Nasir G Khwaja Munshi (Reg No: CC0015BK25AM42AAB)



This is to certify that the Project work “Customer Relationship Management” is submitted to the college by the candidate Mr. Nasir G Khwaja Munshi bearing Reg. No. CC0015BK25AM42AAB is the product of research carried out by the candidate under my supervision in Advertising and Promotions.


Bangalore, May 15 .2010 School Lecturer. In Management Ethics Great Eastern Management

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Three Pillars of Modern Business “Business Ethics, Professionalism & Corporate Governance Importance/Advantages of Business Ethics – Profitability and Morality Ethics of Consumer Production and Marketing Corporate Objectives Corporate Scandals & Corporate malpractices Corporate Roles Ethics and Business: Objections Conclusion Annexure 1 – A Case Study: Profitability with Morality Management of Quality, Leadership, Vision and Core Values Organisation Structure, Work Practices & People Growth Plans References 31 30 31 25 27 28 20 24 16 18 07 09 13

I also express my sincere gratitude and thanks to all the subjects participated in the study. valuable suggestions and for the constant encouragement and co-operation. . Pamela Lecturer. I am grateful for his guidance.ACKNOWLEDGEMENT The Project work was carried out under the remarkable guidance of MRS. Great Eastern Management School.

business has been conducted primarily to earn profit and / or create wealth. Maruti Limited. The inter-dependant nature of relationship between the business and the society is best illustrated by the management guru Peter Drucker (1954) by the example of a ship and sea. He states that the relationship between business and society is “like the relationship between a ship and the sea which engirds it and carries it. which threatens it with storm and shipwreck. Union Carbide. which takes the nectar of a flower without the flower being losing its shape and fragrance and provides honey for the wellbeing of the society. Hence. Enrons Parmalats. and World. and Tata Iron and Steel Company are such examples that indicate that being good in conducting business activities proves good for businesses also.EXECUTIVE SUMMARY Business and society have been coeval since time immemorial and also have been are to name a few representing examples of such business collapses. there has been increasing concern for conducting business in a good or ethical manner.” No doubt. Reliance Industries Limited. No business can survive without societal approval and sanction. there are reasons and evidences to believe that the mindless obsession with profit maximization at any cost carried to any extreme has led to spurt in sordid activities in business causing harm to both the business and society and ultimately leading business to flounder and fizzle out. which has to be crossed but which is yet alien and distant. business dies when society condemns and rejects it. The business history is replete with evidences to believe that business flourishes only where society thrives. Johnson & Johnson. However. not much research has so far been conducted on what . This relationship between business and society is appreciated in Rigveda also : “Corporate should work like a honeybee. Business history is also replete with examples that only the businesses that are conducted through good or right practices enjoy societal sanction and survive and last for long. On the contrary. Though there has been a spurt in research activities on business ethics or ethics in business.” It means that both have to work on a symbiosis manner for each one’s survival and success.

In the wake of revelations of serious scandals. suppliers and the community at large. activities and pursuits that we call business. Every business has an ethical duty to each of its associates namely. In an age of liberalization and globalization corporations can grow. irregularities. owners or stockholders. malpractices perpetrated by corporate entities anywhere and everywhere in the world. Each of these affects organization and is affected by it. economically. Strategy means merely that over the long run and for most of the part. ethical behavior can give a company significant competitive advantages over companies that are not ethical. employees.actually makes business ethics and how being ethical or good is good for business also. however this does not mean that occasions may never arise when doing what is ethical will prove costly to a company nor does it mean that ethical behavior is always rewarded or that unethical behavior is always punished. socially and environmentally good to vast sections of society with whom they are intricately linked. Business ethics is applied ethics. technologies. transactions. aspirations and expectations of different segments of stakeholders who have a stake in the healthy functioning of a corporate entity as a socially responsible member of the civil society. Ethical behavior is the best long term business strategy for company . On the contrary. unethical behavior sometimes pays off and the good sometimes lose. survive and prosper in the long run only if they adopt policies and programmers. . customers. Each is a stakeholder in the enterprise with certain expectations as to what the enterprise should do and how it should do it. which can be considered ethically. the need for good corporate governance and application of ethical values and principles in the conduct of business operations at every level of a corporate organization right from top level is felt more relevant now than before to serve the varied needs. It is the application of our understanding of what is good and right to those assortments of institutions.

Professionalism and Corporate Governance” Business ethics.e. industry. government and society. rule of law. etc. In the years to come. from the different stakeholders. not only corporate governance is going to be the major concern of management but also the basic ingredient of corporate governance is going to change. fairness in deals. transparency. in the present knowledge based.Three Pillars of Modern Business “Business ethics. fixing accountability.. a professional and good management has to identify and quantify the risk being undertaken by various stakeholders. independence in decision making. dying sentiments of investors. Professionalism and Corporate Governance are the important imperatives for survival and growth of a modern business organization confronted with multiple challenges including financial scams. creditors. . In addition to full disclosure of the workings of the company. investors. i. global and competitive environment.

competitive credibility and governance have become increasingly inter-oven. For effective corporate governance. timeliness and the integrity of the information produced at each level of interface defines the real issue. a company must symbolize harmonious alignment of various interests of individual.And then the management has to apply all its innovative qualities to ensure that the risk for each stakeholder is reduced to an accepted level and that each stakeholder is rewarded properly for the risk undertaken by him. management. transparency and accountability are the hallmark for corporate governance. auditors and shareholders. A key element of good governance—corporate or otherwise—is transparency projected through a code of good governance which incorporates a system of checks and balances between key players— boards. Therefore. In short. Transparency in turn requires the enforcement of the right to information and the nature. Being transparent in all the dealings/workings can further enhance the comfort level of the stakeholders. All of this can only succeeds if the responsibilities of each entity and their interface is defined with great clarity and understood by all. The success of any company would largely depend on maintaining a business model wherein all the stakeholders are made comfortable. Profit: Measure of Success . corporate reputation. promoting corporate fairness. corporation and society. corporate governance must be driven by ethical and philosophical concerns as well as legal structural imperative. In yet another perspective.

Ford trial about his company’s philosophy . the dynamic and social oriented President of Cannon said severally years ago is valid forever under whose visionary leadership that company had made great strides and progress in every area of its operations. Importance/Advantages of Business Ethics . but as an enlightened corporate citizen to serve the varying needs and aspirations of different segments of society. He said “If corporations run their business with the sole aim of gaining more market share or earning more profits. and give the benefits to the users and the labourers (meaning workers) with surprisingly enormous profits to ourselves”. peace to war torn areas and renewal to the natural world. So it has been my policy to force the price of the car down as fast as production would permit. If they work together for the common good they can bring food to the poor. environmental and social ruin.No doubt profit is the yardstick to measure the success of every business enterprise whether it is run by the Government or a private organisation.“I do not believe that we should make such as an awful profit on our cars. It is our obligation as business leaders to join together to build a foundation for world peace and prosperity”. Nevertheless a modern business corporation cannot run its business operations solely with a profit motive. A reasonable profit is right. This is reflected by the brilliant statement made by Henry Ford at the time of Dodge v. they may lead the world with economic. but not too much. Ryuzaburu Kaku. What Mr.

business ethics dictates that the first responsibility of business is to remain profitable and generate revenue from the shareholders and the society. considered from all angles. promotes inefficiency and most importantly. Such a loss. but more importantly it is. Moreover. In fact. Thus instead of profits being contradictory to ethics. not to make profits. Nothing can be more have ethical companies made profits. opposed to one another and that if a company is ethical. that have survived competition and turbulent changes through the years and have contributed to social welfare and have contributed to flourished undiminished. a company which can not make profits and makes losses. it is unethical. it is unethical. can not. Rather. which is highly unethical. Because. meet its welfare commitments and jeopardizes the future of its employees. upsets the economy. NOT to make profit. for a company. It is unethical. to make losses. mis-utilises scarce national resources can not pay back creditors. it may forget about making profits. This is like saying that a company can make profits only through unethical means.Profitability & Morality Frequently the impression of most people is that ethics and profits are mutual. at any cost discharge its social responsibility. make huge liabilities. only ethical companies which discharged its social responsibilities. it has no business to force its employees into economic insecurity. the first and foremost ethical . People also frequently seem to believe that a profitable company must necessarily be unethical. Hence.making company becomes a nuisance and a burden to the economy and has not right to exist in the market place. does not make wealth for its shareholders.

maximizing of profit is not only unsatisfying. again and again. But how much profits to make. it is not even accurate.that is the ethical question. . whereas unethical ones have shown results only as flash in the pan. for its employees. and at what cost. quickly growing and even more quickly dying and forgotten. for very long. for itself. No business. however great or strong or wealthy it may be at present. Resorting to unethical behavior or disregarding social welfare is like calling for its own doom. For the long existence and sustained profitability of the firm. can exist on unethical means. it has been demonstrated that it is only ethical organisation that have continued to survive and grow. A more realistic statement has to be more complicated. the means and methods of making it." Business needs to remain ethical for its own good. Doing so would lay a strong foundation for the business for continued and sustained existence. business is required to conduct itself ethically and to run activities on ethical lines. to remain ethical and socially responsible.B. Dys in "The Social Relevance of Business " had stated"As a Statement of purpose. The corporation is a creation of society whose purpose is the production and distribution of needed if the whole is to be accurate: you cannot drop one element without doing violence to facts. Thus business needs. so that it can discharge its social responsibilities and welfare commitments. for its creditors and most importantly. All over the world. As V. or in total disregards to its social concern. in its own interest. Unethical actions and decisions may yield results only in the very short run.obligation of every business is to make profits for its shareholders.

business can play a very significant role in the modernization and development of the country. But this will first require it to come out from its narrow mentality and even narrower goals and motives. if it chooses to do so. the market ceases to be competitive and the results are injustice. Ethics at Market Place Free markets are justified because they allocate resources and distribute commodities in ways that are just. a decline in social utility and a restriction of people’s freedom of choice. that maximize the economic utility of society’s members and that respect the freedom of choice of both buyers and sellers. . It is that organ of the society that creates wealth for the country. drive out competitors with unfair practices or earn monopolistic profits at the expense of consumers. Hence. however conditions change as compared to perfectly competitive market conditions particularly with respect to the number of buyers and sellers and also the entry is not so easy. If firms join together and use their combined power to fix prices. Perfectly competitive markets embody capitalist justice because such markets necessarily converge on equilibrium point and the equilibrium point is the one point at which buyers and sellers on an average receive the value of what they contribute. Fairness is getting paid fully in return for what one contributes and it is this form of justice that is achieved in perfectly competitive free markets. These moral aspects of a market system depend crucially on the competitive nature of the system.Business needs to function as responsible corporate citizens of the country. In a monopoly market situation.

The high prices the seller forces on a buyer in a monopoly situation are unjust and these unjustly high prices are the source of the sellers.e. The high profits in a monopoly market indicate a shortage of goods. What do you do when you find yourself confronted with an opportunity to learn exactly what a competitor is doing or is about to do. Thus monopoly market results in a decline in the efficiency with which it allocates and distributes goods. Oligopoly markets which are dominated by a few large firms are said to be highly concentrated i.Unregulated monopoly markets fall short of the values of capitalist justice and economic efficiency. As a consequence oligopoly market. Other firms are blocked entering the market. their resources cannot be used to make up the shortages indicated by the high profits. like monopolies can generate a decline in social utility and can fail to respect basic economic freedom. It is relatively easy for the managers of these firms to join forces and act as a unit. This uniting of force together can create barriers to entry and result in the same high prices and low supply levels that are characteristics of a monopoly markets. Case No. John E. By explicitly or implicitly agreeing to set their prices at the same levels and to restrict their output accordingly. (P&G) narrated in his talk on 30th January. the oligopolistic can function like a single giant firm. Pepper. 1997 at the Florida University about the philosophy of business ethics practiced by P&G by two live cases will be of great interest and relevance for our discussion. the Former Chairman and Chief Executive of The Procter & Gamble Co.1: An individual made a call from Europe to a Senior Manager of P&G informing him that he had in his possession very sensitive and useful . excess profits. there are relatively small number of firms. What Mr.

Examples are often reported of injuries requiring hospital treatment inflicted on youngsters and adults using toys. people using home. nursery equipment and playground equipment. The Senior Manager of P&G immediately passed on the information to the Head of Security at Unilever. Now the dilemma which arises is where does the consumer’s duty to protect his or her own interests end and where does the manufacturer’s . Each year people suffer serious accidental injuries and few others are killed due to accidents involving consumer products. a computer disk that included the marketing plans of the P&G’s main competitor who was giving serious headache to one of P&G’s flagship brand in the market place. The police swung into action and arrested the culprit. 2: A Senior Executive of one of the advertising agencies of P&G while travelling in a cab in New York found lying on the floorboard. Ethics of Consumer Production and Marketing People are exposed daily to astonishingly high levels of risk from the use of consumer products. The Senior Executive immediately sent back the disk to the Chairman of the competitive company and assured him that neither the agency nor anyone at P&G had looked at the contents of the disk. who in turn alerted the police.documents about the future plans of its competitor – a Lever brand– which he was willing to sell to P&G. In his letter he said “We will always compete with commitment and intensity but will never compromise our ethics to win”. Case No. people requiring treatment for injuries involving home construction materials. workshop equipment.

Consumers are also bombarded daily by an endless series of advertisements urging them to buy certain products. advertisements are also criticized on the grounds that they rarely impart additional information and only give the barest indications of the basic function a product is meant to serve and sometimes misrepresent and exaggerate its virtues. each one of which strikes a different balance between the consumer’s duty to himself or herself and the manufacturer’s duty to the consumer – the contract view. the advertising industry sees things differently. Its basic function is to provide consumers with information about the products available to them – a beneficial service.duty to protect consumers’ interest begin? Three different theories on the ethical duties of manufacturers have been developed. The question to be discussed therefore is whether advertising is a waste or a benefit? Does it harm consumers or help them? Discussion of the ethical aspects of advertising can be organized around the various features like its social . Although sometimes defended as sources of information. However. and the social cost view. Advertising. What does the consumer get for his or her advertising rupee? According to most consumers. the ‘ due care’ view. Economists argue that advertising expenditure is a waste of resources while sociologists bemoan the cultural effects of advertising. The question however is who pays for these advertising expenditures? In the end. The contract view would place the greater responsibility on the consumer. they get very little. whereas the due care and social costs views place the larger measure of responsibility on the manufacturer. the prices consumers pay for the goods they buy must cover advertising costs–the consumer pays. they claim is before all else communication. The advertising business is a massive business.

its effect on desire. The purpose of rights is to enable the individual to pursue his or her significant interests and to protect these interests from the intrusion of other individuals. Thus advertising appears to be effective for individual companies not because it expands consumption but only because it shifts consumption away from one product to another. It is also important because it has several enabling functions. In so far as the relationships between doctor and patient. effects on belief that should be taken into consideration when determining the ethical nature of a given advertisement. its creation of consumer desires and its effects on consumer beliefs. If this is true then economists are correct when they claim that beyond the level needed to impart information . Privacy enables certain professional relationships to exist. lawyer and client. Studies have shown that advertising frequently fails to stimulate consumption of a product and consumption in many industries has increased despite minimal advertising expenditures. However there are few factors like its social effects. database software and communication technologies have given us the power to collect. manipulate and disseminate personal information about consumers on a scale unprecedented in the history of the human race. This new power over the collection. and . The moral issues raised by advertising are complex and involve several still unresolved problems. Advances in computer processing power. manipulation and dissemination of personal information has enabled mass invasions in the privacy of consumers and has created the potential for significant harms arising from mistaken or false information. advertising becomes a waste of resources because it does nothing more than shift demand from one firm to another.effects.

processes and systems by using updated and relevant technologies using its vast financial and human resources . consumers benefit from having life insurance available to them. However there are significant consumer benefits that businesses can provide but they can provide only if there exists agencies that can collect information about individuals and make that information available to businesses. Thus consumers’ rights to privacy have to be balanced with these legitimate needs of businesses. they could not exist without privacy. It is clear then that our interest in privacy is important enough to recognize it as a right that all people have. a company must try to improve its methods of production. including consumers. However this right must be balanced against the rights and legitimate needs of others. orderly and consistent growth in a competitive environment and a free market economy. For example. Ethics in HRM Ethics in Accounting Ethics in Marketing Ethics in Advertising Corporate Objectives To achieve a planned.psychiatrist and patient all require trust and confidentiality.

mission and value statements in a clear cut manner for the benefit of various segments of society and also frame a business code of conduct based on ethical values and principles analyzed above. accountability and transparency of company finances in a socially responsible manner. The era of corporate autocracy is coming to an end.judiciously. local community and society at large. appreciates and recognizes its pivotal role to look after the rights and interests of various segments of society such as shareholders. with probity. Spiritual health of an organisation is based on internal and external connectivity. In simple terms the success or failure of a corporation in the long run will be based on cherished values and ideals acceptable to society as an enlightened corporate citizen and which understands. Level of cohesion. consumers. community involvement and social responsibility are important indicators to measure the spiritual health of a company. efficiently and progressively on ethical lines to serve the public interest. Vision statement: Essentially every vision statement brings to the notice of everyone dealing with the company what is its intention with regard to the future it desires to create by using all its resources at its command more so by its motivated and inspiring human resources. employees. In order to enable everyone dealing with a company to understand its basic objectives and aims. Naturally every company must conduct its affairs economically. It will assure the . A company incorporated in a particular country has the nationality of that country though like a natural person it cannot change its nationality. These should be integrated into the organization’s systems. Let us briefly discuss and understand the relevance and purpose of these statements. co-operation. partnership. procedures and practices. a company must define its vision.

We believe in providing employees with a safe and fulfilling work environment and an opportunity to grow and learn. Every mission statement is addressed to various segments of society such as shareholders. Tom Chappell. We believe in products that are safe.society that the company will take up of social issues and make its contribution for a meaningful living of mankind. owners. Often every mission statement is very concise. Mission statement: Every mission statement is meant to keep the energies of the company rightly focused around its core business areas. employees. inclusive and easily memorized. suppliers and our community. co-partner and CEO of Tom’s of Maine present values in the form of credo about his organizational goals and beliefs as under which cover the best one can think of in every organization:“We believe that both human beings and nature have inherent worth and deserve our respect. . effective and made of natural ingredients. customers and society at large. We believe that our company and our products are unique and worthwhile and that we can sustain these genuine qualities with an ongoing commitment to innovation and creativity. agents. which can ensure robust growth and sustainable profits. customers. We believe that we have a responsibility to cultivate the best relationships possible with our co-workers.

breach of confidential information. France. dishonesty.We believe that our company can be financially successful while behaving in a socially responsible and environmentally sensitive manner”. Japan. John T. CEO’s and other key executives harming the rights and interests of various segments of society. misfeasance. making fraudulent investments. Noonan. South Korea and in our own country relating to various types of corporate crimes such as falsification of accounts by showing inflated profits. facilities. corruption and bribery and milking the company by fat salaries. misappropriation. financial irregularities. mal-administration. a Judge of the United States Court of Appeals in his book “Bribes” which is considered one of the most comprehensive book on bribery ever written provides various reasons as to why bribery has to be . breach of fiduciary duty. siphoning of company’s funds by entering into fictitious transactions. The World Bank has identified corruption as “the single greatest obstacle to economic and social development” of the universe hitting the poor and vulnerable section of the world population. non-disclosure of material facts. severance benefits without any regard to company’s performance or profitability to Board Members. breach of trust. stock option schemes. Germany. embezzlement of company funds by dubious ways. insider trading. Corporate Scandals & Corporate Malpractices There are a number of scandals rocking the corporate world day in and day out anywhere and everywhere in USA. amenities.

in any circumstances is totally unacceptable to this organisation.morally condemned. employment and exploitation of child labor. In reality it is often found that many multinational corporations in the business of arms sale. modernization or expansion of their activities) and later go for de-listing in stock exchanges totally disregarding the interest of small investors. payment. which pays bribes to clinch a business deal. ships. discovery will be followed by severe disciplinary and possibly legal action”. Besides there are a number of misdemeanors exist in our corporate working such as sexual harassment of women by other employees. demand or acceptance of bribes in any shape or form. and wanton destruction of precious natural resources thereby affecting ecological balance and biodiversity of the universe. sophisticated plant and machinery which involves staggering amount of business deals are the real culprits for payment of bribes to people in power through middlemen. aircrafts. will get itself sucked into more murkier deals in future as it will turn into a regular practice. discrimination in employment and pay based on color. In the circumstances many international business corporations which attach significant importance to ethical values and principles have prescribed a corporate code on bribery. Similarly many companies in India make preferential allotments to promoter groups or others primarily intended to achieve the same objective. A company. . sex. race etc. Many of our corporate entities use share buy back by using the funds of such companies as a device to strengthen the control by the promoter groups or foreign companies on them (which can otherwise be used for new projects. which says – “The offer.

which was created by the aforesaid Act. 2002 which is the outcome of the demise of Enron and the scale of misreporting of vital financial information at World-com is the most sweeping reform of corporate governance in USA since the Great Depression in 1930s. Another serious impact of the scandals in USA is the exposure of auditing profession to strong criticism by all about its dubious role in not disclosing vital financial information for public scrutiny and blindly providing support and assistance to scam related corporate entities. appointment of independent audit committee. Corporate Roles . The Sarbanes-Oxley Act. framing of tighter disclosure norms for due compliance. The Public Company Accounting Oversight Board (PCAOB). It is becoming the global benchmark for all corporate entities for setting up proper internal control systems. disclosure of off–the-books transactions that would have big effect on their financial position and putting in place a proper ethical code of conduct to reassure all stakeholders that corporate organisation will carry on their business activities for common good.In the US 2002 can be considered as the year of “whistle blowers” in as much as Sherron Watkins of Enron and Cynthia Cooper of World-com two insiders were responsible to bring in the open the serious accounting irregularities committed by the said companies. establishment of tough financial reporting standards and requiring certification by people at the helm of management about the correctness and accuracy of financial information. to replace self-regulation of US audit profession has already prohibited auditors doing non audit work to their corporate clients.

Similarly every company should organize. strengthening the fiduciary duty of directors to act in the interest of all shareholders and provide shareholders who suffer financial . It should be the responsibility of every corporate entity to provide good investor services. expectations and aspirations of various segments of society in many ways. Every corporate entity should reward their shareholders by paying a decent dividend regularly and offer bonus and rights shares at frequent intervals. However it is thought it fit to cover three important segments of society as under with which every company will be more interlinked than with others. call and conduct general meetings according to the provisions of the Articles of Association and mandatory legal requirements. present and future prospects. ensuring regulators have real powers and resources to monitor companies and impose substantial sanctions for any wrong doing. level of business competition etc. Shareholders: Every Company should provide all required information under the statute to the shareholders from time to time to enable them to understand the financial working of the Company. Incidentally a recent report of Organization for Economic Co-operation and Development (OECD) urges Asian Governments to ensure minority shareholders are adequately protected by strengthening disclosure requirements.“The next wave of enduring great companies will be built not by technical or product visionaries but by social visionaries – those who see their company and how it operates as their ultimate creation and who invent entirely new ways of organizing human effort and creativity” – Jim Collins A socially oriented corporate entity can serve the needs.

commitment. job satisfaction and a distinct corporate culture by trying to tap and unearth an employee’s hidden creative energy and innovation to achieve its organisational goals. right of meaningful work. teamwork. Every organisation should encourage its employees to grow both in their personal and professional lives. Personal growth builds emotional intelligence and professional growth builds skills and intellect. survival. use of excessive authority. It should be appreciated that true power lies not in the ability to control staff but in the ability to trust. equality. right of privacy. Too much control. Realising the importance of labour a modern company gives enough importance to human resources development function to frame a realistic salary structure with good benefits and facilities to their work force but also focuses greater attention for their personal development and career prospects for future advancement by intensive in house and outside training. exploitation. responsibility and pride in their work. Employees need to feel a sense of fairness. Every company should create a healthy environment for individual development. continued growth and success companies are paying more attention how to attract and retain good talent especially of persons with critical skills and knowledge. People like organizations which encourage them to . common vision and shared values they work for the common good and develop a strong sense of loyalty to the company. poor working relationships between employees are sure signs of poor emotional health of an organisation.losses with private and collective rights to sue controlling shareholders and directors. recognition. When employees have a common identity. Employees : Since people are the most critical component of every business for its sustenance.

Employees should have adequate authority. Every transnational organisation is uniting people under a single corporate culture with shared values that transcends cultural. racial and national boundaries.explore their own creativity because in doing so the company gives them the meaning of their very existence. Unfortunately there is a wrong mind set in many organizations to the effect that a worker’s job is to execute a work in the way the management wants and he cannot use his intuition and latent talent power to make improvement on it. a former IBM Executive succinctly states that “the real difference between success and failure in a corporation can be very often traced to the question of how well the organization brings out the great energies and talents of its people” . Consumers: The old rule of caveat emptor is no more valid for sale or provision of services. Naturally a company must produce goods or offer a service of an acceptable standard to suit the needs and . However if employees are allowed to use their knowledge and creativity there will be shared feelings for good of the organisation. A company is required to provide adequate and reliable information to enable a consumer to make his own decision to purchase or avail of a service or not. enough independence in their functional area of work and they must be made accountable for their action. The second preferred employer in India Procter & Gamble Group spends a lot of money on training and career development opportunities right from entry level recruitments to develop their trainees as future leaders. Creativity will not blossom in a rigid over controlled bureaucratic setup and punishes employees severely even for minor failures. In a booklet titled “A Business and its beliefs” Thomas J. Watson.

A company should not indulge in false publicity. give false guarantee and workmanship or tempt to offer substandard goods or services to raise revenues.purchasing power of the consumers giving due regard to their safety and quality aspects and price its products or services on a fair basis with a reasonable profit margin with full back up facilities for after sale service and maintenance through out the working life of a product. A company should provide products or services of high quality and value that improve the life style of world’s consumers. it is the responsibility of a company to make product improvement on a continuous basis. A growing numbers of consumers are choosing products manufactured and or services provided by socially responsible companies. aspirations and expectations of the community. Companies with a genuine consumer commitment earn the respect and support of the local community and local governments. or introduce new products or services to match the changing consumer preferences. emerging needs. In France a recent survey conclusively revealed that companies. misrepresentation of facts. Since a customer relies on the reputation and integrity of the supplier to provide a good quality product or service. In other words consumers are reluctant to lend support to companies for sale of . Realising the importance of customer goodwill every company should set up a grievance cell to monitor and understand the feed back and reaction of its customers with a view to ensure that every product manufactured or service provided shall be within the accepted norms and standards set out by the company. The company should not try to increase the cost of a product by mere change in style without adding value to the product to benefit its user. which produce and market fair trade products even if they are costing a little more are having ready market demand and good acceptability from the discernable consumers.

which suggests that a manager engaged in certain illegal or unethical conduct be excused because he did it not for himself but to protect the interests of his company. It is true that some laws require behaviour that is same as the behaviour required by our moral standards. However again the assumptions behind this argument can be questioned on several grounds. However what experts like Manuel G Velasquez argue is that often assumptions behind this argument like perfectly competitive market situation do not exist. Ethics And Business: Objections People taking objections to bringing ethics into business argue that persons involved in business should single mindedly pursue the financial interests of their firm and not side track their energies or their firm’s resources into doing good works. Business ethics is essentially obeying law.products produced by exploitation of child labour or by not providing good working condition according to accepted international labour norms. The third kind of objection is that to be ethical it is enough for business people merely to obey the law. Another argument is that business managers should single-mindedly pursue the interests of their firms and should ignore ethical considerations. which follow strict environmental and ethical standards in the manufacture and marketing of consumer products. Some laws . However law and morality do not always coincide. Some argue that in perfectly competitive free markets the pursuit of profit will by itself ensure that the members of society are served in the most socially beneficial ways. It is wrong however to see law and ethics as identical. This argument finds its basis in ‘loyal agent’s argument’. Society accepts and rewards companies.

The rapid changes have . Therefore. The business environment becomes extremely complex as change inflicts variety and diversity leading to deep and fundamental ways. political.have nothing to do with morality because they do not involve serious matters. The last century has witnessed that the intellect are becoming the cornerstones of the society. many different ways of measuring profits and the findings of different studies remain inconclusive. parking laws and other laws covering similar matters. Change in the values. The changing economic. The last 150 years have been marked the world over for rapidity of change ushered in by the advent of technology and industrial revolution. These include dress codes. However studies do suggest that by and large ethics do not detract from profit and seems to contribute to profits. Conclusion Change is the only constant factor in everyday life. there is paradigm shift from the goal of maximization of profit or wealth to ethical means to achieve them. environments of business based on the expectation of society has alerted business houses to realign its priorities. legal and social environment has also made the business and businessmen to consider the ethical approach to business. It is witnessed from the Stone Age to civilized age. discussions happen whether ethical companies are more profitable than unethical ones. There are many different ways of defining ethical. When change affects life it also affects the environment and business. This period has also been marked for its attempt to generate unquestioning faith in human reason and intellect. Beyond these arguments for and against the role of ethics in business.

Therefore. society and community influence the trend and structure of economy. Ethics is good in itself. which is the primary consideration in evaluating the business tactics. An ethically based economy can do wonders in the way of creating wealth or society. which has developed a culture for caring for the people and for the betterment of society as a whole. A silent revolution is in under way in business ethics today. The economic relations with the government. People and society are part and parcel of an organization. beliefs and attitudes associated with the profit ethic . There is a growing realization all over the world that ethics is virtually important for any business and for the progress of any society. The ideas. The task of business is to optimize the outcome of economic activity. The people are the ultimate sufferers if the affairs of the organization were conducted unethically which are detrimental to the society. The government. Ethics makes for an efficient economy. the laws cannot always resolve certain key problems of the society and business. It is the economic environment of business. People want and need to be ethical not only in their private life but also in public. also establishing a lot of sensible relationships in and around the society. Ethical behavior enhances the quality of life. there has been a shift in the attitudes of corporate and their executives towards ethics. Over the last two decades. ethics and profit go together in the long run and ethics alone can protect the society. The present day economic environment of business is a complex phenomenon. An ethically responsible organization is one.improved the standard of living. Ethics has a considerable influence on the economy for efficient and smooth functioning. they have a concern over this. public.

When Hundre took over the executive responsibility of PPL. Hundre . Belgaum. To tell people how to be good is even nobler”. managing the organisation was not easy. There was continuous problem of cash flow due to long pending payments from the customers. without knowledge of the ethics. also the inventory was very high leading to high pressure on working capital management. The world of business ethics is quite broad and its tentacles spread into a number of areas in the larger sphere of business society relationship. It is difficult to understand business or business society relationships. for instance. Mark Twain once said: “To be good is noble. Business ethics is what society expects from business.are being challenged as never before. who has given his people operational freedom and liberated them in a "Business Ashram". The historical idea of the divine right of capital no longer applies. an entrepreneur running his business for more than 25 years. There is always a doubt in the mind of the businessmen about what is and what is not ethical. In short “Corporate Houses can earn Profit with Morality” Annexure I A Case Study: Profitability with Morality Mr. cultures and customs lead to change. The social responsibilities of businessmen. The changes in the values. Hundre (65). Chairman and Managing Director of Polyhydron Private Limited (PPL). which in turn lead to re-engineering of ethics. Suresh B. clearly involve ethics and morality.

it is the only policy! We are honest. He has picked up the best from all this and runs his organisation like a &lsquo. where "Honesty is not the best policy. Ricardo Semler's Maverick.analyzed the problems and found the cash flow problem also resulted in non-compliance of the statutory and regulatory requirements. Leadership. as he is not a willful defaulter. Vision & Core Values "We do not pay bribes" He first decided to comply with all the laws and pay the taxes on time. He decided to change the system radically. and the business was to be done only on payment. The Gita. He scrapped the material store and established a transparent supplier management system. He took . He is strongly influenced by a diverse set of teachings and the books he has read which incude the scriptures and spirituality." Management of Quality. Swami Vivekananda and also Japanese Management techniques. Hundre also decided that he would not pay any ashrama' as he calls it. We are transparent. The customers were not given any credit.

The Mission statement reads as "To nurture an ethically managed organisation and not to exploit Customers. He feels that transparency and ethical behavior go hand in hand. He does not like pushing people to perform their duties. In PPL transparency is maintained in all types of data sharing. productivity.a policy decision that he would not entertain any price bargain with the customer and started following a transparent discount policy. employee empowerment and continuous improvement". and Nature". . The Mission is implemented at every facet of the Company. known to all. Information like cost per employee. Government. Suppliers. suppliers are also treated with respect. on the contrary he believes in creating an enabling environment where people work without compromising ethics and morality. Workmen are not asked to work in back shifts as working in odd hours creates unnecessary stress and may adversely affect health and overall performance. Hundre does not object to employees looking into the balance sheets. These are the basic foundations of quality. Quality in PPL is a matter of character building rather than adherence to product or process specifications. growth rate and many such data are shared among all through displays on the notice board. Society. Hundre explains that excellence is about feeling happy about ones work and doing something impossible according to own standards. The Vision statement of PPL is "To create an island of excellence through focus on customer. Any one can question a financial transaction of the Company. profit. Employees. He has created an ethically managed organisation.

Suppliers and employees are trusted. He feels that the fundamental reason for premature collapse of a company is debt trap.Hundre strongly opposes debt based business dealings. People with weak personalities indulge in intoxication to create an artificial sense of well-being. He believes that businesses should build their own financial strength then only sustained growth can be achieved. The Company strongly condemns consumption of any type of intoxicant. Organization Structure. One should acquire strength . Consumption of tobacco or cigarette is prohibited within the Company premises. No further inspection is carried out once the product quality is certified by the person concerned. Work Practices & People . PPL does not employ watchman at the Company gate as the honesty of people is not to be questioned. He believes that trust is an inseparable part of PPL's organizational process.physical and mental through conscious efforts and not by artificial means. Watchman is there only during night hours when no one is working in the factory.

Only one level exists between CMD and the workmen/operators. This level is of Shop Floor Co-coordinators who are expected to be facilitators. They collect their cheques directly from their pigeon holes. No inspection is carried out the quantity is also not formally counted. There is no supervision. Dayto-day information is shared through notice board displays. the supervisors work as mentors and facilitators. The employees follow a common code of ethics "Each of the employees is responsible for both the integrity and consequences of one's own actions." The employees enjoy operational freedom.PPL follows a lean structure. But they can not take reckless decisions which can affect many others and can be questioned. In case the workmen find any problems with the material or component. they coordinate various activities of the departments/functions. They deliver materials directly at the work stations. The workmen are empowered to stop production at any stage in case they notice any product which will not be accepted by the customer. . The suppliers are also made aware about this practice. rather the ownership of decisions and the results there of makes every one to take a responsible decision. In the monthly meeting all issues related to the Company are discussed. they directly communicate with the concerned supplier as it is believed that the workman knows the problem best. Suppliers & Purchases: There is no store provided for raw materials and incoming products. The dates of payments are decided by PPL as per the preference of the supplier. PPL has developed trust and respect from the suppliers. But this does not create a fearful atmosphere.

Hundre says. sustainable and considerable growth is http://www. Size or rate of growth is not http://www. consistent. According to him.scribd. But he feels that quality of wealth is equally important and should not be collected by exploitation. "Taste of the fruit is the core issue not the size." firmly believes" References: .freemba.or plans: "Business should create wealth.

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