Vikas Kumar Tyagi

Why Business Ethics ? “A business that makes

nothing but money is a poor kind of business”–Henry Ford

A business that makes nothing but money (mostly) does not make it for long

Vikas Kumar Tyagi

WHAT IS ETHICS ?WHAT IS ETHICS ? A system of moral A system of moral

pinciples,rules and pinciples,rules and standards of conduct.standards of conduct.

The branch of The branch of philosophy that deals philosophy that deals with issues of right with issues of right and wrong in human and wrong in human affairs.affairs.

Vikas Kumar Tyagi

BUSINESS ETHICSBUSINESS ETHICS

ETHICAL RULES AND PRINCIPLES WITHIN A COMMERCIAL CONTEXT.THE VARIOUS MORAL OR ETHICAL PROBLEMS THAT CAN ARISE IN A BUSINESS SETTING.

Vikas Kumar Tyagi

3 Models of Management 3 Models of Management EthicsEthics

Three Types Of Management Ethics

Vikas Kumar Tyagi

FACTORS AFFECTING ETHICAL OR UNETHICAL

BEHAVIOUR

INDIVIDUAL CHARACTERSTICS

-VALUES

-EGO STRENGTH

STRUCTURAL VARIBLES

-ORGANIZATION

STRUCTURE

ORGANIZATION’S CULTURE

-STRENGTH

ISSUES INTENSITY

Vikas Kumar Tyagi

Mechanisms for Ethical Mechanisms for Ethical ManagementManagement

Top Management CommitmentTop Management Commitment Code of EticsCode of Etics Ethics CommitteeEthics Committee Ethics AuditEthics Audit Ehics TrainingEhics Training

Vikas Kumar Tyagi

What is similarity between all What is similarity between all of these-of these-

ParmalatRoyal Ahold NVTyco internationalImcloneEnronWorldCom Vikas Kumar Tyagi

"It was like riding a "It was like riding a tiger, not knowing tiger, not knowing how to get off how to get off without being without being eaten." eaten."

-Raju. Ramalinga B. -Raju. Ramalinga B.

Vikas Kumar Tyagi

Satyam Computer Services Ltd /Satyam Computer Services Ltd /Mahindra SatyamMahindra Satyam

Founded in 1987 by Founded in 1987 by B Ramalinga Raju in form of in form of Sify Limited and in textiles.Sify Limited and in textiles.

Awards he gotAwards he got Ernst & Young Entrepreneur of the YearErnst & Young Entrepreneur of the Year Asia Business LeaderAsia Business Leader Golden Peacock AwardGolden Peacock Award The company offers The company offers consulting and information and information

technology (IT) services spanning various sectors technology (IT) services spanning various sectors listed on thelisted on the New York Stock ExchangeNew York Stock Exchange National Stock Exchange (India)National Stock Exchange (India) Bombay Stock Exchange (India). Bombay Stock Exchange (India). ByrrajuByrraju Foundation and Foundation and SatyamSatyam Foundation Foundation

Vikas Kumar Tyagi

.. In 2009, B Ramalinga Raju resigned as the In 2009, B Ramalinga Raju resigned as the

Satyam CEO, admitting to an accounting fraud to Satyam CEO, admitting to an accounting fraud to the tune of 7136crore rupeesthe tune of 7136crore rupees

Satyam had engaged PricewaterhouseCoopers as Satyam had engaged PricewaterhouseCoopers as its auditors over past 10 years its auditors over past 10 years

Raju stated that the aborted Maytas deal was Raju stated that the aborted Maytas deal was actually a last attempt to "fill the fictitious assets actually a last attempt to "fill the fictitious assets with real ones“with real ones“

(In August 2009, IL&FS replaced as promoters of Maytas (In August 2009, IL&FS replaced as promoters of Maytas Infra.)Infra.)

In 2008, the Satyam board approved a US$ 1.6 In 2008, the Satyam board approved a US$ 1.6 billion acquisition of the Maytas Infra and Maytas billion acquisition of the Maytas Infra and Maytas Properties controlled by the Raju’s family. Properties controlled by the Raju’s family.

Vikas Kumar Tyagi

What basically happenedWhat basically happened Inflated cash/bank balance of Rs 5040 cr.Inflated cash/bank balance of Rs 5040 cr. A accrued interest of 376 cr.A accrued interest of 376 cr. An understated liability of 1230 cr.An understated liability of 1230 cr. A overstated debtors position of 490 cr.A overstated debtors position of 490 cr. Raju had also opened multiple Raju had also opened multiple benamibenami (dummy) (dummy)

accounts through relatives and friends and used accounts through relatives and friends and used them to trade in Satyam's sharesthem to trade in Satyam's shares

Benami land deals and illegal transfer of shares..Benami land deals and illegal transfer of shares.. Satyam had only 40,000 employees and not around Satyam had only 40,000 employees and not around

53,000 as claimed by Ramalinga Raju. 'Every 53,000 as claimed by Ramalinga Raju. 'Every month Rs.200 million (Rs.20 crore) was being month Rs.200 million (Rs.20 crore) was being withdrawn in the name of non-existent employees.withdrawn in the name of non-existent employees.

Total expected personal gain by Raju was of Rs. 74 Total expected personal gain by Raju was of Rs. 74 billon billon

'Investigation has revealed that money has been 'Investigation has revealed that money has been used to buy land in Hyderabad and other places. used to buy land in Hyderabad and other places.

Vikas Kumar Tyagi

Vikas Kumar Tyagi

Vikas Kumar Tyagi

Effects of the scamEffects of the scam

Leaving an uncertain future for the company and Leaving an uncertain future for the company and its 40,000its 40,000

Satyam Computers could have removed from the Satyam Computers could have removed from the Sensex and NiftySensex and Nifty

World Bank barred Satyam from offering its World Bank barred Satyam from offering its computer services for eight years computer services for eight years

Indian associate of Merrill Lynch terminated an Indian associate of Merrill Lynch terminated an agreement on grounds of "material accounting agreement on grounds of "material accounting irregularities".irregularities".

Satyam’s worth estimated at seven billion dollars Satyam’s worth estimated at seven billion dollars fell to less than 330 million dollars fell to less than 330 million dollars

Vikas Kumar Tyagi

On June 21, 2009, Satyam unveiled On June 21, 2009, Satyam unveiled its new corporate identity – its new corporate identity – “Mahindra Satyam.“Mahindra Satyam.

Ramalinga Raju is currently in a Ramalinga Raju is currently in a Hyderabad prison along with his Hyderabad prison along with his brother and former board member brother and former board member Rama Raju, and the former CFO .Rama Raju, and the former CFO .

They have been provided a VIP status They have been provided a VIP status in jail.in jail.

He suffered heart attack on 8He suffered heart attack on 8thth sep. sep. and was later taken to hospital and was later taken to hospital (NIMS).(NIMS).

Now he is in the same hospital.Now he is in the same hospital. And the investigation is still going on.And the investigation is still going on.

Vikas Kumar Tyagi

Do Do Harvard Harvard Business SchoolBusiness School

syllabus don’t have syllabus don’t have a chapter on a chapter on

managerial ethics?managerial ethics?

Vikas Kumar Tyagi

Example setting -Example setting - Reuben Mark ,the CEO of Colgate –Reuben Mark ,the CEO of Colgate –

Palmolive calling Herb Baum , CEO Palmolive calling Herb Baum , CEO of Dial corporation over the Dial’s of Dial corporation over the Dial’s strategic marketing plan.strategic marketing plan.

Vikas Kumar Tyagi

Where the problem is Where the problem is lying?lying?

Vikas Kumar Tyagi

YOU SHOULD ALWAYS YOU SHOULD ALWAYS FOLLOWFOLLOW“I LIVE BY TRUTH THAT “I LIVE BY TRUTH THAT ‘‘NONO’ IS A COMPLETE ’ IS A COMPLETE SENTENCE”SENTENCE”

Vikas Kumar Tyagi

Vikas Kumar Tyagi