Unit 3: Ethics across business functions
Corporate Governance, Ethics and Corporate Social Responsibility notes · PTU syllabus (MCOP303-18)
On this page
Unit summary
Ethics must be practised in every function — from marketing and HR to finance and the environment. This unit covers ethics in environmental aspects, marketing, HRM, top management, financial markets and investor protection, ethical responsibility towards competitors and partners, managerial integrity, ethical leadership and ethics in global business.
After this unit you can
- Explain environmental and marketing ethics
- Explain HR ethics and top management responsibilities
- Explain ethics in financial markets and investor protection
- Explain ethical leadership, managerial integrity and global business ethics
PTU syllabus topics
- Ethics in environmental aspects
- marketing
- human resource management
- top management
- financial markets and investor protection
- ethical responsibility toward competitors and partners
- managerial integrity
- ethical leadership
- ethics in global business
Marketing
Honest ads, fair pricing
HR
Fair treatment, privacy
Finance
Insider trading, true disclosure
Environment
Pollution, sustainability
Top management
Integrity and ethical leadership
Topic 1
Ethics across business functions
Markets
Fair pricing, honest advertising, no cartels
Environment
Prevent pollution, conserve resources
Trade
Fair competition, honour contracts
Finance
True accounts, no insider trading or fraud
HR
Fair hiring, equal pay, safety, no harassment
Topic 2
Environmental ethics
- Issues: pollution, depletion of resources, climate change, hazardous waste, biodiversity loss.
- Principles: polluter pays, precautionary principle, sustainable development, intergenerational equity.
- Corporate practices: environmental management systems (ISO 14001), carbon disclosure, circular economy, net-zero targets; legal backing — Environment Protection Act 1986, NGT (2010), EPR rules for plastic.
Example
The Bhopal gas tragedy (1984) remains the defining case of corporate environmental and ethical failure in India.
Topic 3
Marketing and HR ethics
- Marketing ethics: truthful advertising (ASCI code), no misleading claims or surrogate ads, fair pricing (no price gouging), product safety, privacy in data-driven marketing, no dark patterns, responsible marketing to children.
- HR ethics: non-discrimination, fair pay and equal remuneration, safe workplace, POSH Act compliance, privacy of employee data, fair layoffs, no child or forced labour in supply chains.
Topic 4
Top management and managerial integrity
- Responsibilities of top management: set the tone at the top, build ethical culture, align incentives with ethical conduct, ensure compliance systems, accurate disclosures, act as stewards for stakeholders.
- Managerial integrity: consistency between values, words and actions; honesty in reporting; fairness; accountability.
- Ethical leadership: leaders who model ethical behaviour, communicate values, reward ethical conduct and discipline violations (Brown and Treviño); servant leadership, authentic leadership.
Topic 5
Ethics in financial markets and investor protection
Insider trading
Trading on unpublished price-sensitive information
Price manipulation
Pump and dump, circular trading
Front running
Broker trades ahead of client orders
Mis-selling
Unsuitable products to investors
Accounting fraud
Window-dressing financial statements
Ponzi schemes
Saradha, Sahara cases
- Investor protection: SEBI regulations (PIT 2015, PFUTP 2003), disclosure norms, SCORES grievance system, Investor Protection and Education Fund, class actions, ombudsman schemes, credit rating oversight.
Topic 6
Responsibility towards competitors, partners and global business ethics
- Competitors: fair competition, no collusion or cartels (Competition Act), no industrial espionage, no predatory pricing, respect IPR.
- Partners (suppliers, distributors): fair terms, timely payment (MSMED Act 45-day rule), honouring contracts, no exploitation.
- Global business ethics: bribery (FCPA, UK Bribery Act, India's Prevention of Corruption Act amendments 2018), cultural relativism vs universal standards, human rights in supply chains (UN Guiding Principles), transfer pricing and tax ethics.
Key terms
- Tone at the top
- Ethical climate set by leadership
- Insider trading
- Dealing in securities with unpublished price-sensitive information
- Polluter pays principle
- Polluter bears the cost of environmental damage
- Ethical leadership
- Leadership demonstrating and promoting ethical conduct
- Mis-selling
- Selling unsuitable financial products
Quick revision
- Environmental ethics: sustainability, polluter pays; Bhopal.
- Marketing ethics: ASCI, no misleading ads; HR ethics: fairness, POSH.
- Top management: tone at the top; managerial integrity; ethical leadership.
- Financial market abuses and SEBI protections.
- Fair competition; supplier ethics; anti-bribery laws.
Important exam questions
Practice questions written to the PTU exam pattern for this unit's syllabus: short answers (Section A style) and long answers (Sections B and C style).
Short-answer questions
- Q1.What is the precautionary principle?
- Q2.State two unethical marketing practices.
- Q3.What is "tone at the top"?
- Q4.What is front running?
- Q5.What is ethical leadership?
- Q6.Name two global anti-bribery laws.
Long-answer questions
- Q1.Discuss ethics in environmental and marketing aspects of business.
- Q2.Explain the ethical responsibilities of top management and the concept of ethical leadership.
- Q3.Discuss ethics in financial markets and investor protection.
- Q4.Explain ethical responsibilities towards competitors, partners and in global business.
Stuck on this unit?
Message SBS on WhatsApp for help with Corporate Governance, Ethics and Corporate Social Responsibility, or to ask about studying M.Com at Synetic.