ETHICAL ISSUES

IN THE
FUCTIONAL
AREA
PRESENTED BY: MARINO, JAYSON
STRUCTURE
 7.1 INTRODUCTION
 7.2 ETHICS IN MARKETING
 7.3 ETHICAL ISSUES IN TAKEOVERS AND MERGERS
 7.4 ETHICS IN FINANCE
 7.5 ETHICS IN HUMAN RESOURCE MANAGEMENT (HRM)
 7.6 EHTICS IN INFROMATION TECHNOLOGY
 7.7 ETHICS IN BANKING
INTRODUCTION
Ethical in the functional areas of any business in necessary to ensure a good rapport between the
management and the employees. In fact, all functional areas, namely MARKETING,
FINANCE, HUMAN RESORCE MANAGEMENT as well as information technology should
follow a code of ethics so as to function well give maximum output.
ETHICS IN MARKETING
 Marketing is a techniques that is used to attract and persuade customers.
 Marketing provide a way in which a product is sold to the target audience.
 Marketing is a management process that identifies, anticipates and supplies consumers
requirement efficiently and effectively.
 Marketing department consist of various subdivisions such as sales, after sales service and
marketing Research.
IN THE FIELD OF SALES
 Not supplying the products made by the company as per the order.
 Not accepting responsibility for the defective product.
 Not giving detains about the hidden cost, such as transportation cost, while making the
contract with the client.
 Not providing the after sales service as per the contract
 Treating two customers differently
 Selling the same product at different prices to different customers.
 Delaying the delivery of the goods without giving any proper reason.
 Changing the terms of the business without taking any approval from the client.
IN THE FIELD OF
ADVERTISING PROMOTION
 Making false commitment to the customers about the benefits of the product
 Supplying product that are different from those that are advertised.
 Giving wrong prices to the customers during advertising.
 Not giving the promised gift in the promotional campaign.
 Hiding major flaws of the product.
 Providing wrong testament about the product to prospective customers.
 Making false references about the competitive product.
 Increasing the price of the product before starting its promotional campaign.
FIELD OF AFTER-SALES
SERVICE
 Using below-standard material for the service and changing for relatively better material from
the costumers.
 Using outmoded service equipment which can be harmful for the products during service.
 Overbilling the service changes, when the customers is not aware of the actual rates.
 Refusing the service of the product due to personal reasons.
 Using rejected or below-standard components for customers temporary relief.
FIELD OF MARKETING
RESEARCH
 Research is conducted only to substantiate the viewpoint of the manager.
 Research is focused on the areas that do not need to be covered.
 Some old research is presented as the new one just for the purpose of the financial gain.
 A biased research report is prepare to suit the marketing.
 The research report is sold to the competitors.
 The report does not include important facts.
 ETHICAL ISSUES IN
ADVERTISING
 In the advertising field, the ethical issues include decisions on what business and market a corporate
organization should enter. Another ethical issue it can be the decision on what product should be provided
by a corporate organization to its customers.
 According to Ferrel and Gresham, ‘there is no clear consensus about ethical conduct; that ethical standards
are neither absolute nor constant; and that attempts to determine whether particular marketing activities are
ethical or non-ethical cannot produce a definitive code of marketing behavior’
 Organizations follow various methods that are unethical while advertising for their products and services.
These method are:
 Ambiguity
 Concealed facts
 Exaggeration
 Psychological appeal
 AMBIGUITY
 Ambiguous advertisement are mostly deceiving for customers. Advertisement become
ambiguous when they are wrongly interpreted and also with, the use of words through which
organizations can avoid making direct statements.
 For example, you can consider the word ‘help’. This word is used by organizations to
ambiguously advertise their products. It can be used in the following ways in advertisements;
 Help us keeping young
 Help you improve your complexion
 Help prevent cavities
 Help keep our house insect free.
CONCEALED FACTS
 Organization must provide conceal information related to product that may result in less
selling of that product thereby resulting in loss. There are mainly two considerations
regarding advertisements that force organization to conceal facts. The first consideration is
that information that will help in selling a product in the way should be provided. The second
consideration is that information about a product should be provided in such a manner that:
 Individuals, who will be purchasing the product do not feel false promises have been made to
them and that they have been let down
 Advertisements related to a product are able to avoid objections from agencies that are
responsible for monitoring advertising.
EXAGGERATION
 Organization may mislead the customer by providing exaggerated information in the
advertisement of their products. The exaggerated information is information that is not
supported in advertisement by using superlative phrases.
 For example, an organization manufactures pain relief ointments can exaggerate information
by stating that a pain reliever provides extra pain relief.
PSYCHOLOGICAL APPEAL
 A psychological appeals is the appeal made considering the emotions of customers. The main
objective of psychological appeal is to persuade customers to purchase product by appealing
to their emotions and do not to reasons.
 For example, consider a car advertisement which focuses on the desire of the elite class to
achieve status. Similarly, a life insurance company may use emotions, such us pity and fear in
its advertisement to persuade people to take insurance policies.
ETHICAL ISSUES IN
TAKEOVERS AND MERGERS
 Mengers and takeovers are stimulated by the urge to diversity or to anchor the new market
rather than to dominate an industry. The primary goal of the corporate invertor is profit of the
shareholder, so even they may be convinced by the idea of the replacement of the top
management. There are certain events that lead to mergers:
 Lack of funds to complete with organizations with better facilities, new equipment and large
workforce.
 Emergence of multinationals that have substantial resources to pose a challenges to the market
share of Indian organizations.
 A growing number of competitors who have recovered from their respective economics
conditions with the help of Mengers and acquisitions.
THE MERGER PROCESS
Certain characteristics .The merger process involves:
 The decision to consider options of merging;
 Search of a suitable merger partner;
 The decision to merge with specific partners;
 Making a proposal to a suitable partners;
 Negotiations of merger agreements;
 Formulations of implementations plans;
 Accomplishing the implementations plan;
 Review and evaluation.
ETHICS IN FINANCE
 Finance is an important element of an organization and it helps in its growth and development.
The finance manager of the firm is responsible for arranging the finance for the firm. The
finance manager funds from the following two sources:
INTERNAL SOURCES
Internal sources mean the owners own funds that are invested as equity in the organization, the
owner contribution in term of equity is low.
The entrepreneur can raise finance internally from various sources:
 Deposits and loans given by owner.
 Personal loan from provident fund and life insurance policy.
 Funds accumulated by the retention of profits.
 Ploughing back of profits.
EXTERNAL SOURCES
External sources means the various financial institutions from where entrepreneurs can raise
funds, such as fixed capital, commercial banks and development banks.
The entrepreneurs can raise finance by:
 Borrowing money from friends and relatives.
 Borrowing from financial institutions.
ETHICS IN HUMAN RESOURCE
MANAGEMENT (HRM)
 HRM is concerned with the management of the people of an organizations.
 The term HRM is used to refer to the procedures, philosophy, policies, and practices related to
the management of the people within an organization.
 HRM is responsible for performing various function like planning, organizing, directing and
controlling of human resources.
 HRM also involves activities like procurement, development, compensation and maintenance.
 According to Ivancevich and Gluck, human resource management is the function performed in
organizations that facilitates the most effective use of people (employees) to achieve
organizational and individuals goals.
OBJECTIVES OF HRM
 To recruit trained and spirited employees,
 To help the organization reach its goals,
 To train the employees for best results,
 To communicate HR policies to the employees,
 To ethically respond to the needs of the society.
ETHICS IN INFORMATION
TECHNOLOGY
 Information technology refers to the gathering processing, creation, delivery and storage of
information and all the processes that make all this possible. The volume of work that is
handled using IT continues to increase almost everyday.
 The characteristic of IT is that it is a particular field which has no geographical boundaries but
application of IT may affect culture and environment differently.
 Computer ethics was founded by MIT Professor Norbert Wiener in the early 1940s when he
was providing a helping hand in the development of an aircraft cannon, capable of gunning
down fast-moving war planes.
TECHNOLOGY ETHICS
Is a new subject. The profile of technology ethics is an follows:
 Thinking ethically about human biotechnology.
 Taking responsibility for e-wastage like environmental damage from computer and other
electronic wastages.
 Employers must check whether employees are wasting time at reactional websites or sending
unprofessional e-mails.
 Sometimes the invasions of piracy occurs though to use of the internet services.
ETHICAL ISSUES
 There are various ethical issues involved in information technology. In 1986, Masovi had
classified ethical issues in the following four groups:
1.ACCESSIBILITY: it involves the right of accessing the require information as well as the true
payment of changes to access the information.
2.PRIVACY: it deals with the degree of privacy and dissemination of information about an
individuals.
3.PROPERTY: it talks about ownership and value of information.
4.ACCURACY:the information which is viable and being accessed is now much more accurate
and authentic.
 The following ten (10) commandment of computer ethics:

1.You will not use computer to harm other people.

2.You will not interfere with the computer network of others people.
3.You will not snoop around in files of other peoples computer.
4.You will not use a computer to steal.
5.You will not use a computer to bear false witness.
6.You will not copy or use propriety software for which you have not paid.
7.You will not use other peoples computer resources without authorization.
8.You will not use other peoples intellectual output.
9.You will think about the social consequences of the programmed you are writing or the system you
are designing.
10.You will always use a computer in ways that demonstrate considerations and respect for your
fellow humans.
 ETHICS IN BANKING
 The unfettered love of money is the root of all evil. Such a claim, exaggerated as it is, reflects
an ethical bias against money and money instruments and, by extension, banks and banking
services that permeates many, if not most, cultures things.
 Trust, transparency and responsibility should form the basis for value system in banking.
Transcendence to a transparent corporate culture can facilitate in solving ethical issues.
Principle of Ethical Banking
 Monopolistic attitude should be curtailed.
 It is also necessary to own up to a mistake when committed, which would strengthen and
improve business ethics and behavior.
 Mutual trust precedes mutual benefit and interest which gives confidence to both the parties
that they will not be cheated.
Code of Ethics to be followed by Bank Managers
 A set of values which make them humane.
 A bank manager should have excellent leadership qualities.
 A bank manager is responsible for all his/her acts and decisions.
BANGKO SENTRAL NG
PILIPINAS (BSP)
 The Bangko Sentral ng Pilipinas (BSP) is The Central Bank of the Republic of the
Philippines. It was established on 3 July 1993 pursuant to the provisions of the 1987
Philippines Constitution and the New Central Bank Act of 1993.
RESPONSIBILITIES
 Liquidity management. The BSP formulates and implements monetary policy aimed at
influencing money supply consistent with its primary objective to maintain price stability.
 Currency issues. The BSP has the exclusive power to issue the national currency.
 Lender of last resort. The BSP extends discounts, loans and advances to banking institutions
for liquidity purposes.
 Financial Supervision. The BSP supervises bank and exercises regulatory powers over non-
bank institutions performing quasi-banking functions.
 Determination of exchange rate policy. The BSP determines the exchange rate policy of the
Philippines.
THANK
YOU!!!
The most important ingredient we put into any relationship is not
what we say or what we do, but what we are. And if our words and
our actions come from superficial human relations techniques (the
Personality Ethic) rather than from our own inner core (the
Character Ethic), others will sense that duplicity. We simply won't
be able to create and sustain the foundation necessary for effective
interdependence.“- Stephen R. Covey