Development of Business Ethics

2712 words (11 pages) Business Assignment

5th Jun 2020 Business Assignment Reference this

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Over the year there has been a major development in the business ethics aspect. Early literature reviews point out a limited amount of studies on business ethics decision, as noted by Ford and Richardson (1994) this review is discouraging in that the number of empirical studies is distressingly small. In another sense, this review is exciting in that it “identifies a large number of opportunities for fruitful research in an area in which we still know so little and need to know so much” (Ford & Richardson, 1994, p. 219; Blay, Gooden, Mellon & Stevens, 2018). Prior reviews mention that business ethics studies have the biggest potential to get new understanding when grounded in theory. More so, to advance theory, the best way is often by applying strong controls and manipulations to experimental methods (Blay et al., 2018). New theories are capable of offering insights by highlighting the potential of information and cues to produce common social norm expectations. This is useful for research in business ethics as it provides both individuals and organizational factors a role in influencing norm-based behavior (Blay et al., 2018).

F.P. Bishop printed one of the first advertising ethics books in which moral indictments of advertising were reported. He addressed issues that still plague agencies and advertisers with an introduction that addresses major challenges that current advertising faces such as “the effect of its use have unquestionably been to promote individual liberty, at the expense, some would say of good order and social discipline (Bishop, 1949; p.3; Drumwright & Murphy, 2009, p. 84).In the past thirty years, research has developed on advertising ethics with one method focusing on recognizing consumer insights of objectionable advertising (Drumwright & Murphy, 2009).

The Ethics of Advertising

The most essential ethics that a business has to face is trust and integrity. A basic understanding of integrity covers the purpose of managing business affairs with commitment and honesty to fair treatment with every customer. In dealing with ethical advertising, both trust and integrity should be included. Advertising is all around us; in consumer lives, online marketers, and even traditional outlets works hard to effectively connect with consumers. Advertising has been important to consumer choice and the economy. And, in a role reversal, it’s the consumers who are now in control of where and what information they want to get (Synder, 2011).

Ethics in advertising includes a well-defined set of principles that govern the communication between the buyer and seller (Bangari, 2016). Advertising is society’s mirror and reflects the values and ethics of that society. Ethics are the most important aspect in the advertising industry with ethical ads not making false claims of lying within the limit of decency (Banagri, 2016). Advertising ethics alters the procedures of business and our lives in prominent and subtle ways. The subject of advertising ethics comes from a long history with many of the ethical criticism and concerns persisting through decades (Drumwright & Murphy, 2009).

The Advertising Message

The customary issues of advertising are to establish a commercial message that’s successful in truth-telling and selling. Past research mentioned that what should be done it’s not always understood or agreed upon (Schauster, 2016). Furthermore, the biggest opportunity for advertisers online is the consumers’ segmentation of “cookies” on computers based on a person’s interest shown on online activities (Synder, 2011). This also was the subject of debate with federal regulators and the united stated congress. Advertisers can use these cookies to provide more direct ads to consumers and reduces ad costs. However, current research shows consumers worry that this type of behavior targeting invades on personal privacy (Synder, 2011). Furthermore, consumers aren’t fully knowledgeable about the collected information nor how it’s used. It is understandable that industries have to perform behavior advertising in an ethical and transparent manner otherwise risk a government shutdown. Advertisers who practice improving the quality of ethics will offer consumers the means to increase their access to pertinent ad information (Synder, 2011).

Facts about Advertisement

Research has shown that consumers will pay more for ethically made products (Synder, 2011). The role of ad agencies is to establish brand trust however, that trust can’t be created by advertising viewed as unethical or improper by consumers. There is no uncertainty that advertising professionals have difficult choices when exercising personal ethics (Synder, 2011) and the role of professionals is key to the implementation of a high standard of ethics by their organization. To provide guidance and clarity, scholars have suggested several ethical decision-making techniques. One test, the TARES test was highly suggested. The test assesses the extent that advertising messages are respectful, truthful, equitable, socially responsible, and authentic (Schauster, 2016). Another normative model has a person evaluate the morals between client and service provider.

The advertising industry signifies the face of big companies to consumers. Global advertisers in 2015 spent $538 billion and this amount steadily rises. As a result of this, the debate over advertising roles has been ongoing. Critics have charged that it’s an ineffective and wasteful tool and the current standard of living would be highest if people were freed from advertising negative influences (Carroll, Brown & Buchholtz, 2017). Others have argued that advertising becomes a beneficial marketing system component and raises consumer satisfaction and the standard of living can be attributed to it. Advertising can be an efficient means of distributing information due to consumers needing to know the ever-changing and enormous selection of products (Carroll, Brown & Buchholtz, 2017).

With the availability of thousands of products, consumers today have real needs for data that’s adequate, accurate, and clear. Adequate information gives potential buyers enough information to make the best choice from the available options. Clear information is straight forward and direct that manipulation nor deception relies upon while accurate information stays away from exaggeration and half-truths (Carroll, Brown & Buchholtz, 2017). Although offering information is one purpose of advertising, persuasion can be looked at as a legitimate form of advertising. Buyers today expect companies to advertise for the purpose of being persuaded to buy a service or product. They also take this as part of commercial systems. For example, close to everyone in the United States has seen the OxiClean commercials where the guy is super excited to “whiten the whites” and “remove all stains”. The spokesman is guaranteeing one scoop of the powder will clean your dirty load in the washing machine. He takes a wine spotted, grass-stained, white polo and dips it into a tank of OxiClean and viola, the shirt comes out looking brand new with little cleaning effort from the consumer.

Advertising Issues

Although persuasion to some degree is deemed okay when selling a product, ethical issues in ads increase as businesses cross lines in an attempt to entertain, persuade, and inform consumers. These ethical issues can arrive from advertising abuses which conceal, exaggerate or use psychological appeal (Carroll, Brown & Buchholtz, 2017).

Ambiguous advertising is when vague words are used to persuade buyers to purchase items. In other words, something with the service or product isn’t clear and stated in ways to mean several various things. This includes weasel words which leave viewers to infer messages and have company’s claim it did not mislead consumers (Carroll, Brown & Buchholtz, 2017). A major weasel word being “help” which lets advertiser proclaim it has no plans to deceive.

Concealed facts is a type of abuse where businesses hide facts by not communicating information to consumers intentionally that they should know when making decisions (Carroll, Brown & Buchholtz, 2017). While one isn’t obligated to tell all ethical facts, concerns appear when facts are selectively presented to establish false beliefs. As a consumer, it’s a must to be informed about products, prices, and competitors however, one must do detective work nowadays to factor out deceptions.

In abuse with exaggerated claims, one can be misled by the exaggerated benefits of products and services. Exaggerated claims are simple claims that can’t be substantiated by evidence (Carroll, Brown & Buchholtz, 2017). The FDA can even impose fine and possible remove the product for having overstated claims.

Psychological appeals in ads are designed to coax on the base of emotional needs and human emotion rather than reason (Carroll, Brown & Buchholtz, 2017). More ethical reasons bring a concern to this type of abuse than other methods. One reason being how the product rarely offers what the ad is promising such as power, masculinity, approval, and other satisfactions. Another reason is how psychological appeals can arouse emotions that manipulate and seem designed to take advantage of the vulnerability in consumers (Carroll, Brown & Buchholtz, 2017). Nonetheless, psychological and emotional appeals stand out more with consumers than a products feature or function. For example, showing hoe a new phone will change your life generally sells more than an advertisement explaining how the phone works.

Advertising to Targeted Consumers

In defining what creates unethical and ethical practices, individuals must start with following a regulatory and legal standard. It would be difficult to be ethical without being honest and advertising practitioners have an obligation to follow and know the government and industry standards (Synder, 2011). Advertising ethics needs to go a step above to ensure appropriate treatment is given to consumers. However, there have been various advertising challenges that are controversial due to questionable ethics. This includes but isn’t limited to protecting children, social media advertising, and pharmaceutical advertising.

Advertising to children is allowed in the United States but needs to be held high in ethical standard due to the audience’s vulnerability (Synder, 2011). Also, ads have to make sure the children understand the nature of advertising. The average U.S. child watches up to 40,000 commercial annually while advertisers spend up to $17 billion in marketing children products (Carroll, Brown & Buchholtz, 2017). Advertisers have even begun to market to eight and nine years old the products meant for teenagers. However, The Children’s Advertising Review Unit was created in the 1970s to outline the areas that need attention to help in avoiding misleading or deceptive as messages to kids (Synder, 2011). The CARU also advises that ads not be shown in a manner that fogs the difference between editorial and advertising content.

In looking at advertising in social media, special thought needs to be taken as this is a controversial group on its own due to fast growth and questionable uses (Carroll, Brown & Buchholtz, 201) and with fast growth can come fast deceptive advertisements. Organizations that use social media may face ethical, reputation, and legal risks in the domain of deceptive and false advertising. To reduce this, the FTC has amended guises that require individuals who blog to disclose when paid by a company or work for a company that has products being blogged or provided items for free (Synder, 2011).

Lastly, pharmaceutical drug advertising directed to individuals also require high ethics. Marketing directed to consumers can provide detailed data on medical procedures available to help treat major illness (Synder, 2011). More so, the FDA requires appropriate warnings are given for each advertisement.

Everyone plays an important role in raising the standards of advertising ethics. Future advertising ethics research commands attention to both external and internal influences that include the client’s role in ethics as well as the vendor’s role (Schauster, 2016). In addition, we should start to explore the relative nature of advertising ethics currently in practice. As agents, suppliers, media, and clients, we can produce the ethical atmosphere and internal processes that will enable professionals to think and act upon ethical issues (Synder, 2011). The need for an integrated framework for understanding the future prevalence of deception within advertising hasn’t been greater.

Conclusion

In conclusion, ethics in advertising includes a well-defined set of principles that govern the communication between the buyer and seller (Bangari, 2016). The most essential ethics that a business has to face in advertising is trust and integrity. The customary issues of advertising are to establish a commercial message that’s successful in truth-telling and selling. The role of ad agencies is to establish brand trust however, that trust can’t be created by advertising viewed as unethical or improper by consumers. With the availability of thousands of products, consumers today have real needs for data that’s adequate, accurate, and clear. Although persuasion to some degree is deemed okay when selling a product, ethical issues in ads increase as a business crosses lines in an attempt to entertain, persuade, and inform consumers. Crossing these lines can lead to advertising abuse types that include ambiguous abuse, concealed facts, exaggerated claims, and psychological appeal. In defining what creates unethical and ethical practices, individuals must start with following regulatory and legal standards and advertising ethics needs to go a step above to ensure appropriate treatment is given to consumers and targeted markets that include children, pharmaceutical, and social media.

References

  • Bangari, M. (2016). Advertising Ethics and Surrogate Advertising Practices: An Empirical Study. CLEAR International Journal of Research in Commerce & Management, 7(4),               94–97. Retrieved from https://search-ebscohostcom.southuniversity.libproxy.edmc.edu/login.aspx?direct=true&db=bth&AN=119728989&site=eds-live
  • Blay, A. D., Gooden, E. S., Mellon, M. J., & Stevens, D. E., (2018). The Usefulness of Social Norm Theory in Empirical Business Ethics Research: A Review and Suggestions for               Future Research. Journal of Business Ethics, 152(1), 191–206.               https://doi.org/10.1007/s10551-016-3286-4
  • Carroll, A. B., Brown, J., & Buchholtz, A. K. (2017). Business & Society: Ethics, Sustainability, and Stakeholder Management (10th ed.). Boston, MA: South-Western. ISBN-13: 9781305959828
  • Drumwright, M. E., & Murphy, P. E. (2009). The Current State of Advertising Ethics. Journal of               Advertising, 38(1), 83–107. https://doi.org/10.2753/JOA0091-3367380106
  • Schauster, E. (2016). Ethics Vs. Survival: The Relationship between Advertising Ethics and Organizational Challenges. American Academy of Advertising Conference Proceedings, 74–85. Retrieved from https://search-ebscohost-com.southuniversity.libproxy.edmc.edu/login.aspx?direct=true&db=bth&AN=118578221&site=eds-live
  • Synder, W. (2011). Making the Case For Enhanced Advertising Ethics. Journal of Advertising Research, 51(3), 477–483. https://doi.org/10.2501/JAR-51-3-477-483

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