ETHICAL ISSUES IN

BUSINESS & CORPORATE

WORLD
CHAPTER 5
THE MORALITY OF LABOR STRIKES
WHAT IS STRIKE?
• a refusal to work organized by a body of employees as a form
of protest, typically in an attempt to gain a concession or
concessions from their employer.
• A work stoppage; the concerted refusal of employees to
perform work that their employer has assigned to them in
order to force the employer to grant certain demanded
concessions, such as increased wages or improved
employment conditions.
A work stoppage is generally the last step in a labor management
dispute over wages and working conditions. Because employees
are not paid when they go on strike and employers lose
productivity, both sides usually seek to avoid it. When
negotiations have reached an impasse, however, a strike may be
the only bargaining tool left for employees
WORKERS GO ON STRIKES FOR
DIFFERENT REASONS
• Higher Compensation
• Improve the Workplace
• Shorter Working Days
• Stop Wages from going down
• More benefits
• Think that their company has been unfair
• Victimization/discrimination
• Lay offs
• Casual appointment for long
• Instability of service
• Payment less than minimum wages
• Non-compliance with requirements of hygiene and sanitation,
health and safety
 TYPES OF STRIKES
• SIT-DOWN STRIKE • SYMPATHY STRIKE
• A strike in which workers show up to work but • A strike initiated by workers in one industry
refuse to work. and supported by workers in a separate but
• GENERAL STRIKE related industry.
• UNFAIR LABOR PRACTICE STRIKE
• A strike affecting all areas of labor force across
many industries typically throughout the entire • An action taken by an employer, that is
country of a large section thereof believed to be inimical to the interest of an
employee organization
 TYPES OF STRIKES
• BOYCOT • PICKETING
• The workers may decide to boycott the • When workers are dissuaded from work by
company in two ways. Firstly by not using its stationing certain men at the factory gates, such
products and secondly by making an appeal to a step is known as picketing. If picketing does
the public in general. In the former case, the not involve any violence, it is perfectly legal
boycott is known as primary and in the latter
secondary. It is a coercive method whereby the
management is forced to accept their demands.
WHISTLEBLOWING
• WHAT IS WHISTLEBLOWING
• It is where workers report misconduct, most often seen at work,
in order to protect the public. Whistleblowers can be employees,
former employees, trainees, agency workers or members of
Limited Liability Partnerships. The misconduct must affect, or
have the potential to affect, the public, rather than being a
personal grievance.
WHISTLEBLOWING complaints typically fall into one of the
following categories:

• Threat to an individual’s health and safety

• Real or potential damage to the environment
• Miscarriage of justice
• Breaking the law, which includes contractual obligations and
health and safety regulations
• Criminal offence
 How Can Whistleblowing Benefit
Your Business?
• Facilitates early detection of fraud within your business.
• Allows you to swiftly put a stop to the wrongdoing and mitigate any risks and repercussions
• Whistleblowers are likely to come to you directly instead of approaching external whistleblowing services.
• When legal action is not required the misconduct can be handled entirely within your business, without being
plastered across headlines in a public scandal.
• if you are required to disclose the incident to the authorities, anticipating the public attention allows you to
prepare for it
 How to Implement a Whistleblowing
Culture?
• it is essential that an acceptance and promotion of whistleblowing is observed at every level of the
organization, including management.
• Creating a whistleblowing policy is a good place to start.
• A whistleblowing policy is a document compiled by an organization which outlines their stance on
whistleblowing and offers information to workers on the whistleblowing procedure
• Whistleblowing awareness can be generated through meetings, posters, promotion of policy, staff training
and anything else that gets people talking.
• Whistleblowing training is a vital resource that both raises awareness of and educates your staff on
whistleblowing.
• Regular training allows staff to keep their knowledge up to date and familiarize themselves with the
whistleblowing process, thus promoting whistleblowing in your business.
MULTILEVEL MARKETING AND
PYRAMIDING
• Multi-level Marketing (MLM) or network
marketing, is individuals selling products to the public
- often by word of mouth and direct sales.
• The main idea behind the MLM strategy is to
promote maximum number of distributors for the
product and exponentially increase the sales force.
• The promoters get commission on the sale of the
product as well as compensation for sales their
recruits make thus, the compensation plan in multi-
level marketing is structured such that commission is
paid to individuals at multiple levels when a single
sale is made and commission depends on the total
volume of sales generated
MULTILEVEL MARKETING AND
PYRAMIDING
• Pyramid Schemes are, however, fraudulent schemes,
disguised as an MLM strategy. The difference between
a pyramid scheme and a lawful MLM program is that
there is no real product that is sold in a pyramid
scheme.
• Participants attempt to make money solely by recruiting
new participants into the program.
• The hallmark of these schemes is the promise of sky-
high returns in a short period of time for doing nothing
other than handing over your money and getting others
to do the same.
 LEGITIMACY
1.Learn more about the company, by finding and studying the company's track record. Do an internet search with
the name of the company and words like review, scam, or complaint. Look through several pages of search results.
You also may want to look for articles about the company in newspapers, magazines, or online. Find out:
• how long the company has been in business
• whether it has a positive reputation for customer satisfaction
• what the buzz is about the company and its product on blogs and websites
• whether the company has been sued for deceptive business practices
• Check with your state Attorney General for complaints about any company you're considering, although a lack of
complaints doesn't guarantee that a company is legitimate.
 LEGITIMACY
2.Don't pay or sign a contract in an "opportunity meeting." Take your time to think over your decision. Your
investment requires real money, so don't rush into it without doing some research first.
• Ask your sponsor for the terms and conditions of the plan, including:
• the compensation structure
• your potential expenses
• support for claims about how much money you can make
• the name and contact information of someone at the company who can answer your questions
 LEGITIMACY
3.Get this information in writing. Avoid any plan where the reward for recruiting new distributors is
more than it is for selling products to the public. That's a time-tested and traditional tip-off to a pyramid
scheme.
• Keep in mind that when you recruit new distributors, you are responsible for the claims you make about
how much money they can earn. Be honest, and be realistic. If your promises fall through, you could be
held liable, even if you are simply repeating claims you read in a company brochure or heard from
another distributor. If you don't understand something, ask for more information until it is absolutely
clear to you.
MLM vs. Pyramid Scheme
UNFAIR COMPETITION
• What Is Unfair Competition?
• Unfair competition occurs when another
company uses wrong or deceptive business
practices to gain a competitive advantage.
• The major category of unfair competition
relates to intentional confusion of customers as
to where the product came from, while the
secondary category relates to unfair trade
practices. Some of the most common forms of
unfair competition include:
FORMS OF UNFAIR COMPETITION
• Bait-and-switch selling technique, such as substituting a lower-cost product from a different brand for a more
expensive, higher-quality product.
• False advertising or making false claims about a product to promote it.
• Misappropriation or use of confidential information, such as stealing a competitor's special formulation or
other trade secrets.
• Trade dress violation, or copying the physical appearance of a product and/or packaging in the attempt to fool
a customer into buying it.
• Trademark infringement.
• Breach of a restrictive covenant, such as a non-compete clause.
FORMS OF UNFAIR COMPETITION
• False representation of services or products, such as exaggerating the capabilities of a product.
• Reverse passing off, or misrepresenting the source of a product by failing to inform the public who
created it.
• This often happens when a company removes the mark from a product and then sells it.
• Unauthorized substitution of one brand of goods or products for another.
• Trade libel/slander or rumormongering, such as written or verbal communications that would ruin or
harm a company's reputation in the industry.
• In order to qualify as trade libel/slander, the false communication must decrease the confidence, respect, or regard
in which your business or product is held. Trade defamation is typically a civil matter, although in serious cases, it
can become a criminal matter.
• Imitation or counterfeiting.
• Below-cost selling.
MONEY LAUNDERING
• Money laundering is the practice of receiving
illegally acquired funds and then passing them off
as money obtained from legal sources.
• Individuals or companies engaging in money
laundering may seek to transfer these unlawfully
obtained funds to different parts of the globe using
money remittance centers, banks and/or digital
payment systems.
MONEY LAUNDERING
• Money laundering is the criminal practice of
processing ill-gotten gains, or “dirty” money,
through a series of transactions; in this way the
funds are “cleaned” so that they appear to be
proceeds from legal activities.
• Money laundering generally does not involve
currency at every stage of the laundering process.
Although money laundering is a diverse and often
complex process, it basically involves three
independent stages, namely: placement, layering
and integration that can occur simultaneously.
STAGES OF MONEY LAUNDERING
STAGES OF MONEY LAUNDERING
• Placement. The first and most vulnerable stage of laundering money is placement. The goal is to introduce
the unlawful proceeds into the financial system without attracting the attention of financial institutions or law
enforcement.
• Placement techniques include structuring currency deposits in amounts to evade reporting requirements or
commingling currency deposits of legal and illegal enterprises. An example may include: dividing large
amounts of currency into less-conspicuous smaller sums that are deposited directly into a bank account,
depositing a refund check from a canceled vacation package or insurance policy, or purchasing a series of
monetary instruments (e.g., cashier’s checks or money orders) that are then collected and deposited into
accounts at another location or financial institution
STAGES OF MONEY LAUNDERING
• Layering. The second stage of the money laundering process is layering, which involves moving funds
around the financial system, often in a complex series of transactions to create confusion and complicate the
paper trail. Examples of layering include exchanging monetary instruments for larger or smaller amounts or
wiring or transferring funds to and through numerous accounts in one or more financial institutions.
• Integration. The ultimate goal of the money laundering process is integration. Once the funds are in the
financial system and insulated through the layering stage, the integration stage is used to create the
appearance of legality through additional transactions. These transactions further shield the criminal from a
recorded connection to the funds by providing a believable explanation for the source of the funds. Examples
include the purchase and resale of real estate, investment securities, foreign trusts, or other assets.
 TAX EVASION vs. TAX AVOIDANCE
• WHAT IS TAX EVASION?
• Tax evasion is an illegal method by which you
can circumvent the tax that you pay. It is a
fraudulent activity by which you reduce the
income that you report or inflate the amount of
expenses.
• The meaning of tax evasion can be understood
as a deliberate manipulation of the money that
you make to eliminate or reduce the amount of
taxes that you owe.
• Any of the following activities that you undertake
can be considered as an attempt of tax evasion:
• Making false statements about your income or
expenses
• Hiding relevant documents
• Not maintaining complete records of the transactions
• Concealing income
• Overstatement of tax credit
• Presenting personal expenses as business expenses
• Tax evasion is considered a crime in all parts of the
world, punishable by law.
TAX EVASION vs. TAX AVOIDANCE
• WHATS IS TAX AVOIDANCE
• Tax avoidance, on the other hand, is a legal method by
which you can reduce your tax liability. Tax avoidance
entails using loopholes in legislature, or undertaking
various other activities by which you can reduce the
amount that you owe in taxes.
• For instance, if you invest in financial instruments outlined
in Section 80C of the Income Tax Act, such as Public
Provident Fund or Equity Linked Savings Scheme, you
can claim deductions. This will be considered tax
avoidance.
• There are various legal methods of tax avoidance that you
can undertake, such as taking out a loan for an electric
vehicle or an education loan. Through tax planning, you
can approach tax avoidance honestly that does not defy the
law.
 Difference Between Tax Evasion and Tax
Avoidance
• Examples of Tax Evasion
• Examples of Tax Avoidance
• Not reporting foreign income is tax evasion. For instance, if you
have rental property that is outside India, not reporting this income • Investing in financial instruments that enable you to save
will constitute tax evasion. taxes is a form of tax avoidance.
• Failure to report income generated from cryptocurrencies is tax • You could claim various deductions such as interest on
evasion. home loan, premiums on medical insurance, loan for
• Not reporting income generated through all-cash transactions is education, etc. These are methods of tax avoidance.
considered tax evasion. • Donating to a charitable institution or a political party to
• If you undertake criminal activities, such as drug sales or running a claim deductions is tax avoidance.
brothel, you may not report this income. This is tax evasion. • Using a financial planner to invest and claim deductions
• Making fake reports or false financial statements is also a form of is a way of tax avoidance.
tax evasion.
• If you pay a bribe to a tax official to hide your financial
statements, that is a form of tax evasion.
THANK YOU
REFERENCES
• https://consumer.sd.gov/fastfacts/marketing.aspx
• https://www.upcounsel.com/unfair-competition
• https://cloudcfo.ph/blog/corporate/anti-money-laundering-act-philippine