Unit-5

Legal Environment and Security issues – Impact of liberalization ,

Existing legal issues, Implications of VAT, Security aspects in Retailing
Ethics in Retailing – Business ethics , Ethical dimensions , non ethical
behaviour , benefits of managing ethics in the work place
Ethics and workplace ethics
• As per the ethics definition, ethics are a general set of rules that are
important to be followed, to be a part of society. Moreover, it guides
one to live in the right way in society. These certain rules are common
worldwide. These ethical principles are inherited as well as are
learned by the individual from their family’s ways of living.
• Workplace ethics are nothing but the rules and procedures that
should be carried out in an office by the employer and the employees
to maintain a professional company culture and to build a better
relationship with their customers by providing better services. It plays
an important role in company growth and development.
Business Ethics – Definition
• There are many definitions of business ethics, but the ones given
by Andrew Crane and Raymond C. Baumhart are considered the
most appropriate ones.
• According to Crane, "Business ethics is the study of business
situations, activities, and decisions where issues of right and wrong
are addressed."
• Baumhart defines, "The ethics of business is the ethics of
responsibility. The business man must promise that he will not harm
knowingly."
Principles of Business Ethics

The principles of business ethics are related to social groups that comprise of consumers,
employees, investors, and the local community. The important rules or principles of business
ethics are as follows −
• Avoid Exploitation of Consumers − Do not cheat and exploit consumer with measures such as
artificial price rise and adulteration.
• Avoid Profiteering − Unscrupulous business activities such as hoarding, black-marketing, selling
banned or harmful goods to earn exorbitant profits must be avoided.
• Encourage Healthy Competition − A healthy competitive atmosphere that offers certain benefits
to the consumers must be encouraged.
• Ensure Accuracy − Accuracy in weighing, packaging and quality of supplying goods to the
consumers has to be followed.
• Pay Taxes Regularly − Taxes and other duties to the government must be honestly and regularly
paid.
• Get the Accounts Audited − Proper business records, accounts must be managed. All authorized
persons and authorities should have access to these details.
• Fair Treatment to Employees − Fair wages or salaries, facilities and incentives must be
provided to the employees.
• Keep the Investors Informed − The shareholders and investors must know about the
financial and other important decisions of the company.
• Avoid Injustice and Discrimination − Avoid all types of injustice and partiality to
employees. Discrimination based on gender, race, religion, language, nationality, etc.
should be avoided.
• No Bribe and Corruption − Do not give expensive gifts, commissions and payoffs to
people having influence.
• Discourage Secret Agreement − Making secret agreements with other business
people to influence production, distribution, pricing etc. are unethical.
• Service before Profit − Accept the principle of "service first and profit next."
• Practice Fair Business − Businesses should be fair, humane, efficient and dynamic to
offer certain benefits to consumers.
• Avoid Monopoly − No private monopolies and concentration of economic power should
be practiced.
• Fulfil Customers’ Expectations − Adjust your business activities as per the demands,
needs and expectations of the customers.
• Respect Consumers Rights − Honor the basic rights of the consumers.
• Accept Social Responsibilities − Honor responsibilities towards the society.
• Satisfy Consumers’ Wants − Satisfy the wants of the consumers as the main objective of
the business is to satisfy the consumer’s wants. All business operations must have this
aim.
• Service Motive − Service and consumer's satisfaction should get more attention than
profit-maximization.
• Optimum Utilization of Resources − Ensure optimum utilization of resources to remove
poverty and to increase the standard of living of people.
• Intentions of Business − Use permitted legal and sacred means to do business. Avoid
Illegal, unscrupulous and evil means.
Broad areas of Business Ethics
• Compliance with laws , rules &regulations-labour laws, weights &
measurements act , companies act
• Protection of customers ‘Interests – Customers interests, security ,
safety & rights are not violated in the pursuance of earning profit,
pricing policy , lack of quality ,rudeness ,deceptive advertising
• Avoiding conflicts of interest between employee and retail company.
• Accepting gifts and entertainment
• Confidentiality
• Fair Dealing with customers, suppliers & competitors
• Standards of Business conduct:
a. Respectful work environment- Employer’s side- Respect & dignity to
employees with equal employment & growth opportunity.
From employees side –Trustworthiness ,respect ,responsibility , Caring,
justice & fairness ,civic virtue and citizenship
b. Prohibited Conduct- Individual companies have their own list of prohibited
conduct, which could result in disciplinary action including termination
• Corporate social Responsibility –Recycling waste, donations, environmental
awareness, participating in community events
• Theft , Fraud or misappropriation
Ethical Dimensions of retailing
• Ethical Standards- Guides employees and managers what is right &
what is wrong, fair from unfair , loyal from unloyal ,trustworthy from
untrustworthy
• Ethical practices in retailing functions :-
a. Product development
b. Promotions
c. Distribution
d. Pricing
e. Market research
• Ethical responsibilities of a retailer-
a. Adherence to all applicable laws and regulations
b. Accurate representation of their education ,training and experience.
c. Being honest in serving customers, clients , employees , suppliers ,
distributors & the public
d. Devices offered are safe fit for their intended use.
e. Communication about products is not deceptive
Non ethical behaviour in Retailing

• Keeping the store open beyond the time prescribed by law.

• Employing young children in shops or offices against the the law
• Improper price stickering
• Deliberately withholding information regarding the product from the customer
• Misuse of company assets /money by employees or managers
• Employee theft
• Salesperson charging full price for a sales item

• Retailer knowingly selling merchandise not of good quality

• Hoarding free samples meant for customers
• Selling the confidential information to the competitor
• Environmentally irresponsible in actions
• Deceptive pricing
• Palming off
• Deceptive advertising
• Deceptive sales practices
• Violating safety norms
• Wrong reporting of sales figure for personal gain
• Merchandiser accepting gifts from suppliers.
• Shoplifting by customers
• Customers buying clothes wearing and than returning
Benefits of managing ethics in the workplace
• Attention to business ethics improves society
• Asset Protection and Assurance
• Productivity will increase
• Team Work will develop
•  Public Image and Brand Value Increases
• Adaptive to changes
• Decision making and implementing is always easy
• Trouble-free working environment
• Less Legal Issues
• The company will Touch New level of Success
How to Teach Workplace Ethics?

• Most of the companies include the rules and regulation the employee
should follow, which must be relating to the ethics of the workplace in the
employee handbook.
• Usually, all these terms are not discussed during the interviews or hiring
process. It is only introduced after the employee joins the company. The
organization’s ethical standard levels play an important role in its work
culture.
• Teaching workplace ethics must be mandatory especially to the employees
who are new like freshers to the company culture. In most of the
organizations, new employees undergo workplace ethics training to make
them understand the importance and advantages of it.
Retail Industry – Legal Acts
• The shops and establishments act –
• Sales Tax Act
• The Consumer Protection Act,1986
• The prevention of food adulteration Act,1954
• The standard of weights and measures Act,1976
• The sale of goods Act,1930
• The essential commodities Act,1955
• The factories Act
• Professional tax Act
• Service Tax Act
• Labour Act
• Provident Fund Act
• Employee state Insurance Act
• The employees Provident funds and miscellaneous Provision Act

• Notes Dictated
Security aspects in Retailing
Security in retailing can be broadly classified in three categories:
• External security
• Internal Security
• Data security
External Security
• Emergence of huge malls ,shopping centres with multiplexes,food
courts ,shopping outlets and other services location ,security has
become a major issue .
• Many convenience stores work 24 X7 and target women customers
making security arrangements even more important .
• This calls for designing of physical counters /layout in such a manner
that it safeguards assets.
• Security systems should keep track of Parking areas, open spaces ,
administration and staff of the mall .
• CCTV’S In parking lots.
• Electronic security tags /ID should be used for vehicle authentication
• Mandatory cctv’s even in the perimetre outside of the shopping area.
Internal
• Preventing shoplifting , pilferage resulting I commercial losses to the retailer. Internal
security mechanism has the twin advantage of controlling consumer and staff driven thefts.
• Store Design:
• Small & theft prone items should be kept
•  Implement crowd management measures if necessary
• Start by mapping out your store 
• Invest in loss prevention and anti-theft devices- Cameras
• Mirrors
• Signage
• Merchandising security tools (e.g., security stands, shelf locks, etc.)
• Protect your business from internal theft
• Video surveillance systems that capture recorded footage and provide real-time
monitoring
• Prominent signs that inform customers the store is under surveillance and/or
protected by an electronic security system
•   Unblocked windows and doors to maximize site lines
•   Bright and thorough lighting, both inside and outside the facility
• Very few or zero places for a criminal to hide or conveniently escape
• Windows and doors made with tempered glass or other break-resistant
materials
• Highly restricted access to the store's rear entrance
• Employee access to silent and/or audible alarms
• Mandatory security training for all employees; clearly established rules and
procedures
• Routine security inspections
Internal Security
• Store Design
• Employee screening and training
• Bar coding
• Electronic Article Surveillance
• Electronic shelf labels
• CCTV’S
Data Security
• It refers to IT security requirements of the retail operations. This
include meeting store level and head office level security problems.
• The following are the broad requirements
• Access level by user
• Recover Management
• Payment gate ways
• Security audit of IT systems