ETHICAL ISSUES IN FINANCE

Financial managers prepare reports, oversee accounting functions, plan investment strategies and direct cash management functions. They also are involved in branch management functions at banks and other financial institutions. They are required to uphold the highest ethical standards because internal and external stakeholders depend on transparent, timely and complete financial documents to make decisions.

1.Accuracy

A company’s financial manager ensures that all financial publications accurately and fairly reflect the financial condition of the company. Accounting errors and financial fraud, such as what was seen in the cases of Enron and World Com, damage the interests of shareholders, employees and affect confidence in the financial system.

2.Transparency

Financial documents reflect a company's performance relative to its peers, and its internal strengths and weaknesses. Regulatory agencies require publicly traded companies to submit periodic financial statements and make full disclosures of material information.

           UNETHICAL ISSUES IN FINANCE

The unethical practices in accounting are more in proprietary, partnership and private limited companies. It is at lower levels in public limited companies and MNCs.

Some of the unethical practices in financing and accounting are as under:

1. Deliberate abnormal delays in payments to (a) Vendors, (b) Dealers commissions and promotion costs.

2. Delays in paying wages, interest to financiers, incentive, bonus to employees.

3. Holding up bills of vendors on silly reasons and ultimately buying from others to avoid payment to earlier vendors.

4. Not prompt in statutory payments of ESI, PF, Sales Tax and Excise Duties.

5. Cheating employees of their dues towards medical expenses, leave travel assistance, children education fees etc.,

6. Opening of current accounts in different banks to avoid adjustments against loans by earlier banker.

ETHICAL ISSUES IN MARKETING

1.Emerging Ethical Problems in Market Research

Market research has experienced a resurgence with the widespread use of the Internet and the popularity of social networking.

2.Grouping the Market Audience

Unethical practices in marketing can result in grouping the audience into various segments. Selective marketing may be used to discourage the demand arising from these so-called undesirable market segments or to disenfranchise them totally.

3.Delivery Channels

Direct marketing is one of the most controversial methods of advertising channels, especially when the approaches included are unsolicited.

4.Anti-Competitive Practices

There are various methods that are anti-competitive. For example, bait and switch is a type of fraud where customers are "baited" through the advertisements for some products or services that have a low price; however, the customers find in reality that the advertised good is unavailable and they are "switched" towards a product that is costlier and was not intended in the advertisements.

UNETHICAL ISSUES IN MARKETING

1. Misleading advertising.

Misleading ads are more than just unethical—they’re illegal. The Federal Trade Commission (FTC) regulates “truth in advertising,” mandating that businesses make accurate statements in their advertising campaigns and, when possible, back their claims with scientific evidence. 

2. Black-hat link building.

Media exposure is almost always a good thing for businesses, and earning inbound links to your company website is the single best way to boost your organic search rankings.

3. Contacting people without consent.

Have you ever thought about buying a list of email addresses so you can bulk up your company’s subscriber list? You’re not the first one. Many businesses have used this tactic to contact people who they otherwise wouldn’t have known. Remember our friends at the FTC? They also enforce a law called the CAN-SPAM act, and under it, you’re legally allowed to email people without their consent—but for one time only.

4. Emotional exploitation.

One of the most effective ways to advertise a business is to call to people’s emotions. Making them laugh or evoking a sense of nostalgia helps consumers forge a small bond with your brand. 

               

                           ETHICAL ISSUES

1. Employment Issues:

HR professionals are likely to face maximum ethical dilemmas in the areas of hiring of employees.

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

b. Faked credentials submitted by a job applicant.

2. Cash and Incentive Plans:

Cash and incentive plans include issues like basic salaries, annual increments or incentives, executive perquisites and long term incentive plans.

3. Employees Discrimination's:

A framework of laws and regulations has been evolved to avoid the practices of treatment of employees on the basis of their caste, sex, religion, disability, age etc. 

4. Performance Appraisal:

Ethics should be the basis of performance evaluation. Highly ethical performance appraisal demands that there should be an honest assessment of the performance and steps should be taken to improve the effectiveness of employees.

6. Safety and Health:

Industrial work is often hazardous to the safety and health of the employees. Legislation have been created making it mandatory on the organisations and managers to compensate the victims of occupational hazards.

                      UNETHICAL ISSUES

1. Abusive behavior

Too many workplaces are filled with managers and supervisors who use their position and power to mistreat or disrespect others. Unfortunately, unless the situation you're in involves race, gender or ethnic origin, there is often no legal protection against abusive behavior in the workplace.

2. Employee theft

One out of every 40 employees in 2012 was caught stealing from their employer. Even more startling is that these employees steal on average 5.5 times more than shoplifters ($715 vs $129). Employee fraud is also on the uptick, whether its check tampering, not recording sales in order to skim, or manipulating expense reimbursements. Ethical alert: The FBI recently reported that employee theft is the fasting growing crime in the U.S. today.

3. Misusing company time

Whether it is covering for someone who shows up late or altering a time sheet, misusing company time tops the list. This category includes knowing that one of your co-workers is conducting personal business on company time. By "personal business" the survey recognizes the difference between making cold calls to advance your freelance business and calling your spouse to find out how your sick child is doing.