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Business Ethics & Corporate Social Responsibility TY-BMS (Sem – 5)

Section – 2
A) Indian Perspective of Ethics
1. Purusharthas: Dharma, Artha, Kama, Moksha
2. Concept of Dharma

B) Ethics: A Global Perspective:


1. Ethics in Global Marketing & Advertising
2. Ethical perspective in Employment including the international labour
Organization Std.
3. Ethics and IT: E-commerce, Privacy Codes.
4. Environmental Ethics: Indian and Western perspectives
5. Ethics and Cross- culture influences
6. Ethical issues and functional aspects of business

A) Indian Perspective of Ethics


1. Purusharthas: Dharma, Artha, Kama, Moksha
2. Concept of Dharma

Purusha means either God or a human being.


Artha means an object or objective. "Purusharthas" means objectives
of a human being. Purusha does not mean male in the physical sense,
but any soul in its differentiated aspect.
So the purusharthas are applicable to both men and women equally.
The purusharthas serve as pointers in the life of a human being. They are
based on the vision of God which is evident in the creation He manifested
and which can be followed by man to be part of that vision and in
harmony with His aims. His worlds are established on the principles of
dharma. They are filled with the abundance of material and spiritual
beings and energies, who seek fulfillment by achieving their desires and
liberation. Since man is God in his microcosmic aspect, he too should
emulate God and manifest the same reality in his own little world. He
should pursue the same aims, experience life in its fullness and be an
instrument of God by serving the purpose for which he has been created.
The four chief aims or purusharthas are:
1. Dharma (righteousness),
2. Artha (wealth),
3. Kama (desire) and
4. Moksha (salvation or liberation)

The rationale behind these purusharthas becomes clear when


we consider the basic tenets of Hinduism. Man is an aspect of God. He
is God's objective reality in creation. He exists in relationship with God
like a reflection in the mirror that is somewhat different yet inseparable

Prof. Abdul Kadir Khan 1


Business Ethics & Corporate Social Responsibility TY-BMS (Sem – 5)

and somewhat similar. Veiled in him is the true self by the influence
and involvement of Prakriti or primordial nature.

The purpose of his life upon earth is to follow the law (dharma) of God
and achieve salvation (moksha) or freedom from his false self
(ahamkara) by leading a balanced life in which both material comforts
and human passions have their own place and legitimacy.

Man cannot simply take birth on earth and start working for his salvation
right away by means of just dharma alone. If that is so man would never
realize why he would have to seek liberation in the first place. As he
passes through the rigors of life and experiences the problem of human
suffering, he learns to appreciate the value of liberation. He becomes
sincere in his quest for salvation. So we have the four goals, instead of
just one, whose pursuit provides us with an opportunity to learn important
lessons and move forward on the spiritual path. What the purusharthas
characterize is not a life of self-negation, but of balance, complexity,
richness, opportunities and moderation in a cosmic drama of immense
proportions in which man ultimately envisions and experiences his true
grandeur and fulfills the very purpose of his creation.

Every individual in Hindu society is expected to achieve these four


objectives with detachment, without any expectation and as a sacrificial
offering to God in the ritual of human life. They have to be pursued
selflessly for a higher and greater cause. Depending upon the attitude and
the manner in which we pursue them, they either set us free or entangle
us deeper with the allurements of human life.

Dharma

The first of the goals is dharma, a word which is difficult to translate in


English. Since the same word is used in many eastern religions, it means
many things to many people and eludes a true definition. It has been
variously translated as duty, faith, religion, righteousness, sacred law, justice,
ethics, and morality and so on. According to one school of Hinduism, dharma
is an obligatory duty as prescribed by the Vedas to be performed by an
individual in accordance with the rules prescribed for the caste to which he or
she belongs. God is an upholder of dharma because he performs His duties
even though they are not obligatory and He is without desire or preference.

There is no word in Latin or English that can truly explain the complex
meaning of dharma. Its first letter "dha" is also the first letter of dharitri, the
earth, which is suggestive of its connection with the earth or earthly life. In a
wider sense, dharma is the secret glue, the binding force, which upholds and
regulates this entire creation just as the gravitational force controls and holds
the entire material universe as one piece. It is the divine constitution that

Prof. Abdul Kadir Khan 2


Business Ethics & Corporate Social Responsibility TY-BMS (Sem – 5)

defines our roles and responsibilities, our social and moral order, our purpose
and goals and the rewards and punishments that are appropriate for our
actions. It is the law of God that is sacred, inviolable and pervasive. It is
responsible for order, regularity, harmony, control, predictability and
accountability. According to Manusmriti, dharma is four footed in the Krita
age and loses one leg in each successive age. Thus in the fourth and last age
of Kali, it becomes crippled and rests upon just one leg.

Dharma exists in all planes, in all aspects and at all levels of creation. In the
context of human life, dharma consists of all that an individual undertakes in
harmony with divine injunctions and his own sense of morality and justice.
However to comprehend the true nature of dharma is not an easy task. The
world is enveloped in illusion as our human minds are. What we see in the
world and learn from it may not be true and reliable. What we consider as
right and wrong or dharma and adharma may not stand the test of truth.
Hence to practice dharma we are advised to rely upon the scriptures and
follow the injunctions contained there in.

The sources of dharma are the Vedas, the Vedangas, the Sutra literature of
which the most important are the Dharmashastras, and scriptures such as
the Bhagavadgita. In ancient India dharmashastras (law books) played an
important role in guiding people on the path of dharma. It is however difficult
to say how far they are relevant in the present age. One should also
remember that dharma should not be viewed as end in itself but the means
to a still higher end, liberation.

Artha

Artha means wealth. Hinduism recognizes the importance of material wealth


for the overall happiness and well being of an individual. A house holder
requires wealth, because he has to perform many duties to uphold dharma
and take care of the needs of his family and society. A person should not
seek wealth for wealth sake but to uphold dharma and help the members of
his family and society achieve their goals. Hinduism therefore rightly places
material wealth as the second most important objective in human life. While
dharma and moksha are meant for oneself, wealth and sex are to be pursued
for the sake of others. Lord Vishnu is the best role model for any
householder. He leads a luxurious life, served by the goddess of wealth
herself, but is very dutiful, helpful, responsive and righteous. So was Lord
Krishna while he was in human form. He lived a very luxurious life, but was
righteous, detached and balanced.

Hinduism advocates austerity, simplicity and detachment, but does not


glorify poverty. Wealth is not an impediment to self-realization, but
attachment to wealth is. Desire for wealth is different from greed for wealth.
Selfless desire for wealth is preferable to selfish desire for wealth. Money and
wealth are a form of divine energy. God is abundance. He is endowed with
eight kinds of wealth. But as Sri Aurobindo pointed out we have negative

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Business Ethics & Corporate Social Responsibility TY-BMS (Sem – 5)

attitude mostly about wealth because hostile and negative forces want us
believe so and thereby prevent its use for righteous reasons.

Seeking wealth through human actions is not discouraged in Hinduism. The


vedic hymns are mostly invocations addressed to gods and goddesses by
men desiring wealth and prosperity. However they also emphasize the need
for right intention, right means and moderation in the pursuit of wealth.
Aiming for wealth is a virtue, but greed is not. Amassing wealth for the family
and for the welfare of oneself is not sinful, but taking what does not belong to
one is. Hinduism, Jainism and Buddhism benefited greatly in the past by the
individual contribution of rich merchants, their wives and children.

Poverty has become a grotesque reality in present day Hindu society and
erroneously considered by many as a virtue. This is a Christian influence.
Hindus have become so poverty conscious that if a saint or a sage leads a
comfortable life, they scoff at him, saying that he is not a true yogi. They
have to remind themselves of the simple fact that none of the Hindu gods
and goddesses are really poor. While they always help the poor and the
needy, none of them glorify poverty as a virtue. According to Hinduism all
experiences are self created and provide an opportunity to learn. So is
poverty and so is wealth. Renunciation does not mean to leave aside wealth
or denounce the wealthy. It means detachment from wealth. To become
indifferent to the comforts and discomforts of life caused by wealth.

Hinduism advocates moderation and balance in the pursuit of material and


spiritual goals. Some Hindus think otherwise, ignoring the fact that what is
applicable to an ascetic does not apply to a householder. Swami Vivekananda
rightly said that religion was not for the empty stomachs. When a person is
beset with survival problems, he would hardly find any solace in religion.
Soothing words would not comfort a hungry soul as much as a morsel of
food.

Kama

Kama in a broader sense means desire. Both Hinduism and Buddhism


consider desire as the root cause of human suffering. According to the
Bhagavadgita, desire leads delusion and bondage to the cycle of births and
deaths. The way out of suffering is to become detached from the sense
objects through such practices as yoga and meditation and perform
desireless actions as sacrificial offerings to God with a sense of duty,
accepting God as the doer and without hankering after the fruit of one's
actions. According to Manusmriti man performs sacrifices because of the
desire for rewards, with the expectation that his actions will bear fruit. Not a
single act of him here on earth appears ever to be done by a man free from
desire. So he who performs his prescribed duties out of desire in the right
manner will obtain the fulfillment of all the desires and reach the deathless
state or even beyond. As we can see the right way to fulfill one's desire is by
performing one's obligatory duties in the right manner but not by neglecting

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Business Ethics & Corporate Social Responsibility TY-BMS (Sem – 5)

them so that the way of the dharma also becomes the way of fulfillment of
desires.

Moksha

The pursuit of dharma regulates the life of a human being and keeps him on
the righteous path. The pursuit of artha and kama enrich his experience and
impart to him valuable lesson. The pursuit of moksha or salvation liberates
him and leads him to the world Brahman. The pursuit of dharma usually
begins in the early age when one is initiated into religious studies. The
pursuit of artha and kama begins in most cases after one becomes a
householder. The pursuit of moksha however is the most important of all
aims and can begin at any time. The other aims are preparatory for this final
aim. However, in most cases, though not correctly, moksha becomes an
important pursuit in the old age during vanaprastha or the age of retirement.
Moksha is both a purushartha and a paramartha (transcendental aim), which
is important not only for men but also for the divine beings.

Moksha actually means absence of moha or delusion. Delusion is caused by


the inter play of the triple gunas, the activity of the senses, attachment with
and desire for sense objects. A person achieves liberation when he increases
the quality of sattva, suppressing rajas and tamas and overcomes his desire
for sense objects by detachment, self control, surrender to god and offering
of one's actions to God. There are many paths to salvation and all of them
lead to God. The main paths are the path of knowledge, of action, of devotion
and of renunciation. Each path has its own advantages and disadvantages.
whatever may be the path, the help and guidance of a guru is indispensable
to one's spiritual journey. A guru is God in human form whose his chief
purpose is to remove the darkness hidden in the hearts and minds of his
disciples and help them find their true selves.

The purpose of purusharthas is to ensure that people would not neglect their
obligatory duties in their deluded state by becoming obsessed with particular
desires that may lead to moral and social decadence and destruction of
family values. The four Purusharthas are responsible for balance in human
life. They make life a rewarding and enriching experience. They cater to the
spiritual and material aspirations of human beings and lead them in the right
direction on the path of liberation. The exemplify the very functioning of God
who, without any particular aim or desire, detached, seeks to establish these
four aims in the entire manifest creation through his trinity of Brahma, Vishnu
and Mahesha and Himself as the highest and supreme aim of all. Thus by
worshipping Brahma we can gain the knowledge of dharma and perform our
obligatory duties with precision and perfection. By worshipping Vishnu we can
gain material and spiritual wealth and work for the welfare of our families and
society. By worshipping Siva we can seek the fulfillment of our desires and
overcome our delusion and finally by pursuing Brahman, or any of these gods
as Brahman, we can achieve liberation by becoming Brahman Himself.

Prof. Abdul Kadir Khan 5


Business Ethics & Corporate Social Responsibility TY-BMS (Sem – 5)

The Concept of Dharma:

Dharma is the path of righteousness and living one's life according to the
codes of conduct as described by the Hindu scriptures.

Dharma is a term that is frequently used in Indian spiritual thought. Though it is a


term with wide and far reaching ramifications, it essentially signifies a sense of
duty, a sense of obligation or a sense of responsibility.
Good Dharma = Good Karma

“Dharma basically means ‘to nourish’, ‘to uphold’ and signifies


whatever supports the universal order and also the individual life in
society. Dharma is the basic value in life as well as in transactions -
social, religious, secular and vocational. Dharma is the first of the three
normal human purposes, the other two being the acquisition of wealth
(artha) and the enjoyment of pleasures (kama). Dharma is
characterized by certain common human values like truth, generosity,
compassion, sympathy, self-restraint, forgiveness, non-enmity,
friendliness, absence of envy and rectitude in conduct.
The scriptures say ‘attend to this, the essence of dharma, do not do to
others what you would not do to yourself. Put yourself in the position of
others and then act’. In other words, dharma is the inner light of clear
conscience, mindful of the welfare of all and minimizing ego
involvement and selfishness in institutional behaviour.
.

Dharma is closely linked with the idea of original human indebtedness


or inescapable obligation. Every human being is born with three debts.
The first is towards his ancestors, the second is towards the sages and
the third is what he owes to the Gods.

By continuing the family line by having his own children, he discharges


his debts towards his ancestors, by studying, understanding the
cultural context and milieu into which he is born, he discharges his
debt towards the sages, as the sages have been responsible for the
unbroken cultural heritage of the land. By respecting and worshipping
the elemental and environmental forces like the air, the rivers, the
mountains, plants, animals etc, he discharges his debts to the Gods.
(The stress on environmental awareness is to be noted here). This
concept of indebtedness is the very source of dharma, which shifts the
focus from desire gratification to duty fulfillment, thus making human
life meaningful and worthwhile .

The two great epics of India, the Ramayana and the Mahabharata both

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Business Ethics & Corporate Social Responsibility TY-BMS (Sem – 5)

emphasize the role of Dharma in individual life as well as in collective


existence. If the Ramayana illustrates the need to subordinate wealth
and enjoyment to dharma, thus making it the mirror of Indian culture,
the Mahabharata expounds on the challenges that dharma faces from
greed and wealth in personal and public life and how real dharma is
sabotaged by surrogates and counterfeits.” This is Dharma, the
bedrock of human existence.
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B) Ethics: A Global Perspective:


1. Ethics in Global Marketing & Advertising
2. Ethical perspective in Employment including in the international labour
Organization Std.
3. Ethics and IT: E-commerce, Privacy Codes.
4. Environmental Ethics: Indian and Western perspectives
5. Ethics and Cross- culture influences
6. Ethical issues and functional aspects of business

Prof. Abdul Kadir Khan 7


Business Ethics & Corporate Social Responsibility TY-BMS (Sem – 5)

1) Ethics in Global Marketing & Advertising:

"A customer is the most important


visitor of our premises.

He is not dependent on us -
we are dependent on him.
He is not an interruption on our work -
he is the purpose of it.

He is not an outsider on our business -


he is a part of it.

We are not doing him a favour


by serving him -
He is doing us a favour by giving us
an opportunity to do so."
- Mahatma Gandhi

The Oxford University Press defines global marketing as “marketing


on a worldwide scale reconciling or taking commercial advantage of
global operational differences, similarities and opportunities in order to
meet global objectives.”
- Oxford University Press’ Glossary of Marketing Terms

Marketing ethics is the area of applied ethics which deals with the
moral principles behind the operation and regulation of marketing.
Some areas of marketing ethics (ethics of advertising and promotion)
overlap with media ethics.

Fundamental Issues in the Ethics of Marketing

Frameworks of analysis for ethical marketing -


Possible frameworks:
• Value-oriented framework, analyzing ethical problems on the
basis of the values which they infringe (e.g. honesty, autonomy,
privacy, transparency). An example of such an approach is the
AMA Statement of Ethics.

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Business Ethics & Corporate Social Responsibility TY-BMS (Sem – 5)

• Stakeholder-oriented framework, analysing ethical problems on


the basis of whomsoever they affect (e.g. consumers,
competitors, society as a whole).
• Process-oriented framework, analysing ethical problems in terms
of the categories used by marketing specialists (e.g. research,
price, promotion, placement).
None of these frameworks allows, by itself, a convenient and complete
categorization of the great variety of issues in marketing ethics.

Nature and Scope of Marketing Ethics


Marketing ethics is viewed as important because of marketing’s
interface with many diverse stakeholders. Marketing is a key functional
area in the business organization that provides a visible interface with
not only customers, but other stakeholders such as the media,
investors, regulatory agencies, channel members, trade associations,
as well as others. It is important when addressing marketing ethics to
recognize that it should be examined from an individual,
organizational, and societal perspective. Examining marketing ethics
from a narrow issue perspective does not provide foundational
background that provides a complete understanding of the domain of
marketing ethics. The purpose is to define, examine the nature and
scope, identify issues, provide a decision-making framework, and trace
the historical development of marketing ethics from a practice and
academic perspective.

DEFINITION OF MARKETING ETHICS


Ethics has been termed the study and philosophy of human
conduct, with an emphasis on the determination of right and wrong.
For marketers, ethics in the workplace refers to rules (standards,
principles) governing the conduct of organizational members and the
consequences of marketing decisions. Therefore, ethical marketing
from a normative perspective approach is defined as “practices that
emphasize transparent, trustworthy, and responsible personal and
organizational marketing policies and actions that exhibit integrity as
well as fairness to consumers and other stakeholders. Marketing ethics
focuses on principles and standards that define acceptable marketing
conduct, as determined by various stakeholders and the organization
responsible for marketing activities.

While many of the basic principles have been codified as laws and
regulations to require marketers to conform to society’s expectations
of conduct, marketing ethics goes beyond legal and regulatory issues.

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Business Ethics & Corporate Social Responsibility TY-BMS (Sem – 5)

Ethical marketing practices and principles are core building blocks in


establishing trust, which help build long-term marketing relationships.
In addition, the boundary-spanning nature of marketing (i.e. sales,
advertising, and distribution) presents many of the ethical issues faced
in business today.
Both marketing practitioners and marketing professors approach
ethics from different perspectives. For example, one perspective is that
ethics is about being a moral individual and that personal values and
moral philosophies are the key to ethical decisions in marketing.
Virtues such as honesty, fairness, responsibility, and citizenship are
assumed to be values that can guide complex marketing decisions in
the context of an organization. On the other hand, approaching ethics
from an organizational perspective assumes that establishing
organizational values, codes, and training is necessary to provide
consistent and shared approaches to making ethical decisions.

Key Issues in Marketing Ethics


By its very nature, marketing ethics is controversial, and there is no
universally accepted approach for resolving questions. Ethical issues
address a problem, situation, or opportunity that requires an individual,
group, or organization to choose among several actions that must be
evaluated as right or wrong. The organization and stakeholders define
marketing ethical issues that must be identified and resolved to build
trust and effective relationships with stakeholders. Because marketing
ethics sometimes deals with subjective moral choices, this requires
decisions about the moral standards to apply and the definition of
ethical issues. However, many groups in society, including
government, are defining ethical and legal issues and proactive
approaches to deal with these issues. For example, millions of blogs or
personal web logs exist on the Internet without any formal code of
ethics or regulation. Many firms, such as Audi, have their own blogs
with many stakeholders requesting the formation of an ethics
committee to create unified standards. Organizations are being asked
to prevent and control misconduct by implementing ethical compliance
programs. Ethics brings many rewards to organizations that nurture it,
but managing ethics requires activity and attention on several levels—
complying with the law, setting ethical standards, and dealing with the
complex decisions related to trade-offs between the bottom line and
ethical conduct.

High ethical standards require both organizations and individuals to


conform to sound moral principles. Fair Trade has emerged to link
ethically minded consumers with marketers concerned with

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Business Ethics & Corporate Social Responsibility TY-BMS (Sem – 5)

disadvantaged producers in developing nations. Starbucks works to


treat coffee farmers fairly in their business relationships by paying
premium prices, long-term contracts, affordable credit, direct
purchasing, and investing in social projects in coffee communities
.
However, general special factors must be considered when applying
ethics to marketing. First, to survive, marketers must contribute to
profits or other organizational objectives. Second, marketers must
balance their desire for success against the needs and desires of
society. Maintaining this balance often requires compromises or
tradeoffs. To address these unique aspects, society has developed
rules—both legal and implicit—to guide marketers in their efforts to
reach their objectives in ways that do not harm individuals or society
as a whole.

External stakeholders’ interests, concerns, or dilemmas help


trigger ethical issue intensity. For example, the National Do-Not Call
Registry has tremendous impact on telemarketers’ business practices.
Organizational culture (internal stakeholders) and individual moral
philosophies and values influence the recognition of ethical issues and
marketing ethics decisions. New Belguim Brewing Company, the third
largest craft beer brewer in the United States, uses only wind energy
and co-generation as well as a vigorous recycling initiative. In addition,
the company practices open-book management. The decisions or
outcomes are evaluated by both internal and external stakeholders.

Marketing ethics relates to issues such as honesty and fairness,


conflicts of interest, discrimination, privacy, and fraud. Government
regulatory agencies and self-regulatory groups such as the Better
Business Bureau have developed formal mechanisms to deal with
ethical issues related to marketing. The Federal Trade Commission
(FTC) enforces consumer protection laws. Within this agency, the
Bureau of Consumer Protection works to protect consumers against
unfair, deceptive, or fraudulent practices. In addition to the FTC, other
federal agencies such as the Food and Drug Administration, the
Consumer Product Safety Commission, and the Federal
Communications Commission try to assist consumers in addressing
deceptive, fraudulent, or damaging conduct. At the state level,
consumer protection statutes exist, and deceptive trade practices laws
exist in most states. In New Jersey, the Attorney General’s office has
filed a lawsuit against Blockbuster, Inc. for not properly disclosing
terms associated with its “No More Late Fees” policy. Overdue rentals
are automatically converted to sales on the eighth day after the due
date. The New Jersey Consumer Fraud Act could result in Blockbuster
paying civil penalties of up to $10,000 for each violation (Merritt,
2005). These regulatory agencies help define many of the issues that

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Business Ethics & Corporate Social Responsibility TY-BMS (Sem – 5)

should be an ethical concern for marketers. Examples of issues include


marketing communications that are false and misleading, material
misrepresentations in external and internal communications, and the
use of telecommunications to deceive customers. Antitrust, deception
in pricing, product liability, and marketing channel relationships all
encompass ethical decisions.

A Framework for Understanding Ethical Decision


Making In Marketing

Ethical decision making in marketing parallels ethical decision


making across all organizational domains. There is much overlap
between marketing ethics and business ethics because the basic
frameworks that describe ethical decision making in an organization
include decisions that encompass marketing. In other words, within the
context of an organization, there is an ethical component to business
decisions, regardless of whether it is marketing or some other
functional area component. External stakeholder interests, concerns or
dilemmas help trigger ethical issue intensity. For example, PETA has
encouraged KFC and other fast-food restaurants to make the ethical
treatment of animals a priority. Organizational culture (internal
stakeholders) and individual moral philosophies and values influence
the recognition of ethical issues and marketing ethics decisions. The
decisions or outcomes are evaluated by both internal and external
stakeholders. While it is impossible to describe precisely how or why an
individual or a work group may make a specific decision, we can
generalize about average or typical behavior patterns within
organizations.
First, as previously discussed, marketing can identify the
importance of stakeholders, stakeholder issues, and gather information
to respond to significant individuals, groups, and communities. Next, in
the decision-making process, marketers should identify the importance
or relevance of a perceived issue– i.e., the intensity of the issue (Jones,
1991). The fast food industry is being pressured by government
agencies, consumers, and special interest groups to offer healthier
menu options, particularly for children. The intensity of a particular
issue is likely to vary over time and among individuals and is
influenced by the organizational culture, values and norms; the special
characteristics of the situation; and the personal pressures weighing on
the decision. McDonald’s restaurants were the targets of negative
publicity associated with the release of the movie Super Size Me. In
response, the company introduced more salads and healthful portions

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Business Ethics & Corporate Social Responsibility TY-BMS (Sem – 5)

and alternatives. Individual factors are obviously important in the


evaluation and resolution of ethical issues, and familiarity with
principal, theoretical frameworks from the field of moral philosophy is
helpful in determining ethical decision making in marketing (Murphy,
Laczniak, Bowie, and Klein, 2005). Personal moral development and
philosophy, organizational culture, and coworkers, determine why
different people perceive issues with varying intensity.
The ethical climate of an organization is a significant element of
organizational culture. Whereas a firm’s overall culture establishes
ideals that guide a wide range of behaviors for members of the
organization, its ethical climate focuses specifically on issues of right
and wrong. The ethical climate is the organization’s character or
conscience. Codes of conduct and ethics policies, top management’s
actions on ethical issues, the values and moral development and
philosophies of coworkers, and the opportunity for misconduct all
contribute to an organization’s ethical climate. In fact, the ethical
climate actually determines whether or not certain dilemmas are
perceived as having an ethical intensity level that requires a decision.
Opportunity usually relates to employees’ immediate job context
—where they work, with whom they work, and the nature of the work.
The specific work situation includes the motivational “carrots and
sticks” that superiors can use to influence employee behavior. Pay
raises, bonuses, and public recognition are carrots, or positive
reinforcement, whereas reprimands, pay penalties, demotions, and
even firings act as sticks, the negative reinforcement. For example, a
salesperson who is publicly recognized and given a large bonus for
making a valuable sale that he or she obtained through unethical
tactics will probably be motivated to use unethical sales tactics in the
future, even if such behavior goes against one’s personal value
system. Research has shown that there is a general tendency to
discipline top sales performers more leniently than poor sales
performers for engaging in identical forms of unethical selling behavior
(Bellizzi and Hasty, 2003). Neither a company policy stating that the
behavior in question was unacceptable nor a repeated pattern of
unethical behavior offsets the general tendency to favor the top sales
performers. A superior sales record appears to induce more lenient
forms of discipline despite managerial actions that are specifically
instituted to produce more equal forms of discipline. Based on their
research, Bellizzi and Hasty concluded that an opportunity exists for
top sales performers to be more unethical than poor sales performers.
In 2004, the American Marketing Association approved a new
code of ethics entitled; “Ethical Norms and Values for Marketers”. The
AMA code provides values which are assumptions about appropriate
behavior, as well as norms that provide suggested behaviors. The AMA

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Business Ethics & Corporate Social Responsibility TY-BMS (Sem – 5)

recognizes the diversity of marketing, and encourages members to


access codes of ethics that address specific functional areas such as
marketing research, direct selling, direct marketing, and advertising.

AMA Code of Ethics

Members of the American Marketing Association are committed to


ethical professional conduct. They have joined together in
subscribing to this Code of Ethics embracing the following topics:

Responsibility of the Marketer

Marketers must accept responsibility for the consequences of their activities


and make every effort to ensure that their decisions, recommendations and
actions function to identify, serve and satisfy all relevant publics: customers,
organizations and society.

Marketers’ Professional Conduct must be guided by:

1. The basic rule of professional ethics: not knowingly to do harm;


2. The adherence to all applicable laws and regulations;
3. The accurate representation of their education, training and experience;
and
4. The active support, practice and promotion of this Code of Ethics.

Honesty and Fairness

Marketers shall uphold and advance the integrity, honor and dignity of the
marketing profession by:

1. Being honest in serving consumers, clients, employees, suppliers,


distributors and the public;
2. Not knowingly participating in conflict of interest without prior notice to all
parties involved; and
3. Establishing equitable fee schedules including the payment or receipt of
usual, customary and/or legal compensation for marketing exchanges.

Rights and Duties of Parties in the Marketing Exchange Process

Participants in the marketing exchange process should be able to expect that


1. Products and services offered are safe and fit for their intended uses;
2. Communications about offered products and services are not deceptive;
3. All parties intend to discharge their obligations, financial and otherwise, in
good faith; and
4. Appropriate internal methods exist for equitable adjustment and/or redress
of grievances
concerning purchases.

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Business Ethics & Corporate Social Responsibility TY-BMS (Sem – 5)

It is understood that the above would include, but is not limited to, the
following responsibilities of the marketer:
In the area of product development and management:

• disclosure of all substantial risks associated with product or service usage;


• identification of any product component substitution that might materially
change the product or impact on the buyer’s purchase decision;
• identification of extra cost-added features.

In the area of promotions:

• avoidance of false and misleading advertising;


• rejection of high-pressure manipulations, or misleading sales tactics;
• avoidance of sales promotions that use deception or manipulations.

In the area of distribution:

• not manipulating the availability of a product for the purpose of


exploitation;
• not using coercion in the marketing channel;
• not exerting undue influence over the reseller’s choice to handle a product.

In the area of pricing:

• not engaging in price fixing;


• not practicing predatory pricing;
• disclosing the full price associated with any purchase.

In the area of marketing research:

• prohibiting selling or fundraising under the guise of conducting research;


• maintaining research integrity by avoiding misrepresentation and omission
of pertinent research data;
• treating outside client and suppliers fairly.

Organizational Relationships

Marketers should be aware of how their behavior may influence or impact the
behavior of others in organizational relationships. They should not demand,
encourage or apply coercion to obtain unethical behavior in their
relationships with others, such as employees, suppliers, or customers.

1. Apply confidentiality and anonymity in professional relationships with


regard to privileged information;
2. Meet their obligations and responsibilities in contracts and mutual
agreements in a timely manner;
3. Avoid taking the work of others, in whole, or in part, and representing this
work as their own or directly benefiting from it without compensation or
consent of the originator or owners; and
4 Avoid manipulation to take advantage of situations to maximize personal

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welfare in a way that unfairly deprives or damages the organization of others.

Any AMA member found to be in violation of any provision of this Code of


Ethics may have his or her Association membership suspended or revoked.

Preamble

The Internet, including online computer communications, has become


increasingly important to marketers’ activities, as they provide exchanges
and access to markets worldwide. The ability to interact with stakeholders
has created new marketing opportunities and risks that are not currently
specifically addressed in the American Marketing Association Code of Ethics.
The American Marketing Association Code of Ethics for Internet marketing
provides additional guidance and direction for ethical responsibility in this
dynamic area of marketing. The American Marketing Association is
committed to ethical professional conduct and has adopted these principles
for using the Internet, including on-line marketing activities utilizing network
computers.

General Responsibilities

Internet marketers must assess the risks and take responsibility for the
consequences of their activities. Internet marketers’ professional conduct
must be guided by:
- Support of professional ethics to avoid harm by protecting the rights of
privacy, ownership and access.
- Adherence to all applicable laws and regulations with no use of Internet
marketing that would be illegal, if conducted by mail, telephone, fax or other
media.
- Awareness of changes in regulations related to Internet marketing.
- Effective communication to organizational members on risks and policies
related to Internet marketing, when appropriate.
- Organizational commitment to ethical Internet practices communicated to
employees, customers and relevant stakeholders.

Privacy

Information collected from customers should be confidential and used only


for expressed purposes. All data, especially confidential customer data,
should be safeguarded against unauthorized access. The expressed wishes of
others should be respected with regard to the receipt of unsolicited e-mail
messages.

Ownership

Information obtained from the Internet sources should be properly authorized


and documented. Information ownership should be safeguarded and
respected. Marketers should respect the integrity and ownership of computer

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and network systems.

Access

Marketers should treat access to accounts, passwords, and other information


as confidential, and only examine or disclose content when authorized by a
responsible party. The integrity of others’ information systems should be
respected with regard to placement of information, advertising or messages.

CONCLUSIONS

Much progress has been made in advancing theory and research


in marketing ethics. In addition, the practice of marketing has been
elevated to higher levels of ethics from professional codes of conduct
provided by the American Marketing Association, Direct Selling
Association, Direct Marketing Association, Marketing Research
Association, American Federation of Advertising and the National
Advertising Division of the Council of Better Business Bureaus. In
addition, most corporations have developed comprehensive codes of
conduct that address specific ethical risk areas in marketing practice.
Recent regulatory changes that require boards of directors to be
responsible for oversight on all ethics issues within an organization
elevate the importance of marketing ethics. It is clear that marketing
ethics is part of organizational responsibility and individuals cannot
make independent decisions about appropriate conduct. There is
recognition through academic research and regulatory initiatives that
corporate culture plays a key role in improving marketing ethics.

Ethics in Advertising:
People in advertising spend a lot of their time dealing with ethical
choices, and those choices are almost never black and white. They're
subtle, shades-of-gray choices, juicy enough for a Philosophy major.
Now let's look at a more subtle shade of truth in this infamous Volvo
commercial. In a real-life monster truck show, the Volvo was the only
car left uncrushed - a great idea for a commercial! But to make the ad,
the film company needed to shoot several takes. So they reinforced
the beams inside the car to stand repeated squashing. When this came
out in the press, Volvo was pilloried and their ad agency got fired,
ultimately going out of business. Did it serve them right? Or was it a
bum rap? No question the demo was rigged. But what it showed was

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the truth: if a monster truck runs over you once, you're safer in the
Volvo.
An ethical brainteaser we deal with every day is: "What can you
legitimately simulate to illustrate the truth?" Before you answer
"nothing!”, ask yourself if a Higher Purpose would be served if Pampers
and Kotex commercials showed the real thing instead of that fake blue
water.

Ads for reputable companies almost never lie. They have to be able to
prove what they say to their own corporate counsel, the ad agency's
lawyers, the network's approval committees and to any number of
regulating bodies like the FDA and the FTC. With at least five different
government agencies looking over our shoulder, the cost of being
caught cheating is simply too high. In addition, the individuals inside a
company want to be able to look at themselves in the mirror. Some like
to think of business people as belonging to some other species, but
remember that most of them are you a few years from now.

So we tell the truth -- but not always the Whole Truth. Like lawyers, our
job is to put our clients in the best light. When you go on a job
interview or a first date, you don't assume a false identity - but you
probably don't make a full disclosure either. Chances are you keep
your lactose intolerance and foot odor issues in the background, and
save your Federation Starfleet uniform for later in the relationship - if
there IS a later.

For a company trying to sell something, an ad is like getting a job


interview with millions of people all at once. The ad wants to make a
good first impression and really, really doesn't want to make people
mad. But different people react differently.

During the 2000 Super Bowl, millions of people saw the following
commercial for Christopher Reeve walking again.

Some of us saw an uplifting message of hope. Some saw a cynical


company manipulating people's hope to make a buck. Still others -
many of them with disabilities - saw an ad that gave false hope. What
did you see?

It's an axiom in advertising that when you do something bold, it's likely
to polarize your audience. And big events like the Super Bowl or the
Olympics make advertisers bolder.

You can tell the ad agency really enjoyed creating the horror movie
spoof with an Olympic runner. This Nike commercial ran during the

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2000 Olympics. But this commercial received over 2,000 complaints.


Nike heard them and killed the spot and unlike Freddie Kruger, this ad
stayed dead!

A lot of people question the ethics of selling consumers things they


don't need - which presupposes that we shouldn't have the things we
don't need but want anyway. We don't need 90% of the stuff in our
apartments. We don't need artwork, among other things. Neanderthals
didn't need cave paintings, but they sure brighten up a grotto. Why did
so many of us bring bottled water - that we paid for - into this meeting
room today, when carrying a canteen of tap water is so much more…
rational?

Advertising, like human beings, lives where Reason meets Desire.


Years ago, The Coca-Cola Company invented a better product. No
consumer product had ever been so thoroughly tested with so many
consumers. This new Coke was provably much better. But consumers
not only didn't buy it, they demonstrated against it. Because a lot of
what they loved about "real" Coke wasn't inside the bottle. It was the
idea of Coke and their experiences with it and how those experiences
were connected to so much of what we imagine life in America should
be like. Advertising isn't just about the things we buy. It's about how
we feel about things, including ourselves. That's what makes it
interesting.

Cause-related marketing
:

Speaking of feelings, 80% of Americans say they feel better about


companies that are aligned with social issues. Two thirds of us say
we'd be inclined to switch to a brand that we identify with a good
cause. It's why American Express put on the Tribeca Film Festival in
lower Manhattan to help bring people back to the area after September
11th. Wal-Mart focuses on community efforts of their associates and
stores. General Mills' "Spoonfuls of Hope" campaign features Lance
Armstrong promoting cancer research. Johnson & Johnson - always at
the top of polls as a socially responsible company -- has been running a
campaign to help promote nursing as a career:

Does the extra business and good will these companies stand to gain
compromise the good that the causes do? What are the ethics of
enlightened self-interest? Not long ago a major advertiser donated a
quarter-million dollars in food aid to Bosnians in the wake of the war
there. By all accounts, the aid did a lot of good. Later, the company
spent over a million dollars to advertise their good deed to American
audiences. What decision would you have made?

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Tobacco Advertising :
Ronald Reagan once appeared in ads touting the health benefits of a
cigarette brand. Times have changed. Now the space in which tobacco
can be promoted in any form is growing more restricted every day.
And tobacco isn't the only legal - and potentially lethal - product that
poses ethical, not to mention public policy questions for us.

Ad agencies and individual advertising people make their own


decisions about categories like tobacco and guns. Many say, "No,
thanks" to working on certain businesses. But would you turn down the
Kraft Macaroni and Cheese assignment because another division of the
same corporation makes Marlboros? That's a tougher question.

Alcohol:
There are hundreds of beer commercials on the air, but not one of
them shows somebody actually drinking the beer. Does that make
them more ethical? And although there's the same amount of the
same chemical in a can of Bud and a shot of Jack Daniels, you don't
see hard liquor advertised on television. In the case of alcohol,
advertisers themselves have made these "ethical" choices. But do they
make rational sense? The Mothers against Drunk Driving (MADD)
probably don't make the same distinction between beer and bourbon
that advertisers do.

Incidentally, advertising people working for free because they believe


in the cause create MADD's ads. Ad folk like to work pro bono for
nonprofits and good causes. Public service campaigns, including anti-
smoking messages, got over $1.5 billion dollars in free media last year.
Altogether, they'd be the fifth largest advertiser.

The ethical issue isn't the alcohol in the product, it's the brand name
on the bottle (Smirnoff Ice). When I say the word "Smirnoff", what do
you think of? - you're not alone. A rival company says this commercial
is misleading you because there's no vodka in Smirnoff Ice. It's a malt
beverage. Does the name "Smirnoff" mean "vodka" or is it just a
name? Many of you are in the target audience. Are you being fooled
here? And if you thought Smirnoff Ice contained vodka, did you also
think it contained ice? You don't have to take time from your studies to
decide this case. As we speak, it's being examined by the ATF (Federal
Bureau of Alcohol, Tobacco and Firearms).

Children
Society imposes context on advertising ethics all the time - especially
in advertising that involves children. Here's a commercial for children's
shampoo. On behalf of Society, can you see what's wrong with this
message?

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Business Ethics & Corporate Social Responsibility TY-BMS (Sem – 5)

The problem isn't something in the spot - it's what's missing. There is
no adult supervision shown around the swimming pool. The Children's
Advertising Review Unit (CARU) of the Better Business Bureau (BBB),
which also monitors kid's programming, requires that adults be shown
supervising children when products or activities could be risky. So
L'Oreal changed the commercial to model good parental behavior.
Score one for Society. Another commercial for Aim toothpaste showed
a child who went to the bathroom in a museum to brush her teeth.
Good hygiene or not, it had to be taken off the air when teachers
complained that they'd never, ever, let a child leave the group
unattended.

Advertisers spend most of their waking hours trying to anticipate what


their audiences will want and how they'll react. We try our best, but
sometimes we miss.

Pharmaceutical advertising :
Information is ethically neutral. In an academic setting like this, we
welcome more information because the marketplace of ideas enables
individuals to form their own judgments - which brings us to
advertising about prescription drugs. Not long ago, only a doctor could
tell you about a new medicine. You probably never heard of it before
you walked in; you didn't know if it was the only one in the world or
one of dozens that did pretty much the same thing. Now advertisers
spend millions of dollars telling you about their medicines. Advertising
puts more information in people's hands. Studies show that drug ads
raise awareness of some conditions so more people seek treatment.
And they know more about their options before seeing the doctor.
That's good, right?

But of course the drug companies don't advertise their cheapest


products. They promote the big moneymakers. There's more
information out there, but it comes with a heavy dose of Point-of-View.
Sometimes there are two points of view in the same commercial. The
FDA requires that, if you promote the benefits of your medicine, you
must also reveal any significant risks or side effects. So we have them
to thank for the now legendary disclaimer for a weight-loss drug. The
medicine worked miracles, but the company was also obliged to
mention its unpleasant side effects, with the result that the drug
turned into a national joke! Does more information elevate the national
dialogue?

Product placement
:

What are the ethics of advertising that doesn't look like advertising? In

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Business Ethics & Corporate Social Responsibility TY-BMS (Sem – 5)

a movie chase scene, the hero and the bad guy are going to need
some kind of car to drive. In the theatre we have no way of knowing
whether the director chose those cars because they fulfilled his artistic
vision - or because the car manufacturer made a deal with the
producer. The car people get exciting exposure for their brand and she
saves a nice piece of change on her production budget. Audiences like
realism in movies. Made-up brands break the spell because they're
obvious fakes. But the difference between something that's just a prop
and something that's a product promotion is getting murkier all the
time, on TV shows as well as movies.

This kind of "product placement" happens in real life, too. If you go out
to a club tonight, you might see some particularly good-looking young
people using a new kind of cell phone. It lets them shoot pictures of
people to their friends across the room: "Here's a cute guy - want to
come and meet him?" Fun stuff like that. If you're curious, maybe
they've taken your picture and they'll be happy to show you the phone
and let you try it. The phone is very cool. And the people are what
advertisers call "aspirational" because they're way cooler than you are.
They're people you want to be. They're also actors and this is a gig for
them. Their job is creating the impression that using this phone is The
Next Trend. If you ask them directly if they are actors, they won't lie.
But if you don't ask, they won't tell. This is the reverse of the Volvo
story. Volvo's demonstration was rigged, no question, but what viewers
saw on TV was the truth. With this cell phone, the demonstration is the
absolute truth, but the scene in the club is pure theater.

(Note: This new "guerrilla" marketing campaign for Sony Ericsson has
received a great deal of negative publicity already for being deceptive
in its approach.)

Subliminal advertising
:
There's one more thing I know you want me to talk about. If you
believe subliminal advertising exists, you don't any more because I
embedded a convincing subliminal denial in this talk. In case you
missed it, subliminal advertising is one of those "urban legends." Try
this experiment. Take a photograph of a glass of ice water or the
beverage of your choice and make a fake ad out of it. Then invite
people in your Psych department to find the subliminal messages in
your ad. They won't disappoint you.

If a bunch of students can create subliminal messages, imagine what


the pros on Madison Avenue can do.

CONCLUSION

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This wouldn't be a talk about ethics in advertising without a word from


our sponsor and here it comes.
80% of American companies have a written Code of Ethics. And
probably 100% of you do too, if you gave it some thought and wrote it
down. Ethics happen, or don't, in our relationships with others.
Advertisers are in the business of communicating with thousands, even
millions, of "others" all the time. That gives us thousands or millions of
chances to practice what we believe every day. And try to get it right.

Ethical perspective in Employment including in the International Labour


Organization Standard:

The discussions on ethical issues that may arise in the employment


relationship, including the ethics of discrimination, and employees’
rights and duties are commonly seen in the business ethics texts While
some argue that there are certain inalienable rights of workplace such
as a right to work, a right to privacy, a right to be paid in accordance
with comparable worth, a right not to be the victim of discrimination,
others claim that these rights are negotiable. Ethical discourse in HRM
often reduced the ethical behavior of firms as if they were charity from
the firms rather than rights of employees. Except in the occupations,
where market conditions overwhelmingly favour employees,
employees are treated disposable and expendable and thus they are
defenselessly cornered to extreme vulnerability. The expendability of
employees, however, is justified in the texts of ‘business morality’ on
the ground the ethical position against such expendability should be
sacrificed for ‘greater merit in a free market system. Further, it is
argued since because ‘both employees and employers do in fact
possess economic power’ in the free market, it would be unethical if
governments or labour unions ‘impose employment terms on the labor
relationship’ There are discussions of ethics in employment
management individual practices, issues like policies and practices of
human resource management, the roles of human resource (HR)
practitioners, the decline of trade unionism, and issues of globalizing
the labour etc., in the recent HRM literature, though they do not

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occupy the central stage in the HR academics. It is observed that with


the decline of labour unions world over, employees are potentially
more vulnerable to opportunistic and unethical behavior. It is criticized
that HRM has become a strategic arm of shareholder profiteering
through making workers into ‘willing slaves’. A well cited article points
out that there are ‘soft’ and a ‘hard’ versions of HRMs, where in the
soft-approach regard employees as a source of creative energy and
participants in workplace decision making and hard version is more
explicitly focused on organizational rationality, control, and
profitability. In response, it is argued that the stereotypes of hard and
soft HRM are both inimical to ethics because they instrumentally
attend to the profit motive without giving enough consideration to
other morally relevant concerns such as social justice and human
wellbeing. However, there are studies indicating, long term sustainable
success of organizations can be ensured only with humanely treated
satisfied workforce.

Market, obviously, is not inherently ethical institution that could be led


by the mythical ‘invisible hand’ alone; neither, it can be alluded that
market is inherently unethical. Also, ethics is not something that could
be achieved through establishment of procedures, drawing codes of
ethics, or enactment of law or any other heteronomous means, though
their necessity could remain unquestioned.However, though market
need not be the cause of moral or ethical hazards it may serve an
occasion for such hazards. The moral hazards of HRM would be on
increase so much as human relations and the resources embedded
within humans are treated merely as commodities.

• Discrimination issues include discrimination on the bases of age


(ageism), gender, race, religion, disabilities, weight and
attractiveness. See also: affirmative action, sexual harassment.
• Issues arising from the traditional view of relationships between
employers and employees, also known as At-will employment.
• Issues surrounding the representation of employees and the
democratization of the workplace: union busting, strike breaking.
• Issues affecting the privacy of the employee: workplace
surveillance, drug testing. See also: privacy.
• Issues affecting the privacy of the employer: whistle-blowing.
• Issues relating to the fairness of the employment contract and
the balance of power between employer and employee: slavery,
indentured servitude, employment law.
• Occupational safety and health.

All of above are related to the hiring and firing of employees. An


employee or future employee can not be hired or fired based on race,
age, gender, religion, or any other discriminatory act.

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Business Ethics & Corporate Social Responsibility TY-BMS (Sem – 5)

International Labour Organization (ILO)


International labour standards are conventions, treaties and
recommendations designed to eliminate unjust and inhumane labour
practices. The primary international agency charged with developing
such standards is the International Labour Organization (ILO).
Established in 1919, the ILO advocates international standards as
essential for the eradication of labour conditions involving "injustice,
hardship and privation". According to the ILO, international labour
standards contribute to the possibility of lasting peace, help to mitigate
potentially adverse effects of international market competition and
help the progress of international development.

The most basic labor rights have been codified by the ILO in the 1998
Declaration of Fundamental Rights at Work after some developed
countries tried to include them at the WTO’s Singapore Meeting in
1996. The declaration outlines five “core labor standards” (CLS) that all
labor markets should strive to meet: freedom of association, the right
to collective bargaining, abolition of forced or compulsory labor,
elimination of child labor, and freedom from discrimination.

Labor standards and their implementation did not merely arise to


promote economic growth. They also emerged as a new and important
area of concern for socially responsible investors, especially in the
“problematic” footwear, apparel, and toy industries. For most investors
involved with this issue, the fundamental matter of concern is the
protection of human rights in the workplace. This is why there is a
strong movement to consider the core labor rights defined in the 1998
ILO Declaration as “universal human rights.” The ILO Declaration on
Fundamental Principles and Rights at Work declares inter alia that all
member states, whether they have ratified the relevant conventions or
not, have an obligation due to their membership in the ILO, to respect,
to promote, and to realize in good faith and accordance with the
Constitution, the fundamental rights which are the subject of those
conventions.

Ethics and IT: E-commerce, Privacy Codes:

Information ethics is the field that investigates the ethical issues


arising from the development and application of information
technologies. It provides a critical framework for considering moral
issues concerning informational privacy, moral agency (e.g. whether
artificial agents may be moral), new environmental issues (especially

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Business Ethics & Corporate Social Responsibility TY-BMS (Sem – 5)

how agents should one behave in the infosphere), problems arising


from the life-cycle (creation, collection, recording, distribution,
processing, etc.) of information (especially ownership and copyright,
digital divide). Information Ethics is related to the fields of computer
ethics and the philosophy of information.

Dilemmas regarding the life of information are becoming increasingly


important in a society that is defined as "the information society".
Information transmission and literacy are essential concerns in
establishing an ethical foundation that promotes fair, equitable, and
responsible practices. Information ethics broadly examines issues
related to ownership, access, privacy, security, and community.

Information technology affects fundamental rights involving copyright


protection, intellectual freedom, accountability, and security.

Professional codes offer a basis for making ethical decisions and


applying ethical solutions to situations involving information provision
and use which reflect an organization’s commitment to responsible
information service. Evolving information formats and needs require
continual reconsideration of ethical principles and how these codes are
applied. Considerations regarding information ethics influence
“personal decisions, professional practice, and public policy”.
Therefore, ethical analysis must provide a framework to take into
consideration “many, diverse domains” (ibid.) regarding how
information is distributed.

Ethics for e-Commerce


There’s nothing like buying something from the local merchants in town.
You know them, you trust them, and they know you and you swap cards
during the holidays. These are relationships built on trust.
Not so in the on-line world of commerce. You’re a home page. Your
buyers are numbers and e-mail addresses. You don’t know them; they
don’t know you. However, you can and should still conduct business
like a local merchant.
 Customers will come back, generating repeat sales.
 Satisfied buyers will tell their friends. (How do you think
Amazon became so big?)
 You’ll demonstrate your commitment to being a good, on-line
citizen.
 You’ll be able to look at yourself in the mirror each morning.

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Business Ethics & Corporate Social Responsibility TY-BMS (Sem – 5)

So, let’s look at the areas where e-tailers have ethical responsibilities
to their customers, to their businesses and to the growing society of
on-line businesses and the buying public.

Post Your Business Policies


Do you accept returns? Under what conditions? Do you give cash
returns or store credit? Are shipments insured? Where are you
physically located? Do you offer customer support and service? 24/7?
Your business policies should be carefully laid out for all to see. There
should be a large link off your home page to a page or two of your
company’s policies. If you guarantee customer satisfaction, tell each
customer. If there are conditions on returns, lay them out clearly. Skip
the 6-point text on the back page (the fine print). Be straight with your
customers right from the start.

Honor Your Policies


The most overused words on the Internet are “ABSOLUTELY FREE”.
Now, unless you’re a complete rube, you know nothing is ever
absolutely free. There’s always a hook, a catch.
So, unless it really is absolutely free, don’t hype what isn’t right. If you
offer a full, money-back guarantee, then give the customer her money
back! There are e-tailers who say one thing in their site text, but
practice a different set of rules when it comes to delivering on
promises made.
You (and the rest of the world) are better off if you do what you say
you’re going to do. It’s the right thing to do. It’s the ethical thing to do.

Come On With the ‘Come-Ons’ Already


Laptops: Only $9.99!!! While they last!!!
You see this kind of ‘come-on’ all the time. So, you click to see what a
$9.99 laptop gets you and discover the site sells abacuses. Or, they
only had one 10-year old laptop for $9.99, which didn’t last long (while
they last). It’s the old bait-and-switch, with a cheap laptop the bait.
Once on the site, you’re rerouted to a page of much higher priced
laptops. You’ve been suckered — again. No one likes to be suckered.
It’s a waste of time and an insult to the individual’s intelligence.
Protect Your Buyer’s Privacy
You can buy a million e-mail addresses (verified, so they say) for as
little as a penny an address. And, where did the purveyors of these
mailing lists acquire their information? From people (on-line
entrepreneurs) who sold them their own company mailing lists. Legal?
Yes. Fair? Well, that’s an ethical question. Do you think it’s fair to sell
your customer list to a marketing data company for sale to anyone
willing to pay $100?

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Business Ethics & Corporate Social Responsibility TY-BMS (Sem – 5)

Your strict privacy policy is a selling point. It’s also the ethical thing to
do, so proclaim your position right there in your terms of service.
“We will not give or sell your name or other personal information to
another party.”
Then, do what you promise.

What About Security?


Another area in which ‘do the right thing’ comes into play.
You gather a lot of personal information on your customers or clients —
names, addresses, credit card numbers — the whole shebang. And,
as the keeper of this invaluable information, you have a moral
responsibility to protect it from hackers and the kids who use your
business computer to do their homework.
Is you site secure? Is your computer protected with multi-layers of
protection against hackers? A fire wall? Anti-malware software?
Encryption for on-line orders? If not, you’re putting your customers at
risk. And believe this: they’ll be none too happy when they discover
that some cracker has their personal information thanks to your lax
security.
Ethics is about responsibility — accepting responsibility and doing the
right thing. If you’re going to be a reputable, on-line dealer — one with
ethical business practices — you have a responsibility to protect the
personal information in your system.
Here’s the bottom line on your bottom line: we have to get rid of the
“snake oil” aspect of on-line commerce. We have to start operating like
the old store on Main Street. Build trust through clearly-stated business
policies, straight-up information (no bait-and-switch), treat customers
fairly (there’s always one) and protect the personal information
entrusted to you.
When we all earn the confidence of more and more on-line buyers, we
make the whole e-commerce ’society’ a stronger, more vibrant place in
which to conduct business — for everyone.

Environmental Ethics: Indian and Western perspectives

Environmental ethics is the discipline in philosophy that studies the


moral relationship of human beings to, and also the value and moral
status of, the environment and its nonhuman contents. This entry
covers:

Prof. Abdul Kadir Khan 28


Business Ethics & Corporate Social Responsibility TY-BMS (Sem – 5)

(1) the challenge of environmental ethics to the anthropocentrism (i.e.,


human-centeredness) embedded in traditional western ethical
thinking;
(2) the early development of the discipline in the 1960s and 1970s;
(3) the connection of deep ecology, feminist environmental ethics, and
social ecology to politics;
(4) the attempt to apply traditional ethical theories, including
consequentialism, deontology, and virtue ethics, to support
contemporary environmental concerns; and
(5) the focus of environmental literature on wilderness, and possible
future developments of the discipline

Environmental ethics is the part of environmental philosophy which


considers extending the traditional boundaries of ethics from solely
including humans to including the non-human world. It exerts influence
on a large range of disciplines including law, sociology, theology,
economics, ecology and geography.

There are many ethical decisions that human beings make with
respect to the environment. For example:
• Should we continue to clear cut forests for the sake of human
consumption?
• Should we continue to propagate?
• Should we continue to make gasoline powered vehicles?
• What environmental obligations do we need to keep for future
generations?
• Is it right for humans to knowingly cause the extinction of a
species for the convenience of humanity?

Environmental Challenges: Global Perspective

Several factors and events that reflect future environmental


challenges:

• Some oil companies and the World Wildlife Fund agree to


prohibit World Heritage site exploration
• The abundance and appeal of heavy oil resources in Canada and
Venezuela and a new focus on producing those resources have
collided with greenhouse gas commitments and waste disposal
issues

Prof. Abdul Kadir Khan 29


Business Ethics & Corporate Social Responsibility TY-BMS (Sem – 5)

• Aggressive “environmental liability management” has become


the norm for major companies in dealing with legacy issues and
in avoiding future liabilities
• The need to accurately measure and manage greenhouse gas
emissions data for purposes of future internal and external
trading is driving a U.S./industry push for “standardization” of
management techniques
• Even as the consequences of global warming are becoming
clearer - climate change impacts already recognized in the
Arctic, with measurable disruptions to Aboriginal lifestyles,
wildlife, existing communities, and industrial development —the
exact causes are still debated, and in turn uneven global
approaches have created unique business challenges
• There is a dire need to mitigate the worldwide loss of fisheries
and underwater habitats due to overexploitation and collateral
damage
• Activities in the Norwegian sector of the North Sea demonstrate
the technical and cost benefits of oil company collaboration in
addressing environmental research, and developing an
environmental management strategy

Environmental Issues in India:

Across India, concern is mounting over an ever growing list of


environmental problems.

More people means increased pressure on natural resources (from


water to forests), while an economy in high-gear is leaving a trail of
pollution that’s affecting not only India, but the rest of the world too

Deforestation
India is witnessing a rising demand for forest-based products. This is
causing deforestation and encroachment into forest protected areas,
which leads to a severe loss of natural resources.

It is estimated that total industrial roundwood consumption in India


could exceed 70 million m3 per year by the end of the decade (350,000
large shipping containers), while domestic supply would fall short of
this figure by an estimated 14 million m3.1

As the nation will have to depend heavily on imports to meet this

Prof. Abdul Kadir Khan 30


Business Ethics & Corporate Social Responsibility TY-BMS (Sem – 5)

growing demand, there is fear that this could result in loss of high
conservation value forests and biodiversity elsewhere.

A thirst for palm oil


India is a big edible oil consumer. In fact, it is one of the three largest
importers of palm oil in the world, along with EU and China. Of these
imports, 95% come from Indonesia and Malaysia, causing negative
social and environmental consequences in these exporting countries.

Conversion of natural forests for cultivating oil palm is a major threat


to biodiversity and livelihoods in the tropics. Most of the lowland
rainforest on the Indonesian island of Sumatra has already been lost,
largely because of the clearance for oil palm and pulp wood plantations

With the global demand for palm oil expected to increase from 28
million tonnes at present to about 50 million tonnes in 20302, there are
very serious concerns that this will happen at the expense of
biologically and economically important forests.

Pollution

Increasing competition for water among various sectors, including


agriculture, industry, domestic, drinking, energy generation and
others, is causing this precious natural resource to dry up. Increasing
pollution is also leading to the destruction of the habitat of wildlife that
lives in waterways.

The academic field of environmental ethics grew up in response to the


work of scientists such as Rachel Carson and events such as the first
Earth Day in 1970, when environmentalists started urging philosophers
to consider the philosophical aspects of environmental problems.

The first international academic journals in this field emerged from


North America in the late 1970s and early 1980s – the US-based
journal Environmental Ethics in 1979 and the Canadian based journal
The Trumpeter: Journal of Ecosophy in 1983. The first British based
journal of this kind, Environmental Values, was launched in 1992.

Ecologic extension

Alan Marshall's category of ecologic extension places emphasis not on


human rights but on the recognition of the fundamental
interdependence of all biological (and some abiological) entities and
their essential diversity. Where as Libertarian Extension can be
thought of as flowing from a political reflection of the natural world,

Prof. Abdul Kadir Khan 31


Business Ethics & Corporate Social Responsibility TY-BMS (Sem – 5)

Ecologic Extension is best thought of as a scientific reflection of the


natural world. Ecological Extension is roughly the same classification of
Smith’s eco-holism, and it argues for the intrinsic value inherent in
collective ecological entities like ecosystems or the global environment
as a whole entity. Holmes Rolston, among others, has taken this
approach.

This category includes James Lovelock's Gaia hypothesis; the theory


that the planet earth alters its geo-physiological structure over time in
order to ensure the continuation of an equilibrium of evolving organic
and inorganic matter. The planet is characterized as a unified, holistic
entity with ethical worth of which the human race is of no particular
significance in the long run

Conservation ethics

Marshall's category of 'conservation ethics' is an extension of use-


value into the non-human biological world. It focuses only on the worth
of the environment in terms of its utility or usefulness to humans. It
contrasts the intrinsic value ideas of 'deep ecology', hence is often
referred to as 'shallow ecology', and generally argues for the
preservation of the environment on the basis that it has extrinsic value
– instrumental to the welfare of human beings. Conservation is
therefore a means to an end and purely concerned with mankind and
intergenerational considerations. It could be argued that it is this ethic
that formed the underlying arguments proposed by Governments at
the Kyoto summit in 1997 and three agreements reached in Rio in
1992

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Prof. Abdul Kadir Khan 32