Documente Academic
Documente Profesional
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AGENDA
Understanding Ethics
Managing Business Ethics Corporate Social Responsibility Complexity of Ethical Issues Ethical Leadership Evaluation of Corporate Governance Internal & External Corporate Governance mechanisms Corporate Governance Ratings
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Scams
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Values
Fundamental beliefs Principles for good, right and just Evaluate something vis--vis a Standard Integrity, Patriotism, Fairness
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Morals
Values attributing to a system of beliefs Values derived from a higher authority Religious system or political system
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Understanding Ethics
Greek word ethos meaning character Right and wrong conduct Studies moral behavior and how one should act a set of concepts and principles that guide us in determining what behavior helps or harms others
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Business Ethics
Study and examination of moral and social responsibility in relation to - business practices - decision-making in business
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Employees:
Provision of fair opportunities in promotions and training, good working environment and timely payment of salaries.
Customer:
Complete information of the service and product should be made available. Personal information of the customers should not be used for personal gain.
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Government:
Rules and regulations regarding taxes, duties, restrictive and monopolistic trade practices and unlawful activities like corruption and bribing should be adhered to.
Environment:
Polluting industries should ensure compliance with the government norms regarding air, water and noise pollution.
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Ethical Absolutism
Certain actions are absolutely right or wrong Consequences or intentions are irrelevant Eg. Stealing A principle which never ought to be violated
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Ethical Relativism
Differences in judgments across different people & cultures
Meta-ethics Normative ethics Applied ethics
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2) Normative ethics practical means of determining a moral course of action nobody is right or wrong; need to tolerate others Eg. "What should one do?"
3) Applied ethics how moral outcomes can be achieved in specific situations
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Normative Ethics
Teleological Ethics Deontological Ethics
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Ethics of Justice
Chooses solution that seems to damage the least number of people Distributive Justice Retributive Justice Compensatory Justice
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Distributive Justice
Perceived fairness of how rewards are distributed across group members Types of Distributive Norms
Equity Equality Power Need Responsibility
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Retributive Justice
Two distinct types
Amount of punishment proportionate to amount of harm caused by the offence Amount of punishment proportionate to amount of unfair advantage gained by the wrongdoer
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Compensatory Justice
Fairness rendered an entity compensates a party who they have injured for the suffering caused Compensatory justice is limited to the extent of the loss suffered
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CONVENTIONAL
Interpersonal Accord and Conformity (Social norms, The good boy/girl attitude)
Authority and social-order maintaining orientation (Law and Order morality) Self-interest orientation (Whats in it for me? Paying for a benefit) Universal ethical principles (Principled conscience)
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POSTCONVENTIONAL
So Heinz got desperate and broke into the man's store to steal the drug for his wife.
Should Heinz have broken into the laboratory to steal the drug for his wife? Why or why not?
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SELF-INTEREST
CONFORMITY
LAW-AND-ORDER
HUMAN RIGHTS
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Conflicts of interests
Circumstance where an individual whose personal interest might benefit from his/her actions or influence
Egs. Unstructured Reporting lines, Nepotism, Gifts
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Code of Conduct
Reward and punishment policy Negligent and fraudulent practice Discrimination and unfair practice Wrong communication and harmful campaign
against competitors
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Ethisphere
Worlds Most Ethical (WME) Companies
Accenture, Capgemini eBay GE UPS Visa Wipro
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ME
SOCIETY
Economic development Combined with sustainable Transport systems bringing Solid economic growth
ECONOMY
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Sustainable Development
According to the UN, sustainable development meets the needs of the present without sacrificing the ability of future generations to meet their own needs. Solutions must meet social, environmental and economic goals simultaneously to satisfy the triple bottom line
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Environmental sustainability
Our Common Future
CONSUMPTION OF RENEWABLE RESOURCES More than natures ability to replenish STATE OF ENVIRONMENT SUSTAINABILITY
Environmental equilibrium
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"environmental pollutant"
means any solid, liquid or gaseous substance present in such concentration as may be, or tend to be, injurious to environment;
"environmental pollution"
means the presence in the environment of any environmental pollutant;
"hazardous substance"
means any substance or preparation which, by reason of its chemical or physico-chemical properties or handling, is liable to cause harm to human beings, other living creatures, plant, micro-organism, property or the environment;
Green Marketing
Marketing of environmentally safe products Promotional activities aimed at taking advantage of the changing consumer attitudes toward a brand
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16
Ads with GM SUVs in natural habitats as if they were as natural as the surrounding trees.
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Conclusion
Educate your customers and give them an opportunity to participate. Be authentic Dont use green washing
Legal
Required
Ethical
Discretionary (Philanthropic)
Expected
Desired / Expected
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Edward Freeman
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Ackermans Model
PHASE I
Chief Executive will identify the social problem Company hires the staff to study the problem and suggest the solution Division managers implement the solution
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PHASE II
PHASE III
Outputs
Communities benefits: Numbers helped
Impacts
Community impacts: How communities are better-off
Why?
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Trusteeship (Gandhism)
"Supposing I have come by a fair amount of wealth either by way of legacy, or by means of trade and industry I must know that all that wealth does not belong to me; what belongs to me is the right to an honourable livelihood, no better than that enjoyed by millions of others. The rest of my wealth belongs to the community and must be used for the welfare of the community.
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Muhammad Yunus
Bangladeshi Banker Nobel Peace Prize Micro credit & micro finance Yunus Social Business (YSB) Incubator funds
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Weightings in percentages
Human-capital development
Talent attraction and retention Labor practice indicators
Economic dimension Corporate governance 6.0 Risk and crisis management 6.0
5.5
5.5 5.0
3.0
3.0 Depends on industry
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Depends on industry
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Ethical Views on
Bribery Child Labour Wages
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Values
Fundamental beliefs Principles for good, right and just Evaluate something vis--vis a Standard Integrity, Patriotism, Fairness
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Morals
Values attributing to a system of beliefs Values derived from a higher authority Religious system or political system
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Understanding Ethics
Greek word ethos meaning character Right and wrong conduct Studies moral behavior and how one should act a set of concepts and principles that guide us in determining what behavior helps or harms others
OCS
Business Ethics
Study and examination of moral and social responsibility in relation to - business practices - decision-making in business
OCS
Employees:
Provision of fair opportunities in promotions and training, good working environment and timely payment of salaries.
Customer:
Complete information of the service and product should be made available. Personal information of the customers should not be used for personal gain.
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Government:
Rules and regulations regarding taxes, duties, restrictive and monopolistic trade practices and unlawful activities like corruption and bribing should be adhered to.
Environment:
Polluting industries should ensure compliance with the government norms regarding air, water and noise pollution.
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Ethical Absolutism
Certain actions are absolutely right or wrong Consequences or intentions are irrelevant Eg. Stealing A principle which never ought to be violated
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Ethical Relativism
Differences in judgments across different people & cultures
Meta-ethics Normative ethics Applied ethics
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2) Normative ethics practical means of determining a moral course of action nobody is right or wrong; need to tolerate others Eg. "What should one do?"
3) Applied ethics how moral outcomes can be achieved in specific situations
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Applied Ethics
Euthanasia Abortion Death penalty Gay / Lesbian marriage
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Normative Ethics
Teleological Ethics Deontological Ethics
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Ethics of Justice
Chooses solution that seems to damage the least number of people Distributive Justice Retributive Justice Compensatory Justice
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Distributive Justice
Perceived fairness of how rewards are distributed across group members Types of Distributive Norms
Equity Equality Power Need Responsibility
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Retributive Justice
Two distinct types
Amount of punishment proportionate to amount of harm caused by the offence Amount of punishment proportionate to amount of unfair advantage gained by the wrongdoer
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Compensatory Justice
Fairness rendered an entity compensates a party who they have injured for the suffering caused Compensatory justice is limited to the extent of the loss suffered
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CONVENTIONAL
Interpersonal Accord and Conformity (Social norms, The good boy/girl attitude)
Authority and social-order maintaining orientation (Law and Order morality) Self-interest orientation (Whats in it for me? Paying for a benefit) Universal ethical principles (Principled conscience)
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POSTCONVENTIONAL
So Heinz got desperate and broke into the man's store to steal the drug for his wife.
Should Heinz have broken into the laboratory to steal the drug for his wife? Why or why not?
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SELF-INTEREST
CONFORMITY
LAW-AND-ORDER
HUMAN RIGHTS
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Conflicts of interests
Circumstance where an individual whose personal interest might benefit from his/her actions or influence
Egs. Unstructured Reporting lines, Nepotism, Gifts
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Code of Conduct
Reward and punishment policy Negligent and fraudulent practice Discrimination and unfair practice Wrong communication and harmful campaign
against competitors
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Case Studies
Case I: Mfg realty land Case II: Forced VRS schemes Whistle blower Apparel industry Medical negligence
Ethisphere
Worlds Most Ethical (WME) Companies
Accenture, Capgemini eBay GE UPS Visa Wipro
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ME
SOCIETY
Economic development Combined with sustainable Transport systems bringing Solid economic growth
ECONOMY
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Sustainable Development
According to the UN, sustainable development meets the needs of the present without sacrificing the ability of future generations to meet their own needs. Solutions must meet social, environmental and economic goals simultaneously to satisfy the triple bottom line
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Environmental sustainability
Our Common Future
CONSUMPTION OF RENEWABLE RESOURCES More than natures ability to replenish STATE OF ENVIRONMENT SUSTAINABILITY
Environmental equilibrium
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"environmental pollutant"
means any solid, liquid or gaseous substance present in such concentration as may be, or tend to be, injurious to environment;
"environmental pollution"
means the presence in the environment of any environmental pollutant;
"hazardous substance"
means any substance or preparation which, by reason of its chemical or physico-chemical properties or handling, is liable to cause harm to human beings, other living creatures, plant, micro-organism, property or the environment;
Green Marketing
Marketing of environmentally safe products Promotional activities aimed at taking advantage of the changing consumer attitudes toward a brand
OCS
16
Ads with GM SUVs in natural habitats as if they were as natural as the surrounding trees.
19
Conclusion
Educate your customers and give them an opportunity to participate. Be authentic Dont use green washing
Case Study
Environmental Sustainability initiatives at HCL Infosystems
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Case Studies
I] Environmental Sustainability initiatives at HCL Infosystems II] Coca Cola
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Mega-projects
Cost more than USD 1 billion Substantial impact on communities and environment Airport Building projects Oil and Gas Nuclear Power plant Dam and hydroelectric projects
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Legal
Required
Ethical
Discretionary (Philanthropic)
Expected
Desired / Expected
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Edward Freeman
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Ackermans Model
PHASE I
Chief Executive will identify the social problem Company hires the staff to study the problem and suggest the solution Division managers implement the solution
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PHASE II
PHASE III
Outputs
Communities benefits: Numbers helped
Impacts
Community impacts: How communities are better-off
Why?
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Change of heart
Prince and pauper
Weightings in percentage
Social dimension Human-capital development Talent attraction and retention Labor practice indicators Corporate citizenship / philanthropy Social reporting
Weightings in percentages
5.5 5.5 5.0 3.0 3.0 Depends on industry
6.0
Depends on industry
Industry-specific criteria
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Prisoners Dilemma
why two individuals might not cooperate, even if it appears that it is in their best interests to do so If A and B both betray the other, each of them serves 2 years in prison If A betrays but B remains silent, A will be set free and B will serve 3 years in prison (and vice versa) If A and B both remain silent, both of them will only serve 1 year in prison (on the lesser charge)
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Prisoner's dilemma
Competitor B Does not advertise Competitor B Does advertise Prisoner A: Loses out Prisoner B: Reaps benefit Suckers punch, Temptation
Rewards payoff
Punishment Payoff
T>R>P>S
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Corporate Governance
History Corporate objectives & goals Ownership pattern Issues in managing public limited firms Stewardship concept Agency model
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History
Mega American collapsing Corporate mis-governance between 1951-91
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Corporate Governance
Systems by which corporations are directed, administered or controlled
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Agency Theory
Relationship between shareholders (principal) and managers (agent) Principal hires agents to perform work Agents may not necessarily make decisions in the best interest s of the principals
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Stewardship theory
Steward protects and maximizes shareholders wealth through firms performance Unifying the role of Chairman & CEO
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India
Shareholders true owners of the company Managements role as trustees
Japan:
Multiple stakeholder model
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Balance of power
Remuneration Monitoring by large shareholders and/or monitoring by banks and other large creditors
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Maxwell Group
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Remuneration committees for Board members be made up in the majority of non-executive directors Board should appoint an Audit Committee incl. at least three non-executive directors
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4. Section 404: Assessment of internal control - A requirement that management and auditors establish internal controls and reporting methods on the adequacy of those controls.
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Yes Bank receives Golden Peacock Global Business Excellence Award 2013
Indian Oil Corporation and HCL Technologies have been conferred with the Institute of Company Secretaries of Indias national award for excellence in corporate governance
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Kinds of Takeover
I. LEGAL CONTEXT Friendly or Negotiated Takeover Hostile Takeover
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Objective
enhancement of shareholder value, keeping in view the interests of other stakeholder
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Risks
Corporate Frauds Money Laundering FEMA
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Clause 49
http://www.nseindia.com/getting_listed/cont ent/clause_49.pdf
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Pyramidal Structures
A co. of a subsidiary holding co. could itself be a holding co.
Power to Shareholders
Shareholder approval and disclosures regime Least legal and government intervention in co. decisions
Single Person Company Self-regulation Stringent Penalties Accounts and Audits Strong Governance Standards
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REFERENCE BOOKS Ethics in Business & Corporate Governance: Corporate Governance Principles, Mechanisms & Practice Business Ethics & Corporate Governance Business Ethics: Concepts and Cases Sixth Edition Business Ethics Managing corporate citizenship and sustainability in the age of globalisation - Second Edition Business Ethics & Corporate Governance Corporate Governance
AUTHOR / PUBLICATION S.K. Mondal ,Tata Mcgraw Hill, Edition 2010 Swamy Dr. Partha Sarathi, Biztantra 2010 Indian Text Edition An Indian Perspective A. C. Fernando Pearson Education Manuel G. Velasquez Andrew Crane, Dirk Matten - Oxford University Press IUP T .N. Satheesh Kumar - Oxford University Press, 2010
Thank You
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