodastheattempttospecifywhatconstitutesnegligenceintheirdesign,production,andsale.

Whatduties,exactly,doproducersoweconsumers?

Onecanthinkofpossibleanswerstothisquestionfallingalongacontinuum,ononeendissocialcontract,ontheother,strictliability.

Socialcontractanswer:Producersoweonlythosethingspromisedtoconsumersinthesalesagreement.

Strictliability:Producersowecompensationtoconsumersforanyharmcausedbytheirproducts.

Inbetweenthesetwoisarangeofanswerswithdifferentinterpretationsofnegligence.

Negligencecanbecharacterizedasafailuretoexercisereasonablecareorordinaryvigilancethatresultsinaninjurytoanother.

Peoplehavedoneanethicalwrongwhentheycauseharmtoothersinwaysthattheycanreasonablybeexpectedtohaveavoided.

Negligenceincludesactsofbothcommissionandomission.

Onecanbenegligentbydoingsomethingthatoneoughtnot(e.g.,speedinginaschoolzone)orbyfailingtodosomethingthatoneoughttohavedone(e.g.,neglectingtoinspectaproductbeforesendingittomarket).

Negligenceinvolvesforeseeingtheconsequencesofouractsandfailingtotakestepstoavoidthelikelyharmfulconsequences

Thestandardsofforeseeabilityraiseinterestingchallenges

Onestandardofforeseeabilitywouldholdpeopleliableonlyforthoseharmstheyactuallyforesawoccurring(actualforeseeability).But,ifsomeoneactuallythinksthatharmsarelikelytoresultfromhisactsandproceedsnonetheless,hehascommittedaseriouswronganddeservesharshpunishment.

Thiscaseseemsmoreakintorecklessness,orevenintentionalharm,thannegligence.

Thisstandardalsoimpliesthatthoughtlesspeoplecannotbenegligent,sinceoneescapesliabilitybynotactuallythinkingabouttheconsequencesofone’sacts.“Ineverthoughtaboutthat”wouldbeanadequatedefenseifweusedthisstandardofnegligence.

Negligenceismeanttoencouragepeopletobethoughtfulandtoholdthemliablewhentheyarenot.

RealityCheck:StrictLiabilityasRiskManagement

Strictliabilityiscontroversialbecauseitappearstoholdbusinessliableforcausingharmsoverwhichithadnocontrol.Likeall“RealityChecks,”thisboxaimstoaddabitmorecomplexitytoanissuethatatfirstappearstobesimple.Isthereanotherwaytothinkaboutthestrictliabilitystandard,notaspunishment,butasameansforallocatingrisksandcosts?

Apreferablestandardwouldrequirepeopletoavoidharmsthat,eveniftheyhaven’tactuallythoughtabout,theyshouldhavethoughtabouthadtheybeenreasonable.

Forexample,inthewell-knowncaseofLeibeckvMcDonald’s(involvingacustomerwhospilledhotcoffeeonherselfafterdrivingawayfromthethedrive-upwindowatMcDonald’s.PresumablyMcDonald’sdidnotactuallyanticipatethatcustomerswouldbeseverelyburnedbycoffee.But,haditsmanagersthoughtaboutwhatpeoplewhoareservedcoffeeatadrive-thruwindowmightdotoholdtheircupswhentheydriveawayfromthewindow,theycouldhaveforeseenthelikelihoodofspills.Moreover,thefactthatMcDonald’shadreceivedmorethan700priorburnclaimsinvolvingcoffeeovera10-yearperiodsuggeststhatareasonablepersonwouldhaveconcludedthatthiswasadangerouspractice.

This“reasonableperson”standardistheonemostoftenusedinlegalcasesandseemstobettercapturetheethicalgoalsoftheveryconceptofnegligence.

Peopleareexpectedtoactreasonablyandareheldliablewhentheydonot.

Whenonehasactualnoticeofalikelihoodofharm,suchasinthecaseoftheburninghotcoffeeatMcDonald’s,thereasonablepersonexpectationisincreased.

Theissueofforeseeabilitycomesupwhenaproductmightbemisused.

ReasonablePersonStandardcanbeinterpretedinvariousways.

A“reasonable”persondoeswhatwecouldexpecttheordinary,average

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