2a) Role and function of business.

EXECUTIVE SUMMARY Business has always recognized that it has an important role, alongside other actors, in the economic and social development of its communities. It is an integrated part of any society and is committed to operating in a responsible and sustainable manner. Corporate Social Responsibility (CSR) is the name now most commonly applied to the multitude of innovative and positive initiatives by business in both the marketplace and the wider community. Today, the developing CSR debate has raised the issue of where the line is between the responsibilities of Government and the role business can play through voluntary social action. Increasingly social actors are looking to companies to fill what they perceive as gaps in, or failures of, State action - particularly in the enforcement of legal frameworks. This is leading to a conflict in expectations between what Governments should do and what companies can contribute. This conflict has wide implications for all players. Firstly, it distorts CSR and undermines the status of law. Secondly, it can lead to unrealistic and unrealisable expectations from within society. Finally, it can open companies to criticism for not delivering to these expectations, as well as diverting companies from their vital role in providing the primary means for wealth creation within a society through profitable activity. Today, the issue of how those profits are made is, however, becoming more important and CSR has emerged from the need to address the issue of business conduct with regard to its operations and interactions with others. At the heart of the relationship with society is the obligation on companies to comply with the law. CSR, on the other hand, is a business decision to move beyond compliance and is done for business reasons alone and is contingent upon the economic health of the business and its needs. It is, therefore, voluntary and varied by nature. The current CSR debate frequently ignores these realities. 2 The reasons for a business to move beyond compliance and undertake a CSR initiative are many and varied but, where businesses do, they do so because it makes economic sense. Given the dynamics of business today, CSR cannot be seen as a rigid engagement and therefore needs to be seen in a different context than the engagement in environmental, social or economic issues by governments. Most countries have legislation that reflects internationally-recognized values and principles, which provide an adequate framework of reference for what a companys responsibilities are. The problem often lies in poor enforcement of the law. It is the responsibility of governments to ensure the rule of law and the enforcement of those laws across its society. While the line between government and business activity is not always a definitive one, it is important to realize that governments have a clear role in society through the provision of certain services such as health and education, wealth redistribution, and as a guarantor of security, amongst others. At times when governments fail or are unable to fulfil their role, companies may consider it makes good business sense to play a part in filling the gap through voluntary CSR initiatives. However, there are limits to

what any business can achieve through CSR. Enterprises are not an alternative to government and CSR is not an alternative to appropriate legislation. Governments, should look to promote and support the adoption of responsible attitudes and good practice by companies. Similarly, other players also need to realize that there are limits to company CSR activity and therefore should frame their expectations grounded in reality. In this paper the IOE provides a business response to where those lines of responsibility are amongst the various actors in the CSR debate and seeks to clarify the role business can play in todays society through voluntary CSR initiatives. ***** 3 INTRODUCTION BUSINESS WITHIN SOCIETY Businesses are the community at work, be they small, medium or large, and national or international in their scope. They reflect the views, social realities and rules of the wider communities in which they operate. Those members of society that come together to form a business do so for a specific purpose: to create goods and services to sell to their community and maybe beyond and, by doing so, to make a profit within the obligations set for them by society. This profit is crucial to a business: it is used as a return to investors, to invest in new technologies and new products, to meet the wage and career expectations of its employees, and to pay taxes and make other contributions to government as specified by legislation and regulation. In other words, without profit there is no business, and without business there is no wealth creation in society. In recent years, the way profits are made and the way business is conducted have come under increased scrutiny. The lexicon of Corporate Social Responsibility (CSR) has arisen from the need to address the issue of business conduct with regard to its operations and its interaction with others. The overwhelming majority of businesses are responsible whether or not they are able to allocate specific resources to identified CSR initiatives. Responsible behaviour is not related to business size, nor does it require specific investments. At the heart of enterprises relationship with society are their obligations under law, including those in the area of governance. CSR, however, stems from a business decision to move beyond compliance and is done for business reasons alone. A businesss ability to invest in CSR initiatives is contingent upon the economic health of the business and its needs. This is true regardless of the size of the business. For an enterprise to engage in CSR without the economic means required or as a clear route to enhancing the business would be to divert resources away from other investments necessary for the wellbeing of the business. That is not good business sense, and that is why it is essential for each individual company to decide whether there is a business case for CSR engagements and whether or not it undertakes such activity. The current debate often ignores these fundamentals and the realities of how a business actively works within society. Too often the language and rationale of CSR are being misused as non-business players seek to address failures in the enforcement of legal and regulatory frameworks. That not only distorts what CSR is but, more importantly, also undermines the status of the law. CSR is a means by which businesses are managed. By understanding its stakeholders, a business is better able to manage its own development and impact. The drivers of this CSR

engagement are therefore many and varied. Externally they are as diverse as the CSR initiatives themselves, and originate from the activities and pressures exerted by investors, consumers, 4 public authorities, NGOs, trade unions and others. Internally these drivers can be grouped generically around six main realities: reputation, brand, profitability, efficiency, recruitment, competitiveness and risk management. It is these which determine engagement in CSR.

THE ROLES OF ENTERPRISES Because each company is different, it is not possible to give a definitive view of how business engages in CSR, but the following considerations need to be taken in to account: The primary role and focus of an enterprise in society are to succeed in its markets and deliver the product, wealth, employment and incomes that people depend upon. Expectations on enterprises should never place that role at risk or detract from that focus; 8 The vast majority of enterprises not only adhere to the law and regulations, they are also frequently making additional contributions to social well-being as they attempt to enhance their brand, reputation, employer base, and so on. There are often unreasonable expectations heaped on enterprises to do even more. While the line between government and business activity is not always a definitive one, it is important to realise that governments have a clear role in society, through the provision of certain services, such as health and education; redistribution of wealth; as guarantor of security, and others. At times, however, where governments fail or are unable to fulfil their role, enterprises may consider it makes good business sense to play a part in filling the gap through voluntary CSR initiatives. But there are limits to what any business can achieve through CSR. However, enterprises should not seek or be expected to replace the state or local authorities and other actors need to also ensure that their expectations of enterprises do not undermine the role of the state. It is through such understandings, on a case-bycase basis, that CSR initiatives can work and the role of the state, as the long-term provider of public goods and sustainable development policies that accommodate the needs of all, can be enhanced. Enterprises are not an alternative to government. CSR is not an alternative to appropriate public legislation and public engagement and enterprises need to be careful to ensure that, in acting, they are not circumventing national policy debates or priorities. This is widely recognized and well-established in, for instance, the OECD MNE Guidelines. Where enterprises are engaging in large infrastructure projects, education or health development or in other areas of traditional public goods, CSR activities should look to ensure their efforts are complementary to national policy and development. They should also look to partner with government rather than be in competition with it and should seek to retain government involvement in the issues in the longer term - e.g. whilst building a road it should vest the result in the government as a means of ensuring its longer-term interest in its maintenance. Enterprises need to consider whether or not by acting in a particular way in a particular context they will encourage government disengagement - e.g. health issues.

Governments are usually able to bring greater sustainability to public health and welfare issues than companies. Enterprises come and go and change over time and, unless the issue of sustainability is addressed by government, the CSR initiative may lack any long-term impact and the improvement sought may diminish - if not cease - if the enterprise either departs or disengages. Enterprises need to continually monitor the impact of their operations to ensure legal compliance or, in those areas where legal regulation is lacking, act to ensure that they are not negatively impacting on the society through their activities. For many larger MNEs this will often be by adopting at national level responses inspired by their own 9 good practice in their home countries or from elsewhere. For some, voluntary reporting on CSR will also be seen as a useful means of making their impact transparent. However, like CSR initiatives themselves, how or even if a business reports or informs on its CSR initiatives should remain a decision for the business itself to determine. Enterprises need to identify who their real stakeholders are. In many instances demands are made of companies by groups who are not stakeholders and represent no one relevant for that business. Managing stakeholders requires engagements to be concentrated on those that affect those with whom the business has a relationship and whose expectations are relevant to the businesss operations. Too often, CSR initiatives fail or are diluted by extraneous engagements with non relevant actors. Enterprises need to be clear as to the nature of their CSR engagement. They need to manage the expectations of recipients of their programmes, being clear about the limits, and thereby avoiding misunderstandings and possible downstream negative effects. Understanding the shorter term engagement reality of many CSR initiatives can help clarify the true nature of that initiative and avoid disengagement problems later on.

Social Responsibilities of a Business Organization towards Suppliers

The social responsibilities of a business organization towards supplier can be explained with the help of the following points: (1) (2) (3) (4) (5) The company should maintain good relations with the suppliers. Payment of credit amount must be done on time. The company should not force the suppliers to work on unreasonable terms. The companies should work for their growth and survival. The companies should not disclose any secret information about its suppliers to other.

These are some of the important responsibilities of a business organization towards suppliers.

Responsibility towards your suppliers emanates from the fact that their survival and growth (partly or wholly) is dependent upon your survival and growth. Suppliers provide you the raw materials, components and parts necessary for the production of your products. You are dependent upon your suppliers for regular, timely supplies of the specified quality at the agreed price. The suppliers in turn depend on you for providing correct design specification, adequate time for production, fixation of a fair price and prompt and timely payments. This two-way relationship works best when it is based on the realization of mutual dependence and one party does not try to pressurize the other for its own benefit. Escorts Limited and Hero Cycles are examples of how firms can play a responsible role in nurturing the growth of suppliers. As these firms have grown form success to success so have their suppliers. A full-fledged bicycle ancillary industry has been established in and around Ludhiana in response to the needs of Hero Cycles and other cycle manufactures. In some cases firms may even provide the seed capital and other necessary infrastructural support to an individual to start and ancillary industry. There are numerous examples where these small ancillary industries have grown to be as successful and large as the firms to which they were originally supplying.

The Social Responsibilities Toward Contractors and Suppliers

There has been great interest in the practice of corporate social responsibility (CSR) and its importance in many business and other organizational transactions. The value of CSR lies in its fundamental principle that the interest of all stakeholders should be considered. Consequently, social responsibility toward contractors and suppliers includes consideration of human rights, labor codes and anti-corruption schemes. Most strategies in this regard are in compliance with the U.N.'s strategic policy initiative for businesses, the United Nations Global Compact.
Human Rights

The business community, including organizations dealing with contractors and suppliers, has the responsibility to uphold human rights. This means that they should not in any way infringe human rights. Specifically, business operations often tend to be a point of contention where human rights may be negatively influenced or positively enforced. Businesses operating within or outside the country should be able to promote the rule of law. For instance, if they are dealing with contractors working in less favorable environments, they should be able to offer or at least ensure that they can provide a better working environment at the time of the transaction and

project. Further, it is the company's responsibility to monitor their supply chain management. This means that organizations should be aware of any human rights issues in every aspect of their business including contractors and suppliers. All business operations, including those with contractors and suppliers, should follow the legal principles of the country. If the organization finds that the national law does not actively promote international standards on human rights, the company should strive to follow the international law. There should be a compromise since the national law cannot be violated.
Complicity and Labor Code

Companies and organizations dealing with contractors and suppliers are also responsible for preventing and addressing complicity among employees. Complicity takes place when the organization becomes aware of human rights abuses and provides an environment where such abuse is supported or encouraged. In terms of labor code, companies are socially responsible for avoiding compulsory and child labor. Further, there shouldn't be discrimination of labor, regardless of the project.
Anti-corruption

It is in the best interest of the suppliers, contractors and even the company itself if the organization refrains from conducting or encouraging illegal methods of businesses such as corruption. Acts of corruption and under the table dealings not only pose risks to the company but also to the suppliers and contractors. Companies are responsible for advocating clean business practices including fair trade and proper business transactions. Read more: The Social Responsibilities Toward Contractors and Suppliers | eHow.com http://www.ehow.com/list_7588406_social-responsibilities-toward-contractorssuppliers.html#ixzz1Fn7KUEWo

Discipline means systematically conducting the business by the organizational members who strictly adhere to the essential rules and regulations. These employees/organizational members work together as a team so as to achieve organizational mission as well as vision and they truly understand that the individual and group aims and desires must be matched so as to ensure organizational success. A disciplined employee will be organized and an organized employee will be disciplined always. Employee behaviour is the base of discipline in an organization. Discipline implies confirming with the code of conduct established by the organization. Discipline in an organization ensures productivity and efficiency. It encourages harmony and cooperation among employees as well as acts as a morale booster for the employees. In absence of discipline, there will be chaos, confusion, corruption and disobedience in an organization. In short, discipline implies obedience, orderliness and maintenance of proper subordination among employees. Work recognition, fair and equitable treatment of employees, appropriate salary structure, effective grievance handling and job-security all contribute to organizational discipline.

Discipline is viewed from two angles/dimensions: 1. Positive Discipline: Positive Discipline implies discipline without punishment. The main aim is to ensure and encourage self-discipline among the employees. The employees in this case identify the group objectives as their own objectives and strive hard to achieve them. The employees follow and adhere to the rules and regulations not due to the fear of punishment but due to the inherent desire to harmonize in achieving organizational goals. Employees exercise self-control to meet these goals. Negative Discipline: Employees adhere to rules and regulations in fear of punishment which may be in form of fines, penalties, demotions or transfers. In this case, the employees do not perceive organizational goals as their own goals. The action taken by the management to ensure desired standard of behaviour/code of conduct from the employees in an organization is called negative discipline. The fear of punishment prevents the employees from going off-track.

2.

Characteristics of a Sound Disciplinary System (Red Hot Stove Rule)

Discipline should be imposed without generating resentment. Mc Gregor propounded the red hot stove rule which says that a sound and effective disciplinary system in an organization should have the following characteristics1. 2. 3. Immediate- Just as when you touch a red hot stove, the burn is immediate, similarly the penalty for violation should be immediate/ immediate disciplinary action must be taken for violation of rules. Consistent- Just as a red hot stove burns everyone in same manner; likewise, there should be high consistency in a sound disciplinary system. Impersonal- Just as a person is burned because he touches the red hot stove and not because of any personal feelings, likewise, impersonality should be maintained by refraining from personal or subjective feelings. Prior warning and notice- Just as an individual has a warning when he moves closer to the stove that he would be burned on touching it, likewise, a sound disciplinary system should give advance warning to the employees as to the implications of not conforming to the standards of behaviour/code of conduct in an organization.

4.

In short, a sound disciplinary system presupposes1. Acquaintance/Knowledge of rules- The employees should be well aware of the desired code of conduct/ standards of behaviour in the organization. This code of discipline should be published in employee handbook. Timely action- Timely enquiry should be conducted for breaking the code of conduct in an organization. The more later the enquiry is made, the more forgetful one becomes and the more he feels that punishment is not deserved. Fair and just action- There should be same punishment for same offence/ misconduct. There should be no favouritism. Discipline should be uniformly enforced always. Positive approach- The disciplinary system should be preventive and not punitive. Concentrate on preventing misconduct and not on imposing penalties. The employees should not only be explained the reason for actions taken against them but also how such fines and penalties can be avoided in future.

2.

3. 4.

Types of Penalties for Misconduct/Indiscipline

For not following the standards of behaviour/code of conduct in an organization, there are two kinds of penalties categorized asa. b. Major penalties- This includes demotion, dismissal, transfer, discharge, withholding increments, etc. Minor penalties- This includes oral warning, written warning, fines, loss of privileges, etc.

World Trade Organization (WTO)

The International trade is based on multilateral trading system. It is a system involving trade amongst various countries. it is

therefore, necessary that the rules and regulation of such system are properly define. In the year 1947, an attempt was made by 23 countries in the world to define the basic norms for conduct of international trade. The trade negotiation amongst these 23 countries in multilateral treaty called general agreement On Traffic and Trade (GATT) in the year 1948. The GATT was established to secure the conduct of international trade based on the principles of non-discrimination, transparency and liberalization. The GATT had been organizing international trade negotiation to define the regulation for and strengthening multilateral trading system over the years. The latest round of international trade regulation was conducted under auspices of GATT from 1986 to 1993. It was on 15 December that the latest round of international trade negotiation among 117 countries was conducted at Uruguay. The agreement so conducted were signed on April 16,1994 by 123 countries. The agreement has come to known as a Uruguay round or the GATT 94. One of the agreements during the Uruguay round was regarding renaming of GATT as World Trade Organization (WTO). The GATT 1994 is being implemented with effect from 1 of January 1995 when the very first agreement regarding the establishment of world trade organization (WTO) was established. Thus the World Trade Organization (WTO) held its last round of international trade negotiation at Doha in July 2006. At present 151 countries are member of World Trade Organization (WTO).

introductionThe World Trade Organization (WTO) came into being on January 1st
1995. It was the outcome of the lengthy (1986-1994) Uruguay round of GATT negotiations. The WTO was essentially an extension of GATT. It extended GATT in two major ways. First GATT became only one of the three major trade agreements that went into the WTO (the other two being the General Agreement on Trade in Services (GATS) and the agreements on Trade Related Aspects of Intellectual Property Rights (TRIPS)). Second the WTO was put on a much sounder institutional footing than GATT. With GATT the support services that helped maintain the agreement had come into being in an ad hoc manner as the need arose. The WTO by contrast is a fully fledged institution (GATT also was, at least formally, only an agreement between contracting parties and had no independent existence of its own while the WTO is a corporate body recognized under international law).

Objective of World Trade Organization (WTO)

* To ensure the conduct the international trade on non-discrimination basis. * To raise standard of living and income, ensuring full employment * To expend production and trade * Protecting environment * Ensuring better share for developing countries.

Function of World Trade Organization (WTO)

* Administering World Trade Organization (WTO) trade agreement * Forum the trade negotiation * Handling trade disputes * Monitoring national trade policy * Technical assistance and training for developing countries * Co-operation with other international organization (like help from World Bank and IMF).

Legal framework of World Trade Organization (WTO)

* Protection through import traffic * Reduction in traffic and binding against further increase

* Conduct of trade according to M.F.N. clauses * Commitment to national treatment rule.

Functions of WTO
1.The WTO facilitates the implementation, administration and operation, and furthers the objectives, of this Agreement and the Multilateral Trade Agreements, and also provide framework for the implementation, administration and operation of the Plurilateral Trade Agreements. 2. The WTO provides the forum for negotiations among its members concerning their multilateral trade relations in matters dealt with under the agreements and a framework for the implementation of the results of such negotiations, as may be decided by the Ministerial Conference. 3. The WTO administers the Understandings on Rules and Procedures governing the Settlement of Disputes. 4. The WTO administers the Trade Policy Review Mechanism (TPRM). 5. With a view to achieving greater coherence in global economic policy-making, the WTO cooperates as appropriate, with the International Monetary Fund (IMF) and with the International Bank for Reconstruction and Development (World Bank) and its affiliate agencies.
Four Basic Rules

1. Protection to Domestic Industry Through Tariffs: a. The General Agreement on Tariffs and Trade (GATT) covers international trade in goods. The workings of the GATT agreement are the responsibility of the Council for Trade in Goods (Goods Council) which is made up of representatives from all WTO member countries. GATT requires the member countries to protect their domestic industry/production through tariffs only.

b. It prohibits the use of quantitative restrictions, except in a limited number of situations. 2. Binding of Tariffs: The member countries are urged to

a. Eliminate protection to domestic industry/ production by reducing tariffs and removing other barriers to trade in multilateral trade negotiations.

b. The reduced tariffs are bound against further increases by listing them in each country's national schedule.

c. The schedules are an integrated part of the GATT legal system.

3. Most Favoured-Nation(MFN) Treatment: a. The rule lays down the principles of non-discrimination amongst member countries.

b. Tariff and other regulations should be applied to imported or exported goods without discrimination among countries.

c. Exceptions to the rules i.e., regional arrangements subjected to preferential or duty free trade agreements, Generalized System of Preferences (GSP) where developed countries apply preferential or duty free rates to imports from developing countries.

4. National Treatment Rule: The rule prohibits member countries from discriminating between imported products and domestically produced like goods in the matter of internal taxes and in the application of internal regulations.

Functions of WTO
The former GATT was not really an organisation; it was merely a legal arrangement. On the other hand, the WTO is a new international organisation set up as a permanent body. It is designed to play the role of a watchdog in the spheres of trade in goods, trade in services, foreign investment, intellectual property rights, etc. Article III has set out the following five functions of WTO; (i) The WTO shall facilitate the implementation, administration and operation and further the objectives of this Agreement and of the Multilateral Trade Agreements, and shall also provide the frame work for the implementation, administration and operation of the plurilateral Trade Agreements. (ii) The WTO shall provide the forum for negotiations among its members concerning their multilateral trade relations in matters dealt with under the Agreement in the Annexes to this Agreement. (iii) The WTO shall administer the Understanding on Rules and Procedures Governing the Settlement of Disputes. (iv) The WTO shall administer Trade Policy Review Mechanism. (v) With a view to achieving greater coherence in global economic policy making, the WTO shall cooperate, as appropriate, with the international Monetary Fund (IMF) and with the International Bank for Reconstruction and Development (IBRD) and its affiliated agencies.

Perhaps the most important question to ask about the WTO, especially in light of recent controversies is: What does the WTO do? The basic functions of the WTO are: 1. Administering WTO trade agreements The WTO shall facilitate the implementation, administration and operation, and further the objectives, of this Agreement and of the Multilateral Trade Agreements, and shall also provide the framework for the implementation, administration and operation of the Plurilateral Trade Agreements. 2. Forum for trade negotiations The WTO shall provide the forum for negotiations among its Members concerning their multilateral trade relations in matters dealt with under the agreements in the Annexes to this Agreement. The WTO may also provide a forum for further negotiations among its Members concerning their multilateral trade relations, and a framework for the implementation of the results of such negotiations, as may be decided by the Ministerial Conference. 3. Handling trade disputes The WTO shall administer the Understanding on Rules and Procedures Governing the Settlement of Disputes (hereinafter referred to as the "Dispute Settlement Understanding" or "DSU") in Annex 2 to this Agreement. 4. Monitoring national trade policies The WTO shall administer the Trade Policy Review Mechanism (hereinafter referred to as the "TPRM") provided for in Annex 3 to this Agreement. 5. Technical assistance and training for developing countries

6. Cooperation with other international organizations With a view to achieving greater coherence in global economic policy-making, the WTO shall cooperate, as appropriate, with the International Monetary Fund and with the International Bank for Reconstruction and Development and its affiliated agencies.

Functions
Among the various functions of the WTO, these are regarded by analysts as the most important:

It oversees the implementation, administration and operation of the covered agreements.[28][29] It provides a forum for negotiations and for settling disputes.[30][31]

Additionally, it is the WTO's duty to review and propagate the national trade policies, and to ensure the coherence and transparency of trade policies through surveillance in global economic policy-making.[29][31] Another priority of the WTO is the assistance of developing, leastdeveloped and low-income countries in transition to adjust to WTO rules and disciplines through technical cooperation and training.[32] The WTO is also a center of economic research and analysis: regular assessments of the global trade picture in its annual publications and research reports on specific topics are produced by the organization.[33] Finally, the WTO cooperates closely with the two other components of the Bretton Woods system, the IMF and the World Bank.[3

Objectives of WTO Important objectives of WTO are mentioned below: (i) to implement the new world trade system as visualised in the Agreement; (ii) to promote World Trade in a manner that benefits every country; (iii) to ensure that developing countries secure a better balance in the sharing of the advantages resulting from the expansion of international trade corresponding to their developmental needs; (iv) to demolish all hurdles to an open world trading system and usher in international economic renaissance because the world trade is an effective instrument to foster economic growth; (v) to enhance competitiveness among all trading partners so as to benefit consumers and help in global integration; (vi) to increase the level of production and productivity with a view to ensuring level of employment in the world; (vii) to expand and utilize world resources to the best; (viii) to improve the level of living for the global population and speed up economic development of the member nations.

About the WTO

The World Trade Organization (WTO), established on 1 January 1995, is the legal and institutional foundation of the multilateral trading system. It provides the principal contractual obligations determining how governments frame and implement domestic trade legislation and

regulations. And it is the platform on which trade relations among countries evolve through collective debate, negotiation and adjudication. The WTO is the embodiment of the results of the Uruguay Round trade negotiations and the successor to the General Agreement on Tariffs and Trade (GATT). Objectives The Preamble of the Agreement Establishing the WTO states that members should conduct their trade and economic relations with a view to "raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services, while allowing for the optimal use of the world's resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of development." Furthermore, members recognize the "need for positive efforts designed to ensure that developing countries, and especially the least-developed among them, secure a share in international trade commensurate with the needs of their economic development." To contribute to the achievement of these objectives, WTO Members have agreed to enter into "reciprocal and mutually advantageous arrangements directed to the substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory treatment in international trade relations."

Objectives (WTO

To create a knowledge base on various matter concerning various National and International Trade Laws and Protocols, and their National and International implications and ramifications. Carry out research and development and the building up of a clearing-house of cases on all matters of WTO agreements which are of national concern including safeguards and redressal mechanisms and suggesting alternative formulation in national interest which could form subject matters of future consultation or pre negotiations of WTO agreement. Increasing awareness amongst Domestic Industry, business, agriculture, service and other sectors on the impacts of trade laws arising out of WTO agreement and other treaties as member of WTO. Cooperating with industry associates, bodies set up by Govt. of India and Export Promotion Council on various issues related to tariff, non tariff and tactical barriers and undertake drive for awareness campaign by jointly or severally holding conferences, seminars, group discussions and other mode of awareness and campaign as also to develop linkages with overseas organizations in order to create a common perception and approach to the resolution of multilateral trade issues. Exploit all potential provisions of WTO agreement available to the developing nations and advising and counseling the Government of India on all such issues of national importance. To assist the Government in negotiating with the International Community in the perspective of the WTO regime and to help strengthen the Indian position in these regards in all possible ways. To co-ordinate efforts with the Government in creating a level playing field particularly for the accounting professionals in India specially in view of the implementation of the WTO regime on GATS through the most effective means possible including the organization of seminars, publication of articles and monographs, and presentation before the Government.

Identify areas of non-fulfillment of the WTO agreement which concern Indian interest and suggest line of action and remedies open for fulfillment of these obligations. Initiate discussions on making the domestic trade and export and import policies more WTO compatible and suggest initiatives to be taken in this respect at various levels to ensure high growth in export and economy including the development of various modes of synergy and effective regulation of trade laws which are functionally divided between Commerce, Finance, Foreign and Product related Ministries. To study the impact and threat perception of WTO agreement on the growing service sector industries including all those covered under 'business services' of GATS agreement in general and knowledge, accountancy and consulting services, transport, communication, medical, education, insurance, banking in particular and suggest policy issues, develop research and education programs aimed at educating members of ICAI. To develop a base of expertise amongst the members of the Institute on Intellectual Property Rights, TRIPS, Anti-dumping laws, EXIM Policy matters etc., through Seminars, training programs and such other methods as may be considered effective.

Performance
Performance Table Economic Indicators Production Employment Export Opportunity

small-scale industries
Production

The small-scale industries sector plays a vital role in the growth of the country. It contributes almost 40% of the gross industrial value added in the Indian economy. It has been estimated that a million Rs. of investment in fixed assets in the small scale sector produces 4.62 million worth of goods or services with an approximate value addition of ten percentage points. The small-scale sector has grown rapidly over the years. The growth rates during the various plan periods have been very impressive. The number of small-scale units has increased from an estimated 0.87 million units in the year 1980-81 to over 3 million in the year 2000. When the performance of this sector is viewed against the growth in the manufacturing and the industry sector as a whole, it instills confidence in the resilience of the small-scale sector.

Year Target Achievement 1991-92 3.0 3.1 1992-93 5.0 5.6 1993-94 7.0 7.1 1994-95 9.1 10.1 1995-96 9.1 11.4 1996-97 9.1 11.3 1997-98 * 8.43 1998-99 * 7.7 1999-00 * 8.16 2000-01 (P) * 8.90 P-Projected (April-December) * Target not fixed at constant prices

Employment

SSI Sector in India creates largest employment opportunities for the Indian populace, next only to Agriculture. It has been estimated that 100,000 rupees of investment in fixed assets in the smallscale sector generates employment for four persons. Generation of Employment - Industry Group-wise Food products industry has ranked first in generating employment, providing employment to 0.48 million persons (13.1%). The next two industry groups were Non-metallic mineral products with employment of 0.45 million persons (12.2%) and Metal products with 0.37 million persons (10.2%). In Chemicals & chemical products, Machinery parts except Electrical parts, Wood products, Basic Metal Industries, Paper products & printing, Hosiery & garments, Repair services and Rubber & plastic products, the contribution ranged from 9% to 5%, the total contribution by these eight industry groups being 49%. In all other industries the contribution was less than 5%. Per unit employment

Per unit employment was the highest (20) in units engaged in beverages, tobacco & tobacco products mainly due to the high employment potential of this industry particularly in Maharashtra, Andhra Pradesh, Rajasthan, Assam and Tamil Nadu. Next came Cotton textile products (17), Non-metallic mineral products (14.1), Basic metal industries (13.6) and Electrical machinery and parts (11.2.) The lowest figure of 2.4 was in Repair services line. Per unit employment was the highest (10) in metropolitan areas and lowest (5) in rural areas. However, in Chemicals & chemical products, Non-metallic mineral products and Basic metal industries per unit employment was higher in rural areas as compared to metropolitan areas/urban areas. In urban areas highest employment per unit was in Beverages, tobacco products (31 persons) followed by Cotton textile products (18), Basic metal industries (13) and Non-metallic mineral products (12). Location-wise Employment Distribution - Rural Non-metallic products contributed 22.7% to employment generated in rural areas. Food Products accounted for 21.1%, Wood Products and Chemicals and chemical products shared between them 17.5%. Urban As for urban areas, Food Products and Metal Products almost equally shared 22.8% of employment. Machinery parts except electrical, Non-metallic mineral products, and Chemicals & chemical products between them accounted for 26.2% of employment. In metropolitan areas the leading industries were Metal products, Machinery and parts except electrical and Paper products & printing (total share being 33.6%). State-wise Employment Distribution Tamil Nadu (14.5%) made the maximum contribution to employment. This was followed by Maharashtra (9.7%), Uttar Pradesh (9.5%) and West Bengal (8.5%) the total share being 27.7%. Gujarat (7.6%), Andhra Pradesh (7.5%), Karnataka (6.7%) and Punjab (5.6%) together accounted for another 27.4%. Per unit employment was high - 17, 16 and 14 respectively - in Nagaland, Sikkim and Dadra & Nagar Haveli.

It was 12 in Maharashtra, Tripura and Delhi. Madhya Pradesh had the lowest figure of 2. In all other cases it was around the average of 6.

Year

Target Achievement Growth rate (lakh nos.) (lakh nos.) 1992-93 128.0 134.06 3.28 1993-94 133.0 139.38 3.28 1994-95 138.6 146.56 5.15 1995-96 144.4 152.61 4.13 1996-97 150.5 160.00 4.88 1997-98 165 167.20 4.50 1998-99 170.1 171.58 2.61 1999-00 175.4 177.3 3.33 P-Provisional

Export

SSI Sector plays a major role in India's present export performance. 45%-50% of the Indian Exports is contributed by SSI Sector. Direct exports from the SSI Sector account for nearly 35% of total exports. Besides direct exports, it is estimated that small-scale industrial units contribute around 15% to exports indirectly. This takes place through merchant exporters, trading houses and export houses. They may also be in the form of export orders from large units or the production of parts and components for use for finished exportable goods. It would surprise many to know that non-traditional products account for more than 95% of the SSI exports. The exports from SSI sector have been clocking excellent growth rates in this decade. It has been mostly fuelled by the performance of garments, leather and gems and jewellery units from this sector. The product groups where the SSI sector dominates in exports, are sports goods, readymade garments, woollen garments and knitwear, plastic products, processed food and leather products. The SSI sector is reorienting its export strategy towards the new trade regime being ushered in by

the WTO. Year Exports (Rs. Crores) (at current prices) 1994-95 29,068 (14.86) 1995-96 36,470 (25.50) 1996-97 39,249 (7.61) 1997-98 43946 (11.97) 1998-99 48979 (10.2) 1999-00 (P) 53975 (10.2) P-Provisional

Major Export Markets An evaluation study has been done by M/s A.C. Nielsen on behalf of Ministry of SSI. As per the findings and recommendations of the said study the major export markets identified having potential to enhance SSIs exports are US, EU and Japan. The potential items of SSIs have been categorised into three broad categories. More.. Export Destinations The Export Destinations of SSI products have been identified for 16 product groups. More..

Opportunity

The opportunities in the small-scale sector are enormous due to the following factors:
Less Capital Intensive Extensive Promotion & Support by Government Reservation for Exclusive Manufacture by small scale sector Project Profiles Funding - Finance & Subsidies Machinery Procurement Raw Material Procurement Manpower Training

 Technical & Managerial skills Tooling & Testing support Reservation for Exclusive Purchase by Government Export Promotion Growth in demand in the domestic market size due to overall economic growth Increasing Export Potential for Indian products Growth in Requirements for ancillary units due to the increase in number of greenfield units coming up in the large scale sector. Small industry sector has performed exceedingly well and enabled our country to achieve a wide measure of industrial growth and diversification.

By its less capital intensive and high labour absorption nature, SSI sector has made significant contributions to employment generation and also to rural industrialisation. This sector is ideally suited to build on the strengths of our traditional skills and knowledge, by infusion of technologies, capital and innovative marketing practices. This is the opportune time to set up projects in the small-scale sector. It may be said that the outlook is positive, indeed promising, given some safeguards. This expectation is based on an essential feature of the Indian industry and the demand structures. The diversity in production systems and demand structures will ensure long term co-existence of many layers of demand for consumer products / technologies / processes. There will be flourishing and well grounded markets for the same product/process, differentiated by quality, value added and sophistication. This characteristic of the Indian economy will allow complementary existence for various diverse types of units. The promotional and protective policies of the Govt. have ensured the presence of this sector in an astonishing range of products, particularly in consumer goods. However, the bugbear of the sector has been the inadequacies in capital, technology and marketing. The process of liberalisation coupled with Government support will therefore, attract the infusion of just these things in the sector. Small industry sector has performed exceedingly well and enabled our country to achieve a wide measure of industrial growth and diversification. By its less capital intensive and high labour absorbtion nature, SSI sector has made significant contributions to employment generation and also to rural industrialisation. This sector is ideally suited to build on the strengths of our traditional skills and knowledge, by infusion of technologies, capital and innovative marketing practices. So this is the opportune time to set up projects in the small scale sector. It may be said that the outlook is positive, indeed promising, given some safeguards. This expectation is based on an essential feature of the Indian industry and the demand structures. The diversity in production systems and demand structures will ensure long term co-existence of many layers of demand for consumer products / technologies / processes. There will be flourishing and well grounded markets for the same product/process, differentiated by quality, value added and sophistication. This characteristic of the Indian economy will allow complementary existence for various diverse types of units. The promotional and protective policies of the Govt. have ensured the presence of this sector in an astonishing range of products, particularly in consumer goods. However, the bug bear of the sector has been the inadequacies in capital, technology and marketing. The process of liberalisation will therefore, attract the infusion of just these things in the sector.

A Practical Guide to Evaluating Professional Business Ethics

Uploaded by albertgates8 (186) on Nov 20, 2007

Business has created wealth that has given numerous individuals financial freedom, yet at the same time, it has widened the gap between the rich and the poor. The philosophy of business considers the primary principles that underlie the operations of an enterprise. Developing a balanced business ethic between profit-taking and honesty is perhaps one of the most difficult tasks for a corporation. In the wake of post-communism, we are now living in triumphant times of global capitalism; but the inevitability of corporate greed and deception in this system can create devastating results like Enron, WorldCom and Arthur Anderson.8 These corporations failed because of the people that work there; a series of deceptive operational decisions left these billion-dollar corporations and their millions of investors in demise. And there are many other examples of smaller companies undergoing corporate restructuring in an effort to save themselves. What business ethics involves is the plundering of natural resources, exploitation of labor in lesser-developed nations, unfair competition, impacts on the environment, treatment of employees and social responsibility.1 Business managers must keep all of these points in mind when making decisions on behalf of their organizations. This paper will look at the different factors a manager ought to look at when making informed decisions, with consideration of the stakeholders the manager him/herself, the corporation and greater society. Through the use of the role-differentiated model, the utilitarian model and the professional contract model, I contend that a business manager has moral right but not the moral obligation to act up to the limits of law in any situation; in other words, the manager will be considered amoral only if he/she has broken the law. First we must understand that all business is anchored in the subjective viewpoints of the manager, of the corporation and of society. Each of these distinct and interconnected entities hold their own beliefs on what businesses ought and ought not to do, and these beliefs often conflict with one another. What we need is a practical method of resolving morality in business dilemmas, and I feel the best way to do it is by reducing business ethics to the law. Legal reduction gives us a more practical way of resolving black and white issues, whereby the grey area is significantly reduced in size. The law gives managers a clear view of the limits of a corporate decision. An opponent of this view might step in and argue that many business situations cannot be resolved to law. For example, if a business is giving customer ABC a favorable discount but not to customer XYZ, although not legally wrong some opponents would suggest that this is ethically wrong because all customers ought to be treated equally. However, we must recognize that this is part of regular business deals. Capitalism and wealth is created by imbalances of assets between countries, businesses and peoples. There is a certain amount of wealth in this world created by the perception of value by different groups of people. The imbalance of perceived value has made countries like USA and Canada richer than countries like Uganda and India. In addition, most business managers are smart people, they know how to develop relationships and how to make money for their organizations or they would not be where they are. Their decision to treat a specific customer favorably is calculated risk that they have decided to take on behalf of their organizations. Hence, giving one customer a favorable discount is simply a part of doing business in the global economy. According to the definition discussed in this paper, the above situation is not morally wrong because the business has not violated any legal rules. I will limit my discussion to business managers within corporations in North America because these seem to be the highest group of people that are scrutinized when the issue of business ethics arises. In addition, different cultures have different business practices that we may not completely agree with (bribery in countries like China and India are common); limiting our discussion to what we know will make the topic more applicable to the North American business culture. However, do keep in mind that the concepts covered are more or less applicable to all businesses regardless of size, location and authority. I will also assume that all business managers make decisions based on the best interest of the organization. Before going into the details, I will discuss some background basics of business ethics. A corporation is an association of individuals, created by law or under authority of law, having a continuous existence independent of the existences of its members, and powers and liabilities distinct from those of its members.6 Hence, a business is distinct from the individual; it has different social, legal and ethical rules from any human being. Many large corporations have a corporate code of conduct which is a set of company policies that define ethical standards for their conduct. This code is normally a reflection of a companys culture, values and a representation of the law. It is completely voluntary, and can take a number of formats and address any issue. Fundamentally, the code is dependent on its credibility taken by industry, unions, consumers and governments.2 In most organizations, business managers make decisions based on this code because its simply the easiest thing to do, and it is likely to be what is best for the corporation. In some cases however, managers will choose to violate the code to gain a favorable position; this often results in moral dilemmas. Role differentiation is a concept often employed by professionals of law, medicine and business. Role morality is based on the idea that there are certain moral responsibilities that change as we move between roles within society. These duties may conflict with those acceptable by reference to ordinary citizenry morality. For example, a defense lawyer because of her role must defend her client wholeheartedly even knowing that her client has committed the crime and is capable of repeating the crime if released. Similarly in business, decisions ought to be made based on the professional role of managers, and not the individual managers themselves. A corporation is owned by shareholders; managers are professionals representing the company who have special business acumen that majority of the population do not have. As a result, similar to how doctors are professionals of the medical system; an executive should practice in the interest of the business with the end-goal of benefiting the shareholders. A manager acting on behalf of the business may feel morally obligated one way toward a decision, but because she is acting on behalf of the business, the decision she makes is by no means an immoral one. If the manager does not take action because his personal morals overpower the professional morals, then he is not a good manager, which means that he may be penalized by the system i.e. fired by management, decreased salary & bonus etc. Albert Carr is a supporter of role morality. Carrs game theory suggests that business is much like a poker game whereby bluffing is a sort of business strategy used by businesses to win the game. Carrs theory is that if a business does not take advantage of a legal opportunity, then others will; hence, it is in the interest of the business manager to take the advantage up to the limits of law. For example, let us say that you are in the middle of a deal that if goes through would boost the companys earnings significantly. Yet the deal is very tough to make because your buyer has five other vendors competing for the same contract. You know the buyer likes to watch the Los Angeles Lakers and you are confident that if you are able to accommodate his wishes - fly him down for the game with court-side seats, you will have a great shot at closing the deal. However, one of your personal values is to never bribe for anything, and to always earn it with hard work. What should you do? We must evaluate this situation on the basis of a manager and not on the basis of the person. As a manager of the company, she has the obligation to grow profits for the company. It would certainly be in best interest of the company to send the buyer down to Los Angeles, with potential upsides of millions of dollars. Although the manager may not be happy with the decision personally, it is not his personal life that is at stake, but his professional life. He has a professional obligation to the shareholders and to all the employees of the organization, and as a result his role morality commands him to take action. In addition, if he does buy the tickets, likely one of the other vendors will, and he would lose the deal for his company. Consequently following Carrs game theory, it would be more advantageous for him to act. An opponent might argue that role-morality and the game theory are limitless in terms of how much a manager can do to gain the advantage. For example, if everyone else is depositing the vendor with millions of dollars into his personal bank account, should the manager also do the same knowing that this is clearly unethical? To answer this question, we must go back to our original argument that business decisions are moral up to the limits of law. Stuffing millions of dollars into someones bank account in hope of getting a business deal is clearly illegal. A good business manager would not risk the reputation and image of the organization and hence would not commit such fraudulent activities. The other vendors that are doing so are simply not good business managers, and they will eventually be prosecuted to the full extent of the law. Another criticism to role-differentiation might be that that its simply too easy of a response to complex professional dilemmas in denying any notion of individual personal responsibility. Opponents might say that role morality is simply an expression of the way that humans are divided into separate segments which make up the general morality of our existence. They may argue that business dilemmas ought to be resolved by normal human morals because these are the true morals that we must appeal to in all situations. Yet, these objections are faulty for many reasons. First, they are impractical. Appealing to broad morals makes the evaluation of a decision much tougher than targeted role morals. For example, in evaluating whether to dump chemical wastes in the nearby river, it would be much tougher to introduce ones personal morals along with

the business morals than to use business morals alone. Secondly, normal morality fails to account for professional roles that have specific responsibilities and expectations attached to them. Role differentiation helps to distinguish between these responsibilities so that a more specific moral dealing can be defined; in addition, it seems inappropriate to use normal values that lie outside of the professional context. If all business managers reduce their decisions to normal morals, then it would seem inevitable that equality would be restored to the capitalist system because normal values generally do not endorse taking an advantageous position over another person, company or country. In effect, this would collapse the entire global economy which is predominantly based on inequality. Another common theory used in professional ethics is teleology utilitarianism. Teleology focuses on the consequences of actions. Utilitarianism is a consequentialist theory stating that one ought to act as to produce the greatest good for everyone. Many utilitarian believe that this theory follows egoism the belief that one should make decisions that maximize their own self-interest.3 Because business managers will likely make decisions to promote the good of that individual or organization, utilitarianism seems like a good model to ensue. This theory offers a straightforward method of deciding the morally right action in most situations. First, we must identify the various courses of actions we can perform. Second, we must determine all of the potential benefits and harms that would result from each action. Finally we must choose the action that provides the highest overall benefits subtracting out all of the costs.9 The calculated decisions that managers make will create the greatest happiness, sometimes with higher happiness to the corporation, and sometimes with higher happiness to society. We can see how that using the utility model, decisions can be morally justified to the limits of law. For example, what should the manager do in deciding whether or not a company should outsource its manufacturing to India so that it can be more price competitive? In this example, the manager would have to determine all of the advantages and disadvantages associated with this decision from the businesss point of view, and not his personal morals. Advantages may be that it boosts profits, improves productivity, and increases the developing countrys employment and training etc. Disadvantages may include that it increases globalization, widens the gap between the rich and the poor, slashes jobs in North America etc. After evaluating these items and recognizing that outsourcing does not violate the law, and that the potential upsides of outsourcing outweigh the potential drawbacks, then the decision to outsource operations abroad is morally qualified. If on the other hand, the manager discovers certain clauses in the agreement that violates North American law, then outsourcing is amoral, and the manager should change the clauses or withdraw from the action completely. A concept that may be employed in the utility calculation is stakeholder analysis. A stakeholder is an individual or group that affects the organization and in turn, is affected by the companys actions and decisions. Stakeholder management goes beyond the traditional production and managerial views of the company and calls for a broader view of the parties involved including shareholders, employees, customers, suppliers, banks, government and NGOs.4 In the example above, the utility calculation would involve everyone that is affected by the outsourcing. An opponent might argue that utilitarianism fails to take into account considerations of justice.5 Using the above example, a business decision might very well produce the greatest happiness by going into India and enforcing child labor, so that all of its workers are less than eighteen years old with wages much lower than the norm. Critics might argue that this is clearly wrong and utilitarianism still sanctions it. Yet the critics are missing an important point in this paper producing the greatest happiness up to the limits of law. Child labor is legally wrong, and no matter how much happiness the business might create, it is not morally right; hence, the utility calculation in this case would not sanction such actions. Another objection might be that happiness is difficult to measure and compare. It is tough to determine the values of certain benefits and costs. For example, how would we go about assigning a value to life? How do we compare money to the value of time, or to the value of human worth? And how can we be sure that our subjective measurements are an objective view of the decision to be made? In looking at these questions, we must consider that just because measuring the utility of a decision is tough does not mean that it is wrong or invalid to do so. In addition, the opponent uses objectivism to defend his argument, but we can counter by saying that almost everything in this world is subjective. Even the law is formed based on individual subjectivism adopted based on the values and beliefs that humans have developed over thousands of years. For example, the legal sanction that one not to kill is not objective in nature, but rather a subjective value that most of us have developed over our lifetimes. This illustrates that evaluating moral situations will inevitably fall in the hands of subjectivism. Hence, objectivism itself shouldnt be a huge concern. What does matter is that the manager tries his best to asses the situation with as little bias as possible. Building on the role-differentiation and utilitarian models of business managers, it seems likely that a contract model would best describe the relationship between a manager and a corporation. A manager enters an employment contract with the organization whereby the organization pays the manager for her services in growing the business.8 The manager enters the relationship voluntarily aware of the restrictions imposed by the business; the manager also retains a level of accountability and has a right to ask for justifications from higher-ups and from shareholders. Moreover both the manager and the organization can exit from the relationship at anytime in the process.10 As a result, the contract demands the wholehearted devotion of the manager to the business, similar to the contractual agreement between a lawyer and his client. Evaluating decisions based on the contract model involves looking at all of the stakeholders and their relationships with one another. The manager enters a contract with the organization; the organization is in contract with the shareholders, the suppliers, the consumers, and the government etc. Hence, working down the chain of contracts, the managers decision must include many parties both internal and external of the organization itself. An example might best illustrate this model. A business manager is looking to hire an analyst for his team to work on a long-term project for one his clients who is Asian. He knows that hiring a Chinese person would benefit his team much more than hiring another race. He currently has two candidates to choose from: one is a Chinese person who graduated from Boston College with an Arts degree, while another candidate is Caucasian who graduated from the Wharton School of Business. What should he do? In looking at this situation, first we must decide how much hiring power this manager has over the HR department according to his contract with the organization. He should then evaluate the hiring policies of the organization and what the criteria are for evaluating candidates; using these contractual criteria, the manager should then evaluate both candidates and objectively come out with a solution based on the advantages and disadvantages of hiring either applicant. The manager should also understand the legal boundaries for human resources and ensure that he does not violate any rules. An opponent might argue that a contract model often does not cover what has not been expressly agreed upon. This creates many problems in terms of moral and legal disputes because a situation was simply not covered in the papers. In the above example, if the contract did not tell the manager what his role is in hiring for the organization, and what the evaluation criteria is, then what should the manager do? Yet this criticism is unfounded; just because a term is not covered does not mean that moral evaluations cannot be made. If the criticism is true, then it would mean that most models are false because not all of their terms are clearly defined e.g. the fiduciary model, the paternalistic model etc. A certain level of subjectivity exists in the contract model. The manager should be able to infer based on other terms of the contract what she ought to do in such a situation. In the example above, the manager has many options: 1. discuss the circumstances with higher management or with shareholders. 2. Subjectively evaluate the situation and make a decision based on what she believes is most professionally correct. 3. Modify the contract to include the new terms. The manager also needs to keep in mind the legal risks that he and the organization may face and incorporate these risks into her analysis. Morally speaking, if it is not legally wrong to hire for the sake of benefiting the organization based on ethnicity, then it would be morally right to do so. In this article, we have evaluated several practical methods of assessing the moral grounds of business decisions. In looking at the role-differentiated model, the utilitarian model, and the contract model, we have come to a consensus that it seems appropriate for business managers to evaluate decisions based on the law. In other words, the business manger is not considered amoral until he has broken the law. Yet we must understand that no single approach can offer answers to all of the ethical questions or to be immune from all problems and criticisms. Acknowledging this, we must continually refine our theories to enrich and amplify professional ethics to higher levels.

7 Principles of Admirable Business Ethics

1. Be Trustful: Recognize customers want to do business with a company they can trust; when trust is at the core of a company, it's easy to recognize. Trust defined, is assured reliance on the character, ability, strength, and truth of a business.

2. Keep An Open Mind: For continuous improvement of a company, the leader of an organization must be open to new ideas. Ask for opinions and feedback from both customers and team members and your company will continue to grow.

3. Meet Obligations: Regardless of the circumstances, do everything in your power to gain the trust of past customer's and clients, particularly if something has gone awry. Reclaim any lost business by honoring all commitments and obligations.

4. Have Clear Documents: Re-evaluate all print materials including small business advertising, brochures, and other business documents making sure they are clear, precise and professional. Most important, make sure they do not misrepresent or misinterpret.

5. Become Community Involved: Remain involved in community-related issues and activities, thereby demonstrating that your business is a responsible community contributor. In other words, stay involved.

6. Maintain Accounting Control: Take a hands-on approach to accounting and record keeping, not only as a means of gaining a better feel for the progress of your company, but as a resource for any "questionable " activities. Gaining control of accounting and record keeping allows you to end any dubious activities promptly.

7. Be Respectful: Treat others with the utmost of respect. Regardless of differences, positions, titles, ages, or other types of distinctions, always treat others with professional respect and courtesy.

Recognizing the significance of business ethics as a tool for achieving your desired outcome is only the beginning. A small business that instills a deepseated theme of business ethics within its strategies and policies will be evident among customers. It's overall influence will lead to a profitable, successful company. By recognizing the value of practicing admirable business ethics, and following each of the 7 principles, your success will not be far off.

PRINCIPLES OF ETHICAL CONDUCT

Gartner is committed to conducting our business to the highest standards of business practices, and to preserving the integrity of our brand. We expect every Gartner associate to work with integrity and professionalism. This Gartner Principles of Ethical Conduct represents our attempt to define Gartner's expectations of how each of us conducts ourselves every day. We cannot anticipate or define standards of behavior for every situation that might arise. We must use our best judgment and moral sense to perform our job responsibilities in an ethical manner within both the letter and spirit of this Policy and Gartner's other policies. This Policy is not intended as a substitute for Gartner's Code of Conduct Policy or for other more detailed policies that relate to standards of conduct. For ease of reference, some of these underlying policies are accessible by hyperlinks directly from this document.

Comply With Applicable Laws. Gartner takes seriously our collective obligation to adhere to all laws that govern our personal and professional actions. You must strictly comply with all applicable laws and regulations of the jurisdictions where you work or do business. While not an exhaustive list, this includes complying with laws and regulations concerning Financial Reporting, Insider Trading, Antitrust, Copyright, Foreign Corrupt Practices and Data Protection. For further information and guidance, see Gartner's Code of Conduct Policy, sections entitled Summary of Laws and Regulations and Insider Trading and Stock Tipping; and separate Insider Trading Policy.

Help Provide a Safe Work Place. All of us deserve to work in an environment free of violence, threats of violence, or intimidation. It is Gartner's policy to strictly prohibit any verbal abuse, threatening behavior, or conduct that may endanger persons or property. This includes possession of any firearm or other weapon on Company property. See the policy entitled Policy Regarding Mutual Respect (Avoiding Unlawful Harassment) and Safety in The Workplace for more information. Treat Fellow Employees With Respect and Dignity. You must avoid any comments or behavior toward others that may reasonably be regarded as harassment, or as reflecting bias on the basis of race, religion, national origin, age, sex, sexual orientation or disability. See the policy entitled Policy Regarding Mutual Respect (Avoiding Unlawful Harassment) and Gartner's Equal Opportunity Statement for more information. Protect Gartner's and Our Clients' Confidential Information. Gartner considers all of its business information, whether about Gartner or others, to be confidential and important business assets. You must comply strictly with your signed confidentiality agreement with Gartner, Company policy and the law, and protect the confidentiality of both Gartner's business information and the business information of our clients. Even if you leave Gartner, you must carefully protect information provided by clients who have been promised confidentiality. In addition, you must never use improper means to obtain the confidential information of any other person or business. For further information and guidance, see Gartner's Code of Conduct Policy, sections entitled Confidentiality of Client Information and Key Areas of Responsibility and the Agreement Regarding Certain Conditions of Employment. Avoid Conflicts Of Interest. You must avoid situations where you have an actual conflict of interest with Gartner, or where the appearance of a conflict of interest may be perceived. This includes not engaging in any outside employment without the prior written permission of senior management, not having a financial interest in, or affiliation with, competitors of Gartner, not serving on outside Boards of Directors without senior management approval, not accepting valuable gifts from business contacts, and not engaging in political activities with Gartner funds, equipment, facilities or supplies. Additional restrictions may apply to you, depending on your position and job responsibilities at Gartner, and you must be sensitive to, and familiar with, applicable conflict of interest rules. For example, you must not have a financial interest in companies that do business or seek to do business with Gartner if you are in a position to influence decisions affecting that business. If you are involved in procuring goods or services for Gartner, you must take special care to avoid so-called 'related party' transactions, which involve contracts with Gartner suppliers or others that directly or indirectly confer a financial benefit on Gartner employees or their relatives. If you are an analyst, you must not own stock in a company that you follow on behalf of Gartner, or that is within an industry or sector that you follow, either directly or as a supervisor. You should review and understand the Company's Conflict of Interest Policy, and Policy Regarding Associates Serving on Boards of Directors for guidelines in this area. Project a Positive Image of Gartner. As Gartner employees, we owe the Company a duty of loyalty. We should all be mindful that we represent Gartner in our day-to-day dealings with outsiders, and can have a significant influence over how Gartner is viewed in the business community. You should present Gartner in a positive light in your verbal and written statements about the Company, and avoid making derogatory comments about Gartner, our products, services, management, employees and systems. See Gartner's Code of Conduct Policy, section entitled Meeting With the Public and Investor Relations and Internet Posting Policy. Act Ethically In the Handling and Reporting of Data. Gartner relies on each of us to use the highest degree of personal integrity in reporting any kind of data or information to the Company, to our clients, and to the financial community. It is your responsibility to provide complete and accurate information when it is requested, and to input only accurate information into the Company's books and records. Any records, expense reports, financial reports and other data presented to Gartner, our clients, and other appropriate parties must be complete and accurate. These obligations have a special significance for Gartner's financial management associates, who are uniquely capable and empowered to ensure that the interests of all those who have a stake in Gartner's financial integrity are appropriately balanced, protected and preserved. See Gartner's Code of Conduct Policy, section entitled Accuracy of the Company's Books and Records and Ethical Principles For Financial Management Associates.

Avoid Substance Abuse. You must never sell, use, possess or be under the influence of illegal drugs, or improperly use, possess or be under the influence of alcohol while on Company premises or while engaged in Company business, including Company or client sponsored events. Exceptions may be made for reasonable consumption of alcohol provided by the Company at Company or client sponsored events. See Gartner's Code of Conduct Policy, section entitled Substance Abuse.

Do You Know About Improper Conduct at Gartner? We strongly encourage you to report any situations you know about that may involve illegal, unethical or otherwise improper business activity, as well as all instances of employee violations of these Principles of Ethical Conduct or any of Gartner's other policies. If you believe someone is engaged in improper or illegal conduct, you should immediately bring it to the attention of your manager, human resources representative, or the General Counsel. You should have no fear of suffering retribution or other adverse employment actions as a result of reporting improper conduct. For further information and guidance, see Gartner's Code of Conduct Policy.
7 Principles of Admirable Business Ethics

1. Be Trustful: Recognize customers want to do business with a company they can trust; when trust is at the core of a company, it's easy to recognize. Trust defined, is assured reliance on the character, ability, strength, and truth of a business.

2. Keep An Open Mind: For continuous improvement of a company, the leader of an organization must be open to new ideas. Ask for opinions and feedback from both customers and team members and your company will continue to grow.

3. Meet Obligations: Regardless of the circumstances, do everything in your power to gain the trust of past customer's and clients, particularly if something has gone awry. Reclaim any lost business by honoring all commitments and obligations.

4. Have Clear Documents: Re-evaluate all print materials including small business advertising, brochures, and other business documents making sure they are clear, precise and professional. Most important, make sure they do not misrepresent or misinterpret.

5. Become Community Involved: Remain involved in community-related issues and activities, thereby demonstrating that your business is a responsible community contributor. In other words, stay involved.

6. Maintain Accounting Control: Take a hands-on approach to accounting and record keeping, not only as a means of gaining a better feel for the progress of your company, but as a resource for any "questionable " activities. Gaining control of accounting and record keeping allows you to end any dubious activities promptly.

7. Be Respectful: Treat others with the utmost of respect. Regardless of differences, positions, titles, ages, or other types of distinctions, always treat others with professional respect and courtesy.

Recognizing the significance of business ethics as a tool for achieving your desired outcome is only the beginning. A small business that instills a deepseated theme of business ethics within its strategies and policies will be evident among customers. It's overall influence will lead to a profitable, successful company. By recognizing the value of practicing admirable business ethics, and following each of the 7 principles, your success will not be far off.