Relationship between ethics and corporation excellence.

Submitted By Name Class Year : Sainath Chavan. Roll No 8103 Ganesh Kadam Roll No 8106 : Master of Financial Management (Sem-VI) : 2008-2011

Under the supervision of Prof.Kohinoor Madam

ORIENTAL INSTITUTE OF MANAGEMENT Plot No.149,Sector-12 Vashi,Navi Mumbai-400703

Business ethics
Companies, led by top management, are increasingly adopting ethical codes of conduct. Modern ethics codes aren't just some simple platitudes set in a break-room plaque. Companies now commit considerable time and money to illustrate their reliance on ethical behavior. Ethical behavior starts at the top. Before a company can expect to be viewed as ethical in the business community, ethical behavior within its own walls-to and by employees-is a must, and top management dictates the mood. Ethical behavior by the leaders of an organization will inevitably set the tone for the rest of the company-values will remain consistent. Further, a well-communicated commitment to ethics sends a powerful message that ethical behavior is considered to be a business imperative. Companies are also interested in determining whether ethical behavior can be measured, just as efficiency and productivity companies must innovate ways to measure ethical behavior, which in turn motivates ethical behavior. Once training, measurement and a new ethical code have been developed, companies are also hiring full-time ethical compliance officers, and starting ethics hotlines to report possible policy violations. Hiring a full-time ethics officer is another signal to employees that ethical violations will be taken very seriously. However, this person isn't just a watchdog-they will take a proactive approach to identifying possible violations before they develop. Ethics are important not only in business but in all aspects of life because it is an essential part of the foundation on which of a civilized society is build. A business or society that lacks ethical principles is bound to fail sooner or later.

A.21 THE MAJOR PRINCIPLES OF BUSINESS ETHICS:

 No discrimination should be done on the basis of caste ,color , and religion, The polices should be fair and transparent Proper provision of safety should be provided by the company to the employees. There should be proper honesty, loyalty, and integrity in the employees. The companys resources should not be utilized by the employees for their personal usage Company should provide better environment condition Information about employees personal lives, health, and work evaluations should be kept confidential. Regular measurement of employee satisfaction should by company. To neither give nor take any illegal payment, remuneration, gift, donation, or comparable, benefits to obtain business or favours. To comply with all regulations regarding preservation of the environment. Employee should report to management any actual or possible violation of code or an event that could affect the business or reputation of the employees company.

A.21 HR ETHICAL ISSUES

Ethical issues abound in HR activities. Areas of ethical misconduct in the personnel function include employment, remuneration and benefits, labour relations, health and safety, training and development, and HRIS (hr ethical issues)

Cash and incentives

plans

Performance appraisal

Race and disability

Ethical issues

Employment issues

Privacy issues

Safety and health

Restructuring and layoffs

Cash and incentives plans This includes base salaries, annual incentive plans, long term incentive plans, executive perquisites, and separation agreements. Base salaries- The HR function is often presumed to justify a higher level of base salaries, or a higher percentage increase than what competitive practice calls for. In some cases, pressure is exerted to re-evaluate the position to a higher grade for the purpose of justifying a larger than normal increase. Annual incentive plan- The HR manager is often forced to design and administer top-management incentive plans, at higher raters than what the individuals deserve. A common rationale presented to the HR executive for bending the rules is the fear of losing the outstanding executives, if higher incentives are not paid.

Long-term incentive plan- Just as with annual incentive plan, many HR executives have the responsibility of designing and administering the firms long term incentive plans, but in consultation with CEO and an external consultant. Ethical issues arise when the HR executive is put to pressure to favour top management interests over those of other employees an investors Executive perquisites- Executive perquisites make the ethical standard of the HR executive difficult because their cost is often out of proportion to the value added. For example a story relates to Bangalore based ,losing making public sector undertaking whose CEO spend 20 lakh to get swimming pool built at his residence. Performance Appraisal Performance appraisal lends itself to ethical issues. Assessment of an individuals performance is based on observation and judgment. HR manager are expected to observe the performance in order to judge its effectiveness. Ethics should be the cornerstone of performance evaluation, and the overall objective of high ethical performance reviews should to provide an honest assessment of the performance and mutually develops a plan to improve the ratees effectiveness. Race, Gender, Age, and Disability The practice of treatment of employees according to their race, ethnic origin, sex, or disability has largely been stopped. A framework of laws and regulations ahs evolved that has significantly improved work place behavior. No enterprise today dare to publicly state it denies minorities, woman, and the disable opportunities for employment, remuneration, and growth prospects different from those given to others. In this environment the role of HR function is to: Monitor the principles and norms of the enterprise to ensure that they reflect the values of the society as expressed in its law.

 Monitor the selection, rewards, development and, the appraisal system to ensure that they are consistent with the principles and norms. Vigorously pursue violations and, when necessary, vigorously work to defend the enterprise against unfounded allegations. Employment Issues While discrimination and harassment situation receives mort publicity, HR practitioners are more likely to face ethical dilemmas in the areas of employee hiring. One challenge commonly encountered is pressure to hire a relative o a friend of a highly placed executive. Another area related to employment is that of faked credentials submitted by a job applicant. While discovery of this kind of fabrication usually leads to termination of the employment, the choice becomes difficult when the applicant has a blend of skills set and a proven track record with his or her previous employers. Privacy issues Privacy issues to protecting a persons private life from intrusive and unwarranted actions. The employee believes that his or her religious, political, and social believes as well as personal life style are private matters and should be safe guarded from being snooped or analysed.Exceptions are permitted grudgingly only when job involvement is clearly involved. For example, it may not be inappropriate to intrude into an employees private matter if it is suspected that he or she discusses with competitor, through email messages, the specification of newly developed product not yet launched into the market. Safety and health Much of the industrial work is hazardous. This is because of the extensive use of high speed and noisy machinery, production processes requiring high temperature, an increasing reliance on chemical compounds .Accidents, injuries and illnesses are likely to occur under these circumstances. Over past decade, new categories of accident and illness have emerged, including the fast growing job safety problem of office injuries.

Restructuring and Layoffs Restructuring and consequent layoffs have become relevant because of poor management, but incompetence does not become unethical. There are ethical implications in the process by which termination decisions are made and actions taken. For example if restructuring requires closing a plant , the process by which that plant is chosen ,how the news will be communicated ,and the time frame for completing the layoffs are ethically important .If conducted in an atmosphere of fairness and equity and with dignity of the affected individuals in mind, the action is ethical. Ethical Dilemmas Several ethical dilemmas comfort an HR manager. The ethical dilemmas arise from three sources-faces to face ethics, policy ethics, and functional area ethics. Face to face ethics These arise mainly because there is a human element in most business transactions. Business is composed of this human transaction; it should not be surprising that face to face ethical dilemmas arise often. It is likely that the quality assurance man overlooks minor defects and approves a lot delivered by a supplier because of the personal relationship that the two enjoy. Corporate policy ethics Companies are often faced with ethical dilemmas that affect their operations across all departments and divisions. The consequences of employment contraction in labour intensive basic industries because of the improved methods of production .Modern technology has replaced older methods of production which has in turn resulted in hundreds being jobless. The ethical burden of deciding corporate policy matters normally rests upon a companys HR management. The Hr manager and directors are responsible for making policies and implementing them too. The ethical content of their policies can have enormous impact throughout the company. It can set an ethical tone and send right signals to all employees as well as external stakeholder.

Functional area Ethics Functional area of a business is likely to comfort ethical issues. Accounting is a critical function of any business. Accounting statements reveals to the manager and owner the financial soundness of a company. Managers, investors, regulating agencies, tax collectors and trade unions rely on accounting data to makedecisions.Honesty, integrity accuracy are absolute requirements of the accounting functions. Account standard ensure a high level of honest an ethical accounting disclosure. Ethical dilemmas crop up in purchasing departments where strong pressure is to obtain the lowest possible prizes from suppliers and where too felt similar need it bag lucrative contracts. Bribes, kickbacks, and discriminating pricing are temptation to both parties.

Ethics And Law

Laws and ethics have common aim- defining proper and improper behaviour. But the two are not quite same. Laws are the societys attempt to formalize- that is to reduce to written rules- idea about what is right and what is wrong in various walks of like. However, it is rarely possible for written rules to capture all the sublet variations that people give to ethics. Ethical concepts are more complex than writing rules. Ethics deals with human dilemmas that frequently go beyond the formal language of laws and the meanings given to legal rules. Similarities and differences apart, legal rules help promote ethical behaviour in organization. Some of the acts which seek to ensure fair business practices in our country are the followings: The Foreign Exchange Regulation Act, 1973, now replaced by FEMA. The Companies Act, 1956. The Monopolies and Restrictive Trade Practices Act, 1969. The consumer Protection Act, 1986. The Environment Protection Act, 1986. The Essential Commodities Act, 1955.

Social and ethical accountability

Social and ethical accounting is a process that can help businesses to stakeholders, and to improve performance, social, environmental and economic. The process typically links a companys value to the development of policies and performance targets and to the assessment and communication of the performance. In this way and through engagement with stakeholder social and ethical issues are tied into a companys strategic management and operations. Social and ethical accounting model there is no standard balance sheet or units of currency. Instead, the are defined by companys value and aims by the interests and expectation of its stakeholders, and by societal norms and deregulations. With the focus on the concerns of society , the social and ethical accounting framework implicitly concerns itself with issues as a wide as economic performance working conditions , environment and animal protection, human rights, fair trade and ethical trade, human resource management and community development , and community development and hence with the sustainability of a companys activities. Companies have begin to open themselves up to their stakeholders, partly because of the push factor of the pressure group activities but also because the realize that a greater awareness of the impact of their activities and how they are perceived is necessary to improve strategic decision making. More and more companies are now incorporating stakeholder in their decision making processes. Much of this is, of course, standard business practice talking to customers and suppliers to identify the issues as they arise to satisfy new needs and a company realize that it is failing to involve important groups or there is mistrust or misleading in its relations with stakeholder.

Principle of social and ethical accounting

These principles can be used in designing and managing a process, or in assessing its quality. The dominant principle of social and ethical accounting is inclusively. This principle requires that the aspirations needs of all stakeholder groups are taken into account at all stages of the social and ethical accounting process. Other principles can be put into three broad relating to the: Scope and nature of the companys social ethical accounting process. Meaningfulness of the information created by the process. Continuous management of the process.

Scope and nature of the process

Completeness- The inclusion in the accounting process of all

appropriate areas of activity relating to an organizations social and ethical performance. Materiality- The inclusion of significant information that is likely to affect stakeholder groups and their assessment of an organizations social and ethical performance. Regularity and timeliness- The need for regular, systematic and timely action of the accountings process to support the decision making of an organization and its stakeholders.

Meaningfulness of information
Quality Assurance- The audit of an organizations process by

an independent and competent third party. The audit is concerned with building credibility in the process with all stakeholder groups, and hence developing meaningful stakeholder engagement. Accessibility Appropriate and effective communication to an organizations stakeholders of its accounting process and its performance. Comparability- The ability to compare information on an organizations performance with previous periods, performance targets, or external benchmarks drawn from other organizations, statutory regulation or non statutory norms.
Reliability- The characteristic that allows an organization and

its stakeholders to depend on the information provided by the accounting to be free from significant error or bias.

Continuous management of the process

Embedded

ness, or systems integration- Making the accounting process part of an organizations operations, systems and policy making; that is, not just a one-off exercise to produce a report. Continuous improvement- Steps taken to improve performance in response to the results of the accounting process.

The Social and Ethical accountability model Embedding

Plan ning

Stakeholder Engagement

Auditing And Reporting

Accounting

The generic model of social & ethical accounting includes six elements in a continuing process that a business undergoes in order to manage & improve its accountability & performance.
PLANNING- The company commits to the process of social &

ethical accounting, auditing & reporting, & defines & reviews its values & social & ethical objectives & targets.
ACCOUNTING-

The scope of the process is defined, information is collated & analysed, & performance targets & improvement plans are developed. A report performance is prepared. on the companys systems &

REPORTING-

AUDITING- The process of preparing the report & the report

itself are externally audited, & the report is made accessible to stakeholder in order to obtain feedback from them.
EMBEDDING- To support each of the stages, structure &

systems are developed to strengthen the process & to integrate it into the companys activity.
STAKEHOLDER

ENGAGEMENTThe concerns of stakeholder are addressed at each stage of the process through regular involvement. At every stage a company should incorporate useful experience from the previous cycle- it must be flexible enough to learn & innovate from the process.

Section 1 Membership of any class shall be contingent upon conformance with the established principle of professional Ethics. Section 2 Honesty, Integrity, Loyalty, fairness, Impartiality, Fidelity to trust, and inviolability of confidence are incumbent upon every member as professional obligations. Section 3- Members shall not make false, misleading or unwarranted statements, representation or claims in regards to professional matters, nor shall they engage in false or deceptive advertising. Section 4- Members shall not falsely or maliciously attempt to injure the reputation of others. Section 5 Member shall endeavor to cooperate with others in profession and shall encourage the ethical dissemination of geoscientific knowledge.

Corporate Excellance
Wipro gets PHDCCI's Ethics in Business Award
Mumbai: Wipro has been awarded the Ethics is Good Business award for the Year 2002. The award, instituted by the Punjab, Haryana and Delhi Chamber of Commerce and Industry (PHDCCI), recognizes Wipros ethics and value-based business performance. Wipro has compiled an "Integrity Manual" that defines the way Wiproites should deal with their customers. Wipro has also introduced a helpline known as Wipro SOS. This helpline comprises senior members of the company, like Chairman Azim Premji, who are available for guidance on any moral, legal or ethical issues that a Wiproite may face.

Reliance Industries ranks No.2 in 'India's Most Respected Companies'

Reliance emerges as India's 'Most Dynamic Organization' Reliance Industries ranks No.2 in 'India's Most Respected Companies' survey India's Most Respected Companies Survey IMRB International Business world, 2004. RIL is the first and only private sector company from India to feature in the 2004 Fortune Global 500 list of 'World's Largest Corporations' and ranks amongst the world's Top 200 companies in terms of profits. RIL also emerged as the only Indian company in the list of global companies that create most value for their shareholders. Infosys Technologies is chosen Company of the Year The Economic Times today announced its Awards for Corporate Excellence, in consonance with its philosophy of recognizing and celebrating business at its best. The company has arguably pioneered in India the concept of valuing intellectual capital, and has aggressively attempted to introduce employee stock options - it, however, has an employee stock offer plan in place for five years now. Infosys is expected to be the first Indian company to have its shares listed on an American stock exchange.

``Ethics in business has to reflect ethics in society'

Our Bureau Kolkata, June 22

Mr. S.M. Dutta, Chairman, Castrol India Ltd, and former Chairman of HLL said that, Ethics was such an inborn concept that all of it cannot be contained in our law. Nobody teaches us ethics; no formal instructions as such, and we are just left to learn it through experimentation. While admitting that the primary task of business was to create wealth by adding economic value to society, the ethical dimension of business has to rest on the three key aspects of "legitimacy, equitability and transparency".

Ranbaxy

Founded in 1962, Ranbaxy is Indias largest pharmaceutical company. The company is now moving from a generic company to a research oriented company and it is at the same time increasing its international presence. It manages operations with a high concern for safety and the environment. It stresses the fact that the company is a responsible corporate citizen. As a responsible corporate citizen, Ranbaxy ensures transparency in their dealings with enforcement agencies, and extends their co-operation to officers of statutory bodies for the purpose of audits and inspections. The company also urges its employees to avoid actions or relationships that might conflict with their job responsibilities, or the interests of Ranbaxy.As for the environment, it ensures responsible consumption of natural resources through processes that are eco-friendly.

Reliance Industries Limited

Reliance is Indias largest private sector enterprise and it plays a major role in Indias petrochemicals sector. Reliance has Indias largest marketing network and all its brands are market leaders. As for business ethics practices, Reliance stresses environmental responsibility. The company has its own set of environmental policies and the policies are available to the public. Highlights of its policies are: Prevent pollution, maximize discharges and emissions. recycling, and reduce wastes,

Conserve natural resources by their responsible and efficient use in all our operations. Plant trees, develop green belt and promote lush green surroundings at manufacturing locations to work in harmony with nature. Emphasize every employees responsibility in environmental performance; ensure appropriate operating practices and training. Promote awareness among contractors, suppliers and customers for shared responsibility towards environment protection.

Infosys

Founded in 1981 by a former socialist, It is located in Bangalore Infosys has become a well-known player in the software industry for its ethical business practices and generous treatment of employees. Its books are open to investors, it offers a stock option plan to employees, and it was the first Indian company to be listed on a U.S. stock exchange. "We certainly find it useful to benchmark ourselves against companies like Infosys," said the chairman of Hindustan Lever, the Indian subsidiary of personal care products giant Unilever.

Balrampur Chini Mills Limited

Balrampur is Indias premier sugar company. It maintains a set of ethical standards and emphasizes the following: Integrity: "We demand of ourselves and others the highest ethical standards." Respect for People: Balrampur contributes its success today to its people and is committed to treating its people with dignity. Community: One of the companys goals is to focus not only on its earnings but also on its efforts to make the world a better place to live. Transparency: Balrampur strives to maintain global standards of corporate transparency, and to increase shareholder confidence in management.

Mitsubishi Corporation
Mitsubishi Corporation, one of the major global enterprises, conducts various businesses in India including marine product trading and automotive parts. The company is committed to serving the welfare of world and local communities. The company set up a Committee for Philanthropy in 1991 to come up with ways to make corporate responsibility to society a part of the companys activities. In addition, the Mitsubishi International Corporation Foundation was also established to help serve the educational needs of economically disadvantaged young people. Environmental responsibility is also an integral part of Mitsubishis corporate philosophy. The company has its own internal environmental guidelines for business activities and has formulated an Environmental Charter that follows the international standard for environmental management systems.

HONEYWELL No employee will give, offer or promise to give, or ask or accept anything of value.. With the following expectations: Items of a strictly advertising nature (that is, imprinted with the companys name) which are less than $10 in value. Standard Chartered Bank Nothing may be given or received which might distort commercial judgment or harm the Groups reputation.. Any business-related personal benefits which you or your family give receive must be reported in writing within three working days to the person to whom you normally report.