Ethical and Unethical issues in management

Ethical and unethical issues in disciplines of management like HR, Finance and Marketing

Ethics

 

Ethics is a code of morale or morale philosophy which is practiced by the humans or group of people in their life.It affects that how the people lead their life and decision making . It concerned about what is good or bad for individuals , society and also defined as moral philosophy.

What is Business Ethics ?

It is also known as corporate ethics. Business ethics can be defined as in written and in unwritten codes of principle and values that govern decision and action within a company.In the business world the organisation culture set standards for the determining the difference between good or bad behavior.

Like every thing has two faces similarly business ethics also has two faces-

• Ethical-ethical practices is refers to the standard of professional conduct that any industry  professional is expected to uphold.

• Unethical-unethical behavior is an action that falls outside of what is considered morally right for a proper person,a profession or an industry,individually can behave unethically, as can businesses, professionalism,or politicians.

 Ethical and Unethical practices in disciplines of management like in

• HR
• Finance
• Marketing

HRM

Human resource management is a management function that helps manager in plans,recruitment,selection,training,development,

remuneration,and maintaining the members of organisation.

Ethical issues in HR

Employee Responsibility: Organisation also have responsibility of their employer,as an employee you have a duty of care,responsibility of safety at work place,ensuring workers receive sufficient,information, ,instruction and training in the work place that the work may be required to perform.

Restructuring and lay offs: It is temporary suspension or permanent termination of employment of an employee or more commonly group of employee for corporate reason such as personnal management or downsizing an organization.

Performance Appraisal: Ethics should be considered on the basis of performance appraisal. Highly ethical evaluations demands the honest assessment of the performance and steps should be taken to improve the effectiveness of employee.

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Cash and incentives plans: cash and incentives plans should be includes the basic issues like salaries, bonus, annual increment, or incentives, executive  perquisites,and long term incentives plans.

Employees discrimination: A frame work of laws and regulation has been evolved to avoid the practice of treatment of employee on the basis of their caste,gender,religion,age,disability,etc . there should be no discrimination with the worker.

Unethical issues in HR

There are following unethical issues in human resource management which is listed below.

Misusing company time : Whether it is covering for someone who shows an update or altering a time sheet , misusing company time top list . This category includes knowing that one of your worker is receiving personal business during company time.

 Abusive behavior : There are many workplace where are so many managers or supervisors who use their power and position to mistreat the workers or disrespect them. Unfortunately, the situations are involved in discrimination,race,gender,etc. Often there is no legal protection against such an abusive behavior in the workplace.

Employee theft : According to recent study by Jack L.Hayes International, one out of every 40 workers in 2012 was caught stealing from their employer. Employee fraud is also on the uptick ,whether its checking ,tempering, not recording sales in order to skim etc.

The FBI recently reported that employee theft is the fasting growing crime in the U.S today.

Lying to employee : The bad way to lose the believe of their your employee is to lie them. Yet , workers do it all the time.One of out of every 10 employee report that their manager and supervisor had lied to them within the past year.

 Marketing

Marketing management is the process of developing strategies and planning for product or services,advertising, promotion, sales to reach desired customer satisfaction.

Ethical issues in marketing

• Market Research
• Market audience
• Ethics in advertisement and promotion
• Delivery channels
• Deceptive advertising and ethics
• Anti competitive practices
• Using ethics as a marketing tactics

Unethical issues in Marketing

• Making false, unaggerated, or unverified claims'
• Distortions of facts to mislead or  confuse potential buyers.
• Sad mouthing rival product.
• Using fear tactics.
• Exploitation
• Spamming
• Plagarism of marketing message
• concealing dark sides or side effects of product and services

Finance 

It is defined as the management of money and which involves the activities like investing,lending,budgeting,forecasting,savings,
borrowing.

Ethical issues in finance

Financial statement : Fictitious revenue

                                             Journal should be prepare on chronological basis

                                             concealed assets and liabilities 

                                             swindling in asset valuation.

                                             Improper disclosure of statement

            For example: The Satyam computer service scandal

Financial marketing : Deception : an act of misinterpret the appropriate information.

                                             Churning : It is a practice by stockbrokers of buying and selling a client investment more often then necessary in order to make more profit in commission.

                                            Unfairness in market  

                                            Unworthiness

           For example : Harshad Mehta Scam

Insider trading : It is defined as essentially denotes dealing in a company's securities on the basis of confedential information relating to the company which is not published or not known to the public used to make profit or loss

Hostile takeover : Hostile takeover is an accession in which the company being acquired doesn't want to b purchased by the particular purchaser that is making a offer. How can someone can purchase something which is not for sale ?

hostile takeovers only work with publicly traded company.That is , they have issued  stock that can be bought and said the stock in market.

Unethical issues in finance

• Deliberate abnormals delays in payments to (a)vendors (b)dealers, commissions snd promotions costs.
• Delay in paying wages, interest to financier, investives, bonus to employers.
• Holding up bills of vendor on silly reasons and ultimately buying from others to avoid payments to earlier'
• Cheating employee of their dues towards medical expemses, leave travel, assisstance, children education fee etc. 

Now, We will discuss the above ethical and unethical issues in management with the help of current example in business world that is given below:

Once listed, LIC will be officially bigger than Reliance, TCS

After two capital infusions, the government owns a substantial part of IDBI Bank (46.5 percent stakes ) which will be completely sold off.

Finance Minister Nirmala Sitharaman on Saturday said insurance major Life Insurance Corporation (LIC) of India will be listed on the bourses as part of the government disinvestment initiative. Riding high on listing of LIC and privatisation of Air India and BPCL, and other state-owned entities, the government has set a disinvestment target of Rs 2.1 lakh crore for FY21. 

In her Budget speech, Nirmala Sitharaman said the government proposes to sell a part of its holding in LIC by initial public offering (IPO). The minister , however, did not reveal the percentage of holding that it would sell. Currently, the government holds the entire 100 percent stake in insurance behemoth LIC , which is a big investor in share sales, including IPOs of state-run companies stake in state-run lender IDBI Bank, thereby making it a private sector bank.

The 60-year-old state-owned firm, LIC, is the country's largest insurer, controlling more than 70 percent of the market share. The insurer has a market share of 76.28 percent in number of policies and 71 percent in first-year premiums.

According to an industry expert, if LIC get listed on exchanges, it would become India's largest company by market capitalisation, overtaking the likes of Reliance Industries (RIL) and Tata Consultancy Services (TCS) . Given LIC's small equity base, the proposed IPO is likely to fetch a huge premium to the exchequer.

"LIC is likely to become the country's biggest company by market capitalisation on the day of the listing given it's the largest company managed by assets under management (AUM)", said Kajal Gandhi, Analyst, ICICI Direct.

With market capitalisation of Rs 8.77 lakh crore, Mukesh Ambani-led RIL is the most-valued company, followed by TCS with at Rs 8.12 lakh crore as on February 1, 2020.

LIC's balance sheet is pretty strong, barring asset quality. LIC's total assets under management crossed the historic figure of Rs 30 lakh crore for the first time in FY19 to Rs 31.11 lakh crore, a rise of 9.38 percent year-on-year . As per the audited figures for FY19, its market value was pegged at Rs 28.74 lakh crore at end-March 2019, up 8.61 percent. The total income of LIC , which includes total premium and investment income , was around Rs 560,784 crore in 2018-19, a rise of 7.10 percent.