Business Ethics PDF

**Ethics in functional areas of business** Ethical problems and phenomena arise across all the functional areas of companies and at all levels within the company. ### Ethics in Compliance Compliance is about obeying and adhering to rules and authority. The motivation for being compliant could be...

**Ethics in functional areas of business** Ethical problems and phenomena arise across all the functional areas of companies and at all levels within the company. ### Ethics in Compliance Compliance is about obeying and adhering to rules and authority. The motivation for being compliant could be to do the right thing out of the fear of being caught rather than a desire to be abiding by the law. An ethical climate in an organization ensures that compliance with law is fuelled by a desire to abide by the laws. Organizations that value high ethics comply with the laws not only in letter but go beyond what is stipulated or expected of them. ### Ethics in Finance The ethical issues in finance that companies and employees are confronted with include: - In accounting -- window dressing, misleading financial analysis. - Related party transactions not at arm's length - Insider trading, securities fraud leading to manipulation of the financial markets. - Executive compensation. - Bribery, kickbacks, over billing of expenses, facilitation payments. - Fake reimbursements ### **Ethics in Human Resources** Human resource management (HRM) plays a decisive role in introducing and implementing ethics. Ethics should be a pivotal issue for HR specialists. The ethics of human resource management (HRM) covers those ethical issues arising around the employeremployee relationship, such as the rights and duties owed between employer and employee. The issues of ethics faced by HRM include: - Discrimination issues i.e. discrimination on the bases of age, gender, race, religion, disabilities, weight etc. - Sexual harassment. - Affirmative Action. - Issues surrounding the representation of employees and the democratization of the workplace, trade ization. - Issues affecting the privacy of the employee: workplace surveillance, drug testing. - Issues affecting the privacy of the employer: whistleblowing. - Issues relating to the fairness of the employment contract and the balance of power between employer and employee. - Occupational safety and health. Companies tend to shift economic risks onto the shoulders of their employees. The boom of performancerelated pay systems and flexible employment contracts are indicators of these newly established forms of shifting risk. ### Ethics in Marketing Marketing ethics is the area of applied ethics which deals with the moral principles behind the operation and regulation of marketing. The ethical issues confronted in this area include: - Pricing: price fixing, price discrimination, price skimming. - Anticompetitive practices like manipulation of supply, exclusive dealing arrangements, tying arrangements etc. - Misleading advertisements - Content of advertisements. - Children and marketing. - Black markets, grey markets. - ### Ethics of Production This area of business ethics deals with the duties of a company to ensure that products and production processes do not cause harm. Some of the more acute dilemmas in this area arise out of the fact that there is usually a degree of danger in any product or production process and it is difficult to define a degree of permissibility, or the degree of permissibility may depend on the changing state of preventative technologies or changing social perceptions of acceptable risk. - Defective, addictive and inherently dangerous products and - Ethical relations between the company and the environment include pollution, environmental ethics, and carbon emissions trading. - Ethical problems arising out of new technologies for eg. Genetically modified food - Product testing ethics. The most systematic approach to fostering ethical behaviour is to build corporate cultures that link ethical standards and business practices. **Principles of Business Ethics** --------------------------------- Being Accountable -- An organisation should be committed to upholding ethical standards that benefit society and employees at every level.  Being Trustworthy -- An organisation should promote trust  Being Respectful -- It is necessary to respect others' opinions and to promote that thought in an organisation Being Transparent -- While it is unethical to share trade secret, but the company market shares, [recruitment ](https://www.shiksha.com/online-courses/what-is-recruitment-st589-tg1271)practices, etc., should be accessible to all.  Being Fair Every employee must be treated fairly and each one of them should get the same opportunity to grow in the organisation and their careers. Being Concerned for Environment -- Climate change, wastage of resources, etc., are affecting the environment to a great degree. These should be an ethical concern for businesses. CocaCola, for example, states that it has goals to conserve water and 'increase water security'.  **Data protection and privacy laws** In the digital economy data is of strategic importance with social economic and governmental activities increasingly carried out online the flow of personal data is expanding fast raising. Issues related to storage and use current technologies, cloud services, the internet of things and Big Data as well as future technological innovations and increased connectivity through 5G networks can can deliver enormous benefits. They also make it more urgent to address various concerns over data and privacy. The challenge for data protection regimes is in managing the risks and addressing the concerns without restricting or eliminating the potential benefits. The role of governments and the industry in protecting online data is of Paramount importance. It must be done with a great deal of trust and confidence, this requires collaboration across stakeholders and geographies cross border. E-commerce presents developing countries with amazing opportunities but those countries that want to participate in the digital economy must consider the need for legal and Regulatory Frameworks to protect the personal data they collect. According to the Global Cyber Law tracker around 60 developing countries do not have current baseline protection laws in place and another 35 only have draft legislation. **Data protection and privacy laws** Data protection and privacy laws in India have evolved significantly over the past few years. Here's an overview of the current landscape: **1. Information Technology Act, 2000 (IT Act)** The IT Act is the primary legislation addressing electronic commerce, cybercrime, and data protection in India. Key provisions related to data protection include: Section 43A: Imposes liability on companies for negligence in implementing reasonable security practices and procedures. If a company fails to protect sensitive personal data, it can be held liable for compensation. Section 72A: Deals with the disclosure of personal information in breach of contractual obligations. It penalizes individuals or entities that disclose personal information without consent. **2. Rules under the IT Act** Several rules under the IT Act also address data protection: The Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011: These rules outline what constitutes \"sensitive personal data or information\" and the practices organizations must follow to protect such data. They include requirements for consent, data security measures, and grievance redressal mechanisms. **3. Personal Data Protection Bill, 2019** India\'s approach to data protection is primarily guided by the Personal Data Protection Bill, 2019, which is inspired by the European Union's GDPR. Key features include: Data Classification: Defines personal data and sensitive personal data. It also introduces the concept of \"critical personal data,\" which will be subject to stricter regulations. Consent: Requires that organizations obtain explicit consent from individuals before processing their personal data. Data Protection Authority (DPA): Establishes a Data Protection Authority to oversee and enforce data protection laws and handle grievances. Data Localization: Mandates that certain categories of data be stored and processed within India. Rights of Individuals: Grants individuals rights similar to those under GDPR, such as the right to access, correct, and erase their data. **4. Digital Personal Data Protection Act, 2023** The Digital Personal Data Protection Act, 2023, represents a significant update in India\'s data protection framework. It incorporates many features of the 2019 Bill and introduces: Expanded Definitions and Scope: Broadens the definitions of personal data and clarifies the scope of data protection. Enhanced Individual Rights: Provides more comprehensive rights to individuals regarding their data, including the right to be forgotten. Stronger Enforcement: Establishes stronger enforcement mechanisms and penalties for noncompliance. **5. Data Protection in Practice** Organizations operating in India must ensure compliance with these regulations, which involves: Implementing Data Security Measures: Adopting reasonable security practices to protect data from breaches. Obtaining Consent: Ensuring that consent is obtained for the collection and processing of personal data. Data Breach Notification: Reporting data breaches to the Data Protection Authority and affected individuals as required. Data Protection Officer: Appointing a Data Protection Officer (DPO) or equivalent to oversee data protection practices. **6. International Considerations** Organizations handling data of Indian residents may also need to comply with international data protection regulations if they operate in multiple jurisdictions, such as the GDPR in Europe. India's data protection landscape is evolving, and staying updated with the latest regulations and guidelines is crucial for compliance. **Why is it important?** 1. 2. 3. **Concept in data protection or personal data:** [Personal data:] personal data refers to any information relating to an identified or identifiable person, including names, addresses, email addresses, phone numbers, IP addresses and even data like social media post. [Data processing:] any operations or set of operations performed on personal data for example The Collection the storage the modification etc is called as processing data. [Data subject:] Data subjects are individuals to whom personal data relates in other words it is you and me people whose data is being collected and processed. [Data controllers:] controllers or legal entities that determine the purposes and means of processing personal data. They are responsible for deciding why and how data is processed. [Data processors:] data processors are entities that process personal data on behalf of controllers, they act according to the controller\'s instructions and are responsible for implementing appropriate security measures. **Principles of data protection:** 1. 2. 3. 4. 5. 6. 7.