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John Smith, a new employer from the states, moved oversees to Russia to start his employment with Horizon Trading Company. Throughout his training, John was instructed to do unethical practices as Regional Supervisor so the company can make money. One unethical practice he was instructed to do was giving or accepting bribes for contracts. Another unethical practice that John was instructed to do was tax evasion, to prevent Horizon Trading Company pay a lot of taxes to the federal and local governments. John also gets troubled at Horizon's retail location where he is instructed to turnoff the sales register to prevent showing a high amount of sales.
The important decision maker in this situation is obviously John Smith. He needs to decide whether to perform these unethical practices or leave the company and work for an employer who does not request their employees to perform unethical practices. The stakeholders involved are the employees, the investors, the government, and the country of Russia. Practicing tax evasion can lead to someone's imprisonment, falsifying the accounting books, and lack of money to the country and its economy.
This is absolutely an ethical decision because not only are these practices not the right thing to do but they are also illegal. On top of ethical decisions John has to make, at the Horizon's retail location, a Russian Tax Inspector walks in on John while the sales registers are turned off. Now John needs to decide what he is going to tell the tax inspector and he must face the consequences for that action.
The community stakeholders can really be affected be these unethical practices. The government can lose funds from the corporations that are operating in their country and liable to pay certain amount of taxes. A county like Russia does not have laws that protect people and their welfare, so going to prison for tax evasion can really be physically and mentally hurtful and painful. Accepting or giving briberies can affect...
Case Study of Ethical Business
Current years, the company director of Microsoft appears to have acted unethically of the business due to the cnet news "Judge calls Microsoft a "monopoly""
Microsoft runs its business in general, regardless of the nature of their products. The Microsoft's monopoly is caused by its operating system called "Windows". If it was simply the case that the products were always the best examples of their kind and established or promoted by the company director, and that customers chose this software in preference to competing products, there should be no especially unethical about the way in which Microsoft or company director operates its business.
However, the case should be researched and analysed with careful caution. This should be the issue of bundling and standards of their products. The reason that Microsoft spends a vast amount of resources unnecessarily creating competing and even inferior standards is to establish dependence on those standards. This dependence is then propagated by the distribution of equally unnecessary bundles of free software, which is not designed to benefit the customer, but is just a delivery vehicle for these standards, which Microsoft can ensure exclusive rights to with the use of patents and copyrights. On the other side, there is Microsoft's network of partners, nearly the whole distribution channel, ensuring that Windows is bundled with nearly every computer ever built, and suddenly the big picture becomes very clear: Microsoft are in fact engaged in racketeering, with all the angles sewn up so tightly that no competition can possibly be established against them. This, of course, is no accident.
determine the ways in which the director has breached the code of ethics expected
But as if Microsoft's despicable behaviour were not bad enough to warrant action against them, there's also their enforcement of this monopoly (against those few brave souls who attempt to breach it) by using more palpably criminal tactics, like smear campaigns and bribery. In fact they would even go so far as to sabotage charities, just to inhibit the spread of alternatives to Windows and Office, lest those who gain experience of these alternatives should learn the truth â€¦ that such alternatives are viable, and therefore Microsoft's software is completely unnecessary. It is essential to Microsoft's strategy that most people remain ignorant of the viability of alternatives, which is why they also spend vast resources on propaganda - and yes, it certainly is propaganda. Legitimate advertising usually does not employ such devices as shills, corrupt analysts, fake "recommendations", and sabotage. As I wrote earlier, Microsoft has refined this into an art form, even to the extent of using political and pseudo-scientific methodologies, to secure their vile agenda of domination. They spread lies that Free Software alternatives to their software is "unamerican" and "communist" in nature, they abuse their power to influence government with so-called lobbying (legalised bribery), they plant supporters, whom they euphemistically refer to as "Technology Evangelists" into every walk of society, to infiltrate and uppress any and all dissent against Microsoft, whilst teams of researchers, in a dark basement, study "Perception Management", to improve the manipulative effectiveness of the "evangelists" agents working in the field. No, this is not a plot from a John le Carré Cold War story - this is the reality of the Microsoft War Machine - their war on our Freedom, their quest for domination, and this sick right-wing extremist agenda of Corporatism - the doctrine of greedy, selfish, cold-hearted megalomaniacs. It may well be that Microsoft are merely a small part of a greater whole, and that the source of this sickness is actually the fundamentally flawed tenets of American society in general. If so, then that is a rather damning indictment of American society, and it may explain its institutionalised narcissism that causes such fear and loathing of anything perceived to be "unamerican", such as the hysterically McCarthyistic backlash against the "EU scum", for their "diabolical deeds" of enforcing law and morality.
For those who may be having difficulty conceiving of alternative business methods to the above (i.e. the morally deficient thugs) let me give you a clue. Businesses should provide products, then advertise those products honestly, and allow consumers to choose whether or not they like them. Products should sell on their own merit, and not rely on devices such as deception and sabotage to guarantee sales. The former is a Free Market Economy, the latter is a bunch of animals ripping each other to pieces out of greed. Let's be humans, not animals. Microsoft needs to be caged or put down, and it's the European Commission's job to do it, since the DOJ seems to have relinquished the task out of a misguided sense of loyalty ("unamerican"). If aspiring to gangsterism is what it means to be "American", then I'll proudly count myself as one of the "EU scum", a Free Thinker, and a Free Software advocate.
Executive summary for the attention-deficient:
Channel and Partner racketeering (market saturation of Windows).
Lock-in dependencies on proprietary software and standards.
Corporate guerilla terrorism using false advertising and shills.
Thuggish "enforcement" using bribery, blackmail and sabotage.
The four walls of Microsoft's monopoly.
Footnote: I wonder if Miguel de Icaza will ever be bold enough to actually state his position on these antitrust investigations and rulings against his friends in Redmond. Well that might be a bit tricky, because he'd either have to condemn or condone their criminal behaviour, and thus take one of those dreaded "black or white" positions that he's so terrified of. Quite a dilemma, but I think the dilemma is not so much in the choice, as in exposing his true nature - officially that is. â-ˆ
Directors Duties - 10 points to remember
Guidance for company directors-
1) Act in the company's best interests, taking everything you think relevant into account
2) Obey the company's constitution and decisions taken under it
3) Be honest, and remember that the company's property belongs to it and not to you or to its shareholders
4) Be diligent, careful and well informed about the company's affairs. If you have any special skills or experience, use them
5) Make sure the company keeps records of your decisions
6) Remember that you remain responsible for the work you give to others.
7) Avoid situations where your interests conflict with those of the company. When in doubt disclose potential conflicts quickly
8) Seek external advice where necessary, particularly if the company is in financial difficulty
Over the years directors duties have been spread out over numerous statutes and case decisions making it difficult for directors to know when they may have breached their duties to the company. Finally, in 2005 we had a white paper proposing to reform company law which included a proposal to codify director's duties. Those proposals have now been made into law with the enactment of the Companies Act 2006.
The general duties of directors are based on and replace those previously decided and set by case law. However, the statutory duties are to be interpreted as before. The provisions of the Act extend to shadow directors (those who are not appointed directors but whose decisions the company follows) and de facto directors (those who act as directors although they have not been formally registered as a director at Companies House) in circumstances as before. They also apply to a person who ceases to be a director.
It is important that any director whether of a big or small company is familiar and complies with their duties. Ignorance is no defence and; the consequences can be severe both for the company and personally. As a director you have no hiding place, you must always act in the best interests of the company.
It is particularly important when starting a new business and considering which trading medium to use to consider the duties which are placed on directors. For example, in small companies where family members are appointed just to make up numbers, you must ensure that they are aware that they cannot simply sit back and have no involvement in the company. There is much more to being a director of a company than being registered at Companies House as will be seen below.
It is reasonable to split the workload of directors based on the talents of the individuals. However, all directors are jointly responsible for the company and the duties towards it. If you are appointing directors with specific expertise such as an accountant as finance director they are also expected to use their professional skills in the best interests of the company.
Sometimes, it is difficult to distinguish between the individual running and/or owning the business and the company. However, the company must be seen as a distinct entity separate from the directors and shareholders.
We can also assist you in the setting up of your company and the running of your company together with advice on finance, shareholders and employees.
Here is a checklist of the main statutory duties on a director and other best practice points to be considered.
The main point to remember is to treat the company as a separate entity. It has its own rights and can take its own actions against you and others.
Section 171 - Duty to act within powers - as a Director you should not exceed the powers conferred on you by the company's Articles of Association. You should always check that you are using the powers conferred on you properly and that the Company does not exceed what it is allowed to do in its Memorandum of Association.
Section 172 - Duty to promote the success of the company - as a Director you must act in good faith for the success of the company and benefit of the shareholders having regard to the likely consequences of any decision long term. This will include considering the interests of employees, business relationships with suppliers, customers and others, the impact on the community and environment, maintaining the reputation of the company for having high standards of business conduct, acting fairly between members of the company and; subject to the legal requirements, to consider and act in the interests of creditors.
Section 173 - Duty to exercise independent judgment - the company is a completely separate entity to you as director. Therefore, as a director you must consider whether a deal with the company which you own will be the best deal for the company as opposed to yourself. At the time a decision is made the matters raised in the rest of Chapter 2 of the Act need to be considered so that you are you acting in good faith and solely for the benefit of the company taking all the circumstances into account and not for example, creating a conflict as set out in Section 175 below.
Section 174 - Duty to exercise reasonable skill and care and diligence - you should act in a manner that any reasonably skilled director would generally act in your particular area of management. You should go to as many board meetings as you can and make sure you know at all times what is happening. As stated, ignorance is no defence and as a director you will be jointly liable for any mistakes made as well as placing your company at risk of claims against it should it fail to use skill and care in providing its services to others or complying with other statutory requirements for example health and safety (Section 178) for example.
Section 175 - Duty to avoid conflicts of interest - as a Director you must avoid a situation in which you have or could have a direct or indirect interest that conflicts or may conflict with the interests of the company. If there is a conflict of interest between you (personally) and the company, ensure that the company always wins. The way to avoid there being any issues over conflicts is to disclose all matters to the board of directors so that the company (acting through its directors) can make a decision with all the facts in front of them.
Section 176 - Duty not to accept benefits from third parties - as a Director you should refrain from dealing in your own interests rather than the company's when dealing with company business and property and must not, for example make a secret profit from any undisclosed and unauthorized transaction or divert work away from the company for your own benefit. Any benefits obtained in this way will have to be account for to the company even if the company benefits as well. You should not accept loans or the benefit of guarantees from the company. This section coincides with and extends Section 175.
Section 177 - Duty to declare the nature and extent of any interest in a proposed transaction or arrangement - as a director, you must disclose all interests in relation to all transactions for example property, information, shares held irrespective of whether or not the company could take advantage of it. You should obtain directors and shareholders approval when it is required before steps are taken. Again, this coincides with and extends the other duties in Sections 171 to 176 above.
Know your rights as a director and/or shareholder in relation to the calling of meetings, voting etc. Keep up to date with all the record keeping and administrative requirements set out in the Companies Act and on top of the duties of directors in relation to specific areas applicable to your business such as health and safety, taxation etc.
If you think that the company may not have enough money to cover its debts obtain advice straight away. Do not wait as it could affect your personal liability.
In addition to the above, you should remember your contractual duties under your employment contract. Beware of your rights and responsibilities as both an employee and a director. Paul Archer, who is head of our employment team will be happy to advise you further on this area.
Keep this checklist of some of the duties of a director in mind as a guide to best practice. It is not a comprehensive list and the law continues to develop as each new case is heard so please call us if you need further assistance or advice and we will be happy to help.
(i) by society,
Involvement in the community
Honesty, truthfulness and fairness in marketing
The degree of safety built into product design
Donation to good causes
The extent to which a business accepts its alleged responsibilities for mishaps, spillages and
The selling of addictive products e.g. tobacco
Involvement in the arms trade
Trading with repressive regimes
(ii) by their particular industry, and
Treatment of customers - e.g. honouring the spirit as well as the letter of the law in respect to warranties and after sales service
The number and proportion of women and ethnic minority people in senior positions
The organisation's loyalty to employees when it is in difficult economic conditions
Employment of disabled people
Working conditions and treatment of workers
Bribes to secure contracts
Child labour in the developing world
Business practices of supply firms
(iii) by their particular company.
Pricing lack of clarity in pricing
Dumping - selling at a loss to increase market share and destroy competition in order to subsequently raise prices
Price fixing cartels
Encouraging people to claim prizes when they phoning premium rate numbers
"Bait and switch" selling - attracting customers and then subjecting them to high pressure selling techniques to switch to an more expensive alternative
High pressure selling - especially in relation to groups such as the elderly
Counterfeit goods and brand piracy
Copying the style of packaging in an attempt to mislead consumers
Irresponsible issue of credit cards and the irresponsible raising of credit limits
Unethical practices in market research and competitor intelligence
Unethical practices relating to products - examples
Selling goods abroad which are banned at home
Omitting to provide information on side effects
Built in obsolescence
Wasteful and unnecessary packaging
Deception on size and content
Inaccurate and incomplete testing of products
Treatment of animals in product testing
Unethical Business Practice of Microsoft
Microsoft Corp through its destructive marketing policy has been able to successfully wipe out competition from some of it's serious contenders. For example, Netscape navigator, a very good search engine and widely used in the last decade, was unfortunately not a freeware.
Microsoft as a counter move released Internet explorer and started giving it free along with Windows operating system. This strategy killed the market for Netscape although Netscape was a better search engine than Internet explorer.
Hotmail, of our own Sabeer Bhatia, was gaining popularity as freeware email and was posing a serious challenge to Microsoft. To overcome this, Microsoft purchased the rights of Hotmail. Sabeer Bhatia settled with millions of dollars from Microsoft and surrendered the rights of Hotmail to Microsoft.
Macintosh had an operating system, which was very user friendly, but due to non-aggressive marketing policy of the company, the product was somehow not popular. Microsoft seized this opportunity, developed it's own brand of operating system WIN-95 based entirely on Macintosh operating system and successfully marketed it across the globe.
Lotus 123 developed by Lotus Corp was extremely popular as electronic spreadsheet. Microsoft developed MS-Excel in a new avatar and killed Lotus 123 in the process. Microsoft has systematically killed all competitors over a period of time and is currently ruling the international market.
Finding itself unchallenged in the market, Microsoft is dictating the price of it's products. Since there is virtually no competition, individuals and companies have no other option but to pay very high price as licensing cost for using Microsoft products.
High cost of licensing is encouraging piracy in a country like India, China where the income level of the people in general is not high. Linux, of late has emerged as a serious contender of Microsoft. It is a freeware open source software and extremely versatile. Total cost of ownership of Linux OS and star office suite of products is much lower than Microsoft.
Besides the cost, Linux is far superior to Windows-OS in terms of speed and ease of use and requires less hardware resources. The transition from Microsoft to Linux will reduce operating cost and give more value proposition. The savings arising out of switching over from windows to Linux will far outweigh the cost of migration and any potential downtime
Unfortunately, we are still sticking to Microsoft products, not willing to take any risk to migrate to Linux. Our biggest fear is our lack of familiarity of Linux as an operating system. Migrating to linux is not a cakewalk either.
Some introspection is required as to how the linux is going to impact the existing hardwares (including all peripherals and components), networking protocols, application software, people etc.
Besides the compatibility issue, we have to address the training needs of different layers of IT people in the organization. For those with Unix background, the training required is bare minimum as Linux being an offshoot of Unix, it uses many of the same commands found in most of the offerings from the major Unix vendors.
Similarly for those with Windows background, training required is more as the Windows environment is very different from Linux. Server administrators in general will need more training than database administrators. Developers do not need as much training.
As far as end users are concerned, migration will have no impact whatsoever and therefore end users don't require any training. Cost of migration from windows to linux will mainly include cost of hardware upgrades, cost of software upgrades and cost of training.
The cost of migration should be weighed against the savings resulting out of use of linux over a period of time and ROI should be worked out to justify the investment.
Microsoft is releasing new versions of Windows-OS and MS-office suite of products almost every year and charging existing users exorbitant as upgradation cost. New releases of Microsoft products are resource hungry. There was a time when we thought 16MB RAM is good enough memory to store Win-OS but after release of win- 98 and now Win- 2003, our perception has changed.
Today, we find that even 32MB RAM is insufficient to run windows 2003. With every new release of Windows operating system and MS-Office suite of products, we are forced to upgrade our hardwares again and again resulting in more and more investment. Is there any nexus between Microsoft, IBM or Compaq as all stand to gain in this game?
In a monopolistic situation like this, exploitation of the customer is bound to happen which is amply demonstrated by Microsoft.
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McGuire, Charles. (1998). The Legal Environment of Business, 3d ed. Dubuque, IA: Kendall/Hunt Publishing Company.
Albertson, Todd. (2007). The Gods of Business: The Intersection of Faith and the Marketplace. Los Angeles, CA: Trinity Alumni Press.Â
Behrman, Jack N. (1988). Essays on Ethics in Business and the Professions. Englewood Cliffs, NJ: Prentice Hall.Â
Bowie, Norman E. (1999). Business Ethics, A Kantian Perspective. Blackwell Publishing.Â
George, Richard T. de (1999). Business Ethics. Prentice Hall. ISBN 0-13-079772-3.Â
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Harwood, Sterling (1996). Business as Ethical and Business as Usual. Belmont, CA: The Thomson Corporation.Â
Jackson, Kevin (2004). Building Reputational Capital. New York, NY: Oxford University Press.Â
Knight, Frank (1980). The Ethics of Competition and Other Essays. University of Chicago Press. ISBN 0-226-44687-5.Â
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Solomon, Robert C. (1983). Above the Bottom Line: An Introduction to Business Ethics. Harcourt Trade Publishers.Â
Ulrich, Peter (2008). Integrative Economic Ethics: Foundations of a Civilized Market Economy. Cambridge: Cambridge University Press. ISBN 978-0521877961.Â
Virághalmy, Lea B. (2003). The excellence of the efficiency of the learning organisation that is the Hellenic features of current economics moral. Budapest. http://www.digitoll.hu/nyomtat.asp?id=17118.Â
666 Albertson, Todd. (2007). The Gods of Business: The Intersection of Faith and the Marketplace. Los Angeles, CA: Trinity Alumni Press.
Behrman, Jack N. (1988). Essays on Ethics in Business and the Professions. Englewood Cliffs, NJ: Prentice Hall.
Bowie, Norman E. (1999). Business Ethics, A Kantian Perspective. Blackwell Publishing.
George, Richard T. de (1999). Business Ethics. Prentice Hall. ISBN 0-13-079772-3.
Hartman, Laura (2004). Perspectives in Business Ethics. Burr Ridge, IL: McGraw-Hill.
Harwood, Sterling (1996). Business as Ethical and Business as Usual. Belmont, CA: The Thomson Corporation.
Jackson, Kevin (2004). Building Reputational Capital. New York, NY: Oxford University Press.
Knight, Frank (1980). The Ethics of Competition and Other Essays. University of Chicago Press. ISBN 0-226-44687-5.
Rothman, Howard; Scott, Mary (2004). Companies With A Conscience. Denver, CO: MyersTempleton.
Seglin, Jeffrey L. (2003). The Right Thing: Conscience, Profit and Personal Responsibility in Today's Business. Spiro Press.
Solomon, Robert C. (1983). Above the Bottom Line: An Introduction to Business Ethics. Harcourt Trade Publishers.
Ulrich, Peter (2008). Integrative Economic Ethics: Foundations of a Civilized Market Economy. Cambridge: Cambridge University Press. ISBN 978-0521877961.
Virághalmy, Lea B. (2003). The excellence of the efficiency of the learning organisation that is the Hellenic features of current economics moral. Budapest. http://www.digitoll.hu/nyomtat.asp?id=17118.
So here's a simple breakdown:
Microsoft is a business, and the purpose of any business is to make money. There's nothing inherently wrong with that, indeed it is absolutely necessary in a developed society.
Microsoft competes with other companies for business, in order to ensure their continued operations. Again, this is perfectly reasonable and expected. Competition is good and necessary, as it drives innovation, stems inflation, and facilitates choice.
Microsoft advertises its products, so that potential customers will be aware of them, and subsequently buy them. This is also perfectly reasonable, ostensibly. However, advertising is open to abusive practises, such as false or misleading claims, or a more recent development variously called "guerilla" or "viral" advertising, where supposedly impartial recommendations aren't impartial at all, but are in fact paid sponsorship. This isn't ethical business, but it is a sadly common practise. Microsoft are more guilty of this behaviour than most, in fact they have refined it into an art form.
As part of its business strategy, Microsoft combines different products into "bundles", so that (for example) customers don't need to obtain a Web browser or a media player before they can start using their new systems. On the face of it, this seems a perfectly reasonable thing to do, if the motive were purely an honourable one. But the fact is that Microsoft do not sell any of these "bundled" products separately, so this isn't design to promote any of those products. But even more substantively, exactly those same features are available (also for free) from other places (e.g. Firefox), so the assertion that the whole purpose of the "bundles" has anything at all to do with either providing missing functionality or "helping" customers is an obvious lie. In fact the only reason Microsoft bundles these products is to exclude others. They make no profit from it at all, and they need not provide something for free if it can be obtained elsewhere. Bear in mind, that it costs Microsoft a huge amount of money to develop these bundled products, that they then give away for free, even though this is completely unnecessary. So the question is, why?
In addition to unnecessarily providing free bundles, Microsoft also unnecessarily develops its own competing standards, for such things as networking and documents, even when those other standards are Free, work perfectly well, have been established for years, and precede Microsoft's questionable reinvention of those standards. Since Microsoft cannot immediately capitalise on something as intangible as a "standard", again one must ask the question, why?
Microsoft maintains a network of so-called "partners". This is not a typical business to business relationship where one firm simply touts another for business, but instead it's a means of guaranteeing loyalty from those firms by means of contracts, and coercing continued loyalty with the threat that firms will lose competitiveness with other "partners" if they back out of this "arrangement". This is a common but nonetheless unethical business practice, made all the more unacceptable by the sheer size of Microsoft's "network", that essentially forms a global monopoly. Western laws dictate that the mere existence of such monopolies is not a crime, but there must be some demonstrable abuse of that monopoly to warrant any remedial action. It is my contention that the means by which Microsoft maintains this monopoly is inherently unethical, since it has no basis on the quality of their products, but is instead enforced by this threat of failure, a threat that only exists because Microsoft created it in the first place. The result is a business that's operated like a global racketeering operation, with "partners" too scared to back out, and customers who are left with little or no real choices, as no real competition has any chance of even being established, much less thriving.