India has been ranked 74

Two steps down since last year Among 180 countries of the world By the Worldwide Corruption Perceptions

Index (CPI)

 18 October 1999:

Reka Maximovitch joins Infosys as Phaneesh Murthys assistant December 2000: Reka Maximovitch quits Infosys 17 December 2001: "sexual harassment and wrongful termination"

$3 million paid by Infosys

23 July 2002: Phaneesh quits 25 April 2003: Case settled out of court for $3

mn payable in a month

BUSINESS ETHICS LEVELS

FIVE BUSINESS ETHICS MYTHS

Top 10 Principles for Positive Business Ethics

By Dr. Philip E. Humbert
Business Ethics are built on Personal Ethics.
Business Ethics are based on Fairness. Business Ethics require Integrity.

Business Ethics require Truth-telling

Business Ethics require Dependability. Business Ethics require a Business Plan Business Ethics apply Internally and Externally Business Ethics require a Profit. Business Ethics are values-based. Business Ethics come from the Boss

DEFINITION
Ethics : Ethos means character It is science of morals It is recognised rule of conduct It is science of character of a person expressed as right or wrong conduct or action.

Nature of Ethics
Ethics deals with human beings only
Ethics is a field of social science It is a normative science :
Normative science judge the value of the facts in

terms of an ideal. What ought to be?

It deals with human conduct which is

voluntary and not forced or coerced by persons and circumstances

Nature of Ethics
Ethics deals with human beings only
Ethics is a field of social science It is a normative science :
Normative science judge the value of the facts in

terms of an ideal. What ought to be?

It deals with human conduct which is

voluntary and not forced or coerced by persons and circumstances

Three types of Individuals, Managers, Managements

Immoral
Amoral Moral

Immoral Management
It cares only about their or companies profitability and success. They see legal standards as barriers or impediments their

strategy is to exploit opportunities for personal or corporate gain.

Amoral Management
:This management is neither immoral nor moral but is not sensitive to the fact that their everyday business decisions may have

deleterious effects on others. These management lack ethical perception or awareness

Moral Management
It not only confirms to accepted and high level of Professional Conduct, they also commonly exemplify leadership on ethical

issues. Management wants to be profitable, but only within the confines of sound legal and ethical percept, such as fairness, justice and due process.

Tata Group
Welfare Measures
8 hours of working Free medical aid Welfare Dept.

Year
1912 1915 1917

Enactment of Indian Law

1948 1948 1948

Schools for employees Children

Works Committees for Grievance handling Leave with Pay Workmens Accident Compensation Training of Apprentices Maternity Benefit

1917
1919 1920 1920 1921 1928

1947 1948 1952 1924 1961 1946

Workers Provident Fund 1920

Tata Group
Welfare Measures Profit- sharing Bonus
Retiring Gratuity TISS Tata Memorial Centre for Cancer Research and Treatment TCS Tata Airlines TIFR

Year 1934
1937 1936 1941

Enactment of Indian Law 1965

1972

1968 1932 1945

Conditions Permitting One to Engage in Harmful but Prevalent Behavior

Refraining from this behavior will unavoidably cause you (or those you care for or for whom you are responsible) serious

harm or loss.' Your engaging in this behavior will not also cause significantly more harm or loss to others.

Everybody doing it
Your engaging in this behavior will not lead others to engage in it in ways that are equally or more harmful, and this would be true if your

engaging in this behavior were to become public knowledge. Your refraining from this behavior will not lead others to refrain from it, and this would be true if your refraining from this behavior were to become public knowledge.

Everybody doing it
Your refraining from this behavior will not unavoidably lead others to engage in it in ways that are substantially more harmful

than would have been the case had you chosen to engage in it yourself and this would be true if your refraining from this behavior were to become public knowledge.

Everybody doing it
Will refraining from bribery cause you (or those you care for or for whom you are responsible) serious and unavoidable harm or loss? Will your engaging in bribery also cause significantly more harm or loss to others?
Will your engaging in bribery lead others to

engage in it in ways that are equally or more harmful, and would this still be true if your engaging in bribery were to become public knowledge?

Everybody doing it
Will your refraining from bribery lead others to refrain from it, and would this still be true if your refraining from bribery were to become

a public knowledge. Will your refraining from bribery unavoidably lead others to engage in if in ways that are substantially more harmful than would have been the case had you chosen to engage in it.

Kohlbergs theory of moral development

Preconventional Level:Self Orientation Punishment avoidance stage and reward seeking Conventional Level : Others Orientation Good Person and law and order Postconventional : humankind orientation

Stakeholders theory of the firm

The corporation should be managed for the benefits of its stakeholders
The rights of the group must be ensured

The group should participate in some sense in decision that substantially affect their welfare.

STAKEHOLDERS MAP OF A LARGE ORGANIZATION

STAKEHOLDER ANALYSIS

Trusteeship
Capitalism
Socialism Egalitarian
(The principle of equal rights for all persons) Non-Violence,Ahimsa,Stealing,Non-possession

Gandhian Philosophy of Wealth Management

It does not recognise right to individual property. Ends and means cannot be separated and both

needs to be equally moral to achieve moral results The enterprise of the entrepreneur, the worker and the consumer, all being co-trustees of the enterprise, responsible to the society at large

Enjoy your wealth by renouncing it

Earn your crores by all means. But understand that your wealth is not yours it belongs to the people. Take what you require for your

legitimate needs, and use the remainder for society Trusteeship seeks to convert through a nonviolent process, private property into social property.

 Swaraj- self rule and self discipline

Ahimsa - Non violence, non exploitation, equality and freedom

Economic Equality
Equal Distribution Concept of theft

Trusteeship
Raw material should be purchased to ensure a living wage to producers
Natural resources not digging cost,

replacement cost. Reduce disparity the ratio between lowest and highest 1:7 in the initial stages

 Expansionism and centralization shall be resisted , decentralization should be encouraged Enterprise is ultimately responsible to the world at large Consumer should be on the board Capital for such enterprises should be interest free

Gandhian Philosophy of Wealth Management

Seven greatest sin : Politics without principles Education without character Commerce without morality Pleasure without conscience Wealth without work Science without humanity Worship without sacrifice

 Ethics in product selection

Ethics in product pricing Ethics in Marketing Ethics related to IPR

Ethics in HR Issues

Ethics in Marketing
Product
Pricing Physical distribution Product promotion

Product
No safety
Hazardous products Duplication

Product Pricing
Dumping
Deceptive pricing Predatory pricing Price fixation Insider trading

Product Promotion
Making false claims and misleading advertisement
Ethics in advertisement

Lower the dignity of women

False promise

Intellectual Property Rights

Copyright
Trademarks Patents Industrial designs Geographical indications

Physical distribution
Territorial restrictions
Full line forcing Exclusive dealing arrangement Artificial scarcity of the product

Corporate Social Responsibility

Philip Kotler and Nancy Lee as CSR is a commitment to improve community well being through discretionary business practices

and contribution of corporate resources.

Corporate Social Responsibility

Corporate Citizenship Corporate Philanthropy Corporate Giving Corporate Community involvement Societal Marketing Community Relations Community Affairs Community Development Global Citizenship

DIFFERENCE
GOOD COMPANY Excellent Products & Services GREAT COMPANY Excellent Products/services & Makes the world a better place

a)
b) c) d) e) f) g) h)

50% of children under 4 malnourished

33% of children below 14 out of school 60% women anemic 5 Mln.++ are HIV positive growing at a compounded rate of 10% each year 500,000 child deaths/year due to respiratory disease 1 Mln. preventable infant deaths (63/1000 for India, 13/1000 in Kerala) 130 Mln. without basic health 226 Mln. without safe drinking water

NO
CAN GOVERNMENT ALONE DO?

Corporate Social Responsibility

Corporate Cause promotion
Persuasive Communication Building awareness and concern Persuading people to to find out more about the cause to donate their time to donate their Money To donate non monetary resources To participate in the event

Whistle blowing
The disclosure by organisation members (former or current) of illegal, immoral or illegitimate practices under the control of their

employers to persons that may be able to effect action.

Whistle blowing
Cynthia Cooper of World com,
Sherron Watkins of Enron Coleen Rowley of FBI

Whistle blowing
There is a misdeed or illegal activity in the organization
A perception that either the management can prevent it or

that it has been initiated by management or certain employees. Important factor is the presence of an individual or group of people who view that some action should be taken against the illegal activity. There is a process by which the individuals or group try to expose the problem to the authorities who can take action.

5 STAGES OF ENVIRONMENT CORPORATE COMMITMENT

Stage

Manager Mindset

Resource Commitment
Minimal resource commitment Budgets for problems as they occur Consistent yet minimal budget

Top-Level Support & Involvement

No Involvement

1. Beginner

Environmental management unnecessary Environmental issues addressed when necessary Environmental management is a worthwhile function

2. Firefighter

Piecemeal Involvement Commitment in theory

3. Concerned citizen

4. Pragmatist

Environmental management is an important business function

Environmental management is a priority item

Generally sufficient funding

Aware and moderately involved

5. Proactivist

Open-ended funding

Actively involved

6 STEP ISSUE MANAGEMENT PROCESS

1. Environmental scanning and issues identification 6. Issues evaluation and monitoring

2. Issues analysis

6 Step Issue Management

5. Issues response and implementation 3. Issues ranking and prioritizing 4. Issues resolution strategizing