How Ethical Should a Business Be? Tri-Perspectives in the New Marketing

By Dr Aqilah Yaacob, Dr Kimberley Khoo Kim Leng, Dr Gan Jen Ling

The Malaysian business landscape has previously been shocked by corporate scandals among government-related companies, such as 1Malaysia Development Berhad (1MDB). 

In spite of having strong emphasis on corporate governance through Malaysia Code of Corporate Governance (MCCG), unethical practices and poor transparency continue being a problem among Malaysian companies.

Malaysia has also recently dropped five spots to rank 62 in the global rankings of Transparency International Malaysia’s (TI-M) Corruption Perceptions Index (CPI) 2021, marking the second consecutive year that the country faced a declining rank.

This signals the importance of corporate governance moving forward.

Ethics for Marketers and Consumers

The marketing world evolved dramatically when businesses were forced to embrace digital transformation due to the hybrid business landscape caused by COVID-19 pandemic. 

There is an increased use of social media among consumers in which businesses are also utilising this platform as an effective form of marketing. 

However, businesses need to remain vigilant in ensuring that the content posted online is trustworthy and credible especially when they are adopting influencer marketing 

With the immense attention given on Environmental, Social and Governance (ESG) and Sustainable Development Goals (SDG), businesses should also contribute towards an ethical movement in providing ethical alternatives for consumers to choose from. 

As the consumers are becoming more aware of their social responsibility, a new wave of ethical practices through businesses’ marketing activities are essential in promoting a more conscious and ethical products and services. 

Marketing has been discussed as a front-stage process. However, it would not be complete without the marketers. 

Marketers and businesses should protect the well-being of the consumers by fully informing consumers about the risks of products and services especially when selling products with potential side effects or dangers.  

In order for company to cultivate ethical behavior among marketers, it has to first create an ethical culture which begins with the company’s core values as guiding principles for both employees and their leaders. 

Ethical Artificial Intelligence (AI) Practices

According to McKinsey Global Survey in 2021, 57% of 1,843 respondents in emerging economies reported AI adoption within the organisation, up from 45% in 2020. 

AI has become a popular tool in marketing as this technology helps to develop robust customer profiles and increase the effectiveness of targeted advertising. 

However, the power of AI comes with a variety of risks associated with data security. Customers demand more transparency and expect organisations to use AI ethically and responsibly. 

According to C3.AI, ethical AI is artificial intelligence that follows well-defined ethical guidelines regarding fundamental values, such as individual rights, privacy, non-discrimination, and non-manipulation. 

The rise of AI requires additional legislation on data protection and consumer privacy. Currently, the Personal Data Protection Act 2010 protects users from any form of abuse against the storage or processing of personal data of individuals, public and private sectors for commercial transactions in Malaysia. 

Failure to comply with the regulations may jeopardise the organisation’s reputation and decrease public confidence. Strict adherence to data ethics is not an option for organisations.

About the writers.

Dr Aqilah Yaacob, Dr Kimberley Khoo Kim Leng, Dr Gan Jen Ling are Lecturers for the School of Management and Marketing at Taylor’s Business School, Faculty of Business and Law, Taylor’s University. Taylor’s Business School is the leading private business school in Malaysia & Southeast Asia based on the 2022 QS World University Rankings by Subject.