1. Managing the ethical
dilemma

2. An ethical dilemma (ethical paradox or moral dilemma) is a problem
in the decision-making process between two possible options,
neither of which is absolutely acceptable from an ethical
perspective.
An ethical dilemma is a moral situation in which a choice has to be
made between two equally undesirable alternatives. Dilemmas
may arise out of various sources of behavior or attitude, as for
instance, it may arise out of failure of personal character, conflict of
personal values and organizational goals, organizational goals versus
social values, etc.

4. A business dilemma exists when an organizational
decision maker faces a choice between two or more
options that will have various impacts on
(i) the organization’s profitability and
competitiveness
(ii) Its stakeholders. ‘
In situations of this kind, one must act out of
prudence to take a better decision. As we can see,
many of these ethical choices involve conflicts ..

5. • How to Solve an Ethical Dilemma?

7. • Examples of Ethical Dilemma
• Some examples of ethical dilemma include:
• Taking credit for others’ work
• Offering a client a worse product for your own
profit
• Utilizing inside knowledge for your own profit
• https://www.youtube.com/watch?v=FB921D4
0ibw

8. • How to Solve an Ethical Dilemma
• Value theory approach: Choose the alternative
that offers the greater good or the lesser evil.
• Find alternative solutions: In some cases, the
problem can be reconsidered, and new
alternative solutions may arise

9. Ethical culture can be defined as a set of
experiences, assumptions, and expectations of
managers and employees about how the
organization encourages them to behave
ethically or unethically. Measuring and building
an ethical culture is a challenging task that offers
enormous long-term rewards.

10. Creating an ethical organizational culture
Top Management Leads Ethics by Example
• One of the most noticeable ways that companies can demonstrate their
commitment to creating an ethical organizational culture is to ensure that top
managers and leaders lead by example. Employees look to the behavior of top
management as an example of the type of behavior that the company finds
acceptable in the workplace. Actions speak louder than words, so when top
executives display ethical behavior, it sends a positive message to employees.
Senior leaders need to be mindful of the fact that they’re being watched and be
sure to practice what they preach.
• Research backs up the notion of leading by example. Stanford psychologist, Al
Bandura is known for his research on observational learning. Bandura’s stages of
observational learning are:
• Attention
• Retention
• Reproduction
• Motivation

11. Ethical Issues in Marketing
• Marketing ethics - Marketers’ standards of
conduct and moral values
• Some industries are required by law to
maintain corporate-level positions responsible
for ethics and legal compliance
• Workplace may generate serious conflicts
when individuals discover that their ethical
beliefs don’t match those of their employer
11

12. Ethical Marketing Activities by
companies
• Put into writing its ethical and social philosophy and
effectively communicate to all employees
• Set a good example at the top
• The corporate culture should reflect an ethical view point in
action as well as in writing
• Establish incentives to reward employees who engage in
activities that bring the company credit in the larger
community
• Provide incentives for employees who drift into unethical
conduct
• Control ethics
12

13. Figure 3.2 - Ethical Questions in Marketing
13

14. Ethics in Promotion
• Truth in advertising is the bedrock of ethics in promotion
• Marketing to children has come under increased scrutiny
• Promoting specific products to college students can raise
ethical questions
• Exaggerated claims, tasteless ads, inappropriate targeting,
• Persuasive role models for inappropriate products,
• Naïve audiences: billboards for cigarettes and alcohol in
poor urban were many are dying from related causes
14

15. Ethics in Pricing
• Most regulated aspect of a firm’s marketing
activities
– Example: Credit-card companies target consumers
with poor credit ratings
• Offer them what industry observers call “subprime” or
“fee-harvesting” credit cards
• Price differentiation
• Price discrimination
15

16. Marketing’s Responsibilities
• Corporate responsibility covers the entire
framework of society
• Marketers must consider:
– The global effects of their decisions
– The long-term effects of their decisions
– The well-being of future generations
• Entire communities can benefit through
socially responsible investing
16

18. EXAGGERATION
• Using false claims in the advertisements about the
product.
• For example:-Ghari detergent - “Pehle Istemaal kare
phir vishvaas kare.”, Tide detergent – “White ho to
Tide ho.”, Vodafone Essar – “Wherever you go our
network follows.”
White ho to
Tide ho.
One Drop Challenge Wherever you go our
network follows.

19. Unverified Claims
• It includes advertisements of “energy drinks” which
tells us about the number of vitamins and how they
help children to grow strong and tall.
• There is no way of verifying these false claims.
• For example:-Horlicks, Maltova, Tiger biscuits.

21. Ethics in Finance

22. Characteristics of Management Prone
to Fraud
• Unduly aggressive financial Targets
• Domination by person or group without controls
• Aggressive accounting practice to keep stock
prices high
• Pressure to reduce tax liabilities
• Major performance related compensation
• Non-Financial personnel involved in accounting
matters

24. Ethical issues in Finance
• Financial statements
• Hostile Takeovers
• Financial Markets
–Insider Trading

25. Fraud in Financial Statements
• Fictitious Revenues
• Concealed Liabilities and Expenses
• Fraudulent Asset Valuations
• Improper or Fraudulent Disclosures or
Omissions
Creative accounting – form of
fraudulent financial reporting so as
to provide misleading information.

26. Example : The Satyam Computer
Services scandal
• was a corporate scandal that occurred in India
in 2009 where Chairman Ramalinga Raju
confessed that the company's accounts had
been falsified. CID told in court that the actual
number of employees is only 40,000 and not
53,000 as reported earlier and that Mr. Raju
had been withdrawing 20 crore (US$4 million)
every month for paying these 13,000 non-
existent employees.

27. Ethical Audit
• An audit that assess a business’s structures,
procedures, systems and policies.
• It measures the extent to which the activities of a
business comply with the standards it has publicly
declared to its external customers
• It measures business conduct against varied moral
standards of the community.

28. Objectives of Ethical Audit
• to provide a critical assessment of functioning of business
• To investigate into acquisition or restructuring operations
• To determine the type of training necessary for employees
• To establish ethical conduct of business
• To enhance, measure and promote the quality that increases
business performance by assessing them against the ethical
business objective
• To improve the quality of governance by evaluating the
performance and ensuring that financial information is both
available and reliable

30. HARSHAD MEHTA SCAM
Harshad Shantilal Mehta was an Indian
stock broker. On April 23, 1992, journalist
Sucheta Dalal exposed Mehta's illegal
methods in a column in The Times of India.
Mehta was dipping illegally into the banking
system to finance his buying. In this scam
Mehta needed banks which issued fake BRs
(Not backed by any government securities).

31. • “Two small and little known banks - the Bank
of Karad (BOK) and the Metropolitan Co-
operative Bank (MCB) - came in handy for this
purpose.
• These banks were willing to issue BRs as and
when required, for a fee, once these fake BRs
were issued, they were passed on to other
banks
• and the banks in turn gave money to Mehta,
assuming that they were lending against
government securities when this was not
really the case.

32. • This money was used to drive up the prices of
stocks in the stock market. When time came to
return the money, the shares were sold for a
profit and the BR was retired. The money due to
the bank was returned.
• This went on as long as the stock prices kept
going up, and no one had a clue about Mehta’s
operations.
• Once the scam was exposed, though, a lot of
banks were left holding BRs which did not have
any value - the banking system had been
swindled of a whopping 4,000 crore (US$728
million). When was revealed by the chairman of
Vijaya Bank.

33. HRM Ethics

34. The Organization
• In an organization the human element
cannot be compromised for the
economic element

35. What is HRM Ethics?
• HRM Ethics is “the affirmative moral
obligations of the employer (business)
towards the employees to maintain
equality and equity justice”
• Do not treat people (employees) simply
as a means for our own purposes
without their full and free consent,
because they are ends in themselves

36. Hard and Soft HRM
• Hard HRM- where employees are viewed instrumentally as a
means to achieve organizational goals
• Soft HRM- where employees are viewed as a subject-in-
themselves. Soft HRM promotes employee rights,
empowerment, involvement, participation, etc
• Both soft and hard HRM can be considered as ethical under
“utilitarianism” concept (greatest good to greatest number),
but deontological theory may accept only soft HRM as
ethically correct and not hard HRM

37. Areas of HRM ethics
• Basic human rights,
• civil and employment rights.
– E.g. Job security, feedback from tests, openness and consultation over
matters which affect the employees
• Social and organizational justice.
– E.g. procedural justice, egalitarianism, equity and equal opportunity
• Equity/Distributive justice (proportionate pay for
proportionate contribution), autonomy and respect
• Safety in the workplace
• Respect, fairness and honesty based process in the workplace
• Privacy

38. Employees’ rights and duties
Rights Duties
To work Loyalty to the firm
For just compensation Respect for current legal and moral
norms
To free association and strike Respect the rights of the employer
For privacy Just contribution to the organization
For freedom of speech Maintain secrecy/confidentiality
To due process Cooperation with boss/subordinates
For participation
For healthy and safe working
conditions
To job satisfaction

39. Employers’ rights and duties
Rights Duties
Demand minimal productivity from
employees
No discrimination in rules for
recruitment and conditions for firing
Loyal cooperation from employees Fair compensation
Requirement of correct behaviour at
the workplace
Work oriented code of conduct
No disruption in work Acceptance of criticism from workers
Peaceful ways of settlement Acceptance of labour court
jurisprudence in conflicts
Improving QWL

40. Some HRM ethics for discussion
• Privacy
• Individualism vs Collectivism
• Restructuring
• Wages and salaries
• Sexual harassment in the workplace
• Discrimination
• Whistle-blowing
• Affirmative Actions

41. Ethical Issues Are Common in
International Business
• outsourcing,
• working standards and conditions,
• workplace diversity and equal opportunity,
• child labor and human rights.

42. Ethical Decision Making Process

43. • Gather the relevant facts
• Recognize an ethical issue (moral awareness)
• Who are the stakeholders and what are their
interests?
• Identify alternative courses of action
• Analyze alternatives using ethical reasoning
methods (moral judgment)
• Decide on a course of action.
• Take action (moral action)

45. Assess and quantify the current state of ethical
culture
broader surveys,
regular pulse checks
behavioral monitoring tools.
Connect culture metrics to business outcomes
HR leaders must collaborate across the business to
demonstrate how culture impacts business outcomes.
Correlating culture metrics with outcome measures
such as customer satisfaction or Net Promoter Scores
can aid the company’s understanding of the critical
aspects of culture

46. • Ensure an inclusive culture that creates
opportunity for all
establish common standards of conduct and
behavior. These determine how the company
expects people to treat one another.
• Equip all employees to consider ethics in
decision-making
HR leaders can take a proactive approach to
reviewing training curriculums, particularly in
modules dedicated to ethics and compliance. They
should ensure that materials include guidance on
how to identify and deliberate on ethical dilemmas,
as well as instructions on who to turn to for help

47. • Create a culture of speaking up
People may be reluctant to state their concerns
or to challenge others’ opinions or choices. They
may fear being seen as confrontational or of
being labeled a whistleblower. Leaders need to
demonstrate their commitment to creating an
open environment for dialogue

48. developing code of ethics and conduct
• Step One: Gathering Information. ...
• Step Two: Creating the Draft. ...
• Step Three: Reviewing the Draft. ...
• Step 4: Formally Adopting the Code. ...
• Step 5: Introducing the Code. ...
• Step Six: Enforcing the Code

49. Values-Based Leadership: Leading with
Principle

51. Values-Based Leadership: Leading
with Principle
• It is critical to understand the difference
between leadership and management.
• Develop your own leadership philosophy,
write it down, and hold yourself accountable
to it.
• Engage and empower your employees to
achieve your vision.
• Understand your own values and the desired
values of your organization

52. Understanding ethics in context
of Indian Business

53. Case Scenario #1
• Suzie is a counselor at the Happy Hearts Counseling Center. She has just
finished an intake session with a new client and received consent from the
client to share information with her psychiatrist. The patient gave Suzie all
of her psychiatrist’s contact information; however, Suzie failed to confirm
the information prior to faxing off the consent form and confidential client
information. She also neglected to include a cover sheet with a
confidentiality statement. The confidential information made its way to the
incorrect location, a centrally located fax machine in a very busy office.
Everyone near the fax machine saw the client’s identifying information and
where she was seeking services.
• How can this situation be rectified? How can it be prevented in the future?

54. Case Scenario #2
• The Happy Hearts Counseling Center recently hired a new administrative
assistant. Unfortunately, due to time constraints, the individual who was
assigned to train the new employee failed to cover all necessary
information about confidentiality requirements. Due to this lack of
training, the employee did not learn the specific guidelines for sharing
confidential information via the internet. The employee emailed another
counselor confidential information about a specific client (including the
clients full name and presenting problem) to the counselor’s personal
email address. Much to the counselor’s surprise, when he checked his
email that evening in his living room he found the document containing
sensitive information. Some members happened to be nearby when he
checked his email.
• What are some ways this problem could have been prevented? What
steps should the counseling center take to correct the problem?