Date post: | 11-Apr-2017 |
Category: |
Business |
Upload: | mohammad-mohtashim |
View: | 827 times |
Download: | 0 times |
Ethical Business Leadership in India: Myth or Reality
Presented By:Group 7 , Section FNamrata Jha-140103106Keerthana-140101081Mohd Mohtashim-140201078Nikith-140103082Viswa Sai Raja-140102064Omkar-140201089Rangavardhan-140101128
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
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
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 relationsRespect for human rightsProgressive environmental practices
Internal Forces Shaping Corporate Ethics
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. Ramayana2.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
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
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
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
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
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’’
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?
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)
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
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