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Transcript of Business Ethics
What is Business Ethics?
- ‘A system of accepted beliefs which control behavior, especially such a system based on morals’ – Cambridge Advanced Learner's Dictionary
- Ethics: Set of beliefs about right and wrong behavior
- Business ethics: moral principles that guide the way a business behaves.
- The principles that determine an individual’s actions also apply to business.
- False facts presented by sellers (Misrepresentation of facts)
- Presenting optimistic claims, which the average buyer would not take at face value, and which cannot be disproved
- Advertisements expressing exaggeratedly
- Statements in advertising that describe claims about a product with no specific facts to back up the claim
- Subjective, Not actionable
- a defense to charges of the misleading advertisement of goods, investments, or services
Puffery vs. Deception
- Puffery --> opinion, subjective
- Deception --> implying a false claim
*Let's have a test*
Puffery or Deception?
Puffery or Deception?
a university study finding that its turtle herbal jelly contained almost no turtle shell
- Let's watch the advertisement
How might one determine when a company has crossed the line between puffery and outright deception?
- Ideal case: Divide puffery and deception clearly
- However, in modern, business society, it is difficult to have perfectly definition
- Puffery is not always easily distinguished from advertising which presents a misrepresentation of facts- otherwise known as a deceptive or false advertisement.
- As deception is illegal, therefore, some companies or producer try to use puffery to make customers confuse. Therefore, grey zone was occurred.
Describe one of the advertisements you have seen recently and comment on whether it contains exaggerated or deceptive message.
Puffery or Deception?
- NO trustworthy
- May have trouble
- Affect the goodwill of the companies in long term
2. “GET FULL MARKS”
3. “ENSURE with PROMISES”
For what kinds of product categories you think exaggeration can be a good advertising approach, while for what kinds of product categories it is not?
- Avoid grey zone
- Judge the advertisements with critical thinking
- Set up the sales of goods law in HK
Q & A
- Business ethics is important. How can it benefit a company?
- Social Responsibility is important. How can corporate social responsible campaign benefit the business?
- What advertising approaches do you think that Pfizer should take in the future in order to avoid the same thing happens?
Refer to the Case Study on Going Green: China Faces Growing Concerns over Pollution (textbook p. 91):
Q1. Describe the environmental issues that China is facing.
Q2. Describe the clash between China’s economic situation and the environment. Why is this such a major concern?
Q3. Do you feel that it is fair for China to receive attention for green gas emissions when U.S. citizens emit more gas emissions per person?
What is social responsibility?
- minimize any harm to the environment and work in ways that do not damage the communities in which it operates
- The following is the dimensions of social responsibility:
Voluntary, Economic, Legal, Ethical
- Robert Jarvik is one of the people who pioneered the invention of artificial hearts, but not a practicing physician
- may mislead audience to believe that he is a physician
- not a kind of puffery --> no exaggeration
- not a kind of deception
--> the drug has been proven to lower cholesterol, Robert Jarvik is a doctor
It is False Advertising!
- Drug manufacturer Pfizer produced a drug called Lipitor
- has been proven to lower cholesterol
- ads featuring Robert Jarvik, who is a doctor
- canceled due to critics by public
- can range from straight out misrepresenting the product
- advertising the max or best features rather than the basic or standard ones
- using fillers or oversized packaging to make consumers think they are buying more