What are the two most common types of unethical practices of business establishment as far

as the products of customer are concerned?

1. Misrepresentation
2. Direct Misrepresentation

Give and explain briefly at least three ways of directly misrepresenting products

1. Deceptive Packaging- the objective is to create an impression wherein the buyer or

the end user will see an improvement either by size or by weight without any change
in price.
2. Adulteration- the unethical practice of corrupting a genuine commodity by imitating
or by adding something to increase its bulk or volume or even by substituting an
inferior product for a superior one for the purpose of profit/gain.
3. False or Misleading Advertisement- the use of false or misleading statement in
advertising and misrepresentation of the product at hand which may negatively affect
many especially the consumer.

How is indirect misrepresentation of a product undertaken?

Indirect misrepresentation of a product undertaken by simply lying to the customer about the
product or service.By using persuasion for the benefit of selling a product or service without
considering the interest of the buyer.

What does caveat emptor mean?

Caveat emptor is a Latin term that means "let the buyer beware." Similar to the phrase "sold as
is," this term means that the buyer assumes the risk that a product may fail to meet
expectations or have defects. In other words, the principle of caveat emptor serves as a
warning that buyers have no recourse with the seller if the product does not meet their
expectations.

When does over-persuasion become unethical?

It becomes unethical when to try to prove something that is not true for the purpose of
persuading customer without giving consideration to his/her interest. Convincing customer to
buy a product because he has the capacity to but it even though he does not need it or use your
acting skill just to persuade customer to buy a certain product.

What is interlocking directorship and why could it lead to unethical actions of a member of
the board of directors?

Membership on the boards of directors of two or more firms by the same individual. It is
normally legal except where the firms are mutual competitors, but is usually considered
undesirable because it allows firms to exchange non-public (privileged) information and,
therefore, may hinder fair competition.

It becomes unethical when a person is in between two corporation to decide whether that
company is to protect or upheld. And whatever decision the person makes, he betrays the trust
given to him by the shareholders of either two corporation.

Insider trading is considered an unethical practice. Why?

Insider trading - is any sort of market operation, executed based on unduly/illegally/improperly

obtained information or by a person who by virtue of his/her position has access to one, but
didn't have the right to execute the transaction. Secondly, insider trading is a sort of a
fraudulent activity insider trading is unethical and for this reason it is illegal. Manipulating the
stock market is bad for the economy and it is clearly unethical. People should not unfairly profit
from insider information. Several people have gone to jail for insider trading because of it
harms people who work hard for their money.

What are some of the unethical practices that executive officers may be guilty of?

1. Claiming a vacation trip to be a business trip

2. Having employees do work unrelated to the business
3. Loose or ineffective controls
4. Unfair labor practices
5. Making false claims about losses to free themselves from paying the compensation
and benefits provided by law
6. Making employees sign documents showing that they are receiving fully what they are
entitled to under the law when in fact they are only receiving a fraction of what they
are supposed to get
7. Sexual Harassment

Distinguish between direct misrepresentation and indirect misrepresentation.

Direct misrepresentation is when you willingly and knowingly lied about your information.
Indirect misrepresentation means that you purposely done so that the product or service
maintains good image by making false statement that could mislead the customer.

Multiple Choice Question

1. D
2. D
3. D
4. B
5. D
6. D
7. C