INTRODUCTION
Ethics, also known as moral philosophy, is a branch of philosophy that addresses questions about morality — that is, concepts such as good and evil, right and wrong, virtue and vice, justice and crime, etc. Major branches of ethics include:
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Meta-ethics, about the theoretical meaning and reference of moral propositions and how their truth values (if any) may be determined;
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Normative ethics, about the practical means of determining a moral course of action;
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Applied ethics, about how moral outcomes can be achieved in specific situations; Moral psychology, about how moral capacity or moral agency develops and what its nature is;
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Descriptive ethics, about what moral values people actually abide by.
Ethics is two things. First, ethics refers to well-founded standards of right and wrong that prescribe what humans ought to do, usually in terms of rights, obligations, benefits to society, fairness, or specific virtues. Ethics, for example, refers to those standards that impose the reasonable obligations to refrain from rape, stealing, murder, assault, slander, and fraud. Ethical standards also include those that enjoin virtues of honesty, compassion, and loyalty. And, ethical standards include standards relating to rights, such as the right to life, the right to freedom from injury, and the right to privacy. Such standards are adequate standards of ethics because they are supported by consistent and well-founded reasons. Secondly, ethics refers to the study and development of one's ethical standards. As mentioned above, feelings, laws, and social norms can deviate from what is ethical. So it is necessary to constantly examine one's standards to ensure that they are reasonable and well-founded. Ethics also means, then, the continuous effort of studying our own moral beliefs and our moral conduct,
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and striving to ensure that we, and the institutions we help to shape, live up to standards that are reasonable and solidly-based. Some years ago, sociologist Raymond Baumhart asked business people, "What does ethics mean to you?" Among their replies were the following: • "Ethics has to do with what my feelings tell me is right or wrong." "Ethics has to do with my religious beliefs." "Being ethical is doing what the law requires." "Ethics consists of the standards of behavior our society accepts." "I don't know what the word means." • These replies might be typical of our own. The meaning of "ethics" is hard to pin down, and the views many people have about ethics are shaky.
FROM WHERE ETHICS COME?
? RELIGION
Virtually all the world's religions teach an essentially similar code of ethics that emphasizes honesty, respect for others and their rights, and selflessness. Therefore, in both business and personal situations, a highly religious person is likely to act in ways that most of us will regard as highly ethical. Their religion will give them highly explicit, generally internally consistent, guides to "good" personal conduct. These guidelines usually can be broadened to apply quite well to business activity. Moreover, those for whom religion is not a central force in their lives are more likely to act in self-centered, ethically questionable ways.
? PARENTS AND TEACHERS
Without really thinking or even being able to avoid it, each person learns ethics from his or her parents and teachers—what they teach in words and perhaps more importantly through
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their actions. These teachings shape our most fundamental attitudes about what is "right" and what is "wrong." As a very brief insurance-related example, the child of an insurance agent, upon reaching adulthood, is much more likely to be honest and truthful in settling claims under his or her insurance policies than is the grown child of another insurance agent if the other agent was terminated by the insurer under disputed circumstances. The child may not have understood the intricacies of those circumstances at the time, but as an adult, he or she is likely to believe in their heart that insurers are not to be to be trusted and do not deserve to be treated honestly.
? ENVIRONMENT
Almost daily, quite casually, and sometimes without thinking, virtually all of us talk about others' and our own actions—offering frequent opinions about whether what they or we have been doing is good, right, and sensible (or perhaps very much the opposite). Buried in this "small talk," "chit chat," gossip, and mealtime conversations are implicit—sometimes very explicit—ethical judgments about the behavior being discussed. People and their words and actions are labeled "wonderful," "mean," "greedy," "generous," or hundreds of other qualities. Over time, these discussions lead each of us to a sense of what the people around us consider to be good and bad, ethical and unethical, conduct. Unless we have strong personal reasons or other commitments to believe otherwise, most of us tend to "go along" with the opinions of those around us, rather than "bucking the tide" by independently evaluating the ethical aspects of others' actions. Thus, often almost automatically, the social consensus can become the approved, although unexamined, ethical standard.
WHAT IS BUSINESS ETHICS?
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Business ethics is the behavior that a business adheres to in its daily dealings with the world. The ethics of a particular business can be diverse. They apply not only to how the business interacts with the world at large, but also to their one-on-one dealings with a single customer. Many businesses have gained a bad reputation just by being in business. To some people, businesses are interested in making money, and that is the bottom line. It could be called capitalism in its purest form. Making money is not wrong in itself. It is the manner in which some businesses conduct themselves that brings up the question of ethical behavior. Good business ethics should be a part of every business. There are many factors to consider. When a company does business with another that is considered unethical, does this make the first company unethical by association? Some people would say yes, the first business has a responsibility and it is now a link in the chain of unethical businesses. Many global businesses, including most of the major brands that the public use, can be seen not to think too highly of good business ethics. Many major brands have been fined millions for breaking ethical business laws. Money is the major deciding factor. If a company does not adhere to business ethics and breaks the laws, they usually end up being fined. Many companies have broken anti-trust, ethical and environmental laws and received fines worth millions. The problem is that the amount of money these companies are making outweighs the fines applied. Billion dollar profits blind the companies to their lack of business ethics, and the dollar sign wins.
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A business may be a multi-million seller, but does it use good business ethics and do people care? There are popular soft drinks and fast food restaurants that have been fined time and time again for unethical behavior. Business ethics should eliminate exploitation, from the sweat shop children who are making sneakers to the coffee serving staff who are being ripped off in wages. Business ethics can be applied to everything from the trees cut down to make the paper that a business sells to the ramifications of importing coffee from certain countries. In the end, it may be up to the public to make sure that a company adheres to correct business ethics. If the company is making large amounts of money, they may not wish to pay too close attention to their ethical behavior. There are many companies that pride themselves in their correct business ethics, but in this competitive world, they are becoming very few and far between.
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ETHICAL CODES
An ethical code is adopted by an organization in an attempt to assist those in the organization called upon to make a decision (usually most, if not all) understand the difference between 'right' and 'wrong' and to apply this understanding to their decision. The ethical code therefore generally implies documents at three levels: codes of business ethics, codes of conduct for employees and codes of professional practice. •
Code of ethics (corporate or business ethics) A code of business ethics often focuses on social issues. It may set out general principles about an organization's beliefs on matters such as mission, quality, privacy or the environment. It may delineate proper procedures to determine whether a violation of the code of ethics has occurred and, if so, what remedies should be imposed. The effectiveness of such codes of ethics depends on the extent to which management supports them with sanctions and rewards. Violations of a private organization's code of ethics usually can subject the violator to the organization's remedies (such as restraint of trade based on moral principles). The code of ethics links to and gives rise to a code of conduct for employees. Code of conduct (employee ethics) A code of conduct for employees sets out the procedures to be used in specific ethical situations, such as conflicts of interest or the acceptance of gifts, and delineate the procedures to determine whether a violation of the code of ethics occurred and, if so, what remedies should be imposed. The effectiveness of such codes of ethics depends on the extent to which management supports them with sanctions and rewards. Violations of a code of conduct may subject the violator to the
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organization's remedies which can under particular circumstances result in the termination of employment. Code of practice (professional ethics) A code of practice is adopted by a profession or by a governmental or non-governmental organization to regulate that profession. A code of practice may be styled as a code of professional responsibility, which will discuss difficult issues, difficult decisions that will often need to be made, and provide a clear account of what behavior is considered "ethical" or "correct" or "right" in the circumstances. In a membership context, failure to comply with a code of practice can result in expulsion from the professional organization. In its 2007 International Good Practice Guidance, Defining and Developing an Effective Code of Conduct for Organizations, the International Federation of Accountants provided the following working definition: "Principles, values, standards, or rules of behavior that guide the decisions, procedures and systems of an organization in a way that (a) contributes to the welfare of its key stakeholders, and (b) respects the rights of all constituents affected by its operations."
Ethical codes are often adopted by management, not because of some over-riding corporate mission to promote a particular moral theory, but accepted as pragmatic necessities in running an organization in a complex society in which moral concepts play an important part. They are distinct from moral codes that may apply to the culture, education, and religion of a whole society. Of course, certain acts that constitute a violation of ethical codes may also violate a law or regulation and can be punishable at law or by government agency remedies. Even organizations and communities that may be considered criminal may have their own ethical code of conduct, be it official or unofficial. Examples could be hackers, thieves, or even street gangs.
ETHICS IN PRODUCTION
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This area of business ethics deals with the duties of a company to ensure that products and production processes do not cause harm. Since few goods and services can be produced and consumed with zero risk, determining the ethical course can be problematic. In some case consumers demand products that harm them, such as tobacco products. Production may have environmental impacts, including pollution, habitat destruction and urban sprawl. The downstream effects of technologies nuclear power, genetically modified food and mobile phones may not be well understood. While the precautionary principle may prohibit introducing new technology whose consequences are not fully understood, that principle would have prohibited most new technology introduced since the industrial revolution. Product testing protocols have been attacked for violating the rights of both humans and animals These production business ethics often deal with defective, addictive or inherently dangerous products and services (e.g. tobacco, alcohol, weapons, motor vehicles, chemical manufacturing). Along with the ethical relations between the company and the environment such as pollution and other environmental ethics issues Ethics in production is a subset of business ethic that is meant to ensure that the production function or activities are not damaging to the consumer or the society. Like other ethics there is a certain code of conduct or standards to be followed, however ensuring that the ethics are complied with is often difficult. One of the most important characteristic of the business today is that there is a great degree of interdependence between various business functions. Production cannot happen without marketing and sales and vice versa. In order to survive in the competitive sphere organizations try to reduce the costs involved in production processes. This cost efficiency is sometimes achieved at the cost of quality. Poor processes and technology is used to keep the cost down, this is especially true for small players who cannot afford economies of scale. Having said this there are also examples of industry giants that compromised on certain production processes, cola companies make up for a good example.
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All the production functions are governed by production ethics but there are certain that are severely harmful or deleterious which need to be monitored continuously. The following are worth mentioning: There are ethical problems arising out of use of new technologies that are deleterious to health, safety and environment. Technological advancements like genetically modified food, radiations from mobile phones, medical equipment etc are less problems are more of dilemmas. Defective services and products or products those are innately deleterious like alcohol, tobacco, fast motor vehicles, warfare, chemical manufacturing etc. Animal testing and their rights or use of economically or socially deprived people for testing or experimentation is another area of production ethics. Ethics of transactions between the organization and the environment that lead to pollution, global warming, increase in water toxicity and diminishing natural resources.
DILEMMA OF ETHICS IN PRODUCTION
There are certain processes involved in the production of goods and a slight error in the same can degrade the quality severely. In certain products the danger is greater i.e. a slight error can reduce the quality and increase the danger associated with consumption or usage of the same exponentially. The dilemma therefore lies in defining the degree of permissibility, which in turn depends on a number of factors. Bhopal gas tragedy is one example where the poisonous gas got leaked out due to negligence on the part of the management. 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. Usually many manufactures are involved in the production of same good. They may use similar or dissimilar technologies for the same. Setting a standard in case of dissimilar technologies is
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often very difficult. There are many other factors that contribute to the dilemma, for example, the involvement of the manpower, the working conditions, the raw material used etc. Social perceptions also create an impasse sometimes. For example the use of some fertilizer by cola companies in India recently created a national debate. The same cold drinks which were consumed till yesterday became noxious today because of a change in the social perception that the drinks are not fit for consumption.
ETHICS IN MARKETING
Marketing Ethics came of age only as late as 1990s. Marketing ethics was approached from ethical perspectives of virtue or virtue ethics, deontology, consequentialism, pragmatism and relativism Ethics in marketing deals with the principles, values and/or ideals by which marketers (and marketing institutions) ought to act.[ Marketing ethics is also contested terrain, beyond the previously described issue of potential conflicts between profitability and other concerns. Ethical marketing issues include marketing redundant or dangerous products/services] transparency about environmental risks, transparency about product ingredients such as genetically modified organisms possible health risks, financial risks, security risks, etc., respect for consumer privacy and autonomy,[ advertising truthfulness and fairness in pricing & distribution. According to Borgerson, and Schroeder (2008), marketing can influence individuals' perceptions of and interactions with other people, implying an ethical responsibility to avoid distorting those perceptions and interactions. Marketing ethics involves pricing practices, including illegal actions such as price fixing and legal actions including price discrimination and price skimming. Certain promotional
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activities have drawn fire, including greenwashing, bait and switch, shilling, viral marketing, spam (electronic), pyramid schemes and multi-level marketing. Advertising has raised objections about attack ads, subliminal messages, sex in advertising and marketing in schools Marketing ethics is the area of applied ethics which deals with the moral principles behind the operation and regulation of marketing. Some areas of marketing ethics (ethics of advertising and promotion) overlap with media ethics. Ethics are a collection of principles of right conduct that shape the decisions people or organizations make. Practicing ethics in marketing means deliberately applying standards of fairness, or moral rights and wrongs, to marketing decision making, behavior, and practice in the organization. A good marketing sense, with the corporate bottom line in mind, is still the single most important motivation for the application of ethics in marketing. Marketing ethics has come to mean the concern over the three major stakeholders in the conduct of business: the company, the industry, and society. These three groups have logically different and differing needs and wants. Out of these differences, ethical conflicts arise. However, the inescapable fact remains that ethics plays an important role in the relationship between a company and the public. Ethics in marketing can result in positive company reputation and image, as well as positive customer impression of the company and its products and services. The ethical marketer knows too well that unethical marketing practices can only lead to bad company reputation and image, bad publicity, dissatisfied customers, lack of consumer trust and confidence, and loss of business or even legal action in the extreme. A sensible marketer will want to avoid the pitfalls of unethical marketing. Ethical abuses result in pressure from government watchdogs and social concern groups. Marketing irresponsibility will only be meted with negative controversy that can very well backfire on the business organization. Consumer interest groups, professional associations, and self-regulatory groups exist precisely to exert influence towards the full practice of ethics in marketing. In a market economy, a business may be expected to act in what it believes to be its own best interest. The purpose of marketing is to create a competitive advantage. An organization achieves an advantage when it does a better job than its competitors at satisfying the product and service requirements of its target markets. Those organizations that develop a competitive
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advantage are able to satisfy the needs of both customers and the organization. As our economic system has become more successful at providing for needs and wants, there has been greater focus on organizations' adhering to ethical values rather than simply providing products. This focus has come about for two reasons. First, when an organization behaves ethically, customers develop more positive attitudes about the firm, its products, and its services. When marketing practices depart from standards that society considers acceptable, the market process becomes less efficient—sometimes it is even interrupted. Not employing ethical marketing practices may lead to dissatisfied customers, bad publicity, a lack of trust, lost business, or, sometimes, legal action. Thus, most organizations are very sensitive to the needs and opinions of their customers and look for ways to protect their long-term interests. Second, ethical abuses frequently lead to pressure (social or government) for institutions to assume greater responsibility for their actions. Since abuses do occur, some people believe that questionable business practices abound. As a result, consumer interest groups, professional associations, and self-regulatory groups exert considerable influence on marketing. Calls for social responsibility have also subjected marketing practices to a wide range of federal and state regulations designed to either protect consumer rights or to stimulate trade. General guidelines • • • Marketing managers must accept responsibility for the consequences of their actions Managers should refrain from knowingly doing harm, adhere to all relevant laws and regulations, and accurately represent themselves, their firms, and their brands Managers must make every effort to verify that their choices and actions serve the best interests of all related customers, organizations, and societies. Specifically they should: ? Adhere to basic ethical guidelines stated above ? Engage in honest and fair practices with clients, employees, and partners ? Offer goods and services that are safe and fit for use ? Refrain from advertising falsely and misleading consumers ? Maintain market research integrity by adhering to market research guidelines
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? Respect consumers privacy rights and ensure confidentiality of information ? Adhere to standards and guidelines of international marketing associations and to the legal requirements of governing bodies
CORPORATE MARKETING ETHICS POLICIES
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PRICING
1) Price fixing- It is illegal. It is considered to be anti-competitive as well as unethical. So a
business cannot: • • • • • Agree prices with its competitors (e.g. it can't agree to work from a shared minimum price list) Share markets or limit production to raise prices (e.g. if two contracts are put out to tender, one business can't agree that it will bid for one and let a competitor bid for the other) Impose minimum prices on different distributors such as shops Agree with competitors what purchase price it will offer suppliers Cut prices below cost in order to force a smaller or weaker competitor out of the mark
1) Price wars 2) Price collusion (agreeing with other competitors to set prices in a market to the detriment of competition and consumers) Deceptive pricing practices cause customers to believe that the price they pay for some unit of value in a product or service is lower than it really is. The deception might take the form
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of making false price comparisons, providing misleading suggested selling prices, omitting important conditions of the sale, or making very low price offers available only when other items are purchased as well
Advertising and promotion Advertising (promotion) is another marketing activity that is regulated in order to deter unethical practice. It includes – •
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Issues over truth and honesty Issues with violence Taste and controversy Negative advertising
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For eg – Advertising in the UK is regulated by the Advertising Standards Authority, which regulates advertising across all media, including TV, internet, sales promotions and direct marketing. The ASA’s role is to ensure ads are legal, decent, honest and truthful by applying the Advertising Codes.
PRODUCT DEVELOPMENT It includes: • • • disclosure of all substantial risks associated with product or service usage; identification of any product component substitution that might materially change the product or impact on the buyer's purchase decision; identification of extra cost-added features
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False or greatly exaggerated product or service claims are also deceptive. When packages are intentionally mislabeled as to contents, size, weight, or use information, that constitutes deceptive packaging. Selling hazardous or defective products without disclosing the dangers, failing to perform promised services, and not honoring warranty obligations are also considered deception. CODES
As Marketers, we must:
1. Do no harm. This means consciously avoiding harmful actions or omissions by embodying
high ethical standards and adhering to all applicable laws and regulations in the choices we make
2. Foster trust in the marketing system. This means striving for good faith and fair dealing so
as to contribute toward the efficacy of the exchange process as well as avoiding deception in product design, pricing, communication, and delivery of distribution.
3. Embrace ethical values. This means building relationships and enhancing consumer
confidence in the integrity of marketing by affirming these core values: honesty, responsibility, fairness, respect, transparency and citizenship
CUSTOMER SERVICE What exactly is Customer Service? It`s your ethical response to the actual results of an
agreement between you and your customer. You`re saying you have a product or service that does something in particular. You`re assuring that claim by also offering a warranty, in many instances. Your customer buys that product in good faith, and gives you money. If your product fails to meet your claim, the customer asks for some kind of response. How you respond to a customer problem or complaint is entirely up to you, which also is entirely
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up to your own morality and your own ethics. If you run a business, those moral values and their ethical implementation enter into the business. As such, if you say you have a flashlight and none of them produce light, customers have a right to complain. If you then tell them all to jump in a lake, you are acting upon a moral principle and an ethical decision. Business ethics, like customer service, are most definitely a profit center. It`s only that most people don`t make the connection between the high-falutin` words of "morality" and "ethics" with commonplace terms like customer support, customer relations, and customer service
DISTRIBUTION In the area of distribution: • not manipulating the availability of a product for the purpose of exploitation;
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not using marketing
coercion in the channel;
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not exerting undue influence over the reseller's choice to handle a product
FACTORS INFLUENCING ETHICAL MARKETING BEHAVIOUR
The relationship among factors that influence ethical behavior can be shown in a framework in which • SOCIETAL CULTURE AND NORMS
? Culture refers to the set of values, ideas, and attitudes of a homogeneous group of people that are transmitted from one generation to the next. ? Culture also serves as a socializing force that dictates what is morally right and just. ? This means that moral standards are relative to particular societies, often reflecting the laws and regulations that affect social and economic behavior, including marketing practices. ? It is common to observe different ethical views in different countries. ? Societal values affect business practices regarding the use of another’s ideas, copyright, trademark, or patent.
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BUSINESS CULTURE AND INDUSTRY PRACTICES Business cultures Comprise the The effective rules of the game • The boundaries between competitive and unethical behavior
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The codes of conduct in business dealings.
It Affects ethical conduct in the exchange relationship between sellers and buyers and In the competitive behavior among sellers.
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CORPORATE CULTURE AND EXPECTATIONS Corporate culture • • It reflects the shared values, beliefs, and purposes of employees that affect individual and group behavior Corporate ethical culture manifests itself in codes of ethics and the ethical actions of top management and co-workers.
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PERSONAL MORAL PHILOSOPHY AND ETHICAL BEHAVIOUR Ultimately, ethical choices are based on the personal moral philosophy of the decision maker. Two personal moral philosophies have direct bearing on marketing practice: THEY ARE: Moral Idealism. Utilitarianism.
RELATIOSHIP BETWEEN MARKETING AND ETHICS
? A reasonable practice leading to positive relationships.
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? That rules are not necessarily contractual. ? Allows buyers and sellers to work together. ? Disadvantage: requires time to develop a list of expected conduct or “rules of behavior.”
COMMON ETHICAL DILEMMAS FACED BY MARKETING
DEPARTMENTS
In fact, everyone in business is wise to develop moral fibers, because ethical problems often lead to legal problems, which bite into profits -- not to mention your career ladder. The first step to confronting any dilemma is recognizing the moral dimension of it. Only then can you properly weigh the pros and cons of your options. Here are common ethical dilemmas you’re likely to face as a marketing professional and steps to keep your reputation intact: Ethical Dilemma: How Far Can You Go in Stealth Marketing? Scenario: An actor hired by a particular company poses as an ordinary Joe and strikes up a conversation with a potential consumer to praise the company’s product or service. Is this fair? Case Study: Don’t think this could actually happen? Think again, says Hartman, who wrote about Sony Ericsson hiring actors posing as tourists to go to the Empire State Building to ask other visitors to take photos of them with the brand’s cameras. Then, the actors talked up the product. She cites other examples such as companies having publicity hires write recommendations for goods and services on various Web sites without disclosing their employer. These maneuvers, known as stealth marketing, are a hotly debated topic in the industry. Where should you stand? Plan of Action: With an ever more sophisticated clientele, companies are quickly learning that transparency rules today’s marketplace. Therefore, experts say your only choice is to be honest and forthright. If you want consumers to sample your product in a natural setting, you can still have them do so. Just let them know who you are and why you’d like to talk to them. If the product is a good one, then your honesty should in no way diminish it.
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Ethical Dilemma: Can You Sell Customer Information? Scenario: When customers shop your online store, they leave an electronic trail that provides lots of information -- from their name and address to the types of goods that interest them when they search the site. A partner company would like to buy the data from you. Should you make the sale? Do you even have the right to use that information in house?
Case Study: Telemarketers and junk email are a part of everyday life. There’s no question that someone is passing around contact information. Companies are always looking to get in touch with customers and find out about purchasing patterns, says H. David Hennessey, professor of marketing at Babson College. Using consumer information is a privacy and fairness issue if not a legal one, he adds, because many people think their purchases are anonymous or somehow protected. Plan of Action: Consult the company’s code of ethics to determine if standards have already been set about how much information you can use internally and externally, says Hennessey. He suggests you put together a group to create a policy about the acceptable ways to use information consumers share with you. Consider privacy law and the American Marketing Association’s set of standards when determining your code of conduct, say experts. Sometimes, the easiest and most effective way to confront such questions is simply to put yourself in your client’s shoes. Would you consider the use an invasion of privacy or betrayal?
Ethical Dilemma: Should You Recall a Flawed Product? Scenario: You discover a flaw in one of your products, but telling the public might affect sales. What should you do?
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Case Study: Many a company has had to grapple with this problem. Think of what must go into the decision to recall cars. Pet food makers had to react to the fact that some food was tainted and killing beloved cats and dogs. In 2006, some consumers of Bausch & Lomb’s ReNu with Moisture Loc contact lens solution suffered from a fungal eye infection, and the company’s marketers were criticized for reacting slowly and being close-lipped. Although extreme, these examples highlight the importance of gaining and maintaining consumers’ trust. Plan of Action: Marketing 101 taught you that your main priority should always be to focus on the positives of the products and services you offer. However, you have to remember that stakeholders in your company aren’t just the financiers who birthed the enterprise but are also the consumers who keep its heart beating. “If profit maximization is going to lead the decision maker down the wrong path, that’s not right,” says Kirk Davidson, professor of corporate social responsibility and marketing at Mount St. Mary’s University in Emmitsburg, Maryland. “You can achieve satisfactory profits and do the right thing.” Any industry expert will tell you -- just as they did Bausch & Lomb in 2006 -- if your product is in any way harmful, you must be honest, ask forgiveness and take action immediately. Take a page from Johnson & Johnson’s handbook. The company’s handling of the Tylenol tragedy in 1982, when seven people in Chicago died as a result of ingesting cyanide-laced Tylenol ExtraStrength capsules, is considered the best example of how to handle a product liability issue. The company swiftly pulled the products from the shelves and quelled the nerves of its consumers.
Ethical Dilemma: What’s Appropriate in Comparison Marketing? Scenario: You’d like to put out an ad for your client that compares his product to the competition. How far can you go? Case Study: Once you start looking for examples of comparison marketing, you will find them everywhere. Makers of acne medication pit an image of a client using one product, say Proactiv, versus photos of the same person using a rival product to show which zaps more zits. Phone
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companies are notorious for comparing their services and charges to those of a rival in television ads. Plan of Action: There’s nothing wrong with wanting to show up the competition -- as long as you don’t step over the line. Be sure that everything you are publicly saying in favor of your company or product and against your competitor is actually true. Test the goods yourself before committing to any promotional materials. Double and triple check the facts. The bottom line is that inaccuracies in such comparison marketing undoubtedly lead to a courtroom, where your rivals will call you out on your errors. You could lose the big bucks, not to mention the respect of an otherwise trusting public. Good marketing ethics affect organizational success. Ethics are the principals a person or department uses when making a decision . Sometimes, the choices are clear cut right and wrong. Often, they are more ambiguous ethical dilemmas. Marketing departments face their own particular set of uncertain problems pertaining to product development, pricing policy, distribution activities and promotion. This article aims not to outline a code of ethics but to reveal areas where business ethics must be employed. Misleading advertising is a common ethical dilemma. Although regulation provides formal boundaries of what an advertisement can and cannot say, marketers must consider the ethical boundaries. Defining when a claim is taken too far or a problem is intentionally, or unintentionally, hidden from the target market is one of the roles of ethics in marketing. The ethics related to direct marketing is another concern of marketing departments. Customers may feel invaded by direct mail or telemarketing. The use of these promotion avenues should be governed by sound ethical principles. Another dilemma is the marketing of harmful products-for example, tobacco and fast food. Marketers must decide how much responsibility they take for the harm which these products cause and how much they delegate to consumers or producers. Again, the right choice is not always clear and this is where good ethical marketers can step up. Marketers should attend to pricing ethics. Predatory pricing, the practice of setting prices to drive out competition, can be harmful to consumers so marketers must tread carefully. Policy designed to foster a healthy marketing environment must be balanced against profit requirements. How cause-related marketing is managed can become another ethical dilemma for marketers. The
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sincerity of a company's interest in a particular cause-the environment or education-can impact on customers' and society's perception of that company. Marketing departments responsible for the relationship with a cause must manage it openly and honestly. How their product affects the environment is of increasing concern to marketing departments. 'Green' practices can improve the good standing of a company and marketing department in the community. Marketers may be challenged by the costs of some environmentally-friendly choices but must consider their responsibility to society. Many other ethical issues confront marketing executives. How clearly and in what way consumers are informed of price or size changes must be weighed against costs. Marketing departments Distribution of transport. For requires healthy of resellers must consider their mark-up policies. issues include quality example, fresh food transport conditions. the ethics behind
Ultimately, ethics relates to organizational performance in generating goodwill for a particular company. This goodwill should translate into sales. Ethical behaviour by the marketing department will make the department and even the company a more attractive place to work as the company's good reputation will transfer to its employees. Motivated, proud employees will improve performance. Bad marketing ethics will destroy a good reputations which is arguably much harder to build than sales numbers.
ETHICS OF HUMAN RESOURCE DEPARTMENT
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The ethics of Human resource department covers those ethical issues arising around the employeremployee relationship, such as the rights and duties owed between employer and employee.
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Discrimination issues include discrimination on the bases of age (ageism), gender, race, religion, disabilities, weight and attractiveness. See also: affirmative action, sexual harassment.
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Issues surrounding the representation of employees and the democratization of the workplace: union busting, strike breaking.
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Issues affecting the privacy of the employee: workplace surveillance, drug testing. See also: privacy.
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Issues affecting the privacy of the employer: whistle-blowing. Issues relating to the fairness of the employment contract and the balance of power between employer and employee: slavery, indentured servitude, employment law.
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Occupational safety and health. Human resource management deals with manpower planning and development related
activities in an organization. Arguably it is that branch of management where ethics really matter, since it concerns human issues specially those of compensation, development, industrial relations and health and safety issues. There is however sufficient disagreement from various quarters. There are different schools of thought that differ in their viewpoint on role of ethics or ethics in human resource development. One group of thought leaders believes that since in business, markets govern the organizational interests and these interests are met through people, the latter are therefore at the highest risk. They believe that markets claim profits in the name of stakeholders and unless we have protocols, standards and procedures the same will develop into a demon monopolizing markets and crushing human capital; HR ethics are become mandatory.
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There is another group of ethicists inspired by neo-liberalism who believe that there are no business ethics apart from realization of higher profits through utilization of human resources. They argue that by utilizing human resources optimally, there is more value creation for the shareholders, organization and the society and since employees are part of the society or organization, they are indirectly benefited. Nevertheless ethics in human resource management has become a perennial debate of late! Discussions in ethics in HRD stem from employee relationships and whether or not there can be a standard for the same. Employee rights and duties and freedom and discrimination at the workplace are issues discussed and covered by most texts on the topic. Some argue that there are certain things in employment relationship that are constant others disagree with the same. For example, right to privacy, right to be paid in accordance with the work (fair compensation) and right to privacy are some areas that cannot be compromised upon. What is important to discuss today is how research informs us about the pivotal role human resource professionals can and should play in ethics management. Research suggests that successful ethics management depends less on formal ethics programs and more on employees' fairness perceptions, ethical leadership at all levels, and the alignment of multiple formal and informal cultural systems to support ethical conduct. To the extent that HR systems invoke fairness evaluations, HR managers design leadership training, and HR systems help to create and maintain organizational culture, HR professionals must play a key role in ethics management. Research has found that employees' perceptions of fairness are equally or more important than other factors in terms of their influence on ethics-related outcomes. Fair treatment is so important because employees who perceive unfair treatment will rebalance the scales of justice by harming the organization. Employees who perceive fair treatment, on the other hand, will reciprocate by going above and beyond the call of duty to help management (by reporting ethical problems, for example). To ensure that employees feel they are treated fairly, it is important to design HR systems and interventions with perceived fairness as a key goal, with an emphasis on procedural (fair decision making procedures) and interaction (fair interpersonal treatment) fairness. Employees' perceptions of fair treatment should be monitored regularly via employee surveys, and changes should be made based upon the results.
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It is also important for HR managers to work with the ethics/compliance office to follow up on employees' ethics concerns because a large percentage of reported concerns are fairness and therefore HR system-related. Most employees equate ethics and fairness; for them, there is no bright line between the ethics and HR offices.
ETHICAL ISSSUES RELATED TO HUMAN RESOURCE DEPARTMENT
Human is the most important resource to an organization. Issues associated with human resources occur as a result of employees working together. These issues are by far the largest category of ethical dilemmas in business.
The four main types of human resource issues are as follows: • Hiring and Termination Issues Recruitment or hiring process is the first step in selecting human resource into an organization, and will significantly influence the successful performance of the organization. Ethics plays a very important role during the recruitment of new employees. Law and regulations dictate that we have to be ethical in hiring. However, ethical hiring practice goes beyond them as well. It has been widely reported by many researchers that ethical hiring practices actually result in better employees being recruited. It is therefore important that sound ethical rules are followed when hiring a new employee. It is of vital importance that candidates
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are to be selected based on merits. Applicants are to be hired based purely on merits such as knowledge, skills, and ability in accordance to the needs of the organization. If a company provides any special considerations, for example affirmative action, where certain groups are given special considerations, these considerations should be well stated in the company's policy statement. In any case, any preferential treatment should be one that is legally allowed. While preferential treatments to certain specific group may be allowed, there should be no discrimination to people from any other group due to race, religion, gender, marital status. Consistency and objectivity during the recruitment process are very important. Criteria, including any changes in the criteria, used for evaluating candidates should be stated and explained to order to avoid unnecessary claim of biasness in the recruitment process. Objective evaluation results in the best employees being recruited while consistency ensures high morale among employees. When we recruit new employees, we should tell the applicants about the true state of the organization. We should not mislead the applicants. In particular, the applicants should be told all pertinent information, including those information that are not publicly known but that will materially affect the new employee's future employment prospect with the organization. We can learn from the case involving Phil McConkey. Phil McConkey was recruited but he was not aware that the company was in the process of being taken over by another entity. One year after joining the company he lost his job with he new company. He sued the company for with-holding important information from me during the recruitment process. We should never place misleading job advertisement in order to get applications if we are offering a job contract different from what we advertised for. For instance, if we want to engage independent contractors instead of normal salaried employment. The reason why we choose to engage independent contractors is that we do not have to be burdened with high salary cost for employees that are not competent, but we are willing to compensate employees according to performance. We should always state clearly our terms of employment. In any case, we do not want to be accused of any job scam.
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We have to be extra careful when we are recruiting employees from organizations that have material dealing with us include our suppliers, customers and competitors. If we are not careful ethical issues very damaging to us can arise. When we employ somebody from our suppliers, the suppliers may feel that we have unethically poached their good employee. After all, it is through the working relationship we have with the suppliers that we can to know the quality of this employee. When we employ somebody from our customers we can be accused of returning favor to that person. This rule applies especially when employing a former senior government employee that has an influence on the awards of contracts to an organization like yours. The case of Ms. Darleen Druyun at the Department of Defense and Mr. Michael Sears at Boeing is a good illustration of the importance of such a rule. In this case, employment favor was apparently granted by Boeing in exchange for favorable consideration for the awards of contracts by Department of Defense. Also, be careful not to employ former government employees for the purpose of lobbying for contracts from their previous government departments. At least, do not do so within the first two years of the employee leaving the government service. It is also not very wise to employ somebody from our competitors because we can be accused of stealing trade secrets from our competitors. If that employee can pass on his previous employer's secrets unethically, what is there to sop him from passing your trade secrets to others? Even though it may not be considered as unethical by some employers, as a matter of courtesy and good public relationship to inform an unsuccessful applicant. When an employee is asked to leave, it is also of vital importance that it is handled with fairness and care. If it is a case of poor performance or disciplines, the employee has to be given prior warning (unless it is violation of a well stated policy or is of a very serious nature)
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and fair hearing. In any case, do not hurt the dignity of the employee and offer to provide the necessary assistance where appropriate. Before an employee leave for any reason, provide him/her with an opportunity to provide feedback on the overall state of the organization by conducting exit interviews. • Discrimination It is the unfair or preferential treatment of a person on the basis of one or more uncontrollable characteristics, including race, gender, age, color, religion, or national origin, as well as handicapped or pregnancy status. Discrimination against others in the workplace can impair your ability to perform your job according to company expectations. In most countries, there are laws that protect potential and current employees from discrimination based on age, race, color, national origin, religion, and gender, as well as pregnancy or handicapped status. • Performance Appraisals They are conducted to evaluate an employee’s performance over a set period of time. When evaluating subordinates, one has to remain consistent and objective. Consistency is even more important when evaluating an existing employee than a prospective employee. Consistency requires that you treat every employee's misbehavior the same way. For example, it would be wrong to punish one employee's tardiness while leaving another employee's tardiness unchecked. In order to maintain objectivity, the company’s standardized evaluation forms should be used. In this way, uniform criteria can be used for the appraisal of all employees under you. Also, all employees in the company are evaluated based on the same criteria.
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Constant feedback and communication between you and your subordinates is necessary to facilitate a positive and productive working relationship. Don’t wait until periodic performance evaluations to express your observations and suggestions. In fact, it is unethical to base salary adjustments upon performance problems that have not been brought to the employee’ s attention. For employees being evaluated, honesty and acceptance of responsibility for performance problems are important ethical considerations. • Disciplinary issues
Disciplining employees is one of the most difficult parts of a manager’s job. Nevertheless, it is vital to the growth and overall success of the organization. Disciplining employees both ensures productivity and sets standards for the future. Discipline should occur immediately after a problem has occurred. It is imperative that the disciplinary actions remain consistent for all employees. A serious disciplinary issue is sexual harassment where female employees (less so for male employees) are subjected to an unwanted sexual behavior that creates an intimidating or hostile work environment. This includes unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature. This conduct is not only unethical, but illegal as well.
GUIDELINES FOR MANAGING ETHICS AT WORKPLACE
The following guidelines ensure the ethics management program is operated in a meaningful
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fashion: 1.Recognize that managing ethics is a process.
Ethics is a matter of values and associated behaviours. Values are discerned through the process of ongoing reflection. Therefore, ethics programs may seem more process-oriented than most management practices. Managers tend to be sceptical of process-oriented activities, and instead prefer processes focused on deliverables with measurements. However, experienced managers realize that the deliverables of standard management practices (planning, organizing, motivating, controlling) are only tangible representations of very process-oriented practices. For example, the process of strategic planning is much more important than the plan produced by the process. The same is true for ethics management. Ethics programs do produce deliverables, e.g., codes, policies and procedures, budget items, meeting minutes, authorization forms, newsletters, etc. However, the most important aspect from an ethics management program is the process of reflection and dialogue that produces these deliverables. 2. The bottom line of an ethics program is accomplishing preferred behaviours in the workplace.
As with any management practice, the most important outcome is behaviours preferred by the organization. The best of ethical values and intentions are relatively meaningless unless they generate fair and just behaviours in the workplace. That's why practices that generate lists of ethical values, or codes of ethics, must also generate policies, procedures and training that translate those values to appropriate behaviours. 3. The best way to handle ethical dilemmas is to avoid their occurrence in the first place.
That's why practices such as developing codes of ethics and codes of conduct are so important. Their development sensitizes employees to ethical considerations and minimizes the chances of unethical behaviour occurring in the first place.
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4. Make ethics decisions in groups, and make decisions public, as appropriate.
This usually produces better quality decisions by including diverse interests and perspectives, and increases the credibility of the decision process and outcome by reducing suspicion of unfair bias. 5. Integrate ethics management with other management practices.
When developing the values statement during strategic planning, include ethical values preferred in the workplace. When developing personnel policies, reflect on what ethical values you'd like to be most prominent in the organization's culture and then design policies to produce these behaviors. 6. Use cross-functional teams when developing and implementing the ethics management program.
It’s vital that the organization’s employees feel a sense of participation and ownership in the program if they are to adhere to its ethical values. Therefore, include employees in developing and operating the program. 7. Value forgiveness.
This may sound rather religious or preachy to some, but it’s probably the most important component of any management practice. An ethics management program may at first actually increase the number of ethical issues to be dealt with because people are more sensitive to their occurrence. Consequently, there may be more occasions to address people’s unethical behaviour. The most important ingredient for remaining ethical is trying to be ethical. Therefore, help
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people recognize and address their mistakes and then support them to continue to try operate ethically. 8. Note that trying to operate ethically and making a few mistakes is better than not trying at all.
Some organizations have become widely known as operating in a highly ethical manner, e.g., Ben and Jerry’s, Johnson and Johnson, Aveda, Hewlett Packard, etc. Unfortunately, it seems that when an organization achieves this strong public image, it's placed on a pedestal by some business ethics writers. All organizations are comprised of people and people are not perfect. However, when a mistake is made by any of these organizations, the organization has a long way tofall. In our increasingly critical society, these organizations are accused of being hypocritical and they are soon pilloried by social critics. Consequently, some leaders may fear sticking their necks out publicly to announce an ethics management program. This is extremely unfortunate. It's the trying that counts and brings peace of mind -- not achieving a heroic status in society
ETHICS ADVICE FOR HR PROFESSIONALS.
1. Know what you believe. 2. Clearly think through what is legally and morally right and wrong. 3. Understand why you believe what you believe. 4. Develop your ability to influence. Be prepared to offer creative solutions to difficult situations. 5. Be able to walk away if your ethical standards are jeopardized
CONCLUSION
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All the production functions are governed by production ethics but there are certain that are severely harmful or deleterious which need to be monitored continuously Because marketing decisions often require specialized knowledge, ethical issues are often more complicated than those faced in personal life— and effective decision making requires consistency. Because each business situation is different, and not all decisions are simple, many organizations have embraced ethical codes of conduct and rules of professional ethics to guide managers and employees. However, sometimes self-regulation proves insufficient to protect the interest of customers, organizations, or society. At that point, pressures for regulation and enactment of legislation to protect the interests of all parties in the exchange process will likely occur. HR systems are key to the development and maintenance of ethical culture. One of the steps HR managers can take is to focus on how ethics and values fit into the design of key systems such as performance management and reward systems. HR managers can integrate accountability for ethics and values into performance management systems so that implementing ethical values is weighted substantially in promotion and compensation decisions (at least as much as bottom line results). Additionally, HR managers can focus on reward systems by rewarding 'exemplary' ethical behavior. To focus on discipline, unethical conduct must be disciplined consistently and at high levels, to send a powerful signal that management means what it says about ethics. Finally, effective ethics management requires regular assessment of the ethical culture. Overall, HR and ethics managers must focus on how cultural systems fit together or align in support of ethical conduct, a common goal
BIBLIOGRAPHY
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We have collected the information needed for this project from: (1) www.google.com (2) www.slideshare.com (3) www.managementparadise.com
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doc_385689033.docx
Ethics, also known as moral philosophy, is a branch of philosophy that addresses questions about morality — that is, concepts such as good and evil, right and wrong, virtue and vice, justice and crime, etc. Major branches of ethics include:
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Meta-ethics, about the theoretical meaning and reference of moral propositions and how their truth values (if any) may be determined;
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Normative ethics, about the practical means of determining a moral course of action;
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Applied ethics, about how moral outcomes can be achieved in specific situations; Moral psychology, about how moral capacity or moral agency develops and what its nature is;
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Descriptive ethics, about what moral values people actually abide by.
Ethics is two things. First, ethics refers to well-founded standards of right and wrong that prescribe what humans ought to do, usually in terms of rights, obligations, benefits to society, fairness, or specific virtues. Ethics, for example, refers to those standards that impose the reasonable obligations to refrain from rape, stealing, murder, assault, slander, and fraud. Ethical standards also include those that enjoin virtues of honesty, compassion, and loyalty. And, ethical standards include standards relating to rights, such as the right to life, the right to freedom from injury, and the right to privacy. Such standards are adequate standards of ethics because they are supported by consistent and well-founded reasons. Secondly, ethics refers to the study and development of one's ethical standards. As mentioned above, feelings, laws, and social norms can deviate from what is ethical. So it is necessary to constantly examine one's standards to ensure that they are reasonable and well-founded. Ethics also means, then, the continuous effort of studying our own moral beliefs and our moral conduct,
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and striving to ensure that we, and the institutions we help to shape, live up to standards that are reasonable and solidly-based. Some years ago, sociologist Raymond Baumhart asked business people, "What does ethics mean to you?" Among their replies were the following: • "Ethics has to do with what my feelings tell me is right or wrong." "Ethics has to do with my religious beliefs." "Being ethical is doing what the law requires." "Ethics consists of the standards of behavior our society accepts." "I don't know what the word means." • These replies might be typical of our own. The meaning of "ethics" is hard to pin down, and the views many people have about ethics are shaky.
FROM WHERE ETHICS COME?
? RELIGION
Virtually all the world's religions teach an essentially similar code of ethics that emphasizes honesty, respect for others and their rights, and selflessness. Therefore, in both business and personal situations, a highly religious person is likely to act in ways that most of us will regard as highly ethical. Their religion will give them highly explicit, generally internally consistent, guides to "good" personal conduct. These guidelines usually can be broadened to apply quite well to business activity. Moreover, those for whom religion is not a central force in their lives are more likely to act in self-centered, ethically questionable ways.
? PARENTS AND TEACHERS
Without really thinking or even being able to avoid it, each person learns ethics from his or her parents and teachers—what they teach in words and perhaps more importantly through
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their actions. These teachings shape our most fundamental attitudes about what is "right" and what is "wrong." As a very brief insurance-related example, the child of an insurance agent, upon reaching adulthood, is much more likely to be honest and truthful in settling claims under his or her insurance policies than is the grown child of another insurance agent if the other agent was terminated by the insurer under disputed circumstances. The child may not have understood the intricacies of those circumstances at the time, but as an adult, he or she is likely to believe in their heart that insurers are not to be to be trusted and do not deserve to be treated honestly.
? ENVIRONMENT
Almost daily, quite casually, and sometimes without thinking, virtually all of us talk about others' and our own actions—offering frequent opinions about whether what they or we have been doing is good, right, and sensible (or perhaps very much the opposite). Buried in this "small talk," "chit chat," gossip, and mealtime conversations are implicit—sometimes very explicit—ethical judgments about the behavior being discussed. People and their words and actions are labeled "wonderful," "mean," "greedy," "generous," or hundreds of other qualities. Over time, these discussions lead each of us to a sense of what the people around us consider to be good and bad, ethical and unethical, conduct. Unless we have strong personal reasons or other commitments to believe otherwise, most of us tend to "go along" with the opinions of those around us, rather than "bucking the tide" by independently evaluating the ethical aspects of others' actions. Thus, often almost automatically, the social consensus can become the approved, although unexamined, ethical standard.
WHAT IS BUSINESS ETHICS?
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Business ethics is the behavior that a business adheres to in its daily dealings with the world. The ethics of a particular business can be diverse. They apply not only to how the business interacts with the world at large, but also to their one-on-one dealings with a single customer. Many businesses have gained a bad reputation just by being in business. To some people, businesses are interested in making money, and that is the bottom line. It could be called capitalism in its purest form. Making money is not wrong in itself. It is the manner in which some businesses conduct themselves that brings up the question of ethical behavior. Good business ethics should be a part of every business. There are many factors to consider. When a company does business with another that is considered unethical, does this make the first company unethical by association? Some people would say yes, the first business has a responsibility and it is now a link in the chain of unethical businesses. Many global businesses, including most of the major brands that the public use, can be seen not to think too highly of good business ethics. Many major brands have been fined millions for breaking ethical business laws. Money is the major deciding factor. If a company does not adhere to business ethics and breaks the laws, they usually end up being fined. Many companies have broken anti-trust, ethical and environmental laws and received fines worth millions. The problem is that the amount of money these companies are making outweighs the fines applied. Billion dollar profits blind the companies to their lack of business ethics, and the dollar sign wins.
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A business may be a multi-million seller, but does it use good business ethics and do people care? There are popular soft drinks and fast food restaurants that have been fined time and time again for unethical behavior. Business ethics should eliminate exploitation, from the sweat shop children who are making sneakers to the coffee serving staff who are being ripped off in wages. Business ethics can be applied to everything from the trees cut down to make the paper that a business sells to the ramifications of importing coffee from certain countries. In the end, it may be up to the public to make sure that a company adheres to correct business ethics. If the company is making large amounts of money, they may not wish to pay too close attention to their ethical behavior. There are many companies that pride themselves in their correct business ethics, but in this competitive world, they are becoming very few and far between.
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ETHICAL CODES
An ethical code is adopted by an organization in an attempt to assist those in the organization called upon to make a decision (usually most, if not all) understand the difference between 'right' and 'wrong' and to apply this understanding to their decision. The ethical code therefore generally implies documents at three levels: codes of business ethics, codes of conduct for employees and codes of professional practice. •
Code of ethics (corporate or business ethics) A code of business ethics often focuses on social issues. It may set out general principles about an organization's beliefs on matters such as mission, quality, privacy or the environment. It may delineate proper procedures to determine whether a violation of the code of ethics has occurred and, if so, what remedies should be imposed. The effectiveness of such codes of ethics depends on the extent to which management supports them with sanctions and rewards. Violations of a private organization's code of ethics usually can subject the violator to the organization's remedies (such as restraint of trade based on moral principles). The code of ethics links to and gives rise to a code of conduct for employees. Code of conduct (employee ethics) A code of conduct for employees sets out the procedures to be used in specific ethical situations, such as conflicts of interest or the acceptance of gifts, and delineate the procedures to determine whether a violation of the code of ethics occurred and, if so, what remedies should be imposed. The effectiveness of such codes of ethics depends on the extent to which management supports them with sanctions and rewards. Violations of a code of conduct may subject the violator to the
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organization's remedies which can under particular circumstances result in the termination of employment. Code of practice (professional ethics) A code of practice is adopted by a profession or by a governmental or non-governmental organization to regulate that profession. A code of practice may be styled as a code of professional responsibility, which will discuss difficult issues, difficult decisions that will often need to be made, and provide a clear account of what behavior is considered "ethical" or "correct" or "right" in the circumstances. In a membership context, failure to comply with a code of practice can result in expulsion from the professional organization. In its 2007 International Good Practice Guidance, Defining and Developing an Effective Code of Conduct for Organizations, the International Federation of Accountants provided the following working definition: "Principles, values, standards, or rules of behavior that guide the decisions, procedures and systems of an organization in a way that (a) contributes to the welfare of its key stakeholders, and (b) respects the rights of all constituents affected by its operations."
Ethical codes are often adopted by management, not because of some over-riding corporate mission to promote a particular moral theory, but accepted as pragmatic necessities in running an organization in a complex society in which moral concepts play an important part. They are distinct from moral codes that may apply to the culture, education, and religion of a whole society. Of course, certain acts that constitute a violation of ethical codes may also violate a law or regulation and can be punishable at law or by government agency remedies. Even organizations and communities that may be considered criminal may have their own ethical code of conduct, be it official or unofficial. Examples could be hackers, thieves, or even street gangs.
ETHICS IN PRODUCTION
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This area of business ethics deals with the duties of a company to ensure that products and production processes do not cause harm. Since few goods and services can be produced and consumed with zero risk, determining the ethical course can be problematic. In some case consumers demand products that harm them, such as tobacco products. Production may have environmental impacts, including pollution, habitat destruction and urban sprawl. The downstream effects of technologies nuclear power, genetically modified food and mobile phones may not be well understood. While the precautionary principle may prohibit introducing new technology whose consequences are not fully understood, that principle would have prohibited most new technology introduced since the industrial revolution. Product testing protocols have been attacked for violating the rights of both humans and animals These production business ethics often deal with defective, addictive or inherently dangerous products and services (e.g. tobacco, alcohol, weapons, motor vehicles, chemical manufacturing). Along with the ethical relations between the company and the environment such as pollution and other environmental ethics issues Ethics in production is a subset of business ethic that is meant to ensure that the production function or activities are not damaging to the consumer or the society. Like other ethics there is a certain code of conduct or standards to be followed, however ensuring that the ethics are complied with is often difficult. One of the most important characteristic of the business today is that there is a great degree of interdependence between various business functions. Production cannot happen without marketing and sales and vice versa. In order to survive in the competitive sphere organizations try to reduce the costs involved in production processes. This cost efficiency is sometimes achieved at the cost of quality. Poor processes and technology is used to keep the cost down, this is especially true for small players who cannot afford economies of scale. Having said this there are also examples of industry giants that compromised on certain production processes, cola companies make up for a good example.
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All the production functions are governed by production ethics but there are certain that are severely harmful or deleterious which need to be monitored continuously. The following are worth mentioning: There are ethical problems arising out of use of new technologies that are deleterious to health, safety and environment. Technological advancements like genetically modified food, radiations from mobile phones, medical equipment etc are less problems are more of dilemmas. Defective services and products or products those are innately deleterious like alcohol, tobacco, fast motor vehicles, warfare, chemical manufacturing etc. Animal testing and their rights or use of economically or socially deprived people for testing or experimentation is another area of production ethics. Ethics of transactions between the organization and the environment that lead to pollution, global warming, increase in water toxicity and diminishing natural resources.
DILEMMA OF ETHICS IN PRODUCTION
There are certain processes involved in the production of goods and a slight error in the same can degrade the quality severely. In certain products the danger is greater i.e. a slight error can reduce the quality and increase the danger associated with consumption or usage of the same exponentially. The dilemma therefore lies in defining the degree of permissibility, which in turn depends on a number of factors. Bhopal gas tragedy is one example where the poisonous gas got leaked out due to negligence on the part of the management. 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. Usually many manufactures are involved in the production of same good. They may use similar or dissimilar technologies for the same. Setting a standard in case of dissimilar technologies is
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often very difficult. There are many other factors that contribute to the dilemma, for example, the involvement of the manpower, the working conditions, the raw material used etc. Social perceptions also create an impasse sometimes. For example the use of some fertilizer by cola companies in India recently created a national debate. The same cold drinks which were consumed till yesterday became noxious today because of a change in the social perception that the drinks are not fit for consumption.
ETHICS IN MARKETING
Marketing Ethics came of age only as late as 1990s. Marketing ethics was approached from ethical perspectives of virtue or virtue ethics, deontology, consequentialism, pragmatism and relativism Ethics in marketing deals with the principles, values and/or ideals by which marketers (and marketing institutions) ought to act.[ Marketing ethics is also contested terrain, beyond the previously described issue of potential conflicts between profitability and other concerns. Ethical marketing issues include marketing redundant or dangerous products/services] transparency about environmental risks, transparency about product ingredients such as genetically modified organisms possible health risks, financial risks, security risks, etc., respect for consumer privacy and autonomy,[ advertising truthfulness and fairness in pricing & distribution. According to Borgerson, and Schroeder (2008), marketing can influence individuals' perceptions of and interactions with other people, implying an ethical responsibility to avoid distorting those perceptions and interactions. Marketing ethics involves pricing practices, including illegal actions such as price fixing and legal actions including price discrimination and price skimming. Certain promotional
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activities have drawn fire, including greenwashing, bait and switch, shilling, viral marketing, spam (electronic), pyramid schemes and multi-level marketing. Advertising has raised objections about attack ads, subliminal messages, sex in advertising and marketing in schools Marketing ethics is the area of applied ethics which deals with the moral principles behind the operation and regulation of marketing. Some areas of marketing ethics (ethics of advertising and promotion) overlap with media ethics. Ethics are a collection of principles of right conduct that shape the decisions people or organizations make. Practicing ethics in marketing means deliberately applying standards of fairness, or moral rights and wrongs, to marketing decision making, behavior, and practice in the organization. A good marketing sense, with the corporate bottom line in mind, is still the single most important motivation for the application of ethics in marketing. Marketing ethics has come to mean the concern over the three major stakeholders in the conduct of business: the company, the industry, and society. These three groups have logically different and differing needs and wants. Out of these differences, ethical conflicts arise. However, the inescapable fact remains that ethics plays an important role in the relationship between a company and the public. Ethics in marketing can result in positive company reputation and image, as well as positive customer impression of the company and its products and services. The ethical marketer knows too well that unethical marketing practices can only lead to bad company reputation and image, bad publicity, dissatisfied customers, lack of consumer trust and confidence, and loss of business or even legal action in the extreme. A sensible marketer will want to avoid the pitfalls of unethical marketing. Ethical abuses result in pressure from government watchdogs and social concern groups. Marketing irresponsibility will only be meted with negative controversy that can very well backfire on the business organization. Consumer interest groups, professional associations, and self-regulatory groups exist precisely to exert influence towards the full practice of ethics in marketing. In a market economy, a business may be expected to act in what it believes to be its own best interest. The purpose of marketing is to create a competitive advantage. An organization achieves an advantage when it does a better job than its competitors at satisfying the product and service requirements of its target markets. Those organizations that develop a competitive
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advantage are able to satisfy the needs of both customers and the organization. As our economic system has become more successful at providing for needs and wants, there has been greater focus on organizations' adhering to ethical values rather than simply providing products. This focus has come about for two reasons. First, when an organization behaves ethically, customers develop more positive attitudes about the firm, its products, and its services. When marketing practices depart from standards that society considers acceptable, the market process becomes less efficient—sometimes it is even interrupted. Not employing ethical marketing practices may lead to dissatisfied customers, bad publicity, a lack of trust, lost business, or, sometimes, legal action. Thus, most organizations are very sensitive to the needs and opinions of their customers and look for ways to protect their long-term interests. Second, ethical abuses frequently lead to pressure (social or government) for institutions to assume greater responsibility for their actions. Since abuses do occur, some people believe that questionable business practices abound. As a result, consumer interest groups, professional associations, and self-regulatory groups exert considerable influence on marketing. Calls for social responsibility have also subjected marketing practices to a wide range of federal and state regulations designed to either protect consumer rights or to stimulate trade. General guidelines • • • Marketing managers must accept responsibility for the consequences of their actions Managers should refrain from knowingly doing harm, adhere to all relevant laws and regulations, and accurately represent themselves, their firms, and their brands Managers must make every effort to verify that their choices and actions serve the best interests of all related customers, organizations, and societies. Specifically they should: ? Adhere to basic ethical guidelines stated above ? Engage in honest and fair practices with clients, employees, and partners ? Offer goods and services that are safe and fit for use ? Refrain from advertising falsely and misleading consumers ? Maintain market research integrity by adhering to market research guidelines
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? Respect consumers privacy rights and ensure confidentiality of information ? Adhere to standards and guidelines of international marketing associations and to the legal requirements of governing bodies
CORPORATE MARKETING ETHICS POLICIES
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PRICING
1) Price fixing- It is illegal. It is considered to be anti-competitive as well as unethical. So a
business cannot: • • • • • Agree prices with its competitors (e.g. it can't agree to work from a shared minimum price list) Share markets or limit production to raise prices (e.g. if two contracts are put out to tender, one business can't agree that it will bid for one and let a competitor bid for the other) Impose minimum prices on different distributors such as shops Agree with competitors what purchase price it will offer suppliers Cut prices below cost in order to force a smaller or weaker competitor out of the mark
1) Price wars 2) Price collusion (agreeing with other competitors to set prices in a market to the detriment of competition and consumers) Deceptive pricing practices cause customers to believe that the price they pay for some unit of value in a product or service is lower than it really is. The deception might take the form
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of making false price comparisons, providing misleading suggested selling prices, omitting important conditions of the sale, or making very low price offers available only when other items are purchased as well
Advertising and promotion Advertising (promotion) is another marketing activity that is regulated in order to deter unethical practice. It includes – •
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Issues over truth and honesty Issues with violence Taste and controversy Negative advertising
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For eg – Advertising in the UK is regulated by the Advertising Standards Authority, which regulates advertising across all media, including TV, internet, sales promotions and direct marketing. The ASA’s role is to ensure ads are legal, decent, honest and truthful by applying the Advertising Codes.
PRODUCT DEVELOPMENT It includes: • • • disclosure of all substantial risks associated with product or service usage; identification of any product component substitution that might materially change the product or impact on the buyer's purchase decision; identification of extra cost-added features
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False or greatly exaggerated product or service claims are also deceptive. When packages are intentionally mislabeled as to contents, size, weight, or use information, that constitutes deceptive packaging. Selling hazardous or defective products without disclosing the dangers, failing to perform promised services, and not honoring warranty obligations are also considered deception. CODES
As Marketers, we must:
1. Do no harm. This means consciously avoiding harmful actions or omissions by embodying
high ethical standards and adhering to all applicable laws and regulations in the choices we make
2. Foster trust in the marketing system. This means striving for good faith and fair dealing so
as to contribute toward the efficacy of the exchange process as well as avoiding deception in product design, pricing, communication, and delivery of distribution.
3. Embrace ethical values. This means building relationships and enhancing consumer
confidence in the integrity of marketing by affirming these core values: honesty, responsibility, fairness, respect, transparency and citizenship
CUSTOMER SERVICE What exactly is Customer Service? It`s your ethical response to the actual results of an
agreement between you and your customer. You`re saying you have a product or service that does something in particular. You`re assuring that claim by also offering a warranty, in many instances. Your customer buys that product in good faith, and gives you money. If your product fails to meet your claim, the customer asks for some kind of response. How you respond to a customer problem or complaint is entirely up to you, which also is entirely
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up to your own morality and your own ethics. If you run a business, those moral values and their ethical implementation enter into the business. As such, if you say you have a flashlight and none of them produce light, customers have a right to complain. If you then tell them all to jump in a lake, you are acting upon a moral principle and an ethical decision. Business ethics, like customer service, are most definitely a profit center. It`s only that most people don`t make the connection between the high-falutin` words of "morality" and "ethics" with commonplace terms like customer support, customer relations, and customer service
DISTRIBUTION In the area of distribution: • not manipulating the availability of a product for the purpose of exploitation;
•
not using marketing
coercion in the channel;
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•
not exerting undue influence over the reseller's choice to handle a product
FACTORS INFLUENCING ETHICAL MARKETING BEHAVIOUR
The relationship among factors that influence ethical behavior can be shown in a framework in which • SOCIETAL CULTURE AND NORMS
? Culture refers to the set of values, ideas, and attitudes of a homogeneous group of people that are transmitted from one generation to the next. ? Culture also serves as a socializing force that dictates what is morally right and just. ? This means that moral standards are relative to particular societies, often reflecting the laws and regulations that affect social and economic behavior, including marketing practices. ? It is common to observe different ethical views in different countries. ? Societal values affect business practices regarding the use of another’s ideas, copyright, trademark, or patent.
•
BUSINESS CULTURE AND INDUSTRY PRACTICES Business cultures Comprise the The effective rules of the game • The boundaries between competitive and unethical behavior
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•
The codes of conduct in business dealings.
It Affects ethical conduct in the exchange relationship between sellers and buyers and In the competitive behavior among sellers.
•
CORPORATE CULTURE AND EXPECTATIONS Corporate culture • • It reflects the shared values, beliefs, and purposes of employees that affect individual and group behavior Corporate ethical culture manifests itself in codes of ethics and the ethical actions of top management and co-workers.
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PERSONAL MORAL PHILOSOPHY AND ETHICAL BEHAVIOUR Ultimately, ethical choices are based on the personal moral philosophy of the decision maker. Two personal moral philosophies have direct bearing on marketing practice: THEY ARE: Moral Idealism. Utilitarianism.
RELATIOSHIP BETWEEN MARKETING AND ETHICS
? A reasonable practice leading to positive relationships.
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? That rules are not necessarily contractual. ? Allows buyers and sellers to work together. ? Disadvantage: requires time to develop a list of expected conduct or “rules of behavior.”
COMMON ETHICAL DILEMMAS FACED BY MARKETING
DEPARTMENTS
In fact, everyone in business is wise to develop moral fibers, because ethical problems often lead to legal problems, which bite into profits -- not to mention your career ladder. The first step to confronting any dilemma is recognizing the moral dimension of it. Only then can you properly weigh the pros and cons of your options. Here are common ethical dilemmas you’re likely to face as a marketing professional and steps to keep your reputation intact: Ethical Dilemma: How Far Can You Go in Stealth Marketing? Scenario: An actor hired by a particular company poses as an ordinary Joe and strikes up a conversation with a potential consumer to praise the company’s product or service. Is this fair? Case Study: Don’t think this could actually happen? Think again, says Hartman, who wrote about Sony Ericsson hiring actors posing as tourists to go to the Empire State Building to ask other visitors to take photos of them with the brand’s cameras. Then, the actors talked up the product. She cites other examples such as companies having publicity hires write recommendations for goods and services on various Web sites without disclosing their employer. These maneuvers, known as stealth marketing, are a hotly debated topic in the industry. Where should you stand? Plan of Action: With an ever more sophisticated clientele, companies are quickly learning that transparency rules today’s marketplace. Therefore, experts say your only choice is to be honest and forthright. If you want consumers to sample your product in a natural setting, you can still have them do so. Just let them know who you are and why you’d like to talk to them. If the product is a good one, then your honesty should in no way diminish it.
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Ethical Dilemma: Can You Sell Customer Information? Scenario: When customers shop your online store, they leave an electronic trail that provides lots of information -- from their name and address to the types of goods that interest them when they search the site. A partner company would like to buy the data from you. Should you make the sale? Do you even have the right to use that information in house?
Case Study: Telemarketers and junk email are a part of everyday life. There’s no question that someone is passing around contact information. Companies are always looking to get in touch with customers and find out about purchasing patterns, says H. David Hennessey, professor of marketing at Babson College. Using consumer information is a privacy and fairness issue if not a legal one, he adds, because many people think their purchases are anonymous or somehow protected. Plan of Action: Consult the company’s code of ethics to determine if standards have already been set about how much information you can use internally and externally, says Hennessey. He suggests you put together a group to create a policy about the acceptable ways to use information consumers share with you. Consider privacy law and the American Marketing Association’s set of standards when determining your code of conduct, say experts. Sometimes, the easiest and most effective way to confront such questions is simply to put yourself in your client’s shoes. Would you consider the use an invasion of privacy or betrayal?
Ethical Dilemma: Should You Recall a Flawed Product? Scenario: You discover a flaw in one of your products, but telling the public might affect sales. What should you do?
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Case Study: Many a company has had to grapple with this problem. Think of what must go into the decision to recall cars. Pet food makers had to react to the fact that some food was tainted and killing beloved cats and dogs. In 2006, some consumers of Bausch & Lomb’s ReNu with Moisture Loc contact lens solution suffered from a fungal eye infection, and the company’s marketers were criticized for reacting slowly and being close-lipped. Although extreme, these examples highlight the importance of gaining and maintaining consumers’ trust. Plan of Action: Marketing 101 taught you that your main priority should always be to focus on the positives of the products and services you offer. However, you have to remember that stakeholders in your company aren’t just the financiers who birthed the enterprise but are also the consumers who keep its heart beating. “If profit maximization is going to lead the decision maker down the wrong path, that’s not right,” says Kirk Davidson, professor of corporate social responsibility and marketing at Mount St. Mary’s University in Emmitsburg, Maryland. “You can achieve satisfactory profits and do the right thing.” Any industry expert will tell you -- just as they did Bausch & Lomb in 2006 -- if your product is in any way harmful, you must be honest, ask forgiveness and take action immediately. Take a page from Johnson & Johnson’s handbook. The company’s handling of the Tylenol tragedy in 1982, when seven people in Chicago died as a result of ingesting cyanide-laced Tylenol ExtraStrength capsules, is considered the best example of how to handle a product liability issue. The company swiftly pulled the products from the shelves and quelled the nerves of its consumers.
Ethical Dilemma: What’s Appropriate in Comparison Marketing? Scenario: You’d like to put out an ad for your client that compares his product to the competition. How far can you go? Case Study: Once you start looking for examples of comparison marketing, you will find them everywhere. Makers of acne medication pit an image of a client using one product, say Proactiv, versus photos of the same person using a rival product to show which zaps more zits. Phone
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companies are notorious for comparing their services and charges to those of a rival in television ads. Plan of Action: There’s nothing wrong with wanting to show up the competition -- as long as you don’t step over the line. Be sure that everything you are publicly saying in favor of your company or product and against your competitor is actually true. Test the goods yourself before committing to any promotional materials. Double and triple check the facts. The bottom line is that inaccuracies in such comparison marketing undoubtedly lead to a courtroom, where your rivals will call you out on your errors. You could lose the big bucks, not to mention the respect of an otherwise trusting public. Good marketing ethics affect organizational success. Ethics are the principals a person or department uses when making a decision . Sometimes, the choices are clear cut right and wrong. Often, they are more ambiguous ethical dilemmas. Marketing departments face their own particular set of uncertain problems pertaining to product development, pricing policy, distribution activities and promotion. This article aims not to outline a code of ethics but to reveal areas where business ethics must be employed. Misleading advertising is a common ethical dilemma. Although regulation provides formal boundaries of what an advertisement can and cannot say, marketers must consider the ethical boundaries. Defining when a claim is taken too far or a problem is intentionally, or unintentionally, hidden from the target market is one of the roles of ethics in marketing. The ethics related to direct marketing is another concern of marketing departments. Customers may feel invaded by direct mail or telemarketing. The use of these promotion avenues should be governed by sound ethical principles. Another dilemma is the marketing of harmful products-for example, tobacco and fast food. Marketers must decide how much responsibility they take for the harm which these products cause and how much they delegate to consumers or producers. Again, the right choice is not always clear and this is where good ethical marketers can step up. Marketers should attend to pricing ethics. Predatory pricing, the practice of setting prices to drive out competition, can be harmful to consumers so marketers must tread carefully. Policy designed to foster a healthy marketing environment must be balanced against profit requirements. How cause-related marketing is managed can become another ethical dilemma for marketers. The
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sincerity of a company's interest in a particular cause-the environment or education-can impact on customers' and society's perception of that company. Marketing departments responsible for the relationship with a cause must manage it openly and honestly. How their product affects the environment is of increasing concern to marketing departments. 'Green' practices can improve the good standing of a company and marketing department in the community. Marketers may be challenged by the costs of some environmentally-friendly choices but must consider their responsibility to society. Many other ethical issues confront marketing executives. How clearly and in what way consumers are informed of price or size changes must be weighed against costs. Marketing departments Distribution of transport. For requires healthy of resellers must consider their mark-up policies. issues include quality example, fresh food transport conditions. the ethics behind
Ultimately, ethics relates to organizational performance in generating goodwill for a particular company. This goodwill should translate into sales. Ethical behaviour by the marketing department will make the department and even the company a more attractive place to work as the company's good reputation will transfer to its employees. Motivated, proud employees will improve performance. Bad marketing ethics will destroy a good reputations which is arguably much harder to build than sales numbers.
ETHICS OF HUMAN RESOURCE DEPARTMENT
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The ethics of Human resource department covers those ethical issues arising around the employeremployee relationship, such as the rights and duties owed between employer and employee.
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Discrimination issues include discrimination on the bases of age (ageism), gender, race, religion, disabilities, weight and attractiveness. See also: affirmative action, sexual harassment.
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Issues surrounding the representation of employees and the democratization of the workplace: union busting, strike breaking.
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Issues affecting the privacy of the employee: workplace surveillance, drug testing. See also: privacy.
• •
Issues affecting the privacy of the employer: whistle-blowing. 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. Human resource management deals with manpower planning and development related
activities in an organization. Arguably it is that branch of management where ethics really matter, since it concerns human issues specially those of compensation, development, industrial relations and health and safety issues. There is however sufficient disagreement from various quarters. There are different schools of thought that differ in their viewpoint on role of ethics or ethics in human resource development. One group of thought leaders believes that since in business, markets govern the organizational interests and these interests are met through people, the latter are therefore at the highest risk. They believe that markets claim profits in the name of stakeholders and unless we have protocols, standards and procedures the same will develop into a demon monopolizing markets and crushing human capital; HR ethics are become mandatory.
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There is another group of ethicists inspired by neo-liberalism who believe that there are no business ethics apart from realization of higher profits through utilization of human resources. They argue that by utilizing human resources optimally, there is more value creation for the shareholders, organization and the society and since employees are part of the society or organization, they are indirectly benefited. Nevertheless ethics in human resource management has become a perennial debate of late! Discussions in ethics in HRD stem from employee relationships and whether or not there can be a standard for the same. Employee rights and duties and freedom and discrimination at the workplace are issues discussed and covered by most texts on the topic. Some argue that there are certain things in employment relationship that are constant others disagree with the same. For example, right to privacy, right to be paid in accordance with the work (fair compensation) and right to privacy are some areas that cannot be compromised upon. What is important to discuss today is how research informs us about the pivotal role human resource professionals can and should play in ethics management. Research suggests that successful ethics management depends less on formal ethics programs and more on employees' fairness perceptions, ethical leadership at all levels, and the alignment of multiple formal and informal cultural systems to support ethical conduct. To the extent that HR systems invoke fairness evaluations, HR managers design leadership training, and HR systems help to create and maintain organizational culture, HR professionals must play a key role in ethics management. Research has found that employees' perceptions of fairness are equally or more important than other factors in terms of their influence on ethics-related outcomes. Fair treatment is so important because employees who perceive unfair treatment will rebalance the scales of justice by harming the organization. Employees who perceive fair treatment, on the other hand, will reciprocate by going above and beyond the call of duty to help management (by reporting ethical problems, for example). To ensure that employees feel they are treated fairly, it is important to design HR systems and interventions with perceived fairness as a key goal, with an emphasis on procedural (fair decision making procedures) and interaction (fair interpersonal treatment) fairness. Employees' perceptions of fair treatment should be monitored regularly via employee surveys, and changes should be made based upon the results.
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It is also important for HR managers to work with the ethics/compliance office to follow up on employees' ethics concerns because a large percentage of reported concerns are fairness and therefore HR system-related. Most employees equate ethics and fairness; for them, there is no bright line between the ethics and HR offices.
ETHICAL ISSSUES RELATED TO HUMAN RESOURCE DEPARTMENT
Human is the most important resource to an organization. Issues associated with human resources occur as a result of employees working together. These issues are by far the largest category of ethical dilemmas in business.
The four main types of human resource issues are as follows: • Hiring and Termination Issues Recruitment or hiring process is the first step in selecting human resource into an organization, and will significantly influence the successful performance of the organization. Ethics plays a very important role during the recruitment of new employees. Law and regulations dictate that we have to be ethical in hiring. However, ethical hiring practice goes beyond them as well. It has been widely reported by many researchers that ethical hiring practices actually result in better employees being recruited. It is therefore important that sound ethical rules are followed when hiring a new employee. It is of vital importance that candidates
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are to be selected based on merits. Applicants are to be hired based purely on merits such as knowledge, skills, and ability in accordance to the needs of the organization. If a company provides any special considerations, for example affirmative action, where certain groups are given special considerations, these considerations should be well stated in the company's policy statement. In any case, any preferential treatment should be one that is legally allowed. While preferential treatments to certain specific group may be allowed, there should be no discrimination to people from any other group due to race, religion, gender, marital status. Consistency and objectivity during the recruitment process are very important. Criteria, including any changes in the criteria, used for evaluating candidates should be stated and explained to order to avoid unnecessary claim of biasness in the recruitment process. Objective evaluation results in the best employees being recruited while consistency ensures high morale among employees. When we recruit new employees, we should tell the applicants about the true state of the organization. We should not mislead the applicants. In particular, the applicants should be told all pertinent information, including those information that are not publicly known but that will materially affect the new employee's future employment prospect with the organization. We can learn from the case involving Phil McConkey. Phil McConkey was recruited but he was not aware that the company was in the process of being taken over by another entity. One year after joining the company he lost his job with he new company. He sued the company for with-holding important information from me during the recruitment process. We should never place misleading job advertisement in order to get applications if we are offering a job contract different from what we advertised for. For instance, if we want to engage independent contractors instead of normal salaried employment. The reason why we choose to engage independent contractors is that we do not have to be burdened with high salary cost for employees that are not competent, but we are willing to compensate employees according to performance. We should always state clearly our terms of employment. In any case, we do not want to be accused of any job scam.
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We have to be extra careful when we are recruiting employees from organizations that have material dealing with us include our suppliers, customers and competitors. If we are not careful ethical issues very damaging to us can arise. When we employ somebody from our suppliers, the suppliers may feel that we have unethically poached their good employee. After all, it is through the working relationship we have with the suppliers that we can to know the quality of this employee. When we employ somebody from our customers we can be accused of returning favor to that person. This rule applies especially when employing a former senior government employee that has an influence on the awards of contracts to an organization like yours. The case of Ms. Darleen Druyun at the Department of Defense and Mr. Michael Sears at Boeing is a good illustration of the importance of such a rule. In this case, employment favor was apparently granted by Boeing in exchange for favorable consideration for the awards of contracts by Department of Defense. Also, be careful not to employ former government employees for the purpose of lobbying for contracts from their previous government departments. At least, do not do so within the first two years of the employee leaving the government service. It is also not very wise to employ somebody from our competitors because we can be accused of stealing trade secrets from our competitors. If that employee can pass on his previous employer's secrets unethically, what is there to sop him from passing your trade secrets to others? Even though it may not be considered as unethical by some employers, as a matter of courtesy and good public relationship to inform an unsuccessful applicant. When an employee is asked to leave, it is also of vital importance that it is handled with fairness and care. If it is a case of poor performance or disciplines, the employee has to be given prior warning (unless it is violation of a well stated policy or is of a very serious nature)
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and fair hearing. In any case, do not hurt the dignity of the employee and offer to provide the necessary assistance where appropriate. Before an employee leave for any reason, provide him/her with an opportunity to provide feedback on the overall state of the organization by conducting exit interviews. • Discrimination It is the unfair or preferential treatment of a person on the basis of one or more uncontrollable characteristics, including race, gender, age, color, religion, or national origin, as well as handicapped or pregnancy status. Discrimination against others in the workplace can impair your ability to perform your job according to company expectations. In most countries, there are laws that protect potential and current employees from discrimination based on age, race, color, national origin, religion, and gender, as well as pregnancy or handicapped status. • Performance Appraisals They are conducted to evaluate an employee’s performance over a set period of time. When evaluating subordinates, one has to remain consistent and objective. Consistency is even more important when evaluating an existing employee than a prospective employee. Consistency requires that you treat every employee's misbehavior the same way. For example, it would be wrong to punish one employee's tardiness while leaving another employee's tardiness unchecked. In order to maintain objectivity, the company’s standardized evaluation forms should be used. In this way, uniform criteria can be used for the appraisal of all employees under you. Also, all employees in the company are evaluated based on the same criteria.
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Constant feedback and communication between you and your subordinates is necessary to facilitate a positive and productive working relationship. Don’t wait until periodic performance evaluations to express your observations and suggestions. In fact, it is unethical to base salary adjustments upon performance problems that have not been brought to the employee’ s attention. For employees being evaluated, honesty and acceptance of responsibility for performance problems are important ethical considerations. • Disciplinary issues
Disciplining employees is one of the most difficult parts of a manager’s job. Nevertheless, it is vital to the growth and overall success of the organization. Disciplining employees both ensures productivity and sets standards for the future. Discipline should occur immediately after a problem has occurred. It is imperative that the disciplinary actions remain consistent for all employees. A serious disciplinary issue is sexual harassment where female employees (less so for male employees) are subjected to an unwanted sexual behavior that creates an intimidating or hostile work environment. This includes unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature. This conduct is not only unethical, but illegal as well.
GUIDELINES FOR MANAGING ETHICS AT WORKPLACE
The following guidelines ensure the ethics management program is operated in a meaningful
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fashion: 1.Recognize that managing ethics is a process.
Ethics is a matter of values and associated behaviours. Values are discerned through the process of ongoing reflection. Therefore, ethics programs may seem more process-oriented than most management practices. Managers tend to be sceptical of process-oriented activities, and instead prefer processes focused on deliverables with measurements. However, experienced managers realize that the deliverables of standard management practices (planning, organizing, motivating, controlling) are only tangible representations of very process-oriented practices. For example, the process of strategic planning is much more important than the plan produced by the process. The same is true for ethics management. Ethics programs do produce deliverables, e.g., codes, policies and procedures, budget items, meeting minutes, authorization forms, newsletters, etc. However, the most important aspect from an ethics management program is the process of reflection and dialogue that produces these deliverables. 2. The bottom line of an ethics program is accomplishing preferred behaviours in the workplace.
As with any management practice, the most important outcome is behaviours preferred by the organization. The best of ethical values and intentions are relatively meaningless unless they generate fair and just behaviours in the workplace. That's why practices that generate lists of ethical values, or codes of ethics, must also generate policies, procedures and training that translate those values to appropriate behaviours. 3. The best way to handle ethical dilemmas is to avoid their occurrence in the first place.
That's why practices such as developing codes of ethics and codes of conduct are so important. Their development sensitizes employees to ethical considerations and minimizes the chances of unethical behaviour occurring in the first place.
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4. Make ethics decisions in groups, and make decisions public, as appropriate.
This usually produces better quality decisions by including diverse interests and perspectives, and increases the credibility of the decision process and outcome by reducing suspicion of unfair bias. 5. Integrate ethics management with other management practices.
When developing the values statement during strategic planning, include ethical values preferred in the workplace. When developing personnel policies, reflect on what ethical values you'd like to be most prominent in the organization's culture and then design policies to produce these behaviors. 6. Use cross-functional teams when developing and implementing the ethics management program.
It’s vital that the organization’s employees feel a sense of participation and ownership in the program if they are to adhere to its ethical values. Therefore, include employees in developing and operating the program. 7. Value forgiveness.
This may sound rather religious or preachy to some, but it’s probably the most important component of any management practice. An ethics management program may at first actually increase the number of ethical issues to be dealt with because people are more sensitive to their occurrence. Consequently, there may be more occasions to address people’s unethical behaviour. The most important ingredient for remaining ethical is trying to be ethical. Therefore, help
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people recognize and address their mistakes and then support them to continue to try operate ethically. 8. Note that trying to operate ethically and making a few mistakes is better than not trying at all.
Some organizations have become widely known as operating in a highly ethical manner, e.g., Ben and Jerry’s, Johnson and Johnson, Aveda, Hewlett Packard, etc. Unfortunately, it seems that when an organization achieves this strong public image, it's placed on a pedestal by some business ethics writers. All organizations are comprised of people and people are not perfect. However, when a mistake is made by any of these organizations, the organization has a long way tofall. In our increasingly critical society, these organizations are accused of being hypocritical and they are soon pilloried by social critics. Consequently, some leaders may fear sticking their necks out publicly to announce an ethics management program. This is extremely unfortunate. It's the trying that counts and brings peace of mind -- not achieving a heroic status in society
ETHICS ADVICE FOR HR PROFESSIONALS.
1. Know what you believe. 2. Clearly think through what is legally and morally right and wrong. 3. Understand why you believe what you believe. 4. Develop your ability to influence. Be prepared to offer creative solutions to difficult situations. 5. Be able to walk away if your ethical standards are jeopardized
CONCLUSION
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All the production functions are governed by production ethics but there are certain that are severely harmful or deleterious which need to be monitored continuously Because marketing decisions often require specialized knowledge, ethical issues are often more complicated than those faced in personal life— and effective decision making requires consistency. Because each business situation is different, and not all decisions are simple, many organizations have embraced ethical codes of conduct and rules of professional ethics to guide managers and employees. However, sometimes self-regulation proves insufficient to protect the interest of customers, organizations, or society. At that point, pressures for regulation and enactment of legislation to protect the interests of all parties in the exchange process will likely occur. HR systems are key to the development and maintenance of ethical culture. One of the steps HR managers can take is to focus on how ethics and values fit into the design of key systems such as performance management and reward systems. HR managers can integrate accountability for ethics and values into performance management systems so that implementing ethical values is weighted substantially in promotion and compensation decisions (at least as much as bottom line results). Additionally, HR managers can focus on reward systems by rewarding 'exemplary' ethical behavior. To focus on discipline, unethical conduct must be disciplined consistently and at high levels, to send a powerful signal that management means what it says about ethics. Finally, effective ethics management requires regular assessment of the ethical culture. Overall, HR and ethics managers must focus on how cultural systems fit together or align in support of ethical conduct, a common goal
BIBLIOGRAPHY
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We have collected the information needed for this project from: (1) www.google.com (2) www.slideshare.com (3) www.managementparadise.com
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doc_385689033.docx