2. LAYOUT
• INTRODUCTION
• ETHICS IN HRM
• MARKETING ETHICS
• ETHICAL ASPECTS OF FINANCIAL MANAGEMENT
• TECHNOLOGY ETHICS AND PROFESSIONAL ETHICS.
2Prepared by: Ms. Himani R.
3. INTRODUCTION
• ETHICS IN ORGANIZATION IS THE ETHICAL
TREATMENT OF EMPLOYEES,
STOCKHOLDERS, OWNERS, PUBLIC, ETC.
• ETHICS AND ETHICAL BEHAVIOR ARE THE
ESSENTIAL PART OF THE HEALTHY
ENVIRONMENT.
• ETHICAL BEHAVIOR IMPROVES THE
WORK ATMOSPHERE AND HELPS TO
MOTIVATE EMPLOYEES, EVOKES A SENSE
OF PRIDE FOR THE COMPANY AND
IMPROVES PUBLIC IMAGE.
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4. LEVELS OF ORGANIZATIONAL
ETHICS
• Company
concentrat
es on its
long term
goals for
the benefit
of society.
Social
Responsibilit
y
• Company
shows
carelessne
ss for the
consequen
ces of it’s
actions.
Social
Disregard • Company
adjusts its
policies
according
to the
social
conditions,
demands
&
pressures.
Social
Responsiven
ess
• Company
does not
extend its
activity any
further
than
meeting its
legal
responsibil
ities.
Social
Obligation
4Prepared by: Ms. Himani R.
5. ETHICS IN HRM
• HRM IS THE PROCESS OF PLANNING, ORGANIZING,
DIRECTING AND CONTROLLING HUMAN ACTIVITIES
TO ACHIEVE THE ORGANIZATIONAL GOAL AND
INDIVIDUAL GOALS.
• ETHICS ARE THOSE VALUES, WHICH HAS BEEN
IMBIBED WITHIN AN INDIVIDUAL ON REINFORCED
EXTERNALLY THAT HELP HIM TO DISTINGUISH
BETWEEN RIGHT AND WRONG AND TO ACT
ACCORDINGLY.
• THERE CAN BE SEVERAL SOURCES OF ETHICS LIKE
RELIGION, ORGANIZATIONAL CULTURE, LEGAL
OBLIGATIONS ETC.
5Prepared by: Ms. Himani R.
6. AREAS OF HRM ETHICS
• BASIC HUMAN RIGHTS, CIVIL AND
EMPLOYMENT FIGHT. (E.G. JOB
SECURITY, FEEDBACK FROM
TESTS);
• SAFETY IN THE WORKPLACE;
• PRIVACY;
• JUSTIFIABLE TREATMENT TO
EMPLOYEES. (E.G. EQUITY AND
EQUAL OPPORTUNITY);
• RESPECT, FAIRNESS AND
HONESTY BASED PROCESS IN
THE WORKPLACE.
6Prepared by: Ms. Himani R.
7. ROLE OF HR IN PROMOTING
ETHICS
• IMPROVE RECRUITMENT AND SELECTION TESTS
• CONDUCT ETHICS TRAINING
• ENSURE THAT THERE ARE NO PITFALLS IN PERFORMANCE
APPRAISAL
• REWARDS AND DISCIPLINARY SYSTEM
• IMPROVE AND FACILITATE TWO WAY COMMUNICATION
• AVOID ANY KIND OF DISCRIMINATION AMONG THE
EMPLOYEES BASED ON CERTAIN FACTORS LIKE CASTE,
COLOUR, CULTURE, RELIGION, APPEARANCES ETC.
• EQUAL OPPORTUNITIES MUST BE GIVEN TO EVERY
EMPLOYEE FOR HIS ADVANCEMENT AND DEVELOPMENT.
• MEASURES SHOULD BE TAKEN FOR EMPLOYEE SAFETY
WHILE WORKING IN THE ORGANIZATION.
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8. UNETHICAL PRACTICES OF HRM
1. EMPLOYERS
• CREATING SPLIT IN UNION LEADERS;
• BIASED ATTITUDE IN SELECTION, TRANSFER, PROMOTION ETC.;
• OFF-SHORING AND EXPLOITING ‘CHEAP’ LABOUR MARKETS;
• CHILD LABOUR;
• RENEGING(BREAKING PROMISES) ON COMPANY PENSION
AGREEMENTS;
• PHYSICAL VIOLENCE;
• COERCION (FORCING);
• LONGER AND INFLEXIBLE WORKING HOURS;
• PUTTING ON MORE STRESS ON EMPLOYEES FOR INCREASING
THE PRODUCTIVITY;
• THE USE OF DISPUTED AND DUBIOUS PRACTICES IN HIRING AND
FIRING OF PERSONNEL. 8
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9. CONTINUED
2. EMPLOYEES
• FALSE CLAIM OF PERSONAL DETAILS LIKE AGE,
QUALIFICATIONS ETC.
• PRODUCING FALSE CERTIFICATES.
• TAKING DECISIONS AS PER THEIR CONVENIENCE.
3. GOVERNMENT
• ANNOUNCING THE VACANCIES AND NOT TAKING ANY ACTION
FURTHER.
• FUNCTIONING OF GOVERNMENT OFFICES IS NOT
TRANSPARENT AND RELIABLE.
• SELECTION COMMITTEES WILL BE EXCESSIVELY CAUTIOUS
OF RESERVATION QUOTAS AND POSSIBLE COURT CASES
RATHER THAN GAINING THROUGH THE RESPONSIBILITIES.
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10. MARKETING ETHICS
• ETHICS: IS THE ART & SCIENCE OF DETERMINING GOOD AND
BAD OR RIGHT OR WRONG MORAL BEHAVIOR.
• MARKETING: IS THE PROCESS OF COMMUNICATING THE VALUE
OF A PRODUCT OR SERVICES TO CUSTOMERS FOR THE
PURPOSE OF SELLING IT.
• MARKETING ETHICS: IS THE AREA OF APPLIED ETHICS WHICH
DEALS WITH THE MORAL PRINCIPLES BEHIND THE OPERATIONS
AND REGULATIONS OF MARKETING.
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13. WHY ETHICS IN FINANCE IS
NECESSARY?
• ETHICS PURIFIES THE
INDUSTRY.
• ETHICS SET THE STANDARDS
OF EXCELLENCE FOR
PROFESSIONALS IN
FINANCIAL SERVICES.
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•ETHICS IN THE FINANCIAL
SERVICES INDUSTRY AFFECT
ALL, EVEN THE CONSUMERS.
•IF YOU ARE NOT A FINANCIAL
SERVICES PROFESSIONAL,
YOU’RE A CONSUMER OF
FINANCIAL SERVICES.
14. ETHICAL ASPECTS OF FINANCIAL
MANAGEMENT
• WHEN YOU THINK ABOUT IT, YOU REALIZE THAT
YOU PUT YOUR HARD-EARNED SAVINGS IN THE
CARE OF FINANCIAL FIRMS – ASSET MANAGERS,
BANKS, INSURANCE, AND ALL KINDS OF FUNDS –
AND YOU TRUST THEM TO LOOK AFTER THE
MONEY.
• YOU WANT THE BEST RETURN, BUT THERE IS A
BALANCE BETWEEN RISK AND REWARD.
• YOU NEED TO FEEL CONFIDENT THAT YOU CAN
TRUST THE FINANCE PROFESSIONALS TO ACT
WITH INTEGRITY, IN YOUR INTERESTS.Prepared by: Ms. Himani R. 14
15. ETHICAL VIOLATIONS IN FINANCE
1. INSIDER TRADING
• INSIDER TRADING IS THE TRADING OF A CORPORATIONS
STOCK OR OTHER SECURITIES (E.G. BONDS OR STOCK
OPTIONS) BY INDIVIDUALS WITH POTENTIAL ACCESS TO
NON-PUBLIC INFORMATION ABOUT THE COMPANY
• SUCH A TRADE IS MOTIVATED BY THE POSSIBILITY OF
GENERATING EXTRAORDINARY GAIN WITH THE HELP OF
NONPUBLIC INFORMATION (INFORMATION NOT YET
MADE PUBLIC).
• IT GIVES THE TRADER AN UNFAIR ADVANTAGE OVER
OTHER TRADERS IN THE SAME SECURITY.
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16. CONTINUED
• 2-STAKEHOLDER INTEREST V/S STOCKHOLDER INTEREST
• SHAREHOLDERS HOLD SHARES IN THE COMPANY – THAT IS
THEY OWN PART OF IT.
• STAKEHOLDERS HAVE AN INTEREST IN THE COMPANY BUT DO
NOT OWN IT (UNLESS THEY ARE SHAREHOLDERS).
• OFTEN THE AIMS AND OBJECTIVES OF THE STAKEHOLDERS ARE
NOT THE SAME AS SHAREHOLDERS AND THEY COME INTO
CONFLICT.
• THE CONFLICT OFTEN ARISES BECAUSE WHILE
SHAREHOLDERS WANT SHORT-TERM PROFITS.
• THE OWNERS OFTEN HAVE TO BALANCE THEIR OWN WISHES
AGAINST THOSE OF THE OTHER STAKEHOLDERS OR RISK
LOSING THEIR ABILITY TO GENERATE FUTURE PROFITS (E.G.
THE WORKERS MAY GO ON STRIKE OR THE CUSTOMERS
REFUSE TO BUY THE COMPANY’S PRODUCTS).Prepared by: Ms. Himani R. 16
17. EXAMPLES OF UNETHICAL
TEMPTATIONS
• MAKE EXAGGERATED CLAIMS TO COUNTER
EXAGGERATED CLAIMS OF A COMPETITOR
• OFFER A CUSTOMER AN UNAUTHORIZED ‘GIFT’ IN
RETURN FOR THEIR BUSINESS
• CONCEAL INFORMATION FROM A CUSTOMER IN
ORDER TO GET THEIR BUSINESS AND TO MEET YOUR
SALES’ GOALS
• PUT NON BUSINESS-RELATED EXPENSES ON YOUR
EXPENSE ACCOUNT
• DIVULGING CONFIDENTIAL INFORMATION ABOUT
ONE CUSTOMER TO ANOTHER IN ORDER TO
FACILITATE A SALE
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18. COMMON REASONS (EXCUSES)
FOR UNETHICAL BEHAVIOR
• 1. ‘EVERYBODY’ ELSE IS DOING IT.
• 2. IT’S NOT THAT BIG OF A DEAL.
• 3. IT’S NECESSARY (THE ENDS JUSTIFY THE MEANS).
• 4. IT’S NOT GOING TO HURT ANYONE.
• 5. IT’S FOR THE BENEFIT OF THE COMPANY/
SOMEBODY ELSE.
• 6. I DESERVE IT.
• 7. IT’S LEGAL.
• 8. NOBODY WILL KNOW.
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19. HOW TO CURB UNETHICAL
PRACTICES
• 1. IMPROVING STANDARDS
• 2. COMPREHENSIVE LAWS
• 3. PLEDGING OF SHARES
• 4. WEAK LINKS
• 5. AUDITORS’ ROLE
• 6. INSTITUTIONAL INVESTORS
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Bid-rigging: The offence of bid‑rigging is committed only if the person requesting the bids or tenders is not informed beforehand about the agreement made between the parties.
Predatory Pricing-the pricing of goods or services at such a low level that other firms cannot compete and are forced to leave the market.
Price fixing: a practice whereby rival companies come to an illicit agreement not to sell goods or services below a certain price.
