Ethical Concerns Raised in Advertising, How to Reduce Liability Exposure - Assignment Example

Law Introduction Stiff competition in the current business atmosphere has forced companies to come up with sustainable and effective advertisements with the objective of making their products to be easily recognized by the customers as well as to improve their sales. Through the advertisement of their product and services, companies are in a position to face off their competitors. Additionally, consumers are educated on the benefits of the products and how they are used (Beauchamp, 1991). Similarly, by effective and timely advertising of their products, companies enjoy strong brand awareness that results into increased sales and high profitability. Apart from making the customers aware of the available brands, advertising is used as a way of creating strong positive relationship between a firm and the consumers (Mick, 1986). In addition, advertising allows for elimination of middle men thus increasing the company profits and improving the image of the organization. In order to ensure that consumers’ needs are met, companies should strictly follow the advertising rules as outlined by the government (Seaquist, 2012). According to the law, all business advertising relating to a new or existing brands must be legal, honest, an accurate description of the brand, decent and socially responsible (O'Guinn, Allen and Semenik, 2008). If any advertising fails to meet any of these aspects, business owners are not only liable under the law but also their relationship with the consumers deteriorates. This paper aims at assessing business advertising as a legal and ethical issue that relates a current work environment. Ethical concerns raised in advertising Through the close monitoring of advertising by the Federal Trade Commission, the industry operates within strict regulations. Despite the advertising laws been in place, some advertisers have been noted to violate ethical standards thus negatively affecting the consumers as well as the general public (Mick, 1986). Advertisers are supposed to be careful and act ethically when promoting their brands. It is vital for organizations to have a list of ethical issues at hand in order to come up with legal and responsible products advertisements. The section below discusses various ethical issues that cannot be overlooked by an organization that aims at creating strong positive relationship with its consumers. Truth in advertising In order to enforce the provisions of the Federal Trade Commission Act, FTC has set notable requirements for truth in advertising. According to the Bureau Consumers Protection, all products advertisements in US must be truthful, not deceptive and fair (MacLean and Joseph, 2007). Additionally, advertisers are required to have evidence that supports the claims that they make. In this way, the consumers will have confidence while contacting the organizations or while using the products being advertised. According to FTC, deceitful statements are the ones that that are likely to mislead the consumers who under normal circumstances act reasonably (MacLean and Joseph, 2007). Unfair advertisements as indicated by the FTC are the ones that are in a position to cause substantial and unavoidable injury. Advertising products that are harmful Different states have diversified views on their advertisement of services and products. Their challenge is creating a balance between personal responsibilities on the society and regulating what the citizens are allowed to involve in (O'Guinn et al, 2008). For example, US has strict regulations on various advertising issues while still entirely prohibits others. For instance, the law only permits cigarette advertisements on specified media that does not include radio and television while alcohol advertisements are permitted in all media. In order to ensure that they act ethically as the advertisers, it is essential for companies to have a good look at the nature of their product line (O'Guinn et al, 2008). It is vital to note that television advertisements for various types of fast food are entirely legal and appropriate in creating demand. However, in the contemporary medical world, doctors have embarked on portraying the fast foods as major causes of continued obesity globally. Advertising strategies Another ethical challenge that is experienced during product advertising is maintaining the values that the society believes in. Organizations and advertisers in general have a range of less than ethical but legal avenues that they can use. These include subliminal advertising, emotional appeals, utilizing the less educated persons, use of propaganda among others that ethical advertisers continuously hesitate to use (Mick, 1986). After any advertising strategy, consumers value organizations that do not use untrue information to ensure their brands are purchased. Advertising to minors With growing demand for children products such as toys, special emphasize is placed on children advertising. FTC indicates that minors are not in a position to comprehend statements and images that are exaggerated in nature. The law ignores unethical ramifications of totally legal advertising for example creating a brand loyalty in minors while they do not have any information that touches on the brand (Mick, 1986). Advertising and social responsibility Being a wide concept that relates to advertising, social responsibility cannot be overlooked by the advertisers as they focus on making their information to be used by the third parties. One of the key aspects that relate to social responsibility is the ecological issue. It is worth to note that advertisements that advocates for lavish life that results into wastage of resources and destruction of the surrounding environment makes serious offense against ecological issues. In his effort to maximize his benefits in the earth, man thinks that he can use the available resources in any manner. However, any product advertising that seems to negatively affect human development and fosters lavish lifestyle is treated as false and it is seen to having destructive effects and harmful to the society. Two ethical theories to the situation to support at least two different outcomes Deontology theory One of the major theories that are applicable in advertising is deontology. Deontology theory states that individuals and companies should adhere to their obligations and duties (Lafollette, 2001). This implies that managers in various areas including human resource departments, marketing departments and employees welfare among other areas should ensure that organizations follow their obligations within the society in order to be considered as ethically collect (Lafollette, 2001). According to this theory, individuals and organizations who exceed their obligations an aspect referred to as supererogation, are highly valued. According to Deontology theory, there are various theories that advertisers should adopt to avoid being seen as not adhering to their obligations. The first one is the Kantianism theory. According to Immanuel Kant, individuals must follow their duty in order to be seen to act in the morally way. Secondly, he argues that the motive of an individual who carries out an action is the one that matters and not the consequences of the actions that makes them to be seen as right or wrong. The three formulations that Kant advocates for in his ethical theory includes acting only according to the maxim that an organization can will to be a universal law, acting in a way that treat humanity and every rational being to act as though his or her maxim is within a universal kingdom of ends (John, 1998). The second theory is the moral absolutism. This theory indicates that some deontologists indicate that certain actions are totally wrong or right not withstanding their consequences. The third theory is divine command. This theory indicates that an action is right if God has indicated that it is right (Dougherty, 2011). Additionally, this theory argues that the rightness of any action depends on the performance of that action as a duty. On its part, contemporary deontology which covers individuals like Thomas Nagel, Frances Kamm, Thomas Scanlon and Roger Scruton among others indicates that one may harm as a way of saving more and only if the harm is the result of a greater good itself. Utilitarian ethical theory This theory is founded on the ability of the firms and managers to predict the consequences of their actions (John, 1998). A manager who emulates this theory believes that the choice that yields the greatest benefit to the majority of individuals is the one that is ethically collect (Broad, 1998). One form of utilitarianism is act utilitarianism. This form indicates that a person or an organization performs an act that generates the most benefit to the people regardless of the available constraints (Bentham, 2009). The second form of is rule utilitarianism. Rule utilitarianism takes into account the law and fairness while undertaking ethical practices. In the twentieth century, various forms of utilitarianism emerged. These include ideal utilitarianism, two level utilitarianism, and preference utilitarianism among others. The objective of utilitarian ethical theory is not only to avoid suffering and negativities on the third parties but also to ensure that firms maximize total benefit (Broad, 1998). Best ethical outlook As indicated earlier, deontology theory dictates that organizations should adhere to their duties and obligations while serving the society. This implies that managers for example when creating new advertisements of their brands should take into account the needs and the values of the society where they operate (Dougherty, 2011). Similarly, managers should provide the right information that will guide the consumers while making purchasing decisions. This is an indication that as compared to the utilitarian ethical theory, deontology theory provides the best legal outcome for the business that is undertaking an advertisement as any product. Constitutional law Constitutional law is a body that governs or represents the relationship that exists between different entities (Tooker, 1990). For example, the executives of the company or of a state where the law making individuals and those who interpret the law operate in check and balance. In United States, commercial speech like advertising has been amended appropriately to ensure that it is protected for the interest of the consumers. In US, constitution advertisement is given a priority from other freedom of expression. Since United States encourages free market, companies can advertize their brands depending on what they offer and thus been given the priority in advertisement. Contract Contract is an agreement between two parties that have a common goal thriving in a free market economy (Koffman and MacDonald, 2007). Contract is based on the commitment that results to a firm achieving the objectives set for the specified duration. Advertising is a medium that is used to break the status quo of the firms thus engaging in creative ideas that benefit the company at long last though costly. Mass media advertising is an important tool that can be used to make a contract between different entities. Contract is an agreement that is a solution to marketing and is allowed by the law and thus stipulated in the constitution. Whenever one break the contract without notifying the other, one can be taken to the court since certain duration is specified when the contract will be viable (Koffman and MacDonald, 2007). If the contract period is over then, agreement can be made again and renew the contact. Anti-trust law Law that allows competition in the business sector, and stipulates how the consumers can be protected from individuals who want to make money from the competition is known as anti-trust law (Blumenthal, 2013). United States government has a statue that protects the consumers from being exploited during business practices. For example, advertising can be used to market some of the brands since consumers follow their choice, or what is being advertised. The price may be high which is an exploitation to the consumers, and this is the reason anti-trust law exists to curb these practices (Blumenthal, 2013). Competition is healthy in a free market economy, and thus monopoly powers are not encouraged in addition to price-fixing by firms. Securities regulations Securities regulations are rules that are set to govern brokers and other dealers who are professional in the market. For example, each and every country has set rules that cover transactions in businesses with securities (Lemke, 2013). United States has rules for exchange and self-regulatory organizations. For example, financial industry regulatory authority (FINRA), the Securities regulator is known as securities exchange commission (SEC). The law was created to ensure that brokers-dealers and other professionals in the market do not exploit the consumers (Lemke, 2013). Later in 1933, amendment was made. It was known as Securities Act of 1933, later in 1934 another amendment was established resulting to Securities Exchange Act of 1934 (Lemke, 2013). Though an advertisement has been used to advertise products, securities regulations have to be followed to ensure that marketers comply with the law. Employment law This is an act that was established and enacted by the government to ensure that responsibility is considered when one is given the mandate to carry a certain task and also maintain the employment rate (Simon and Gillian, 2005). Employment rate must be high so that individuals can improve their financial status. Employment law must be applied in all the organizations since they regulate labor and specifies the hours that an individual can work in a particular company. The prices and the rate an individual should be paid upon working are still contained in that docket. Environmental law Environmental laws are rules and regulations that regulate human daily routines in the environment (Faure and Niels, 2014). The activities that are carried may affect the air, water or even the entire land. The laws require safeguarding of animals and plants in the universe (Faure and Niels, 2014). Through advertising, individuals are updated on the importance of safeguarding environment since in long terms the environment is beneficial to human beings and other creatures. Crimes Crime is an action that individual engages in, and if an individual is prosecuted by the state it is punishable. The law requires citizens who are abiding and follow the constitution (Olivelle, 2004). Illegal activities like fraudulent among other activities can lead one a jail, and this is the reason a law is published for individuals to be aware of it. Recommendation to reduce liability exposure In order to ensure that firms reduce their liability during their advertising, it is vital for proper measure are put in place prior to coming up with the advertisement. One of the measures that I recommend organizations and managers to adopt is to make the advertisement language to be clear thus making individuals to make decisions that are correct. As indicated by the deontology theory of ethical issues, managers’ duty is to provide information that relates to their products in a clear manner. On its part, FTC clearly indicates the business principle and the products description and contents that advertisers must follow (Davis, 2013). Secondly, managers should advice potential customers who are seeking information regarding their products to ask for clarification to avoid being liable in case the consumers sought legal procedure after experiencing harmful effects after using the products. Such feedback and clarifications should be clearly stored for future usage. Organization should also provide terms of use of the information that is included in the advertisement. By ticking an icon that indicates they understand and accept the terms of use, an organization will also reduce the liability that may arise in future. Content attribution is another recommendation which organizations can use to reduce their advertising liability. This entails verifying and distinguishing their posted information from other materials. In this way, firms will avoid the legal costs that may arise due to poor decision made by the third parties. Another way through which managers can reduce liability during advertising is by using disclaimers. This involves making a statement at the end of the advertising that is focused at prevention of incorrect comprehension of the information that is provided in the advert. In this way, managers will not be liable for the mistakes done by the listeners of the adverts. Conclusion Based on the above discussion, it is clear that in business advertising, there are legal and ethical issues that cannot be overlooked. Key ethical issues that companies must emulate during their advertising includes true advertising, use of the laid down rules to advertise harmful products, advertising and social responsibilities and advertising tactics. Ethical theories that relates to business advertising includes deontology advertising and the utilitarian ethical theory with the former being the best ethical outlook that touches on advertising. In their efforts to seek legal compensation that arise from advertising, consumers are provided with support from consumers protection agencies. Thus, there is need for firms to reduce their liability that arise from advertising by adopting policies such as use of clear and understandable language, clarification of the information in the advertising, providing terms of use and content attribution and use of disclaimers at the end of the advertisement among many others. References Beauchamp, L. (1991). Philosophical Ethics: An Introduction to Moral Philosophy. New York: McGraw Hill. Bentham, J. (2009). Theory of Legislation. New York: General Books LLC. Blumenthal, W. (2013). Models for merging the US antitrust agencies. Journal of Antitrust Enforcement (Oxford Journals) 1 (1): 24–51. 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