Ethical Issues in Business

Ethical issues occur when a given decision, scenario or activity creates a conflict
with a society’s moral principles which requires a business organization or a
person to select the choices that must be examined as an ethical (right) or
unethical (wrong) ways.
Ethical issues in business management can be complex and challenging. Even
though there are numerous rules, enactments, laws, and statutes that happen to
hold employees and employers accountable, these only do not completely
discourage employees from behaving unethically or immorally.
Managers experience ethical issues at the personal, organizational,
trade/professional, societal and global levels. These issues arise between
managers and their conflict with stakeholder groups such as customers,
suppliers, employees, competitors, law and government, superiors,
wholesalers, and retailers.
Organizations promote conducting business based on honesty, integrity, and trust.
Ethical issues in business management circumscribe a broad range of areas
within an organization’s ethical standards and sensitive decision-making, in
compliance with the organization’s core values.

Ethical issues in HRM

Human resource management (HRM) plays a decisive role in introducing and implementing
ethics. Ethics should be a pivotal issue for HR specialists. The ethics of human resource
management (HRM) covers those ethical issues arising around the employer-employee
relationship, such as the rights and duties owed between employer and employee.

It is evident that the HRM can play an important role in promoting ethical behaviour in the
organization.
The human resource department can achieve this by initiating programs that promote ethical
culture in the organization.
These programs can be incorporated in the human resource functions, which include recruitment,
selection, training and orientation as well as rewarding.
However, the management should ensure that the programs put in place do not promote the very
behaviours they are meant to restrict.
The issues of ethics faced by HRM include:

1. Employment Issues such as Recruitment of favorable persons; Gender

discrimination in selection and promotion process; Not maintaining
confidentiality; Discrimination in salary or compensation fixation;
discrimination on the bases of age, gender, race, religion, disabilities, weight
etc.
2. Issues related to Cash and Incentive Plans,
3. Issues relating to the fairness of the employment contract and the balance of power
between employer and employee.
4. Issues related to Discriminations of the employees
5. Issues related to Performance Appraisal
6. Issues related to Privacy and workplace surveillance, .
7. Issues related to Safety and Health
8. Issues related to Restructuring and Layoffs
9. Other issues like using forced labour, child labour, Longer working hours,
Increasing work stress, Sexual harassment.
10.Twisting and curving authentic trade unionism; using union leaders to
coerce employees
11. Issues related to protection of whistle blowers as retaliating against employees who report
unethical or illegal activities within the organization is morally unacceptable.

Ethics of Production
This area of business ethics deals with the duties of a company to ensure that products
and production processes do not case harm. Some of the more acute dilemmas in this
area arise out of the fact that there is usually a degree of danger in any product or
production process and it is difficult to define a degree of permissibility, or the degree
of permissibility may depend on the changing state of preventative technologies or
changing social perceptions of acceptable risk.
• Defective addictive and inherently dangerous products and services (e.g., tobacco,
alcohol,
weapons, motor vehicles, chemical manufacturing).
• Ethical relations between the company and the environment : pollution,
environmental ethics, carbon emissions trading.
• Ethical problems arising out of new technologies : genetically modified food, mobile
phone
radiation and health.
• Product testing ethics : animal rights and animal testing, use of economically
disadvantaged
 groups (such as students) as test objects.

D. Ethical issues in Production

1. There are ethical problems arising out of use of new technologies that are
harmful to health, safety and environment. This includes technological
advancements like genetically modified food, radiations from mobile phones,
medical equipment etc.
2. Defective services and products or products those are innately deleterious like
alcohol, tobacco, fast motor vehicles, warfare, chemical manufacturing etc.
3. Animal testing and their rights or use of economically or socially deprived
people for testing or experimentation is another area of production ethics.
4. Ethics of transactions between the organization and the environment that lead to
pollution, global warming, increase in water toxicity and diminishing natural
resources.
5. There are certain processes involved in the production of goods and a slight
error in the same can degrade the quality severely.
6. Usually many manufactures are involved in the production of same good. They
may use similar or dissimilar technologies for the same.
7. Social perceptions also create ethical issues sometimes. For example, the use of
some fertilizer by cola companies in India recently created a national debate.

Ethics of Intellectual Property, Knowledge and Skills

Knowledge and skills are valuable but not easily “ownable” as objects. Nor is it obvious
who has the greater rights to an idea : the company who trained the employee, or the
employee themselves ? The country in which the plant grew, or the company which
discovered and developed the plant’s medicinal potential ? As a result, attempts to assert
ownership and ethical disputes over ownership arise.
• Patient infringement, copyright infringement, trademark infringement.
• Misuse of the intellectual property systems to stifle competition : patient misuse, copyright
misuse.
• Employee raiding : the practice of attracting key employees aways from a competitor to take
unfair advantage of the knowledge or skills they may possess.
• The practice of employing all the most talented people in a specific field, regardless of need, in
order to prevent any competitors employing them.
• Bioprospecting (ethical) and biopiracy (unethical).
• Business intelligence and industrial espionage.
Ethics in Information Technology
Information Technology is considered as a branch of Information and Communication
Technology. It is the usage of technology which leads to ethical issues. The pace of technology
can raise questions on Ethics as newer products make their way replacing the existing ones. In
fact increasing advances in the technological innovations are adding up to environmental
degradation such as computer screens, Keyboards, printers are already polluting the
environment. All these wastes produce toxins that cannot be decomposed easily. On the other
hand many technological developments have occurred. New manufacturing processes that are
outsourced either are replacing the manpower there or exploiting workers by engaging them at
cheaper prices. Although we cannot control technology and innovation, the better way is to adapt
and change. The role of ethics in technology is of managing it rather than controlling the same.
Public issues in IT are:-
· Plagiarism
· Software Piracy
· Hacking
· Computer Crimes
· Viruses
· Job displacement
· Digital Divide
· Nanotechnology and IT
· Netiquette
· Cookies and spyware
Public has not realized the critical importance of ethics to IT. Business men should take the
responsibility for these decisions. They must create a working environment in which ethical
dilemmas can be discussed openly and constructively.

Non-disclosure and corporate espionage:

Many business managers are at uncertainty of recent and past employees take
information comprises customer data used by organizations in direct competition
with the organization. When intellectual property is taken or private customer
information is unlawfully distributed, this constitutes corporate espionage.
Corporate espionage is espionage conducted for commercial or financial purposes.
It is also known as industrial espionage, economic espionage or corporate spying.
Technology and privacy practices:
Monitoring employees’ s use of technology, for instances email, social media
platforms and websites history.
Ethics in Copyrights and Patents
Intellectual Property (IP) is a legal term covering various forms of valuable business assets. The
three broad primary areas of IP are trademarks, copyrights and patents. Copyright refers to the
legal right of the owner of intellectual property”. In simpler terms, ‘copyright is the right to
copy’. This means that the original creator of a product and anyone he gives authorization to are
the only ones with the exclusive right to reproduce the work. Copyright law gives creators of
original material, the exclusive right to further develop them for a given amount of time, at
which point the copyrighted item becomes public domain. A copyright gives the owner of a work
of expression the exclusive right to:
1. Reproduce the work.
2. Distribute copies of the work to the public.
3. Display copies of the work in public.
4. Perform the work in public.
5. Create derivative works based on the original work. A copyright is collection rights which can
be given away, sold, leased, or licensed.
Copyright Infringement
Copyright infringement is the violation, piracy or theft of a copyright holder's exclusive rights
through the unauthorized use of a copyrighted material or work. It includes unauthorized use of a
work or material is any unauthorized reproduction, distribution, performance, public display or
transfer to a derivative work without the copyright owner's permission. An infringement occurs
under all of the following three conditions:
· The owner must hold a valid copyright.
· The alleged infringer must be able to access the copyrighted work.
· Duplication of the copyrighted work must occur beyond exceptions. If an exception does not
apply, permission is requested by the person seeking to use the work.
· There are three terminologies associated with copyright infringement:
· Piracy: The term "piracy" has been used to refer to the unauthorized copying, distribution and
selling of works in copyright.
· Theft: It is an instance where a person exercises one of the exclusive rights of the copyright
holder without authorization
· Freebooting: The term “freebooting” has been used to describe the unauthorized copying of
online media, particularly videos, onto websites such as Facebook, You Tube or Twitter.

Environmental ethics is a branch of ethical thought that focuses on the relationship between
humans and their natural environment. It is a holistic approach to understanding and evaluating
our moral obligations to protect and preserve the environment for creating a sustainable society.
Environmental ethics seeks to bring together the interests of both humans and the environment,
recognizing that both are interdependent and have intrinsic value.
A variety of ethical theories, including consequentialism, utilitarianism, and virtue ethics, define
environmental ethics. These ethical theories provide a framework for understanding the moral
obligations we have to the environment and how we should act to protect it. Environmental
ethics also draws upon the fields of philosophy, economics, ecology, and law, providing a
comprehensive approach to understanding and evaluating the moral implications of human
actions.
Importance of Environmental Ethics
· Environmental ethics is essential for protecting the environment, species, and resources.
· It promotes sustainable practices and encourages people to become more aware of the
impact their actions have on the environment.
· It emphasizes the interconnectedness of all living things and the need to respect them. It
encourages us to think about our place in the world and how we can contribute to
preserving the natural environment.
· Environmental ethics helps to build better relationships with nature, recognizing its
intrinsic value, not just its instrumental value.
· It encourages us to think beyond our immediate needs and consider the long-term
implications of our actions.
· It teaches us responsibility towards our environment, advocating for environmentally
friendly practices that help protect natural resources.
· Environmental ethics also promotes better public policies and laws, which help ensure
that our environment is properly cared for.
Examples of Environmental Ethics
One example of environmental ethics in action is using renewable energy sources. Renewable
energy sources are sources of energy that are naturally replenished and can be used without
depleting natural resources. Examples of renewable energy sources include solar, wind, and
hydropower. Renewable energy sources are seen as an ethical choice, as they do not cause
pollution or deplete finite resources.
Principles of Environmental Ethics
1. Respect for the intrinsic value of nature: Nature should not be treated as a commodity or
resource to be exploited and discarded.
2. Interdependence of species and ecosystems: Humans depend on nature and natural
systems. We must recognize our role in preserving and protecting the environment.
 3. Ecological sustainability: We must strive to use resources responsibly and with an eye to
preserving ecosystems and biodiversity.
4. Human responsibility: We are responsible for our own actions and decisions and their
consequences for the environment.
5. Human equity: We must strive for a just world where the rights and needs of humans,
animals, and plants are respected and protected.
6. Precautionary principle: We should take precautions against environmental harm, even
when scientific evidence is inconclusive.
7. Right to know: Individuals have the right to access information about environmental
issues.
8. Right to participate: Citizens have the right to participate in environmental decision-
making processes.

E. Ethical issues in Research

1. The principle of voluntary participation requires that people should not be
coerced or forced into participating in research.
2.Closely related to the notion of voluntary participation is the requirement of
informed consent. Essentially, this means that prospective research participants
must be fully informed about the procedures and risks involved in research and
must give their consent to participate.
3.Ethical standards also require that researchers should not put participants in a
situation where they might be at risk of harm as a result of their participation.
4.There are certain standards to be applied in order to protect the privacy of
research participants.
5.Increasingly, researchers have to deal with the ethical issue of a person's right to
service.

Business managers have the liabilities and responsibilities as well as obligations to

establish and put into action a code of conduct and ethics so that every employee of
the organization should be obey and follow the basic moral or ethical issues that
promotes conduct which rely on the honesty and integrity as well as compliance
and governance persistent with an organization’s core values.
Here are the following steps to be followed to resolve Ethical issues:
• Gather the relevant facts and identify the problems or issues;
• Identify the affected or aggrieved parties;
• Consider or accept the ethical issues involvements ;
• Identify which basic or fundamental principles are influenced or affected;
• Refer or mention to the employing organization’s internal procedures or
methods;
• Consider and assess the alternative course of action ; and
• Execute or implement the alternative course of action and monitor it’s
progress.