ETHICAL ISSUES IN MANAGEMENT

REPORT ON

ETHICAL ANALYSIS OF BYJU’S

SVKM NMIMS, Mumbai

Name SAP ID Roll

Vishwas Patel 80512100545 E004
Prem Sundar 80512100774 E014
Manoj Gali 80512100025 E024
Trishal Arora 80512100600 E034
Arnav Malhotra 80512100310 E054
Aashi 80512101015 E064

“We, the members of the Group Project, certify that the submitted written report is the original work of our
team and all the analysis and reporting text is entirely our own. Facts, figures and other relevant information
drawn from sources, where required, is duly acknowledged”.
 Relevance of ethics for the organization

Business ethics refer to the moral values and principles that a business abides by in its functions and
operations as a business entity. It reveals the values of the business and the people working in the company.
Byju’s, worlds most valuable educational technology company, is valued at 16.5 billion Dollars. Founded by
Byju Raveendran, Byju’s is used by 15 million students and has 900000 paying subscribers.

Byju’s is involved in education and therefore, the trust of students is paramount for not only its success but its
survival. When they choose an institute, they show trust in that organization. If a company in this sector
shows unethical behavior by cheating students, not providing promised services etc., it will get a negative
reputation. People join institutes based on word of mouth and the students wronged by the company will
discourage others from joining hence the revenue would trickle down.

If a company indulges in unethical behavior, it is seen that talented and ethical people will leave that
particular organization. Ethical, talented people won't be comfortable indulging in unethical behavior
therefore, in order to get and maintain a talented workforce, organizations must follow ethical behavior. In an
ed-tech company where the quality of education is paramount, an organization cannot afford to lose talented
teachers.

Reputation and brand image are important for a company. If a company indulges in unethical behavior and it
is revealed to the general public, it will be disastrous for its reputation and it will lose out to the competition.
Ethical behavior on the other hand, will lend a good brand reputation to a company and improve its
competitiveness. Furthermore, if the image of a company is compromised, investors, which provide such high
valuation to companies like Byju’s will back out and company will see its valuation falling down.

Accusations on the company

 Toxic work culture: Source
o The management aggressively monitors the sales numbers and employees have claimed that the
company is inhuman in terms of workload
o The interactions are abusive in nature, which was validated by our primary research interviewee.
o Here’s a link of one such instance, which shows both the kind of pressure that is built up and the
abusive environment
o Employees raised the issue of the company lacking an ethical HR structure
 Sales process: An immense emphasis is given on salesmen meeting their targets and showing the
“numbers”.
o Salesmen making false claims
 Primary research interviewee confirmed that the management is fine with the salesmen resorting
to any unethical means, like making exaggerated claims, playing with insecurity, lying about
own identity etc., to get customers
 Secondary research shows instances of salesmen claiming to be from IIT/NIT to build credibility
for JEE aspirants (Source - Quora). Once content is bought, pre-made videos are shared
  Even WhitehatJr video had gotten viral, where in one of the free trail classes it was evident that
the teacher was not answering the questions, and consistently persuaded the child to take the
course to get the answers. (Source – YouTube)
o Leveraging parents and children insecurity
 Salesmen convince parents that they need Byju, by playing with their fear that their child will be
left behind, or resort to a level of saying that the student is weak in studies and needs more
resources
 Forced to buy product instantly, by giving one-time deals, thus not giving sufficient time to think
before shelling out exorbitant money
 False claims on mass media ads
o One famous ad of Whitehat Jr. suggested that a 6-year-old kid was hired by Google, which came out to
be false.
o Pradeep Poonia is one of the few people who have been waging war against Byju for their false claims
 Dealing with customer complaints and issues post purchase
o Primary research interviewee confirmed that once purchase is made, the company extends customer
complaints, several of which are still unaddressed. In the name of doubt clearing, the students are
provided with helpline numbers which have 20-30 minutes of waiting time
o There is a 15-day refund policy which they try to extend as much as possible
 Taking down negative comments from websites
o Byju has consistently been taking down customer complaints and negative reviews over platforms like
play store, YouTube, Quora, which suggest their method of handline criticism and also the amount of
abuse of power they are doing

Morals of the organization

Commitment to excellence – Providing good quality content for all school ed-products and enhance learning.
Giving top notch content structured by experts in their respective fields with plethora of experience.

Responsibility – Making the product digital has enabled students to use it even from villages and emote towns,
this has bridged the gap for students from unfavourable locations. The sales and marketing team makes sure
that their products are reaching even to the remotest villages.
Being the sole big player as of today, they are highly responsible to maintain the quality of content provided
and also making sure it is provided to all, they also run programs where in they are funding to the needs of
underprivileged kids.

Credibility – To sustain growth and stay relevant and trustable in long term, one crucial factor in determining
an organization's existence is the extent to which it is seen as a trustworthy and reliable source of messages.
As an organisation Byju’s establishes credibility via experienced and passionate teachers, this increases the
trust in minds of parents.
Caring – Being an ed-tech firm, they also work on social initiatives such as ‘Education for All’ programs.
Believe in bringing positive change – Education can change a person individually and also the society as a
whole, providing good education and equal access to all is definitely a big step ahead for a better society.
They believe that society betters if changes occur at the root and i.e., at the school level education majorly
where they are providing their services primarily.

Stakeholders and ethics

The stakeholders for Byju's are employees, customers and investors.
Since the company has commitment to excellence, it is beneficial to all the stakeholders. For customers this
means getting quality content for their children and this means more sales for Byju’s which is a positive sign
for both employees and investors. Higher sales lead to better compensation and salaries for the employees and
this also leads to higher market share for the company which provides higher return on investment for the
investors and they are motivated to keep investing.
By taking responsibility to make quality education accessible to every part of the country, customers are the
ones who are benefitted the most as they don’t have to worry about getting quality education from only
certain cities of the country. This is also leads to market penetration in Tier 2 and Tier 3 cities and hence
profitable for the investors.
The company also believes in having credible and passionate teachers because this establishes the trust in
parents that their children are being taught by good teachers. Similarly, the CSR initiative of ‘Education for
All’ also gives positive reputation to the company. A good trust factor leads to good reputation for
organization and this also boosts employees and investors' confidence in the company.

Ethical Violations and risks

Ethical Theories that organization violated

1. Deontology – Sales practices in Byju are not regulated and the pressure of performance leads to
salesmen resorting to false claims just to boost their sales figures. Although most are subtle lies, the
dishonesty directly violates the ethical principle of Deontology
2. Virtue ethics and Integrity
 Taking advantage of parent's insecurity in a country like India where proper education is a
major concern for parents, and reinforcing their insecurity during sales pitch questions the
virtue ethics of the salesmen as well as the management who’s not discouraging the behavior
 False claims made in advertisements, misusing the post purchase refund policy again are unfair
trade practices by Byju and does not follow the fundamental principal of Integrity
3. Employees right: Employees should be treated properly by the organization and the company should
address the concerns. Toxic work culture and unethical leadership at management level, who puts
immense pressure on just final result, disrespects the employees' rights to be treated fairly.

Impact of Ethical Violation on stakeholders

1. Employees
  Byju’s work culture has been on talks for quite some time and this could lead to a higher
attrition rate and also directly impacts talent recruitment
 The treatment led to a feeling of resentment, and these employees don’t hesitate to expose the
negative aspects of the organization
2. Customers
 Although the offerings by Byju are innovative and can actually help students grow, the
company is known more for the unethical aspects, and consumer perception and trust are
directly impacted by this.
3. Investors
 The company currently has a solid backing of investors based on market growth potential
present in the market. But the continuation of unfair practices can result in reduced investor
options as many won’t like to be associated with a brand with a negative image

Organization and Ethics

To arrest the unethical practices and poor employee treatment, Byju's management has taken the following
steps.
HR policies:
They started firing the managers who were aggressive towards the employees. The calls between staff and
managers were tracked and recorded—hiring more HR professionals to help the employees and emphasizing
the 'humane' aspect of HR. New HR initiatives to developed employee connections and arrest the attrition
rate. HR also now is being integrated into the business strategy, thus improving employee and customer
satisfaction.
Employee tracking:
One of the unethical policies adopted by employees is blatantly lying to the customers to make a sale. Byju's
developed a tool that tracks keywords during a call between the salesperson and a consumer. A full-fledged
17-member audit team who track the calls and check for these misselling deeds. Calls flagged with misleading
ideas be audited. They made "Misselling" a friable offense.
Darwin Box:
Employees use an employee-led HR tool to log in and out following a shift policy, giving the confidence of
not being tracked. This also provides an anonymous platform where employees can complain to HR
professionals. This initiative led to many abusive managers being punished, and employees had a stage to
voice their concerns.

BYJU'S Let's Talk:

"Let's Talk" is an employee wellness initiative undertaken by Byju's, which provides employees with 24*7
one-one online counseling sessions to help the employees under stress, conducting a workshop to stay
motivated, positive, and aligned with the company's vision. This is the first initiative taken as the employee
first, keeping the employees in mind and helping them become more stable and make use of the wellness
resources and talk to the selected therapists of their choice

Conclusion
Byju is an innovative ed-tech startup, but the aggressive sales strategy and work-culture makes it seem like a
sales company instead. These strategies might be a major reason for the exponential growth of the company,
but the costs of obtaining are high. Organizations are routing towards an inclusive and collaborative work-
culture, Byju isn’t, which could be detrimental in a long run, when the market saturates or there are larger
competitors. An organization needs to have an inclusive culture where it takes care of its employees and
customers and that would be a major factor for staying as market leader

References:
 https://hr.economictimes.indiatimes.com/news/workplace-4-0/recruitment/byjus-to-hire-around-8000-
people-across-business-content-product-development-roles/80330622
 https://inc42.com/infocus/covid19-tech-impact/startups-prioritise-employee-mental-health-amid-
second-covid-wave/
 https://inc42.com/buzz/whitehat-jr-drops-defamation-suit-against-pradeep-poonia/
 https://www.edexlive.com/news/2020/oct/10/byju-announces-lets-talk-initiative-for-employees-to-
access-one-on-one-counselling-15137.html
 https://anchor.fm/startup-operator/episodes/Roundup-13---Darwinbox--PhonePe--Pinelabs--Byjus-
and-more-eq28oh
 https://qz.com/india/1968727/founder-karan-bajaj-on-whitehat-jr-ads-toxic-work-culture-claims/
 https://blogs.tuni.fi/leadershipforchange/general/770/#:~:text=Ethical%20Theories%20and%20Moral
%20Practice%20in%20Organisations&text=The%20key%20ethical%20theories%20and,virtue
%20ethics%2C%20and%20postmodern%20view.&text=Deontology%20is%20an%20ethical
%20theory,to%20differentiate%20right%20from%20wrong.
 https://startuptalky.com/byjus-work-culture/
 https://qr.ae/pGUtK8

Exhibits
Customers
Employees/Ex-employees

Plagiarism Report