Ethics and Social Responsibility in Business
In business, companies achieve recognition of being ethically and socially responsible by behaving or operating honestly in regards to their suppliers, contracts, personnel, pricing, advertising and selling methods. When a company’s actions aren’t for personal gains and self-interests, this company is known to be ethical. But being unethical doesn’t necessarily mean being illegal. Ethics is based on what society believes is morally right or wrong, so a company should follow the social standards that are held highly in society to be considered an ethical company.
For example, in 2009, Dannon claimed that two of their most well-known products, Activia yogurt and DanActive diary drink, were “clinically or scientifically proven to regulate digestion and strengthen the immune system” respectively. Because of these health claims, Dannon sold their products at a 30% price increase over other brands with many consumers entrusting the company’s history, research, and honesty. They created an advertisement that featured actress Jamie Lee Curtis who endorsed their products and its supposed benefits. After much testing from the FTC and feedback from consumers, it was eventually proven that none of the results stated above were accurate. Because of this social irresponsible action in false advertising, Dannon suffered terrible financial consequences through numerous lawsuits.