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Business Ethics
“Clean business is great business"

Prepared by:- Arun Khedwal,
Bhanu Bhatnagar
Prashant Panhale
Agenda
Quote’s
Definition
Why business ethics?
4P’s
Case Study-1 (Fraud)
Case Study-2 (Non Ethical Governance)
Case...
Definition
• Business
– Economic system in which goods and services
are exchanged for one another or money, on
the basis o...
Why Business Ethics?
Attract customers to the firm's
products, thereby boosting
sales and profits
Attract more employees...
Profit Maximization
It is understandable that a
company's ultimate goal is to
increase profit.
While some company’s go t...
Ethical Issues – 4 P’s
Promotion
 False & misleading advertising
 Bribery
 Promotional allowances
 Unethical sales tac...
Advertising Vs. Reality
Case Study-I :: Satyam Scandalam
About Satyam
 Satyam computer services limited was founded in 1987 by
Mr. Ramalinga Raju
 Satyam computers started with ...
The Scam
 Accounting fraud of over 7,800 crores rupees
 Past 7 years accounting books were cooked:

- Profits were infla...
Impact of Scam
 Jobs of over 50,000 were at risk
 India`s global image was suffered
 Indian stock market fell dramatica...
SATYAM-MAYTAS
Case Study-II :: Vodafone Tax Case
Case Study-II :: Vodafone Tax Case
 Acquisition of Hutch-Essar Ltd for 11 billion USD
 Taxability over Capital Gains on ...
Case Study-III :: TATA’s Business Ethics
TATA’s Business Ethics & Principles
National Interest:Committed to benefit the
economic development of the
countries in wh...
TATA’s Social Reforms
Tata Group

Enforced by law/ Legal
Measures

 1912- Eight-hour day

 1948- Factories Act

 1915- ...
Our Responsibility
Minimal- What we shouldn’t do
Don’t steal, don’t kill & don’t lie
Better: What we should do
Be fair, ...
Conclusion
Ethics should & must play an important role in
today’s organization's.
It is vital in determining the long te...
Business Ethics
Business Ethics
Business Ethics
Business Ethics
Business Ethics
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Business Ethics

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Quote’s
Definition
Why business ethics?
4P’s
Case Study-1 (Fraud)
Case Study-2 (Non Ethical Governance)
Case Study-3 (Good Ethics)
Promote Good Ethics
Our Responsibility
Conclusion

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Transcript of "Business Ethics "

  1. 1. Business Ethics “Clean business is great business" Prepared by:- Arun Khedwal, Bhanu Bhatnagar Prashant Panhale
  2. 2. Agenda Quote’s Definition Why business ethics? 4P’s Case Study-1 (Fraud) Case Study-2 (Non Ethical Governance) Case Study-3 (Good Ethics) Promote Good Ethics Our Responsibility Conclusion
  3. 3. Definition • Business – Economic system in which goods and services are exchanged for one another or money, on the basis of their perceived worth • Ethics – Derived from the Greece word “ethos”, meaning character and manners. – Ethics is the study and philosophy of human conduct, with an emphasis on determining right from wrong – In Other words Ethics are moral guidelines which govern good behaviour
  4. 4. Why Business Ethics? Attract customers to the firm's products, thereby boosting sales and profits Attract more employees wanting to work for the business, reduce recruitment costs and enable the company to get the most talented employees Attract investors and keep the company's share price high, thereby protecting the business from takeover Ethics contribute to profit
  5. 5. Profit Maximization It is understandable that a company's ultimate goal is to increase profit. While some company’s go to the extreme & maximize profits unethically by slashing employee expenses, lowering product quality or impacting the environment negatively.
  6. 6. Ethical Issues – 4 P’s Promotion  False & misleading advertising  Bribery  Promotional allowances  Unethical sales tactics Product  Product quality & safety  Fare packing & labelling  Product warranties  Damage to the Environmental Ethical Issues Price  Price fixing  Price negotiation  Price increase  Price discrimination Place  Dumping  Unfair competition  Government policy
  7. 7. Advertising Vs. Reality
  8. 8. Case Study-I :: Satyam Scandalam
  9. 9. About Satyam  Satyam computer services limited was founded in 1987 by Mr. Ramalinga Raju  Satyam computers started with only 20 employees  The company offers consulting and information technology services to various sectors  Satyam computers converted into public ltd co. Listed in Bombay stock exchange in 1991  Listed in New York stock exchange in 2001  Listed in EURONEXT Amsterdam stock exchange in 2008  There were 52,000 employees working in Satyam in September 2008
  10. 10. The Scam  Accounting fraud of over 7,800 crores rupees  Past 7 years accounting books were cooked: - Profits were inflated - Understated liability and overstated debts - Accrued interest (which was non-existent) -The gap in the balance had risen due to inflated profits  Planned to buy the Maytas to fill the gap in the balance sheet
  11. 11. Impact of Scam  Jobs of over 50,000 were at risk  India`s global image was suffered  Indian stock market fell dramatically  Biggest single day fall of 175 Rs. On Jan 6th 2009 of Satyam share  SEBI said that, if Saytam found guilty, its license to work in India may be revoked  The New York Stock Exchange halted trading in Satyam stock  India's National Stock Exchange announced removal of Satyam from S&P CNX & Nifty 50  The GDP fell by 0.4%  I.T sector suffered a downturn
  12. 12. SATYAM-MAYTAS
  13. 13. Case Study-II :: Vodafone Tax Case
  14. 14. Case Study-II :: Vodafone Tax Case  Acquisition of Hutch-Essar Ltd for 11 billion USD  Taxability over Capital Gains on overseas transaction  Withholding Tax obligations of the Non Resident buyer  2 Billion USD / 12,000 Crore Rupees Tax  I-T claims that the sale involved India based assets and hence should be taxed  5 year long legal battle  Bombay High Court ruling in favour of Revenue Dept.  Supreme Court ruling in favour of Vodafone International Holdings  Review petition by Finance Ministry  Pranab Mukherjee brings in GAAR
  15. 15. Case Study-III :: TATA’s Business Ethics
  16. 16. TATA’s Business Ethics & Principles National Interest:Committed to benefit the economic development of the countries in which it operates. Equal opportunities employer:Provide equal opportunities to all its employees and all qualified applicants for employment Financial reporting and records:Prepare and maintain its accounts fairly and accurately and in accordance with the accounting and financial of the country . Gifts and donations:Its employees shall neither receive nor offer or make, directly or indirectly, any illegal payments, remuneration, gifts, do nations or comparable benefits Competition :Fully support the development and operation of competitive open markets. Government agencies:Employees shall not, unless mandated under applicable laws, offer or give any company funds or property as donation to any government agency or its representative.
  17. 17. TATA’s Social Reforms Tata Group Enforced by law/ Legal Measures  1912- Eight-hour day  1948- Factories Act  1915- Free medical aid  1948- Employees State Insurance Act  1920-Leave with Pay  1920- Workers Provident Fund Scheme  1937- Retiring gratuity  1948- Factories Act  1952-Employee Provident Fund Act  1972- Payment of Gratuity Act
  18. 18. Our Responsibility Minimal- What we shouldn’t do Don’t steal, don’t kill & don’t lie Better: What we should do Be fair, Be honest, Fulfil duties & work hard  Best: What we could do to make things excellent for all of us… Incentive & recognitions for outstanding ethical behaviours, raise awareness & educate youth
  19. 19. Conclusion Ethics should & must play an important role in today’s organization's. It is vital in determining the long term success for any organization. “ Ethical business is Good Business” “Choose for yourself today”
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