ethical and unethical issues realted to marketing, HR(human resource ) and finance.

Ethical and Unethical issues related to marketing

Ethical Issues in Marketing

Ethical problems in marketing stem from conflicts and disagreements. Each party in a marketing transaction brings a set of expectations regarding how the business relationship will exist and how transactions should be conducted. Each facet of marketing has ethical danger points as discussed below.

Market Research

Some ethical problems in market research are the invasion of privacy and stereotyping. The latter occurs because any analysis of real populations needs to make approximations and place individuals into groups. However, if conducted irresponsibly, stereotyping can lead to a variety of ethically undesirable results.

Market Audience

Selective marketing is used to discourage demand from so-called undesirable market sectors or disenfranchise them altogether. Examples of unethical market exclusion are past industry attitudes to the gay, ethnic minority, and plus-size markets.

Another ethical issue relates to vulnerable audiences in emerging markets in developing countries, as the public there may not be sufficiently aware of skilled marketing ploys.

Delivery Channels

Direct marketing is the most controversial of advertising channels, particularly when approaches are unsolicited. TV commercials and direct mail are common examples. Electronic spam and telemarketing push the borders of ethics and legality more strongly.

Pricing Ethics

Bid rigging is a form of fraud in which a commercial contract is promised to one party, although for the sake of appearance several other parties also present a bid.

Predatory pricing is the practice of selling a product or service at a very low price, intending to drive competitors out of the market, or create barriers to entry for potential new competitors.

Pyramid Scheme: This business practice relies on getting the initial investor or “captain” to enroll others for a fee to them who in turn will also enroll others in order to get paid.

Key Points

• Each party in a marketing transaction brings expectations regarding how the business relationship will exist. For example, if a consumer wishes to make a purchase from a retailer, their expectations include wanting to be treated fairly by the salesperson and wanting to pay a reasonable price.
• Ethical marketing decisions and efforts should meet and suit the needs of customers, suppliers, and business partners. Unethical behavior such as price wars, selective advertising, and deceptive marketing can negatively impact a company’s relationships.
• Recent trends show that consumers prefer ethical companies. As a result ethics itself is a selling point or a component of a corporate image.

https://www.youtube.com/watch?v=cX5Wz9fElJk

what is unethical issues of marketing:-

 Using women as sex symbols 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.

Using fear tactics

This is another common unethical marketing practice among snake oil salespersons. You will hear them saying something like: “This price is a limited-time offer. If you don’t buy now, you might have to pay much more to buy it later because the offer will end up in two days time, and the price will go up.” The only motive behind those statements is to prompt the potential buyer to make a decision on the spot. And that’s wrong.

 Exploitation

This is charging for much more than the actual value of a product or service. For marketing efforts to remain with ethical limits; the prices of your offers must be equal to or less than the value they give the buyer. If the value is less than the cost, it’s unethical.

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.

Ethical and unethical issues related to HR(Human resource:-

Ethical issues in human resource:-

In short, an organization's culture can be at odds with what's the best thing to do for HR managers. As conflict arises, the HR manager must be adept at resolving conflicts between the demands of company culture and those of ethical behavior.

Major Issues in Ethical Management

Some of the major issues an organization deals with is handling ethical challenges in workforce diversity.

The following are some of the major ethical challenges an organization faces in ethical management −

1. Race, gender and Disability

In many organisations till recently the employees were differentiated on the basis of their race, gender, origin and their disability. Not anymore ever since the evolution of laws and a regulatory framework that has standardised employee behaviour towards each other. In good organisations the only differentiating factor is performance! In addition the power of filing litigation has made put organisations on the back foot. Managers are trained for aligning behaviour and avoiding discriminatory practices.

2. Employment Issues

Human resource practitioners face bigger dilemmas in employee hiring. One dilemma stems from the pressure of hiring someone who has been recommended by a friend, someone from your family or a top executive.

Yet another dilemma arises when you have already hired someone and he/she is later found to have presented fake documents. Two cases may arise and both are critical. In the first case the person has been trained and the position is critical. In the second case the person has been highly appreciated for his work during his short stint or he/she has a unique blend of skills with the right kind of attitude. Both the situations are sufficiently dilemmatic to leave even a seasoned HR campaigner in a fix.

3. 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. This personal life may encompass things like his religious, political and social beliefs etc. However certain situations may arise that mandate snooping behaviours on the part of the employer. For example, mail scanning is one of the activities used to track the activities of an employee who is believed to be engaged in activities that are not in the larger benefit of the organisation.

4. 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. There is increased pressure upon the HR function to pay out more incentives to the top management and the justification for the same is put as the need to retain the latter. Further ethical issues crop in HR when long term compensation and incentive plans are designed in consultation with the CEO or an external consultant. While deciding upon the payout there is pressure on favouring the interests of the top management in comparison to that of other employees and stakeholders.

5.Equal Opportunity

The HR managers must regularly monitor the company's hiring practices to make sure there is no discrimination in the hiring process based on ethnicity, sexual orientation, race, religion and disability. However, simply abiding with Equal Employment Opportunity Commission (EEOC) guidelines does not guarantee ethical behavior.

For example, if an HR manager recommends a candidate in order to fill a quota, that decision is unethical, because it will remove other applicants that may be more qualified.

6.Fair Working Conditions

Companies are basically expected to provide fair working conditions for their employees in the business environment, but being answerable for employee treatment typically means higher labor costs and resource utilization.

Fair pay and benefits for work are more obvious factors of a fair workplace. Another important factor is provision of a non-discriminatory work environment, which again may have costs engaged for diversity management and training.

The entire process of HR auditing is broadly segmented into the following phases −

• Pre-audit information − The pre-audit information phase engages a review of the company’s policies, HR manuals, employee handbooks, reports, etc., which act as the basis of working in the company.
• On-site review − The next phase of on-site review engages questionnaires, interviews, observations, informal discussions, surveys, or a combination of such methods to get the necessary inputs from the members of the company.
• Records review − The records review phase needs detailed scanning of present HR records, employees’ files, employee absenteeism and turnover statistics, notices, compensation claims, performance assessments, etc.
• Audit Report − On the basis of this analysis, the final audit report is compiled with appropriate conclusions, summary and recommendations, highlighting the strengths and weaknesses of the HR function along with the necessary developments as needed.

UNETHICAL HR POLICIES AND PRACTICES 

Abstract 

Purpose: To throw light on some unethical Human resource policies followed by companies and suggest ways to overcome them. 

Approach: This is a theoretical paper designed to provide a conceptual clarity on the subject. It is an exploratory study aiming to enhance recognition and understanding of some policies and practices that are causing discomfort in organizations.

Findings: A number of policies reported to be unethical by employees all over the world have been described in detail. 

Value: This paper will offer insights to HR professionals encouraging them to realize and change some policies and practices that have become a part of their organizations. It also will encourage people from other fields to realize how they can flag unethical practices in their organizations.

Keywords: Unethical, HR, Policies. 

Article classification:Conceptual Article 

UNETHICAL HR POLICIES AND PRACTICES 

The Human Resource Management function discharged by a specialized department has been one of the better management philosophies to have emerged over time. But not all HR departments add value to a company, some actually end up doing more harm than good. In the course of history, this department has been viewed as a supporting clerical and administrative appendage, to anauxiliary function necessary for salary and leave-related information and also,as an entity that is misused by many exploitative employers to unleash employee harassment policies. Many HR policies are designed to exploitwhile some others simply evolve into the well-intended but badly executed realm. This paper intends to examine whether it is fair to blame all policy failures on the same department and ascertain which policies and practices have caused the most heartburn among employees. 

1- Disguised Salaries 

This is the most abused unethical policy where the offered salary is misquoted to an incumbent. The extent of variance between the actual in-hand salary and the one quoted at the time of recruitment ranges from lakhs to a couple of thousands but the reality is that it is the freshers or the needy employees who are the usual sufferers of this gimmick. The senior employees and the higher managers have already learnt their lessons the hard way and enquire well before accepting any offered salary. What is usually done is to include various expenses made by the company in the total salary which might include contributions to Provident Fund, social security, training programs and sometimes, even the electricity used. There is no question that this practice is completely unethical. Today, the current generation of HR professionals do believe in explaining the entire salary structure in detail with complete truthfulness as every employee who is shortcharged in this fashion ultimately either leaves or becomes demotivated.

2- Training Policy 

All HR departments have training obligations as training traditionally has been one of the core HR functions. Very few HR managers are able to weave this function in the overall management of the organization thus, actually achieving a learning and development strategy. The lack of ethics in this policy is the absence of the policy itself i.e. when training does not move in a systematic manner with a well thought out plan of implementation and evaluation, it loses all relevance and significance in the minds of employees. This loss is extremely dangerous as people tend to reject all succeeding training programs as the same useless interruption to work, at best, to be visualized as a holiday. The true extent of damage is seen by well-meaning HR managers who are unable to communicate any enthusiasm in their senior managers towards crucial training areas. Evaluation of training programs and conducting proper training needs analysis, taking the points of view of both employees and their managers will ensure that there is some order in the training policy. Ensuring transfer of learning to the organization and work setting will also become more probable in such a scenario. 

3- Job Descriptions 

 Most organizations today believe in having well-articulated and clear job descriptions and matching job specifications. However, the actual application of these JDs remains rare with most line managers preferring to use a far more flexible approach. It is rare indeed to witness an employee refuse a task merely because it is not included in his JD, what is also becoming rare is the failure to accept different functional jobs. It is common nowadays to find engineers successfully embracing an HR role or a finance professional trying his hand in operations. The unethical policy, however, creeps in when these flexible JDs are forced on employees with a threat of termination. Again, being more manifest in fresh employees, it acts as a huge de-motivator with the suffering employee losing all trust in the company. It is common to find this phenomenon at work in fresh engineering and management graduates. who are lured away in campus placements by fancy designations and salaries. Most do not enquire deeply in job profiles and some are deliberately misled by recruiters. The subsequent job profiles offered on joining the company shatter the expectations and dreams of the new employee thus causing de-motivation.

4- The Ethics Policy 

Few organizations possess an ethics policy and fewer still have a well articulated one. One good example here is the one followed byMindTreeInternational which offers many case studies to drive the point home. The need for such a policy cannot be debated, it is, of course, necessary and fundamental and its absence will definitely be rued in future. However,the ethics policies need to be continuously improved, redrafted, and communicated taking live examples from the organization’s own history. The lacuna here affects not only one department but the entire company, the industry, and also the country. In fact, it evolves into a ghost that haunts the company forever.

5- Separation Policy 

All HR departments do not necessarily have separation policies but we shall consider relevant practices as part of this policy. Separation of an employee is the time when any person can easily measure the mettle of the HR department. The manner in which the resignation is accepted, the subsequent process of trying to retain a talented employee, the negotiations and the extent of offered conditions for reconsideration and finally, the decency with which the final payments are delivered to the employee, communicates the preparedness and competence of the department. Say, for example, if the resignation was unexpected and not foreseen, if the highest level of managers were mobilized for the negotiations, if the offered conditions were clearly unmatched to the current position-holder and the current policies and finally, if the final payment was delayed to the extent of receiving a threat for legal action, then all these behaviors give definite indications as to the competence and preparedness of the HR department. Why is thisanunethical policy? It is so, because it acts as a flag, motivating all others to follow the same path for realizing their justified as well as unjustified demands.

6- Lean Management 

The concept of lean management gained momentum during recession where companies had to cut costs and curb expenses to make through. However, if there are any expenses that can be curtailed without affecting the efficiency of the company, they should have been addressed proactively not waiting for the threat of recession. If, however, these expenses cause discomfort and were resorted to as a last resort, then they should be recalled as soon as is possible. Indian companies run by traditional business owners have been known for their cost-cutting and lean management. In fact, most perks and fringe benefits introduced by the MNC s remain unacknowledged in these companies. Lean management becomes an unethical HR policy when it starts pinching employees, making them work extra hours in uncomfortable working conditions, not sanctioning leave and withdrawing basic facilities. No explanation is necessary to illuminate the monstrous nature of these lean management policies where the management tries to keep the costs low once it finds the way to do so. Asking your employees to not take leave for a couple of months to ensure smooth functioning is one thing, while making the leave sanctioning process tedious for ever is another.There is no harm in saving costs as long as they don’t cause discomfort for a long time.

Ethical Issues in Finance

ETHICS IN FINANCE. Ethics in general is concerned with human behavior that is acceptable or "right" and that is not acceptable or "wrong" based on conventional morality. General ethical norms encompass truthfulness, honesty, integrity, respect for others, fairness, and justice.

1. Methodology/approach

The chapter develops a methodology including three steps: first stating a major principle, then defining a rule and finally proposing possible implementation, taking of concrete steps.

2. Findings

Assessments of the financial crisis most often consider that the sources of the problems stem from economic and financial imbalances and failures. Indeed, this kind of explanation is relevant and may be agreed as a proximate cause. But such a widespread, long-lasting crisis relied on worse and deeper roots. Misconduct and greed by financial players and market participants was a culprit for the crisis. To address this issue, the chapter develops eight principles that can contribute, at least to some extent, to fulfill the basic mission of finance.

3. Research implications

This chapter raises the question of whether there was an earlier period where finance was more closely tethered to ethical principles. Looking at the ideas of those who make a distinction between moral doctrine and ethics can help to understand the nature of the crisis and to implement practical solutions even though these concepts are often confused and mixed-up.

4. Practical/social implications

The implications of ethical behavior based on the principle of seeking the “common good” lead to a professional approach aimed at financial institutions as well as at their executive leaders and their employees. This chapter discusses avenues for thought.

5. Originality/value

Proposals presented in this chapter combine eight ethical principles, two final observations and practical views and suggestions developed in accordance with a three-step approach to be implemented by professionals so that the letter of the rule may never stifle the spirit of the principles.

Unethical Practices in Finance:

The unethical practices in accounting are more in proprietary, partnership and private limited companies. It is at lower levels in public limited companies and MNCs.

Some of the unethical practices in finance.

 i. Deliberate abnormal delays in payments to (a) Vendors, (b) Dealers commissions and promotion costs.

ii. Delays in paying wages, interest to financiers, incentive, bonus to employees.

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

iv. Not prompt in statutory payments of ESI, PF, Sales Tax and Excise Duties.

v. Cheating employees of their dues towards medical expenses, leave travel assistance, children education fees etc.,

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

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

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

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

x. Taking private finance only from those who are ready to do personal Favours to the finance department head.

There are different approaches to raise funds as shown here under:

(1) Long Term Financing:

The popular sources for long term financing are as under:

i. Issue of equity shares,

ii. Issue of irredeemable debentures,

iii. Retained earnings (plough back of profits),

iv. Financial assistance from special financing institutions.

(2) Medium Term Financing:

The usual sources of finance are as follows:

i. Issue of redeemable debentures,

ii. Issue of preference shares,

iii. Public deposits,

iv. Medium Term loans,

v. Financial assistance from special financing institutions.

(3) Short Term Financing:

The commonly used modes of short term financing are:

i. Trade credit,

ii. Bank credit and

iii. Advances from dealers and customers.

While taking credit and during public issues the companies have to furnish the accounts and performance details including the details of promoters. To what extent truthful information and data is provided to financiers/investors is the ethical issue involved in investment matters.