business ethics ; whistle blowing ; accounting and ethics ; ethics in HRM ; ethics in management ; marketing and ethics ; AMA code ; CRM ; social responsibility marketing ; calcutta university semester 4 business ethics ;

1. PROF. MAHUA MUKHERJEE
UNIT 3 ETHICS IN
MANAGEMENT

2.  The 3 zones of management
1. MARKETING
2. HR
3. ACCOUNTING AND FINANCE
 ETHICS IN WORKPLACE
 VALUES AND ETHICS
 MYTHS OF ETHICS

3.  The term “ethics” is derived from “Ethos” is a
Greek word meaning "character" that is used to
describe the guiding beliefs or ideals that
characterize a community, nation, or ideology.
 Management is derived from a French word
MÁNÁGÉ which means managing of horses.
 Management is managing resources.
 Ethics can be viewed as an input that catalyses
and energises managers and leaders to
contribute their best I 348
 34

4. MARKETING ANDETHICS
 The term MARKET is derived from a Latin word
“MARCATUS” which means a place of trade.
 Marketing refers to
 The activity
 A set of instructions
 Societal processes
by which individuals or groups obtain what they need or
want through
 Creating
 Communicating
 Delivering and
 Freely exchanging
products and services that have value for
 Customers
 Clients
 Partners &
 The society

5. KEY FUNCTIONS OF MARKETING
 Ensure that product offerings are done in
adequate quantities to meet the demands of the
customers.
 Using promotional tools like ads , personal selling
and sales promotion to meet the goods and
services to the needs of the target customers.
 Transferring products from their points of
production to points convenient for customers.
 Warehousing products safely until they are
needed for sale.
 Ensure that product offerings fulfill pre determined
quality and quantity control, standards of size
weight etc.
 Extending credit facilities to channel members or

6. 1. Why should marketers worry about ethics?
2. What roles do moral value play in economic
system?
3. Do competitive pressures conflict with ethical
considerations in marketing?
4. Does legal system provide too many or too few
ethical constraints on the marketer?
MARKETERS SHOULD HAVE A BROAD VIEW OF
ETHICS IF THEY REALLY WANT TO
UNDERSTAND AND SERVE TODAY’S
CUSTOMERSW

7. AREAS OR ZONES OF MARKETINGREQUIRINGETHICS
1) DIRECT MARKETING
DIRECT
MARKETIN
G
FACE TO FACE SELLING
DIRECT MAIL
MARKETING
CATALOGUE MARKETING
TELE MARKETING
DIRECT RESPONSE TELEVISION MARKETING
ONLINE MARKETING
KIOSK MARKETING

8.  The direct marketing is addressing issues of public policy
and ethics.
 Direct marketers know that, left unattended, such problems
will lead to increasingly negative consumer attitudes , lower
response rates and calls for more restrictive State and
Central regulation.
 Honest and well designed marketing offers targeted only
towards consumers who will appreciate and respond to
them.Paid Ad with a
Response
channel
Direct Mail
Out bound
telemarketing
Face to
face sales
call
Centreing
communicati
on

9. 2) MARKETING ETHICS AND CONSUMER RIGHTS
 The laws and regulations are there to protect the
consumers from unethical practices of businesses.
 These laws recognise that the customers have basic
rights in the market place.
 Ultimately each marketer rely on his or her own value
system to determine what is and what is not ethical
 The value system should recognise consumer rights
a) To safety
b) To full information
c) To value of price paid
 Marketers should uphold and advance the integrity,
honour and dignity of the marketing profession by being
honest in serving customers, clients, employees,
suppliers, distributors and the public.

10. MIX
 AS PER AMA CODE
PRODUCTS
&
SERVICES
ADVERTISIN
G
DISTRIBUTIO
N
PRICING
Marketers have
the resposibility
to ensure
producty safety
to disclose all
product risks,
and to identify
any factor that
might change
product
performance.
E.G. Maruti
failed to fulfill
responsibilities
by providing
faulty gear
boxes to 2009
edition Wagon R
cars
Marketers must
avoid deceptive
and misleading
communication,
must not repeat
high pressure
sales tactics
and must avoid
manipulating
consumers to
buy.
E.G. lambart
failed to fulfill
the
responsibilities
when they
advertised
Listerine as
preventing
Suppliers should
not coerce their
intermediaries
into taking
unwanted
products,they
should not create
false shortages to
drive up prices of
their products.
E.g. Chrsler did
not fulfill their
duties when they
forced dealers to
take unwanted
cars during an
economic
downturn
Marketers must
not engage in
price fixing or
predatory pricing
and must disclose
all prices
associated with
the purchase
including service ,
installationa and
delivery.
E.g. GE did not
fulfill these
responsibilities in
1960s where
several of its
executives were
indicated for price
fixing
MARKETIN
G MIX

11.  Some areas not covered by AMA code and hence
unethical
1. An individual to work in a tobacco comp[any if
he thinks it causes cancer
2. An international marketer go into practice of
offering bribes if he sees his competitors doing
so though not supporting it.
3. Duplicating of products.

12. 4)CUSTOMERRELATIONSHIP MANAGEMENT
 It is an approach to manage the interaction of an
organisation with current and potential customers.
 It utilises data analysis about the history of a
consumer with an organisation to improve
business relationships with customers.
 It is deemed ethical as it specifically focuses on
organis customer retention.

13. 5) SOCIALLY RESPONSIBLE MARKETING
 It refers to a marketing philosophy which leads
organisations into determining marketing activities
that are in the best interest of the society as well
as for consumers in present and in the long run.
 Socially responsible marketing advocates that the
qualifying marketing actions should not merely
meet the minimum ethical business guidelines but
voluntarily exceed them.

14. HUMAN RESOURCE
MANAGEMENT
 It is concerned with the management of the
workforce, HR planning and other employee
centric activities in an organisation.
 It is a special branch of business management
where ethics play a crucial role.
 Human beings are most responsible for the
development and empowerment of human
resources involved in the operations and
management of organisations, ethical issues in
the HRM function acquire prime importance.

15. CONCEPT OF HR
 HRM is referred to as a a system of activities and
strategies that focus on the successful
procuring, developing and maintaining
competent employees across all organisational
levels to achieve its goals in an effective and
efficient manner.
 As a key management function,the goal of HRM
is to maximise the contributions of employees in
order to achieve optimal productivity and
effectiveness simultaneously attaining to
individual objectives

16. FUNCTIONS OF HRM
 PROCUREMENT It refers to activities undertaken
by HR managers for filling present and future
positions in an organisation (recruitment,
selection etc)
 DEVELOPMENT It refers to both employee
training & development (management)
 COMPENSATION It refers to establishment of
pay scale &other benefits for the employees
 MAINTAINANCE It aims at retaining experienced
& efficient employees in the organisation –
motivation,job rotation etc
 INTEGRATION It consists of mainly industrial
relations and ensuring good relations between

17. ETHICAL ISSUES IN HRM
 PRIVACY IN SOCIALISATION
Privacy is of such sufficient value that it ought to
be protected.
The issues that must be addressed to in
developing the case for a right of privacy in
employee records and in formulating a company
privacy protection plan for these records
They are

18. INFORMATION ISSUES
Access that
employees have
Steps taken to ensure
the accuracy &
completeness
Means used to gain
Disclosure to
persons outside
the company The persons within
a company who have
access
Use (to which
it is put)
Kind (that is
collected)

19. Ethical challenges arise for HR managers when
certain intrusive acts such as closely monitoring the
activities of employees on close circuittelevisions or
tapping their phones breach the privacy of
employees.
FOR EXAMPLE – The HR manager may also
scrutinise the PCs of employees without their
knowledge or consent.

20. PSYCHOLOGICAL EXPECTANCY
MODEL
It is necessary to understand the usefulness of the
psychological expectancy model for examining the
critical variables in all choice situations, including
ethical decision making.
There are many HRM policies inn the areas of
RECRUITMENT, TRAINING , PERFORMANCE
EVALUATION AND REWARD SYSTEMS that exert
a powerful influence on ethical practices.

21. Whether
managem
ent control
or
surveilanc
e exists
Employee
tends to be
unethical
Action avoided
Employe
e
calculate
s
+
-
Is it
Worth?
Proceed
(Based on individual
Or environmental factors)
Yes
No
1. Possiblity of
making money
2. How much?
3. Social reward?
1. Individual shame experienced
by doing something unetical
2. Punishment given by one’s peers
3. Probability of
getting caught & Paying a penalty

22. RESTRUCTURING AND
LAYOFFS
Employers are generally reagarded as having the
right to make decisions about
 HIRING
 PROMOTION
 DISCHARGE AS WELL AS WAGES
 JOB ASSIGNMENTS AND
 OTHER CONDITIONS OF WORK
Employees have the corresponding right to accept
or to refuse work on the terms offered and
negotiate for more favourable terms

23. WAGES AND SALARIES
IMPLEMENTATION
 2 main issues
FAIRNESS OF WAGES
FAIRNESS OF EMPLOYEE WORKING CONDITIONS
BASIC MORAL
OBLIGATION OF
AN EMPLOYER
PROVIDE
THEM WITH
COMPENSATIO
N
TOWARDS
EMPLOYEES IS TO
(ON THE RATIONAL
VIEW OF THE FIRM)
FREELY AND
KNOWINGLY
AGREED TO
RECEIVE
IN EXCHANGE
FOR THEIR
SERVICES
BASIC MORAL OBLIGATIONS OF AN EMPLOYER

24. No formula exixts for
determining a Fair wage
(with mathematical
exactitude)
EMPLOYERS AND WORKERS INTERESTS ARE TO BE BALANCED
Employer’s interest
in minimising costs
Workers interest in
Providing a decent living
For themselves/ families ++

25. SEXUAL HARRASMENT
VERBAL
NONVERBAL
Every time an employee looks up
the same person and is
staring at them
• Distasteful
Inappropriate facial expressions
• Unprofessional and suggestive
(such as blowing kisses,winking,
suggestive lip movements)
Items of decore inappropriate
• Décor items that are:
Stemigareting such as sexual
remarks on T-shirts ,
cups, glasses, desks etc.
Calling by pet names
•Baby •Sweety •Darling etc
Hear say
• Generating harrassing
campaigns
about a person’s personal life
•Rumors and gossips are
destructive
to people and productivity
Inappropriate sounds and
comments
•Looks • Dress •Comments of a
sexual nature
•Sounds of vulgar nature
Attempting to converse about
• Steering conversations • Fantasy
etc

26. UNDERTAKEN TO ENSURE
ETHICS IN HRM
HUMAN QUALITY DEVELOPMENT
HQG
WESTER
N
AUTHOROTARI
AN
DEMOCRATIC
EASTERN
DIVINE LIKE
DEMONIC LIKE

27. DISCRIMINATORY PRACTICES
DISCRIMI
NATORY
PRACTICE
S
CONDITION
S OF
EMPLOYME
NT
PROMOTIO
N
PRACTICES
SCREENING
PRACTICES
RECRUITME
NT
PRACTICES
DISCHARGE

28. WHISTLE BLOWING
 This term was first used by the Government
employees
 They went to public with complaints of corruption
and mismanagement in government agencies
 This was later used even in private sector
 When any similar activities is noticed, whistle
blowing is an activity by a member or an ex-
member of an organisation to disclose wrong
doing in or by the organisation

29. WHISTLE BLOWING TYPES
INTERNAL
WHISTLE
BLOWING
EXTERNAL
WHISTLE
BLOWING
Wrong doing reported only
to higher authorities
in the organisation;
other means also exist for
employees to register
their concerns with an
assurance of confidentiality
Wrong doing is reported
to external individuals or
bodies such as
Government agencies,
newspapers or public
Interest groups

30. RESOLUTIONOF ETHICAL ISSUES IN HRM
 PROACTIVE ROLE OF TOP
MANAGEMENT
 IMPLEMENTING A CODE OF
ETHICS
 DEVELOPING ETHICS
COMMITTEES AND HOTLINES
 ENCOURAGING WHISTLE
BLOWING
 ETHICS TRAINING

31. ETHICAL ISSSUES IN
ACCOUNTING
AND FINANCE
 Accountants should present a true and fair view
 The picture that an accountant presents can be
either enlightening or misleading depending on
how he or she chooses to deficit it.
 Even within the law, various maneuvers can be
carried out which are often regarded as being in
ethically grey areas
 The most common practice of this kind is known
as “creative accounting” a phrase which is
popularly associated with ‘cooking the books ‘
which is legal although morally dubious

32.  Under reporting of income to avoid taxes is an
illegal practice.
 If caught under reporting, individuals and
companies will be subject to penalties and in
extreme cases criminal charges.
 Unethical accountants could easily alter company
financial records and maneuver numbers to paint
false pictures of company successes
 This may lead to short term prosperity, but altered
financial records will ultimately spell the downfall
of companies when Securities exchange
Commission discovers the fraud.
ALL THE ABOVE ISSUES CAN BE SOLVED
THROUGH GAAP