BUSINESS ETHICS
Ethics :- Moral principles that govern a
person's behaviour or the conducting of an activity.
Business Ethics :-
HUMAN RESOURCE
Human
resource management (HRM or HR)
is the strategic approach to the effective management of people in an
organization, so that they help the business gain a competitive advantage. It
is designed to maximize employee performance in service of an
employer's strategic objectives.
Ethical Issues In
Human Resource
There are several major issues faced by
human resource
1) Employment issues
Human
resources professionals are likely to face maximum ethical dilemmas in the areas
of hiring of employees.
Pressure to
hire a friend or relative of a highly placed executive.
Faked
credentials submitted by a job applicant.
Discovery
that an employ who has been with the organisation for sometime is skilled and
has established a successful record had lied about is educational credentials.
2)cash and
plans
Cash and
plans include issues like basic salaries, annual incentives , executive
perruistes and long term incentive plans
HR managers
have to justify a higher level of basic salaries or higher level of percentage
increase than the competitors to retain several employees
3)Employees discrimination
A frame work
of laws and regulations has been evolved to avoid the practices of treatment of
employees on the basis of their caste, sex, religion, disability etc…
A demanding
ethical challenge arises when there is pressure on the HR manager to protect
the firm or an individual at the expense
of someone belonging to the group which is being discriminated against.
4)Perfomance Appraisal
Ethics
should be the basis of perfomance evaluation . highly ethical perfomance
appraisal demands that there should be an honest assessment of the perfomance
and steps should be taken to improve the effectivense of employees.
Some
employees are given low rates, despite, their excellent perfomance on the basis
of factor like caste, religion or not being loyal to appraiser.
5)Privacy
The private
life of an employe which is not affecting his professional life should be free
from intrawise and unwarranted actions
HR manager`s
face three dilemma`s
1) The
first dilemma relates to information technology a fains need for information
particularly about employer while on job may be at odds with employees privacy.
2) The second dilema relates to the AIDS testing.AIDS has
become a public health problem. It is however generally understood that AIDS
cannot be controlled by casual and normal contact employees with this illeness
should not be discriminated against and they should be allowed to perform jobs
which they are qualified
3) The third ethical dilema relates to whistle blowing
.Whistle Blowing refers to a punlic disclosure by former or current
employees of any legal , immoral, or
illegimate practices involving their employees .
The HR managers is in dilema how to solve their issue between
the opponents and defenders of whistle blowing
6)Safety and health
Industrial work is often hazardous to the safety and health
of employees.Legislation have been created making it mandatory on the organisation
and managers to compensate the victim of occupational hazards.
Ethical delimmas of HR managers arise when the justice is
defined to the victims by the organisation.
Unethical issues in Human Resource
1)
Disguised Salaries
This is the most abused unethical
policy where the offered salary is misquoted to an incumbent. The extent of
variance between the actual in-hand salary and the one quoted at the time of
recruitment ranges from lakhs to a couple of thousands but the reality is that
it is the freshers or the needy employees who are the usual sufferers of this
gimmick. The senior employees and the higher managers have already learnt their
lessons the hard way and enquire well before accepting any offered salary. What
is usually done is to include various expenses made by the company in the total
salary which might include contributions to Provident Fund, social security,
training programs and sometimes, even the electricity used.
2) Training Policy
All HR departments have training obligations
as training traditionally has been one of the core HR functions. Very few HR
managers are able to weave this function in the overall management of the
organization thus, actually achieving a learning and development strategy. The
lack of ethics in this policy is the absence of the policy itself i.e. when
training does not move in a systematic manner with a well thought out plan of
implementation and evaluation, it loses all relevance and significance in the
minds of employees. This loss is extremely dangerous as people tend to reject
all succeeding training programs as the same useless interruption to work, at
best, to be visualized as a holiday. The true extent of damage is seen by
well-meaning HR managers who are unable to communicate any enthusiasm in their
senior managers towards crucial training areas.
3)Lying to employees
The fastest way to lose the trust of
your employees is to lie to them, yet employers do it all the time. One of out
every five employees report that their manager or supervisor has lied to them
within the past year.
4) Misusing company time
Whether it is covering for someone
who shows up late or altering a time sheet, misusing company time tops the
list. This category includes knowing that one of your co-workers is conducting
personal business on company time. By "personal business" the survey
recognizes the difference between making cold calls to advance your freelance
business and calling your spouse to find out how your sick child is doing.
MARKETING
Marketing is the study and management of
exchange relationship Marketing is
the business process of creating relationships with and
satisfying customers . With its focus on the customer, marketing is one of
the premier components of business management.
Ethical issues in marketing
1)Advertising and
Promotion
In the early days of existence of corporations,
especially during 1940s and 1950s, tobacco was advertised as a substance that
promotes health. Of late, an advertiser who does not meet the ethical standards
is considered an offender against morality by the law.
- Sexuality is a major point of
discussion when ethical issues in advertising content are considered.
Violence is also an important ethical issue in advertising, especially
where children should not be affected by the content.
- Some select types of advertising
may strongly offend some groups of people even when they are of strong
interest to others. Female hygiene products as well as haemorrhoid and
constipation medication are good examples. The advertisements of condoms
are important in the interest of AIDS-prevention, but are sometimes seen
by some as a method of promoting promiscuity that is undesirable and
strongly condemned in various societies.
- A negative advertising policy
lets the advertiser highlight various disadvantages of the competitors’
products rather than showing the inherent advantages of their own products
or services. Such policies are rampant in political advertising.
2)Delivery Channels
Direct marketing is one of the most controversial
methods of advertising channels, especially when the approaches included are
unsolicited.
Some common examples include TV and Telephonic
commercials and the direct mail. Electronic spam and telemarketing also push
the limits of ethical standards and legality in a strong manner.
3)Deceptive Marketing
Policies and Ethics
Deceptive marketing policies are not contained in a
specific limit or to one target market, and it can sometimes go unseen by the
public. There are numerous methods of deceptive marketing. It can be presented to consumers in various
forms; one of the methods is one that is accomplished via the use of humor.
Humor offers an escape or relief from various types of human constraints, and
some advertisers may take the advantage of this by applying deceptive
advertising methods for a product that can potentially harm or alleviate the
constraints using humor.
4)Pricing Ethics
There are various forms of unethical business
practices related to pricing the products and services.
Bid rigging is a type of fraud in which a
commercial contract is promised to one party, however, for the sake of
appearance several other parties also present a bid.
Predatory pricing is the practice of sale of a
product or service at a negligible price, intending to throw competitors out of
the market, or to create barriers to entry.
Unethical Issue In marketing
1. Misleading advertising.
Misleading ads are more than just unethical—they’re illegal.
The Federal Trade Commission (FTC) regulates “truth in advertising,” mandating
that businesses make accurate statements in their advertising campaigns and,
when possible, back their claims with scientific evidence. However, it’s common
for advertisers to exaggerate certain features and downplay others in order to
make their products look as attractive as possible, so the line becomes
somewhat blurry. The ethical line here is when your claims start to be
unprovable; for example, tobacco cigarettes were originally advertised as
“healthy.”
2. Black-hat link building.
Media exposure is almost always a good thing for businesses,
and earning inbound links to your company website is the single best way to
boost your organic search rankings. There are ethical ways to build links
and increase mentions of your brand ; the most common is to use guest posting
opportunities to write high-quality content for your target audience that cites
one of your brand’s pieces of original research.
3. Contacting people without consent.
Have you ever thought about buying a list of email addresses
so you can bulk up your company’s subscriber list? You’re not the first one.
Many businesses have used this tactic to contact people who they otherwise
wouldn’t have known. Remember our friends at the FTC? They also enforce a law
called the CAN-SPAM act, and under it, you’re legally allowed to email
people without their consent—but for one time only. Even that single contact
can start irritating people, making your uninvited communication do more harm
than good for your brand image, so don’t push the limits here. You’re better
off building your contact lists organically.
4. Insensitive controversy.
Stirring up a bit of healthy controversy can be an
effective way to get more attention ; you can stand out as a thought leader by
presenting an unpopular opinion, and cultivate discussion among your readers.
However, when you venture into a world of controversy haphazardly, you’ll
probably end up making more enemies than new fans. Pepsi made this mistake
recently when they tried to use an ad to introduce their product into a
Black Lives Matter protest —and while the ad tried to evoke a positive tone,
their intentional attempt to get political backfired in a big way.
5. Emotional exploitation.
One of the most effective ways to advertise a business is to
call to people’s emotions. Making them laugh or evoking a sense of nostalgia
helps consumers forge a small bond with your brand. However, when you
intentionally evoke rage or sadness in a tasteless way, you could be seen as
exploiting emotions, rather than sympathizing with them.
Ethical standards for companies are only going to grow more
intense over the next several years. Consumers will have access to newer forms
of technology and more quantities of information, which means greater overall
transparency, and the number of businesses switching to organic and
inbound marketing campaigns will similarly increase, adding competitive
pressure to the mix.
Finance
Finance:- is a field that is concerned with the allocation (investment)
of assets and liabilities over space and time, often
conditions of risk or uncertainty. Finance can also be
defined as the art of money management.
Ethical issues in finance
1)Accuracy
A company’s financial manager ensures that all
financial publications accurately and fairly reflect the financial condition of
the company. Accounting errors and financial fraud, such as what was seen in
the cases of Enron and WorldCom, damage the interests of shareholders,
employees and affect confidence in the financial system. Some organizations
document ethics guidelines specifically for financial managers. For example,
the ethics code of the United States Postal Service requires senior financial
managers to maintain accurate records and books
2)Transparency
Financial documents reflect a company's performance
relative to its peers, and its internal strengths and weaknesses. Regulatory
agencies require publicly traded companies to submit periodic financial
statements and make full disclosures of material information. A change in the
senior executive ranks, buyout offers, loss or win of a major contract and new
product launches are examples of material information. Transparency also means
explaining financial information clearly, especially for those who aren't
familiar with the company’s operations. Financial managers should not hide,
obscure or otherwise render relevant financial information impossible for
ordinary shareholders to understand.
3)Timeliness
Timely
financial information is just as important as accurate and transparent
information. Management, investors and other stakeholders require timely
information to make the right decisions. Many cases exist of a publicly traded
company's stock reacting sharply and negatively to negative earnings surprises
or unpleasant product-related news. For example, a company should promptly
disclose manufacturing problems that could temporarily affect sales
4)Integrity
Financial
managers should strive for unimpeachable integrity. Customers, shareholders and
employees should be able to trust a financial manager's words. Managers should
not allow prejudice, bias and conflicts of interest to influence their actions.
Managers should disclose real or apparent conflicts of interest, such as an
investment position in a stock or an ownership interest in one of the bidding
companies for a procurement contract. The structure of certain stock-based
incentive compensation schemes could also result in ethical issues.
Unethical issues in finance
1) Deliberate abnormal delays in payments to (a) Vendors, (b)
Dealers commissions and promotion costs.
2) Delays in paying wages, interest to financiers, incentive,
bonus to employees.
3) Holding up bills of vendors on silly reasons and
ultimately buying from others to avoid payment to earlier vendors.
4) Not prompt in statutory payments of ESI, PF, Sales Tax and
Excise Duties.
5) Cheating employees of their dues towards medical expenses,
leave travel assistance, children education fees etc.,
6) Opening of current accounts in different banks to avoid
adjustments against loans by earlier banker.
7) Creating bogus bills of purchase to show higher costs and
hence losses to avoid bonus payment to employees.
