Functional area Ethical Dilemmas

This arises while following standard ethical practices in different areas. e.g. accounting statements reveal the financial soundness of company and help in key decision making by owners, managers, investors, regulating agencies, tax collectors, trade unions etc so they require honesty, integrity and accuracy. For this, professional accounting organizations have given generally accepted accounting standards to ensure transparency of statements but they are rarely followed in practice. In purchasing department, strong pressures are felt to obtain lowest possible prices form suppliers and the supplier also want to get attractive contracts. So bribes, kickbacks and discriminatory pricing are tempting both the parties. In the marketing area, the potential dilemma arise in pricing, promotions, advertising, product information, relation between advertisement agencies and their client, market research etc. Sophisticated communication technology which is mostly abused/ misused to realize ones ambitions also possess dilemma. MANAGING ETHICS It means establishing and implementing the ethical principle and practices. In past, it was assumed in most companies that ethics is a matter of an individual concern but today in the changed environment, many companies use managerial ways/techniques to encourage and ensure ethical behavior. Some of them are following:
1) Top Managements Active Support And Participation

It is the CEO who should take initiative to ensure ethical standards in an organization. Management must avoid business strategies, schedules and reward system that place unreasonable pressure on employees. Making policies and implementing them should have ethical content which conveys strong signal to employees and external stake holders.

e.g. JRD TATA once remarked that if we were like other groups, we would be twice as big as we are today. What we have sacrificed is a 100% growth.
2) Code Of Ethics It is a set of ethical principles which a business should follow: it varies from book length to short statements in one or two pages. e.g. council for fair business practices (CFBP) FICCI (Federation of Indian Chamber of Commerce & Industry) form code of ethics. Most of the codes resemble one another. Purpose of each code is to provide guidance to managers and employees when they face dilemma. Most effective codes are those drawn up with the co-operation and wide spread participation of employees & penalty against violation of codes.

3) Ethics Committees There are the high level committees comprising of board of directors chaired by the CEO of the company to advice on ethical issues. The commodities filled questions form employees, help the company 4) Ethics Hotlines They are the confidential hotlines through which an employee can raise any ethical issues to the higher level; which he may otherwise hesitate to raise with immediate supervisor thinking that he might be prejudiciously treated later on. 5) Ethics Training Programme: There are the programs to acquaint managers and employees of the company with the official company policy on ethical issues and show how to implement the policies in every day decision making. Usually stimulated cases based on actual events in the company are used to illustrate how to apply ethical principles to on the job problems. Generally, ethics training is more useful if it is given by company managers than outsiders and if it focuses on specifics from work environment than on abstract philosophical discussions. Nearly all companies who take ethics seriously impart the training. 6) Law & Ethics Laws are the societys attempt to formalize and precisely describe what is right and wrong, including the punishment for what is wrong. Aim of ethics is also to define proper and improper behavior. But laws can not cover all the subtle matters of life. Ethical deal with human dilemmas which are far beyond the formal language and interpretation laws.

However, legal rules/acts help to promote ethical behavior and ensure fair business practices. Some of such laws in India are: FEMA 1999, Companys act 1956, MRTP ACT 1969, Consumer Protection Act 1986, Essentials Commodities Act 1955 etc..

Why ethics is important? Ethics corresponds to basic human needs. Values create credibility with the public. Values create credibility with employees Value help in better decision making. Ethics and profit Law can not protect the society, ethics can.