Institute of Management Technology Hyderabad

Course Handout First Semester (Batch 2013 2015)

Course Title: Ethics, Responsibility & Governance Program: PGDM / PGDM (Finance) / PGDM (Marketing) Instructor-in-charge: Dr. Srividya Raghavan

Course Code: MGMT 551 Credits: 3

Instructors Dr. S.Sailaja (Sec A); Dr. Srividya Raghavan (Sec B); Dr. Andal Ammisetti (Sec C) Email id (@imthyderabad.edu.in) saisailaja; srividyar; aandal

Course Objective As a compulsory general management course in the first semester of the business management program, Ethics, Responsibility and Governance is designed to provide an overview of responsibilities and obligations of a business as a social, economic and legal entity. This course aims to provide a framework for examining moral obligations and ethical decision making through the lens of various theories of ethics. It provides a perspective on the social responsibility of a business and deliberates critical issues of corporate governance mechanisms. The objective of the course is to provide a primer on how businesses should think, act and behave as a responsible social unit that exists for the benefit of the society and its various stakeholders. Learning Outcomes (LO) At the end of the course the students will be able to: 1. Appreciate the importance of ethical thinking in business context and understand how ethical thinking goes beyond compliance with laws and regulations. 2. Critically analyze a context of ethical dilemma through the application of theories of ethics such as Universalism, Rights, Distributive Justice, Ethics of Care and Virtue Ethics 3. Make balanced decisions in situations of ethical dilemma using ethical decision making models. 4. Understand the need for organizations to be socially responsible and adopt sustainable business practices. 5. Understand the role of corporate governance and top management in providing the overarching strategic direction to business 6. Understand the need for internal and external corporate governance mechanisms in protecting shareholders interest 7. Understand the functioning of top management and the need to balance the interests of various stakeholders. 8. Understand the need for compliances and external controls in management of business

Text book Ethics, Responsibility and Governance Compiled by S. Subramanian and Published by Tata McGraw Hill for IMT Hyderabad Reference Books 1. Banks, Erik., Corporate Governance, John Willy Publishers 2. Velasquez, M.G., Business Ethics: Concepts And Cases 6th Economy Edition, Prentice Hall of India 3. Fernando, A. C., Business Ethics & Corporate Governance 2nd Economy Edition, Pearson Education 4. Monks, R. & Minow, N., Corporate Governance, Prentice Hall India 5. Ferrell, O.C., Fraedrich, J, Ferrell, L., Business Ethics: Ethical Decision Making and Cases, Cengage Learning 6. Collins, D., Essentials of Business Ethics, Wiley Publishers 7. Kotler, P. & Lee, N., Corporate Social Responsibility, Wiley Publishers 8. Werther, W.B., & Chandler, D., Strategic Corporate Social Responsibility: Stakeholders in a Global Environment, Sage Publications

ETHICS, RESPONSIBILTY AND GOVERNANCE (ERG) Session Topic Content SECTION I: CORPORATE ETHICS (1) 2 July .
nd

Readings & Cases

Introduction

Introduction to the course content: Ethics, Responsibility and Corporate Governance (CG) how they are linked. Briefing on course requirements

Course handout Text Book

(2) 4 July
th

Ethics, Morals & Values

Conceptual understanding of various concepts. (Terms often confused or used interchangeably) Lecture and Discussion

Chapter 1: Introduction to ethics and CG (pgs 5-41) Additional Reading (AR) 1: Linking Strong Moral Principles to Business Success Knowledge@Wharton Chapter 2: Principles of ethics (pgs. 42-81)

(3,4) 9/11th July

Principles of Ethics

Theories and principles to use as lenses for examining contexts

Lecture and Discussion

Additional Reading: Global Approaches to Anti-Corruption (HBS 9-902-062) Chapter 4: Ethics and Ethical reasoning.(pgs 82-105) Text Book - A note on ethical decision making (pgs 250- 266) Case 1: Martha McCaskey (HBS 9 403 114)

(5) 16 July
th

Ethical reasoning

Systematic ethical decision making. Situations of personal value conflict and how to deal with them. Case Discussion

(6) 18th July

Ethical context

w.r.t. Business objectives and market development

Chapter 5: Organizational Ethics and the law (pgs106-133) Chapter 6: The Corporation and its Stakeholders (pgs 134-155)

Case Discussion

Chapter 8:Business-Government Relations (pgs 156-179) Case 2: GE Healthcare in India: An (Ultra) Sound Strategy (UV1038)

(7) 23rd July (8) 25th July

Ethical context Ethical context

IPR market dynamics Case discussion wrt. Customers wellbeing Case Discussion

Case 3: Hollywood in India (A) (HBS 9 711 017) Chapter 15: Consumer Protection (pgs 180-201) Case 4: On Weldon's Watch: Recalls at Johnson & Johnson from 2009 to 2010 (HBS: 9 311 029)

(9) 30th July

Ethical context

w.r.t. Employees wellbeing

Chapter 16: Employees and the corporation (pgs 202-224) Chapter 17: Managing a diverse workforce (pgs 225-249) Case 5: Wal-Mart A Case of Employee Discrimination - Multi Media case study

Case Discussion

(10) 1 Aug
st

Building ethical organization

Case and Article Discussion

General reading: Business Standard Article http://www.businessstandard.com/article/politics/kick back-nation-

113060700972_1.html Case 6: Infosys in IndiaBuilding a Software giant in a corrupt environment (HBS-9701-030) SECTION II: CORPORATE SOCIAL RESPONSIBILITY (11) 6th Aug CSR brief historical perspectiveCurrent DefinitionModern Practices Increasing positive contributionCSR practices marketing gimmick? Lecture and Discussion Chapter 18: The Community and the Corporation (pgs 268-289) Additional Reading 2: Competitive Advantage and CSR(HBR-R0612D)

(12) 8 Aug
th

Case Discussion

Chapter 3: Corporate Social Responsibility (pgs 291-213) Case 7: ITC e-Choupal: Corporate Social Responsibility in Rural India (HKU765-PDFENG Additional Reading: Corporate Social Responsibility in India: No Clear Definition, but Plenty of Debate: India Knowledge@Wharton (http://knowledge.wharton.upenn. edu/india/article.cfm?articleid=46 36 )

(13) 13th Aug

CSR Vs Profit Vs Government Role UN Global Compact Development Vs Environment Protection

Lecture and Discussion

Tata: Leadership With Trust (Available in Text book)

(14) 15th Aug

Lecture and Discussion

Chapter 10: Ecology and Sustainable Development in Global business Case 8: Vedanta in Orissa- Multi Media case study Three small videos related to Vedantas Niyamgiri project

(15) 20 Aug
th

Environmental Protection

Case Discussion

Chapter 11: Managing Environmental Issues (pgs 337-

360) Case 9: Special Economic Zones in India: Public Purpose and private property (A) Additional Reading 3: Tiffany & Co: A Case Study in Diamonds and Social Responsibility: India Knowledge@Wharton (http://knowledge.wharton.upenn. edu/india/article.cfm?articleid=40 99 ) (16/17) 22 /27 Aug
nd th

Sustainable Practices, Legal issues and ReportingTriple Bottom-line Reporting

Lecture and Discussions

Karmayogs Rating of CSR activities of Indian firms- Study of website www.karmayog.com and ISO 26000 (from ISO website)

SECTION III: CORPORATE GOVERNANCE (18) 29th Aug (19/20) 24 /25 August
th th

Ethical leadership

Ethical leadership

Case 10: HP Company: CEO Succession in 2010 (HBS 9-411056) Chapter 9: Corporate Governance: Principles and Practices (pgs. 386-419) Chapter 14: Stockholder Rights and Corporate Governance Additional Reading 4: Mergers & Acquisitions: legal context: basic framework for Corporate Governance (HBS 9 803 200) Text Book pgs: 421-426 on three forms of CG in UK, Germany and Japan

Corporate Governance Introduction

Managing public limited firms Agency problems - context of M&A Why governance? Changes in eighties - Cadbury Report, Hampel Report and OECD Committee Recommendations SOX Act. Lecture and Discussion

Practioner Session

(21/22) 3 /5 Sept
rd th

Corporate Governance

Global Corporate Governance models Lecture and Discussion

(23) 10th Sept

Internal corporate governance mechanisms

Role of Board (Directors); Functions of the board; Case Discussion

Case 11: Corp: Assessing the board invitation Additional Reading 5: HBR Sept. 2002: What makes great boards great

Additional Reading 6: HBR Nov. 2006: How Well run boards make decisions (24) 12 Sept
th

Board management

Corporate control, Agency relationship and Activists shareholders Case Discussion

Case 12: Barnes and Nobles Inc.: The Yucaipa Proxy Challenge. (IVEY W11506)

(25) 17th Sept

Internal corporate governance mechanisms Internal corporate governance mechanisms

Internal corporate government mechanism Whistle blowers Case Discussion

Case 13: Olympus and the Whistle Blowing President (IVEY 12751)

(26) 19th Sept

Internal corporate government mechanism accounting issues

Case 14: Worldcom Inc.What Went Wrong? (HBS 905M43PDF-ENG) or Case: Accounting fraud at Worldcom (HBS 9 104 071) Reference Case: A letter from Prison (HBS 9-110-045)

Case Discussion

(27) 24th Sept

Internal corporate governance mechanisms

Short term-long terms goals Case Discussion and discussion on reporting

Case 15: Lehman Brothers: Crisis in Corporate Governance (NACRA NA0176)

(28) 31st Aug/1st Sept Practitioner Session

External mechanisms

Hostile takeovers and Corporate Control activity Lecture and Discussions Corporate Governance Lessons from Financial Crisis Lecture and Discussions Lecture and Discussion

Additional Reading 7: The Future of Corporate Governance (HBS Digital Chapters BEP029)

(29) 31st Aug/ 1st Sept Practitioner Session (30) 26 Sept

th

Corporate Governance in India

Case Discussion

Chapter 18: Corporate Governance in India (pgs 427 445) Case 16: Corporate Governance Failure at Satyam (HKU889PDF-ENG)

Review of course learning

PRACTIONER SESSIONS Name 1 Mr. Shriram Subramanian Mr. N.V. Subbarao Designation Founder and MD Company Ingovern Research Services Pvt. Ltd Reboot Systems (India) Place Bangalore

Co-founder and CEO

Hyderabad

ASSESSMENT PLAN Component Description 1 2 3 4 5 CP Debate Written Report & Presentation Activities (4) End Term Weightage 30% (15 +15) 10% (5 + 5) 10% (5 + 5) 20% ( 5% each) 30% LO Assessed LO 1-8 LO 2, 3.4 LO 5,6,7,8 LO 1, 2,3 4 LO 1-8 Time line Aug 30th and Oct 4th 1st and 27th August 10th Oct 5th Aug 21st Oct.

Case Analysis (30 marks): Case Analysis is done at three levels One at the individual level, two at study group level and three at the class level. On days that students have a case analysis, students must discuss the case in their study groups and submit a case analysis note one day before the class (4:30 pm on Monday and Wednesday). Assessment is done on level of understanding the case facts, critical thinking and decision making. Debate (10 marks): Early in the semester the class will be divided into ten teams (5-8 students). There are two debates/discussions for the course. This will be spread across the sessions. The first debate is in the area of ethics. This will be an open debate that must demonstrate an ability to develop a logical argument/point of view (POV). Evaluation is on the level of preparation on topic given, critical thinking, ability to articulate point of view and ability to defend point of view. In the second debate student groups work with topics of CSR. Each topic will be allocated to two teams, each taking opposite views. Each team prepares a paper (not to exceed 10 pages) describing its position and arguments. Supportive documentation and references are required. Each team will make a 5 minute argument followed by a counterargument. The debate lasts 20 min (Giving each team 2 opportunities to present their POV). The softer parameters of the presentation will be assessed on persuasiveness, creativity, accuracy, and responsiveness to the opposing view-points.

CG Report and Presentation (10): Each student has to choose a listed Indian firm and analyze its corporate governance practices in comparison with Infosys Technologies ltd on a set of parameters. The parameters are 1. 2. 3. 4. 5. Board Composition Audit committee practices Ownership Structure Auditors Regulatory Compliances

Activities (20 marks): There are series of activities linked to ethical decision making that is done in class. The evaluation is done on level of involvement, application of knowledge and ability to learn from the activity. End term Exam (30 marks): A case based comprehensive exam covering all topics to assess understanding of theory and application of the same.