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In a national survey, members of the American Association of Advertising Agencies (4As) were contrasted with non-member agencies to determine awareness and influence of the 4As Standards of Practice, the Professional Code of Ethics for 4As members. The 4As Code was selected because the 4As represents the principle professional association of the support service industry, advertising. The data suggest that whatever the impetus, knowledge of the 4As Code is prevalent among top advertising managers, both presidents and creative directors. Nonmembership in the 4As hardly precludes knowledge and adoption of the 4As Code.
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ABSTRACT. In a national survey, members of 4As agencies were contrasted with non-member agencies to determine awareness and influence of the 4As Standards of Practice, the Professional Code of Ethics for 4As members. The 4As Code was selected because the 4As represents the principle professional association of the support service industry, advertising.
The existence of a professional association or organizational code of ethical conduct is not a necessary or sufficient condition for ethical behavior. However, over the past 30 years, such widely publicized scandals as Watergate, the IranContra expose of 1987, the escalation of insider trading on Wall Street during the 1980s, the savings and loan disclosures, and embezzlement by the chief executive of the United Way (Maes et al., in press) have resulted in public outcry and insistence on greater social responsibility (Schermerhorn et al. (1991). Public demand began to force organizations across industries and professions to reconsider the notion of corporate accountability (Ettorre, 1992).
In 1991, the U.S. Sentencing Commission, an independent agency within the U.S. federal court system, unanimously embraced the first guidelines for sentencing corporations charged with such offenses as fraud, theft, or antitrust violations (Ettorre, 1992; Maes et al., in press). While fines can range as high as $290 million, the amount can be decreased if an organization can show proof of strong ethical compliance systems. Between 1990-1992, more than one-third of Fortune 500 companies drafted formal codes of ethical conduct (Beheish and Chatov, 1993; Maes et al., in press).
Professional association status and impact Professional associations perform important professional competency and quality control functions both in governing the professions and in serving as screening mechanisms for entering the profession. But has this proven to be the case in actual practice?
In Caplow's study (1954), four steps comprising the process of professionalization are identified: (1) the establishment of a professional association with specific membership criteria, (2) naming the association to depict exclusivity, (3) the development and implementation of a code of ethics with specific criteria for exclusion of undesirables, and (4) extended political activity to establish the occupation in a position of power (see also Stankey, 1990).
For some highly regulated industries such as engineering firms, medical practitioners, attorneys, certified public accountants, and pharmacists, professional codes of ethics have teeth, and violating members may lose their privilege to practice their professions. In industries composed of support services, however, such as the American Marketing Association and the American Association of Advertising Agencies, their codes are less rigid and have a diminished policing authority. Although agency members may be expelled for flagrant violations of the Code, they still remain active practitioners in the marketing and advertising communities. Schultze (1981) comments that the advertising industry's emphasis on corporate codes of ethics has always been designed to endorse the industry's social status and legitimize its economic identity
In a previous article in this journal, The Code of Ethics of the American Marketing Association (AMA) was discussed (O'Boyle and Dawson 1992). In it, the authors concluded that the AMA Code in and of itself was too vague to be useful in daily marketing operations and too restricted to be enlightening in ethical dilemmas. They felt that a more definitive set of instructions was needed for practitioners and could be provided by individual corporate codes of conduct.
E. B. Weiss (1976) notes that as of the late 1970s, the influence of consumerism dominated marketing and advertising. This influence has continued throughout the 1980s and 1990s. Because of the renewed interest in the truthfulness in advertising, in September, 1990, the 4As revised their 1924 Standards of Practice of Ethical Conduct.
Awareness and influence of the code Professional association codes usually specify the purpose and beliefs of groups of professionals and have emerged in response to the social, environmental, and economic demands of the times (Maes, Sylvestre and Smith, in press). Stevens (1994) states that corporate codes of ethical conduct are designed to influence employee behavior and are used as managerial tools for creating change. These codes often demand higher standards than those required by law (Stevens, 1994).
Yet some researchers have questioned the impact of professional association codes (Chonko and Hunt, 1985); others have found that the codes have made an impact on decision-making (Posner and Schmidt, 1987). However, before the codes can affect decision-making, people must first be made aware of their existence. To this end we have explored awareness and adaptation of the 4As Standards of Practice. In our survey, 80 out of the 129 respondents (approximately 62%) indicated they were aware of the 4As code, although only 56 out of the 80 represented firms were 4As members. This indicates that firm membership in 4As did not guarantee awareness of the code.
The questionnaire
The American Association of Advertising Agencies is the most prominent professional association in the advertising industry. Therefore, this professional association was selected as the basis for examining the overall influence of its Standards of Practice (Code of Ethical Conduct) on both members and non-members.
A similar study of the National Association of Accountants by Sweeney and Siers (1990) was replicated by adjusting their questionnaire to fit the advertising industry. The Sweeney and Siers study was selected for several reasons. First, although a highly regulated profession today, the developmental stages of the accounting profession paralleled those of advertising. Second, because of past practices and current trends, both professions are under constant public scrutiny with a risk of exposure to unethical practices. For advertisers, this kind of exposure could parallel the specter of a formal audit.
Measures
The survey questionnaire used in the Sweeney Siers study (1990) was used with modifications suited to a target audience of advertising professionals. Such modifications included notation of membership in the American Association of Advertising Agencies, organizational position (whether president/branch manager or creative director), and agency size (noted in approximate yearly capitalized gross billings).
A pilot questionnaire was sent to a group of experts in the advertising profession and modified according to their suggestions. Branch managers and creative directors who participated in the pilot questionnaire were eliminated from participation in the national survey.
Sample
Two hundred fifty agency branch managers/presidents and two hundred fifty creative directors of both full-service member and non-member agencies throughout the United States were targeted. These were randomly selected from The 1993/94 Roster of the 4As and the July, 1993, Standard Directory of Advertisers. We decided to survey two levels of the hierarchy based on the belief that there are different perceptions of a company's ethical standards that exist at various organizational levels (Posner and Schmidt, 1987).
The 4As agencies were significantly larger in size than the non-4As agencies. The average agency size (measured in terms of millions of dollars in yearly capitalized gross billings) for the 4As was $34.77 million as compared to an average size of $12.61 million for the non 4As agency. Since agency size and age are not determining factors in qualifications for 4A membership, they were not determining factors in agency selection for participation in this study.
The survey questionnaire was administered twice over a four month period. We received a 26% response rate which produced a less than desirable sample size for full parametric statistical analysis.
Limitations
By using only the July, 1993 Standard Directory of Advertisers, many new and low volume agencies of less than $1 million in yearly capitalized gross billings may not be listed (Jim Bramblett, personal communication, February 18, 1994). Additionally, there is a fee charged to be listed in this directory. Agencies that opt not to pay the fee do not appear in the listing.
This study cannot be used to imply actual ethical standards of any occupational group. As previously mentioned, the existence of a code is not a necessary or sufficient condition for ethical behavior. The study results can only suggest member and non-member knowledge or awareness of professional codes of ethics. Thus, a study of this nature extends occupational or professional application in the academic literature.
Results
Sixty-five and one-half percent of the 120 respondents were members of the 4As. A total of 50 agency presidents/branch managers (64%) returned the surveys as compared to only 28 creative directors in agencies that were members of the 4As.
The size of the advertising agencies was determined by asking the respondents for approximate yearly capitalized gross billings. While the average agency size was reported as $26.82 million, onethird of the respondents related their agency size as less than $5 000 000; another one-third reported their size as ranging between $5 000 000 and $25 000 000; and the final third listed their size from $25 000 000 to the $270 000 000 maximum.
The results of survey questionnaire were as follows:
Question One: Are you aware of the existence of the 4As Standards of Practice (Code) and your obligations under the Standards of Practice?
Of the 4As members, only 67.1% reported being aware of the code, while 32.9% of the non 4As members were aware of the 4As Code. Five additional survey questions were designed to further explore the awareness of those respondents answering affirmatively.
Question Two: Has the 4As Code directly or indirectly influenced one or more decisions you have made within the past year?
As shown in Table I, fifty-one percent of the 4As members who were aware of the Code said that the Code had influenced their decisions, whereas only 25% of non-members used the Code in decision making.
Question Three: Have you ever discussed the Code and/or implementation of the Code with other organizational members in non-creative areas of responsibility?
Forty-five and three-tenths percent (45.3%) of the 4As members who were aware of the 4As Code reported that they had discussed the Code with organization members in non-creative areas. Only 25% of non-members who were aware of the code had discussed it.
Question Four: Do you believe that the 4As Code will help you explain to another person the unprofessional implications of a request to perform an unethical act?
Of 4As members who were aware of the Code, approximately 85% said that they believe it could be helpful in explaining implications of requests to perform unethical acts. Of nonmembers, 79% said that they believed the 4As Code would be helpful.
Question Five: Have you ever used the Code for such a purpose?
Of 4As members who were aware of the Code, only 30% (16) have actually used the Code for such a purpose. Of non-members, 21% who were aware of the 4As Code had used the Code to explain the unprofessional implications of a request to perform an unethical act.
Question Six: Question six asked if the respondent had discussed the code and/or implications of the code with superiors, subordinates, or clients. Table II reflects the response distribution of the three response options.
Part One asked: Have you ever discussed the Code and/or implications with subordinates in the creative area?
Of 4As members who were aware of the Code, 37% stated that they had discussed the Code with subordinates. Of non-members who were aware of the 4As Code, 27% responded that they had discussed the Code with subordinates in the creative area.
Part Two of Question six: Have you ever discussed the Code and/or implications with clients?
Of the 4As members who were aware of the Code, 58% have discussed the Code with clients, whereas 50% of the non-members had discussed the 4As Code with clients.
Part Three of Question six: Have you ever discussed the Code and/or implications with superiors?
Twenty percent (20%) of the 4As members who were aware of the Code reported discussing the Code with superiors. (Only 28 of the respondents probably had superiors since 8/28 answered this question.) Fifteen percent (15%) of nonmembers who were aware of the Code reported discussing the Code with superiors. (Only 9 of the non-member respondents probably had superiors since 9/27 answered this question.)
Discussion
The data revealed some surprising results. While one might expect that the larger the agency, the more likely that it belonged to the 4As, this did not turn out to be the case. In fact, there is a small negative correlation between membership and billings (-0.2489). Additionally, there appears to be virtually no correlation between the size of an agency and awareness of 4As Standards of Practice (0.0456).
This finding could be due to several facts. In order to be accepted into the 4As, an agency must be in good financial standing. The 4As membership designation, therefore, may be viewed much like acceptance for a credit card or loan. Another consideration of the relationship between size and membership could be that as agency size increases, so does its perception of its professional autonomy; thus, an agency may feel "beyond" the need to use the 4As Code. The implication here may also be that the evidence of ethical conduct is an intuitive aspect of the environment, and explicit representation of these considerations is felt as unnecessary.
Question Two presents some interesting perspectives. First, there is no way to determine if a "no" response indicated that no ethical decision had been made or that the code had not influenced a decision made. However, an active advertising agency would unlikely experience a year without having to make some type of ethical decision.
Second, 51% of 4As members who were aware of the Code said that it had directly or indirectly influenced one or more of their decisions within the past twelve months, whereas of non-members who were cognizant of the Code, 25% had used the Code for such purposes. Since only approximately half of the 4As members used the Code for decision-making and such a relatively large number of non-members used it, it may be that the agencies belong to other professional organizations and/or have their own codes. It would seem logical that more 4As members would use the Code more often since the association stresses ethics consciousness.
In Question Three, although 45.3% of the 4As members who were aware of the Code said they had discussed it with members in non-creative areas, the results could indicate that the agencies are using other methods such as training, to disseminate ethical agency requirements. Again, implicit recognition of the code's implications obviate the need for such discussion.
In Question Four, the researchers expected that a large percentage of 4As members would agree that the Code could be useful to explain the consequences of performing an unethical act, and indeed 85% of the 4As members concurred. Moreover, it was hardly surprising that 79% of 4As non-members who were aware of the Code also believed that the 4As Code serves as a constructive tool.
In Question Five, of 4As members aware of the Code, only 30% had used it to explain the ramifications of a request to do something unethical. If ethics is highly touted among the 4As, why did no more than 30% respond that they had used the Code this way? Could it be that they are relying on their own personal values or upon corporate codes of their individual agencies? Possibly, they simply do not view the Code as a valuable tool for this purpose or relied on general ethics principles to resolve ethics problems, particularly with respect to clients.
Question Six was revealing to the researchers because there was so little difference (only 10%) between 4As members who were aware of the Code and non-members who had actually discussed it with subordinates in the creative area. There was almost the same small difference (8%) of members and non-members who had discussed the Code with clients. Additionally, this was also true of the difference (5%) between members and non-members who had discussed the Code with superiors in the creative area. One might expect these managers to discuss the Code in-house, that is, with subordinates and superiors, but there were relatively few who reported that they did. Again, this could be due to employees receiving the information from training programs or other sources.
With the resurgence of the emphasis on ethics in business, it was interesting that so few of the respondents had discussed the Code with clients. However, it may be that the agency's reputation had made it unnecessary to do so.
The size of the firm appeared to have little influence on responses to the questions. None of the questions reflected a statistically significant difference between the response of larger firms and smaller firms.
Conclusion
Although the researchers recognize that there are many environmental and perceptual variables that affect the responses, this "first cut" examination reveals some interesting results.
The data from the study suggests that whatever the impetus, knowledge of the 4As Code is prevalent among top advertising managers, both presidents and creative directors. Additionally, nonmembership in the 4As hardly precludes knowledge and adoption of the 4As Code.
So the question remains: Is the 4As Code so widely known and accepted that it makes little difference whether an agency is a member for it to apply the precepts of the 4As Code? Or are the 4As members becoming apathetic in paying attention to the 4As Code?
This study provides a glimpse into a profession grappling with an ethical image problem. While ethical codes of conduct are an attempt to initiate thinking about standards, awareness of a professional code does not guarantee that the code will affect individual decisions. Perhaps as more research is generated, any links between the Codes and individual decisions will become clearer.
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Department of Management,
College of Business and Management Studies, University of South Alabama, Mobile, AL 36688, US.A.
E-mail: [email protected]. edu
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