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Business and Ethical Values

Corruption and White Collar Crimes

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BEV: Corruption & White Collar Crimes

White-collar crime or socio economic crime is a crime committed by a person of respectability and high social status in course of his occupation, which is not of the nature of physical violence.

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White Collar Crimes

1) Financial Irregularities

2) Manipulations in the share market

3) Insider trading

4) Inflated/wrong accounting practices - Satyam, ENRON

5) Violation of Foreign Exchange Regulation

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White Collar Crimes

Tax evasion and avoidance

Income Tax / Customs duty evasion - Under invoicing

NPAs and Loans

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White Collar Crimes

Violation of standards, weight and measures – Non conformance, false claims; fake products

Theft and misappropriation of public property and funds

Unfair competition – False advertisements

Professional misconduct

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Corruption

An inducement to wrong by bribery or other unlawful meansA departure from what is pure and correct.

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Corruption

Some root causes of corruption Changing moral values, Greed Projected life styles of the rich – influence of TV.

Cinema Poor justice system Demand & supply Influence of political people in decision making Lack of clearly defined rules and guidelines

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Corruption

Some forms of corruptionIllegal gratificationCommissions & Expensive giftsUsing connections / money for favoursPreference to own community/party members

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Corruption

Some cases of corruption in society1) Govt certificates (land etc) clearances, – Colleges, AICTE, Liquor

2) Employment, transfers 3) Medical Services- Private practice by govt doctor,

right/wrong

4) Political donations

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Corruption

Can corruption be justified? TTE gives the seat meant for him to an unreserved

sick passenger and accepts Rs.100/- You are in a hurry and are stopped for over

speeding. A clerk does out of the way service to a needy

person and accepts gift/money offered. A highly skilled govt. doctor operates a critically ill

patient in a private hospital and charges for that. TIP – Bribe as a motivator??

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Corruption

Why corruption is not right ethically Loss of trust in the system Benefits the rich, at the cost of the poor Can it become a universal practice – Emmanuel Kant Country’s image is affected, No respect for Indian abroad Other countries doing business with India – reluctant Denying someone’s just opportunity Threat to society – low quality construction, abuse/misuse

of scarce resources, national security eg. Defense deal

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Corruption

Can corruption be eradicated?Unlikely, but it can be reduced ……… Value based education and ethical upbringing Creating public awareness – Govt, NGO, Religion Strong and timely legal action Strong professional bodies Corporate commitment to ethical culture Appreciating ethical practices in corporate