Ethics in Functional

Areas
Objectives
 Various concepts of Ethics from Indian perspective:

◦ Purusharthas
◦ Ethical principles of Indian management
◦ Cross – cultural influences
 Ethics in Functioning areas:

◦ Finance
◦ Global Marketing
◦ Advertising
◦ IT & E-commerce
◦ Production/Operation
◦ Media & journalism
◦ HR & employment - ILO standards
◦ Environment
 Few scams
Indian Perspective of Ethics

Indian ethos are drawn from vedas,

upanishads and bhagwadgita
Purusharthas is a key factor for Indian Ethics:

◦ Dharma Moksha

◦ Artha
◦ Kama
Kama

◦ Moksha Artha

Dharma
Ethical principles

Indians working pattern has seen the

following characteristics:
◦ Ego sublimation vs ego assertion
◦ Team achievement vs individual
◦ Emphasis on duties vs rights
◦ Concern for world development
◦ Sacrificing vs fighting spirit
◦ Spiritual attainment vs materialistic
Key differences between Western
and Indian perspective

Social mixing
Society approach
Elderly respect
Family values
Emphasis on society, religion
Elements like hard work, smart work
Ethics and cross-culture influence

Each country, community has a unique

culture and ethical base
Due to globalisation, international trade
has increased and lead to cross cultural
influence of ethics
Each country must respect the values
and ethics of the host country and
perform in accordance with their norms
Flashback…
Ethics in Global Marketing
 International trade should respect laws, regulations,
culture and customs of host countries
 Should not exploit weakness of the host country for
commercial benefits
 Product development
◦ Disclosing all substantial risk associated
◦ Disclose details of all component substitutions for
the product or service
◦ Selective marketing
 Pricing
◦ Explain to customers what they pay for, avoid hidden
costs
◦ Price fixing
◦ Price discrimination
◦ Price skimming
◦ Price gouging
 Distribution
◦ Expiry dates of products or services
◦ Transporting goods in a safe and hygienic manner
 Packaging and labeling
◦ Packaged efficiently to protect goods during transit
and transport
◦ Label with all necessary information for customers
 Green marketing
◦ Selling products or goods based on their
environmental benefits
 Guidelines for marketing:
◦ Proper product policy
◦ Eco-friendly production process
◦ Proper pricing policy
◦ Proper distribution scheme
◦ Ethical promotion and advertising policy
 Ethics of Marketing
 Marketers must not do harm in
carrying out their selling
knowingly
responsibilities.
 They embrace basic marketplace
should including truth telling, genuine
values,
service to customers, avoidance of
practices acclaimed to be unfair, and an
adherence to honest and open
communications with clients.
 Most general areas of marketing practice provoke
substantial ethical and discussion.
comment
These areas include:
 Marketing segmentation,
 Marketing research,
 Product development,
 Pricing,
 Distribution,
 Personal selling,
 Advertising
 Market Segmentation
 Ethical questions especially surround the target
marketing of segments that include
potentially vulnerable populations such as
children, the elderly, the
impoverished(poor) ,and marketing illiterates.
For example:
 Children are a $25+ billion market in the United
States alone for products such as toys, sugared
cereal, DVDs, and video games.
 If a company markets products to an
its
uneducated customer base that is not aware of
the serious consequences of a certain
product, such as selling cigarettes in
developing countries, that’s an ethical issue that
needs to be addressed. If they are not aware of
these issues; therefore it is morally wrong
to sell them cigarettes.
 Similarly for older kids, the ethical issues might focus
more on the appropriateness of certain products
(violent video games), or the degree to which
young teenagers might be inclined to particular
kinds of provocative fashion or lifestyle advertising.

 The key issue involved in targeting children turns

on whether marketers should be held to a
higher standard care and caution when marketing to
children.
 Marketing Research
 During process it is the
responsibility
research of researcher to keep the
information which he collects from
respondent.
secret Misuse of info creates
this unethical issue in
marketing.
 Product Management

 Ethical issues surrounding the management

of products are central to marketing because
marketing process generally begins with a
the
product (broadly defined to
goods, services, or ideas). include
 Product Management
 The most common ethical concerns in
this area pertain to the safety of products are
safe "for their use as intended" is a basic
consumer expectation.
 Product Management
 Another area of concern is product
growing
counterfeiting(copy
counterfeiting involves of original).
the unauthorized Product
copy of
patented products, inventions, and trademarks
or the violation of registered copyrights (often for
the purposes of making a particular product look
like a more popular branded leader).
 Common of product counterfeiting
include
examplesfake Rolex watches, knockoff Levi
jeans, and illegally pirated video and audio
tapes of popular movies and music.
 Pricing

 Perhaps no area of managerial activity is more

difficult to assess fairly and to prescribe normatively in
terms of morality than the area of pricing.

 Price gouging is an example of an unethical pricing

strategy. A company may raise prices of items that
are temporarily in high demand. This is sometimes
seen in the wake of emergency situations when the
price of plywood jumps after a flood, even though
there is enough plywood to repair houses.
 Pricing
 Predatory pricing, on the other hand,
involves pricing a product low enough to dampen
demand. This type of pricing is typically used
to end a competitive threat. The company
lowering the price is operating to protect
market share from moving to the competition.
 Selling counterfeit goods, such as
watches, handbags and designer athletic shoes at
the same high price as the "real" goods,
is another example of an unethical strategy.
 Price fixing, price skimming, price
discrimination are also the examples of it.
 Distribution
 The distribution element of marketing involves
the entire supply chain from manufacturer
through wholesalers and distributors (including
retailers) on to the final consumer. At each point
in the supply chain, because there are
economic interactions between these various
parties, the potential for ethical issues to occur is quite
common.
 Distribution
 Power and Responsibility
Perhaps the most severe issue within
the channel of distribution supply chain has
to do with the question of power and
responsibility
within the itself. Oftenone
channel
organization within the channel has
economic leverage than greater other
members, and with that economic
channel
leadership
comes a potential for ethical abuse.
 Distribution
Example:
 Powerful chains often demand
payments
supermarketfrom (allowances)
ensure
producers that their will
to shelf
space
productsin supermarkets. have supermarket
operators Many
also pay-to-stay fees
payments to supermarkets by producers to
demand
keep their products on the shelf.
 On the other hand power manufacturer
may
full take advantage from small
retailers.
 Distribution
 Gift Giving
Another concern channel
common
relationships has to within
do with "gift giving"
sometimes transforms into bribery.
that A
standing business long- is to
custom and to give modest gifts
clients entertain
to business
associates. Such practices cement
can important economic
relationships.
 Distribution
 Grey Market
The grey market also raises ethical issues.
The grey market is unauthorized intermediaries
that go around authorized marketing channels
by buying in low-price markets and reselling in
high-price markets at lower prices than those
charged by authorized channel members.

Many consumer packaged goods including

toothpaste, bath soap, and deodorant are often
purchased in the grey market.
 Personal Selling

 There are number of ethical issues in

personal selling. The first one that comes to
mind is the manipulation of potential
customer, Some salespeople are pushy
and make unrealistic claims about product
and give improbable (unbelievable,
impossible) guarantee.
 Like wise some sales people give gifts
,money
or favor in exchange of purchase.
Ethics in Advertising/Promotion
◦ A paid non personal communication about an
organisation or its product/service that is
transmitted to a target audience through mass
media is an Advertisement.
◦ 2 main ethical issues - unacceptable means of
persuasion and deceptive advertising.
 Profit motive for advertising: while
remembering the ultimate profit motive, business
should also follow its social responsibility. Under
the pretext of experimenting, companies often
resort to unethical ads.
Jingles / Images / Concept

Name 3 ads which have famous Jingles

Name 3 ads which have famous images
Name 3 ads which have famous concept
Amul – Study of Print Ads
Name 3 Controversial Ads in print / tv
Exaggeration
Racism
Frauds / Issues:
1. Deceptive or misleading ads
2. Stereotyping
3. Use of sexual themes
4. Use of fear
5. Affecting social values
6. Surrogate ads
7. False claims
8. Comparative advertising
9. Using children for ads
https://www.youtube.com/watch?v=YhJ9jsShRrc
https://youtu.be/lxpmxuj3FuI
http://www.businessinsider.in/Pepsi-is-taking-an-audacious-swipe-at-Cokes-polar-be
ars/articleshow/47680323.cms

https://www.youtube.com/watch?v=R347lsr23X8
https://www.scoopwhoop.com/inothernews/indian-advertisements-controversies/#.
94zlulbgl
Kapil
Sharma’s Ad
Guidelines for Ethical Advertising:
◦ Be socially responsible
◦ Direct and truthful
◦ Not harm any religion, culture or caste
◦ Biased on superstition
◦ Should not take advantage of any particular
situation or cause
◦ Norms of ASCI
 APPLE, ACCC AGREE ON $2.25M 4G FINE
Summary: Apple and the Australian Competition and
Consumer Commission (ACCC) have agreed that
Apple should pay a
$2.25 million penalty for calling its iPads "4G", even
though they don't work on Australian 4G networks
Facts:
iPad with Wi-Fi and 4G could connect to Telstra's LTE
network on:
 Its web page and online store

 Its own stores

 Information and materials provided to resellers

 Information and materials provided by Apple on

reseller sites
 APPLE, ACCC AGREE ON $2.25M 4G
FINE
Impact:
 Provided unconditional refunds to all potentially

affected iPad customers

 Altered its worldwide marketing materials

 Apple also changed the designator globally

Approach:
 Utilitarian - An ethical decision is one that

produces the greatest good for the

greatest number of people
 APPLE'S SIRI SUED AGAIN
FOR
Summary:EXAGGERATED ADS
Siri, the voice-activated personal assistant
program built into the Apple iPhone 4S, has been
sued again for allegedly overselling its abilities in
advertising and TV commercials
Facts:
 False Claims of Siri is user friendly

 Siri to make appointments,

 Find restaurants

 Even to learn the guitar chords to classic rock songs

 Tasks as easily accomplished "just by asking" Siri,”

 APPLE'S SIRI SUED AGAIN
FOR
EXAGGERATED ADS
Impact:
 Fine was paid
 Advertisement was modified

Approach:
 Utilitarian - An ethical decision is one that

produces the greatest good for the greatest

number of people
 Moral Right- An ethical decision is one that best

maintains and protects the fundamental rights and

privileges of the people affected by it
 GLAXOSMITHKLINE FINED $3 BILLION BY FDA
FOR IMPROPER MARKETING AND UNETHICAL
BEHAVIOR
 Summary: GlaxoSmithKline (GSK), to pay $3 billion
in criminal and civil liabilities in the largest
healthcare fraud settlement in US history. GSK was
caught promoting several drugs for unapproved
uses, failing to report safety data, paying kickbacks
to physicians, and price reporting
Facts:
 Unapproved uses (or off-label uses) - Paxil

 Failing to report safety data – Avandia

 Kickbacks
GLAXOSMITHKLINE FINED $3 BILLION BY FDA
FOR IMPROPER MARKETING AND UNETHICAL
BEHAVIOR
Impact:
 Fine was paid

 Prison to CEO, Managers and Executive

 Global brand image was effected

Approach:
 Utilitarian - An ethical decision is one that

produces the greatest good for the greatest

number of people
Ethics in IT / E-Commerce
Issues:
Software Piracy
Unauthorized Access
E-mail frauds
Hacking – Pros & Cons
Plagiarism
Online shopping fraud

IT Act – 2000
10 commandments of Computer Ethics
Ethics in Production / Operation

Issues:
 Using sub-standard materials for production
 Deviating from the standard specification of
production
 Attractive outsides, defective insides
 Using easy or cheap equipment
 Discarding the final testing of products,
services
 Using low qualified or unskilled workers
 Use of animals of product testing
 Purchasing low quality raw materials
 Using expired or worn off materials,
equipments
 Ignoring quality problems arising
 Fixing vendors, suppliers based on personal
benefits or relations
 Poor inventory management
 Delaying delivery of goods for price hikes
 Touch ups on old goods for sale purpose
 Occupation hazards
 Workers rights
 Child Labor
Flashback…
Ethics in Media & Yellow Journalism
Issues:
 Seek truth and report
 Test the accuracy & the reliability of sources
 Question source’s motive for providing
information
 Do not misrepresent news or headlines
 Don’t distort news or information or images
unless sensitive
 Don’t plagiarize
 Avoid stereotyping on race, gender, religion etc
 Encourage open exchange of views and opinions
 Report fairly avoid advising unless required
 Reach out to all societies and classes – poor, rich,
influential
 Show compassion for those affected or the
victims
 Don’t intrude into personal or private life unless
crucial
 Handle juvenile cases or sex crimes cautiously
 Don’t enforce personal views or thoughts on
viewers, readers, listeners
 Act independently - Remain free of associations
and affiliations
 Be accountable and responsible
 Treat news as information for the betterment of
society and community; not as a means of
personal gains or benefits
Ethics in Employment
Ethical issues:
◦ Discrimination
◦ Favored recruitments
◦ Sexual or racial harassment
◦ Improper working conditions
◦ Child labor
◦ Communication gap
◦ Biased or unfair promotions, incentives
◦ Intruding into employee privacy
◦ Unethical relationships with suppliers and
partners based on personal benefits
◦ Unethical relationships with customers
based on dishonesty
9 QUESTIONS FOR WHICH COMPANIES CAN BE SUED:
 ARE YOU MARREID
 DO YOU HAVE OR PLAN TO HAVE CHILDREN
 HOW DO TO YOU PLAN TO MANAGE WORK &
FAMILY BALANCE
 HOW OLD ARE YOU
 HOW IS YOUR HEALTH
 WHAT ARE YOUR RELIGIOUS AFFILIATIONS
 WHAT COUNTRY ARE YOU FROM
 DO YOU SRINK / SMOKE – HOW REGULARY?
 DO YOU HAVE ANY CRIMINAL RECORDS
 Ethical guidelines
 International Labor Organization (ILO):
◦ Established in 1919
◦ Promotes rights at work
◦ Organs: Governing Body, ILC, ILO
◦ Core conventions of ILO:
 Forced labor
 Abolition of Forced Labor
 Equal Remuneration
 Discrimination (Employment Occupation)
 Freedom of Association & Protection of Right
to Organised
 Right to Organize and Collective Bargaining
 Minimum Age
 Worst Form of Child Labor
Ethics in Environment
Issues:
◦ Population explosion
◦ Deforestation
◦ Over exploiting of non renewable resources
◦ Improper waste management
◦ Soil erosion
◦ Water pollution
◦ Air pollution
◦ Noise pollution
◦ Threat to wildlife
◦ Ozone layer depletion
◦ Acid rain
 Environmental Audit
Ethics in Finance
 Issues:
◦ Money laundering
◦ Stealing
◦ Bank account frauds
◦ Net banking frauds
 Need of ethics in finance:
◦ They deal with public money
◦ They reflect the country’s economy
◦ International trade is affected by their performance
 How:
◦ Honesty and integrity in transactions and advise
◦ Transparency & Accuracy
◦ Effective regulations and monitoring
◦ Income to better the institution
◦ Overall growth and development of customers and
economy
 Ethics in Accounts:
 Misinterpretation of accounts
 Falsification of accounts
 Manipulation of accounts
 Intentional omission of information or detail
 Partial disclosure or no disclosure
 Window Dressing
 Insider Trading
 Turf Guarding
 White Collar Crime
 Organised Crime
Scams

Coca-Cola India
Satyam Scam
LIC Fake Loan Housing scam
Harshad Mehta scam
2G scam
Coal auction scam
IPL scam