Indian Ethos & Business Ethics

UNIT 5
Prof. Sujeet Subhash Tambe
B.E(Chemical), M.M.S(Operations),
UGC-NET(Management), SET(Management), Ph.D (Pursuing)

Navsahyadri Group of Institutes, Faculty of Management – MBA

Savitribai Phule Pune University
 SOURCES OF
BUSINESS
ETHICS
IMPORTANCE OF
BUSINESS ETHICS
CONTD..
TOP ETHICAL COMPANIES IN INDIA

Reliance Industries Mahindra and

Tata Motors and Mahindra

Tata Steel Hindalco Industries

IBM HSBC India

GlaxoSmithKline Jindal Steel and

National Thermal Power Limited

Power Corporation Idea

 TOP ETHICAL INTERNATIONAL
COMPANIES
Nike PepsiCo

Hewlett-Packard Marriott

Oracle International

Intel Google

American Express Time Warner

McDonald’s
ISSUES OF BUSINESS ETHICS

In Finance In International

In Human Resource Business

Management In Property,

In Production In Property Rights

Marketing Rights and

Intellectual Property
Rights
 TOP ETHICAL INTERNATIONAL
COMPANIES
Nike PepsiCo

Hewlett-Packard Marriott

Oracle International

Intel Google

American Express Time Warner

McDonald’s
ISSUES OF BUSINESS ETHICS

In Finance In International

In Human Resource Business

Management In Property,

In Production In Property Rights

Marketing Rights and

Intellectual Property
Rights
 ETHICS IN
FINANCE
Ethics in Finance are concerned with Technical

Issues such as the Optimal Mix of Debt and Equity

Financing, Dividend Policy, and the Evaluation of

Alternative Investment Projects, and the Valuation

of Options, Futures, Swaps, and other Derivative

Securities, Portfolio Diversification etc.

OPERATIONAL AREAS OF
FINANCIAL ETHICS
CONTD..
 CASE OF SATYAM COMPUTER SERVICES
SCANDAL
was the 2008 winner of the coveted en Peacock
Award for Corporate Governance Risk Management and
Compliance Issues.

Satyam Computer Services Scandal was nounced on 7

January 2009, when Ramalinga Raju confessed
that had been falsified.
 MANIPULATIONS
MADE
Inflated figures for cash and bank balances of 5,040
crore (US$1.09 billion) as against 5,361 crore
(US$1.16 billion) reflected in the books.
An accrued interest of 376 crore (US$81.59 million)
which was non-existent.
An understated liability of 1,230 crore (US$266.91
million) on account of funds was arranged by himself.
An understated debtors' position 490 crore
(US$106.33 million) of against2,651 crore
as
(US$575.27 million) in the books.
 CONTD..

On 22 January 2009, CID told in court that the

Actual number of Employees was only 40,000 and
not 53,000 as reported earlier and that Mr. Raju
had been Allegedly Withdrawing INR 20 crore
rupees every month for paying these 13,000 Non-
existent Employees.
 CONTD..
April 2009, 46% stake in Satyam
was by Mahindra &
Mahindra owned
any Tech Mahindra, as part of its
fication Strategy and Satyam rebranded as
Satyam" with C.P Gurnani as the new
ETHICS OF PRODUCTION

Ethics of Production deals with the duties of

a Company to ensure that Products

and Production Processes are not Harmful.

AREAS OF ETHICAL CONCERN IN
PRODUCTION
Defective, Addictive and
inherently Dangerous Products and
Services ;

Ethical relations between the

Company and the Environment;

Ethical problems arising out of New

 CONTD..

Product Testing Ethics;

Selling Goods Abroad which are Banned

at Home;

Omitting to provide Information on Side

Effects;

Unsafe Products;
 CONTD..

Built in Obsolescence;

Wasteful and Unnecessary Packaging;

Deception on Size and Content.

 CASE STUDY ON
BHOPAL GAS TRAGEDY
Bhopal Gas Tragedy is the World's
Worst Industrial Catastrophe occurred
on the night of December 2–3, 1984 at
the Union Carbide India Limited (UCIL)
Pesticide Plant in Bhopal, Madhya
Pradesh, India.
 AABBOUT THE
UCIL wasCCproducing
AASSEE Pesticide Sevin using Methyl
Isocyanate as an Intermediate.
On the night of December 2–3, 1984, water entered
tank containing 42 tons of MIC resulting
Exothermic Reaction Increasing
the Temperature inside the tank to over
200 °C (392 °F) and further the
Raising and Releasing Toxic Gases into
Pressure
the atmosphere.
 FACTORS LEADING TO THE
MAGNITUDE OF GAS
LEAK
Storing MIC in Large Tanks and Filling Beyond
Recommended Levels;

To Reduce Energy Costs, the Refrigeration

System was kept Idle;

The MIC was kept at

not at 4.5 degrees as
 CONTD..

The MIC Tank Alarms had not worked for

Four Years;

Plant Location Close to a Densely Populated

Area;

Inadequate Emergency Action Plans

 CONTD..

Lack of Skilled Operators;

The Dependence on Manual Operations;

No Maintenance Supervisor placed on

the Night Shift;

Lack of Training to the MIC workers

 CONTD..

Halted Promotions seriously affecting

Employee Morale driving some of the most
skilled elsewhere;

Instrument Readings were being

taken every Two Hours,

than the required One

 CONTD..

Workers were forced to use English manuals

when only a few had a grasp of the language.
 PRESENT DAY STATUS
OF THE CASE
Civil and Criminal Cases are pending in the
United States District Court, Manhattan and
the District Court of Bhopal, India, involving
UCC, UCIL employees, and Warren Anderson,
UCC CEO at the time of the disaster.
 CONTD..
In June 2010, seven ex-employees, including
the former UCIL chairman, were convicted in
Bhopal of causing Death by negligence and
sentenced to Two Years Imprisonment and a
fine of about $2,000 each, the maximum
punishment allowed by law. An eighth
former employee was also convicted but died
before judgment was passed.
 HR
MANAGEMENT
Human Resource Management Ethics
cover the sphere of activity of
Recruitment, Selection, Orientation,
Performance Appraisal, Training and
Development, Industrial Relations and

Health and Safety Issues where

ethics really matters.
AREAS OF ETHICAL
MISCONDUCT IN HR
MAANAAGGERIAL
AACCTTIIONSS FFORR
MAANAAGIING ETTHIICS OFF
HRM
HR ETHICS AT KENTUCKY FRIED
CHICKEN (KFC)
KFC opened its first fast-food outlet in
Bangalore in June 1995. KFC is very keen
about ethical standards and is strict about its
vendor engagements.
 CONTD..

To secure a contract with Kentucky Fried

Chicken the Suppliers have to comply with
similar ethical standards as KFC i.e. they must-

not utilize Under Age Labour;

must pay Fair Wages;

Avoid placing Harmful

 HR STANDARDS
AT KFC
Health and Safety of Workers

Justice in case of Eventuality

Employment Practices

Fair Wages
 ETHICS OF MARKETING

Ethics in Marketing deals with the Principles,

Values or Ideals by which Marketers

and Marketing Institutions ought to act.

 UNETHICAL PRACTICES IN
MARKETING

Dumping

Fixing Cartels Price

Bait and Switch Selling

Counterfeit Goods and

Brand Piracy
 CONTD..

Deceptive Advertising

Copying the Packaging

Style Premium Rate Calling

 CONTD..
Irresponsible Issue of Credit Cards &

Raising of Credit Limits

MARKETING IN BRITISH AIRWAYS

British Airways developed a Cause Marketing

Campaign called Change for Good partnered
with UNICEF.
Passengers on British Airways flights are
encouraged to Donate Leftover Foreign
Currency from their travels.
MODE OF MARKETING ADOPTED

British Airways Advertises its program during

an In-flight Video, on the Backs Of Seat
Cards, and with In-flight Announcements.
The company also developed a Television Ad
featuring child thanking British Airways for
its contribution to UNICEF.
 RESULT
As Change for Good is Directly Targeted to
Passengers and produces immediate results,
it does not require Extensive Advertising or
Promotion and is Highly Cost Efficient.
Since, 1994, it has distributed almost $45
million around the world.
INTERNATIONAL BUSINESS ETHICS

Ethical Issues and Dilemmas in International

Business prevail because Political Systems,
Law, Economic Development, and Culture
vary significantly from nation to nation.
PROPERTY RIGHTS AND
INTELLECTUAL PROPERTY RIGHTS

Property Rights enhance Individual

Property by Extending the Line
of Non- interference by the State or
Others
 AREAS OF ETHICAL CONCERN

Patent Infringement, Copyright Infringement

and Trademark Infringement

Misuse of Intellectual Property Laws to Stifle

Competition

Employee Raiding
PLUS Ethical Decision-Making Model
• PLUS Ethical Decision-Making Model is one of the most used and
widely cited ethical models.
• To create a clear and cohesive approach to implementing a solution to
an ethical problem; the model is set in a way that it gives the leader
“ethical filters” to make decisions.
• It purposely leaves out anything related to making a profit so that
leaders can focus on values instead of a potential impact on revenue.
The letters in PLUS each stand for a filter
that leaders can use for decision-making:
• P – Policies and Procedures:
Is the decision in line with the policies laid out by the company?
• L – Legal:
Will this violate any legal parameters or regulations?
• U – Universal:
How does this relate to the values and principles established for the
organization to operate? Is it in tune with core values and the company culture?
• S – Self:
Does it meet my standards of fairness and justice? This particular lens fits well
with the virtue approach that is a part of the five common standards mentioned
above.
These filters can even be applied to the process, so leaders have a clear
ethical framework all along the way.
Defining the problem automatically requires leaders to see if it is violating
any of the PLUS ethical filters. It should also be used to assess the viability
of any decisions that are being considered for implementation, and make a
decision about whether the one that was chosen resolved the PLUS
considerations questioned in the first step. 
No model is perfect, but this is a standard way to consider four vital
components that have a substantial ethical impact.