Issues of Ethics

7/31/2019 Issues of Ethics

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. Some of the standard consumer rights are as follows.

: Consumer needs to be protected fromharm or injury to their body and environment duringand after use.

: The consumers should be free tochoose any alternate product of their liking.

: The consumer has high to know thetruth full details of the product to be able to select theproduct of his choice.

: The dealer or manufacturer must

hear the complaints about any inconvenience or injusticetaken place due to the business transaction with them.( : Asking compensation or freereplacements is the right of the consumer in case of harmdone due to faulty product.


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There are various unethical practices inmarketing throughout the world. We cancategories for (a) Rural Products, (b)Industrial products, (c) Consumer products,(d) Pharma products etc. Let us discuss fewexamples from the Indian context.


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Rural Products : Some of the unethical practicesin marketing are : (a)Mixing of low quality rice with high quality

rice after getting sample approved for highquality rice.(b)Mixing of palm oil in groundnut oil togenerate more profits.Selling the locally grown cherries in the nameof England(imported)to get better prices.


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(2)Industrial Products : In case of industrial Product there are various issues to beattended from the point of view of product, performance,packing and transport. Some of the issues are as follows

(a)However good an industrial product is there are instanceswhere damages do take place in handling, poor packaging andTransportation. The dames occur in trying to save costs, and tosomehow hurriedly push the product to the customer. (b)Many of the industrial products need to be erected,

commissioned and trial runs to be taken. It is essential that themanufacturer should do a quality job on these aspects and avoiddelays. They should be able to prove the product and ensure thatthe quality and performance is assured on continual basis.


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(3)Consumer goods: (a)Offer of unworkable gift schemes like free stay in distant luxury hotel,collecting A to Z stickers, getting a gold coin in soap packet etc. (b)Other unethical marketing strategies are to use similar colouredpackage, print and looks of popular bands, Giving comparisons of competitors product and trying to display theirproduct as superior by taking about only favorable points. (d)Marketing false claims like pure ghee, natural sandalwood oil orherbal etc. where as in reality some other essence or fragrance are usedto get the original feel.


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(4)Pharma Products: (a)Production and sale of duplicate make of popular drugsand tablets.

(b)Printing in smallletters and figures which are verydifficult or impossible to read. Not giving full details of contents and side effects andselling pediatric medicine to adults and vice versa. Similarly, in case of the food products and preparationsome colors and ingredients are used which may beharmful to health


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In both domestic and international marketspricing is an important weapon. This weaponis used in used in both fair and unfairmanner. Some of the commonly practicedprice related competitions in India are asfollows :


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(1) : Frequently the tooth paste makers come out withprefixes like new, extra -white, double power, buy two get one free 25% extra forsame price etc. All these slogans are price related. In additions to this the qualityis varied that is 80 gms packets are made instead of 100 gms packets to showprice advantage.

: This is a dynamic area where there are always changes infeatures, style and options. There is intense competition between products of (a)

Maruthi Udyog Ltd, (b) Hyundai Motor co, (c) Ford Motor co, (d) General Motorsand (e) TELCO. Adding aor deleting certain featuares does the price variation.Only experts in automobile field can made our genuine difference in each variety,each make and the possible impact on pricing. All customers are not capable of evaluating these aspects and hence goby their choice of brand or whichever is lowpriced as per the Promotional activities.

: The competition in washing machines, refrigerators mixers is toosevere. Here again to compare the price and advantages is bit complicated themore confusing due to too many varieties and negligible difference between thedifferent makes. Attention can be diverted from price matter by highlighting onbrand of collaboration, warranty, awards won and No. 1 in sales in India etc. Theprice factor however continues to be guiding factor to buyers of low and middleclass category of customers.


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The judgment of ethical values has relevance to the environment we live in.However, the corporate has to use the following factors to take care of moralresponsibilities in advertisements. Ensure that non is harmed or irritated by the picture or narration inadvertisements.Highlight your good points and avoid criticizing other products.

Ensure that consumer gets fair treatment and not misguided.Local laws, socio-cultural values and norms should be respected and thereshould be no direct or indirect violation.Avoid using similar or some logos, names and punch line that are alreadyused by competition.Avoid display of women in derogatory mannerOnly product related aspect to be explained rather that covering other news

and views.


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Every nation has its own system of regulations and control to curbunethical practices in advertising. In India the ministry of commerceadvertises every now and then exhorting the public to inform themagainst wrong, unfair and unethical advertisements so that they can takecorrective actions. Some of the commonly found unethical practices in Indian

advertisements are as follows: Trying to criticize or condemn competitor products by way of comparison and using similar names as that of competitors.Utilizing the communal feeling by symbols, color, temples and flags.Imitating the competitors advertisements and use of slang languagesagainst those advertisements.Display of women in scanty cloths and excess use of women eventhough not required.Excessive glorification of products like a car shown as flying instead of running on road.


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Accountancy work begins where bookkeeping work ends. It isconcerned with following functions. Checking the work done by the bookkeepers in order to ensurethat all the business transaction has been correctly recorded inthe books of account.

Passing entries for rectification of errors and makingadjustments.Preparing a trial balance either by taking debit and credit totalsof each account with cash and bank balance or taking thesebalance to find out the arithmetical accuracy of the books of accounts.Preparing trading and profit and loss account to show the grossand net results of the business for a given financial year andPreparing balance sheet showing the financial position of thebusiness at the end of the financial year.


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The misappropriation can happen in both receipt and payment level as follows. (a : The important ways by which moneyreceived is misappropriated are as follows : Non-recording of cash sales proceeds and embezzling the money so received.Non recording of cash received against unusual sales such as sale of oldfurniture, substandard goods, junk scrap etc.Misappropriation of cash received on miscellaneous accounts such a recaovery of bad debts, discount etc. (4)Misappropriation of cash received from unusual sources such as donations, fitsetc(5)Misappropriation of money received from the sale of the goods sent on sale of return basis or by V.P.P. by showing such goods as returned in the books

(6)Under-recording of cash sales or recording only a part of the cash salesproceeds and pocketing the balance of the cash sales proceeds.


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Cash may be misappropriated even while making payments asexplained below:Recording false or factitious cash purposes and pocketing thatamountRecording a cash purchase at a higher figure than the actualpurchase amount and pocketing the difference amojnt

Misappropriation of money shown as having paid to factitiouscreditors for purpchases.Misappropriation of money shown as having paid as wages in thewage-sheets by entering factitious names of workers therein.Recording payments of cash which are not at all madeRecording payment s on some accounts at a figure higher thanthe actual payments and pocketing the difference amountNot recording purchases returns, discounts and allowances fromsuppliers of good and pocketing the amounts by showing themas payments to the suppliers of goods.


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Frauds may take place in respect of goods,Such fraud or misappropriation of goods iscommon, particularly when the goods aresmall but are of high value such as watches,

jeweler, spare parts of costly machines,computers etc.

Misappropriation of goods means wrongfulconversion or fraudulent application by thosewho handle the goods.


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1.Recording sales of larger quantity than what is actually supplied andmisappropriating the balance quantity.2.Recording purchased of larger quantity than what is actually suppliedby the suppliers and misappropriating the balance quantity privately bycolluding with a the suppliers. 3.Goods can be misappropriated by actual theft. 4.Goods can also be misappropriated by supplying more goods thanwhat is stated in the invoice and privately receiving the differencequantity from the buyers. It is very difficult to detect frauds in respect of goods. Proper methodsof keeping the accounts of purchase and sales, periodical stock-checking stock taking strict internal check and control, cross-checking, frequent shifting of the employees from one department toanother etc. will help in avoiding misappropriation of goods.


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Manipulation of accounts is fraud, normallydone by officers on the advice of topmanagement. There are different reasons fordifferent companies to indulge in such fraud.

This is done by deliberate false entries inbooks of accounts, altering erasing theentries. Not entering some true factualincome expenses etc. All these are donewith some objectives by adopting certainmethods as explained in ensuing paragraphs.


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Manipulation of accounts is usually done by top official with thefollowing objectives. To show more profit that what it actually is so that :

The op most officials may get more commission in case they getcommission on profits, or Their services may be retained by showing to the shareholders that they

are able to earn more profit because of their efficiency and thus try tomaintain the confidence and support of the shareholders; or

In case they have held more shares, they may sell them at higher price bythe declaring higher dividend; or

They may obtain further credit from banks and other financial Institutions,by showing the financial strength of the company far better than what itactually is, or

They can attract more subscribes to the new shares to be shortly issued bythe company.


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To show less profit than what is actually is sothat:: The top most official can purchase their companys

shares is the market at lower price; or They may reduce or avoid the payment of income tax, or They can give a wrong impression about the success of

the business to their competitors ; or They can with- hold the declaration of dividend; or They can declare a lower rate of dividend; or They can reject any demand of the workers for higher

wages etc


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Manipulation of accounts may be done in any of thefollowing ways:(1)By not providing for any depreciation on fixedassets:(2)By providing more or less depreciation that what is

desirable.(3)By over-valuation or under-valuation of liabilities;(4) By over-valuation or under-valuation of assets(5) By recording revanue expenditure as capitalexpenditure or vice versa;

(6)By recording fictitious sales and return outwards toshow less profit(7)By recording fictitious purchases and returninwards to show profit


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(8)By utilizing secret reserves during a period when the company hasmade lessprofit or no profit without disclosing this fact to the shareholders:

(9)By crediting profit and loss account with the incomes which will bereceived next

year.(10)By not crediting profit and loss account with the incomes which areaccrued due

due but which have not been actually received.(11)By not recording some items of expenses to show profit(12) By recording some fictitious expenses to show less profit(13)By not providing for outstanding(14)By adopting window-dressing i.e by showing outwardly a more

prosperous position of the business that what it actually is. It is aprocess by which the balance sheet is made to show a state of affairs forbetter that what it actually is. Window dressing is generally in the formof misrepresentation. It is important to note that window dressing is notillegitimate.


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All types of human beings are involved inwork related behavior. We have to attributethis (ethical and unethical) behavior to (a)employers (b) employees, (c) governmentagencies (d) manpower consultants and (e)outside sources like vendors and dealers.Behavior varies as per inducements, like-dislikes, greed, wrong perception and bias.


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: They sometime indulge in unfairpractices like one or more of the following. Creating split in union leaders by inducing

regionalism, cartelism or ego problems.

Not caring for just demands of the Trade Union andnot behaving respectfully with union leaders. Trying to crease rift between different unions if

there are more than one recognized union. Biased attitude in selection, transfers, promotions,

and training and development activities. Giving different treatment and facilities to differentpeople in the same level posts.


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: The employees involvement in unfairactivities is disused in details in ensuing chapters.However some common problems are as follows: False claim of age, qualifications and experience. Someeven forge marks cards to claim certain qualifications.Producing take certificates of SC/ST category to obtain a

job in that category.Head of personnel projecting or short listing candidatesbelonging to his commonly , region or religion.Creating transfers, openings, promotions suiting to theirown kith and kin.Taking decision very slow or very fast to suitconveniences of own kith and kan.


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Government agencies role is reducing yearafter year due to lesser employments in government in governmentsector. However the unfair or unethical practices continue ingovernment sector in following manner. Announcing the Vacancies and not taking any action further. Not clearabout processing dates, written tests/interview dates and selection

dates. Accountability is totally lacking..Functioning of government employment offices is not transparent, notreliable and in fact its purpose is not well servedGovernment offices and selection committees will be excessivelycautions of reservation quotas and possible court cases rather thangoing through the responsibilities in an unhindered manner.Most of time the government selections get stalled or delayed due to

situations like question paper leakage or court cases.The government method of selections is at best suited to low paid jobsand not for senior level posts.


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(7)Omitting to record a credit sale and pocketing themoney received after some time from the customer ordebtor(8)Misappropriation of money received on discountingbills.(9)Omitting to record the entire amount of cash sales andpocketing the same.(10)By teaming and lading under which the cashier utilizeswrongly the money received from the first customer andthe money received from the second customer is creditedto the first customer, the money received from the thirdcustomer is credited to the second customer, the moneyreceived from the fourth customer is credited to the thirdcustomer and so on. This procedure is continued till thecashier finds it possible to pur back the money somisappropriated.


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Salary or wages are fixed based on factors like merits of the candidates andexperience, conditions of the labour market, completive industry wages in thatlocation, the firms economic condition, nature of the job, laws governingminimum wages, comparable salaries and the negotiation. However there aresome irregularities, disparities as follows: The wages are kept lower for women for some level positions compared to man.Some companies try and avoid payment of PF, gratuity, ESI plan and pension.

There is lot of disparity in payment of salary, scales, increments and non-monetary benefits.The role of favoritism, cartelism, regionalism is observed in various places, thoughin some places it is not openly seen.Delays in paying salaries, paying in installments, taking signatures for higheramount than actually paid and deliberate hold up of salary are also happening.There are incidences where salary is reduced after initial few monthsmanagements.


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Wherever cash the reliability factor pays salary is notsatisfactory. Only those who pay by cheques seem tofollow some kind of discipline.In case of public works, road and bridge constructions,rural development schemes the contractor generally takeshis cut before paying the workers. This trend in India has

become an organized corruption. Workers seem to treat itas an accepted evil rather than objectionable evil.Similarly though the state and central government staff and officials are paid salaries, they expect public (whocame for any work) also .in India, seems to have becomean accepted unfair practice rather than objectionable

unfair practice, Inability of Indians to overcome such unfairsocial norm is one of the root causes of poor progress.


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Discrimination is one of the oldest unfairpractices going on all over the world in bothformal and informal way of working. Some of theglaring olden day examples of discrimination are:

In India for centuries the caste system (Upper caste, lowercaste) has been in practice. This was creating inequality andunfair treatment to one segment of society or another.Similarly women were always treated as second gradecitizens of the society

In USA, until 1957, black people had no legal status,.Women were not allowed to vote. Thus both low castepeople and women were discrimated.


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: In India many of the workers in project sites.Construction works, agriculture and agro based industries areemployed very fast and are removed whenever work or season isover. This kind of hiring firing is causing seasonal, disguisedand industrial unemployment. It is fair to employ themabruptly. A system has to be devised to organize the labour andutilize them on alternate work or arrange. Some kind of a lowerlevel compensation package on lean period.

of Women :It is fair to say that women haveequal opportunities in jobs and salaries. But invariably womenplay a dual or triple role of job, home and childrenresponsibilities. Hence she needs more leave and flexible worktimings. It is unfair not a give them leave whenever asked and itis disadvantages to company to give too much leave. Hence thesituation calls for a separate consideration for womenemployees.


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: The senior and experiencedemployees are finding themselves at wrong end interms of emoluments and encouragement. This isdue to fast change of technology and knowledgebase. The younger generation is quick to adapt tochanges. Hence the gap is difficult to fill and thedisparity will continue till retirement of elderlyemployees.

: Due to computerization and e-commerce there is a trend of younger people

mentoring elderly colleagues. This is due to fastchanges in style of functioning and correspondingtraining essential for sustenance in jobs.


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: Since last 10-15 yearsthere is a revolution in working hours. Youngergeneration now works from 10 to 14 hours/daycompared to 8 hours of standard work. Evenwomen employees work long houses, night shifts

and go alone on overseas trips to attend to theirproject work.

he ITES and BPO companies have totallychanged the limitations of salaries and work

hours in India. This has increased employmentopportunities and at the same time has lead tolots of objectionable habits in younger personnel.


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Employees right to privacy came to mean to beleft alone. In other than working hours anemployee is free to spend time, as he likes.During working hours every employee shouldhave adequate space or zone of privacy. This is

to protect employees in need for peace, theirdress, manners and grooming and theirpersonal property in the work place. For a longtime the employee privacy subject was not well-understood. In last 10-15 years the technologygrowth has made it clearer to understand theneed for privacy protection


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. Some of the courts upheld privacy violations as follows 1.Intrusion in locker rooms and bath rooms bysurveillance.2. Publication of private matters.3. Disclosure of medical records4Appropriation of an employees name for commercialuses5.Retrieving or accessing employee e-mail, unauthorizedway However some permission employee privacy inquiriesare,

Criminal history inquiries(2) Credit history inquiries and(3) Access to medical records


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Polygraph and psychological tests are done by someexecutives to prevent and detectCrime in the work place and this is violation of

employee rights. These tests are to be avaoided as ::They are not reliable or valid and are at bestindicatorsTest results, to some extent can be manipulated bythe operator.

The tests may include irrelevant questions pertainingto a persons privacy.


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Employers can detect employees speed of work, number and length of Phone calls madeand received rests period and number of hours the machines are used. Though thesefactors may be part of work study it is alsotrue that some companies use it forsurveillance.


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A company should seek private information only forlegitimate purposesSeek permission of employee before using his/hername and photograph for any commercialadvertisementIn any drug abuse, necessary medical test is to becarried out and necessary explanation given to theemployee about its need and importance rather thanscaring them. Convince about confidentiality andinform test results and abuse for improvements.Such practice will get positive attitude


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The unethical practices in restructuring and layoffs are asfollows ::(1)To remove or irritate some employees who do not toethe line of management thinking(2)To create situations where in some unwantedemployees leave the organization themselves.(3)In the guise of cost reduction and trimming, eliminateoutdated technology people and bring in talented newrecruits who are more flexible to changing needs.(4)Keeping away trouble creators and poor performers.This also serves as a warning to others who do notperform well.(5)Create panic in workers and staff to have an upper handto deal with union leaders.


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Sexual harassment to a person creates hostile workenvironment to that person. Such harassment could bedue to any of the following factors.

Unwelcome sexual advances, request for sexual favors,verbal or physical conduct of a sexual nature.Submission to such conduct is made wither explicitly orimplicitly a term or condition of a individual employment.Submission to or rejection of such conduct by anindividual is used as the basis for employment decisionsaffecting wuch an individual orSuch conduct has the purpose or effect of unreasonablyinterfering with an individuals work performance orcreating an intimidating, hostile, or offensive workenvironment.


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Favoritism and giving under excess facilities andincrements may also have same kind implicit threat.Writings on bathroom walls, display of pornographicpictures in work place.There are rare examples where women deliberately wearexposing dress to attract attention of male colleagues andtalk with extra sweet words and excessive pleasantmannerisms. Though this type also can be branded assexual harassment, such cases are very rate and nocomplaints are made. At best the boss calls such womenemployees and asks them to adopt a proper dress code asper the local tradition and ethics.

Issues of Ethics

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