Unedited 9/22/11

Small Business Ethics

 

 

Advertising

Advertising can be defined as the promotion of a product or service in media such as radio, television, billboards, web pages and mailed flyers. When analyzing the ethicacy of an advertisement it is important to know if the ad, in any way, has led the buyer to false expectations. Leading a person to false expectation is a form of deception although in customary ethics not much stigma is attached to this form of dishonesty. Thus, the social morality is tolerant, to a small extent, to deception in advertising. Take for example, vegetables in a grocery store. Signs are strategically placed to confuse the buyer into mistaking the price of a produce. On impulse shoppers reach for the expensive produce instead of the more inexpensive variety hidden on a lower shelf. Customary ethics dictates a certain learning curve to consumer buying. The idea goes that "consumers before you had to learn the tricks of buying" and "so should you." However, customary ethics can only go so far supporting such practices.

Written ethical codes and ethical theory is quite different from the ethics of custom and tradition. In theory deception is deception no matter how slight it is. In this light deceiving the buyer by the grocer might be seen as dishonest, manipulative and outright wrong.

Remember there are limits to what is socially acceptable. The definition of fraud is "A knowing misrepresentation of truth or concealment of a material fact to induce another to act to act to his or her detriment." Black's Law Dictionary

Relevant notes:

IT Ratio (integrity ratio): The ratio between what a buyer expects and what they actually receive. An advertisement represents the "front side of a deal." It says for example that if you sign up now "you can get phone service for $19.99 a month." The "back side" of the deal reveals that the consumer must actually pay $32.41 a month for the service. On top of that, this amount is only good for six month after which the charges go up even more. So the IT Ratio here is 1:8, given a deception scale of 1-10. This ratio gives the ethical evaluator some idea of the dilution of business integrity. Integrity in this light, means "doing what you say you will do in fact." In other words a business with a high IT Ratio is offering the symbol of a product or service but not the substance of product or service. IT Ratios can go quite high in today’s world. One can find a car for rent at an airport for $16.50 as advertised on the Internet. The actual amount billed is $59, and that does not include insurance. By cleaver means what looked like a good deal was in fact not very good deal at all.

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