BUSINESS ETHICS

END TERM PROJECT

ON

“ETHICS IN VARIOUS COMPANIES”

SUBMITTED BY:
GROUP 1
ABHISHEK JAIN: 201822049
CHITRANSHI KHANDELWAL: 201822057
GARIMA SINGHAL: 201822059
HIMANSHU GUPTA: 201822061
KEVAL GALA: 201822067
 1. OYO Rooms Hospitality Company

Introduction: - OYO Rooms, commonly known as OYO, is an Indian hospitality

service and budget hotel network. It was founded in 2013 by Ritesh Agarwal and has since
grown to over 8,500 hotels in 230 cities in India, Malaysia, UAE, Nepal, China and Indonesia.
Company’s code of conduct:
 Fundamental Mission:
OYO Group shall engineer a harmony between human society and natural environment,
sustain safety and security of the society from engineering approach, and achieve social
contributions through development of the company’s business. Based on the 10 codes of
conduct below, the Company shall perform goods with ethics and good sense in order to
broadly benefit societies regardless of nationalities.

 Compliance to Social Norms:

The Company shall comply with laws, regulations and unwritten norms and advance
whole some corporate activities.

 Disclosure of Information:
The Company adequately disclose information and actively communicate with societies.

 Preservation of Natural Environment:

The Company shall exert ourselves to reduce environmental burden of company’s

business operation and contribute to preservation of natural environment using company’s
technologies in environmental science.

 Contribution to Society:

The Company shall improve life environment of local societies through cooperation and
communication with local people.

 Construction of Superior Work Environment:

The Company shall exert ourselves to construct safer and more pleasant work
environment that allows each employee to demonstrate and challenge his/her creativity.

 Relation with Anti-Social Forces:

The Company shall maintain resolute attitude against anti-social forces that thread social
orders and safety.

 International Contribution:
From international perspectives, The Company shall comply with global rules and
contribute to development of local communities in mutual trust and good faith.
  Dissemination in Corporate Ethics:

Top managements shall understand that they are responsible for realizing these principles
and shall example the realization by leadership to disseminate the principles. They
organize effective company structures to disseminate corporate ethics.

 Incompliance Responses:
In incompliances with the principles, top managements shall take immediate response
under their own responsibilities to investigate the compliances, develop preventive
measures, disclose investigated information, clarify authorities and responsibilities, and
take harsh disciplinary action to related personnel including themselves.

Source of Influence:
The company’s code of conduct is influenced by:
‘Utilitarianism’ which states that an action is morally right if it results in greatest amount of
good for the greatest amount of people affected by the action. Such as disclosure of information,
contribution to society, fundamental mission aims at greater good of the society.
‘Ethics of duties’ is defined by a set of prior moral rules that humans should apply to all relevant
ethical problems such as compliance to social norms and incompliance responses.

Deviation from their code of conduct

Unethical practices by OYO:
The unethical practice of OYO includes not giving the full disclosure of information about the
facilities they are going to provide as well as deceptive photographs of the hotel room which can
create illusion for the customers. Hence violating their Disclosure of Informationcode of
conduct
Apart from this the main problem customers are facing is sudden change in the location of hotel
booked and it has been found that the location shifted at inferior place related to first one. Hence
violating their Compliance to Social Normscode of conduct.
E.g. of the same is, Mr. Prasad Rao customer of OYO room, booked hotel room in sunrise
residence hotel (ref id rlfb5460) situated at banjara hills one of the best area in Hyderabad and
his hotel got changed that to from the 5 km distance from the previous venue without the prior
approval.
 2. Nike
Introduction: - Nike, Inc. is an American multinational corporation that is engaged in the
design, development, manufacturing, and worldwide marketing and sales of footwear, apparel,
equipment, accessories, and services. The company is headquartered near Beaverton, Oregon, in
the Portland metropolitan area. It is the world's largest supplier of athletic shoes and appareland a
major manufacturer of sports equipment, as of 2012, it employed more than 44,000 people
worldwide. As of 2017, the Nike brand is valued at $29.6 billion.
Company’s code of conduct:
 Matter of respect:
NIKE knows that people perform best in a work environment free from unlawful
harassment and discrimination, and The Company want to be sure that harassment and
discrimination of all types does not occur at NIKE. To that end, NIKE’s policy prohibits
discrimination and harassment, seeks to prevent harassment and provides employees with
an effective complaint process. Employees must take care to treat others the way they
would expect to be treated.

 Environment, safety and health:

NIKE is committed to providing safe and healthy work environments and to being an
environmentally responsible corporate citizen. The NIKE standard, at a minimum, is to
comply with all environmental, safety and health laws and regulations.
 Product Safety:
It is essential that NIKE provide products to company’s consumers that are innovative,
inspiring, and safe
 Accurate Records & Reports:
Every employee has the responsibility to maintain accurate records and reports, including
financial and accounting records that accurately and completely reflect all transactions and
assets. Employees may not make any false statements, misleading or artificial entries, or
material omissions or misrepresentations in any of NIKE’s financial books, records, or
other documents or communications. No funds or assets may be maintained for illegal or
improper purposes.
 Privacy:
NIKE is committed to handling the personal information of company’s employees,
consumers and others responsibly and in compliance with applicable privacy laws around
the world.
 Ask it before you do it:
The whole idea is to speak up. Ask questions. Bring your concerns into the open. Then do
the right thing. Ask yourself:
o Is it legal?
o Does it follow NIKE policy?
 o How will the decision affect others (consumers, shareholders, suppliers, partners,
competitors, the community, and other employees)?
o How will the decision look to others?
o How would you feel if the decision were made public?
o Have you fully explored the implications of this decision?
o Would additional advice be helpful?

Source of Influence:
The company’s code of conduct is influenced by:
‘Utilitarianism’ which states that an action is morally right if it results in greatest amount of
good for the greatest amount of people affected by the action. Such as product safety and
environment safety and health. It aims that their products do not hamper society at large.
‘Ethics of duties’ is defined by a set of prior moral rules that humans should apply to all relevant
ethical problems such as privacy and ask it before you do it code of conduct specifies certain
rules that employees are expected to follow.

Deviation from their code of conduct

Unethical practices by NIKE: -
In March, the International Labor Rights Forum reported that Nike has turned its back on its
commitment to the Worker Rights Consortium (WRC), which effectively blocks labor rights
experts from independently monitoring Nike’s supplier factories.
Nike’s use of hazardous chemicals in its product and supply chain, which is a big problem for
workers who are exposed to them and even those who wear the products. Hence violating their
Product safety code of conduct.
Nike does not use fur, angora or other exotic animal hair or skin in its products, which is
definitely a step in the right direction. However, it does use leather, wool and down feather
without specifying sources, which is problematic as the welfare of animals and workers is
unknown and is not guaranteed. Hence violating their Environment, safety and healthcode of
conduct.
 3. Coca-Cola Company
Introduction: - The Coca-Cola Company is an American corporation, and manufacturer, retailer, and
marketer of nonalcoholic beverage concentrates and syrups. The company is best known for its flagship
product Coca-Cola. Headquarters in Atlanta, Georgia, U.S., United States. Founded by John Pembertone as
coca colaand Asa Griggs Candler as Coca Cola Company.

Company’s code of conduct:

 Safe and healthy workplace environment:
The Company believe that a safe and healthy workplace is a fundamental right of every
person and also a business imperative. The Company’s Workplace Rights Policy requires
that The Company take responsibility for maintaining a productive workplace in every part
of Company
 Compete fairly and within legal boundaries:
The Company compete fairly and within legal boundaries. The Company know that
everyone benefits from a competitive marketplace, so The Company follow the antitrust
and fair competition laws in all locations.

 Land Rights and Water Resources:

The Company believe in proper and careful use of the land, water and other natural
resources to maintain a sustainable living environment. And to avoid harm to the local
people andcommunity.
 Confidentiality:

Never disclose confidential information about the Company, Its customers, suppliers,
competitors or other business partners, and never post anything that might constitute a
threat, intimidation, harassment or bullying.

 Engagement on human rights:

The framework for company’s engagement on human rights is The Coca-Cola Company’s
Human Rights Policy, which covers the following topics: » Respect for Human Rights »
Community and Stakeholder Engagement » Diversity and Inclusion » Freedom of
Association & Collective Bargaining » Safe and Healthy Workplace » Workplace Security
» Forced Labor and Human Trafficking » Child Labor » Work Hours, Wages and Benefits.

 General Norms:

The Company Comply with Trade Compliance Laws.

The Company Do Not Tolerate Bribery.
The Company Do Not Trade on Inside Information.
Source of Influence:
The company’s code of conduct is influenced by:
‘Ethics of rights and justice’ which states that humans irrespective of their gender, race,
religion or any other factor should be able to universally enjoy all the rights. Such as
Engagement on human rights and safe and healthy work place environment.
‘Ethics of duties’ is defined by a set of prior moral rules that humans should apply to all relevant
ethical problems such as Confidentiality, General Norms.

Deviation from their code of conduct

Unethical practices by Coca-Cola Company: -
Kala Dera is a large village outside the city of Jaipur where agriculture is the primary source of
livelihood. Coca-Cola started its bottling operations in Kala Dera in 2000, and within a year, the
community started to notice a rapid decline in groundwater levels. Caused due to the improper
usage of the ground water by the company, it is known that it requires 9L of clean water to
manufacture 1L of Coca-Cola. It is also known that 1.5m L of ground water is being use by the
company per day throughout the country. Hence violating their Land Rights and Water
Resourcescode of conduct.

Prior to locating a bottling plant in Kala Dera, Coca-Cola is supposed to have conducted an
Environmental Impact Assessment that looks at a variety of current conditions and potential
impacts if the plant is built and operated. The Coca-Cola company has refused to share the
environmental impact assessment it conducted for Kala Dera (or any other plants in India), citing
"legal and strategic confidentiality" reasons.

In reaching out to the media and the public regarding the scathing the Energy and Resources
Institute (TERI) assessment, the Coca-Cola company has misrepresented the facts on several
occasions. Hence violating their basic ethical norms for rights and justice.
 4. WALMART
INTRODUCTION: -Walmart Inc. is an American multinational retail corporation that operates
a chain of hypermarkets, discount department stores and grocery stores. Its headquarters is in
Bentonville, Arkansas. The company was founded by Sam Walton in 1962 and incorporated on
October 31, 1969. Walmart is the world’s largest company by revenue over US$500 billion
according to Fortune Global 500. It is a publicly traded family owned business, as the company
is controlled by the Walton family.
Company’s code of conduct
The basis of the code of conduct are:
• Respect for the Individual
• Service to the Customers
• Striving for Excellence
It also includes other ethical code of conduct:

 Compensation:

Suppliers shall fairly compensate their employees by providing wages and benefits which
follow the local and national laws and regulations of the jurisdictions in which the suppliers
are doing business, or which are consistent with the prevailing local standards in the
countries, if the prevailing local standards are higher.

 Hours of Labor:

Suppliers shall maintain reasonable employee work hours in compliance with local
standards and applicable laws of the jurisdictions in which the suppliers are doing business.
Suppliers’ employees shall not work more than 72 hours per 6 days or work more than a
maximum total working hours of 14 hours per a continuous 24 hour period. Supplier’s
factories should be working toward achieving a 60-hour workweek. Wal-Mart will not use
suppliers who, on a regularly scheduled basis, require employees to work in excess of the
statutory requirements without proper compensation as required by applicable law.
Employees should be permitted reasonable days off (at least one day off for every seven-
day period) and leave privileges.

 Forced/Prison Labor:

Forced or prison labor will not be tolerated by Wal-Mart.

 Child Labor:

Wal-Mart will not tolerate the use of child labor. Wal-Mart will not accept products from
suppliers or subcontractors who use child labor. No person shall be employed at an age
younger than the legal minimum age for working in any specific jurisdiction. In no event
shall suppliers or their subcontractors employ workers less than 14 years of age.
  Discrimination /Rights:

All conditions of employment must be based on an individual’s ability to do the job, not on
the basis of personal characteristics or beliefs. Wal-Mart favors suppliers who do not
discriminate on the basis of race, color, national origin, gender, sexual orientation, religion,
disability, and other similar factors.

 Freedom of Association and Collective Bargaining:

Suppliers will respect the rights of employees regarding their decision of whether to
associate or not to associate with any group, if such groups are legal in their own country.
Suppliers must not interfere with, obstruct or prevent such legitimate activities.

 Immigration law and compliance:

Only workers with a legal right to work shall be employed or used by a supplier. All
workers’ legal status must be validated by the Supplier by reviewing original
documentation (not photocopies) before they can commence work. Procedures which
demonstrate compliance with these validations must be implemented. Suppliers must
regularly audit employment agencies from whom they obtain workers to monitor
compliance with this policy.

 WORKPLACE ENVIRONMENT:

Factories producing merchandise to be sold by Wal-Mart shall provide adequate medical

facilities and ensure that all production and manufacturing processes are carried out in
conditions that have proper and adequate considerations for the health and safety of those
involved. Wal-Mart will not do business with any supplier that provides an unhealthy or
hazardous work environment or which utilizes mental or physical disciplinary practices.

Source of Influence:
The company’s code of conduct is influenced by:
‘Ethics of rights and justice’ which states that humans irrespective of their gender, race,
religion or any other factor should be able to universally enjoy all the rights. Such as
compensation, respect for the individual, child labor, discrimination/rights, forced/prison labor.
‘Egoism’ states that all decision makers freely decide to pursue either short term or long term
interest such as freedom of association and collective bargaining.
‘Ethics of duties’ is defined by a set of prior moral rules that humans should apply to all relevant
ethical problems such as Hours of Labor, Immigration Law and Compliance.

Deviation from their code of conduct

Unethical practices by Walmart Inc.: -

Walmart has been accused of sexual discrimination and unfair pay for employees, and
destruction of small towns, excessive amounts of corporate power through the
government.Hence violating their Discrimination /Rights code of conduct.
During 1989, sales grew to $26 billion. As the sales grew, ethical standards lowered throughout
the company. Walmart poor labor practice consists of avoiding non-unionizing of all employees,
low wages and sexual discrimination.The unethical practices include forcing employees to work
unpaid off the clock, erasing hours from time cards and prevented workers from taking lunch and
other breaks that were guaranteed by the state laws. Hence violating their Discrimination
/Rights and workplace environment code of conduct.

Almost 2000 women in 48 states claim that Walmart discriminated against them for pay and
promotions. Walmart ended up paying $11.7 million in back wages and compensatory damages
to settle the sex discrimination lawsuit, 2013.

It is also unethical to the communities it develops in. Walmart tends to crush competitors. The
more successful Walmart is the more there will be bankruptcies of small businesses.
 5. JOHNSON AND JOHNSON
Introduction: Johnson & Johnson is an American multinational medical device, pharmaceutical
and consumer packaged goods manufacturing company founded in 1886. Johnson & Johnson is
headquartered in New Brunswick, New Jersey, the consumer division being in Skillman, New
Jersey. The corporation includes some 250 subsidiary companies with operations in 60 countries
and products sold in over 175 countries. Johnson & Johnson's brands include numerous
household names of medications and first aid supplies.
Company’s code of conduct
The words that the company lives by are:
 Credo responsibilities
 Compliance
 Ethics
 Fairness
 Impartiality
The company quotes, “THE COMPANY BELIEVE OUR FIRST RESPONSIBILITY IS TO
THE DOCTORS, NURSES AND PATIENTS, TO MOTHERS AND FATHERS AND ALL
OTHERS WHO USE OUR PRODUCTS AND SERVICES”
The other code of conduct includes:
 Safety of the customer:

Ensuring the safety of patients and volunteers who take part in clinical trials, protecting
their confidentiality and complying with data protection laws.

 Abiding by the international law:

Adhering to the applicable manufacturing, packaging, distribution and export laws and
regulations for company’s industry and in the countries where The Company do business.

 Fair marketing game:

Following all laws and regulations regarding the promotion, marketing and sales of
company’s products, including ensuring that what The Company say is truthful, not
misleading, and is consistent with regulatory approvals for company’s products.

 Safe product:

Complying with all laws relating to product quality and safety, consistently monitoring the
safety, quality and performance of company’s products and complying with all
requirements for reporting adverse events and product quality complaints.

 Anti-corruption and anti-bribery laws:

Johnson & Johnson takes a strong stance against bribery consistent with the anti-bribery
laws that exist in many countries around the world. The company strictly prohibit bribes,
 kickbacks, illegal payments and any other offer of items of value that may inappropriately
influence or reward a customer to order, purchase or use the products and services, whether
provided directly or through a third party such as a distributor, customs broker or other
agent.

 Antitrust and competition laws:

Antitrust and competition laws promote fair competition and protect consumers from unfair
business practices. These laws frequently address areas such as illegal agreements between
competitors aimed at preventing or restricting free competition, price fixing and unfair
trade practices. The company comply fully with all applicable antitrust and competition
laws. It is responsible for dealing fairly with customers, suppliers, competitors and other
third parties.

Source of Influence:
‘Utilitarianism’ which states that an action is morally right if it results in greatest amount of
good for the greatest amount of people affected by the action. Such As safety of the customer,
Safety of products which aims that the goods should serve for the good of society at large.
‘Ethics of duties’ is defined by a set of prior moral rules that humans should apply to all relevant
ethical problems such as Abiding By the International Law, Fair Marketing Games, Anti-
Corruption and anti-bribery laws and anti-trust and competition laws; Which aims that company
should follow these set of rules to be morally correct.

Deviation from their code of conduct

Unethical practices by Johnson & Johnson company: -
The company unethical practices Includes that according to some reports over years the company
circumvented the FDA by cynically and successfully pushing the drug’s use for very different
maladies, particularly in the treatment of children and the elderly. Hence violating their Safety of
the customercode of conduct.
Johnson & Johnson marketed Risperdal aggressively to the elderly despite knowing that
Risperdal posed serious health risks for older adults, like an increased risk of strokes, the
company went so far as to create a dedicated sales force, Eldercare, to promote the drug to
doctors who primarily treated older patients. Risperdal was also marketed as a safe treatment for
children. Hence violating their Safety of the customer and Safe productcode of conduct.
Women have complained about serious injury and have filed suit against J&J subordinate
Ethicon, claiming that vaginal mesh manufactured by Ethicon causing them life-altering
complications. Upon investigation, a few doctors and scientists have concluded that J&J Ethicon
vaginal mesh and bladder slings do not meet reasonable safety standards. The FDA issued Public
Health Notifications regarding the use of vaginal mesh products to treat pelvic organ prolapse
and stress urinary incontinence in October 2008, in February 2009, and in July 2011. Hence
violating their Safe product and Antitrust and competition lawscode of conduct.
 6. Honda Motor Co., Ltd.
Introduction:-Honda Motor Company is a Japanese Public Multinational Conglomerate
corporation primarily known as a manufacturer of automobiles, aircraft, motorcycles, and power
equipment.
Honda has been the world's largest motorcycle manufacturer since 1959, as well as the world's
largest manufacturer of internal combustion engines measured by volume, producing more than
14 million internal combustion engines each year.Honda became the second-largest Japanese
automobile manufacturer in 2001. Honda was the eighth largest automobile manufacturer in the
world behind Toyota, Volkswagen Group, Hyundai Motor Group, General Motors, Ford, Nissan,
and Fiat Chrysler Automobiles in 2015.

Company’s code of conduct

 Appropriate Advertising and Publicity:

Honda engages in advertising, publicity, and sales promotion activities in good faith so as
to constantly meet the trust and expectations of customers and society. Honda will properly
engage in product advertising, publicity, and sales promotion activities to avoid misleading
customers.

 Quality of Products and Services:

Honda will place the highest priority on the quality and safety of products as well as
services, and comply with established standards and procedures. Honda will also request
business partners and distributors/dealers to adhere to Honda’s standards and procedures.

 Compliance with Competition Laws:

Honda will engage in free and open competition with competitors to maintain its stance as
a company trusted by customers and society.

 Communication in the Workplace:

Honda strives to create workplaces in which co-workers can trust one another at all
times.Honda will strive for smooth communication in the workplace to create a harmonious
work environment.

 Respect of Human Rights:

Honda strives to maintain its stance as a company committed to practicing fairness and
sincerity and respects human rights.Honda will respect fellow associates, interact with them
in a sincere and appropriate manner, and never engage in any form of harassment or unjust,
discriminatory behavior in the workplace.
  Environmental Protection:

Honda actively endeavors to protect the global environment throughout all business
activities as a responsible member of society. Honda will comply with laws and
regulations, company policies, and internal standards related to environmental protection
and strive to reduce the burden on the environment by engaging in resource conservation,
energy conservation, and recycling.

Source of Influence:
‘Ethics of rights and justice’ which states that humans irrespective of their gender, race,
religion or any other factor should be able to universally enjoy all the rights such as Respect oh
human Rights.
‘Utilitarianism’ which states that an action is morally right if it results in greatest amount of
Food for the greatest amount of people affected by the action such as Appropriate advertising
and publicity, Environmental Protection.
‘Ethics of duties’ is defined by a set of prior moral rules that humans should apply to all relevant
ethical problems such as Quality of Product and Services, Compliance With Competition Laws,
Communication in the Workplace.

Deviation from their code of conduct

Unethical practices byHonda Motor Co., Ltd.: -
The Center for Auto Safety (CAS) has accused Honda of hiding death and injury claims reported
to the automaker in contravention of federal law requiring such disclosures.
Since 2000, automakers have been required to file quarterly Early Warning Reports (EWRs) with
the National Highway Traffic Safety Administration (NHTSA) to give the agency a heads-up on
trends of deaths and injuries. According to a letter CAS Executive Director Clarence M. Ditlow
sent to NHTSA acting administrator David Friedman, Honda has not reported all the incidents of
death and injury caused by exploding air bags in its cars. Ditlow urged a Justice
Department investigation into the matter.
In 2013, Honda reported only 28 death and injury claims. That compares to 1,774 by Toyota and
even 110 by Hyundai, which sells half as many cars as Honda. Ditlow cited two instances in
which Honda settled claims by those injured by air bag explosions, but did not report those
incidents to the NHTSA. Hence violating their Fair play and Compliance with Competition
Laws code of conduct.
 7. Samsung: -
Introduction:-Samsung is a South Korean multinational conglomerate headquartered in
Samsung Town, Seoul. It comprises numerous affiliated businesses, most of them united under
the Samsung brand, and is the largest South Korean business conglomerate.
Company’s Code of conduct:-
 Basic Principles:

Samsung C&T aims to make an organizational culture where all employees and executives
share the corporate values and practice integrity. Therefore, Company enacts Samsung
C&T Code of Ethics based on Samsung Management Philosophy and Samsung Spirit as a
code of conduct and standards for value judgment that all employees shall follow and
uphold.

 Ethical Management:

Samsung C&T respects customers’ opinions and protects their assets and honor by
upholding quality-oriented management. They also compete freely and fairly, complying
with the laws, regulations and business ethics of all domestic/overseas sites in which The
Company operate. They do not exploit loopholes in the laws and/or regulations or conduct
unfair business activities that go against business ethics. Company provides best products
and services to meet the demands and expectations of company’s customers, and respond
quickly and attentively to customers’ rightful claims.

 Basic Ethics of Employees:

Employees of Samsung C&T keep basics and principles and have humanity, ethics,
manners, and etiquette in company’s everyday life to safeguard self-esteem and honor.
They pursue mutual growth of individual employees and the Company by initiating
positive changes.

 Responsibility to Employees and executives:

Samsung C&T respects dignity and value of individual employees and executives, and
endeavors to improve emotional/physical quality of life of employees and executives.

 Responsibility to company’s country and Society:

Samsung C&T protects shareholders’ profit and contributes to bringing prosperity to

people’s lives and driving social development by growing into a sound company through
reasonable business activities.

Compliance with Code of Ethics: -

Company establishes Guidelines for Ethical Practice regarding bribery and other misconducts so
that company’s employees and executives can strictly comply with the Code of Ethics. Company
rewards employees and executives who comply with the code of ethics and contribute to the
Company’s ethical management, and penalize those who violate the code of ethics.
Source of Influence:
‘Ethics of duties’ is defined by a set of prior moral rules that humans should apply to all relevant
ethical problems such as Compliance with Code of Ethics, Basic Principles, Basic Ethics of
Employees, Ethical Management, Responsibility to Employees and Executives. These Code of
conduct specifies Set of rules that are right and wrong.
‘Utilitarianism’ which states that an action is morally right if it results in greatest amount of
Food for the greatest amount of people affected by the action such as Responsibility to the
country and society.

Deviations from the ethical code of conduct:-

Samsung is known to have employed many illegal practices in the past and conducted unethical
business activities. These include stealing intellectual ideas, employing under-age labor and
portraying themselves in a fake manner. Samsung was taken to court by Apple and were accused
of stealing some of Apple’s ideas. Apple claimed that Samsung owed those $379 million,
however Samsung agreed to the claims and said they only owed $52 million to Apple. This is
unethical of a business as it ruins their brand image and can lead to less sales and a loss of loyal
customers. Hence company violated fair competition code of conduct.
 8. PUNJAB NATIONAL BANK
INTRODUCTION: Punjab National Bank (PNB) is an Indian multinational banking and
financial services company. It is a state-owned corporation based in New Delhi, India. The bank
was founded in 1894. As of 31 March 2017, the bank has over 80 million customers, 6,937
branches, and 10681 ATMs across 764 cities.

Company’s code of conduct

 Need and objective of the code:

As a part of corporate governance, the listed entities are required to lay down a code of
conduct for Directors on the board of an entity and its senior management. Accordingly,
the bank has laid down this code of conduct for its directors on the boards and its core
management.

 Bank’s belief system:

This code of conduct attempts to set forth the guiding principles on which bank shall
operate and conducts its daily business with its multitudinous stakeholders, government
and regulating agencies, media and anyone else with whom it is connected.

 Philosophy of the code:

The code envisages and expects-

The highest level of confidentiality and fair dealing within and outside the bank. Toaddress
misuse or misapplication of the bank’s asset and resources.
1. General standards of conduct.
2. Conflict of interest

 Employment/Outside Employment:

The members of core management are expected to devote their total attention to business
interest of the bank.

 Business interest:

If any member of the board of directors and core management considers investing in
securities issued by bank’s customer, supplier or competitor, they should ensure that these
investments do not compromise their responsibilities to the bank.

 Good corporate governance practices:

Each members of board of directors and core management of the bank should adhere to the
practices to ensure compliance with good corporate governance practices.
Source of Influence:
‘Ethics of duties’ is defined by a set of prior moral rules that humans should apply to all relevant
ethical problems such as good corporate governance practices, business interests, philosophy of
the code and bank’s belief system. These code of conduct specifies the set of rules which are
morally that all employees are expected to follow.

Deviations from the ethical code of conduct

Punjab National bank’s unethical practices includes the biggest scams in the banking industry.
The bank has been found guilty of fake bank guarantees over several years to help two jewelry
groups - controlled by Indian diamond magnate Nirav Modi and his uncle Mehul Choksi - raise
billions of dollars in foreign credit. The CEO suspended 21 officials.

The report lays out how failings by 54 PNB officials - ranging from clerks to foreign exchange
managers, and auditors to heads of regional offices, allowed the fraud to be perpetrated. The
damning conclusions of the report stand in contrast to the lack of regulatory action taken by the
authorities since the fraud was reported.

Hence this scandal violates the Philosophy of the code, Business interestand Good corporate
governance practices code of conduct.
 9. Kotak Mahindra Bank
Introduction: Kotak Mahindra Bank is an Indian private sector bank headquartered in Mumbai,
Maharashtra, India. In February 2003, Reserve Bank of India (RBI) gave the licence to Kotak
Mahindra Finance Ltd., the group's flagship company, to carry on banking business. It offers a
wide range of banking products and financial services for corporate and retail customers through
a variety of delivery channels and specialized subsidiaries in the areas of personal finance,
investment banking, general insurance, life insurance, and wealth management.

Company’s code of conduct

 Key Commitments:

Act fairly and reasonably in all company’s dealings with its customers. The Company will
make every attempt to ensure that customers have a trouble-free experience in dealing with
us; but if something does go wrong, The Company will deal with the same quickly and
sympathetically.

 Information:

The Company will guide company’s customers in choosing products and services which
meet his / her requirements.

 Terms and conditions:

When a customer enrolls / accepts a product or service for the first time, The Company will
provide the customer with the Rules and Regulations that are relevant to the product /
service.

 Advertising and marketing:

The Company will ensure that all advertising and promotional material is clear, fair,
reasonable and not misleading.

 Cash Transactions

The bank will make all attempts to ensure the correctness of cash dispensed at company’s
counters; the customer is advised to count and ensure correctness before leaving the cash
counter.

 MONITORING:

The bank has a “Nodal Officer” to ensure compliance of the Code. The bank’s internal
auditing procedures make sure they meet the Code.

 Liability of Losses:
If an account holder acts fraudulently or without reasonable care and this causes a loss to
the account holder, the bank will not be liable for the loss.
  LOANS AND ADVANCES:
Before lending money, granting or increasing an overdraft, credit card or any other
borrowing, the company will assess the ability of the customer (borrower) to repay.

Source of Influence:
‘Ethics of duties’ is defined by a set of prior moral rules that humans should apply to all relevant
ethical problems such as Information, Terms and Conditions, Advertising and Marketing,
Monitoring, Loans and Advances, Liability of Losses. These code of conduct specifies the
ethical norms and rules that all employees and customers are expected to follow.

Deviations from their code of conduct

The Kotak Mahindra bank has some unethical practices which include that they are not
transparent to their customers. They don’t disclose the information fully related to interest rates
while offering loans.
For example: A customer named Amit complained regarding this matter. He told that when he
was taking loan, the bank offered him an interest rate 0.25% less than Axis Bank and other
Indian banks. But as soon as he took the loan there was a hefty increase in interest rates. The
service provided was not acceptable.
 10. Nestlé
Introduction: Nestléis a Swiss food and drink company headquartered in Vevey, Vaud,
Switzerland. Nestlé's products include, baby products, medical food, bottled water, breakfast
cereals, coffee and tea, confectionery, dairy products, ice cream, frozen food, pet foods, and
snacks. Nestlé was formed in 1905 by the merger of the Anglo-Swiss Milk Company, established
in 1866 by brothers George and Charles Page, and FarineLactée Henri Nestlé, founded in 1866
by Henri Nestle. Nestlé has 447 factories, operates in 194 countries, and employs around
339,000 people.
Company’s code of conduct
 Compliance with laws, rules and regulations
Nestlé and its employees are bound by the law. Compliance with all applicable laws and
regulations must never be compromised. Employees shall adhere to internal rules and
regulations as they apply in each situation.

 Conflicts of Interest
Employees shall avoid Conflicts of Interest whenever possible. If a Conflict of Interest
situation has occurred or if an employee faces a situation that may involve or lead to a
Conflict of Interest, the employee shall disclose it to his or her Line Manager and/or the HR
or the Legal or Compliance Function to resolve the situation in a fair and transparent
manner.

 Insider trading
Nestlé prohibits the purchase and sale of Nestlé shares or securities based on potentially
share price relevant information which is not yet public. Non-compliance may not only
entail disciplinary sanctions, but also result in criminal charges.

 Antitrust and fair dealing

Commercial policy and prices will be set independently and will never be agreed, formally
or informally, with competitors or other non-related parties, whether directly or indirectly.
Customers, territories or product markets will never be allocated between Nestlé and its
competitors but will always be the result of fair competition. Customers and suppliers will
be dealt fairly.

 Confidential information
Confidential information consists of any information that is not or not yet public
information. It includes trade secrets, business, marketing and service plans, consumer
insights, engineering and manufacturing ideas, product recipes, designs, databases, records,
salary information and any non-published financial or other data.
  Bribery and corruption
Employees must never, directly or through intermediaries, offer or promise any personal or
improper financial or other advantage to obtain or retain a business or other advantage from
a third party, whether public or private. Nor must they accept any such advantage in return
for any preferential treatment of a third party. Moreover, employees must refrain from any
activity or behavior that could give rise to the appearance or suspicion of such conduct or
the attempt thereof.

Source of Influence:
‘Ethics of duties’ is defined by a set of prior moral rules that humans should apply to all relevant
ethical problems such as Bribery and Corruption, Confidential Information, Anti-Trust and Fair
dealing, Compliance with Laws Rules And Regulations, Insider trading and Conflicts of interest
The Employees of the company should adhere to the rules that are morally right.

Deviations from the code of conduct

 Baby formula and boycott
Nestle aggressively pushed their breastfeeding formula in less economically developed
countries (LEDCs), specifically targeting the poor. They made it seem that their infant
formula was almost as good as a mother’s milk, which is highly unethical for several
reasons. The problem was the need for water sanitation. The people didn’t have access to
clean water, so it was necessary for them to boil the water. But due to low literacy rates,
many mothers were not aware of this, so they mixed the formula with polluted water which
put the children at great risks. Nestle seems to have knowingly ignored this and encouraged
mothers to use the formula even when they knew the risks. Hence the company violates
Antitrust and fair dealing code of conduct.

 Child labor, abuse, and trafficking

Most people love chocolate, but few know the dirty deals behind chocolate production. The
children are usually 12 to 15 years old, and some are trafficked from nearby countries – and
Nestle is no stranger to this practice.

The International Labor Rights Fund filed a lawsuit against Nestle (among others) on
behalf of three Malian children. The suit alleged the children were trafficked to Côte
d’Ivoire, forced into slavery, and experienced frequent beatings on a cocoa
plantation. Hence the company violates Compliance with laws, rules and regulations
code of conduct.

 Health Threats

In July 2009, the Food and Drug Administration (FDA) and the Centers for Disease
Control and Prevention (CDC) warned consumers to avoid eating any varieties of pre-
packaged Nestle Toll House refrigerated cookie dough due to risk of contamination with E.
coli O157:H7 (a foodborne bacterium that causes illness). In the US, it caused sickness in
 more than 50 people in 30 states, half of whom required hospitalization. One woman had a
fatal infection before the batch was reclaimed. Hence the company violates Compliance
with laws, rules and regulations and Antitrust and fair dealing code of conduct.

 Pollution

Nestle has been involved in several incidents regarding pollution. A 1997 report found that
in the UK, over a 12-month period, water pollution limits were breached 2,152 times in 830
locations by companies that included Cadbury and Nestle. The situation in China was much
worse. Hence the company violates Compliance with laws, rules and regulations code of
conduct.