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Main concepts

Rajan Mani:IBS, Hyderabad: Sem III:2011

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Ethics – business ethics – morality – moral reasoning Teleological (egoism, utilitarianism & dualism) Deontological frameworks (existentialism, contractarianism, Kantian thought) Mixed frameworks ( intutionism, love ethic, divine command) Utilitarianism – utility – intrinsic good – instrumental good – need – wants Rights – legal, moral, negative, positive, contractual Justice – distributive, retributive, compensatory, egalitarian, capitalist, socialist, libertarian, as fairness, equal liberty, fair equality of opportunity
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Caring – ethic of caring, concrete relationship Virtue - ethic of virtue Business: Ideology – individualistic, communitarian; command economy, free market, private property, natural rights, surplus value, alienation, bourgeois, proletariat, invisible hand, natural price, natural liberty, survival of the fittest, Darwinism, mixed economy, intellectual property Market place: perfect competition, demand & supply, equilibrium point, monopoly, oligopoly, price fixing, price discrimination, price setting, price leadership, countervailing power, oligopoly power, anti-trust, regulation
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Pollution, toxic substance, nuclear wastes Exponential depletion, peaked depletion, free good, unlimited good Ecological system, ecological ethic, right to a livable environment Absolute ban, private costs, social costs, external costs Cost-benefit analysis, risk, social audit Right of consent, conservation, rights of future generations, multiple access, doomsday scenario

Rajan Mani:IBS, Hyderabad: Sem III:2011

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Contractual theory (of seller’s duties), duty to comply, implied claim, reliability, service life, maintainability Product safety, reasonable risk, duty of disclosure, duty not to misrepresent, duty not to coerce Manufacturer’s implied warranty, disclaimer, caveat emptor Due care theory, Theory of advertising & market power (Kaldor), Theory of creation of consumer desires (Galbraith), bait advertisements, deception

Rajan Mani:IBS, Hyderabad: Sem III:2011

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Contractual theory (of seller’s duties), duty to comply, implied claim, reliability, service life, maintainability Product safety, reasonable risk, duty of disclosure, duty not to misrepresent, duty not to coerce Manufacturer’s implied warranty, disclaimer, caveat emptor Due care theory, Theory of advertising & market power (Kaldor), Theory of creation of consumer desires (Galbraith), bait advertisements, deception

Rajan Mani:IBS, Hyderabad: Sem III:2011

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Job discrimination: institutionalised / isolated, intentional / non-intentional, statistical indicators, discriminatory practices Formal policy of ‘equality’, affirmative action, programme, utilisation analysis, reverse discrimination Compensation argument for preferential treatment, end goals of affirmative action programmes, invidious content, comparable pay

Rajan Mani:IBS, Hyderabad: Sem III:2011

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Rational model of the organisation Employee’s obligations to the firm, law of agency, conflict of interest, actual / potential conflicts of interest Commercial bribe, commercial extortion, theft, fair wage, OSHA Horizontal / vertical job specialisation, job satisfaction Political model of the organisation, organisational politics, political tactics Right to privacy – physical / psychological, right to freedom of conscience, whistle blowing, right to participate, right to due process
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Board procedures – board processes – broad vision Disclosure – valuation – compliance – misgovernance – transparency Agency theory, Sociological Theory, Stewardship theory Governance mechanisms & practices Managerial obligations to customers, employees, investors, society Stakeholders - shareholders
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World Bank – McKinsey report OECD, Cadbury & Hampel reports CII code Kumar Mangalam Birla, Irani & Narayana Murthy Committees SEBI’s initiatives

Rajan Mani:IBS, Hyderabad: Sem III:2011

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Statutory duties – roles & responsibilities – de facto – de jure Directors’ remuneration – remuneration committee – performance bonus – severance – executive pay Family owned business – independent directors – nominee directors – management structure Legal position – liability of directors – unlimited liability – validity of Acts
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Auditors’ roles & responsibilities – audit failures – conflict of interest - independence of auditors – audit failures – objectives of an audit – fraudulent auditing practices – mis-statement of financial statements Cost audit – internal auditors – non-audit services – quality audit Oversight – board - penalties

Rajan Mani:IBS, Hyderabad: Sem III:2011

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Agreement – combination Competition Commission of India – regulation of competition – ownership – concentration Political governance – political influence Capital market – securities market – product market

Rajan Mani:IBS, Hyderabad: Sem III:2011

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Corporate constitutionalism Government regulation – relations with business – power of coercion – limits of power – limiting corporate power Political governance Regulatory role Role of judiciary State intervention
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Anti corruption strategies Contract law – enforcement – exit mechanism – bankruptcy & foreclosure Fair taxation – property rights Governance: challenges – frameworks – models – settings Institutional framework: media, judiciary, banking systems

Rajan Mani:IBS, Hyderabad: Sem III:2011

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Board of directors Executive management Internal control groups Code of conduct

Rajan Mani:IBS, Hyderabad: Sem III:2011

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Regulatory oversight Legal / bankruptcy regimes Capital markets access Corporate control activity Block holding monitoring Activist institutional investor monitoring External audits Credit rating agency review
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Similarities and differences in methodology, parameters and scope of processes of these four agencies  GMI  Risk Metrics  CRISIL  ICRA
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Accounting standards – best practices transparency CG rating – rating methodology Legislative changes Self regulation Serious fraud office RBI Emergence of SEBI – jurisdiction – primary market reforms – role of securities market clause #49
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Business Ethics is not an oxymoron Business can be done profitably, successfully and ethically Ethical action is complex because needs of different stakeholders have to be balanced Ethical dilemmas often force choice between two rights As long as human greed exists , corporate scams will take place Regulators have perforce to play catch-up There are organisations which consciously practice ethics in business as well as set new standards for corporate governance
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Thank you and God bless !
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