Finance
Fundamentally, finance is a social science discipline. The discipline borders behavioral economics, sociology, economics, accounting and management. It concerns technical issues such as the mix of debt and equity, dividend policy, the evaluation of alternative investment projects, options, futures, swaps, and other derivatives, portfolio diversification and many others. It is often mistaken to be a discipline free from ethical burdens. The 2008 financial crisis caused critics to challenge the ethics of the executives in charge of U.S. and European financial institutions and financial regulatory bodies. Finance ethics is overlooked for another reason— issues in finance are often addressed as matters of law rather than ethics.
“In financial analysis, a channel check is third-party research on a company’s business based on collecting information from the distribution channels of the company. It may be conducted in order to value the company, to perform due diligence in various contexts, and the like.”
Finance Paradigm
Aristotle said, “the end and purpose of the polis is the good life”. Adam Smith characterized the good life in terms of material goods and intellectual and moral excellences of character. Smith in his The Wealth of Nations commented, “All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind.”
Neoliberal recommendations to developing countries to unconditionally open up their economies to transnational finance corporations were fiercely contested by some ethicists. The claim that deregulation and the opening up of economies would reduce corruption was also contested.
Other issues
Fairness in trading practices, trading conditions, financial contracting, sales practices, consultancy services, tax payments, internal audit, external audit and executive compensation also fall under the umbrella of finance and accounting. Particular corporate ethical/legal abuses include: creative accounting, earnings management, misleading financial analysis, insider trading, securities fraud, bribery/kickbacks and facilitation payments. Outside of corporations, bucket shops and forex scams are criminal manipulations of financial markets. Cases include accounting scandals, Enron, WorldCom and Satyam.
Human Resource Management
Human resource management occupies the sphere of activity of recruitment selection, orientation, performance appraisal, training and development, industrial relations and health and safety issues. Business Ethicists differ in their orientation towards labour ethics. Some assess human resource policies according to whether they support an egalitarian workplace and the dignity of labor.
Trade unions
Unions for example, may push employers to establish due process for workers, but may also cost jobs by demanding unsustainable compensation and work rules.
Unionized workplaces may confront union busting and strike breaking and face the ethical implications of work rules that advantage some workers over others
Management Strategy
Among the many people management strategies that companies employ are a “soft” approach that regards employees as a source of creative energy and participants in workplace decision making, a “hard” version explicitly focused on control and Theory Z that emphasizes philosophy, culture and consensus. None ensure ethical behavior. Some studies claim that sustainable success requires a humanely treated and satisfied workforce.
Sales and Marketing
Marketing of age only as late as 1990s. Marketing ethics was approached from ethical perspectives of virtue or virtue ethics, deontology, consequentialism, pragmatism and relativism.
According to Borgerson, and Schroeder (2008), marketing can influence individuals’ perceptions of and interactions with other people, implying an ethical responsibility to avoid distorting those perceptions and interactions..
Production
This area of business ethics usually deals with the duties of a company to ensure that products and production processes do not needlessly cause harm. Since few goods and services can be produced and consumed with zero risk, determining the ethical course can be problematic. In some case consumers demand products that harm them, such as tobacco products.
Intellectual Property
Intellectual property (IP) encompasses expressions of ideas, thoughts, codes and information. “Intellectual property rights” (IPR) treat IP as a kind of real property, subject to analogous protections, rather than as a reproducible good or service. Boldrin and Levine argue that “government does not ordinarily enforce monopolies for producers of other goods. This is because it is widely recognized that monopoly creates many social costs. Intellectual monopoly is no different in this respect. The question we address is whether it also creates social benefits commensurate with these social costs.”
International standards relating to Intellectual Property Rights are enforced through Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS).
