The document outlines ethical considerations across various functional areas, including marketing, finance, human resource management, and workplace ethics. It discusses concepts such as market types (perfect competition, monopoly, oligopoly), ethical advertising practices, finance ethics, and the importance of maintaining integrity in recruitment and training processes. The document also addresses issues like sexual harassment, whistle-blowing, and the significance of workplace ethics in fostering a productive and respectful work environment.

1. ETHICS IN FUNCTIONAL AREAS
Dr. SHAILAJA B
ASSOCIATE PROFESSOR

2. Ethics in Marketing
• Marketing is a technique that is used to attract and
persuade customers.
• Marketing provides a way in which a product is sold
to the target audience.
• Marketing is a management process that identifies,
anticipates and supplies consumer requirements
efficiently and effectively.
• The main aim of marketing is to make customers
aware of the products and services.
• It also focuses on attracting new customers and
keeping existing customers interested in the product.

3. Different types of Markets
• Perfect Competition
• Monopoly
• Duopoly
• Oligopoly
• Monopolistic Competition

4. Perfect Competition Market
• Perfect competition is a market system
characterized by many different buyers and
sellers. In the classic theoretical definition of
perfect competition, there are an infinite
number of buyers and sellers.
• With so many market players, it is impossible for
any one participant to alter the prevailing price
in the market. If they attempt to do so, buyers
and sellers have infinite alternatives to pursue.

5. Characteristics of Perfect Competition
• Large Number of Buyers and Sellers
• Freedom of Entry or Exit of Firms
• Homogeneous Product
• Profit Maximization Goal
• Perfect Mobility of Goods and Factors
• Perfect Knowledge of Market Conditions

6. Monopoly Market
• A monopoly is the exact opposite form of market
system as perfect competition. In a pure monopoly,
there is only one producer of a particular good or
service, and generally no reasonable substitute.
• In such a market system, the monopolist is able to
charge whatever price they wish due to the
absence of competition, but their overall revenue
will be limited by the ability or willingness of
customers to pay their price.

7. Characteristics of Monopoly
• Under monopoly, there is one producer or seller of a particular
product and there is no differ­
ence between a firm and an
industry. Under monopoly a firm itself is an industry.
• A monopoly may be individual proprietorship or partnership or
joint stock company or a co­
operative society or a government
company
• A monopolist has full control on the supply of a product. Hence,
the elasticity of demand for a monopolist’s product is zero
• There is no close substitute of a monopolist’s product in the
market. Hence, under monopoly, the cross elasticity of demand
for a monopoly product with some other good is very low
• A monopolist can influence the price of a product. He is a price-
maker, not a price-taker
• Pure monopoly is not found in the real world

8. Oligopoly Market
• Oligopoly is a market situation in which there
are a few firms selling homogeneous or
differenti­
ated products. It is difficult to pinpoint
the number of firms in ‘competition among the
few.’ With only a few firms in the market, the
action of one firm is likely to affect the others.
• An oligopoly industry produces either a
homogeneous product or heterogeneous
products.

9. Characteristics of Oligopoly
• Interdependence
• Advertisement: if all oligopolists continue to
spend a lot on advertising their products and one
seller does not match up with them he will find
his customers gradually going in for his rival’s
product.
• Competition
• Barriers to Entry of Firms
• Lack of Uniformity

10. Ethical Issues in Advertising
• In the advertising field, the ethical issues include decisions on
what business and market a corporate organization should enter.
• Another ethical issue can be the decision on what product
should be provided by a corporate organization to its customers.
• Though it is important that ethical standards be provided for the
advertising of a particular product, it is not easy to establish
common ethical standards which are agreed upon by different
organizations
• However, there is a general view also related to ethics in
advertising. This view is that advertising practices, such as
deceptive advertising, price fixing, holding of product test data,
and falsifying research behavior in the market are unethical
practices.

11. Unethical methods of Advertising
• Organizations follow various methods that are
unethical while advertising for their products
and services.
• These methods are:
Ambiguity
Concealed facts
Exaggeration
Psychological appeal

12. Ambiguity
• Ambiguous advertisements are mostly deceiving for
customers.
• Advertisements become ambiguous when they are wrongly
interpreted and also with, the use of words through which
organizations can avoid making direct statements.
• For example, you can consider the word ‘help’. This word is
used by organizations to ambiguously advertise their
products.
• It can be used in the following ways in advertisement:
• Help us keep young
• Help you improve your complexion
• Help prevent cavities
• Help keep our house insect free

13. Concealed Facts
• Organizations can conceal information related to a
product that may result in less selling of that product
thereby resulting in loss.
• The advertising practice of concealing facts is
unethical because it, in a way, allows the exploitation
of people.
• This way the organizations may be exploiting the
customers and causing serious health injuries to
them. Customers may also not be able to obtain the
products of their choice.

14. Exaggeration
• Organizations may mislead the customers by providing
exaggerated information in the advertisements of their
products. The exaggerated information is information
that is not supported by evidence.
• Organizations can exaggerate information in
advertisements by using superlative phrases.
• For example, an organization manufacturing pain relief
ointments, can exaggerate information by stating that a
pain reliever provides extra pain relief.
• The use of these superlatives may not cause any harm to
customers but may be misleading sometimes.

15. Psychological Appeal
• A psychological appeal is the appeal made
considering the emotions of customers.
• The main objective of psychological appeal is to
persuade customers to purchase products by
appealing to their emotions and not to reason.
• For example, consider a car advertisement which
focuses on the desire of the elite class to achieve
status.
• Through psychological appeal, the organizations
make promises about their product that are not
fulfilled when customers buy the products.

16. ETHICS IN FINANCE

17. WHAT IS FINANCE
• Finance means fund or other financial resources; it deals with
matter related to money and the market. The field of finance
refers to the concept of time, money and risk and how they are
interrelated. Banks are the main facilitators of funding. Funding
means asset in the form of money.
• Finance is the set of activities that deals with the management of
funds. It helps in making the decision like how to use the
collected fund.
• It is also art and science of determining if the funds of an
organization are being used in a right manner or not.
• Through financial analysis, any company or business can take
decision in making financial investments, acquisition of company,
selling of company, to know the financial standing of their
business in present, past and future. It helps to stay competitive
with others in making strategic financial decisions. Finance is
the backbone of business; no business can run without finance.

18. WHAT IS ETHICS IN FINANCE
• Ethics in finance is one of the main things which everyone
has to follow from the small, medium and big
level company because almost all the country depend up
on the financial background of the country because
without financial component no business can run for a
long time.
• The assumption of modern financial-economic theory runs
counter to the ideas of honesty, devotion, dependability
and loyalty.
• Ethics in finance may vary from different industries to
different industries but everyone is liable to-do their work
at most good faith. Peoples who involved in
finance activity have to serve both their company and their
customers at most good faith.

19. EFFICIENCY IN FINANCE
• Act with honesty and integrity, avoiding real or
clear conflicts of interest in personal and professional
relationships.
• To provide information which is full, fair, accurate,
complete, objective, relevant, timely and
understandable, including in and for reports and
documents that the Company files with, or submits to,
the other public communications made by the
Company.
• Act in accordance with all applicable laws, rules and
regulations of governments, and other appropriate
private and public regulatory agencies.
• Act in good faith, responsibly, with due
care, competence and carefulness, without
misrepresenting material facts.
• Respect the confidentiality of information acquired in

20. Some Fraud Situations by Management In Finance
• Unduly aggressive financial Targets
• Pressure to reduce tax liabilities
• Non-Financial personnel involved in
accounting matters
• Aggressive accounting practice to keep stock
prices high

21. Insider Trading

22. Introduction
• Insider trading essentially denotes dealing in a company’s
securities on the basis of confidential information relating
to the company which is not published or not known to the
public used to make profit or loss. It is fairly a breach of
fiduciary duties of officers of a company or “connected”
persons as defined under the SEBI regulations,1992,
towards the shareholders.
• The information that is not available to general public
outside the company is termed as insider information. But
if this information is available to general public, it would
have a significant impact on the price of company’s stock

23. Who are insider traders?
• Corporate officers, directors , and employees who traded
the corporations securities after learning of significant ,
confidential corporate developments.
• Friends , business associates, family members , and other
types of such officers , directors , and employees, who
traded the securities after receiving such information.
• Employees of law, banking , brokerage and printing firms
who were given such information to provide services to the
corporation whose securities they traded.
• Govt employees who learned of such information because
of their employment by the Govt .
• Other persons who misappropriated ,and took advantage
of, confidential information from their employers.

24. EFFECTS ON STOCK MARKET
1. Insider trading tends to reduce the size of the
market, and this harms everyone.
2. A decline in the liquidity of stock because it is
harder to find buyers & sellers for stock.
3. Increase in the variability of stock prices
4. A decline in the market’s ability to spread risk.
5. A decline in the market efficiency due to reduce
number of buyers and sellers.
6. A decline in the utility gains available to traders.
7. Insider trading increases the cost of buying and
selling stocks in the market.

25. GREENMAIL
• Greenmail is the practice of buying enough shares in a
company to threaten a hostile takeover so that the
target will repurchase its shares at a premium.
Regarding mergers and acquisitions, the greenmail
payment is made to stop the takeover bid. The target
company is forced to repurchase the stock at a
substantial premium.
• Corporate raids occasionally aim to generate large
amounts of money by hostile takeovers of large, often
undervalued or inefficient (i.e. non-profit-maximizing)
companies, by either asset stripping and/or replacing
management and employees

26. Golden Parachute
• A golden parachute consists of substantial benefits given to
top executives if the company is taken over by another firm
and the executives are terminated as a result of the merger or
takeover. Golden parachutes are contracts with key
executives, and can be used as a type of anti-takeover
measure, often collectively referred to as poison pills, taken by
a firm to discourage an unwanted takeover attempt. Benefits
may include stock options, cash bonuses.
• On June 24, 2013, The Wall Street Journal reported
that McKesson Corporation Chairman and CEO John
Hammergren's pension benefits of $159 million had set a
record for "the largest pension on file for a current executive
of a public company

27. ETHICS IN HUMAN RESOURCE
MANAGEMENT

28. Introduction
• HRM is concerned with the management of the ‘people’
of an organization. The term HRM is used to refer to the
procedures, philosophy, policies, and practices related
to the management of people within an organization.
• HRM is an approach to bring the people and the
organization together so as to achieve the desired goals.
• HRM is responsible for performing various functions like
planning, organizing, directing and controlling of human
resources.
• HRM also involves activities like procurement,
development, compensation and maintenance.

29. Unethical Practices During The Recruitment
Process
• Recruitment of known persons without assessing their abilities
• Recruitment on the basis of financial favors
• Recruitment of the relatives of other employees
• Recruitment based on the recommendations of friend, business
associates and other persons close to the leader
• Recruitment of under qualified persons
• Recruitment of over qualified persons
• Recruitment of less acceptable men when there are better suited
women available for the job.
• Employing children below fourteen years for the job
• Giving less than minimum wages fixed by the government

30. Unethical Practices By Training Manager
• Arranging training only for favorite employees, whether they deserve it or
not
• Employing outsiders for providing training to trainees even when there
are several persons available inside
• Planning and organizing the training programme without even knowing
the need for training
• Organizing training during peak seasons or on days when workload is very
high
• Starting training programmes in an ill-prepared manner
• Extending the time of the training programme to allow the trainees to
have a relaxed time
• Supplying outmoded and old training materials for the purpose of training
• Experimenting with trainees by asking them to set their own timetable for
training

31. Unethical Practices In The Area Of
Administration
• Tampering leave records of the employees
• Giving leaves continuously to favorite employees
• Giving promotions to non-eligible persons merely on
the recommendations of a friend or business associate
• Ignoring issues related to the security of the company
• Interference in various activities of the administration
from the top Management
• Giving the contract for uniforms of the employees to
the wrong companies just for the sake of personal
benefits

32. WORK PLACE SAFETY

33. Ethics in the Workplace
• The application of moral principles, standards
of behavior, or set of values regarding proper
conduct in the workplace as individuals and in
a group setting
• Ethics allow you to distinguish the difference
between right and wrong

34. The Essentials
• Every company is different but they all should
take the following into consideration:
 Trustworthiness
 Respect
 Responsibility
 Fairness
 Caring

35. Relationships and Ethics
o Ethics applies to any relationship between the following
individuals:
 Management/Supervisors
 Colleagues/Employees
 Customers
o Communication is key among management, employees, and
customers in order for respect to be extended to each person
within the organization, and promote relationships that are
based on honesty and integrity
o Be cautious to cross the line between personal friendships in
the workplace and professionalism.

36. Good Workplace Ethics
Staying productive
Be accountable for your actions
Take initiative
Think critically to be able to solve problems
Blowing the whistle
Be punctual
Stay positive
Stay professional
Take pride in your work
Immediately attempting to correct an issue
Set the example

37. How to Encourage Good Ethics in the
Workplace
Fair consequences
Fair treatment
Recognition
Communication (be clear and consistent)
Have office policies
Transparency
Trainings
Have plans of action
Constructive feedback

38. Benefits of Good Ethics in the Workplace
Loyalty
Desirable work environment
Produce results
Build good references
Good office morale
Growth and expansion
Recognition

39. Poor Ethics
 Illegal practices
 Stealing
 Ignoring procedures and
policies
 Abusing confidentiality
agreements
 Falsifying information
 Making decisions for your
own personal gain
 Lack of communication
 Withholding information
 Poor customer services
 Gossiping
 Abusing computer privileges
 Ignoring problems
 Blackmail
 Lying
 Bribes
 Taking on roles that are not
under your job title
 Being unpunctual; poor
attendance

40. Sexual Harassment

41. Introduction
• Sexual Harassment is based on the victims
perception, not the intent
• The victim does not have to be of the opposite sex
• The harasser can be anyone in the work
environment
• The victim does not have to be the person
harassed but could be anyone affected by the
offensive conduct
• The harasser’s conduct must be unwelcome

42. Sexual Harassment consists of :
 Unwelcome sexual advances
 Request for sexual favors
 Verbal or physical conduct of a sexual nature
It can effect:
• The victims work performance and work
• The victims employment status
• The creation of a hostile, intimidating,
offensive work environment

43. Examples of Sexual Harassment
• Sexual comments
• Undue attention
• Verbal and physical sexual advances
• Inappropriate body language
• Visual displays
• Explicit sexual behavior
• Sexual bribery

44. What to do about Sexual Harassment
• The victim should instantly inform the
harasser directly that the conduct is
unwelcome and must stop.
• Report sexual harassment

45. WHISTLE BLOWING

46. Introduction
• Release of information by a member or former
employee of an organization that is evidence of
illegal and or immoral conduct in the organization
or conduct in the organization.
• Whistle Blowing can only be done by an member in
the organization not a witness of a crime or a
reporter.
• Whistle Blowing is something that can be done only
by a member or former member of an organization
• It must be an Information that is not available for
public

47. ……count
• It should be an evidence of some significant kind
of misconduct on the part of an organization.
• Information must be outside normal channel of
communication.
• Release of Information must be something that
is done voluntarily as opposed to being legally
required.
• Whistle Blowing must be undertaken as moral
protest. The motive must be correct some wrong
not to seek vigilance or personal advancement.

48. TYPES OF WHISTLE-BLOWING
• Internal Whistle Blowing: When an individual
advocates beliefs or revelations within the
organization.
• External Whistle Blowing: When and
individual advocates beliefs or revelations
outside the organization.