A Case Study on Corporate Governance & Business Ethics Commonwealth

Games 2010 Management Manipulation

By George Norman B. Patayon

I. Executive Summary

The Commonwealth Games 2010 in New Delhi, India, is a brilliant example of

poor governance and manipulation of funds. For this study, we will focus
more on the manipulation of funds and ethical issues. The study will also
present alternative courses of action and recommendations to prevent it from
moving forward.

II. Statement of the Problem

General Problem
The general problem is the management of manipulation of the Organizing
Committee in the Commonwealth Games 2010 in New Delhi, India.

Specific Problem
The following points are the unethical actions of the Organizing Committee:

 The manipulation of the government fund through overpriced award

costs to international contractors.
 Increased taxes for the citizens of India and to defer other government
projects to fund the Commonwealth Games

III. Significance of the Study

The study will benefit business owners, managers, supervisors, and
employees to avoid and detect similar cases.

 For the business owners and managers, to define appropriate action

for the employees involved.
 Define policies to avoid management of manipulation.

IV. Objectives

General Objective
The general objective of this case study is to prevent manipulation
management within the organization.
 Specific Objective
At the end of the study, we can propose alternatives to the Management:
 Check and balance the submitted and approved costs.
 Appropriate allocation of funds within the organization.
 Encourage the organization to embrace ethical behaviors.

V. Situational Analysis

History of the Commonwealth Games

The Commonwealth Games is an internationally successful multi-sport event
founded in 1930; the event is played by athletes from the Commonwealth of
Nations and athletes from the Olympics. The first Games were held in
Hamilton, Ontario, Canada, attended by 11 nations and 400 athletes.

The concept of conducting sports events trails back to 1891 – a sporting

competition bringing together the members of the British Empire was written
in the article of Reverend Astley Cooper in the Times suggesting “Pan-
Britannic-Pan-Anglican Contest and Festival every four years as a means of
increasing the goodwill and good understanding of the British Empire.”

The Games are overseen by the Commonwealth Games Federation (CGF),

which controls the sporting program and selects the host cities. The host city
is selected from across the Commonwealth, with 18 cities in seven countries
have hosted it.

Commonwealth Games 2010 Awarded to New Delhi

The Commonwealth Games 2010 was awarded to India last 2003. This was
the first time India would host an international multi-sport event. The slogan
“Come Out and Play,” created by the organizing committee, was designed to
encourage members of the Commonwealth to unite and engage in the
Games. The committee stated, “it is also a call to the people of India,
especially in Delhi, to come out in support of the Games and play the perfect
hosts at the XIX Commonwealth Games 2010 Delhi” (CWG Delhi, 2010).

Management of Manipulation
The Commonwealth Games 2010 have been spoiled by corruption, fraud, and
mismanagement. The Games was a golden opportunity for India to create a
great impression on different stakeholders: tourists, investors, and players.
 The budget was bloated from the original budget of Rs, 22,000 crores to Rs.
30,000 crores in 2010. The increase in funding resulted in increasing taxes
and deferment of other government projects. The Central Vigilance
Commission (CVC) gathered the actual prices of the purchased items against
the payments made by the Organizing Committee. The bills produced by the
suppliers were found fake with overhyped prices. The costs for a tissue paper
roll were found to be bloated by 200%.

The estimation is that Rs. 200 crores has been plundered by the Organizing
Committee in a very structured and well-planned manner. The investigations
discovered that the Rs. 700 crores investment was overpriced, and the actual
cost of investment would never go beyond Rs. 500 crores.

Ethical Issues

The Chairman of the Organizing Committee, Mr. Suresh Kalmadi, is involved

in all manipulations of funds and misappropriation of deals.

Four major construction companies were involved in the case:

 Nussli of Switserland
 GL Events of Meroform Consortium
 ESA JV Indo Consortium
 PICO-Deepali Overlays Consortium

The CVC also discovered that fake certificates were submitted during the
bidding process resulting in substandard work and materials. This has led to
massive gains for the vendors and contractors.

The Joint General Director of the CVC OC, R K Scheti, was also found to
have deep involvement in the misuse of the government funds and abuse of
power at large. Scheti was involved in many allegations relating to approvals,
authorizations, ticket distributions, etc. The CVC was supposed to be the
check and balance.

VI. Strategic Alternatives

Given that the Organizing Committee and the Central Vigilance Commission
are already involved in the manipulation of the government funds, and the
check and balance are already compromised, below are other strategic ways
to prevent corruption:
 Budget Transparency
Similar to government-funded projects in the Philippines, the public must have
access to the central government’s budget proposal and comparison of the
bidding contractors; this has two benefits:
 Additional preventive measures for corruption because the budgets are
accessible to the public’s scrutiny.
 The Organizing Committee will have a chance to explain the cost of
the materials, labor cost, shipping costs, and other factors affecting the
price.

Enlightened Citizens
The year 2010 was the beginning of smartphones. Enlightened citizens
armed with smartphones increase the demand for government transparency.
The enlightened citizens are very prevalent now in the Philippines, and the
government is constantly pressed by how they spend the government funds.
The enlightened citizens bear the danger of misinformation, but the benefit is
that the government are always on their toes.

Regular Audit
Considering the amount of the project, a regular audit – bi-annual or annual –
is a necessity. The public must have access to the audit findings.

VII. Analysis and Conclusion

To conclude this case study, I would like to emphasize that the main issue is
the manipulation of Management, misappropriation of funds, and unethical
deals. The bloating of costs is a clear sign of corruption by the Organizing
Committee and the Joint General Director of the CVC. However, only a few
people were penalized because the court failed to prove their involvement in
corruption; the inflated costs were not indicators of irregular transactions.

Given the failure to establish the proof of irregular transactions, we conclude

that there was no regular audit in the procurement and approval of materials
and awards.

The fake certifications of the contractors are another clear sign of irregularity
but not proof of corruption and acceptance of bribes. This has led us to the
conclusion that the check and balance system of the Organizing Committee is
already compromised.

VIII. Recommendation to Management

 The Management has to come up with long-term strategies and evidence-
based anti-corruption efforts. Here are the recommended measures:

Specific HR Policies about Acceptance of Bribe and Manipulation

The Labor Code protects the employees in the Philippines, and thus, the
Human resource has to come up with specific policies about the acceptance
of Bribe and Manipulation:
 A policy that an employee must refuse any forms of gifts – monetary or
in kind. In situations that an employee cannot refuse, the gift must be
surrendered to HR.
 Recording and approval of official business trips.
 Due process for the employee. HR must secure evidence before taking
any further action.

Annual or Bi-annual Audit Investigation

Assuming these are prepared correctly, the audit reports will prove evidence
against an employee suspected of accepting bribes and manipulation.

Develop and Foster a Culture of High Integrity

Organizational development training tremendously helps in developing a
culture of competent and honest employees. The leaders of the organization
play an important role. Research shows that the transformational leadership
style motivates employees to do great in the office.

References

Mungiu-Pippidi, A. (2018). Seven Steps to Control of Corruption: The Road Map.

American Academy of Arts & Sciences.

https://www.amacad.org/publication/seven-steps-control-corruption-road-map
Gupta, A. (2018). A Case Study on Corporate Governance & Business Ethics

Commonwealth Games 2010 Management of Manipulation. Published.

Vahid, T. (2010). Dissertation submitted for BA Hons, International Development: The

Third World with NGO Management. Published.