GROUP 1 GGSR “BUSINESS ETHICS”

MEANING OF BUSINESS ETHICS

 Business ethics enhances the law by outlining acceptable behaviors beyond government control.
 The moral principles, policies and values that govern the way business and individuals engage in
business activity

IMPORTANCE OF BUSINESS ETHICS

The importance of business ethics reaches far beyond employee loyalty and morale or the strength of a
management team bond. As with all business initiatives, the ethical operation of a company is directly
related to profitability in both the short and long term.

KEY TAKESWAY

 Business ethics involve a guiding standard for values, behaviors, and decision-making.
 Ethics for business have changed over time but they're important for every company.
 Running a business with ethics at its core from the top down is essential for company-wide integrity.
 Behaving in a consistently ethical manner can lock in a solid reputation and long-term financial
rewards for companies.
 Employees tend to remain loyal to, and perform more effectively for, a company with a high
standard of ethics.

ETHICAL ISSUES

Ethical difficulties are complex, morally problematic circumstances or challenges involving concerns of
right and wrong, fairness, and behavior principles. These challenges frequently occur when competing
values, interests, or ethical principles make determining the most acceptable solution difficult. Course of
action. Ethical concerns are frequently debated, and individuals or groups may hold opposing views on how
to handle or resolve them. These issues can range from business to health care to technology to the
environment and many other facets of human life.

 Ethical issues can be complex and multifaceted, and they often require careful consideration of the
consequences of different actions
 Ethical issues concerns about privacy, human rights, environmental sustainability, fairness, justice,
and honesty are a few examples of ethical dilemmas. Finding morally acceptable and responsible
solutions to ethical problems frequently requires careful investigation and the application of ethical
reasoning

Abusive or Intimidating Behavior

The meaning of the phrases can vary from person to person; examples include physical threats, untrue
allegations, aggravating a coworker, vulgarity, insults, yelling, harshness, ignoring someone, and being
unreasonable. In order to define abusive behavior, purpose must be taken into account.

Conflict of Interest

Occurs when your personal interests and outside activities conflict or compete with the company's business,
objectives, or principles.

Remember these 2 Principles

 As an employee, you must give your full-time best efforts to your work. Your employer must have
your full attention.
 Keep you personal business completely separate from your company business.
Classification of Ethical Issues

Ethical Issues

Ethical issues are defined as situations that occur as a result of a moral conflict that must be addressed. Thus,
ethical issues tend to interfere with a society's principles.

Information Technology

Ethics in IT addresses questions of what is right and wrong in the use of technology, what are fair and
equitable uses for it, and who is responsible for the consequences. Both the creators of the technology and
the users of it must deal with these questions, enacting safeguards and plans to ensure the rights of
individuals are balanced with those of corporations and governments.

Consumer Fraud

Consumer fraud refers to illegal actions that entail deception or trickery that are committed against a single
consumer or a group of customers, causing them to suffer monetary loss or physical harm.

Accounting Fraud:

Accounting fraud is the intentional manipulation of financial data to mislead stakeholders about the
performance or health of a company's finances. This dishonest behavior frequently seeks to provide the
impression that a business is more financially secure or successful than it actually is. A few prevalent types
of accounting fraud are:

 Revenue Recognition Fraud: When a business reports income before it has been generated, this
happens. Identifying sales that didn't actually happen, for instance
 Expense Manipulation: Intentionally understating liabilities or misrepresenting expenses in order to
exaggerate the company's financial situation.
 Asset Valuation Fraud: Overstating the value of assets on the balance sheet to inflate the company's
net worth.
 Off-Balance Sheet Financing: Keeping certain liabilities off the balance sheet to make the company
appear less indebted than it really is.
 Inventory Fraud: Manipulating the value of inventory, like inflating it to overstate assets.

Consequences of Accounting Fraud

 Loss of Investor Trust: Shareholders and potential investors rely on accurate financial information
to make informed decisions. Accounting fraud can erode trust and confidence.
 Legal and Regulatory Consequences: Companies engaging in accounting fraud can face lawsuits,
regulatory investigations, and potential fines.
 Financial Instability: Misrepresenting financial health can lead to mismanagement of resources and
eventual financial instability or even bankruptcy.

Marketing Fraud
Marketing fraud refers to dishonest tactics used to advertise or promote goods or services. It seeks to deceive
customers or other businesses for individual or corporate gain. Typical examples of marketing fraud are:

 False Advertising: Making untrue or misleading claims about a product's features, benefits, or
performance.
 Bait-and-Switch: Luring customers with an attractive offer and then trying to sell them a different,
often more expensive, product.
 Misrepresentation of Product Quality: Falsely representing the quality, origin, or ingredients of a
product.
  Fake Reviews or Testimonials: Creating fictitious positive reviews or testimonials to enhance the
perceived credibility of a product or service.
 Pricing Deception: Using deceptive pricing strategies to create a false perception of value or
discounts.
 Loss of Consumer Trust: Consumers rely on accurate information to make purchasing decisions.
When they feel misled, trust is eroded.
 Legal Ramifications: Engaging in marketing fraud can lead to lawsuits, regulatory fines, and
penalties.
 Reputation Damage: A company's brand and reputation can suffer significant damage due to
deceptive marketing practices.

Classification of Ethical Issues under Discrimination

 Gender Discrimination
- Example: "A company paying male employees higher salaries than their female counterparts for the
same job."
 Racial Discrimination
- Example: "Denying a job opportunity to a qualified candidate based on their race or ethnicity."
 Age Discrimination
- Example: "Firing an older employee solely because of their age, even if their performance is
satisfactory."
 Disability Discrimination
- Example: "Refusing to provide reasonable accommodations for employees with disabilities, making it
difficult for them to perform their job."

REFERENCES

 Meaning and Importance of Business Ethics

https://www.investopedia.com/ask/answers/040815/why-are-business-ethics-important.asp