Ethical and Unethical issues in Finance

Meaning of Ethics

Ethics is a system of moral principles. They affect how people make decisions and lead their lives.Ethics is concerned with what is good for individuals and society and is also described as moral philosophy.The term is derived from the Greek word ethos which can mean custom, habit, character or disposition.

Meaning of Finance

Finance is defined as the management of money and includes activities like investing, borrowing, lending, budgeting, saving, and forecasting. There are three main types of finance: (1) personal (2) corporate and (3) public/government.

Ethical and Unethical issues in Finance:

1. Deliberate abnormal delays in payments to:

• Vendors
• Dealers Commissions
• Promotion costs

2. Delays in paying:

• Wages
• Interest to financiers
• Incentives
• Bonus to Employees

3. Holding up bills of vendors on silly reasons and ultimately buying from others to avoid payment to earlier vendors.

4. Not prompt in statutory payments of:

• ESI
• PF
• Sales Tax
• Excise Duties

5. Cheating employees of their dues towards:

• Medical Expenses
• Leave travel assisstance
• Children education fees etc.

6. Creating bogus bills of purchase to show higher costs and hence losses to avoid bonus payment to employees.

7. Collecting loans from private financiers at higher rate of interest to help kith and kin and to get kick-backs.

8. Quick release of payments to known or adjustment parties and delaying payment to others.

9. Opening of current accounts in different banks to avoid adjustments against loans by earlier banker.

Ethical and Unethical issues in Marketing

Meaning of Ethics

Ethics is a system of moral principles. They affect how people make decisions and lead their lives.Ethics is concerned with what is good for individuals and society and is also described as moral philosophy.The term is derived from the Greek word ethos which can mean custom, habit, character or disposition.

Meaning of Marketing

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

Ethical and Unethical issues in Marketing

1. Making unverified claims

In a desperate bid to compel potential and existing customers to buy their products or services, some marketers use false statements, exaggerated benefits, or make unverifiable claims about their offers.

2. Bad-Mouthing of rival products

Emphasizing the dark sides of your rival’s products in a bid to turn potential customers towards your own products is another common but unethical marketing practice. Rather than resort to this bad strategy, you should emphasize on those aspects that make your offer stand out from the rest of the pack. That’s professional and ethical.

3. Concealing dark sides of Product

This unethical marketing practice is rife in the natural remedies industry, where most manufacturers deceive potential buyers that their products have no side effects because they are “made from natural products”. But in reality, most of these products have been found to have side effects, especially when used over a long period. In fact, there’s no product without side effects—it’s just that the side effects might be unknown. It’s better to say, “There are no known side effects” than to say “there are no side effects“.

4. Spamming

Spamming is when you send unsolicited emails to potential customers, encouraging them to buy your products or services. This is the commonest unethical marketing practice done online. The number of time you send such emails doesn’t matter. Whether you send them once, or on occasions, or frequently, you remain a spammer.

5. Plagiarism of marketing messages

Though uncommon, some business owners and salespersons engage in using the exact marketing messages of their competitors to market their own products or services. Creativity is a huge part of marketing, and using other businesses’ marketing messages just passes you off as being creatively bankrupt and fraudulent.

6. Using women for advertising

The rate at which even reputable brands are resorting to this unethical marketing practice is quite alarming. If you observe TV, billboard, and magazine adverts, there’s something common to most of them; a half-naked lady is used to attract attention to the product or service being advertised.

Ethical and Unethical issues in Human Resource

Meaning of Business Ethics

Business Ethics is a form of applied ethics or professional ethics, that examines ethical principles and moral or ethical problems that can arise in a business environment. These ethics originate from individuals, organisational statements or from the legal system.

Meaning of Human Resources

Human Resources are the people who make up the work force of an organization, business sector or an economy. "Human Capital" is sometimes used as synonymously with "Human Resources", although human capital typically refers to a  narrow effect . Likewise other terms sometimes include manpower, talent, labour, personnel or simply people.

Ethical issues in Human Resource:

1. Discrimination:

In many organisations till recently the employees were differentiated on the basis of their race, gender, origin and their disability. Managers are trained for aligning behaviour and avoiding discriminatory practices.

2. Cash and Compensation Plans:

There are ethical issues pertaining to the salaries, executive perquisites and the annual incentive plans etc. The HR manager is often under pressure to raise the band of base salaries and to pay out more incentives.

3. Safety and Health:

Industrial work is often hazardous to the safety and health of the employees. Legislations have been created making it mandatory on the organisations and managers to compensate the victims of occupational hazards.

4. Privacy issues:

Any person working with any organisation is an individual and has a personal side to his existence which he demands should be respected and not intruded. The employee wants the organisation to protect his/her personal life.

Unethical issues in Human Resources:

1. Unlimited hours of work:

Since last 10-15 years there is a revolution in working hours. Younger generation now works from 10 to 14 hours/day compared to 8 hours of standard work. Even women employees work long hours, night shifts and go alone on overseas trips to attend their project work.

2. Talent and Compensation:

These days it is found that employees at early age of 30 to 45 years becoming CEO, MD and Chairman of Corporate. In earlier decades it was unwritten rule to have top executives only in the age range of 50 to 80 years.

3. Dual Responsiblities of Women:

It is fair to say that women have equal opportunities in jobs and salaries. But invariably women play a dual or triple role of job, home and children responsibilities. Hence she needs more leave and flexible work timings.

4. Knowledge based:

The senior and experienced employees are finding themselves at wrong end in terms of emoluments and encouragement. This is due to fast change of technology and knowledge base. The younger generation is quick to adapt to changes. Hence the gap is difficult to fill and the disparity will continue till retirement of elderly employees.