Acf - Beip. Chapter 2

Two
CHAPTER
Concepts and Theories of

Business Ethics
INTRODUCTION
We have already seen in the introductory chapter that the word ethics is derived from the Greek word ethikos
meaning character or custom. Today we use the word ethos in a different connotation meaning a characteris-
tic, or attitude of a group of people, culture and so on. When we talk of ‘business ethos’, we mean the atti-
tude, culture and the manner of doing business of the business community. Philosophers generally distinguish
‘ethics’ from ‘morality’. To them while ‘morality’ refers to human conduct and values, ‘ethics’ refers to the
study of human character or behaviour in relation to moral values, that is, the study of what is morally right
or morally wrong. In ordinary parlance, however, people use these expressions interchangeably. When we say
something was done ‘ethically’ or ‘morally’, we mean that things were done correctly.
DEFINITIONS OF ETHICS
Ethics is a branch of axiology which together with metaphysics, logic and epistemology constitutes philoso-
phy. Ethics attempts to find out the nature of morality, and to define and distinguish what is right from what
is wrong. Ethics is also called moral philosophy. Ethics according to Manuel G. Velasquez ‘is a study of moral
standards whose explicit purpose is to determine as far as possible whether a given moral standard (or moral
judgement based on that standard) is more or less correct’.1 Many ethicists assert that there is always a right
thing to do based on moral principle, while others subscribe to the broader view that the right thing to do
depends on the situation. To many philosophers, ethics is just a ‘science of conduct’. Epicurus, the philoso-
pher, defined ethics as a science that ‘Deals with things to be sought and things to be avoided with ways of
life and with telos’, which means the chief aim or end in life.2
Like one of its later-day offshoots, economics, ethics is also imprecise, as it deals with human behaviour
that cannot be placed into a straitjacket. It is said that when there are five economists, there will be six differ-
ent opinions. Likewise, philosophers have been discussing ethics at least for more than 2,500 years—since
the time of Socrates and Plato, but they have not been able to arrive at an acceptable definition. Moreover, the
area of study encompassing ethics is vast and covers the length and breadth of human behaviour, and that
makes it far more difficult to comprehend.
Many ethicists prefer to call ethics as the study and philosophy of human conduct, with an emphasis on deter-
philosophy’, ‘moral principles’, ‘rules of conduct’, etc., the definition of The American Heritage Dictionary is
mining right and wrong. While most dictionaries define ethics as the science of ‘morals in human conduct’, ‘moral
more focused: ‘The study of the general nature of morals and of specific moral choices; moral philosophy; and
30 BUSINESS ETHICS—AN INDIAN PERSPECTIVE
the rules or standards governing the conduct of the members of a profession.’3 According to Ferrel et al.,4 ‘Values
and judgements play a critical role when we make ethical decisions’ as compared to ordinary decisions.
In sum, ethics as a moral and normative science refers to principles that define human behaviour as right,
good and proper. However, it should be stressed that these principles do not lead to a single course of action,
but offer a means of evaluating and deciding among competing options.
PERSONAL ETHICS AND BUSINESS ETHICS

Personal ethics refer to the set of moral values that form the character and conduct of a person. Organization
ethics, on the other hand, describes what constitutes right and wrong or good and bad, in human conduct in
the context of an organization. It is concerned with the issue of morality that arises in any situation where
employers and employees come together for the specific purpose of producing commodities or rendering serv-
ices for the purpose of making a profit. An organization can be described as a group of people who work
together with a view to achieving a common objective, which may be to offer a product or service for a profit.
Organization ethics, therefore, deals with moral issues and dilemmas organizations face both in business and
non-business settings that include academic, social and legal entities.
MORALITY AND LAW

Philosopher James Rachels suggests two criteria fulfilling a minimum conception of morality—reason and impar-
tiality. By the use of reason, Rachels means that a moral decision must be based on reasons acceptable to other
rational persons. The criterion of impartiality is fulfilled when the interests of all those affected by a moral deci-
sion are taken into account, with of course, the recognition of finite knowledge of the repercussions of any ethi-
cal decision. Following Rachels, then, any legitimate moral theory must meet the tests of reason and impartiality.
People often tend to confuse legal and moral issues. These are two different things. Breaking an unjust law is not
necessarily immoral. Gandhiji during his Dandi Yatra broke the law the British made in India to the effect that
one who produced salt would have to pay a tax. His civil disobedience movement also was meant to disobey or
even to break the British-made law. By no stretch of imagination, these acts of the Father of the Nation could be
William Shaw in his book Business Ethics brings to focus two contexts to illustrate this situation5:
considered immoral. Likewise, the legality of an action could not automatically be considered morally right.
1. An action can be illegal, but morally right. For instance, during the freedom struggle many wanted free-
dom fighters (criminals according to the colonial rulers) had hidden themselves in the houses of patri-
otic Indians to save themselves from prosecution and imprisonment. Though this was against the British
law in India, this patriotic deed of freedom-loving Indians was no doubt an admirably brave and moral
2. An action that is legal can be morally wrong. For instance, a profit-earning company anxious to retain its
action.
top brass may sack hundreds of its workers to save enough money to pay the former with a view to get-
ting their guidance and managerial expertise. This act may be perfectly legal but morally unjustified.
Then, how do we understand the relationship between law and morality? Generally, law codifies a nation’s
ideals, norms, customs and moral values. However, changes in law can take place to reflect the conditions of
the time in which they are enunciated. For instance, during the British rule in India, several laws were enacted
that benefited the colonial power and its maintenance, and militated against the interests of natives. To keep
those laws even after independence would not only be unanachronistic but also totally out of place. Moreover,
even if a nation’s laws are both sensible and morally sound, they may be insufficient to establish moral stan-
dards to guide the people. The law cannot cover the wide variety of possible individual and group behaviour
and in many situations is an inadequate tool to provide moral guidance.6
There is thus a clear-cut difference between law and morality. In a particular situation, an act can be legal but
will not be morally right. For example, it will be legal for an organization which is running in loss to lay off a
few employees so as to exist in the business situation. But it is not morally right to do so, because the employees
will find it difficult to find a living. On the other hand, an action performed can be illegal but morally right. For
example, during the second World War, in Hitler’s Germany it was illegal to help Jewish family to hide from the
Nazis, but it was a morally admirable act.
In the organization too, we will find such situations where an act will be morally right and legally wrong
to perform. The strong ethical base of the individual as well as of the organization would come to the rescue
CONCEPTS AND THEORIES OF BUSINESS ETHICS 31
of that situation. The law cannot cover the wide variety of possible individual and group conduct. Instead, it
prohibits actions that are against the moral standards of the society.
HOW ARE MORAL STANDARDS FORMED?

There are some moral standards that many of us share in our conduct in society. These moral standards are influ-
enced by a variety of factors such as the moral principles we accept as part of our upbringing, values passed on
to us through heritage and legacy, the religious values that we have imbibed from childhood, the values that
were showcased during the period of our education, the behaviour pattern of those who are around us, the explicit
and implicit standards of our culture, our life experiences and more importantly, our critical reflections on these
experiences. Moral standards concern behaviour which is very closely linked to human well-being. These stan-
dards also take priority over non-moral standards, including one’s self-interest. The soundness or otherwise of
these, of course, depends on the adequacy of the reasons that support or justify them.
RELIGION AND MORALITY

Many people believe that morality emanates from religion, which provides its followers its own set of moral
instructions, beliefs, values, traditions and commitments. If we take Christianity as an illustration, it offers its
believers a view that they are unique creatures of Divine Intervention ‘that has endowed them with con-
sciousness and ability to love’. They are finite and bound to earth, and having been born morally flawed with
the original sin, they are prone to wrongdoing. But by atoning for their sins, they can transcend nature, and
after death, become immortal.7 One’s purpose in being born in this sinful world is to serve and love one’s
Creator. For the Christian, the way to do this is to emulate the life and example of Jesus Christ who was the
very embodiment of love and sacrifice. What greater love and sacrifice there can be than to lay down one’s
own life for the sake of those whom you love? Christians find an expression of love in the life of Christ who
died on the Cross to atone for the sins of mankind whom He loved abundantly. Their expression of this love
is shown when they perform selfless acts to help even strangers in distress, develop a keen social conscience,
and is therefore made intrinsically worthwhile. Service to fellow human beings is an inalienable part of the
Christian virtue. Has not Jesus enjoined His followers: ‘Whatever you do to the least of my brethren, that you
do unto Me?’ The life of Mother Teresa epitomized this basic Christian virtue of love that found expression
in her selfless service to the lepers, the hungry and those afflicted with serious and terminal diseases. This
commitment of love towards one’s fellow human beings hones the Christian sense of responsibility not only
to his family but also to the wider community.
Unlike in Christianity where most of the moral principles are drawn from the teachings of Christ who
also provided the interpretations for the Ten Commandments and other moral standards gleaned from the
Old Testament, Hinduism, the major religion in India, does not provide one acceptable source of moral stan-
dards. The Hindu view of moral standards is drawn from a large and bottomless cauldron that contains val-
the Ramayana, Mahabharata, Bhagavad Gita, Panchatantra, Naganantham and the Jataka tales. One of
ues accrued from various religious beliefs. The Hindu moral standards are exemplified in works such as
ory of Karma, the doctrine of the soul and the doctrine of mukti (freedom).8 Almost all the Hindu religious
the common fundamental areas of agreement which can be called the Indian religious tradition is the the-
traditions agree in the belief that a person’s actions leave behind some sort of potency which provide the
commensurate power to ordain joy or sorrow in the person’s future birth. When the fruits of action are such
that they cannot be enjoyed in the present life, it is believed that the benefits for righteous deeds or penal-
ties for wrong doing will be reaped in the person’s next birth, as a human or any other being. It is also
believed that the unseen potency of the action generally requires some time before it could give the doer
the merited enjoyment of benefit or punishment. These would accrue and set the basis for enjoyment and
suffering for the doer in the person’s next life. Only the extreme fruits of those good or bad actions can be
reaped in the person’s present life. 9 The nature of a person’s next birth is determined by the pleasant or
Bhagawad Gita also underlines the fact that a person has a choice in action, but never in its outcome. The
painful experiences that have been made ready for that person by the maturing actions in this life. The
results are determined the moment the action is carried out—the fruits thereof cannot be avoided, and in
any case, are not under the control of human beings. Therefore, people should concentrate on their actions
without worrying about the results they will bring.
All Hindu religious thinking leads to the general principles of ethical conduct that must be followed for the
attainment of salvation. Controlling all passions, no injury to life in any form, and a check on all desires for pleas-
ures, are principles which are acknowledged universally in all Hindu traditions and beliefs. The Indian religious
Thiruvalluvar, through his magnum opus, Thirukkural, has provided ethical prescriptions for the overall well-
philosophy drawn from the Hindu ethos and tenets provide a rich tapestry for ethical theories. The Hindu sage
being of people. Anyone who reads the following couplet will understand its pithiness and eloquence: That con-
duct is virtue which is free from these four things: malice, desire, anger and bitter speech.10
Religion, therefore, provides not only a formal system of worship, but also a prescription for social inter-
course. William H. Shaw quotes the most celebrated religious mandate which is found in almost all major reli-
gions of the world: ‘Do unto others as you would have them do unto you.’ Termed the ‘Golden Rule’, this
injunction epitomizes one of mankind’s highest moral ideals. But then, though religious ideals, teachings and
thoughts provide a platform for enunciation of what constitutes moral behaviour and are always inspiring,
these are very general and can hardly provide guidelines for precise policy injunctions. Nonetheless, religious
organizations do take positions and articulate their stands on specific issues on such diverse fields of human
endeavour as politics, education, economy, administration and medicine. They also help mould public opin-
ion on such important national social issues as abortion, euthanasia, homosexual relations, and international
issues as nuclear weapons and developmental assistance to poor countries to fight poverty, HIV etc. The Roman
Catholic Church has a rich tradition of trying to translate its core values to the moral aspects of industrial rela-
pastoral letters such as Pope Leo XIII’s Rerum Novarum (1891) and Pope John Paul II’s encyclical Contesimus
tions. Several Popes in the 20th century had spread the Catholic religious ideals through their encyclicals and
Annus (1991). Likewise, the Catholic Bishops’ Conferences in many major countries issue pastoral letters to
their flock and take stands on important socioeconomic and even political issues.
MORALITY, ETIQUETTE AND PROFESSIONAL CODES

It is also necessary to understand the differences between morality and etiquette, and morality and law. While
morality is the moral code of an individual or of a society, etiquette is a set of rules for well-mannered behav-
iour. Etiquette is an unwritten code or rules of social or professional behaviour such as medical etiquette.
Morality can be also differentiated from law which consists of statutes, regulations, common law and consti-
tutional law. Morality is different from professional codes of ethics which are special rules governing the mem-
bers of a profession, say of doctors, lawyers and so on. Morality is not necessarily based on religion as many
people think. Although we draw our moral beliefs from many sources, for ethicists the issue is whether these
beliefs can be justified.
When people work in organizations, several aspects of corporate structures and functions tend to under-
mine a person’s moral responsibility. Organizational norms, group commitment to certain goals, pressure to
conform and the diffusion of responsibility can all make the exercise of personal integrity in the context of an
organization difficult. Moral principles provide confirmatory standard for moral judgements. This process,
however, is not mechanical. Principles provide a conceptual framework that guides people in making moral
decisions. Careful thoughts and reflection with an open mind are very necessary to work from one’s moral
principle to make a moral judgement. A person can hold a moral or ethical belief only after going through a
process of ‘a conscientious effort to be conceptually clear, to acquire all relevant information, and to think
rationally, impartially and dispassionately about the belief and its implications’.11
MANAGEMENT AND ETHICS

Management of any business involves hundreds of decisions. Ethical issues occur in all decision making
processes. Conflicts and ethical dilemmas are part and parcel of such processes. There arises a continuous
conflict between the goals of an organization and various issues relating to its day-to-day management. The
success of any business organization is measured by revenues, profits, cost-cutting, quality, quantity, effi-
ciency, and so on. These objectives of the organization may run in direct conflict with its social commitment
which is measured in terms of obligations to stakeholders, both within and outside the organization. For
instance, cost-cutting may be used as a tool to enhance revenue and profit. In the process of realizing this
objective, the company may have to lay off some workers. This creates a conflict between the organizational
goal and the business units’ obligation to the stakeholders, in this case, the discharged workers. These issues,
of course, will differ from organization to organization, people to people and the problems and issues thrown
up in each case may lend themselves to different interpretations. For its own survival, it is necessary that the
organization should maintain its competitive edge in the market. It should produce useful, safe, and quality
products and services at affordable prices. While doing so, the organization should ensure that the interests of
the stakeholders are not adversely impacted. This requires a fine balancing act on the part of the organization.
The dilemmas and conflicts that managements encounter during decision making processes and their obli-
gations to stakeholders require a balancing act, involve analytical approach, and sound decision making in
view of the fact that each of such decisions has its own rewards and penalties. Some of these decisions may
agers may be prompted to resort to deception, or suppressio veri, suggestio falsi (suppressing truth, suggest-
have an impact on the health and safety of consumers. Sometimes, in order to push the sales of products, man-
ing falsehood). This creates a conflict of interest for them between their obligation to their organization and
their obligation to consumers and other stakeholders. The business managers need to recognize the impact of
their decisions and actions on their own organization and the community at large. A clear understanding of
the moral consequences of their decisions and the manner of implementing them on all stakeholders is required
at all levels in the organization. This may not be as simple as it sounds, because not all ethical questions have
simple ‘yes’ and ‘no’ answers. ‘In practice, the ethical questions have many alternatives with different prob-
abilities of occurrence and have different impacts on stakeholders. Each set of choices will have different eco-
nomic and social consequences and may lead to further decision points.’12
NORMATIVE THEORIES
Ethics is a normative study, that is, an investigation that attempts to reach normative conclusions. It aims to arrive
at conclusions about what things are good or bad, or what actions are right or wrong. In other words, a normative
theory aims to discover what should be, and would include sentences such as ‘companies should follow corporate
governance standards’ or ‘managers ought to act in a manner to avoid conflicts of interests’. This is the study of
moral standards which are correct or supported by the best reasons, and so ‘attempts to reach conclusions about
moral rights and wrong, and moral good and evil’.13 For instance, the stakeholder theory has a ‘normative’ thrust
and is closely linked to the way that corporations should be governed and the way that managers should act.
There are different normative perspectives and ethical principles that often contradict one another. There
are consequentialist and non-consequentialist normative theories (Fig. 2.1). In the organizational context, we
can identify the following ethical theories that have an impact on the manner in which ethics or the lack of it
could be identified in a business organization. These are, according to William H Shaw,14 the following:
Fig. 2.1
Classification of Normative
Theories
1. Egoism, both as an ethical theory and as a psychological theory.

2. Utilitarianism, the theory that a morally right action results in the greatest good to the largest number
of people.
4. Other non-consequentialist normative themes: duties, moral rights and prima facie principles.
3. Kant’s ethics, with his emphasis on moral motivation and respect for persons.
ETHICAL THEORIES IN RELATION TO BUSINESS

EGOISM
‘The view that associates morality with self-interest is referred to as egoism.’15 Therefore, it can be said that ego-
ism is an ethical theory that treats self-interest as the foundation of morality. Egoism contends that an act is
morally right if and only if it best promotes an agent’s (persons, groups or organizations) long-term interests.
Egoists make use of their self interest as the measuring rod of their actions. Normally, the tendency is to equate
egoism with individual personal interest, but it is equally identified with the interest of the organization or of
the society.
Decisions based on egoism mainly are intended to provide positive consequences to a given party’s inter-
est without considering the consequence to the other parties. Philosophers distinguish between two kinds
of egoism: personal and impersonal. The personalist theory argues that persons should pursue their long-
term interest, and should not dictate what others should do. Impersonal egoists argue that everyone should
follow their best long-term interest. It does not mean that an egoist will act against the interest of the soci-
ety. They may be able to safeguard their interest without hurting the interest of others. When an organiza-
tion performs or safeguards its interest without hurting the interest of others, then we can say that the
organization acts ethically.
PSYCHOLOGICAL EGOISM
Egoism asserts that the only moral obligation we have is to ourselves, though it does not openly suggest that
we should not render any help to others. However, we should act in the interests of others, if that is the only
way to promote our own self-interest.
Ethicists who propose the theory of egoism have tried ‘to derive their basic moral principle from the alleged
fact that humans are by nature selfish creatures’.16 According to these proponents of psychological egoism,
human beings are so made that they must behave selfishly. They assert that all actions of men are motivated
by self-interest and there is nothing like unselfish actions. To them, even the so-construed self-sacrificial act
like, say, whistle-blowing in an organization to bring to the notice of the top brass the unethical acts practised
down the line, or by top executives, is an attempt by the whistle-blower to either take revenge or become a
celebrity.
Criticism of the Theory of Psychological Egoism Though there are a few advocates of the theory of
egoism even today, one would hardly come across philosophers who would propose it as the basis for personal
or organizational morality. Generally, the theory is criticized on the following grounds:
1. Egoism as an ethical theory is not really a moral theory at all. Those who espouse egoism have very
subjective moral standard, for they want to be motivated by their own best interests, irrespective of the
nature of issues or circumstances. They never try to be objective, and everything is viewed subjectively
2. Psychological egoism is not a sound theory inasmuch as it assumes that all actions of men are moti-
based on whether it would promote their own self-interests or not.
vated by self interest. It ignores and undermines the human tendency to rise above personal safety as
proved in thousands of examples of personal sacrifices at times of calamities such as floods, earth-
3. Ethical egoism ignores blatant wrongdoings. By reducing every human act to self-interest and self-
quakes and other natural disasters.
serving, the theory does not take a clear stand against so many personal or organizational vices such
as corruption, bribery, pollution, gender and racial discrimination.
UTILITARIANISM: ETHICS OF WELFARE

There are two names associated with utilitarian philosophy; they are Jeremy Bentham (1748–1832) who is
generally considered the founder of traditional utilitarianism, and philosopher cum classical economist, John
Stuart Mill (1806–73). According to the utilitarian principle, a decision is ethical if it provides a greater net
utility than any other alternative decision. Bentham’s principle can be stated thus: ‘The seeking of pleasure
and avoidance of pain, that is, happiness, is the only right and universally desirable end of human action.’
Ethics is nothing else than the art of directing the actions of men so as to bring about the greatest possible
happiness to all those who are concerned with these actions. It is not merely the agent’s own happiness but
that of all concerned. Bentham viewed the interests of the community as simply the sum of the interests of its
members. Summarized, the utilitarian principle holds that ‘An action is right from an ethical point of view if
and only if the sum total of utilities produced by that act is greater than the sum total of utilities produced by
any other act the agent could have performed in its place’. The utilitarian principle assumes that we can some-
how measure and add the quantities of benefits generated by an action and deduct from it the measured quan-
tities of harm that act produced, and determine thereby which action produces the greatest total benefits or the
lowest total costs.17
When utilitarianism argues that the right action for a particular occasion is the one that produces more util-
ity than any other possible action, it does not mean that the right action is the one that produces most utility
for the person who performs the action. On the contrary, an action is right, as pointed by J. S. Mill, if it pro-
duces the most utility for all the persons affected by the action.18
When we try to analyse the utilitarian theory, there are certain inferences and implications of the theory
that we must take into account, as otherwise, we will get ourselves totally misled: (i) When utilitarians say
that practising the theory will lead to ‘the greatest happiness for the greatest number’, we should include the
unhappiness or pain that may be encountered along with the happiness; (ii) One’s actions will affect other peo-
ple in different degrees and thus will have different impacts; (iii) Since utilitarians assess actions with regard
to their consequences, which cause different results in diverse circumstances, anything might, in fact, be
morally right in some circumstances; (iv) Maximization of happiness is the objective of utilitarians not only
in the immediate situation, but in the long run as well; (v) Utilitarians agree that most of the time we do not
know what would be the future consequences of our actions; and (vi) Utilitarianism does not expect us to give
up our own pleasure while choosing among possible actions.
Utilitarianism fits in correctly with the intuitive criteria that people use when they discuss moral conduct.
For instance, when people have a moral obligation to perform some action, they will evaluate it on the basis of
the benefits or harms the action will bring upon human beings. The theory leads to the inevitable conclusion
that morality requires the agent to impartially take into account everyone’s interest equally. While assessing the
usefulness of utilitarianism in the organizational context it should be understood that it provides standards for
a policy action namely, if it promotes the welfare of all, more than any other alternative, then it is good. Second,
the theory provides an objective means of resolving conflicts of self interest with the action for common good.
Third, the theory provides a flexible, result-oriented approach to ethical or moral decision making.
One major problem with the utilitarian theory concerns the measurement of utility. Utility is a psycho-
logical concept and is highly subjective. It differs from person to person, place to place, and time to time.
Therefore, it cannot be the basis for a scientific theory.
A second problem concerns the intractability to measurement that arises while dealing with certain ben-
efits and costs. For example, how can one measure the value of life or health?
Another problem of the utilitarian theory concerns the lack of predictability of benefits and costs. If they
cannot be predicted, then they cannot be measured either.
The fourth problem concerns the lack of clarity in defining what constitutes ‘benefit’ and what constitutes
‘cost’. This lack of clarity creates problems, especially with respect to social issues that are given different
interpretations by different social or cultural groups.
KANTIANISM: ETHICS OF DUTY

Immanuel Kant (1724–1804) is regarded as the most important ethician in the rationalistic school in mod-
ern times. One of the basic principles of his ethics is his most famous ethical doctrine that a goodwill is the
only unqualified good. Kant said that for an action to be morally worth it should reflect a goodwill. By will
Kant meant the unique human capacity to act from principle. Contained in the notion of goodwill is the
concept of duty: only when we can act from duty does our action have moral worth. When we act only out
of feeling, inclination, or self-interest, our actions—although they may be otherwise identical with ones
that spring from the sense of duty—have no true moral worth.
Kant stressed that the action must be taken only for duty’s sake and not for some other reason. For Kant,
ethics is based on reason alone and not on human nature. In Kant’s perspective, the imperatives of morality
are not hypothetical but categorical. He says that the moral duty that binds us is unconditional. The core idea
of his categorical imperative is that an action is right if and only if we can will it to become a universal law of
conduct. This means that we must never perform an action unless we can consistently will that it can be fol-
lowed by everyone.
Organizational Importance of Kantian Philosophy Kantian theory of ethics has adequate relevance to
a business organization. Though there are lots of criticisms against Kantian ethics we would consider the positive
aspects of his ethics which would be beneficial in organizational decision making. The categorical imperative of
Kant gives us firm rules to follow in moral decision making for certain issues, because the result of such actions
does not depend on the circumstances or the performer. Lying is an example. No matter how much good may result
from the act, lying is always wrong. However, Thiruvalluvar has a different interpretation of the value of truthful-
ness. To him “Even falsehood has the nature of truth, if it confers a benefit that is free from fault’. (Ibid)
Kant introduces an important humanistic dimension to business decisions. In the ethical theories of egoism
and utilitarianism humans are considered means to achieve the ends. In the new economic scenario, human beings
are sidelined by technological growth and other developments. Kant gives more importance to individuals.
kartha is a must to make that action morally right. People in the organization perform certain actions which
For Kant, an action has moral worth only when it is done from a sense of duty. A normal motivation of the
are beneficial to them thinking that somehow it will be beneficial to the other. The Kantian principle of moti-
vation of a performer of action comes as a correcting instrument to the organization. This is very much rele-
vant for the organization when it takes decisions on ethical issues.
The two formulations of Kant are as follows:
1. To act only in ways that one would wish others to act when faced with the same circumstances; and
2. Always to treat other people with dignity and respect.
To sum up, to Kant, reason is the final authority for morality. Blind beliefs or rituals cannot be the foundation
for morality. He emphasized that the basics of ethics are those moral actions that are taken by a sense of duty
and dictated by reason.
SOME MORE NORMATIVE THEORIES OF BUSINESS ETHICS

There is a certain amount of confusion in defining business ethics as a field of study between the ethics the-
orists and those engaged in business. Business ethics is couched in abstract theory by academicians and
philosophers. They express their theories in bombastic language and convoluted expressions such as ‘deon-
tological requirements’, ‘hedonistic calculus’ and the like, which make no sense to ordinary businessmen who
are neither philosophically inclined nor trained in philosophy. Businessmen express themselves in ordinary
language and do not like to deal in abstractions. They are interested in solving the specific problems that con-
front them directly, rather than indulging in abstractions that look like a road to nowhere.
It is imperative, therefore, that the business ethicist should produce a set of ethical principles that are both
lucid and easy to comprehend for business folks, who can place them in the context of their day-to-day busi-
ness and see whether they have any practical relevance. The search for a down-to-earth theory has led to the
evolution of several normative theories that suit specific business environment. ‘A normative theory of busi-
ness ethics is an attempt to focus this general theory exclusively upon those aspects of human life that involve
business relationship.’19 In simple language, a normative theory is specifically meant to provide men with eth-
ical guidance when they carry on their day-to-day business.
Presently, there are three normative theories of business ethics that have evolved over a period of time.
They are (i) stockholder theory; (ii) stakeholder theory; and (iii) social contract theory (Fig. 2.2). Of these
three, the oldest and one that has fallen into disrepute with business ethicists in recent times is the stockholder
theory, though economists like Milton Friedman, following the footsteps of Adam Smith uphold the line of
thinking pursued by the promoters of the theory. To most of the critics, the stockholder theory is an unwar-
ranted hangover from the ‘bad old days of capitalism’. The next theory evolved was the stakeholder theory,
which, over the past three decades or so, has gained widespread acceptance among the business ethics com-
munity. However, in recent years, the social contract theory has emerged as a strong contender to the stake-
Fig. 2.2
Classification of Normative
Theories of Business Ethics
holder theory and occupies a pre-eminent position among the normative theories. It needs to be stressed here
that each of these three normative theories upholds a distinctly different model of a businessman’s ethical obli-
gations to society, and hence only one of them can be found to be correct. This, of course, will depend upon
the sensitivity of the analyst and the manner of his logical interpretation.
THE STOCKHOLDER THEORY

The stockholder theory, also known as the shareholder theory, expresses the business relationship between the
owners and their agents who are the managers running the day-to-day business of the company. As per the
theory, businesses are merely arrangements in which one group of people, namely, the shareholders advance
capital to another group namely, the managers to realize certain ends beneficial to them. In this arrangement,
managers (including the Board of Directors) act as agents for shareholders. The managers are empowered to
manage the capital advanced by the shareholders and are duty bound by their agency relationship to carry on
the business exclusively for the purpose outlined by their principals. This fiduciary relationship binds man-
agers not to spend the available resources on any activity without the authorization from their owners, regard-
less of any societal benefits that could be accrued by doing so. This obviously implies, as per this line of
thinking, that a business can have no social responsibilities.
According to the strict interpretation of the stockholder theory, managers have no option but to follow
the dictates of their masters. If the stockholders vote by a majority that their company should not produce
any obnoxious product—which in the perception of the managers would be a profitable business proposi-
tion—the managers still have to abide by the decision of the owners of the company. This may be a far-
fetched example, as shareholders who buy stocks of a company to maximize their return on investment may
not issue any such direction. There are companies that produce cigarettes, liquor, and pistols and make money
to maximize stockholders’ returns. In all such cases, stockholders seem to be happy with the high dividends
they get apart from an increase in market capitalization of their stock and therefore, there is no reason for
them to issue directions that negate the managers’ actions. The stockholder theory has been succinctly sum-
marized by economist Milton Friedman who asserted thus: ‘There is one and only one social responsibility
of business—to use its resources and engage in the activities designed to increase its profits so long as it
stays within the rules of the game, which is to stay engaged in open and free competition without deception
or fraud.’
give the managers a carte blanche to ignore ethical constraints in the single-minded pursuit of profit. The the-
A careful reading of the definitions of the stockholder theory provides us an understanding that it does not
ory stresses that managers should pursue profit only by all legal, non-deceptive means. A lot of adverse crit-
icism against the theory could have been avoided had the critics appreciated the fact that the stockholder theory
did not stress that managers were expected to pursue profit at all costs, even ignoring ethical constraints. The
stockholder theory is also associated with the line of utilitarian argument adopted by liberal classical econo-
mists. One’s pursuit of profit, goaded by one’s enlightened self interest in a free market economy leads col-
lectively to the promotion of general interest as well, guided as it is by Adam Smith’s ‘invisible hand’.20
‘Invisible Hand’ was a term coined by Adam Smith to express the idea that though each individual in his/her
economic activities acts in his/her own interest such actions are guided by a sort of ‘invisible hand’ which
ensures that they are also to the advantage of the community as a whole. Each individual by pursuing his own
self-interest promotes the interest of the society more efficiently than when he really intends to promote it.21
Such being the case, it is unwarranted to expect businesses to act directly to promote the common good.
Therefore, there is no justification to make a claim that businesses ‘have any social responsibilities other than
to legally and honestly maximise the profits of the firm’.22
Apart from this ‘consequentialist’ line of thinking in support of the stockholder theory, there is another
‘deontological’ argument as well to buttress it. The argument runs like this: ‘Stockholders provide their cap-
ital to managers on the condition that they use it in accordance with their wishes. If the managers accept this
capital and spend it to realize some social goals, unauthorized by the stockholders, does it not tantamount to
a clear breach of the agreement?’
Criticism of the Stockholder Theory Many business ethicists have been criticizing the stockholder the-
ory for various reasons. It has been described, as part of corporate law that has outlived its usefulness; as one
based on a ‘myopic view of corporate responsibility’ and as one that leads to ‘morally pernicious
consequences’. Robert C. Solomon23 in his Ethics and Excellence (1992) finds it ‘not only foolish in theory,
but cruel and dangerous in practice’ and misled ‘from its nonsensically one-sided assumption of responsibil-
ity to a pathetic understanding of stockholder personality as Homo Economicus’ (The Economic Man). Many
ethicists discard the theory as an outmoded relic of the past.
If so many ethicists wish to dismiss the theory as impractical and even foolish, it is because of its perceived
of the market forces’. Most modern day ethicists have little faith in laissez-faire capitalism (absolutely uncon-
association with the utilitarian supporting argument and neo-classical economists’ faith in the ‘invisible hand
trolled free enterprise system) that is beset by market failures. They believe that to the extent the stockholder
theory is associated with that type of economic model (laissez-faire capitalism) that cannot be relied upon to
secure the common good. The theory itself stands discredited because of its failures.
Another reason why the stockholder theory stands discarded today is because ‘the contemporary eco-
nomic conditions are so far removed from those of a true, free market’.24 In today’s world, government—
especially in its role in collecting huge taxes and spending the large sums that it earns on various welfare,
people-centric, and even defence projects—influences the activities of corporations enormously. Besides,
in the modern economies, as a producer the State itself has a significant stake in several utilities and envi-
ronmental activities. In such a situation, it is very likely that the pursuit of private profit will not truly be
productive for the public good.
Another criticism of the stockholder theory is based on a false analogy. It goes like this: if govern-
ments of democratic societies have a moral justification to spend the taxpayer’s money for promoting the
common welfare of people without taking their consent, then, it might mean, by inference, that businesses
are also justified in carrying out social welfare activities without the consent of the shareholders. But
then, this is based on a wrong and far-fetched assumption. The very objective of a government, apart from
providing political governance, is to provide some basic utility services and also to ensure that the lot of
the poor is improved over a period of time. Undertaking welfare measures is one of the generic functions
of a government and on occasions such as natural calamities such as earthquakes, floods, tsunamis, etc.,
this may be the most important cause for its existence. Moreover, governments get a mandate from their
electors to go ahead with the public welfare activities on the basis of promises made by political parties
in their manifestos.
However, in the case of a business organization, promoting social welfare is only incidental to its major
function of increasing the profit of the company so as to enhance the long-term shareholder value. They give
no undertaking to any shareholder that they would promote public welfare activities when they are formed.
In recent times, many socially conscious companies such as Infosys, Dr. Reddy’s Labs and Tata Steel do seek
and get the approval of their shareholders to spend a part of their profit on social welfare activities.
STAKEHOLDER THEORY
The stakeholder theory of business ethics has a lengthy history that dates back to 1930s. The theory represents
a synthesis of economics, behavioural science, business ethics and the stakeholder concept. The history and the
range of disciplines that the theory draws upon have led to a large and diverse literature on stakeholders.
In essence, the theory considers the firm as an input–output model by explicitly adding all interest
groups—employees, customers, dealers, government, and the society at large—to the corporate mix. Figure 2.3
illustrates the different kinds of stakeholders.
The theory is grounded in many normative theoretical perspectives including ethics of care, ethics of fidu-
ciary relationships, social contract theory, theory of property rights, theory of the stakeholders as investors,
communitarian ethics, critical theory, etc. While it is possible to develop stakeholder analysis from a variety
of theoretical perspectives, in practice much of the stakeholder analysis does not firmly or explicitly root
itself in a given theoretical tradition, but rather operates at the level of individual principles and norms for
which it provides little formal justification. In so far as stakeholder approaches uphold responsibilities to non-
shareholder groups, they tend to be in some tension with the Anglo-American model of corporate governance,
which generally emphasizes the primacy of ‘fiduciary obligations’ owed to shareholders over any stakeholder
claims.
However, the stakeholder theory unfortunately carries some sort of an unclear label since it is used to
refer to both an empirical theory of management and a normative theory of business ethics, often intermixed
and without distinguishing one from the other. In this theory, the stakeholder is defined as anyone who has
a claim or stake in a firm. In a wider sense, a stakeholder will mean any individual or group who can affect
Fig. 2.3
Stakeholders of
an Organization
or is affected by the corporation. Interpreted narrowly, stakeholders would mean ‘those groups who are vital
to the survival and success of the corporation.’25 In its empirical form, therefore, the stakeholder theory
argues that a corporate’s success in the market place can best be assured by catering to the interests of all its
stakeholders, namely, shareholders, customers, employees, suppliers, management and the local community.
To achieve its objective, the corporate would have to adopt policies that would ensure ‘the optimal balance
among them’.
As a normative theory, the stakeholder theory stresses that regardless of the fact whether the manage-
ment achieves improved financial performance or not, managers should promote the interests of all stake-
holders. It considers a firm as an instrument for coordinating stakeholder interests and considers managers
as having a fiduciary responsibility not merely to the shareholders, but to all of them. They are expected to
give equal consideration to the interests of all stakeholders. While doing so, if conflicts of interests arise,
managers should aim at optimum balance among them. Managers in such a situation may be even obliged
to partially sacrifice the interests of shareholders to those of other stakeholders. Therefore, in its normative
form, the theory does assert that corporations do have social responsibilities.
A serious reading of the theory will show that a manager’s fundamental obligation is not to maximize
the firm’s profitability, but to ensure its very survival by balancing the conflicting claims of its multiple
stakeholders. There are two principles that guide corporations to comply with this requirement. According
to the first, called the principle of corporate legitimacy, ‘the corporation should be managed for the ben-
efit of its stakeholders: its customers, suppliers, owners, employees and the local communities. The rights
of these groups must be ensured and, further, the groups must participate, in some sense, in decisions
that substantially affect their welfare’.26 The second principle, known as the stakeholder fiduciary prin-
ciple, asserts that ‘management bears a fiduciary relationship to stockholders and to the corporation as
an abstract entity. It must act in the interests of stakeholders as their agent, and it must act in the inter-
ests of the corporation to ensure the survival of the firm, safeguarding the long term stakes of each
group’.27
The stakeholder theory has received a wide acceptance among ethicists, perhaps due to the ‘fact that the
theory seems to accord well with many people’s moral intuitions, and, to some extent, it may simply be a spill-
over effect of the high regard in which the empirical version of the stakeholder theory is held as a theory of
management’.28 However, the theory is not beyond reproach and criticism. It has been subject to many criti-
cisms on many perfectly valid grounds.
Criticism of the Stakeholder Theory The stakeholder theory is often criticized, more often than not
as ‘woolly minded liberalism’, mainly because it is not applicable in practice by corporations. Another cause
for criticism is that there is comparatively little empirical evidence to suggest a linkage between stakeholder
concept and corporate performance. But there are considerable theoretical arguments favouring promotion
of stakeholders’ interests. Managers accomplish their organizational tasks as efficiently as possible by draw-
ing on stakeholders as a resource. This is in effect a ‘contract’ between the two, and one that must be equi-
table in order for both parties to benefit.
The major problem with the stakeholder theory stems from the difficulty of defining the concept. Who
really constitutes a genuine stakeholder? There is an expansive list suggested by authors, ranging from the
most bizarre to include terrorists, dogs and trees, to the least questionable such as employees and customers.
Some writers have suggested that any one negatively affected by corporate actions might reasonably be
included as stakeholder, and across the world this might include political prisoners, abused children, minori-
ties and the homeless. However, a more seriously conceived and yet contested list of stakeholders would
generally include employees, customers, suppliers, the government, the community, assorted activist or
pressure groups, and of course, shareholders. Some writers of the theory opine that where there are too
many stakeholders, it is better to categorize them as primary and secondary stakeholders ‘in order to clar-
ify and ease the burden it places upon directors’. Clive Smallman29 says: ‘The case for including both the
serious claimants and the more flippant are rooted in business ethics, in managerial morality and in best
practice in business strategy.’ Moreover, in his opinion, though the inclusion of a large number of claimants
may be well-intentioned, it may not be practical for corporate managers to cater to such a large number of
stakeholders.
It is also argued further that the ‘intent of the theory is better achieved by relying on the hand of manage-
ment to deliver social benefit where it is required’ rather than suggesting a wide range and diversity of stake-
holders to cater to. In modern corporations, stockholders are too many and scattered to wield any effective
control over them. Hence, they delegate the powers of decision making and execution to their agents, salaried
managers through the Board of Directors. The agency model specifies mechanisms which reduce agency loss,
i.e., the extent to which shareholders are put to loss when the decisions and actions of agents differ from what
they themselves would have done in similar situations.
In the assessment of Clive Smallman ‘The stakeholder model also stands accused of opening up a path to
corruption and chaos; since it offers agents the opportunity to divert wealth away from shareholders to oth-
ers, and so goes against the fiduciary obligations owed to shareholders (a misappropriation of resources)’.30
Thus, the stakeholder model of corporate governance leads to corrupt practices in the hands of managements
with a wide option (because of too many stakeholders) and also to chaos, as it does not differ much from the
agency model, while increasing exponentially the number of principals the agents have to tackle.
The stakeholder theory also can be criticized on the ground that it extends the rights of stakeholders far too
much. To draw ethical conclusions from observations of the state of law is as dangerous as to assume that what
is legally required should be ethically justifiable. Moreover, to assume that all stakeholders who are impacted
by a contract have a moral right to bargain about the distribution of its effects may also lead to an inference that
they have a right to participate in the decision making process of business as well, which is absurd.
THE SOCIAL CONTRACT THEORY

The social contract theory is one of the nascent and evolving normative theories of business ethics. It is closely
related to a number of other theories. In its most acknowledged form, the social contract theory stresses that all
businesses are ethically duty bound to increase the welfare of the society by catering to the needs of the con-
sumers and employees without in any way endangering the principles of natural justice. The social contract the-
ory is based on the principles of ‘social contract’ wherein it is assumed that there is an implicit agreement
between the society and any created entity such as a business unit, in which the society recognizes the existence
of a condition that it will serve the interest of the society in certain specified ways. The theory is drawn from
the models of the political–social contract theories enunciated by thinkers like Thomas Hobbes, John Locke
and Jean Jacques Rousseau. All these political philosophers tried to find an answer for a hypothetical situation
as to what life would be in a society in the absence of a government and tried to provide an answer by imagin-
ing situations of what it might have been for citizens to agree to form one. ‘The obligations of the government
towards its citizens were then derived from the terms of the agreement.’31 As in normative theory of business
ethics, the social contract theory draws much from the averments of these political thinkers.
The social contract theory adopts the same approach as the one adopted by the political theories towards
deriving the social responsibilities of a business firm. The theory assumes a kind of society that is bereft
of any complex business organization such as the ones we have today. It will be a ‘state of individual pro-
duction’. They go on to pose such questions as ‘what conditions would have to be met for members of
such a society to agree to allow such businesses to be formed?’ The moral obligations of business towards
individual members of society are then drawn from the terms of such an implicit agreement between the
two. Therefore, the social contract theory is based on an assumed contract between businesses and mem-
bers of the society who grant them the right to exist in return for certain specified benefits that would
accrue to them. These benefits are a result of the functioning of these businesses, both for their own sake
and for that of the larger society.
When members of the society give the firms legal recognition, the right to exist, engage them in any
economic activity and earn profit by using the society’s resources such as land, raw materials and skilled
labour, it obviously implies that the firms owe an obligation to the society. This would imply that business
organizations are expected to create wealth by producing goods and services, generate incomes by pro-
viding employment opportunities, and enhance social welfare. The concept of ‘social welfare’ implies that
the members of the society are interested to authorize the establishment of a business firm only if they
gain some advantage by doing so. Such gains occur to them in two distinct ways, namely, as consumers
and employees. As consumers, members of the society benefit from the establishment of business firms
at least in three ways: (i) business firms provide increased economic efficiency. This they do by enhanc-
ing the advantages of specialization, improving decision making resources and increasing the capacity to
acquire and utilize expensive technology and resources; and (ii) business firms offer stable levels of pro-
duction and channels of distribution; and (iii) business firms also provide increased liability resources,
which could be used to compensate consumers adversely affected by their products and services. As
employees, people are assured by ‘business firms of income potential, diffused personal legal liability for
harmful errors, and income allocation schemes’.32
However, business firms do not provide an unmixed blessing. The interests of the public as consumers
can be adversely affected by business firms when they deplete the irreplenishable natural resources, pol-
lute the environment and poison water bodies, help to reduce the personal accountability of its members
and misuse political power through their money power and acquired clout. Likewise, the interests of the
public as employees can be adversely affected by their alienation from the product of their own labour, by
being treated as mere cogs in the wheels of production, being made to suffer from lack of control over their
working conditions and being subjected to monotonously boring, sometimes damaging and dehumanizing
working conditions.
Taking into account these respective advantages and disadvantages, business firms are likely to produce
the social welfare element of ‘social contract’ and enjoin that business firms should act in such a manner so
as to
1. benefit consumers to enable them reach maximization of their wants;
2. benefit employees to enable them secure high incomes and other benefits that accrue by means of
employment; and
3. ensure that pollution is avoided, natural resources are not fast depleted and workers’ interests are
protected.
From the justices’ point of view, the social contract theory recognizes that members of the society author-
ize the establishment of business firms on condition that they agree to function ‘within the bounds of general
canons of justice’. Though what these canons of justice mean is not yet a settled issue, there is a general under-
standing that these canons require that business firms ‘avoid fraud and deception . . . show respect for their
workers as human beings, and . . . avoid any practice that systematically worsens the situation of a given group
in society’.33
It can be summarized from the above arguments that the social contract theory upholds the view that
managers are ethically obliged to abide by both the ‘social welfare’ and ‘justice’ provisions of the social
contract. If fully understood, these provisions impose significant social responsibilities on the managers of
corporations.
Criticism of Social Contract Theory The social contract theory, like the other normative theories of
business ethics, is subject to many criticisms. Critics argue that the so-called ‘social contract’ is no contract at
all. Legally speaking, a contract is an ‘agreement between two or more persons which is legally enforceable
provided certain conditions are observed. It normally takes the form of one person’s promise to do something
in consideration of the other’s agreeing to do or suffer something else in return’.34 A contract implies a meet-
ing of minds, which does not exist in the so-called social contract. Social contract is neither an explicit nor
implicit contract. Those who enter into a business do so merely by following the legal procedures that are nec-
essary under the law of the land and would be shocked if they were told that while doing so, they had entered
into a contract to serve the interest of the society in ways that are not specified in the law and that it would have
a substantial impact on the profitability of the firm. Therefore, where there is neither a meeting of the mind nor
an understanding of the implications of what goes when one gets into a contract, the social contract is more of
a fiction than a true contract.
But the proponents of the social contract theory are not unduly put off by such harsh criticisms. They concur
with the view of the critics that the core theme of the theory namely, social contract is indeed a fictional or hypo-
thetical contract and proceeds further to state that this is exactly what is needed to identify managers’ ethical obli-
gations. In the words of Thomas Donaldson ‘If the contract were something other than a ‘fiction’, it would be
inadequate for the purpose at hand; namely revealing the normal foundations of productive organizations’.
According to social contract theorists, the moral force of the social contract is not derived from the consent of
the parties. However, in their view ‘productive organizations should behave as if they had struck a deal, the kind
of deal that would be acceptable to free, informed parties acting from positions of equal moral authority. . . .’35
TEACHINGS OF THE CHURCH
the present. The work for justice finds its expression from the Gospels. The opening lines of Gaudium Et Spes
The longing for justice has always been a central theme of the Catholic Church from earliest Biblical times to
of the Second Vatican Council placed the centrality of justice to the Christian calling most vividly in the fol-
lowing words: ‘The joys and hopes, the sorrows and anxieties of the women and men of this age, especially
those who are poor or in any way oppressed, these are the joys and hopes, the sorrows and anxieties of the fol-
lowers of Christ.’36
the encyclical of Pope Leo XIII’s on the Condition of labor (Rerum Novarum). From this modest beginning,
The expression of the Church’s social teaching commenced in the late 19th century, 1891 to be exact, with
Catholic teaching has grown rapidly, representing a rising crescendo of social consciousness and concern in
the Church. The social teaching of the Church, based on Christian ethics, comprises sets of principles, guide-
lines and applications which provide a compelling challenge for individuals as well as corporations in respon-
sible citizenship.
As pointed out, the Church always supports and promotes the welfare of the poor. The Church’s concern
for the marginalized is always expressed through her teachings. The less privileged and the marginalized real-
ize the fact that the wealth of the world is in the hands of a few. This emerging awareness of the mass is sup-
ported by the Church. People often think how business and ethical teachings of the Church can be related.
People always tried to see business without any reference to religion. But now the trend has changed and organ-
izations and institutions relate business with religion and ethics.
This transition is due to the increased importance of ethics in business. The pressing concerns of the soci-
ety are reflected in the teachings of the Church. ‘Option for the poor’ is the catchword of the Church’s teach-
ings. The Church’s concerns and ethical teachings are found in several papal encyclicals. In the modern
organization, sound ethics is a key criterion for success.
RERUM NOVARUM
Since the late 19th century, there developed a strong tradition of reflective thought on economic issues within
of Rerum Novarum, an encyclical of Pope Leo XIII. The central theme of the papal letter to his flock was the
the Catholic Church. This concern on economic issues started effectively in May 1891 with the publication
relationship between the State, employers and the workers. It strongly laid the foundation for human dignity.
It was a revolutionary work, because the Church could change the misconception that she supports the rich
and the powerful of the society.
This encyclical directs the State and organizations to perform their duties to the working class. When man
is deprived of dignity and equality, he will indulge in unethical practices. There should be mutual support in
the society as well as in organizations. This mutual support will help him perform his best for productivity
and profit. ‘The consciousness of his own weakness urges man to call in aid from without. We read in the pages
of the Holy Writ: it is better that two should be together than one; for they have the advantage of their soci-
ety. If one falls, he shall be supported by the other. Woe to him that is alone, for when . . . It is natural impulse
which binds men together in civil society; and it is likewise this which leads them to join together
in associations which are, it is true, lesser and not independent societies, but nevertheless, real societies. When
the State and organizations perform their duty, there would not be corruption or unethical behaviour in the
society.’37
GAUDIUM ET SPES
Gaudium Et Spes is the Pastoral Documentation of the Church released during the Second Vatican Council in
1965. The burning concern of the Church is that the rapid change and technological advancement makes human
beings aware of many facts and that their demands have changed. These aggressive demands have led to so
many things that he or she should not have indulged in. To a certain extent this revolution leads to unethical
practices. The internal fight of values and developments has changed the basic values of human beings. The
social teaching of the Church has developed through addressing new circumstances and conditions of society
as they have emerged.
Today, the human race is involved in a new stage of history. Profound and rapid changes are spread-
ing by degrees around the whole world. Triggered by the intelligence and creative energies of man,
these changes recoil upon him, upon his decisions and desires, both individual and collective, and upon
his manner of thinking and acting with respect to things and to people. Hence we can already speak of
a true cultural and social transformation, one which has repercussions on man’s religious life as well.
A change in attitudes and in human structures frequently calls accepted values into question.38
THE TRADITION OF CATHOLIC SOCIAL THOUGHT

The papal encyclicals and pastoral letters that form the foundation of Catholic Social Thought (CST) are moral
documents that reflect the concerns of the Church for the lives of millions of human beings as the result of
the working of the economies. From the beginning, the focus of CST has been on the problem of poverty and
the marginalization of the disadvantaged, first in the industrialized countries and then in the Third World.
In the past three decades or so, there has been a growing concern about too much consumption by the rich and
Popularum Progressio thus: ‘The superfluous wealth of rich countries should be placed at the service of poor
inadequate consumption by the poor. This concern was expressed by the Pope Paul VI in his encyclical,
nations . . . Otherwise their continued greed will certainly call down on them the judgment of God and the
environment. Pope John Paul II in his encyclical Centesimus Annus expressed this concern thus: ‘Equally wor-
wrath of the poor.’ Another aspect of the Church’s concern is the impact of excessive consumption of the earth’s
rying is the ecological question, which accompanies the problem of consumerism and which is closely con-
nected to it. In his (or her) desire to have and to enjoy rather than to be and to grow, man (or woman) consumes
the resources of the earth and his (or her) own life in an excessive and distorted way’ (Para 37). Earlier he has
noted: ‘It is not wrong to want to live better; what is wrong is a style of life which is presumed to be better
when it is directed toward ‘having’ rather than ‘being’, and which wants to have more, not in order to be more
but in order to spend life in enjoyment as an end in itself’ (Para 36).
Thus, the CST reiterated and reinforced by various papal encyclicals advocates that the materialistic-
minded consumerism should be substituted by the creation of a more humane future through empowering
people to rebuild the values and institutions necessary to morally constrain self interest.39
INDIAN ETHICAL TRADITIONS

India has rich ethical traditions which envisioned in the scriptures of the land such as the Gita, the Upanishads,
etc. Hindu scriptures speak of the performance of right duty, at the right time in the right manner. The rich
Indian tradition has always emphasized the dignity of human life and right to live in a respectful manner. The
rich values that once prevailed in India are now disappearing from the mainstream. Indian traditions are copied
and followed by Western countries in their social welfare and organizational conduct.
GANDHIAN PRINCIPLES
The Gandhian principle of trusteeship is another philosophy on ethics that has received increased importance
in the present day world of decaying morals and lack of trust among individuals as well as organizations.
The philosophy of trusteeship implies that an industrialist or businessman should consider himself to be a
trustee of the wealth he possesses. He should think that he is only a custodian of his wealth meant to be
used for the purpose of business. The wealth belongs to society and should be used for the greatest good
of all. The trusteeship concept should also be extended to the labour in industry. It does not recognize cap-
ital and assets as individual property. This was basically to reduce the conflict between ‘haves’ and ‘have
Bhagawad Gita. Gandhiji also advocated Sarvodaya, meaning welfare for all. He was of the firm view that
nots’. The origin of the trusteeship principle can be traced to the concept of non-possession detailed in
capital and labour should supplement each other. There should be a family atmosphere and harmony in work
place. Gandhi’s philosophy of trusteeship has got more relevance in the present scenario. In the recent past,
social involvement by business has, for the most part, taken the shape of philanthropy and public charity.
This has led to the building of temples, hospitals and educational institutions. A few examples of such activ-
ities would include the Birla Temple in Kolkata, the Shree Vivekananda Research and Training Institute set
up by Excel Industries in Mandvi which is very much in the spirit of trusteeship; the L&T Welfare Centre
in Bombay, the Tata Institute of Fundamental Research, and the Voltas Lifeline Express that has been run-
ning on Indian tracks for over a decade.
RIGHTEOUSNESS AS THE WAY IN THE GITA

The Bhagawad Gita cites numerous instances of how moral values and ethics can be incorporated in one’s
or her direction, and struggling to find an answer to ethical dilemmas. The Lord reiterates that work or karma
work life. Many of its verses are directly significant for the modern manager who may be confused about his
is the driving force of life, and this work has to be ethical.

Chapter II, Verse 47 says ‘You have a right to perform your prescribed duty, but you are not entitled to
to not doing your duty’.40 This is the important message of Gita that the performer of the action has only
the fruits of action. Never consider yourself the cause of the results of your activities and never be attached
to perform the prescribed duty and not indulge in the result of the action. If the worker leaves the result of
because he is not worried of the result whether it is good or bad. This teaching of the Gita draws one’s atten-
the work to the Lord, on the realization that the result is beyond his control, then he can be serene forever,
tion to Nishkama Karma.

In the organizational context too when one is only worried of the result, he or she is likely to fall into
improper activities. On the other hand, if one is ready to do his or her duty to the maximum of one’s ability
and able to set aside the result, he or she will be an ethical person in the organization.
Chapter II, Verse 56 says ‘One who is not disturbed in mind admits the threefold misery or elated when
there is happiness and who is free from attachment, fear and anger, is called a sage of steady mind’.41
A steady mind, another mental state, is desirable in one’s work life, to retain one’s integrity in the
work one does. A steady mind gives you the right attitude and right direction. Detachment is that qual-
ity which enables the individual not to accept anything for personal gratification. In the organizational
context, this quality is very much valued. Personal desires and conflicting interests end up in unethical
Lord Krishna’s promise, in the seventh and eighth verse of Chapter IV of the Gita is that, whenever evil
practices.
dominates, the Lord takes an avatar to set right the situation and re-establish the Dharma.42 Translated, these
verses mean as follows:
Yada yada hi dharmasya glanir bhavati bharata

abhyuthanam adharmasya tatamanam srujamy aham43
Whenever and wherever there is decline of Dharma and ascendance of Adharma, then, O scion of the Bharata
race! I manifest (incarnate) Myself in a body.44
Paritranaya sadhunam vinashayacha dushkritam

dharma samsthapanarthaya sambahvami yuge yuge 45
For the protection of the good, for the destruction of the wicked, and for the establishment of Dharma, I am
born from age to age.46
BUSINESS AND ISLAM
in the Hadith (collection of the Prophet’s sayings). In Islam, there is an explicit edict against the exploitation
For Islam, all principles covering business emanate from the Holy Quran, as they are explained and amplified
of people in need through lending them money at interest and doing business through false advertising.
Mohammed, the last Prophet and Messenger, was very much involved in business before he was chosen
by God. He was involved in trade from his early age and had widely travelled and had rich experience in
business.
The Prophet laid stress on honesty and truthfulness in business. He said ‘God shows mercy to a person
who is kind when he sells, when he buys and when he makes a claim’.47 His teachings cover a wide range of
business and economics. Muzammil H. Siddiqi,48 in his article ‘Business Ethics in Islam’: enumerates the fol-
lowing major business principles drawn from the teachings of Prophet Mohammed:
1. No fraud or deceit: The Prophet said, ‘When a sale is held, say—there’s no cheating.’ (Al-Bukhari,
1974)
2. No excessive oaths in a sale: The seller must avoid excessive oaths in selling an article: The Prophet
ordained: ‘Be careful of excessive oaths in a sale. Though it finds markets, it reduces abundance.’
(Muslim, 3015)
3. Need for mutual consent: Mutual consent is necessary: ‘The sale is complete when the two part with
mutual consent.’ (Al-Bukhari, 1970)
4. Be strict in regard to weights and measures: ‘When people cheat in weight and measures, their pro-
vision is cut off from them.’ (Al-Muwatt, 780) He told the owners of measures and weights: you have
been entrusted with affairs over which some nations before you were destroyed.’ (Al-Trimidhi, 1138)
5. The prophet was very much against monopoly: ‘Whoever monopolises, he is a sinner.’ (Abu Da’ud,
2990)
6. Free enterprise: According to the Prophet, the price of the commodities should not be fixed unless
there is a situation of crisis or extreme necessity.
7. Hoarding is forbidden: Hoarding the commodities in order to increase their prices is forbidden.
8. Forbidden transactions: Transaction of things that are forbidden is also forbidden, such as intoxicants.
The Prophet Mohammed ordained that businesses should promote ethical and moral behaviour and should
follow honesty, truthfulness and fulfilment of trusts and commitments, while eliminating fraud, cheating and
cut-throat competition.
SHARIAH AND INTEREST ON CAPITAL

Shariah bans the taking of interest, because according to this law, investors can make profits only from
business based on exchange of assets and not on money. As per the law, bankers sell sukuk or Islamic bonds
they would be paying on conventional debt. As per the Shariah, the money thus gained cannot be used to
only by the use of property and other assets so as to generate income which would be equal to the interest
finance gambling, guns or alcohol. Such assets managed under Islamic rules will be $2.8 trillion by 2015,
according to the Islamic Financial Services Board, an association of Central Banks based in Kuala Lumpur,
46 BUSINESS ETHICS AND CORPORATE GOVERNANCE
Malaysia.49 According to Zafar Sareshwala, Managing Director of Parsoli Investments: ‘It is the religious
requirement of a Muslim to be invested; rather it is unislamic to hold money. Interest is forbidden, but shar-
able under Shariah as long as it is in companies compliant with the Shariah rules.’50 This implies that
ing risk and responsibility, that is, sharing profit and loss is acceptable. Equity investing is wholly accept-
Muslim investors invest only in a portfolio of ‘clean stocks’. They do not invest it stocks of companies deal-
ing in alcohol, conventional financial services (banking and insurance), entertainment (cinemas and hotels),
and automobile ancillaries are all Shariah compliant. Currently, there are more than 800 Shariah compli-
tobacco, pork meat, defence and weapons. Sectors such as computer software, drugs and pharmaceuticals
ant stocks on the exchanges.

SUMMARY
‘Ethics’ and ‘morality’ though used interchangeably are two different concepts. ‘Morality’ according
to philosophers refers to human conduct and values and ‘ethics’ is the study of a set of principles that
define human character or behaviour in relation to what is morally right or morally wrong. The prin-
ciples do not lead to a single course of action but provide a means of evaluating and deciding among
competing options.
Ethics is considered a normative study, that is, an investigation that attempts to reach
normative conclusions. Ethics, in business relates to human conduct in a business organization.
Ethical theories in business include the consequentialist and non-consequentialist normative theo-
non-consequentialist normative themes: duties, moral rights, and prima facie principles.
ries and the normative themes of egoism, utilitarianism, and Kantian ethics. There are also, other
Egoism asserts that an act is morally right if and only if it best promotes an egoist’s (person,
group or organization) long term interests. According to the utilitarian principle an action is ethi-
cally right only if the sum total of utilities produced by that act is greater than the sum total of util-
ities produced by any other act that could have been performed in its place. In the organization, the
usefulness of the utilitarianism is assessed by the policy decision that if it promotes the welfare of
all more than any other alternative, then it is good. One of the basic principles of Kantian ethics is
that a good will is the only unqualified good. Kant introduces an important humanistic dimension
to business decisions which is to behave in the same way that one would wish to be treated under
the same circumstances and to always treat other people with dignity and respect. Each of these the-
ories has been subjected to criticism and has not been easily adopted by the business organizations.
The search for a down-to-earth theory has led to the evolution of several normative theories that
suit specific business environment. Presently, three normative theories of business ethics, namely
stockholder theory, stakeholder theory and social contract theory have evolved over a period of time.
The stockholder theory expresses the business relationship between the stock owners and their
managers should pursue profit only by all legal, non-deceptive means. Many business ethicists have
agents who are the managers running the day-to-day business of the company. As per the theory,
been criticizing the stockholder theory for various reasons. Adverse criticism against the theory
could have been avoided had it been properly understood. The stockholder theory did not stress that
managers were expected to pursue profit at all costs, even ignoring ethical constraints. In recent
times, however, many socially conscious companies such as Tata Steel do seek and get the approval
of their shareholders to spend a part of their profit on social welfare activities.
The stakeholder theory argues that a corporate’s success in the market place can best be assured
by catering to the interests of all its stakeholders, namely, shareholders, customers, employees, sup-
pliers, management and the local community. This objective is achieved when corporations adopt
policies that would ensure the optimal balance among all stakeholders. The stakeholder theory is
often criticized mainly because it is not applicable in practice by corporations and also because
there is comparatively little empirical evidence to suggest a linkage between stakeholder concept
and corporate performance. The major problem with the theory stems from the difficulty of
defining a genuine stakeholder.
The social contract theory is a nascent and evolving normative theory of business ethics. It is
based on the principles of ‘social contract’ wherein it is assumed that there is an implicit agreement
between the society and any created entity such as a business unit, in which the society recognizes
SUMMARY
the existence of a condition that the business unit will serve the interest of the society in certain
specified ways. However, business firms do not provide an unmixed blessing. The interests of the
public as consumers can be adversely affected by business firms when they deplete the irreplen-
ishable natural resources, pollute the environment and poison water bodies, help reduce the per-
sonal accountability of its members and misuse political power through their money power and
acquired clout. The social contract theory, like the other normative theories of business ethics, is
subject to many criticisms.
Though there are several ethicists who argue that religion and morality which form the basis
and core of ethics are not necessarily interconnected, the concepts and theories that are dealt with
in this chapter clearly demonstrate that almost all of them have their roots in religious beliefs. The
world’s great religions––Christianity, Hinduism and Islam have all left their indelible marks on
morality and the conduct of people in every aspect of human endeavour including business. Every
religion has provided its followers its own set of catechisms, moral instructions, beliefs, values and
virtues, traditions and commitments. It is true that even agnostics and non-believers can be ethical
in their business dealings, but even they might find it difficult to prove that their values were not
shaped by what they imbibed from the society, of which they are a part. And almost all societies,
from the ancient to the present, are influenced by religions and their teachings.
KEY WORDS
Ethikos ∑ Moral values ∑ Science of morals ∑ Social con- ianism ∑ Prima facie principles ∑ Psychological egoism
duct ∑ Ordinary parlance ∑ Norms of behaviour ∑ Kantian philosophy ∑ Stockholder versus stakeholder
∑ Moral standards ∑ Immortal ∑ Epitomized ∑ Terminal ∑ Social contract ∑ Social welfare ∑ Canons of justice
diseases ∑ Christian Virtue of love ∑ Ten Command- ∑ Explicit contract ∑ Implicit contract ∑ Encyclicals
principles ∑ Sarvodaya ∑ Righteousness ∑ Steady mind

ments ∑ Old Testament ∑ Religious philosophy ∑ Pastoral letters ∑ Pastoral documentation ∑ Trusteeship
∑ Common law ∑ Constitutional law ∑ Conscientious
effort ∑ Normative perspectives ∑ Egosim ∑ Utilitar-
DISCUSSION QUESTIONS
1. Many social thinkers are of the opinion that morality and ethics are built on the foundation of religion. Do
you subscribe to the view? Substantiate your answer.
2. Out of the three major normative theories (stockholder, stakeholder and social contract), which one, in
your perception adequately explains the basis for business ethics?
3. An ideal normative theory of business ethics should capture the ethical obligations arising out of business
agreements. In your perception, which normative theory is useful for constructing satisfactory proceed-
ings justifying ethical obligations of business?
4. Business ethics is basically a Western concept. Would you agree? Substantiate your answer.
5. All major religions of the world provide a moral basis for their followers to carry on their business ethi-
cally. Do you agree? Either way, provide arguments to prove your point.
NOTES
1. Manuel G. Velasquez, Business Ethics: Concepts and Cases, 6th ed. (Delhi: Pearson Education, 2007), p. 22.
2. R. V. Badi and N. V. Badi, Business Ethics (Delhi: Vrinda Publications, 2005).
3. The American Heritage Dictionary, 1st ed. (New York: American Heritage Publishing Company, 1969). Cited
in Paul W. Taylor, Principles of Ethics: An Introduction, Encino, CA: Dickenson Publishing Company, 1975).
4. O. C. Ferrel, John Paul Fraedrich, and Linda Ferrel, Business Ethics: Ethical Decision Making and Cases,
6th ed. (New Delhi: Bizantra, 2005).
5. William H. Shaw, Business Ethics, 4th ed. (Singapore: Thomson/Wadsworth, 2002).

6. Ibid., p. 9.
7. Ibid., p. 11.
8. Poonam Sharma and Kanika T. Bhal, Managerial Ethics—Dilemmas and Decision Making (New Delhi:
Sage Publications, 2004).
9. Ibid., p. 11.
10. William H. Shaw, Business Ethics, 4th ed. (Singapore: Thomson/Wadsworth, 2002), p. 33. (Thirukkural,
with English Translation by Rev, Drew and John Lazarus, Thendral Nilayam, Chidambaram, Tamil Nadu)
11. Thirukkural
12. See Note 2.
13. See Note 1.
14. See Note 10.
15. Ibid.
16. Ibid., pp. 46–47.
17. Hendry Sidgwick, Methods of Ethics, 7th ed. (Chicago, IL: Chicago University Press, 1962).
18. John Stuart Mill, cited in John Hasnas, The Normative Theories of Business Ethics—A Guide for the
Perplexed, Business Ethics and Corporate Governance, Book of Readings (Hyderabad: ICFAI Center for
Management Research, 1998).
19. John Hasnas, The Normative Theories of Business Ethics—A Guide for the Perplexed, Business Ethics and
Corporate Governance, Book of Readings (Hyderabad: ICFAI Center for Management Research, 1998).
20. Milton Friedman, Capitalism and Freedom (Chicago, IL: University of Chicago Press, 1962), p. 133.
21. Adam Smith, The Wealth of Nations IV–V (London, UK: Penguin, 1999), p. 45.
22. Ibid.
23. Robert C. Solomon, Ethics and Excellence: Cooperation and Integrity in Business (New York: Oxford
University Press, 1992). Cited in John Hasnas, The Normative Theories of Business Ethics—A Guide for
the Perplexed, Business Ethics and Corporate Governance, Book of Readings (Hyderabad: ICFAI Center
for Management Research, 1998).
24. John Hasnas, The Normative Theories of Business Ethics—A Guide for the Perplexed, Business Ethics and
Corporate Governance, Book of Readings (Hyderabad: ICFAI Center for Management Research, 1998).
In C. Huizinga ed. Corporate Governance: A Definitive Exploration of the Issues (Los Angeles, CA: UCLA
25. E. Freeman and D. Reed, “Stockholders and Stakeholders: A New Perspective on Corporate Governance.”,
Extension Press, 1983).
Perplexed,” Business Ethics Quarterly (January 1998) 8: 25–26.

26. Evan and Freeman, cited in John Hasnas, “The Normative Theories of Business Ethics: A Guide for the
27. John Hasnas, “The Normative Theories of Business Ethics: A Guide for the Perplexed,” Business Ethics
Quarterly (January 1998), 8: 19–42.
28. Ibid.
29. Clive Smallman, “Exploring Theoretical Paradigms in Corporate Governance,” International Journal of
Business Governance and Ethics (2004), 1 (1): 78–94.
30. See Note 8.
31. See Note 17.
32. Thomas Donaldson, Corporation and Morality (Englewood Cliffs, NJ: Prentice Hall, 1982), Chapter 2.
33. Ibid.
34. Michael Greener, Penguin Dictionary of Commerce (Middlesex, UK: Penguin Books, 1979).
eds. The Ruffin Series in Business Ethics, 56, Oxford University Press, US, 1992.
35. Thomas Donaldson, “Ethics of International Business.” in Thomas J. Donaldson and Edward Freeman,
36. Second Vatican Council, Gaudium et Spes Pastoral Constitution on the Church in the Modern World
(Vatican City: Vatican, 1965).
37. Encyclical, 1891.
38. Pastoral document, 1965..
39. Edward P. DeBerri et al., Catholic Social Teaching, Our Best Kept Secret (New York: Orbis Books, 1985).
40. Padman Govindarajan, “Secret of Action in Bhagawad-Gita,” available at www.salagram.net/
GP-ActionBG.html
41. SABCL. “Essays on the Gita, with Sanskrit Text and Translation of the Gita,” available at www.
writespirit.net/inspirational_talks/talks_by_sri_aurobindo/the_message_of_the_gita__by_sri_aurobindo/
sankhyayoga_(chapter_ii)
42. N. Vittal, “Role of Vigilance and Its Process in Arresting Corruption,” 7 January 2001, available at http://
cvc.nic.in/vscvc/cvcspeeches/jan2k1.html
43. Subhamoy Das, “Learn a Verse from the Bhagavad Gita,” 2007, available at http://hinduism.about.com/
od/thegita/qt/gitaverse.htm
44. Bhagavad Gita, available at http://sss.vn.ua/bh_g_eng.htm#Chapter%20IV
45. Subhamoy Das, “Learn a Verse from the Bhagavad Gita,” 2007, available at http://hinduism.about.com/
od/thegita/qt/gitaverse.htm
46. The Vedanta Society of Japan (Nippon Vedanta Kyokai), available at http://vedanta.jp/en/tvk/06/
KyokaiJAug-Oct06.txt
47. Al-Bukhari, 1934. Cited in Muzammil H. Siddiqi, “Business Ethics in Islam,” 2007, available at www.
pakistanlink.com/Religion/2004/12172004.htm
48. Muzammil H. Siddiqi, “Business Ethics in Islam,” 2007, available at www.pakistanlink.com/Religion/
2004/12172004.htm
49. Will McSheehy and Shanthy Nambiar, “Islamic Bond Fatwas Surge on Million-Dollar Scholars,” May 1,
2007, available at www.bloomberg.com/apps/news?pid=20601109&sid=a.DsH16oTM6U&refer=home
50. Shailesh Menon, “Shariah Index Can Woo Islamic Funds,” available at http://economictimes.indiatimes.
com/Create_Shariah_index_and_watch_Islamic_funds_flow_in/articleshow/1982487.cms
FURTHER READINGS
Chryssides, G. D. and Kaler, J. H., An Introduction to Business Ethics, 1st ed. (London, UK: Chapman & Hall,
1993).
DeBerri, E. P. and Hug, J. E., Catholic Social Teaching, Our Best Kept Secret, 1st Indian ed. (New York: Orbis
Books, 2004).
Flannery, A. ed., Gaudium et Spes Pastoral Constitution on the Church in the Modern World, Second Vatican
Council, 1965. 18 May 2007, Available at www.osjspm.org/majordoc_gaudium_et_spes_part_one.aspx
Mackinnon, B., Ethics, Theory and Contemporary Issues, (Belmont, CA: Wadsworth/Thomson Learning,
2004).
Sharma, P. and Bhal, K.T., Managerial Ethics—Dilemmas and Decision Making (New Delhi: Sage
Publications, 2004).
Smallman, C., “Exploring Theoretical Paradigms in Corporate Governance,” International Journal of Business
Governance and Ethics (2004), 1 (1): 78–94.
CASE
Study
BIOCON—INDIA’S OWN HOME-GROWN BIOTECH COMPANY
(This case study is based on reports in the print and elec-

tronic media, and is meant for academic purpose only. The
ogy enterprise specializing in biopharmaceuticals, custom
author has no intention to sully the image of the corporate

research, clinical research and enzymes (Fig. 2.4).
or executives discussed.)
BIOCON’S PERFORMANCE
BIOCON—AN OVERVIEW
Biocon, as India’s own home-grown biotechnology com-
pany, has shown exemplary performance since its inception
in 1978 (Table 2.1). Its integrated business model and the
Biocon was established in 1978. As India’s leading biotech-
company’s excellent business strategy have earned for
nology company, it has evolved over the past 30 years from an
Biocon exemplary performance, both in terms of profits and
enzyme manufacturing unit to a fully integrated biopharma-
ever-increasing value of its scrips.
ceutical enterprise, focusing on healthcare. It applies its pro-
prietary fermentation technologies to develop innovative and ∑ Biocon Ltd has posted a 44 per cent increase in its net
effective biomolecules in oncology, cardiology, diabetology profit at INR 475.1 million for third quarter ended
and other therapeutic segments. December 31, 2006, compared with INR 327.9 million
Biocon’s success has been primarily due to the com- posted during the same period of the previous fiscal. The
pany’s expertise to develop innovative technologies and company earned a revenue of INR 8630 million, profit of
products and to rapidly leverage them to adjacent domains. INR 1080 million in 2006–07, and grew 23 per cent in the
This unique ‘integrated innovation’ approach has yielded a first quarter of 2007–08.
host of patented products and technologies that have enabled ∑ During the period, the Biocon scrip, after several months,
multi-level relationships with its global clientele. rallied over 10 per cent on both the bourses, closing at INR
Biocon India Limited and its two subsidiary compa- 410.25 on the Bombay Stock Exchange (BSE) and at INR
nies, Syngene International Limited and Clinigene 410.45 on the National Stock Exchange (NSE). It gained
International Limited, form a fully integrated biotechnol- INR 75, touching an intra-day high of INR 445.65 on the
BSE.
Fig. 2.4
Biocon’s Integrated Business Model
(Source courtesy: Biocon, www.biocon.com/
biocon_aboutus_business.asp)
∑ The revolutionary oral insulin programme has passed

phase I human clinical trials and is likely to enter phase
II soon.
BIOCON IN NEWS RECENTLY1, 2

Biocon has been very much in the news in recent times as
shown below:
∑ New York Times called Kiran Mazumdar Shaw, the Chair -
person, ‘India’s mother of invention’ and The Economist
gave her the title ‘India’s Biotech Queen’.
∑ Biocon’s Syngene enters into research partnership with
Bristol-Myers Squibb on 14 March 2007.
∑ Biocon Limited unveiled comprehensive portfolio of
renal therapy products on 8 March 2007
∑ Biocon grants exclusive marketing license for BIOMAb
EGFR for Pakistan on 18 January 2007.
∑ Biocon Limited and Neopharma signed MoU for a joint
venture on 5 January 2007.
∑ Biocon buys US-based start-up IATRICa Inc in a sub-
$10 million deal.
∑ Biocon buys 70 per cent stake of the German pharma
AxiCorp in a €30-million deal to market its injectible
insulin, generics, biosimilars and biologics.
Source: http://www.hindu.com/2011/04/22/stoies/ 201104

2264831700.htm
BIOCON AND ITS SUBSIDIARIES

Biocon, has floated three subsidiary companies in the
process of building up an integrated business model and with
a view to enjoying the benefits of complete integration in
biotechnology business.
Syngene is a 99.99 per cent owned subsidiary of Biocon lases, amyloglucosidase, cellulases, catalases, lipases, and pro-
Incorporated. On 18 November 1993, its paid-up capital teases. However, over the years all categories of enzymes have
was INR 28.75 million. By way of a restructuring, 99.9 per become less and less significant in Biocon’s staple of biotech
cent of the shares held by Kiran Mazumdar Shaw, ICICI and products. From close to 90 per cent in the early 1990s
a few other scientists were transferred to Biocon in consid- enzymes’ share in the topline had dropped to 11 per cent in
eration for the issue of shares by Biocon to the sharehold- 2006–07. It has shrunk further to 5 per cent in the first quarter
ers of Syngene on 31 March 2002. of 2007–08.
FOOD ADDITIVES
Clinigene is a 100 per cent owned subsidiary of Biocon
Ltd. It was incorporated on August 4, 2000 with an author-
ized capital of INR 5 million. The paid-up capital of Food additives manufactured and marketed by Biocon
Clinigene was INR 500,000. include emulsifiers, hydrocolloids, natural colours, special-
Biocon Biopharmaceuticals Private Limited (BBPL) is a ity fats and specialized proteins.
SERVICES
joint venture company of Biocon in collaboration with CIMAB
SA, Cuba. The equity participation by Biocon is 51 per cent.
CUSTOM RESEARCH
The joint venture agreement was entered on 22 February 2002.
The paid-up capital of BBPL was INR 8.8 million.
PRODUCTS AND SERVICES

Biocon subsidiary, Syngene, leverages its synthetic chem-
istry skills to carry out custom research in early stage drug
discovery and development.
Kiran Mazumdar Shaw, the founder of Biocon, firmly
CLINICAL RESEARCH 6
believes that India should make full use of her intellectual
capital with a view rising high in the value chain in a man-
ner totally different from the Western model, which did not
Another Biocon subsidiary, Clinigene, conducts phases I–
take into account the affordability of medicines to the
IV clinical trials and longitudinal research to discover
patients. Besides, ‘India needs to leverage its affordable
novel biomarkers. Clinigene is a clinical research organi-
cost base to deliver high-value innovation to global mar-
zation that offers global biotechnology and pharmaceuti-
kets by building excellence across the innovation chain,
cal majors strong clinical trial services, regulatory and
from discovery to product and clinical development’. 3 This
laboratory capabilities for clinical drug development. The
is the policy perspective that trigged the growth of Biocon
value-added services include patient registries and clini-
over the past three decades. According to Sandeep Rao,
cal databases in diabetes, lipidemia, oncology, and car-
General Manager, Business Development, ‘Biocon’s
diovascular diseases.
impressive range of products and partnered services con-
BIOCON’S CORPORATE SOCIAL RESPONSIBILITY (CSR)

tinue to build a robust pipeline of biosimilar and discov-
ery-led biological programs in oncology, nephrology,
diabetes and autoimmune diseases’. 4
ACTIVITIES
Since the enzyme business of Biocon declined,
Mazumdar Shaw announced on 18 June 2007 that the com- Biocon’s CSR activities centre around the Biocon Foundation
pany decided to sell the division to the Danish firm that has been established with the aim of identifying and
Novozymes for $115 million (INR 4,715 million). Biocon implementing projects that impact the social and economic
will put some of the sale proceeds into R&D and some for scenario in the country. It main focus areas are to provide qual-
acquisitions. 5 ity healthcare and health education for the betterment of
BIOPHARMACEUTICALS
Indian society.
ing Arogya Raksha Yojana, aims to provide high-quality

Through its initiative, Biocon Foundation, by establish-
Biocon manufactures a wide spectrum of biopharmaceuticals drugs at affordable prices to the masses at all BioCare
ranging from small molecules to biological and dosage forms Pharmacies and participating clinics.
which include anti-diabetic agents, anti-hypertensive and anti-
CLINICAL TRIALS AND DRUG TESTING IN

inflammatory agents, anti-oxidants, haemostatic agents,
INDIA7
cholesterol-lowering agents, digestive-aid enzymes, hepatop-
rotective, immuno-suppressants, nutraceuticals and orthope-
dic agents.
Any development of new drugs needs various tests before
ENZYMES being released in the market commercially. These tests are
called clinical trials. One of the main areas of Biocon’s
Biocon manufactures and markets a broad range of industrial research focused on developing oral insulin to control dia-
enzymes, food additives and process aids which include amy- betes, which also, like other medicines require extensive drug
testing. Biocon also conducts clinical trials, not only to test the also an attractive destination for high-quality health services
efficacy or otherwise of its own products, but also of others due to a variety of reasons such as low cost, trained person-
associated with it through its subsidiary company, Clinigene. nel and medical infrastructure. A huge population with
What are these clinical trials and what are its impacts on peo- diverse untreated diseases: this is what people in the medical
ple affected by these trials? profession call the ‘India advantage’.
‘India increasingly emerges as a preferred destination for ‘In India particularly, unethical and illegal clinical trials
outsourcing clinical trials—testing of new drugs on humans— are most rampant and are conducted without fear because,
and the country may also be heading toward providing the say critics, there is no law to safeguard the interests of vol-
greatest source of human guinea pigs for the global drug indus- unteers, while regulatory authorities, ‘by design or default’
try.’8 Clinical trials come with a staggering price tag. fail to take action against such trials.’12
Worldwide, clinical research was estimated to be a $5–6 bil-
ILLEGAL CLINICAL TESTS

lion market in 2002, and clinical research spending is expected
to touch $20 billion by 2007. CMSInfo, Chesam, UK, reports
that national spending on clinical trials in America alone was A spate of unfortunate events over the past few years has
nearly $25.6 billion in 2006 and expected to rise to $32.1 bil- brought to the fore the rampant practice of conducting uneth-
lion in 2011—growing at an average rate of 14 per cent per ical and even illegal clinical trials in India. This is causing
year.9 ‘A recent presentation by the Drug Controller-General immense concerns, triggering a huge public outcry over the
of India said that the market value for clinical trials outsourced regulatory authorities’ failure to check such practices, initiat-
Asia Times, in an article on the subject, quoted the CEO of

to India was around $300 million, up 65% from 2006, and was ing even lawsuits.13 It has become more and more lucrative.
expected to be between $1.5 billion and $2 billion by 2010.’
But industry stakeholders contest this claim.10 Biocon (Kiran Mazumdar Shaw), who said that clinical
recent times since it offers the pharmaceutical industry the rai-

The business of clinical trials has increased multi-fold in research was expected to touch $10 billion by the year 2005.14
son d'être and the logic for obtaining governmental license

WHY ARE MNC DRUG COMPANIES FLOCKING TO
INDIA?
to market their products. However, human beings from
developing countries are being used as guinea pigs and are
paid a pittance for the huge losses in health and life suffered
At the time of her independence, pharmaceutical research in
by them. This is because in countries like India, there are
India did not rely on clinical testing. Medical scientists mostly
teeming millions of people who are extremely poor and
reverse-engineered drugs already developed in advanced
could be paid a small compensation compared to the citizens
countries. But everything changed when India submitted to
of developed countries. The drug industry has also involved
pressure from the World Trade Organization (WTO) to stop
uninformed, non-consenting people from developing coun-
the practice, and implemented rules that prohibit Indian com-
tries as human volunteers.11
panies from creating generic versions of drugs patented else-
where.
THE INDIAN ADVANTAGE Now, multinational pharmaceutical companies have
assured profits in the Indian market, and the country has sud-
India’s most significant offering is cost savings. More than denly become a profitable location for the expensive tests
40 per cent of drug development costs are incurred in clini- required for FDA’s clearance of any drug. Though it is still
cal trials and India offers immense savings on that aspect. too premature to predict how much the legislative changes
India has 40 million asthmatic patients, 34 million diabetic have boosted drug development, observers say the number of
patients, 8–10 million HIV-positive people, 8 million epilep- studies conducted by multinational drug companies has
tic patients, and 3 million cancer patients, among other cat- sharply increased now.
egories. India’s 34 million diabetics account for one-fourth Regardless of where clinical trials are performed, the
of the global diabetic population and the number keeps FDA requires the same evidence showing that a drug is safe
increasing every year. The number is estimated to grow to and effective before granting its approval for any drug. It is
57.2 million by year 2025. Pharmaceutical companies often the responsibility of the institutional review boards at the
view this as ‘raw stock’. medical institutions where the studies take place to ‘actively
There were reports of several trials that were conducted pursue issues of informed consent’.
in government hospitals where alone poor patients can afford It is a fact that multinational drug companies are resorting
to get treated. These poorly funded government hospitals to illegal clinical tests in India because of the ever increasing
look at these trials as a source of income to buy their equip- cost of drug research both in Europe and the United States.
ment. Besides, there is no effective monitoring mechanism In developing countries such as India and China, govern-
for research and often regulations have to be diluted. Since ments are not too careful to ensure that such clinical tests do
India possesses a huge target drug testing population and the not lead to human suffering and death. Even in cases where
country encourages the outsourcing of clinical trials, phar- such tests have led to deaths, the compensation paid to the
maceutical companies from the West rush to India. India is victims’ families work out to be a small fraction of what it
would have cost them in developed countries. According to Biocon has also decided to set up a centre on a 10-acre
Ashish Singh, Vice President of Bain & Co., a consulting firm plot in the Hyderabad biotech SEZ being developed by the
that reports on the healthcare industry, ‘the total spending on Andhra Pradesh State Industrial Infrastructure
outsourcing clinical trials to India could top $2 billion by Corporation. The SEZ in Andhra Pradesh has a state-of-
2010’.15 the-art effluent treatment plant with marine discharge
Companies are attracted to India not only because of facility. Andhra Pradesh has promised Biocon uninter-
the huge patient pool and skilled workers, but also rupted power and water supply.
because many potential study volunteers are ‘treatment Andhra Pradesh has been keen to get Kiran Mazumdar
naive’, meaning they have not been exposed to the wide Shaw to invest in the state ever since it realized that the
array of biomedical drugs that most Western patients biotech major is unhappy over Bengaluru infrastructure.
have. Besides, doctors here are easier to recruit for trials There is a view among many that the company is moving to
because they do not have to go through the same ethics Andhra Pradesh due to its inability to handle the pollution it
procedures as their Western counterparts. Moreover, in generates and protect the environment as required by the
countries like India patients ask fewer questions about Bengaluru Municipal Corporation.
what is going on. However, the Andhra Pradesh government provides a
common effluent treatment for similar companies in its
industrial estate. Biocon does not show that the company is
UNETHICAL PRACTICES OF BIOCON

interested in protecting the environment, as its first plant at
Bengaluru is still running without the effluent treatment
Though Biocon as India’s own home-grown biotech com- plant.
pany has been receiving rave reviews in the media for its
innovative initiatives in biotechnology, it has also attracted
BIOCON ENHANCES TRADE OPERATIONS IN
adverse critical comments for underplaying ethical issues
BANGLADESH17
in its efforts to be a successful company. The following eth-
ical lapses have been reported in the media in recent times.
Biocon has accepted some lapses, justified some, while Biocon is on an aggressive drive in Bangladesh because of
contested some others. The following instances demon- the country’s increasing dependence on the lifestyle dis-
strate how acceptable it becomes for a successful organi- order drugs such as cardiovasculars and anti-diabetics.
zation to make compromises on ethical issues when it is Bangladesh, which is viewed as an attractive destination
addicted to the pursuit of success. for active pharmaceutical ingredients (APIs), has been
looking at leading Indian companies for its supplies, and
ILLEGAL CLINICAL TRIALS BY BIOCON

companies like Biocon have managed to stay ahead in the
region. For Biocon, 50 per cent of its earnings are from
In 2004, Biocon and Shantha Biotech in Hyderabad came exports.
under scrutiny for conducting illegal clinical trials that led The company’s range of APIs is accepted by leading
to eight deaths. generics and branded companies across the world and have
It was alleged that Shantha Biotech failed to obtain also found favourable acceptance in Bangladesh mainly
proper consent from patients while testing a drug meant to because the products are manufactured ‘under stringent stan-
treat heart attacks. Biocon tested a genetically modified form dards’. Therefore, Biocon’s statin portfolio, oral anti-diabet-
of insulin without the proper approval from the Drug ics and immuno-suppressants are on the list of exports to
Controller General of India (DCGI) or the Genetic Bangladesh.
Engineering Approval Committee (GEAC). The latest drugs from the company’s stables being
After the outcry against Shantha and Biocon, the Indian Insugen, an r-DNA insulin and BioMAb EGFR for head and
government adopted stricter ethical guidelines for clinical neck cancer will see it being on the export list.
research, but one cannot be too sure that companies are abid- Biocon has a reasonable presence with an advantage of
ing by the new rules. being one of the few companies with a product offering as
variant as cardiovascular, diabetes, and oncology, and has
ENVIRONMENTAL INFRACTIONS16
been a key exporter to the region.
It is easier for companies like Biocon to put up a plant
in countries like Bangladesh since the pollution norms are
Biocon decided in February 2007 to set up a INR 10,000 not strictly followed there. Furthermore, clinical trials
million manufacturing facility at Jawahar Pharma City, a could be easily conducted without any objection from the
special economic zone (SEZ) near Visakhapatnam, Andhra government.
Pradesh.
PROCEDURAL LAPSES AT BIOCON18 Biocon to be innovative in its practices with a view to

making avaliable to the country’s poor medicines at afford-
The Karnataka government referred the issue of Biocon Ltd’s able prices. But while doing this, a company should not
lapses in making methylcobalamin to the DCGI in 2006 for indulge in unethical practices that tarnish the image of the
further action. Methylcobalamin, a form of vitamin B12, is country’s producers and their products. This is a lesson we
used to treat nervous problems (neuropathy) among diabet- should learn from this case.
ics. Biocon holds a manufacturing licence for methylcobal-
KEY WORDS
amin since June 2003 and was to follow a seven-step
procedure. However, the company skipped some steps and
changed the process by using an intermediate drug (dimethyl Biocon ∑ Patented products ∑ Joint venture (JV) ∑ Memo-
benzimidazole) imported without licence from Auspure randum of Understanding (MoU) ∑ Oncology ∑ Diabetology
Biotech Ltd, China. ∑ Cardiology ∑ Multilevel relationships ∑ Global clientele
The State Drugs Controllerate found in January 2006 ∑ Unethical practices ∑ Proprietary fermentation technology
that Biocon had cut short the steps and violated Section 18a ∑ Effluent treatment plant ∑ Clinical trials
(vi) read with Rule 78(b) of the Drugs & Cosmetics Rules
DISCUSSION QUESTIONS
by not intimating the changes in the standard operating pro-
cedure.
The State Drugs Control authorities cancelled the 1. Discuss the singular characteristics of Biocon as India’s
licence in late January 2006. On 10 February 2006, Biocon fast-growing technology enterprise, while tracing its
applied for a fresh licence and received it in March. A growth.
Biocon spokeswoman said that the situation was rectified 2. What are the problems associated with conducting clin-
and the company continues to make the drug based on the ical trials in India? How has Biocon circumvented them?
new March licence. However, she argued that methyl-
NOTES
cobalamin in terms of sales and revenue was a ‘very
insignificant product’ to the company.
In its statements, Biocon said it had admitted to inspecting The author is obliged to the following two groups of
officials to a ‘procedural lapse’ in the manufacturing process. EPGDBM students (indicated by 1 and 7) for the basic
Also, import of an intermediate from China does not need a inputs produced by them to this case study:
licence. It had now stopped importing the intermediate.
It stated that it had revised its production process and had 1. M. S. Somasundram, B. Sai Ramesh, and A. Valliappan,
commenced the production of methylcobalamin. Accepting “Biocon and its (Un)Ethical Practices,” unpublished
the fact that the company had committed a procedural lapse report (Chennai: LIBA, 2007).
pharma co AxiCorp for e30 mn,” The Economic Times,

as it had not updated the drug controllers’ office about the 2. Correspondent, “Biocon picks up 70% in German
changed process, they filed the new process seeking a fresh
license. The company argued that the situation had been rec- 11 February 2008, available at
tified once the Karnataka’s Drugs Control Department issued http://economictimes.indiatimes.com/News/News_By_
a fresh license in March 2006. Industry/Healthcare_Biotech/Biocon_picks_up_70_in
The above news indicates that the company is not keen _German_pharma_co_AxiCorp_for_e30_mn/arti-
on the procedures and is willing to correct only when iden- cleshow/2774679.cms
tified and informed. Biocon would have continued with its
ability,” Biocon Ltd., The Economic Times, 30 July 2007.
3. Kiran Mazumdar Shaw, “Innovation to Deliver Afford-
old procedure violating the guidelines of the Drugs Control
Department of Karnataka, had it not been identified during
4. Biocon, “Products & Services,” 2007 available at www.
the routine inspection.
biocon.com/biocon_products.asp
5. Venkatesha Babu, “Clean Cut From the Past,” Business
This also indicates that Biocon’s shift from Bengaluru to
Today, 10 August, 2007, Available at http://businesstoday.
Andhra Pradesh is not only for the effluent treatment facil-
ity, but for other reasons as well.
digitaltoday.in/index.php?issueid=18&id=1012&option
CONCLUSION
= com_content&task=view
6. Biocon Press Release, available at www.biocon.com/
Though many well-informed Indians are happy about the biocon_press_release_details.asp?subLink=news&Fileid=
achievements of Kiran Mazumdar and her biotech company 926.
Biocon, there have also been several adverse criticisms 7. Ramani, N. Srinivasan, T. Suchithra, and S. Sudha,
against the unethical practices followed by the firm. In the “Unethical Clinical Trials and Drug Testing by Biocon,”
drug industry, it is important for a home-grown company like unpublished report (Chennai: LIBA, 2006).
8. Vera Hassner Sharav, “Fast Growing Business: Unethical pharmabiz.com/article/detnews.asp?articleid=34481&s

Clinical Trials in India,” Alliance for Human Research ectionid=50
Protection, 27 July 2004, available at www.ahrp.org/info-
to DCGI,” The Hindu Business Line, 4 April 2006,
18. Bureau, “Karnataka Refers Biocon’s Procedural Lapse
mail/ 04/07/27.php
9. Robert Fee, “The Cost of Clinical Trials: Drug available at www.thehindubusinessline.com/2006/04/-
Discovery and Development,” 1 March 2007, available 04/stories/ 2006040402040500.htm
atwww.dddmag.com/the-cost-of-clinical-trials-aspx
Billion-Dollar Projection,” The Hindu Business Line, 14 FURTHER READINGS

10. P. T. Jyothi Datta, “Clinical Trial Market to Fall Short of
Basu, I., “India’s Clinical Trials and Tribulations,” Asia

October 2008.
11. Pratap Ravindran, “Clincal Trial on Trial,” The Hindu Times, 23 July 2004, available at www.atimes.com/
Business Line, 1 November, 2004, available at www. atimes/South_Asia/ FG23Df03.html
thehindubusinessline.com/2004/11/01/stories/
BBC News, “Drug Trials Outsourced to India,” 22 April
2004110100150900.htm
2006, available at http://news.bbc.co.uk/2/hi/south_asia/
12. See Note 8. 4932188.stm
13. Ibid.
in India?” Business Standard, 18 February 2004.
Gulhati, C. M., “Debate: Should Clinical Trials Be Allowed
14. See Note 7.
––––––, “Needed: Closer Scrutiny of Clinical Trials,” Indian
Journal of Medical Ethics (January–March 2004) 12 (1),
15. Scott Carney, “Testing Drugs on India’s Poor” Truthout,
2005, available at www.truthout.org/cgi-bin/artman/exec/
view.cgi/33/16613
16. Correspondent, “AP pips B’lore in Biocon Deal,” The
available at www.issuesin medicalethics.org/121ed004.
Times of India, 17 February 2007, available at http://

html
Srinivasan, S., “Indian Guinea Pigs for Sale: Outsourcing
timesofindia. indiatimes.com/articleshow/1630228.cms Clinical Trials,” India Resource Centre, 8 September
17. Nandita Vijay, “Biocon to Enhance Trade Operations,” 2004, available at www.indiaresource.org/issues/global-
27 July 2006, Pharmabiz.com, available at www. ization/2004/indianguineapigs.html

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Two

Concepts and Theories of

PERSONAL ETHICS AND BUSINESS ETHICS

MORALITY AND LAW

HOW ARE MORAL STANDARDS FORMED?

RELIGION AND MORALITY

MORALITY, ETIQUETTE AND PROFESSIONAL CODES

MANAGEMENT AND ETHICS

1. Egoism, both as an ethical theory and as a psychological theory.

ETHICAL THEORIES IN RELATION TO BUSINESS

UTILITARIANISM: ETHICS OF WELFARE

KANTIANISM: ETHICS OF DUTY

SOME MORE NORMATIVE THEORIES OF BUSINESS ETHICS

THE STOCKHOLDER THEORY

THE SOCIAL CONTRACT THEORY

TEACHINGS OF THE CHURCH

THE TRADITION OF CATHOLIC SOCIAL THOUGHT

INDIAN ETHICAL TRADITIONS

RIGHTEOUSNESS AS THE WAY IN THE GITA

is the driving force of life, and this work has to be ethical.

tion to Nishkama Karma.

Yada yada hi dharmasya glanir bhavati bharata

Paritranaya sadhunam vinashayacha dushkritam

BUSINESS AND ISLAM

SHARIAH AND INTEREST ON CAPITAL

ant stocks on the exchanges.

principles ∑ Sarvodaya ∑ Righteousness ∑ Steady mind

5. William H. Shaw, Business Ethics, 4th ed. (Singapore: Thomson/Wadsworth, 2002).

Extension Press, 1983).

Perplexed,” Business Ethics Quarterly (January 1998) 8: 25–26.

BIOCON—INDIA’S OWN HOME-GROWN BIOTECH COMPANY

(This case study is based on reports in the print and elec-

author has no intention to sully the image of the corporate

∑ The revolutionary oral insulin programme has passed

BIOCON IN NEWS RECENTLY1, 2

Source: http://www.hindu.com/2011/04/22/stoies/ 201104

BIOCON AND ITS SUBSIDIARIES

PRODUCTS AND SERVICES

BIOCON’S CORPORATE SOCIAL RESPONSIBILITY (CSR)

ing Arogya Raksha Yojana, aims to provide high-quality

CLINICAL TRIALS AND DRUG TESTING IN

ILLEGAL CLINICAL TESTS

Asia Times, in an article on the subject, quoted the CEO of

recent times since it offers the pharmaceutical industry the rai-

son d'être and the logic for obtaining governmental license

UNETHICAL PRACTICES OF BIOCON

ILLEGAL CLINICAL TRIALS BY BIOCON

PROCEDURAL LAPSES AT BIOCON18 Biocon to be innovative in its practices with a view to

pharma co AxiCorp for e30 mn,” The Economic Times,

8. Vera Hassner Sharav, “Fast Growing Business: Unethical pharmabiz.com/article/detnews.asp?articleid=34481&s

Billion-Dollar Projection,” The Hindu Business Line, 14 FURTHER READINGS

Basu, I., “India’s Clinical Trials and Tribulations,” Asia

Times of India, 17 February 2007, available at http://

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