This document discusses emerging ethical issues in business. It begins by explaining the importance of recognizing ethical issues and identifying foundational values like honesty, integrity, and fairness. The document then explores specific ethical issues and dilemmas businesses may face, such as misuse of company time/resources, abusive behavior, lying, conflicts of interest, bribery, corporate intelligence, discrimination, and more. It also addresses the challenge of determining what constitutes an ethical issue in business decisions.

1. CHAPTER 3 :
EMERGING BUSINESS ETHICS
ISSUES

2. TABLE OF CONTENT
 Summary
 Recognizing an Ethical Issue (Ethical Awareness)
 Foundational Values for Identifying Business Ethics Issues
 Ethical Issues and Dilemmas in Business
 Misuse of company time and resources
 Abusive or intimidating behaviour
 Lying
 A conflict of interest
 Bribery
 Corporate Intelligence
 Discrimination
 Sexual Harassment
 Fraud
 Financial Misconduct
 Insider Trading
 Intellectual Property Rights
 Privacy Issues
 The Challenge of Determining an Ethical Issue in Business

3. SUMMARY
 In this chapter, we consider some of the ethical issues
emerging in business today, including how they arise from the
demands of specific stakeholder groups.
 In the first half of the chapter, we explain certain universal
concepts that pervade business ethics, such as integrity,
honesty, and fairness.
 The second half of the chapter explores a number of emerging
ethical issues, including misuse of company time and
resources, abusive and intimidating behavior, lying, conflicts of
interest, bribery, corporate intelligence, discrimination, sexual
harassment, fraud, financial misconduct, insider trading,
intellectual property rights, and privacy.
 We also examine the challenge of determining decisions that
have an ethical component for the firm to consider.

4. RECOGNIZING AN ETHICAL
ISSUE (ETHICAL
AWARENESS)
 The first step in understanding business ethics is to develop
ethical issue awareness.
 Awareness arises because of conflicts among individuals’
personal moral philosophies and values, the values and culture
of the organizations in which they work, and those of the
society in which they live.
 Failure to acknowledge ethical issues puts corporations at
great risk, particularly in industries where business is perceived
as a game that must be won at all costs.
 An ethical issue is a situation or a problem that requires
thought, discussion, or investigation in order to make a
decision.

5. Next, a video on
Creating ethical cultures in
business: Brooke Deterline at
TEDxPresidio

6. FOUNDATIONAL VALUES FOR
IDENTIFYING BUSINESS ETHICS
ISSUES
 Understanding foundational
values can help identify and
develop discussions and a
constructive dialogue on
appropriate conduct.
 Honesty, fairness and integrity are
the glue that holds businesses
together.
Three
Foundational
Values
Honesty
Integrity
Fairness

7. FOUNDATIONAL VALUES FOR
IDENTIFYING BUSINESS ETHICS
ISSUES
 Honesty refers to truthfulness or
trustworthiness. Issues related
to honesty also arise because
business is sometimes regarded
as a “game,” governed by its
own rules rather than by those of
society.
 Dishonesty is a lack of integrity,
incomplete disclosure, and an
unwillingness to tell the truth.
Lying, cheating, and stealing are
actions usually associated with
dishonest conduct.
Three
Foundational
Values
Honesty
Integrity
Fairness

8. FOUNDATIONAL VALUES FOR
IDENTIFYING BUSINESS ETHICS
ISSUES
 Integrity refers to being whole,
sound, and in an unimpaired
condition. In an organization, it
means uncompromising
adherence to ethical values.
Three
Foundational
Values
Honesty
Integrity
Fairness

9. FOUNDATIONAL VALUES FOR
IDENTIFYING BUSINESS ETHICS
ISSUES
 Fairness is the quality of being
just, equitable, and impartial.
 In business, equality is about the
distribution of benefits and
resources. This distribution could be
applied to stakeholders or the
greater society.
 Reciprocity is an interchange of
giving and receiving in a social
relationship. It is the return of small
favors of approximately equal value.
 Optimization is the trade-off
between equity (that is, equality or
fairness) and efficiency (that is,
maximum productivity).
Three
Foundational
Values
Honesty
Integrity
Fairness

10. Next, a video on
The Significance of Ethics and
Ethics Education in Daily Life |
Michael D. Burroughs | TEDxPSU

11. ETHICAL ISSUES AND
DILEMMAS IN
BUSINESS

12. ETHICAL ISSUES AND
DILEMMAS IN BUSINESS
Ethical Issue
 An ethical issue is a
problem, situation, or
opportunity that requires an
individual, group, or
organization to choose
among several actions that
must be evaluated as right
or wrong, ethical or
unethical.
Ethical Dilemma
 An ethical dilemma is a
problem, situation, or
opportunity that requires an
individual, group, or
organization to choose
among several actions that
have negative outcomes.

13. TYPES OF ETHICAL
ISSUES AND DILEMMAS IN
BUSINESS

14. TYPES OF ETHICAL ISSUES
AND DILEMMAS IN BUSINESS
1. Misuse of company time and
resources
2. Abusive or intimidating
behaviour
3. Lying
4. A conflict of interest
5. Bribery
6. Corporate Intelligence
7. Discrimination
8. Sexual Harassment
9. Fraud
10.Financial Misconduct
11.Insider Trading
12.Intellectual Property Rights
13.Privacy Issues
14.Environmental Issues

15. TYPES OF ETHICAL
ISSUES AND DILEMMAS IN
BUSINESS
MISUSE OF COMPANY
TIME AND RESOURCES

16. Misuse of company time and
resources
A Major Misconduct
 Misuse of company time
and resources is a major
form of observed
misconduct in
organizations.
Computer and Internet
 Using company computer
software and Internet
services for personal
business is one of the
most common ways
employees misuse
company resources.
 Many companies, like
Boeing, have implemented
official policies delineating
acceptable use of
company resources.

17. Next, a video on
Misusing the Company's Computer |
Dodging Landmines

18. TYPES OF ETHICAL
ISSUES AND DILEMMAS IN
BUSINESS
ABUSIVE OR INTIMIDATING
BEHAVIOUR

19. ABUSIVE OR INTIMIDATING
BEHAVIOR
Common for Employees
 Abusive or intimidating
behavior is a common
ethical problem for
employees.
What is abusive or
intimidating means?
 The concepts of abusive or
intimidating behavior can
mean anything from physical
threats, false accusations,
annoying behavior, profanity,
insults, yelling, harshness,
ignoring someone, or even
unreasonableness.
 The meaning of these words
can differ from person to
person.

20. ABUSIVE OR INTIMIDATING
BEHAVIOR
Importance of Intent
 Intent is an important
factor in determining
whether a situation is
abusive.
Bullying
 Bullying is associated with a
hostile workplace where a
person or group is
threatened, harassed or
overly criticized.
 The concept of bullying is
now considered a legal
issue, with millions of
Americans reporting having
experienced or witnessed
bullying at work.

21. Next, a video on
Bullying and Corporate
Psychopaths at Work: Clive Boddy
at TEDxHanzeUniversity

22. TYPES OF ETHICAL
ISSUES AND DILEMMAS IN
BUSINESS
LYING

23. LYING
 Lying relates to distorting the
truth.
 The point at which a lie becomes
unethical in business is based on
the context of the statement and
its intent to distort the truth. A lie
becomes illegal if it is determined
by the judgment of courts to
damage others.
 There are three types of lies
Omission Lying
Commission
Lying
Joking

24. LYING
 Joking without malice
Omission Lying
Commission
Lying
Joking

25. LYING
 Commission lying is creating a
perception or belief by words that
intentionally deceive the receiver of the
message.
 Commission lying involves using words
or creating noise that intentionally
confuse the receiver of a message.
Noise can be the intentional use of
modes of communication that the
sender knows the receiver does not
fully understand.
Omission Lying
Commission
Lying
Joking

26. LYING
 Omission lying is intentionally not
informing others of any differences,
problems, safety warnings, or negative
issues related to the product or
company that significantly affects
awareness, intention, or behavior.
Omission Lying
Commission
Lying
Joking

27. Next, a video on
How to Deal with a Lying Co-Worker

28. TYPES OF ETHICAL
ISSUES AND DILEMMAS IN
BUSINESS
A CONFLICT OF INTEREST

29. A CONFLICT OF
INTEREST
 A conflict of interest exists
when an individual must choose
whether to advance his or her
own interests, those of the
organization, or those of some
other group.
 To avoid conflicts of interest,
employees must be able to
separate their private interests
from business dealings.
Separation
of Interest
Personal
Dealings
Business
Dealings

30. Next, a video on
Conflict of Interest

31. TYPES OF ETHICAL
ISSUES AND DILEMMAS IN
BUSINESS
BRIBERY

32. BRIBERY
 Bribery is the practice of
offering something (usually
money) in order to gain an illicit
advantage.
 Bribery can be defined as an
unlawful act, but it can also be a
business ethics issue in that a
culture includes such fees as
standard practice.
 Types of Bribery
Types
of
Bribery
Active
Bribery
Passive
Bribery

33. BRIBERY
 Active bribery means that the
person who promises or gives
the bribe commits the offense.
Types
of
Bribery
Active
Bribery
Passive
Bribery

34. BRIBERY
 Passive bribery is an offense
committed by the receiver of the
bribe.
Types
of
Bribery
Active
Bribery
Passive
Bribery

35. BRIBERY
 Facilitation payments to obtain or retain business do
not constitute bribery payments in the United States,
as long as they are small.
 However, the legality of this practice varies in other
countries.

36. Next, a video on
Dilemma: Bribery in International
Business: Ethics and the Foreign
Corrupt Practices Act

37. TYPES OF ETHICAL
ISSUES AND DILEMMAS IN
BUSINESS
CORPORATE
INTELLIGENCE

38. CORPORATE INTELLIGENCE
(CI)
What is CI?
Corporate intelligence is the collection
and analysis of information on markets,
technologies, customers and competitors,
as well as on socioeconomic and external
political trends.
CI involves in-depth discovery of
information from corporate and court
documents, regulatory filings, and press
releases. CI is not an ethical issue if the
information is obtained legally.
However, there are a number of
questionable or illegal techniques used to
collect information.
Tools of CI
Hacking
Social
Engineering
Dumpster
diving
Whacking
Phone
Eavesdropping

39. CORPORATE INTELLIGENCE
(CI)
 Hacking is one of the top
methods for obtaining trade
secrets.
 System hacking assumes
that the attacker already has
access to a user account
 Remote hacking involves
remotely trying to penetrate a
computer system via the
Internet
 Physical hacking requires
that an agent personally enter
a facility
Tools of CI
Hacking
Social
Engineering
Dumpster
diving
Whacking
Phone
Eavesdropping

40. CORPORATE INTELLIGENCE
(CI)
 Social Engineering is another
popular method of obtaining
valuable corporate information.
Social Engineering is tricking or
fooling individuals into revealing
their passwords or other
valuable corporate information.
 Shoulder surfing is when
someone looks over an
employee’s shoulder to obtain
a password
 Password guessing is self-
explanatory
Tools of CI
Hacking
Social
Engineering
Dumpster
diving
Whacking
Phone
Eavesdropping

41. CORPORATE INTELLIGENCE
(CI)
 Dumpster diving is a messy but
very successful way to acquire
trade secrets. Once trash is
discarded onto a public street or
alley, it is considered fair game.
Tools of CI
Hacking
Social
Engineering
Dumpster
diving
Whacking
Phone
Eavesdropping

42. CORPORATE INTELLIGENCE
(CI)
 Whacking is wireless hacking.
Tools of CI
Hacking
Social
Engineering
Dumpster
diving
Whacking
Phone
Eavesdropping

43. CORPORATE INTELLIGENCE
(CI)
 Phone Eavesdropping is yet
another tool for CI agents. A
person with a digital recording
device can monitor and record a
fax line.
Tools of CI
Hacking
Social
Engineering
Dumpster
diving
Whacking
Phone
Eavesdropping

44. Next, a video on
Competitive intelligence Early
warning for threats and
opportunities

45. TYPES OF ETHICAL
ISSUES AND DILEMMAS IN
BUSINESS
DISCRIMINATION

46. DISCRIMINATION
Discrimination on the basis of race, color, religion, sex,
marital status, sexual orientation, public assistance status,
disability, age, national origin, or veteran status is illegal in
the United States.
A company in the United States can be sued for
discrimination if it:
 Refuses to hire an individual for discriminatory reasons
 Maintains a system of employment that unreasonably
excludes an individual from employment
 Unreasonably discharges an individual
 Discriminates against an individual with respect to hiring,
employment terms, promotion, or privileges of employment
as it relates to discrimination

47. DISCRIMINATION
 The Equal Employment Opportunity Commission (EEOC)
handles discrimination filings.
 The Age Discrimination in Employment Act specifically
outlaws hiring practices that discriminate against people 40
years of age or older, as well as those that require employees
to retire before the age of 70.
 Many companies have initiated affirmative action programs,
which involve efforts to recruit, hire, train, and promote qualified
individuals from groups that have traditionally been
discriminated against on the basis of race, gender, or other
characteristics. These programs may be mandated from the
federal level, but many companies opt to implement them
voluntarily. Discrimination can also be an ethical issue in
business when companies use race or other personal factors to
discriminate against specific groups of customers.

48. AFFIRMATIVE ACTION
PROGRAMME IN MALAYSIA
 New Economic Policy 1971
 Equality in wealth distribution amongst three (3) major
ethnic groups in Malaysia i.e Malay, Chinese, Indian
 Why it has been perceived as a discrimination?
48

49. Next, a video on
Affirmative Action: Crash Course
Government and Politics #32

50. TYPES OF ETHICAL
ISSUES AND DILEMMAS IN
BUSINESS
SEXUAL HARASSMENT

51. SEXUAL HARASSMENT
 Sexual harassment is a form of sex discrimination
that violates Title VII of the Civil Rights Act of 1964. It
is defined as a repeated, unwanted behavior of a
sexual nature perpetrated upon one individual by
another.

52. SEXUAL HARASSMENT
 To establish sexual harassment, an employee must
understand the definition of a hostile work
environment, for which three criteria must be met:
 The conduct was unwelcome
 The conduct was severe, pervasive, and regarded by the
claimant as so hostile or offensive as to alter his or her
conditions of employment
 The conduct was such that a reasonable person would
find it hostile or offensive

53. SEXUAL HARASSMENT
 The key ethical issue within sexual harassment is
called dual relationship, which is defined as a
personal, loving, and/or sexual relationship with
someone with whom you share professional
responsibilities.
 An unethical dual relationship is one where the
relationship causes a conflict of interest or risk of
impairment to professional judgment.
 Consent is created if any sexual relationship is
considered mutual.

54. Next, a video on
Preventing Sexual Harassment At
The Workplace

55. TYPES OF ETHICAL
ISSUES AND DILEMMAS IN
BUSINESS
FRAUD

56. FRAUD
What is Fraud?
 In general, fraud is any
purposeful communication
that deceives, manipulates,
or conceals facts in order to
harm others.
 Fraud is a crime that can
result in fines and/or
imprisonment.
Types of Fraud
Types
of
Fraud
Accounting
Fraud
Marketing
Fraud
Consumer
Fraud

57. FRAUD
 Accounting fraud usually involves
falsifying information about a
corporation’s financial reports, which
would otherwise provide important
information about the financial health
of the company to investors and
other stakeholder groups.
 Accountants today feel increased
pressure to perform, to keep fees
low, and must follow complicated
regulations—all of which can
contribute to the pressure to commit
fraud.
Types of Fraud
Types
of
Fraud
Accounting
Fraud
Marketing
Fraud
Consumer
Fraud

58. FRAUD
 Marketing fraud is the process
of dishonestly creating,
distributing, promoting, and
pricing products.
 Serious ethical issues can
occur in this area.
 False or misleading marketing
communications can destroy
stakeholder trust in a
corporation.
 False or deceptive advertising
is a key issue in marketing
communications.
Types of Fraud
Types
of
Fraud
Accounting
Fraud
Marketing
Fraud
Consumer
Fraud

59. FRAUD – MARKETING FRAUD
 Puffery can be defined as exaggerated
advertising, blustering, and boasting
upon which no reasonable buyer would
rely.
 Implied falsity means that an
advertising message has a tendency to
mislead, confuse, or deceive the public.
 Literally false claims can be divided
into tests prove (establishment claims),
when the advertisement cites a study or
test that establishes the claim; and bald
assertions (non-establishment claims),
when the advertisement makes a claim
that cannot be substantiated, as when a
commercial states a certain product is
superior to any other on the market.
Categories of Misleading
Advertisements
Categories
Puffery
Implied
Falsity
Literally
False

60. FRAUD
 Consumer fraud occurs
when consumers attempt to
deceive businesses for their
own gain.
 There are many different
ways of engaging in
consumer fraud, from
stealing from stores, to
price tag switching, to lying
to obtain discounts.
Types of Fraud
Types
of
Fraud
Accounting
Fraud
Marketing
Fraud
Consumer
Fraud

61. FRAUD
 Collusion involves an employee
who helps a consumer commit
fraud.
 Duplicity involves a consumer
duping a store. For example, a
customer who stages an
accident and then sues the store
for damages is engaging in
duplicity.
 Guile is associated with a
person who knows right from
wrong but uses tricks to obtain
an unfair advantage.
Types of Consumer Fraud
Types of
Consumer
Fraud
Collusion
Duplicity
Guile

62. TYPES OF ETHICAL
ISSUES AND DILEMMAS IN
BUSINESS
FINANCIAL MISCONDUCT

63. FINANCIAL MISCONDUCT
 The failure to understand and manage ethical risks played a
significant role in the financial crisis. The 2008 global
recession was caused in part by a failure on the part of the
financial industry to take appropriate responsibility for its
decision to utilize risky and complex financial instruments.
 Corporate cultures were built on rewards for taking risks
rather than rewards for creating value for stakeholders.

64. FINANCIAL MISCONDUCT
 Major Ethical Financial Misconduct Leading to 2008 Global
Recession
 Subprime lending and
 executive compensation in poorly performing or failed firms
 The Dodd- Frank Wall Street Reform and Consumer Protection Act
was passed in 2010 to increase accountability and transparency in
the financial industry and protect consumers from deceptive
financial practices. The act established a Consumer Financial
Protection Bureau (CFPB) to protect consumers from unsafe
financial products.
 Remember that top executives are ultimately responsible for
decisions made by the employees of their companies. Regulatory
systems in place failed to catch the systemic risks that were at play
during the financial industry meltdown.

65. Next, a video on
The Enron Scandal Explained in One
Minute: Corporate Recklessness, Lies
and Bankruptcy

66. TYPES OF ETHICAL
ISSUES AND DILEMMAS IN
BUSINESS
INSIDER TRADING

67. INSIDER TRADING
Insider Trading. An insider is any officer, director, or
owner of ten percent or more of a class of a company’s
securities.

68. INSIDER TRADING
 Illegal insider trading is the
buying or selling of stocks by
insiders who possess
information that is not yet
public.
 Legal insider trading involves
legally buying and selling stock
in an insider’s company, but
not all of the time. Insiders are
required to report their trades
within two days of the
transaction.
Types of Insider Trading
Legal
Insider
trading
Illegal
Insider
Trading

69. TYPES OF ETHICAL
ISSUES AND DILEMMAS IN
BUSINESS
INTELLECTUAL PROPERTY
RIGHTS

70. INTELLECTUAL PROPERTY
RIGHTS
Intellectual Property Rights involve the legal
protection of intellectual property (IP), such as music,
books, and movies.
 Digital copyrights continue to be a controversial issue
in the United States and across the world, and
existing laws are often difficult to enforce.

71. TYPES OF ETHICAL
ISSUES AND DILEMMAS IN
BUSINESS
PRIVACY ISSUES

72. PRIVACY ISSUES
 Many privacy issues come
into play in the business
world.
 Some issues that managers
should consider involve
monitoring employee use of
technology and consumer
privacy.
 It can be a challenge for
businesses today to meet the
needs of consumers while at
the same time protecting
their privacy.
Employee
Privacy
Issues
Consumer
Privacy
Issues

73. PRIVACY ISSUES
 There are few legal protections of an
employee’s right to privacy while at
work, which allows employers a great
deal of leeway in monitoring employees.
 Electronic monitoring allows a
company to determine whether
productivity is lower than it could be
because employees are spending too
much time on personal activities.
 Practices that respect employee
privacy but do not abdicate the
employer’s responsibility help create a
climate of trust that promotes
opportunities for resolving employee–
employer disputes without lawsuits.
Employee
Privacy
Issues
Consumer
Privacy
Issues

74. PRIVACY ISSUES
 There are two dimensions
to consumer privacy:
 Consumer awareness of
information collection
 Growing lack of consumer
control over how companies
use the personal information
they collect.
Employee
Privacy
Issues
Consumer
Privacy
Issues

75. Next, a video on
Facebook's Cambridge Analytica
data scandal, explained

76. TYPES OF ETHICAL
ISSUES AND DILEMMAS IN
BUSINESS
ENVIRONMENTAL ISSUES

77. ENVIRONMENTAL ISSUES
 Kyoto protocol: international and global treaty in
a world commitment to reducing emission of
carbon dioxide in an attempt to reducing the
global warming and pollution(USA did not sign
the treaty).
 Water pollution
 30 million plastic bottles are thrown daily for a
total 11 billion a year in the US
 Nuclear power VS Green Energy Practices
77

78. THE CHALLENGE OF
DETERMINING AN ETHICAL
ISSUE IN BUSINESS

79. The Challenge of Determining an
Ethical Issue in Business
 Most ethical issues will become
visible through stakeholder concerns
about an event, activity, or the results
of a business decision.
 Determining ethical issues is a
constant challenge. Over time,
problems can become ethical
issues as a result of changing
societal values.
 Stakeholders trigger ethical issue
awareness and individuals openly
discuss it and ask for guidance and
the opinions of others
 Once discussed, one enters the
ethical decision-making process.
Ethical Issues
Visible to
stakeholder
Stakeholders
discuss the
issues
Enters the
Ethical
Decision
Making
Process

80. “RESOLVING ETHICAL
BUSINESS CHALLENGES”
NOTES
 In this case, recent graduate, Daniel, must decide how to handle
the contradictions between writing copy for a product being
endorsed by a person who no longer uses it. YOLO wants to use
celebrity endorser, Gloria Kunies, to endorse a bacon product
produced by Delicious Uber Bacon Ingredients Extraordinaire
Corporation. While Gloria has consumed and enjoyed the bacon
product in the past, she is currently a vegetarian for health reasons
she attributed in part to consuming bacon.
 While her endorsement does not officially break any laws, Daniel
believes it is dishonest and a contradiction to have a vegetarian
promoting bacon. Ask the students if the situation in any way
violates the concepts of fairness, honesty, and integrity. What are
the potential repercussions for Delicious Uber Bacon Ingredients
Extraordinaire Corporation and YOLO if consumers discover Gloria
is now a vegetarian? What would the students do if they were in
Daniel’s place?

81. Discussion Question
 https://www.chegg.com/homework-help/daniel-
graduated-michigan-university-landed-job-copywriter-
y-chapter-3-problem-2req-solution-9781285974644-
exc