10: Ethics and Other Areas of

Business
General Issues;
Ethics of Accounting Information;
Ethics of Human Resource Management;
Ethics of Sales and Marketing;
Ethics of Production;
Ethics of Intellectual Property, Knowledge
and Skills;

Ethics and Technology;

Management and Business Ethics;
Related Disciplines;
Etiquettes, Manners and Cultural differences

10.1.1 General Issues

Every business has its own philosophy dominated by
the fundamental purposes of a company. If a company's
main purpose is to maximize the returns to its
shareholders, then it is unethical for it to consider the
interests and rights of anyone else.
Ethical rights and duties existing between companies
and society are debated in the context of interpretation
of the concept of corporate social responsibility or CSR.
Moral rights and duties between a company and its
shareholders are to be looked at in consideration of:
a. fiduciary responsibility, and
b. stakeholder concept v. shareholder concept.

10.1.2 General Issues

There are ethical issues concerning relations
between different companies: e.g. hostile
takeovers, industrial espionage, as well the
leadership issues, such as corporate
governance.
Corporations do have political contributions.
There should always be the scope of law
reform, especially for resolving ethical debates
such as the one over the crime of corporate
manslaughter.
Corporate ethics policies may be misused as
marketing instruments.

10.2 Ethics of Accounting Information

Creative accounting, earnings management,
misleading financial analysis.
Insider trading, securities fraud, bucket shops,
forex scams: concerns (criminal) manipulation of
the financial markets.
Executive compensation: concerns excessive
payments made to corporate CEO's and top
management.
Bribery, kickbacks, facilitation of payments:
while these may be in the (short-term) interests of
the company and its shareholders, these practices
may be anti-competitive or offend against the
values of society.

10.3.1 Ethics of Human Resource

Management
The ethics of human resource management (HRM) covers
those ethical issues arising around the employer-employee
relationship, such as the rights and duties owed between
employer and employee. More specifically, the issues are
Discrimination issues, including discrimination on the
bases of age (ageism), gender, race, religion, disabilities,
weight and attractiveness.
Issues arising from the traditional view of relationships
between employers and employees.
Issues surrounding the representation of employees and
the democratization of the workplace: union busting,
strike breaking.

10.3.2 Ethics of Human Resource

Management
Issues affecting the privacy of the employee:
workplace surveillance, drug testing.
Issues affecting the privacy of the employer: whistleblowing.
Issues relating to the fairness of the employment
contract and the balance of power between employer
and employee: slavery, indentured servitude,
employment law.
Occupational safety and health.
All of the above are also related to the hiring and firing
of employees. Employees can not be hired or fired
based on race, age, gender, religion, or any other
discriminatory act.

10.4 Ethics of Sales and Marketing

Marketing goes beyond the mere provision of
information about (and access to) a product
and may seek to manipulate the values and
behavior.
To some extent society regards this as
acceptable, but the ethical line is to be drawn
somewhere.
Marketing ethics overlaps strongly with media
ethics, because marketing makes heavy use of
media. However, media ethics is a much larger
topic and extends outside business ethics.

10.4.1 Major Ethical Issues of Marketing

Pricing: price fixing, price discrimination, price
skimming.
Anti-competitive practices: these include but go beyond
pricing tactics to cover issues such as manipulation of
loyalty and supply chains, anti-competitive practices,
violation of antitrust law.
Content of advertisements: attack ads, subliminal
(hidden) messages, sex in advertising, products regarded
as immoral or harmful
Children and marketing: marketing in schools.
Black markets, grey markets (trade of a commodity
through distribution channels, while legal, are unofficial,
unsolicited or unintended by original; in case black
market, the trade of goods and services are illegal
themselves and/or distributed through illegal channels).

10.4.2 A Few Specific Marketing Strategies

Greenwash (practices of companies spinning their products and
policies as environment friendly such as by presenting cost
cuts as reduction in use of resources);
Bait and switch (a form of fraud advertising a product or
service for sale at a unprofitably low price but customers
reveal that the advertised good is not available while a
substitute is);
Shill (associate, usually a person assuming the air of an
enthusiastic customer of a good or service of a company with
which he pretends to have no relation whatsoever);
Viral marketing (marketing network that uses preexisting social
networks to achieve other marketing objectives such as
product sales through self-replicating viral process, analogous
to the spread of pathological and computer viruses);
Electronic spam (abuse of electronic system to send unsolicited
bulk messages indiscriminately);
Pyramid scheme, Planned obsolescence.

10.5.1 Ethics of Production

This area of business ethics deals with the duties
of a company to ensure that products and
production processes do not cause harm.
Some of the more acute dilemmas in this area
arise out of the fact that there is usually a
degree of danger in any product or production
process and it is difficult to define a degree of
permissibility, or the degree of permissibility
may depend on the changing state of
preventative technologies or changing social
perceptions of acceptable risk.

10.5.2 Ethics of Production:

Some Specific Issues
Defective, addictive and inherently dangerous
products and services (e.g. tobacco, alcohol, weapons,
motor vehicles, chemical manufacturing, bungee
jumping).
Ethical relations between the company and the
environment: pollution, environmental ethics, carbon
emissions trading
Ethical problems arising out of new technologies:
genetically modified food, mobile phone radiation
and health.
Product testing ethics: animal rights and animal
testing, use of economically disadvantaged groups
(such as students) as test objects.

10.6.1 Ethics of Intellectual

Property, Knowledge and Skills
Knowledge and skills are valuable but not easily
"ownable" as objects.
Nor is it obvious who has the greater rights to an
idea: the company who trained the employee,
or the employee themselves?
The country in which the plant grew or the
company which discovered and developed the
plant's medicinal potential?
As a result, attempts to assert ownership and
ethical disputes over ownership arise.

10.6.2 Ethics of Intellectual Property,

Knowledge and Skills: Specific Issues
Patent infringement, copyright infringement, trademark
infringement.
Misuse of the intellectual property systems to stifle/suppress
competition: patent misuse, copyright misuse, patent troll,
submarine patent.
Even the notion of intellectual property itself has been
criticized on ethical grounds
Employee raiding: the practice of attracting key employees
away from a competitor to take unfair advantage of the
knowledge or skills they may possess.
The practice of employing all the most talented people in a
specific field, regardless of need, in order to prevent any
competitors employing them.
Bio-prospecting (ethical) and bio-piracy (unethical).
Business intelligence and industrial espionage.

10.7 Ethics and Technology

The computer and the World Wide Web are two
of the most significant inventions of the twentieth
century. There are many ethical issues that arise
from this technology. It is easy to gain access to
information. This leads to data mining, workplace
monitoring, and privacy invasion.
Medical technology has improved as well.
Pharmaceutical companies have the technology to
produce life saving drugs. These drugs are
protected by patents and there are no generic
drugs available. This raises many ethical
questions.

10.8 Ethics and Management: the

Perspective
The ethical issues in business have become more
complicated because of diversity and increase in
complexity of business establishments and economic
and social issues. The relationship of management
with business ethics is determined by the facts that
a. There is an increased need for companies to adhere/
adjust to ethical principles and domestic standards
and culture;
b. A companys management is responsible for setting
ethical standards and creating a working environment
and
c. Managers are to lead through setting example in
fostering a culture of ethical behavior in the
companies.

10.8.1 Ethics and Management:

Defining the State of Ethics in Business
In order to define the state of ethics in the business, the
policy makers, managers and senior employees of a
company need to ask these questions:
How ethically vulnerable is the company? What are the
core values and guiding principles of the company? Is
the company committed to living and exhibiting the core
values in everything it does?
Knowing what is right is important, but doing what is right
is critical.
Right ethical decisions and actions can be planned and
implemented only if there is a strong and unwavering
commitment to core values and guiding principles.

10.8.2 Ethics and Management:

An Example
Companies should have the flexibility in adjusting its
cost structure during bad economical times, replace old
factories by new ones, or change technology in ways
that would require fewer people to do the work.
But should they go for employee layoff to cut costs in
bad times?
Decisions like that should be made with empathy and
support (financially) to those who will be affected by
it. If the top management people share the burden of
cost reductions and belt-tightening by freezing their
salaries or taking personal pay cut in such situations,
they deserve the utmost respect and create a scope of
more effective use of internal resources for
overcoming the trying period.

10.9 Religious Views on Business Ethics

The historical and global importance of religious views
on business ethics is sometimes underestimated in
standard introductions to business ethics. Particularly
in Asia and the Middle East, religious and cultural
perspectives have a strong influence on the conduct of
business and the creation of business values.
Examples include:
Islamic banking, associated with the avoidance of
charging interest on loans.
Traditional Confucian disapproval of the profitseeking motive.
Quaker testimony on fair dealing.

10.10.1 Related Disciplines

Business ethics should be distinguished from the
philosophy of business, the branch of philosophy
that deals with the philosophical, political, and
ethical underpinnings of business and economics.
Business ethics operates on the premise, for
example, that the ethical operation of a private
business is possible -- those who dispute that
premise, such as libertarian socialists, (who
contend that "business ethics" is an oxymoron) do
so by definition outside of the domain of business
ethics proper.

10.10.2 Related Disciplines

The philosophy of business also deals with questions
such as
a. What, if any, are the social responsibilities of a
business;
b. Business management theory;
c. Theories of individualism vs. collectivism;
d. Free will among participants in the marketplace;
e. The role of self interest;
f. Invisible hand theories;
g. The requirements of social justice; and
h. Natural rights, especially property rights, in relation
to the business enterprise.

10.10.3 Related Disciplines

Business ethics is also related to political
economy, which is economic analysis from
political and historical perspectives. Political
economy deals with the distributive
consequences of economic actions.
It asks who gains and who loses from
economic activity, and is the resultant
distribution fair or just, which are central
ethical issues.

10.10.4.1 Related Disciplines:

A Brief List of Related Areas
Bribery
Business
Culture
Business law
Corporate
Behavior

Ethicism
Ethics

Corporate
Crime
Corporate
Social
Responsibility

Ethical
Consumerism
Ethical Implications Political
in Contracts
Economy

Corruption

Ethical Code
Ethical Job

Fiduciary

Management
Journal of
Business Ethics
Optimism bias
Strategic
Misrepresentation
Strategic Planning

10.10.4.2 Related Disciplines:

Three Branches of Normative Theory
Virtue ethics emphasizes character rather than
rules or consequences and suggests that if the
person is good follow whatever s/he does no
matter taking it granted that the consequence
cannot be bad;
Deontology holds that acts are inherently
good or bad and everybody has the duty to do
those things that are inherently good (for
example, truth telling) without bothering what
the consequences can be, and
Consequentialism.

10.11.1 Etiquette, Manners,

Cultural Differences
Etiquette is a code of behavior that influences
expectations for social behavior according to
contemporary conventional norms within a
society, social class, or group.
Rules of etiquette are usually unwritten, but aspects
of etiquette have been codified from time to time.
Rules of etiquette encompass most aspects of
social interaction in any society, though the term
itself is not commonly used. A rule of etiquette
may reflect an underlying ethical code, or it may
reflect a person's fashion or status.

10.11.2 Etiquette, Manners,

Cultural Differences
Like "culture", etiquette is a word that has gradually
grown plural, especially in a multi-ethnic society with
many clashing expectations. Thus, it is now possible to
refer to "an etiquette" or "a culture", realizing that these
may not be universal. In Britain, though, the word
etiquette has its roots in the eighteenth century, becoming
a universal force in the nineteenth century to the extent
that it has been described as the one word that aptly
describes life during the reign of Queen Victoria.
Etiquette may be wielded as a social weapon. The
outward adoption of the superficial mannerisms of an ingroup, in the interests of social advancement rather than a
concern for others, is considered by many a form of
snobbery, lacking in virtue.

10.11.3 Etiquette, Manners,

Cultural Differences
The etiquette of business is the set of written and unwritten
rules of conduct that make social interactions run more
smoothly.
Office etiquette in particular applies to coworker
interaction, excluding interactions with external contacts
such as customers and suppliers. Both office and business
etiquette overlap considerably with basic tenets of
etiquette. These rules are often echoed throughout an
industry or economy. For instance, 49% of employers
surveyed in 2005 by the American National Association
of Colleges and Employers found that non-traditional
attire would be a "strong influence" on their opinion of a
potential job candidate.

10.11.4 Etiquette, Manners,

Cultural Differences
"Etiquette tells one which fork to use. Manners tell
one what to do when your neighbor doesn't".
Manners involve a wide range of social interactions
within cultural norms as in the "comedy of
manners", or a painter's characteristic "manner".
Etiquette and manners, like mythology, have
buried histories especially when they seem to
have little obvious purpose, and their
justifications as logical ("respect shown to others"
etc.) may be equally revealing to the social
historian.

10.11.5 Etiquette, Manners,

Cultural Differences
Some such individuals consider etiquette to be an unnecessary
restriction of freedom of personal expression; others consider
such a philosophy to be espoused only by the unschooled, the
unmannerly and the rude.
For instance, wearing pajamas to a wedding in a cathedral may
indeed be an expression of the guest's freedom, but also may
cause the bride and groom to suspect that the guest in pajamas
is expressing amusement, disparagement, or disrespect towards
them and their wedding. Etiquette may be enforced in
pragmatic ways: "No shoes, no shirt, no service" is a notice
commonly displayed outside stores and cafs in the warmer
parts of North America. Others feel that a single, basic code
shared by all makes life simpler and more pleasant by removing
many chances for misunderstandings and by creating
opportunities for courtesy and mutual respect.

10.11.6 Etiquette, Manners,

Cultural Differences
Etiquette is dependent on and evolves with culture;
what is excellent etiquette in one society may shock
another.
Etiquette can vary widely between different cultures
and nations.
In China, a person who takes the last item of food from
a common plate or bowl without first offering it to
others at the table may be seen as a glutton and
insulting the generosity of the host.
In America a guest is expected to eat all of the food
given to them, as a compliment to the quality of the
cooking.