ETHICAL AND UNETHICAL ISSUES IN DISCIPLINES OF MANAGEMENT 

Ethics is derived from Greek word 'ethos' which means custom, usage or habit. These are the moral principles that govern a person's behavior or the conducting of a task.

Business ethics which is also known by the name of corporate ethics. It examines ethical principles and moral or ethical problems that can arise in a business environment. These norms, values, ethical, and unethical practices are the principles that guide any business.

So, today in this blog we are going to discuss about ethical and unethical practices in context of management for three different posts that are HR, Finance and Marketing.

1. HR (Human Resource)

HR plays a vital role in any company. Human resource management is the department of any business organization that looks after the hiring, management and firing of staffs. It focuses on the work of people within the business, ensuring best work practices and good work environment are in place every time.

 

Ethical issues in discipline of HR

 

I. Employment issue:

HR's face ethical dilemma in the area of hiring employees, for example

1) Pressure to hire a friend or relative of a highly placed executive.

2) Faked credentials submitted by a job applicant.

If there would be any issue regarding this, HR will be responsible for this carelessness.

II. Employees Discrimination:

Every organization follows a code of conduct to avoid the practices of treatment of employees based on the caste, sex, religion, or community. An ethical challenge arises when there is pressure on the HR manager to protect the firm or an individual at the cost of someone belonging to the group which is being discriminated against.

III. Performance appraisal:

Ethics should be one of the basis of performance evaluation. Highly ethical performance appraisal demands that there should be an honest assessment of the performance and steps should be taken to improve the effectiveness of employees. However, HR managers, sometimes, face the dilemma of assigning higher rates to employees who are not deserving them; based on some unrelated factors eg. closeness to the higher management. Some employees are, however, given low rates, despite their excellent performance on the basis of factor like caste, religion or not being loyal to the appraiser.

IV. Privacy Issues:

Any person working with any organization has a personal side to his existence which should not be intruded instead respected. The employee wants the organization 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 the snooping behaviors on the part of the employer. For example, mail scanning is one of the activities that is used to track the activities of an employee who is believed to be engaged in activities that are not good for the organization.

V. Cash and Compensation plans:

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 also required for future. Moreover ethical issues arises 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 favoring the interests of the top management in comparison to that of other employees and stakeholders.

VI. Opportunity for new skills:

If the HR department selects who gets training, it can run into ethical issues. As training is a chance for development and broadened opportunities, employees who are left out of training may debate that they are not being given equal opportunities in the workplace.

Unethical issues in discipline of HR

I. Firing employees with NO prior notice.

II. Actions to be taken only against lower staffs.

III. Treating employees just as a resource.

IV. Employee theft:

It deals with stealing, use or misuse of an employer's assets without permission. Assets like money, time,  supplies, merchandise company property, information. It can be a very serious issue for the HR managers to look after these kinds of things in the company.

V. Workplace Conflicts:

It can often happen in an organization that due to the unfavorable decision making. The HR manager should take certain measure to avoid these in an ethical way.

2. FINANCE

The functions of finance department typically include planning, organizing, auditing, accounting and controlling the finance of the company.

This department manages the money of the organization and also produces the company's financial statement.

Ethical issues in FINANCE

I. Accuracy:

The financial mangers of the company have the duty to check all the financial publications are accurate and fairly reflect the financial conditions of the company. Managers are responsible for any kind of frauds or errors in accounting. Managers are bound to follow certain ethical standards for all the transactions to be recorded carefully.

II. Honesty:

Managers should not be bias and should not allow conflicts of interests, without disclosing any personal data of the customers. Shareholders, customers, employees, stakeholders should trust their managers.

III. Transparency:

It generally means means explaining financial information clearly. Managers should not hide any kind of information regarding financial statements of the company .Every company has to submit financial reports every year to ensure that every transactions are done ethically.

IV. Timeliness:

Timely updating of financial records is as important as being accurate and transparent. Managers, stakeholders, investors have to get accurate data within the time so that they can use that in the process of decision making.

Unethical issues in FINANCE

I. Extending the payment dates of the creditors, vendors, dealers commission.

II. Fake promises are made of incentives, promotion.

III. False promise to the customers and stakeholders for their profit.

IV. Taking finance from those who are giving personal favors to the the finance department.

V. To avoid tax managers takes loans from private investors at higher rates.

VI. Opening of accounts in different banks to avoid adjustments against loans by earlier banks.

VII. Delays in paying wages and incentives to employees.

3. MARKETING

Marketing means the action of promoting and selling products or services, including market research and advertising. it comes in various forms based on audience, media platform and business in today's evolving and dynamic market place. Ethical issues in marketing arise from the conflicts and lack of agreement on particular issues.

Ethical issues in MARKETING

I. Grouping the market audience

II. Delivery channel

III. Adequate market research 

IV. Deceptive marketing policies 

V. A proper unbiased and accurate information collection

Unethical issues in MARKETING

I. Accuracy in advertisement:

They use photographs of high-quality product and sell the poor quality of goods. That is not a good practice at all.

II. Emotional exploitation:

This problem arises every once in a while, they make a quiet exit when consumers complain about feeling manipulated.

III. Offering false claims:

Certain companies often show some offers and claims regarding their product. But when it comes into the matter they make excuses.

IV. False brand comparison:

Comparing one product to another that is really not related, in order to make one thing look more or less desirable than it really is.

Thankyou

Apurva