Business ethics and how it is related with gandhian philosophy of wealth management.

1. Business Ethics

2. TRUSTEESHIP MANAGEMENT
Gandhian Philosophy of Wealth
Management
Trusteeship, as applicable to the
corporate world, refers to the act of
holding and managing resources on
behalf of the stakeholders of the firm.

3. TRUSTEESHIP MANAGEMENT
Gandhian Philosophy of Wealth
Management
 Gandhian Philosophy of wealth management is based on the
‘Servodaya’ principles of Truth, Non-Violence and Trusteeship;
wherein harmony between labour and management reigns
supreme.
 According to Gandhiji, managers and proprietors of business
firms are only the trustees of wealth of society.
 The idea of trusteeship advocated by Gandhiji, is based on and
has its origin in the Bhagaved Gita-in the principles of
‘aparigraha’ (non-possession) and ‘Sambhawa’ (equalism)
which were followed by Mahatma Gandhi.
 Gandhiji’s motto was ‘greatest good of all’.

4. Gandhiji’s views on labour
management relations
 My ideal is that capital and labour
should supplement and help each
other. They should be a great family
living in unity and harmony; capital not
only looking to the material welfare of
the labourers, but their moral welfare
also-capitalists being trustees of the
welfare of the labouring classes under
them.

5. Gandhiji’s views on labour
management relations
 Gandhiji assigned a paternalist role to management in
their dealings with labour
 Gandhiji considered trade unions to be means of
workmen’s material and moral development.
 He declared that a strike is an inherent right of the
working man for the purpose of securing justice, but
they must be considered a crime immediately if the
capitalists accepts the principle of arbitration.
 If conflict arises between labour and management, the
weapon proposed by Gandhiji is Satyagraha

6. Gandhiji’s principle of Trusteeship
 Trusteeship principle is foundation of
philosophy of wealth management
Principles of Trusteeship
 No recognition to right to individual property
 Resources must be held and utilised for the benefit
of society.
 Management is the trustees of the stakeholders
and must work towards optimising stakeholder
value, not merely maximising shareholder value

7. Gandhiji’s principle of Trusteeship
 In case of industrialist what they produce should
be determine by social necessity with optimal
utilization of scarce resources and not by
personal whims
 Though wealth legally belongs of owners of
business, morally belongs to society and
community.

8. Seven greatest Sins
 Politics without principles
 Education without character
 Commerce without morality
 Pleasure without conscience
 Wealth without work
 Science without humanity
 Worship without sacrifice

9. Indian Corporate Leaders and
Trusteeship
 Infosys, particularly from its former CEO , Narayana Murthy
for creating this company along with a small group of
people (better sharing of wealth in society), the
involvement of employees in the company’s fortunes
(through ESOPs) and his contentment with a mere 7% of
company stock (he prefers it that way) reflect a deep-
rooted commitment towards trusteeship.
 House of the Tatas with their corporatized initiatives for
socio-corporate benefits
 “WIPRO Cares” Foundation, with a targeted corpus of Rs
100 crore for primary education;
 Birla foundation with its focus on socio-economic
improvement in the lives of the people touched by the
corporation.

10. Social & Economic
Responsibilities of Business

11. Meaning of CSR
By the term ‘Corporate Social Responsibility’
(CSR) what is generally understood is that
business has an obligation to society that
extends beyond its obligation to its
shareholders or owners.

12. Definition of CSR
CSR means operating a business in a manner that
meets or exceeds the ethical, legal, commercial
and public expectations that the society has of
business”.
The World Business Council for Sustainable
Development defines CSR as: “the continuing
commitment by business to behave ethically and
contribute to economic development while
improving the quality of life of the workforce and
their families as well as of the local community
and society at large”.

13. To whom Business Organizations are
responsible?????
Primary Stakeholders
Secondary Stakeholders

14. Relations between a business firm and its primary
stakeholders
Business firm
(Managers)
Wholesalers
(Retailers)
Creditors
Suppliers
Customers
Stockholders
Employees
(Unions)
Invest
capital
Lend
money
Sell
materials
Buy
products
Distribute
products
Sell
labor

15. Relations between a business firm and some of its
other (secondary) stakeholders
Business Firm
(Managers)
The
General
Public
Business
Support
Groups
Governments
Social
Activist
Groups
Media
Central/State
and Local
Governments
Local
Communities
Regulation,
taxes
Friendly,
hostile
Social
demands
Image,
publicity
Advice,
research
Positive,
negative
opinion
Jobs,
environment

16. How Does CSR benefit Business???
Reputation
Loyal Employees
&
Customers
Less Law Suits
Less Media
Harassment
Access to
Capital
Improves
Improves
Productivity
Community
Goodwill
Better
Environment

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