Quote’s Definition Why business ethics? 4P’s Case Study-1 (Fraud) Case Study-2 (Non Ethical Governance) Case Study-3 (Good Ethics) Promote Good Ethics Our Responsibility Conclusion

1. Business Ethics
“Clean business is great business"
Prepared by:- Arun Khedwal,
Bhanu Bhatnagar
Prashant Panhale

2. Agenda
Quote’s
Definition
Why business ethics?
4P’s
Case Study-1 (Fraud)
Case Study-2 (Non Ethical Governance)
Case Study-3 (Good Ethics)
Promote Good Ethics
Our Responsibility
Conclusion

4. Definition
• Business
– Economic system in which goods and services
are exchanged for one another or money, on
the basis of their perceived worth
• Ethics
– Derived from the Greece word
“ethos”, meaning character and manners.
– Ethics is the study and philosophy of human
conduct, with an emphasis on determining
right from wrong
– In Other words Ethics are moral
guidelines which govern good behaviour

5. Why Business Ethics?
Attract customers to the firm's
products, thereby boosting
sales and profits
Attract more employees
wanting to work for the
business, reduce recruitment
costs and enable the company
to get the most talented
employees
Attract investors and keep the
company's share price
high, thereby protecting the
business from takeover
Ethics contribute to profit

6. Profit Maximization
It is understandable that a
company's ultimate goal is to
increase profit.
While some company’s go to
the extreme & maximize
profits unethically by slashing
employee expenses, lowering
product quality or impacting
the environment negatively.

7. Ethical Issues – 4 P’s
Promotion
 False & misleading advertising
 Bribery
 Promotional allowances
 Unethical sales tactics
Product
 Product quality & safety
 Fare packing & labelling
 Product warranties
 Damage to the Environmental
Ethical
Issues
Price
 Price fixing
 Price negotiation
 Price increase
 Price discrimination
Place
 Dumping
 Unfair competition
 Government policy

8. Advertising Vs. Reality

10. Case Study-I :: Satyam Scandalam

11. About Satyam
 Satyam computer services limited was founded in 1987 by
Mr. Ramalinga Raju
 Satyam computers started with only 20 employees
 The company offers consulting and information
technology services to various sectors
 Satyam computers converted into public ltd co. Listed in
Bombay stock exchange in 1991
 Listed in New York stock exchange in 2001
 Listed in EURONEXT Amsterdam stock exchange in 2008
 There were 52,000 employees working in Satyam in
September 2008

12. The Scam
 Accounting fraud of over 7,800 crores rupees
 Past 7 years accounting books were cooked:
- Profits were inflated
- Understated liability and overstated debts
- Accrued interest (which was non-existent)
-The gap in the balance had risen due to inflated profits
 Planned to buy the Maytas to fill the gap in the balance
sheet

13. Impact of Scam
 Jobs of over 50,000 were at risk
 India`s global image was suffered
 Indian stock market fell dramatically
 Biggest single day fall of 175 Rs. On Jan 6th 2009 of Satyam share
 SEBI said that, if Saytam found guilty, its license to work in India
may be revoked
 The New York Stock Exchange halted trading in Satyam stock
 India's National Stock Exchange announced removal of Satyam from
S&P CNX & Nifty 50
 The GDP fell by 0.4%
 I.T sector suffered a downturn

14. SATYAM-MAYTAS

15. Case Study-II :: Vodafone Tax Case

16. Case Study-II :: Vodafone Tax Case
 Acquisition of Hutch-Essar Ltd for 11 billion USD
 Taxability over Capital Gains on overseas transaction
 Withholding Tax obligations of the Non Resident buyer
 2 Billion USD / 12,000 Crore Rupees Tax
 I-T claims that the sale involved India based assets and
hence should be taxed
 5 year long legal battle
 Bombay High Court ruling in favour of Revenue Dept.
 Supreme Court ruling in favour of Vodafone
International Holdings
 Review petition by Finance Ministry
 Pranab Mukherjee brings in GAAR

18. Case Study-III :: TATA’s Business Ethics

19. TATA’s Business Ethics & Principles
National Interest:Committed to benefit the
economic development of the
countries in which it operates.
Equal opportunities employer:Provide equal opportunities to all
its employees and all qualified
applicants for employment
Financial reporting and records:Prepare and maintain its accounts
fairly and accurately and in
accordance with the accounting
and financial of the country .
Gifts and donations:Its employees shall neither receive
nor offer or make, directly or
indirectly, any illegal
payments, remuneration, gifts, do
nations or comparable benefits
Competition :Fully support the development
and operation of competitive open
markets.
Government agencies:Employees shall not, unless
mandated under applicable laws,
offer or give any company funds
or property as donation to any
government agency or its
representative.

20. TATA’s Social Reforms
Tata Group
Enforced by law/ Legal
Measures
 1912- Eight-hour day
 1948- Factories Act
 1915- Free medical aid
 1948- Employees State
Insurance Act
 1920-Leave with Pay
 1920- Workers Provident
Fund Scheme
 1937- Retiring gratuity
 1948- Factories Act
 1952-Employee Provident
Fund Act
 1972- Payment of Gratuity
Act

21. Our Responsibility
Minimal- What we shouldn’t do
Don’t steal, don’t kill & don’t lie
Better: What we should do
Be fair, Be honest, Fulfil duties & work hard
 Best: What we could do to make things
excellent for all of us…
Incentive & recognitions for outstanding
ethical behaviours, raise awareness & educate
youth

22. Conclusion
Ethics should & must play an important role in
today’s organization's.
It is vital in determining the long term
success for any organization.
“ Ethical business is Good
Business”
“Choose for yourself today”