Ethical Business Leadership in India - Myth or Reality?

1. Ethical Business Leadership in India:
Myth or Reality
Presented By:
Group 7 , Section F
Namrata Jha-140103106
Keerthana-140101081
Mohd Mohtashim-140201078
Nikith-140103082
Viswa Sai Raja-140102064
Omkar-140201089
Rangavardhan-140101128

2. Ethical Leadership
The 4-V Model of Ethical Leadership
• Leadership that is directed by respect for ethical beliefs
and values and for the dignity and rights of others
4-V Model of Ethical Leadership
Values
•Ethical leadership begins with an understanding of and commitment to our
individual core values
Vision
•Vision is the ability to frame our actions
Voice
•process of articulating our vision to others in an authentic and convincing
Virtue
•Understanding that we become what we practice, we foster virtue by
practicing virtuous behavior – striving to do what is right and good

3. Characteristics of an Ethical Leader
Articulate and embody the purpose and values of the organization
Focus on organizational success rather than on personal ego
Find the best people and develop them
Take a charitable understanding of others’ values
Create a living conversation about ethics, values and the creation of value for
stakeholders
Frame actions in ethical terms

4. Do Business Ethics Pay?
 Remi Trudel and June Cotte
conducted a research to gauge
how customers would react to
ethically produced goods.
 ‘Ethically produced good’
Progressive stakeholder relations
Respect for human rights
Progressive environmental practices
Internal Forces Shaping Corporate
Ethics

5. Indian Culture and Ethics
Influence of ancient culture on
ethics
•A history that cuddles the
concept of noble ends
justifying dubious means
•Basis of Indian business
ethics:
1. Ramayana
2.Mahabarata
3. Arthshastra
•The foundation of Indian strategic thought
•Advisory for a king on statecraft, economic policy and military
strategy
•Advocates the use of deception and sometimes brutal measures for the
common good
•Topics range from “when a nation should violate a treaty and invade”
to “when killing domestic opponents is wise’’
Indian Culture: A culture that has flourished for more than three
thousand years old is impossible to view through Western glasses

6. Ethical Relativism
What?
 Ethical norms are socially constructed and highly
dependent on context
 Describes both relativity in ethics between individuals as
well between societies
Why?
 Morality may be seen as a means in which humans try to
adapt to their environment. Thus, different environments
will result in different moralities.
 Moral rules differ between societies because of different
beliefs
India and the West: Different
Ethical Equilibriums
 A culture of favours, friendship
and clanship that clashes with the
Western concepts of conflict of
interest and pure meritocracy
 Favours Loyalty over competence
 Gives more emphasis on loyalty
over competence
The ethical equilibrium of the two civilizations are likely to differ as both have
different origins, norms and culture

7. Ethical Indian Leaders
 Ratan Tata, Tata Group
 A long-standing reputation for ethical leadership and corporate
social responsibility
 “Tatas don't bribe” and the “Tatas don't indulge in politics”
 Built in the twin pillars of "trust" and "integrity“
 A mission toward society-
 ‘Tata Nano’ the small car produced by Tata Motors especially for the
middle class is cheaper than Ford’s’Model T ‘launched in America in
1908.
 Tata Steel donates 65% of its profit to charity

8. Ethical Theory of CSR – Tata Steel
 Has four subparts:
 Normative Stakeholder Theory – Tata Steel has taken proactive
measures to address stakeholder’s concerns. Example: For
community and society – infrastructure for civic amenities,
healthcare etc.
 Universal Rights – States that human rights have been taken as the
basis of CSR, especially in the global market place. Tata Steel has
promoted human rights as a part of its core business philosophy. It
has adhered to the Universal Declaration of Human Rights. It has
implemented the principles of the UN Global Compact
 Sustainable Development – Tata Corporate Sustainability Reporting
initiative (GRI Process, Triple Bottom Line Report). Tata Index for
Sustainable Human Development to evolve a common direction for
CSR initiatives
 Common Good Approach – Tata focuses on the development of
underdeveloped people as a part of its CSR
Ethical Theory
Universal
Rights
Stakeholder
Theory
Sustainable
Development
Common
Good
Approach

9. Ethical Indian leaders
 Azim Premji, Wipro
 World’s Most Ethical Companies (by the Ethisphere Institute for the
Fourth Successive Year -2012 to 2015)
 ethics and compliance program ,reputation, leadership and
innovation ,governance, corporate citizenship and responsibility
and culture of ethics
 Sound values, integrity and professional will were identified as the
impetus that drove Permji to churn Wipro from a $2 million
company to $1.76 billion and turn it into one of the most ethical
companies of the world
 Ethics, Integrity and Responsible citizenship are a foundational
first principle of the organization

10. Examples of Unethical Business Practices
 Satyam Scam; Unethical behaviour by the director, Mr. Ramalinga Raju, the
auditor PwC and SEBI
 Overstated revenues and profits
 Overstated debtors’
 Understated liabilities
 Paid salaries to non-existent employees – 53,000 in place of actual 40,000
 Serious questions regarding conflict of interest:
 when promoter families become executive directors
 when audit firms which are tasked to uncover any wrong doing, end up
certifying worthless accounts
 when otherwise competent Independent Directors are unable to live up to the
expectations of those investors whose interest they are mandated to represent
‘’It was like riding a tiger, not
knowing how to get off without
being eaten’’

11. The Indian Scenario
“If you choose not to participate in [corruption], you leave behind a fair
amount of business’’ –Ratan Tata
• The company believes that the
growth of the company has
decreased as the company’s
policy is only to deal with the
clients of ethical standards
Goldman Sachs
India
•Enercon, the world fifth’s largest wind
turbine manufacturer was coerced to end
the joint venture with the Indian company.
The joint venture was worth US$566
million. The company was intimidated by
the authorities and it termed the situation
as “government-abetted theft
Enercon
Business success
in India comes at
an ethical cost?

12. The outcome
Fiscal Loss
• US$314 billion has flown out of
India since 1991 in the form of
evaded taxes and corruption
Shaky investor
confidence
• 87th out of 178 countries on its
Corruption Perceptions Index
• 134th out of 183 countries in
“ease of doing business’’
(ranked by World Bank)
Breakdown of
Customer Trust
• Tourism (only 6.5 million
foreign tourists compared to 57
million in China)
• Financial Services (only a
fourth of households savings
went into financial channels)

13. What needs to be done?
Attitudinal changes
• Businesses must realise that the key to sustained growth in top and bottom line is ethical
business practice
• Aggrieved customers must raise their voice against deficiency in services at all forums, starting
from social media to consumer courts
Regulatory changes
• Tough regulators for high complaint sectors like real estate and travel and tourism
• Tightening tort laws and providing for class action suits to dent fraudulent business practices
• Improving complaint registration and empowering unorganised customers against unethical
business practices

14. Reference List
 CSR Ethical Practices for Indian Business: The Strategy toAchieve Global Leadership by Nishant Gehlot,
Yamini Sharma and Neelam Kalla,1DMS, JNV University, Jodhpur in Global Journal of Management and Business
Studies, ISSN 2248-9878 Volume 3, Number 10 (2013), pp. 1173-1180
 Ethical Leadership: Best Practice for Success by Dr Subhasree Kar Associate Professor Sambhram Academy of
Management Studies Bangalore in IOSR Journal of Business and Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN:
2319-7668 PP 112-116
 Ritesh Kumar Singh, P. (2013). India lacks business ethics. The Hindu Business Line. Retrieved 18 August 2015, from
http://www.thehindubusinessline.com/opinion/india-lacks-business-ethics/article5093688.ece
 Scu.edu,. (2015). Business Ethics in a Global World: India's Changing Ethics. Retrieved 18 August 2015, from
http://www.scu.edu/ethics/practicing/focusareas/business/conference/2007/presentations/sheth.html
 Wipro.com,. (2015). Wipro Named as a 2014 World's Most Ethical Company by the Ethisphere Institute for the Third
Successive Year. Retrieved 18 August 2015, from http://www.wipro.com/newsroom/press-releases/Wipro-named-
as-a-2014-worlds-most-ethical-company-by-the-Ethisphere-Institute-for-the-third-successive-year/
 Knowledge@Wharton,. (2015). Business vs. Ethics: The India Tradeoff? - Knowledge@Wharton. Retrieved 18 August
2015, from http://knowledge.wharton.upenn.edu/article/business-vs-ethics-the-india-tradeoff/
 Mishra, R., Sarkar, S., & Singh, P. (2012). Today's HR for a sustainable tomorrow. New Delhi: Allied Publishers. pp.
280-281