Indian Ethos & Business Ethics

End Term paper

Submitted By: Kuntal Bajpayee

SAP ID: 80012100369

Roll N0: H079

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Answer 1.

Dharma is an important term in Indian religion. In Hinduism, it means "duty,"

"virtue," "morality," and even "religion," and refers to the power that supports
the universe and society. Hindus generally believe that the more common term for
"universal law" or "justice" is Rita, but Dharma was revealed in the Vedas. Daruma
is the power to sustain society, growing grass, shining the sun, making us moral
people, and rather giving humans the opportunity to act in good faith.

But acting in good faith does not mean exactly the same thing for everyone.
Different people have different obligations and obligations depending on their age,
gender, and social status. Daruma is universal, but it is also special and works in
specific situations. Therefore, each person has his own Dharma known as sva-
dharma. What is right for women may not be right for men, and what is right for
adults may not be so for children.

The importance of sva-dharma is well demonstrated by Bhagavad Gita This text

depicts the hero Arjuna riding his chariot, set before the massive battle of
Mahabharata and driven by his tanker Krishna among the large army. Warrior
Arjuna asks Krishna why she should fight in battle. Indeed, he asks that killing
relatives and teachers is wrong and refuses to fight.

Krishna assures him that this particular battle is correct, and he must fight as his
duty or as Dharma as a warrior. Arjuna's Sva Dharma was a warrior and was
supposed to take part in the battle, but he must fight within the rules of the warrior
Dharma, away from the consequences of his actions. Indeed, it is wrong not to act
according to your own law and is called Adharma.

The right thing to do according to the Daruma is also understood as a service to

mankind and God. The idea of what became known as Sanatana Dharma can be
traced back to prana (ancient text). Those who stick to this idea of their eternal law
and constitution insist on it.
Answer 2

Market Model : A market-based corporate governance system relies on investors

to exert influence on the management of the company. It defines the
responsibilities of the different participants in the company,
including shareholders, the board of directors, management, employees, suppliers,
and customers.They have the right to elect all the members of the Board and
the Board directs the management of the company. Some of the features of this
model are:

This is shareholder oriented model. It is also called Anglo-Saxon approach to

corporate governance being the basis of corporate governance in Britain, Canada,
America, Australia and Common Wealth Countries including India

Directors are rarely independent of management

Companies are run by professional managers who have negligible ownership stake.
There is clear separation of ownership and management.

Institution investors like banks and mutual funds are portfolio investors. When
they are not satisfied with the company’s performance they simple sell their shares
in market and quit.

The disclosure norms are comprehensive and rules against the insider trading are
tight

The small investors are protected and large investors are discouraged to take active
role in corporate governance.

Market-based corporate governance systems place the responsibility of corporate

management on investors.

A market-based corporate governance system relies on capital markets to

influence the management of the company.

Market-based corporate governance systems benefit from their ability to respond

dynamically to changes.
Issues with market-based governance systems include short-termism and the
potential of index funds to undermine accountability.

Control Model: Social Control Model of corporate governance argues for full-
fledged stakeholder representation in the board. According to this model, creation
of Stakeholders Board over and above the shareholders determined Board of
Directors would improve the internal control systems of the corporate governance.
The Stakeholders Board consists of representation from shareholders, employees,
major consumers, major suppliers, lenders etc. companies raise significant part of
capital through banking and other financial institutions. Since the banks and other
institutions stakes are very high in businesses, they also work closely with the
management of the company. The shareholders and main banks together appoint
the Board of Directors and the President. In this model, along with the
shareholders, the interest of lenders is recognised.
We will suggest control model to company, Corporate Governance in India
plays a key role in protecting valuations of a company because the ultimate goal
of good governance is to maximise the interest of all stakeholders. The value
accumulated by the company over the years can be wiped away by a single
unlawful incident, thus internal controls at the right place is mandatory.
Answer 3

Many large-scale corporate fraud occurred between 2000 and 2002, including
scandals by Enron, WorldCom, and Global Communications. The shortcomings of
Arthur Andersen and Tyco International include inadequate accounting controls,
weak corporate governance systems, conflicts of interest for stock analysts, lack of
independence of auditors, inadequate disclosure regulations, and serious SEC
funding. These accounting scandals caused billions of dollars in losses and
damaged investors’ confidence in the authenticity of the company’s financial
statements.

All of these occurrences prompted the passage of this legislation, which intends to
close accounting loopholes, improve corporate governance regulations, raise
company responsibility and disclosure duties, and compel corporate openness in
shareholder reporting and financial transaction descriptions. It also resulted in the
establishment of the Public Company Accounting Oversight Board, a new quasi-
public institution tasked with regulating and monitoring business activity,
particularly in the accounting and auditing industries. The bill's sponsors, US
Senator Paul Sarbanes and US Representative Michael G. Oxley were given the
name Sarbanes-Oxley Act.

he act was named for its sponsors: U.S. Sen. Paul Sarbanes and U.S. Rep. Michael
Oxley. Thus the act came to be known as Sarbanes – Oxley Act, 2002.

The Sarbanes-Oxley Act of 2002 was created in response to widespread corporate

fraud and failures. The act implemented new rules for corporations, such as setting
new auditor standards to reduce conflicts of interest and transferring responsibility
for the complete and accurate handling of financial reports. To discourage fraud
and misappropriation of corporate assets, the act imposes harsher penalties for
violators. To increase transparency, the act enhanced disclosure requirements, such
as disclosing material off-balance sheet arrangements. If a corporation fails to
comply with this statute, it could face fines of up to $1 million if done accidentally
and S5 million if done on purpose, as well as unfavorable publicity and lawsuits.
This behavior resulted in a plethora of unexpected benefits. By combining all of
the employees' ethical values and requiring them to follow the proper processes, it
improved the control environment. Participation in the audit committee has
increased, and documentation has improved. The executives were able to assist in
the exploration of convergence opportunities when they faithfully executed SOX
regulations at the lowest cost and with the fewest resources available. This measure
also aided in the standardization of procedures and the simplification of the
process. As a result of the fear of heavy fines, there has been a reduction in human
error as well as an increase in corporate transparency.In a nutshell, the legislation
aided in the protection of investors by strengthening the accuracy and
trustworthiness of company disclosures made in accordance with securities
regulations, among other things.

Sarbanes – Oxley Act, 2002

Named after ( Paul Sarbanes Senate member and U.S. Representative Michael G.
Oxley)

Came into in USA for addressing all the issues associated with corporate failures
and to achieve quality governance to restore investor’s confidence.

The Act created a new board consisting of five member of whom two will be
certified public accountants. All accounting firms will have to register with the
board and submit particulars of fees received from public company clients for audit
and non-audit services, financial information about the firm, list of firm’s staff who
participate in audit, quality control policies, information on civil, criminal and
disciplinary proceedings against the firm or any staff member.

The board will conduct annual inspections of firms, which audit more than 100
public companies, and once in 3 years in other cases. The board will establish
rules governing audit quality control, ethics, independence and other
standards.Securities and Exchange Commission (SEC) Committee suggested
Sarbanes

Example :

Enron, located in Houston, Texas, was considered one of a new breed of American
companies that participated in a variety of ventures related to energy. It bought and
sold gas and oil futures, built oil refineries and power plants, and became one of
the world's largest pulp and paper, gas, electricity, and communications companies
before it filed for bankruptcy in 2001.

Several years before Enron’s bankruptcy, the government had deregulated the oil
and gas industry to allow more competition, but deregulation also made it easier
for companies to act fraudulently. Enron, among other companies, took advantage
of this situation.

The various misdeeds and crimes that Enron's officers and employees committed
were extensive and ongoing. Particularly damaging misrepresentations produced
inflated earnings reports for shareholders, many of whom eventually suffered
devastating losses when the company failed. Many other instances of dishonesty
and fraud also occurred, including embezzlement of corporate funds by Enron
executives and illegal manip
Answer 4

Answer 4: a. Ethics is not synonymous with Religious sentiments

The relationship between religion and ethics is about the relationship between
revelation and reason. Religion is based in some measure on the idea that God
(or some deity) reveals insights about life and its true meaning. These insights
are collected in texts (the Bible, the Torah, the Koran, etc.) and presented as
“revelation.” Ethics, from a strictly humanistic perspective, is based on the
tenets of reason: Anything that is not rationally verifiable cannot be
considered justifiable.

From this perspective, ethical principles need not derive their authority from
religious doctrine. Instead, these principles are upheld for their value in promoting
independent and responsible individuals—people who are capable of making
decisions that maximize their own well-being while respecting the well-being of
others.

Even though religious and secular ethics don’t derive their authority from the same
source, we still must find a way to establish common ground between them;
otherwise we’re condemning ourselves to live amidst social discord and division. It
is believed that we can accommodate the requirements of reason and religion by
developing certain qualities that we would bring to our everyday ethical
discussions.

When academics talk about ethics, they are typically referring to decisions
about right and wrong. As noted above, the study of ethical behaviour goes back
thousands of years to ancient Greece. Ethics are a branch of philosophy that
investigates questions such as “What is good and what is bad?” “Is it just to reward
one group with more benefits than another?” “What action should an individual or
organization take if a client mistreats him/her/it?” In practice, ethics are decision-
making tools that try to guide questions of human morality, by defining concepts
such as good and bad, right and wrong, virtue and vice, justice and crime, etc.

Often, religion and ethics are treated as the same thing, with various religions
making claims about their belief systems being the best way for people to live,
actively proselytizing and trying to convert unbelievers, trying to legislate public
behaviours based around isolated religious passages, etc. Of course, not all
religions are the same, some are more liberal than others and some more
conservative, but in general, all religious traditions believe that their faith
represents a path to enlightenment and salvation.

By contrast, ethics are universal decision-making tools that may be used by a

person of any religious persuasion, including atheists. While religion makes claims
about cosmology, social behavior, and the “proper” treatment of others, etc.

Ethics are based on logic and reason rather than tradition or injunction. As Burke
suggests of the “hortatory Negative” of the “Thou Shalt Not’s” found in many
religious traditions that tell people how to behave by “moralizing," ethics include
no such moralizing.

If something is bad, ethics tells us we should not do it, if something is good,

obviously there is no harm in doing it. The tricky part of life, and the reason that
we need ethics, is that what is good and bad in life are often complicated by our
personal circumstances, culture, finances, ethnicity, gender, age, time, experience,
personal beliefs, and other variables.

Often the path that looks most desirable will have negative consequences, while
the path that looks the most perilous for an individual or organization will often
result in doing the best for others. Doing what is “right” is a lot harder than doing
what is expedient or convenient.

Aristotle said that cultivating qualities (he called them “virtues”) like prudence,
reason, accommodation, compromise, moderation, wisdom, honesty, and
truthfulness, among others, would enable us all to enter the discussions and
conflicts between religion and ethics—where differences exist—with a measure of
moderation and agreement. When ethics and religion collide, nobody wins; when
religion and ethics find room for robust discussion and agreement, we maximize
the prospects for constructive choices in our society
Answer 4: b. Ethics is different from individual Feelings

Individual feelings is a category of philosophy defining a person's codes of conduct

or his/her beliefs about what is right or wrong. More notably, individual feelings
deals with moral factors shaping an individual's conscience such as honesty,
commitment, integrity, accountability and so on. On the other hand, Ethics in
general refers to the combination of individual and organizational rules
dominating the individuals' behavior within a specific profession. It is suggested
that individual ethics/ fellings are developed from childhood and the individual's
background and socialization process have a great bearing on its development
,whereas Ethics are those guidelines imposed on the working staff within a given
corporate context. Although we might not like to admit it, the two types of ethics
under scrutiny are different in important ways. For one thing, an individual has the
right to alter and/or modify his/her individual ethics, but is not able to change the
ethical values established by the job standards . Another thing is that values like
commitment and accountability overlap in the job context and they are no more
individual. On this basis, it can be stated that individual and job ethics may
experience conflicting situations where organizational and individual values differ
in sensitive ways.

Ethics is different from Feelings:

Generally, our ethical choices are based on our feelings.Most of us feel bad when
we indulge in something wrong. But criminals may feel good even when they do
something bad. People when indulge in doing something wrong for the first time,
may feel bad, but if they find it to be beneficial or if it leads to pleasure, they may
make it a habit without feeling any remorse. (repentance/guilt).

Ethics is also not solely the purview of a religion or religious beliefs. Although
most religions incorporate an ethical code of conduct into their belief system,
religious faith is not required to be ethical and ethical principles apply to everyone
regardless of religious affiliation.

Example :

1.Being ethical does not always entail abiding by the letter of the law, although
most laws articulate ethical standards generally accepted by the citizenry. Martin
Luther King, Jr. employed nonviolent civil disobedience in the 1950’s and 1960’s
to defy discriminatory, segregationist legislation and advance the cause of civil
rights in the United States. King patterned his actions on the social protest
movement Ghandi led in South Africa in the 1890’s.

2.If someone start giving bribe to the higher official , he may feel guilty for the
first time , but after seeing the ease of work done , he might make it as a habit ,
Here his priority is to make the work done in time but his values are conflicting
between the organizational values and individual values.

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