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Free Example of Code of Ethics Essay

Deceptive advertising is a technique applied by many companies to swindle non-suspecting customers indirectly. False or misleading statements are used to describe a product in order to attract the interest of customers. Although this is illegal in many countries, advertisers still find a way of deceiving consumers sometimes even in a legal way (Ministry Council on Consumer Affairs, 2009). The impetus for this ethical issue lies in the art and skill of understanding a customer’s needs and providing for this need in whichever manner.

Mortgage Incorporated has been in the market for the last fifteen years. They are among the main providers of loans and mortgages for buying houses. Given the high competition and high prices of their products they had to reduce the prices of their products by half in the last four years. As a result of this, sales have increased by thirty percent in the last three years. However, customer preference to bank loans instead of mortgages has resulted into a reduction in sales by up to ten percent.  As such, the company has initiated a Corporate Social Responsibility activity to enhance marketing hence win a bigger market share and get customers to use their product (Merrit, 2009).

As the Vice President of the CSR, I realized that the marketing department has the intention of deceptively marketing the product. They intend to charge the customers fully for a product that they have advertised to be offered at a discount. The reason given for this act of scarcity mentality is that the company needs to continue serving the customer well. This will have a lot of negative long term impacts on the business. First, the customer will feel deceived because their trust has been violated (Wilson, 2009). In the process, the customer may start negative publicity against the company, which will definitely lead to loss of some customers.

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It is possible that a keen customer can follow up on prices on the fine print. The realization that there is no discount offered as previously promised can attract a law suit. Nevertheless, the company may be able to win the suit but, a lot of resources will have been put spent in this process instead of developing the firm. This will contribute immensely to the high costs of running the business and a negative public image for the company. Research has shown that such a law suit will reduce customers’ loyalty and trust hence sales will definitely decline. In addition, no employee would want to be associated with such leadership which will absolutely increase the negative impacts to the company (Wilson, 2009).

Opening vignette and research reveal that a code of ethics is important smooth running of any operation in business especially one facing ethical dilemmas (Merrit, 2009). Ethical dilemmas are dependent on the type of industry and the ethical issues they face. As such, each organization has its own code of ethics tailored to suit them. This code serves to control the behavior of members of a profession and also reflect the values of the organization.

Certain factors are put into consideration when preparing a code of ethics, among them; the mission statement, policies on employees conduct and the specific values of the company (Merrit, 2009). Both the broader goals and specific nuances are put into consideration. Employees and legal stakeholders should also be consulted in the process. Language is an important tool of communication and therefore, vague language is not allowed in a code of ethics. The code of ethics for the Mortgage Incorporated will be;

I. Members will provide accurate and truthful information on products while undertaking advertisements and all other forms of solicitations. This information will be observed and followed strictly and evidence submitted to both the customer and the company.

II. All agreements shall be put into writing with any discounts being stated clearly. Members shall abide by such agreements.

III. Every member is expected to be impeccably honest in his dealings with the customers. This applies to disclosure of prices.

IV. All members are to follow the laws of this state that regulate mortgage industry.

V. In case of a disagreement, members shall follow the approved mediation process. This includes disagreements with colleagues and also with customers. This also applies to completion of tenure.

VI. Members shall uphold the company’s value and mission statement at all times.

  1. Members shall behave in a professional manner.
  2. There shall be no discrimination of any client based on race, color or tribe. All clients will be treated fairly.

The code of ethics prepared above is meant to deal with the ethical issue at hand, and other issues relating to the business. Codes I, II, III and  IV outline how to deal with either the customer or a colleague. In code number one, the mortgage provider has to be utterly truthful when dealing with the client. This will ensure that the company follows whatever promises it made to the client during advertisements. Therefore, if there were any discounts to be offered then this promise has to be fulfilled (Ministry Council on Consumer Affairs, 2009). The mortgage provider will also be liable to provide proof of the same.

Codes number two to four regulate the mortgage provider’s dealings with the customer. The customer expects to be provided with complete and accurate information which will help in dealing with any deceptive advertising (Ministry Council on Consumer Affairs, 2009). Though this information is put in writing further emphasizes can be acquired fro m a court of law.

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