Mod2

• This module has the following parts and corresponding icons: What I Need to Know, What I Know, What's In, What's New, What is It, What's More, What I Have Learned, What I Can Do, Assessment, Additional Activities, Answer Key, References.
• At the end of this module you will also find: References, This is a list of all sources used in developing this module.
• This learning module was designed and written with you in mind. It is here to help you the major ethical issues in entrepreneurship. The scope of the module permits it to be used in many different learning situations. The language used recognizes the diverse vocabulary level of students. The lessons are arranged to follow the standard sequence of the course. But the order in which you read them can be changed to correspond with the textbooks you are using now.
• The module has only one lesson, namely: Lesson 8 - Formulating a morally defensible position on ethical issues in entrepreneurship like basic fairness, personnel and customer relations, distribution dilemmas, fraud, unfair competition, non-respect of agreements, environmental degradation, etc.
• Formulate a morally defensible position


  Develop an ethical stance that can be justified on moral grounds
• Ethical issues in entrepreneurship


  • Basic fairness
  • Personnel and customer relations
  • Distribution dilemmas
  • Fraud
  • Unfair competition
  • Non-respect of agreements
  • Environmental degradation
• Espionage


  A competitor uses espionage to obtain economically advantageous information in the possession of another
• Collusion


  Companies collude to set prices, effectively dismantling the free market
• Bribery


  A misconduct which gives reward or "knockback" to a person in an attempt to sway opinions or behaviors, strictly for personal advantages
• Extortion


  A misconduct which gives reward or "knockback" to a person in an attempt to sway opinions or behaviors, strictly for personal advantages
• Theft


  A misconduct which gives reward or "knockback" to a person in an attempt to sway opinions or behaviors, strictly for personal advantages
• This module will help you learn about the major ethical issues in Entrepreneurship
• It aims to formulate a morally defensible position on ethical issues in entrepreneurship
• Basic Fairness


  Ethical decision-making processes should center on protecting employee and customer rights, making sure all business operations are fair and just, protecting the common good and making sure individual values and beliefs of workers are protected
• Partners


  • You have a duty to act in good faith concerning your partner
  • The better course of action may be to simply buy out their interest in the business
• Gross Negligence


  • As a board member, you have a duty to exercise the utmost care respecting decisions that affect the corporation and its shareholders
  • Failing to properly investigate a matter that affects their interests could be viewed as gross negligence supporting a breach of your ethical and legal duty of care
• Mistreating Employees


  • Lawsuits are filed against employers who are accused of sexual harassment or discrimination against their employees
  • Some employers have been sued for threatening or firing whistle-blowers, or employees who point out illegal practices or safety violations in the workplace
• Discrimination and Harassment in the Workplace


  • There's never an excuse or a justifiable reason for harassment of any kind in any workplace
  • If a supervisor discriminated against an employee based on her gender, religion, or ethnicity when making recommendations for a promotion, legal action could be sought
• Family-Run Businesses


  • Conflicts of interest may cause ethical issues in small business, especially if they are family run
  • When personal family issues interfere with business decisions, this is a conflict of interest and an ethical concern
• Employee Behavior


  • Whether an employee can spend work time checking personal email accounts, how a manager deals with claims of harassment and to what extent manager can "groom" a certain employee for a promotion are all examples of ethical issues regarding employee behavior
  • There are legal consequences for some unethical employee behavior
• Employee Working Conditions


  • Employers must be aware of the safety of their work environment and if they have compensated employees for all the time they have worked
  • They must also consider if they have required an employee to work an unreasonably long period of time or if they have him doing an unusually difficult task
• Side Deals and Sub-Standard Work


  • When dealing with customers or clients, business people must ensure that they use their information correctly, do not falsely advertise a product or service and do not intentionally do sub-standard work
• Pricing Strategy Ethics


  Price collusion exists when a number of competitors agree to set prices at a certain level, bypassing the natural market forces of supply and demand and creating an unfair advantage over consumers
• Product Placement Ethics


  End-caps, point-of-sale displays, and demo kiosks are all examples of positioning techniques that are inherently harmless, but which can be used in arguably unethical ways
• Ethics and Promotions


  The "bail and switch" tactic is widely considered unethical, yet many companies still practice this promotions technique
• Fraud


  It can be in the form of financial misconduct or misrepresentation
• Unfair Competition


  A situation in which competitors compete on unequal terms because favorable or disadvantageous conditions are applied to some competitors but not to others
• Examples of Unfair Competition


  • Anti-trust Law or Competition Law
  • Trademark Infringement
  • Misappropriation of Trade Secrets
  • Trade Libel
  • Tortious Interference
  • Anti-competitive practices
  • Dumping
  • Exclusive dealing
  • Price fixing
  • Refusal to deal
  • Dividing territories
  • Limit pricing
  • Tying
  • Resale price maintenance
  • Religious/minority group doctrine
• Unfair Communication


  Examples of unfair communication in business practices
• Matthias Rath is a vitamin entrepreneur who used to be a doctor and is considered to be the most powerful of all "crackpots"
• Limit pricing


  Is set by a monopolist at a level intended to discourage entry into a market
• Tying


  Products that aren't naturally related must be purchased together
• Resale price maintenance


  Resellers are not allowed to set prices independently
• Religious/minority group doctrine


  Business must apply tribute to a significant normally religious part of the community in order to engage in trade with that community
• Matthias Rath recommends vitamin pills to cure even serious ailments
• In UK ads, Matthias Rath claimed that 90% of cancer patients die within several months of starting chemo, arguing that corporations let them die for profit
• Matthias Rath uses his lies to sell an HIV/AIDS "miracle cure", saying that HIV doesn't cause AIDS and antiretroviral drugs won't work, leading to the spread of infections in South Africa
• Johnson & Johnson to pay $417m in cancer lawsuit - A Los Angeles jury ordered Johnson & Johnson to pay a record $417 million to Echevarria, a hospitalized woman who claimed in a lawsuit that the talc in the company's iconic baby powder causes ovarian cancer when applied regularly for feminine hygiene
• Breach of contract


  A legal cause of action in which a binding agreement or bargained for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party's performance
• Environmental degradation


  The deterioration of the environment through depletion of resources such as air, water, and soil; the destruction of ecosystems and the extinction of wildlife