Ethical Issues related to

customer

Professional Ethics and Entrepreneurship

 Agenda
01 Team

02 Ethical Principles

03 Introduction

04 Some common ethical issue related to customer

05 Impacts of ethical and unethical practices on customers.

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 01
Team

Areeb Habibah Muhammad

Batoor Zaheer Umer

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 02 Ethical Principles
 Ethical principles are fundamental guidelines or standards that help
individuals and organizations determine what is right and morally
acceptable in various situations such as honesty, integrity, fairness,
transparency, respect, and privacy.

To uphold ethical principles in customer-related activities, organizations

should implement the following practices like Clear ethical standards,
training and education, privacy protection, transparent communication etc.

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 03 Introduction
 Ethical issues refer to concerns or dilemmas that arise
when considering what is morally right or wrong in a
particular context or situation. These issues involve
evaluating and making decisions based on principles,
values, and norms that guide human behavior and
interactions.

 Ethical issues occur when a given decision, scenario or

activity creates a conflict with a society's moral
principles.

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04
Some common ethical issue related to customer

 Honesty and Transparency.

 Fair Pricing.
 Product Safety and Quality.
 Customer Privacy and Data Protection.
 Product liability and TQM.
 Fair Treatment and Non-Discrimination.
 Ethical issue related to advertising.
 Consumer movement and rights.
 Honesty Businesses have an ethical obligation to provide
accurate and truthful information to customers about their
products or services. Misleading advertising, deceptive
pricing, or concealing important information can be
considered unethical.

Honesty builds trust, fosters long-term customer

relationships, and promotes a positive reputation for
businesses

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 Fair Pricing
 Setting fair prices for products
or services is an ethical concern.
Practices such as price gouging,
predatory pricing, or price
discrimination can exploit
customers and be seen as
unethical.
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 Pricing is an important part of
marketing, and being transparent
about costs helps build trust
with customers. Share your
fixed prices, and show how your
prices align with your products
and services.
 When businesses artificially
inflate prices either during a
high-demand time or sales
promotion, this is known
as price hiking.
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 Customer privacy
 Organizations that collect and store customer data have an
ethical responsibility to protect that information and use it
only for legitimate purposes. Sharing customer data
without consent or failing to implement adequate security
measures can raise ethical concerns.

 It involves the ethical responsibility to safeguard

customer data, maintain confidentiality

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 Advertising
 Ethical concerns can emerge when
businesses engage in manipulative or
exploitative advertising and marketing
practices. This includes tactics that target
vulnerable populations, promote harmful
behaviors, or use deceptive techniques
 False advertising happens when a company
overstates or embellishes the benefits of its
products and services. Overpromising can be
harmful to gaining customers' trust.
 Product Safety and quality
 Product quality is indeed an ethical issue that relates to the responsibility of businesses to provide
products that meet or exceed reasonable expectations of performance, reliability, safety, and
durability.

 Ensuring the safety and quality of products is an ethical imperative. Selling defective or harmful
products, failing to disclose risks, or disregarding safety standards can endanger customers and
breach ethical principles.

 Products must be inspected properly for quality before they are put for sale

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Product liability and TQM
 When a product is found to be defective or dangerous, the parties responsible for
its production and distribution may be held liable for any harm caused to
consumers, users, or bystanders.
 Product liability laws are designed to protect consumers from harm and provide a
legal recourse for those injured by defective products.
 TQM (Total quality management) is the continual process of detecting and
eliminating manufacturing errors, improving the customer experience, and
ensuring employees are fully trained. Through TQM, companies increase
customer satisfaction, reduce costs, and foster team work ….. 1950s (William
Deming, a management consultant)
 Principles of TQM

1st 2nd 3rd 4rth 5th 6th 7th 8th Mar

.Customer Integrated System

Focus
Process Strategic
centered Thinking
.Employee Fact-Based Decision
Involvement Making
Communications
Continuous
Improvement

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 Customer Focus: Central to all successful TQM systems is an understanding that quality is determined by
the customer. No matter what measures you introduce to improve the quality of your products and services,
the only way of knowing if they have been successful is customer feedback, whether in the form of reviews,
return rates, or satisfaction surveys.

 Process Centered: A TQM system will fail without a clear focus on processes and process-led thinking.

 Employee Involvement: Every person in an organization—from entry-level workers to management—has

a responsibility for the quality of products and services. 

 Continuous Improvement: A major component of TQM is continual improvement. Continual

improvement will lead to improved and higher quality processes. Continual improvement will ensure
companies will find new ways and techniques in producing better quality products, production, be more
competitive, as well as exceed customer expectations
 Fact Based Decision-making: Business performance can only be assessed using the available facts, such as
sales data, revenue figures, and customer retention rates. The opinions of customers, employers and
suppliers should never be used to inform decisions.

 Strategic Thinking: Businesses must adopt a strategic approach towards quality improvement to achieve
their goals, vision, and mission

 Integrated System: Businesses comprise of various departments with different functionality purposes.
These functionalities are interconnected with various horizontal processes TQM focuses on. Everyone in the
company should have a thorough understanding of the quality policies, standards, objectives, and important
processes. It is very important to promote a quality work culture as it helps to achieve excellence and
surpass customer expectations. An integrated system ensures continual improvement and helps companies
achieve a competitive edge.

 Communication: Effective communication is essential when an organization is implementing significant

changes for the sake of business improvement.
 Fair Treatment and
Non-Discrimination
Ethical considerations include treating all customers fairly and
without discrimination based on factors such as race, gender,
religion, or socioeconomic status. Practices that discriminate
against certain customers or deny them equal access to goods or
services can be seen as unethical.

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 Consumer movements and
rights
 The consumer movement consists of individuals and
organizations that advocate for the rights and welfare of
consumers, especially when those rights are violated by
corporations and governments.

 The core belief is that all people have a right to access

safe goods and quality services, to be treated fairly and
offered effective solutions if things go wrong.

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  Right to Safety: Consumers have the right to be protected against goods and services that are
hazardous to their health or safety. This includes the right to expect products that meet safety
standards and are free from defects or risks.
 Right to Information: Consumers have the right to accurate and truthful information about the
products and services they purchase. This includes clear and transparent labeling, pricing, and
disclosure of relevant details to enable informed decision-making.
 Right to choose: The consumer must have the right to choose between different products at
competitive prices. So, the concept of a competitive market where many sellers sell similar products
must be established to ensure that the consumer can actually choose what to consume and in what
quantity.

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  Right to Seek Redressal: Consumers have the right to seek redressal against unfair trade practices
and exploitation. It means if any damage is done to a customer, he has the right to get compensation
depending on the degree of damage.
 Right to Represent: Consumers get the right to redress and to demand compensation. While seeking
any redress, the consumer has the right to be represented in the consumer court.

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 World’s Consumer
right day

15 March

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 Real-life
Examples
 Wells Fargo Unauthorized Accounts
Scandal (2016).

 Volkswagen Emissions Scandal (2015)

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 Impacts of ethical and unethical practices
05 on customers

 Trust and Confidence

 Customer Satisfaction
 Consumer Rights Protection
 Long-Term Relationships
 Negative Impacts of Unethical Practices

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