Ethical and Unethical Issues in disciplines of management

ETHICAL AND UNETHICAL ISSUES OF STRATEGIC FINANCE

Hello Everyone, I  Vandana bharti of lovely professional university (Mittal school of business).
I'm going to write my first blog .

                                       

  " Ethical and Unethical issues of  Stragetic Finance"

ETHICAL AND UNETHICAL PRACTICES IN HR:

Hresource management deals with manpower planning and development related activities in an organization. Arguably it is that branch of management where ethics really matter, since it concerns human issues specially those of compensation, development, industrial relations and health and safety issues. There is however sufficient disagreement from various quarters.

There are different schools of thought that differ in their viewpoint on role of ethics or ethics in human resource development. One group of thought leaders believes that since in business, markets govern the organizational interests and these interests are met through people, the latter are therefore at the highest risk. They believe that markets claim profits in the name of stakeholders and unless we have protocols, standards and procedures the same will develop into a demon monopolizing markets and crushing human capital; HR ethics are become mandatory.                                   

There is another group of ethicists inspired by neo-liberalism who believe that there are no business ethics apart from realization of higher profits through utilization of human resources. They argue that by utilizing human resources optimally, there is more value creation for the shareholders, organization and the society and since employees are part of the society or organization, they are indirectly benefited. Nevertheless ethics in human resource management has become a perennial debate of late!

Discussions in ethics in HRD stem from employee relationships and whether or not there can be a standard for the same. Employee rights and duties and freedom and discrimination at the workplace are issues discussed and covered by most texts on the topic. Some argue that there are certain things in employment relationship that are constant others disagree with the same. For example, right to privacy, right to be paid in accordance with the work (fair compensation) and right to privacy are some areas that cannot be compromised upon. In the united states over the past few decades, the most well  to do people the 1% have garnered an increasingly disproportionately large share of the nation's assests, concentrating greater and greater wealth in the hands of fewer and fewer people.

The 2013 Federal Reserve Board survey of consumer Finance shows that the richest 3% of U.S house holds own 54.4% of the nation's wealth, which is more than double the total wealth of the poorest 90% of families. The top 10% hold nearly 85% of the nation's wealth, whereas the bottom 50% only own 0.8%.

A graphic in The Boston Globe's 2015 Divided Nation series illustrates the trend favoring the ultrawealthy. It shows that in 1978, the top 0.1% of the U.S . population held 7.1% of the wealth, but that swelled to 22% of the wealth in 2012 as economic gains flowed to investors and finanical service providers.

ETHICAL AND UNETHICAL  PRACTICES IN MANAGEMENT:

   1.Eliminate the "carried interest" tax provisions. 

Carried interest is a term used to describe the bonus incentive performance fee paid to managers of  hedge and private equity funds to reward them for superior performance. the U.S internal Revenue code (IRC) specifically taxes this income at the income at the long-term capital gains rate (a maximum of 15%) rather than the ordinary income.

 2. Effectively cap tax deductibility   eof excessive executive compensation.

The IRC prohibits corporations from deducting executive salaries exceeding $1 million. this has resulted in compensation for senior executives being based largely on short-term and noneconomic 

measures  of "performance" that may be detrimental to the company.

 3.Raise the holding  period for gains considered long term.

Currently, a capital asset needs to be held for one year before the gains on its scale can be preferentially taxed at the long-term capital gains rates of 0%,15% or 20% rather than at the short terms gains rates of 10%-39.6%.

4.Reduce tax subsidies for home ownership

Increasing home ownership has been a worth while objective for many years.yet wealthy individuals receive subsides in the form of tax deductibility for second homes only  they can  afford further.

ETHICAL AND UNETHICAL PRACTICES IN FINANCE:

Ethics and Market System

The kind of market system affects business and HR ethics; the latter thus becomes negotiable. In occupations where the market conditions do not favor the employees it is necessary to have government and labor union interventions in order to control the possible exploitation. In free market system, employees and the employer are almost equally empowered, negotiation create win win situations for both the parties. Government or labor union interventions become harmful.

Globalization has brought about the concept of globalizing labor, trade unions have started to decline and the role of HR as such in issues like employee policies and practices has become a debatable topic. In fact many people are of the opinion that HR is nothing but an arm of the stakeholders through which major strategic and policy decisions are divulged geared towards profit making!

Thought there can be no single opinion on ethics in HR that is convincing. Market in itself is neither an ethical institution nor unethical and no policies and procedures alone cannot govern and align markets to human well being. However the requirement of such policies and procedures can also not be denied. In lieu of this HR ethics should take care of things like discrimination (sexual, religion, age etc), compensation, union and labor laws, whistle blowing, health and safety of the employees etc.

 Thanks for reading and don't forget to share your point of view in comment section below....