Deceptive and Subliminal Advertising in Corporate America: Value Adder or Value Destroyer?

By Mujtaba, Bahaudin; Jue, Arthur L. | Journal of Applied Management and Entrepreneurship, January 2005 | Go to article overview
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Deceptive and Subliminal Advertising in Corporate America: Value Adder or Value Destroyer?


Mujtaba, Bahaudin, Jue, Arthur L., Journal of Applied Management and Entrepreneurship


Executive Summary

A frequently under-scrutinized area of ethical practice in organizations, deceptive and subliminal advertising has served as a method by some firms to convey messages intended to persuade and influence consumer behavior. With the increasing focus on ethical lapses in corporate America, such advertising is explored within this discussion as a potential psychological and behavioral socialization method that has been perceived widely by consumers and advertisers as efficacious and potentially detrimental in its effects. The results of a qualitative survey, on the topic of subliminal advertising, with 65 participants are discussed and summarized. Recommendations are provided for enhancing corresponding public awareness through the development of robust methods of ethical evaluation. A framework grounded in values theory and spirit-centered leadership is offered to assess controversial or subliminal advertising and its role in social value maximization.

Unethical Business and Advertising

Corporate America has become increasingly criticized for perceptions of unethical practices and intentions. Recent high-profile cases of exploitative corporate brutalism (Morgan, 1998) are well-documented in the popular press. For example, companies such as WorldCom, Enron, and Arthur Andersen (among others) have been portrayed as breaking trust with public faith (Ampofo, Mujtaba, Cavico, and Tindall, 2004) through deceptive practices and unsavory agendas that compromised the espoused values they had communicated to investors, employees, customers, regulators, and other stakeholders (Pohlman, 2004). Pohlman stated that all too often, managers and employees are pressured to improve the bottom line in the short term at all costs; and this can result in situations where the lack of focus on long-term value creation generates difficulties for the organization as observed with Enron and other firms in the last five years. In efforts to pursue more profit, boost stock performance, or enhance competitiveness, these firms engaged in either obscuring the facts, intentionally reporting inaccurate fmancials, and Grafting messages intended to manipulate public perceptions of reality (Kroeker & Losi, 2002; Wessel, 2003).

Unethical orientations such as these have generally received widespread public attention after the discovery or disclosure of potentially illegal actions. For instance, WorldCom's demise occurred in response to the revelation of over nearly $4 billion of reclassified assets intended to increase its stock valuations (Wessel, 2003). Adelphia was accused of carrying more than $2.3 billion in off-balance-sheet debt (securities and Exchange Commission, 2002). During the Enron fiasco, investors lost more than $60 billion (Baron, 2002). Ironically, prior to becoming indicted for obstructing justice, Arthur Andersen had sponsored studies that link ethical behavior and rewarding integrity with high performance cultures and long-term competitiveness (Business for Social Responsibility, 2004; Toffler, 2003). Corporate fraud examiner and CPA, Patrice Viton (2003), observed that financial misrepresentation on balance sheets and income statements has reached epic levels with frequent abuses occurring in revenue recognition practices, provisions for uncertainty in future costs, asset valuations, and related-party transactions.

Yet, besides evidences of dubious financial and legal abuses (Ampofo et al, 2004), another unethical but arguably more subtle and less publicly denounced practice may involve the use of deceptive and subliminal advertising. Advertising is typically characterized as the communication of messages about products, brands, or services targeted at audiences for the purpose of informing, persuading, and/or reminding (Kotler & Armstrong, 1990). Effective ads increase loyalty, create name recognition, and generate sustained, repeated sales for savvy enterprises. Implemented via long-term promotional plans, they target well-defined populations with specific goals linked to a firm's strategy through sound market analysis and carefully crafted positioning statements (Mujtaba & Douglass, 2003).

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