Ethics and the Conduct of Business

Deceptive advertisement, is where the manufacturer of a product or service, gives untrue or misleading information when advertising. Advertisements have been known to lure people into buying things they would not have otherwise bought. That fact has made advertisers to include false information or omit crucial information during advertisement. One of the ways the public is deceived is by omitting hidden charges in the advertisement. One example is where the advertisement says that a phone costs $87.5. Once you have bought it, you will realize that in order for you to use that phone, you need to activate it and that will cost extra money. Another common type of deceptive advertisement is where standards are manipulated. In the computing world for example, it is a fact that 1024 megabytes is equal to1 gigabyte. That is not the case when it comes to buying storage devices. You will discover that they have changed 1 gigabyte to be equal to 1000 megabytes. Lastly, manufactures tend to exaggerate on the performance of their products. Beauty products like Fair Lovely are said to remove black sports on the face within a month. That is not always the case; some have used this product for even over a month without any significant change. What most people fail to notice is that, Fair and Lovely have written in very small font that if it does not work, consult a doctor. Legally they have not deceived but morally, they have (Malachowski, 2001).

Here is a fiction example of a deceptive advertisement; “The new and better Renault Twingo is out, it comes with comfortable seats that keep away back pains and at 56 miles per gallon it will keep you going on forever.” Obviously someone does not spend the whole of his life in a car, so there might be other things that can cause a back ache. If by any chance you are having back pains, a Renault Twingo is not the cure. Also, a car running at 56mpg is not a car that will keep on going forever. First of all, the Renault costs more than a back therapy, so an unsuspecting customer will spend his money on a material thing, rather than on his health. The result can be permanent damage to the back, or worst still death. Others would probably by the Renault because of its fuel consumption. It is a known fact that there is no four cylinder engine car that can be that economical. So a person, who thought that he would be saving money after buying the Renault, will be in for a surprise. He will be forced to change his budget and probably deny himself and his family, some basic needs (Boatright, 2009).

On June 2003 Oracle Corporation, a giant in applications dealing with data storage, made an unexpected bid worth five billion dollars as an attempt to take over PeopleSoft. Despite raising their bid, the board of PeopleSoft still rejected the offer which then led the battle to be settled in court. Oracle’s CEO, Mr Ellison had said that his company had no interest in continuing to provide PeopleSoft’s products, if the takeover was successful. This raised some concerns since it meant that the PeopleSoft’s employees would be eroded away. Perhaps this is the reason why the executives of PeopleSoft rejected the takeover. What is more believable is that, since the directors have powers to slow down the takeovers, they use this opportunity to enrich themselves. This is possible because they have to be rewarded for accepting the takeover (Monica, 2004).

What makes this bid unusual is that the Oracle made their bid after PeopleSoft announced that they were to merge with J.D Edwards, which is another software firm. This was seen as a way of hindering PeopleSoft from enlarging their customer base. Before the sale of the PeopleSoft to Oracle was made, the board of directors of PeopleSoft were supposed to check whether the value of shares would reduce or increase once the takeover was successful. The other thing they were supposed to do is to ensure the rights the shareholders once enjoyed in PeopleSoft, would not be lost (Lohr & Flynn, 2004).

The “poison pill” adopted by soft people raised the price of the takeover buy enabling the multiplication of more shares. PeopleSoft gave rights to the shareholders to obtain a bigger amount of common stock. The acquired rights were changed into many ordinary shares. This weakened the worth of shares of PeopleSoft owned by Oracle making it even more expensive for the Oracle to buy (Monica, 2004).

References

Boatright, J. (2009). Ethics and the Conduct of Business. New Jersey: Pearson Education.

Lohr, S., & Flynn, L. J. (2004). Judge Allows Oracle to Bid for PeopleSoft. Web.

Malachowski, A. R. (2001). Business Ethics: Methodological issues. New York: Routledge.

Monica, P. R. (2004). Finally, Oracle to buy PeopleSoft . Web.

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