Those heady days of this last cycle have at last ended. From an industry high of over 500 thousand employed, which grew since the last correction in 1998; recently we have lost only 100,000 people so far. 200+ thousand of the half million people, rushed into our business during that period, incorrectly thinking they were going to be in a “sales industry.” When both you and I know, the customers believed they were speaking with a professional mortgage expert who would look out for their best interest and treat them with the utmost good faith, and not compromise their rights or interests in favor of another’s, including a right or interest of the loan officer/mortgage broker.

But instead borrowers more often were talking with a ‘used car sales Big Commissioned closer type’ individual – that fact of life cannot be seriously denied at this point, by any industry observer. There’s a major conflict as between big commissions/greed on the one hand, and ethical behavior on the other, an issue I have written about several times in the past. Because, for example, certain foul-hearty loan products ‘could’ be originated doesn’t mean they ‘should’ be.

I think everybody who survives this correction crisis, and particularly the various industry discussion boards, need to STOP enabling substandard, mediocre, and ethically challenged originators, they need to be given the boot so they don’t infect the business for everybody else this next go around, wherever they are found. You know what I mean, those with weak values, little integrity, and poor or on-existent ethical standards – the ones where the commission check and how much money the make, is their focus. On these boards we all can see a post that says “”which wholesalers are easy to get approved with, or which ones don’t pull broker’s credit or how about ‘what subprime lenders are left that do high LTV’s with 580 FICO stated wage earners?’ or lenders who don’t do appraisal reviews? or who disregards co borrower’s scores? Or who doesowest score for stated income on foreclosure bailout? There are literally thousands of examples I have seen, and if you frequent these boards so have you.

They basically say ‘what is the path of least resistance so I can make a big score (commission) and what can I do to ensure I do the least amount of work possible ….’ And, not just those questions, but all the ones that reveal they don’t belong in the biz. I see questions like those on all the boards I read. ENABLERS then jump up and say “”Hey I can help!”" and then direct those brain-dead clowns to the answer … and the cycle continues … we all need to stop Enabling those that do not belong in our industry! People that ask these sort of questions are the ones that stuff loans into wholesalers, which then move upstream, become part of securitizations, which then become downgraded, and at a final point hurt all of us! People’s retirement funds, and many money fund investments buy MBS’s (many recently loaded up with crap loans).

These people are easy to spot and it’s up to YOU to protect the industry from them. Just look what they did to us this last cycle! I’ve written about this before, you ARE your brother’s keeper in this industry! They’ve been a major contributing factor in tanking 150+ lenders, closing down countless brokerages, and putting homeowners in situations where their families must face possibly living in a tent!

I think another terrible example, are some in the industry training sector as well. Especially the podium pitch-man types, who mostly work to pump up your ego – you know the ones that say they will ‘reveal the secrets of how to predictably, reliably, and repeatedly get $10,000, $20,000, and even $25,000 checks on every mortgage – month in and month out, while only working part-time!’ Or how about this one ‘Discover How You Can Quickly And Easily Make An ADDITIONAL $100,000/Yr. Even in this Down Market – GUARANTEED!’ Or even those that promote (RESPA violation) paying kickbacks to friends, for referrals etc. When recommending that other originators access these types, or you even speaking positively about them, tends to help contaminate the industry with more problematical originators dealing with the public. If you’re one of them and you say “the wholesalers did it with their reckless programs!”

In small measure you are right, many of them were indeed tempting – but the bottom line there, is that the guidelines didn’t read “”ignore USC 1001 and section IX of the 1003 ….”" Fraud is fraud and bad loans are bad loans … if you ever put income on an application that was not your borrower´s (solely) and/or if you wrote an option arm for someone who was on salary or fixed income then indeed YOU were the problem and I hope you change your ways and join with me and be an ethical partner in our industry. Let me say it a bit bluntly. More than 100,000 front-line originators made a killing (income wise) the last 7+ years. Now because of their ethical short-comings, most are gone or are on their way out. Without strong moral values and high ethical standards you cannot last in this industry for four decades like I have.

Article by Peter Samuel Cugno, Chairman & CEO of Secret! University, the educational division of Americas Money Center, Inc. with 40+ years experience in the subprime industry niche. Questions or comments may be directed online here.

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Tags: ethics, management, strategic, planning, thinking

Over the years I have always found it to be a most privileged situation to be in – to be allowed into the innermost corners of certain individuals lives. They have to have a degree of trust in you to let you in there in the first place.

I made it very clear when I challenged this man to tell me the truth. I was not involved in the incident in any way whatsoever, but he was telling me a lie there and then, then the next time he came to tell me something no matter how genuine it might be, I would always have that niggling thought that it was all just one big smokescreen and lie.

I have taught this in various classes in school from five year olds upwards. If you tell me a lie today then how will I know to-morrow that you are telling me the truth, when it might very well be the truth?

There are those who think that Chaplains and Pastors will believe whatever is said to them, because they are nice men. We are not called to be nice.

At times, Jesus Christ reacted and responded to particular groups of religious people and it could never be said that He was being nice! He spoke strong challenging tough realistic words on various occasions.

Speaking the truth is vitally important, if we wish to maintain good relationships and keep valued friends.

That is why God has said, “”You shall not give false testimony against your neighbour”".

Being a reliable witness in a court of law is essential, and a witness sticks to the facts and seeks to be accurate regarding what actually happened.

God intends that truth permeates and saturates every part of our lives.

I repeat this because it crucially important and has to be put into practical operation no matter where we are, and no matter what our age. If someone comes up and tells me something, which I later discover to be a pack of lies, then the next time that individual speaks to me, I am wondering if he is telling me the truth, or is this just another tale, and in business such trust, reliability and loyalty is essential.

Almighty God detests lying lips, but He delights in men who are truthful, and some discover that to be true when it is just too late.

That old saying, “”sticks and stones may break my bones; but words can never hurt me”" is just not true.

Words can hurt, inflicting deep painful wounds from which some people take years to recover. It is possible to be healed and recover much more quickly.

Telling the truth involves treating people fairly and graciously. Judgmental half truths and even slight exaggerations can be cruel.

The tongue can ruin reputations, speak lies when under severe pressure, boast to satisfy a man’s ego, talk when silence would be golden, and when reporting matters inaccurately can cause havoc.

God says the tongue can be like a spark setting on fire a great forest.

Lies can cause the guilty to go free or the innocent to suffer.

Lies not only pervert justice but they destroy the integrity of the character speaking maliciously.

Jesus Christ clearly teaches that one day we will be answerable for every careless word we might have uttered.

Sandy Shaw

Sandy Shaw is Pastor of Nairn Christian Fellowship, Chaplain at Inverness Prison, and Nairn Academy, and serves on The Children’s Panel in Scotland, and has travelled extensively over these past years teaching, speaking, in America, Canada, South Africa, Australia, making 12 visits to Israel conducting Tours and Pilgrimages, and most recently in Uganda and Kenya, ministering at Pastors and Leaders Seminars, in the poor areas surrounding Kampala, Nairobi, Mombasa and Kisumu.

He broadcasts regularly on WSHO radio out of New Orleans, and writes a weekly commentary here entitled “”Word from Scotland”" on various biblical themes, as well as a weekly newspaper column.

His M.A. and B.D. degrees are from The University of Edinburgh, and he continues to run and exercise regularly to maintain a level of physical fitness.

Sandy Shaw

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Tags: business, ethics, management, reasearch, corporate

Dishonest business people generally don’t last in the world of business, and if they do, they struggle. They struggle to put deals together and that is because dishonesty creates many unwanted headaches. Its common for them to get used to doing business a certain way, the unethical way, and they continue to repeat the same mistakes.

The rewards you get from being honest in your business practice are immense. Fellow associates will respect you way more. Clients will refer your service or product, oftentimes not because of the product, but because of you! Your credibility will soar. So, if you want to fly like an eagle and soar with the birds?

Tell me the truth. Only imminent success will follow. Try this, imagine yourself being honest, its not very tough. Actually, once you get used to it, its easy. Go figure. Lets all grow……together.

Sam Hachem is a local Edmonton, Alberta businessman and recognized Real Estate expert. Business ethics play a big part in him maintaining a strong business practice.

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Tags: business, ethics, honest, maintain, management

Yet many businesses take the approach that getting new customers is their number 1 priority. They actively seek out those interested in their wares, entice them to buy and then after they make the sale they treat them like D.I.R.T.

D – Disposable

I – Insignificant

R – Removable

T – Trivial

One of the things that has always confused and irritated me is how some businesses penalize their customers for their loyalty. Here’s an example of what I mean:

We used to live in the Denver, CO metro area and subscribed to both of the Denver newspapers. (Yes, there used to be 2 large, popular newspapers in Denver.) Almost every year we received notices that the subscription rates were going up. This went on for several years and we didn’t think much about it since it seemed the price of just about everything was always going up.

Then 1 day I received a sales call for 1 of the newspapers. Like most telemarketing phone calls, they went through their entire sales pitch and offered me a “”special rate”" if I would subscribe before I had a chance to tell them I was already a subscriber. When I did tell them I was a subscriber they thanked me for subscribing and were just about to hang up when I asked – “”Since I am already a subscriber can I get the special rate?”"

This question seemed to shock them when they stuttered, “”no.”"

I then asked them why not and their response was that the special deal was only for “”new”" subscribers.

Since the special deal was for more than 60% off the normal subscription price of several hundred dollars a year, I was, shall we say, slightly perturbed.

When we hung up I immediately called the subscription department for the paper and asked them about getting the discount that new subscribers were getting. They also stated that I couldn’t because it was “”only for new subscribers.”"

As soon as they finished the statement about only new subscribers getting the discount, I replied, “”I see, then cancel my subscription – TODAY.”"

Did I ever take that paper again? Yes, 1 year at a time.

You see, I knew that every 6 months there was a subscription drive to get new subscribers. And even if I didn’t get a phone call, I’d see a table set up at any of the grocery stores I visited where I could get a new subscription with a new subscriber discount. Plus, if I signed up at 1 of these tables, I’d get an additional gift.

Now I’m not opposed to giving gifts to get new subscribers. I do it myself. What does upset me is having a business that I’m paying on a regular basis tell me I have to pay more because I am already 1 of their customers.

To this day I don’t understand why that newspaper and many other businesses treat their loyal customer base so badly.

The point I am trying to make is: while you’re working so hard to gain new subscribers and customers, treat your existing subscribers and customers like the precious gems they are. Don’t forget about them and don’t penalize them.

As online marketers we are always looking for new and better ways of doing things so we can increase our profits. We look for ways to increase our traffic and ways to increase our conversion rates. We look for ways to build our lists and then for ways to get more of our subscribers to buy from us. Unfortunately, some of us forget that making our loyal subscribers and customers feel special is 1 of the best ways to keep and profit from them. Over the years I’ve offered several different free gifts to gain new subscribers. However, when I put the gift online I also either send out a mailing to my list giving them the same gift or make it available inside the member area. When I’ve sent a mailing about the addition of a bonus on an existing sale, I’ve included information about how those who had already purchased the product it could also get the free bonus.

Am I obligated to give my existing subscribers and customers the new free gift. No, it’s not an obligation. It’s just good business.

Unfortunately, too many businesses have forgotten the old business practice of. “”take care of your customers and they will take care of you.”"

To Your Success,
Susan Carroll

——–

Susan has been helping people with their online marketing for more than 4 years. You’re invited to join her free membership site at: FriendsWhoCare.us where she gives many free tools and resources.

You may re-publish the article in its entirety, with the resource information at the bottom left intact.

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Tags: ethical, management, power, financial, resource

In the realm of ethical decision-making, familiarity breeds a kind of ethical stability. In other words, as long as the people, cultural setting, values and issues are relatively known to those involved, then the kinds of ethical decisions those people are required to make will be sufficiently familiar for them to do so in relatively manageable ways. Being ethical will be neither too challenging nor too difficult for them to understand. Thus, ethical familiarity breeds ethical stability.

Newness and change, however, can breed a kind of ethical instability. When new people enter the setting bringing a very different culture and a somewhat different set of values, and having different customs and practices, then it is likely that new problems will arise among and between both groups. The meeting and interchange between and among the principles and processes familiar to these groups is where the difficulties arise. To use a different vocabulary, this is a conflict between their principles and processes.

Ethical Principles are the values and preferences of a group as imagined, articulated and understood. They expect that all the ordinary activities of life revolve around them. They actually see and perceive the reality of the world from the perspective of those values and preferences. For example, a group will articulate just how much and what kinds of assertive behaviors are allowed (e.g., organized sports) and which ones are outlawed (e.g., gladiatorial combat & dueling to the death).

Ethical Processes are the ways in which ethical decisions are made. This includes how the ethical principles and issues are perceived, how they are analyzed, how the principles are applied and how competing principles are seen in relationship to each other. For example the ancient Oath of Hippocrates “”not to administer a poison nor to recommend such a course”" seems clear, and yet, in modern medical practice “”chemo-therapy”" is precisely that, the administration of poison, but in a controlled and prudent manner for the good health of the patient. Indeed, the Hippocratic Oath has changed with time. Clearly competent health care professionals had to actively engage a moral dilemma, analyze the facts, and with great information and imagination, devise and risk a new course of action. Hence, big changes can come about, but ideally of course, only with careful, responsible, competent and reasonable engagement by all concerned.

The Reality of Ethical Evolution and Revolution: The process of applying principles can be anything from simple and easy to most complex and difficult. Circumstances and situations demand a nuanced appreciation for many ethical issues. That is why civilizations have developed classes or professions of judges of all sorts (e.g., the judiciary, boards of review, and umpires in athletic contests) who spend their time studying, practicing, reviewing, assessing, weighing and deciding within the contexts of real-life issues. It is from just such considerations as these that principles and processes are sometimes found to meet their limits because of changes in circumstances, situations, knowledge and popular moral insight and acceptance. Some ethical principles and processes formerly considered ethical become unethical (e.g., those allowing for slavery and polygamy, and vigilante law enforcement and dueling, respectively). Some principles and processes formerly considered unethical become ethical (e.g., charging interest on loans, and economic capitalism and chemo-therapy, respectively). And to make things even more complicated, there often develops a rationale for exceptions to the ordinary ethical norm.

For the various ethics systems of principles and processes to be healthy, meaningful and manageable, both principles and processes must be in constant states of development, evolution and revolution. Thus, we must avoid taking refuge in a few preferred principles in order to avoid healthy growth or genuinely new issues. We must also beware of becoming so shallow and unhealthy as to have simplistic or silly principles. Likewise, we must reform and revise ethical processes (even some ancient ones) some of whose effectiveness have diminished and even become destructive (e.g., tribal prejudices, cultural hatreds and superstitious beliefs) in the various 21st Century, cosmopolitan, multicultural ethical frames of reference. (Yes, there are numerous healthy ethical systems in the world.) And, we must avoid having ethical processes which are far too complicated for ordinary society members to grasp, understand and find effective in ordinary daily life. All ethics is personal. The ultimate ethical question is how both the collective society and society’s individual members are helped by the ethical principles and ethical processes we embrace and use.

Healthy ethical dynamics between and among ethical principles and ethical processes are crucial to making good sense a way of life.

For more information and for the opportunity to arrange for a seminar on personal Ethics relative to membership in organizations, groups, businesses, etc., go to this site and click on the Organization Ethics web page. Author & presenter: Nathan Mamo.

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Tags: code, ethics, business, management, training

Two small business owners or possibly businessmen walked up to another newspaper vending machine. One deposited the proper coins and opens the door to take his paid for newspaper. Then he asks his companion if he would like one as well? A second newspaper is removed without payment. The companion then jokes about receiving 2 newspapers for the price of one.

I personally witnessed this scenario. What I did was to take the necessary coins from my own pocketbook and deposit them into the machine. I opened the door and then closed the door without taking a newspaper. The two small business owners or executives now stared at me in disbelief.

As I approached the restaurant door, one of the businessmen opened the door, but he could not look me in the eyes. He knew he did wrong, but he thought that no one else would see. And he probably else thought that everyone else does it so why not?

Business ethics is all about character. And character is all about doing the right thing when no one else is looking.

I call this self leadership because if you cannot lead yourself well by demonstrating character when no one else is looking how can you lead others?

One of the most consistent complaints that I hear from small business owners is about the lack of work ethics such as employees who do not give an hour of work for an hour of pay. Yet, how many of their executives, supervisors and managers are doing the same thing?

Possibly, these two small business owners thought that rank had its privileges or that they had already paid their fair share? Earning a certain position does merit some additional benefits, but rank does not give permission to steal, to be disrespectful, to be unethical.

Given that our actions are open to everyone to see and hear, we in the business world must be consistently executing the right actions through our work ethics demonstrated by our self leadership skills. For failure to do so, will only cause us harm sometime down the road or the path to the restaurant door when we fail to notice who is observing our business ethics.

How is the leadership character in your organization? Get this free self leadership checklist.

Do you need some additional business coaching training services Then visit the business coaching training gym.

Leanne Hoagland-Smith coaches small businesses to large organizations and high school students to entrepreneurs to double performance by closing the gap between today’s outcomes and tomorrow’s goals. Please feel free to visit this site and explore how she can help you from the free articles to the improvement tips.

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Tags: business, ethics, honest, maintain, management

Are you ethical in your business dealings? Are you ethical in your personal dealings? There are many people that would say that your business ethics and your personal ethics have absolutely nothing to do with each other, but truthfully they have everything to do with each other because there is no such thing as business ethics. You are either ethical in life or your not!

I look at the state of business in America today and I believe that the lack of ethics and character are a large part of the downturn in our economy over the past years. Some may say that there have always been scandals in business and government and I would agree with that but at no other time in history has it ever been as excepted as it is today. In today’s society people think it’s just business as usual if they have to lie and cheat to get ahead. As terrible as that sounds it is true! Where do people get the idea that being unethical is ok? In large part I think they see the scandals of former presidents, CEO’s, right down to the people on their children’s school boards making unethical decisions and doing unethical things. This problem will only continue to get worse until we, the American citizens stand up and say no more! We need to begin teaching Americas youth that there is right and there is wrong. To many people are to busy worrying about doing what it takes to get ahead whatever the cost , to realize the example we are setting for the next generation.

Are you willing to cheat on your golf score? If you go to the grocery store and the cashier gives you change for a $20 bill when you only gave her a $10 bill do you correct her? The sad thing is that most people are willing to cheat on a golf score and would not correct the cashier. With that being said if people are willing to cheat on their golf score than why would they not be willing to cheat on their taxes or not follow through with a business deal? People don’t think of not correcting the cashier as stealing but it really is! If someone is willing to steal from the grocery store where they shop, than what would stop them from stealing from your companies expense account? There in lies the problem. Now you have to understand I don’t come to you with this all figured out nor am I up on a high horse looking down on anybody but I do believe we all need to work a lot harder on making honest and ethical decisions in our lives and having a zero tolerance policy for those we associate with . We need some true leader to stand up and say no more. It starts as just a few people and then it becomes infectious and will continue to spread. What we are striving for is to restore ourselves as men and women, to rewind to a time when you could seal a deal with a handshake and your good word after all, a mans word is his worth (this applies to women too). It is up to you and me to demand of those we deal with on a daily basis to have high moral standards and a strong code of ethics!

What steps will you take to ensure your future in business and in life? I know for me it is a daily battle to do as I say to be on time to tell the complete truth and point out unethical things to those who are doing them and help rectify the situation. Let us stand together as one united nation and demand that our government, businesses and families stand on a foundation of strong principles and values. Only we can make the difference! Here’s to a brighter future and a stronger nation, god bless!

To Your Success

Chad DeMay

Better Health & Spreading Wealth, earn 3-5k or more while enjoying life

Visit this website

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Tags: business, ethics, honest, maintain, management

Integrity therefore came to mean ‘ethically sound’ by metaphorical extension. As so often with metaphors applied to human subjective experience, we can discover something useful when we take the metaphor literally.

Consider a person who is grappling with an inner conflict. It may be that two of their most important values are in conflict, or that they cannot choose between alternatives that seem to be equally tempting (or equally scary). Because memory, learning and behaviour are influenced by emotional states, it could even be that what they believe and how they act change significantly depending on how they are feeling.

Can a person who has significant unresolved internal conflicts be a good leader? It’s doubtful. Such a person would find it hard to make decisions and stick to them, because whichever alternative they choose would leave part of themselves unsatisfied. In addition, when you feel ambivalent about your own decisions, it is hard to defend them against criticism.

So unresolved internal conflicts do not make for good leadership. They lead to indecision, inconsistency, and an inability to stick to your guns – none of which are desirable characteristics in a leader. In order to build the sound internal foundation (also known as “character”) which is necessary for leadership, you need to identify your own values and resolve any values conflicts that you uncover.

Being clear about your own values and acting in line with them also means that you will be perceived as “walking your talk” – the key element in leading by example.

The most important thing to remember about emotional intelligence as it applies to leadership is that self-awareness is the foundation on which all the other ‘competencies’ of emotional intelligence are based. If you are not aware of your own emotions, it’s impossible to manage them and hard to understand the emotions of others; in turn, self-management and empathy are prerequisites for being able to handle and inspire emotions in other people.

For a splendid fictional example of how low self-awareness impacts on leadership, see any episode of the hit TV series “The Office” or the nearly-as-good American remake, “The Office: An American Workplace”.

Andy Smith is an Emotional Intelligence consultant and NLP Trainer based in Manchester, UK. His website contains many free articles and downloads.

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Tags: ethical, management, power, financial, resource

Anticipation

How can management and decision makers control a crisis? The answer is simple. A crisis cannot be controlled, but the consequences of the crisis can be managed, mitigated and/or prevented. The first order of business is to know and understand the hazards that threaten the “”business.”" An effective organization must conduct a hazard vulnerability analysis that ranks threats. Dealing with threats against organizational character must be one of the threats considered.

Many disaster preparedness programs consider the traditional natural and manmade hazards, but a class of hazard often overlooked is related to business continuity, especially public relations. Public relations incidents raise concerns, and if not handled properly, can elevate to the level of a crisis. If the crisis grows large enough, it can threaten the very existence of an organization.

Crisis Response Begins With an Admission

The most critical part of crisis response is admitting that you are, in fact, in the midst of a crisis. It is only at this point that the consequences of a crisis can be managed. Following a predetermined action plan and set of organizational morals can guide the response. A public information campaign addressing the situation and describing what the organization is doing to rectify the problem is activated, and a trained public information officer addresses media and public concerns.

How To Be Seen As Responsive

* Be proactive in the approach, viewing the problem from the eyes of the consumer.

* Do not try to utilize the science of the issue to prove a point.

* Do not use the engineering aspect to explain that a repeat of the event is not possible or is incredibly remote.

* Do not try to utilize the facts as your defense.

* Remember that the public does not want to hear about the science, the engineering — or, at times, even the facts. The public wants to hear that you understand their concerns and that the organization sees the issue from their perspective.

Managing and Maintaining Character

Management of character is easy when your organization has chosen in advance to do the right thing. Warren Buffet once said, “”First, state clearly that you do not know all the facts. Then state the facts that you do know. One’s objective should be to get it right, get it quick, get it out, and get it over. You see, your problem won’t improve with age.”"

Preparing for a crisis allows the “”if-then”" thought process to occur in advance of an issue. Decisions can be made in advance, not under duress. Preparing to have an open and honest response to a public relations crisis in advance of an onslaught of reporters and public scrutiny (when your legal counsel is attempting to persuade you to limit your liability exposure) will prevent senior management from being led astray.

Waiting until the disaster occurs puts forces upon decision makers that may change their perception of reality. “”Groupthink is a mode of thinking within a cohesive group that is engaged in by people who so strongly seek consensus that there is no realistic appraisal of alternative courses of action,”" stated Michael C. LeMay in Public Administration: Clashing Values in the Administration of Public Policy. “”A drive for consensus at all cost completely suppresses dissent.”"

Crises easily can become a groupthink phenomenon. With prior planning and decision making, you can avoid having your values go sideways during the crisis. Follow the advice of Warren Buffet by engaging in public transparency that will save the organization time as well as its reputation. It’s easy when the direction has already been established from the executive level to “”do the right thing.”"

Conclusion

All aspects of a successful emergency response are contingent upon planning. A successful outcome is achieved by doing the right thing at all turns, not solely attempting to protect the organization from legal liability. Organizational character can be maintained if advanced planning and training ensures that all parties understand the organization’s policy is to be open and honest. This will maintain the integrity of the organization, ensuring that organizational character is valued and protected.

Author Bio

Mr. Reilly is the President of Emergency Solutions Ltd. His credentials include Certified Emergency Manager from the International Association of Emergency Managers, Certified Business Continuity Professional from DRI International, and he is a Master’s Degree candidate in Public Administration.

Mr. Reilly can be reached through his company’s website.

Visit the website to see how he and his associates can help you prepare you business, school, or hospital for a disaster.

(c) 2007 Daniel J. Reilly. All rights reserved.

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Tags: ethical, management, power, financial, resource

Ethics have always been an important aspect of every business activity, although the term has meant different things at different times in different lands to different people. Nonetheless, as ethical concerns are an inseparable element of business, advertising can not ignore them. Sadly, the advertising industry has rarely cared to look beyond immediate marketing objectives. The argument in the industry is that it is the government’s job to judge what is right and what is wrong. Shirking its own responsibility for regulation, the industry has belittled business values and agencies have harmed their balance sheets.

For any business, customer is very important, and businessman attempt to communicate to all their target customers using means of communication like advertising and sales promotion. Advertising is a very powerful and most commonly used tool.

Benefits of advertising

• Communication

The organization has to attract the customer and create a market for its products. For this purpose, advertising is the most powerful and widely used tool for communicating message regarding products/services to a large target audience.

• To raise the standard of living

In our developing economy, adverting with its micro and macro level influences, exerts vast and varied influences that have played key role in raising the standards of physical and material well being of the Indian society.

• To make market competitive

In India, one finds many innovations being introduced which has changed the market structure from seller’s market, and thus the result is more competitive market conditions.

• Product differentiation

It is a fact that advertising brings about products variety through real and psychological product differentiation.

Critical evaluation of advertising

Though many benefits are achieved through advertisements, the ad message is becoming more and more exaggerated. To achieve competitive advantage, advertising magnifies unimportant differences, resorts to clever, tricky product promises, and claims more and more unbelievable benefits. The customer finds many advertisements as false, deceptive, or misleading. Consumers are uncertain regarding whether or not the performance of a product purchased will in fact meet their needs. If they find that the product lacks in quality, advantage, durability etc., as advertised they might not buy it again, and develop an aversion to every other product of that company.

Unethical advertising

Advertisement is considered unethical in the following situations;

• When it has degraded or underestimated the substitute or rival’s product.

• When it gives false or misleading information on the value of the product.

• When it fails to give useful information on the possible reaction or side effects of the product. And

• When it is immoral.

Ways of misleading the consumers

• Many a time, traders entice the customers into their stores by advertising goods at a very low price, but they stock only a handful of such sale items in the store. When the advertised goods are sold out, consumers are steered towards the higher-priced stock or lower quality goods.

Retailers must ensure that reasonable supply of products is available during the sales, and retailers should not purposely avoid it. Retailers should make it clear in the advertisement that how many items on sale are available or when the sale ends.

• Sale offer should be for a limited period. Advertisement should declare that sale offer is for a limited time period. The period of the offer should be made clear in the advertisement only when the advertised goods are available for a limited period or stocks are limited.

• Traders often offer insignificant price reduction. To illustrate, a trader may advertise that the price of product is reduced to Rs.99.95, when the normal selling price is Rs.100.. The trader must include the normal selling price and discounted price in his offer .The trader sale offer is misleading if the trader claims the product is below cost , when the price is not below cost after discounts, rebates and other allowances it is misleading if the trader simply shows a fictitious higher price as normal selling price in the advertisement.

• Advertisement must clearly indicate the total price of goods or services. All price comparison must be truthful and must not intentionally or unintentionally mislead the consumers. Under the Fair Trade Practices Act, retailers have an obligation to ensure that they do not mislead or make false representations to customers with respect to price of the goods. The consumers who shop around and compare the prices of various products are less likely to be deceived by misleading claims consumers should also be aware of what is a reasonable price of goods and not take any advertised discounts at face value.

• While many sales are legitimate or genuine, the consumers should not get attracted to such sales offers i.e., “”Hurry…very few days remain for sale”. The consumers should be aware of what to expect when retailers place items on sale and how to avoid being misled by discount advertisements. A marketer should take care to ensure that when goods or services are advertised to be available at a discount or as being on sale, it is a genuine discount or sale.

Remedies to overcome deceptive advertisements

• Cease-and- Desist Orders

The cease-and-desist orders, which prohibit the respondent from engaging any more in deceptive practice, are actually the only formal procedure established by the Federal Trade Commission Act for enforcing the prohibition of ‘ deceptive acts and practices.”

• Restitution

Restitution means the consumer is compensated for any damage caused to him by the product that had advertised claims not adequately substantiated. Restitution is rarely considered because of its severity.

• Affirmative Disclosures

If an advertisement has provided insufficient information to the consumers, an affirmative disclosure might be issued Affirmative disclosure require ‘clear and conspicuous disclosure’ of omitted information. Often the involved information relates to the deficiency or limitations of the product or service possibly relating to matters of health or safety.

• Corrective Advertising

Corrective Advertising requires the advertisers to verify past deception by making suitable amendment in any of its future commercial.

Self Regulation in Advertising

It is our responsibility to regulate our operations. And we must do it ourselves. Self regulation is not a quick-fix solution; it will be completely ineffective with out commitment from and the integrity of one and all. Self Regulation may require the following;

• The development of a self-regulatory code of conduct covering all forms of media that is sensitive to ethics, legalities, decency and truthfulness in advertising.

• Provision for monitoring and accountability, including a policy allowing for the removal of ads that violate the code.

• Greater participation of advertising professionals in the regulatory process.

• The inclusion of non-industry players in the process

• Consumer awareness of the self regulation system.

• Simplification of the complaint process against ads.

• Transparency throughout the entire system.

These reforms will achieve three goals. They will make the industry accountable for its actions. They will make regulators and critics think twice before attacking the industry and finally they will lead the public to trust ads, advertisers and agencies.

Conclusion

Reputable companies and advertising agencies avoid telling lies. They realize the cost of being caught. A dent in trust can prove to be much costlier than the failure of an ad campaign or for that matter, even a brand. The challenge before advertisers and agencies is to ensure that ads reflect our values. We must endeavor to see that “advertising” does not remain a dirty word.

Dr.Gomathi Viswanathan

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Tags: marketing, advertising, company, management, ethics