BUSINESS & ETHICS DO NOT GO TOGETHER

ETHICS:Moral principles that govern a person's behaviour or the conducting of an activity.

Ethics is knowing the difference between what you have a right to do and what is right to do.

FOUNDATIONS OF ETHICAL BEHAVIOUR

Treat others as you would be treated

Respect

Honesty

Trust

BUSINESS ETHICSBusiness ethics are moral principles that guide the way a business behaves. The same principles that determine an individual’s actions also apply to business.

Acting in an ethical way involves distinguishing between “right” and “wrong” and then making the “right” choice. It is relatively easy to identify unethical business practices.

For example, companies should not use child labour. They should not unlawfully use copyrighted materials and processes. They should not engage in bribery.

IMPORTANCE OF BUSINESS ETHICS

Employee commitmentInvestor and customer loyalty and confidenceLegal problems and penaltiesCustomer satisfactionAbility to build relationships with stakeholdersPerformance, revenue and profitsReputation and image

ETHICAL ISSUES RELATING TO BUSINESS

Honesty

Unfair competition

Just compensation

Respecting rights of others

AREAS OF RESPONSIBILITY

GENERAL PUBLIC• Public Health Issues. What to do about inherently dangerous products such as alcohol, tobacco, vaccines, and steroids.

• Protecting the Environment. Using resources efficiently, minimizing pollution.

• Recycling. Reprocessing used materials for reuse.

• Developing the Quality of the Workforce. Enhancing quality of the overall workforce through education and diversity initiatives.

• Corporate Philanthropy. Cash contributions, donations of equipment and products, and supporting the volunteer efforts of company employees.

CUSTOMERS• The Right to Be Safe. Safe operation of products, avoiding product liability.

• The Right to Be Informed. Avoiding false or misleading advertising and providing effective customer service.

• The Right to Choose. Ability of consumers to choose the products and services they want.

• The Right to Be Heard. Ability of consumers to express legitimate complaints to the appropriate parties.

EMPLOYEES Workplace Safety.

Monitored by Occupational Safety and Health Administration.

Quality-of-Life Issues.

Balancing work and family through flexible work schedules, subsidized child care, and regulation such as the Family and Medical Leave Act of 1993.

Ensuring Equal Opportunity on the Job.

Providing equal opportunities to all employees without discrimination; many aspects regulated by law.

Age Discrimination.

Age Discrimination in Employment Act of 1968 protects workers age 40 or older.

Sexual Harassment and Sexism.

Avoiding unwelcome actions of a sexual nature; equal pay for equal work without regard to gender.

INVESTORS

•Obligation to make profits for shareholders.

•Expectation of ethical and moral behavior.

• Investors protected by regulation by the Securities and Exchange Commission and state regulations.

BUSINESS ETHICS AND SOCIAL RESPONSIBILITY

• Management’s consideration of profit, consumer satisfaction, and societal well-being of equal value in evaluating the firm’s performance.

• Contributions to the overall economy, job opportunities, and charitable contributions and service.

• Organizations measure through social audits.

UNETHICAL BEHAVIOURUnethical behaviour is an action that falls outside of what is considered morally right or proper for a person, a profession or an industry.

Individuals can behave unethically, as can businesses, professionals and politicians

COMMON CAUSES OF UNETHICAL BEHAVIOR

Pressure

Fear

Greed

Convenience

Following boss’s directives

Meeting overly aggressive business/financial objectives

Helping the organization survive

Meeting schedule pressures

Be a team player (group think)

Rationalizing that others do it

Resisting competitive threats

Advancing own career

COMMON MISCONDUCTS IN ORGANIZATIONS

Misrepresenting hours worked Employees lying to supervisors Management lying to employees, customers, vendors or the public

Misuse of organizational assets Lying on reports/falsifying records Sexual harassment Stealing/theft Accepting or giving bribes or kickbacks Withholding needed information from employees, customers, vendors or public

BUSINESS AND ETHICS CAN NOT GO TOGETHER

• Morals and values differ for an individual

• Ethics are often ignored at a work place

• In today’s situation with immense pressure and competition, business and ethics can’t go together

• Everyone wants to make quick money. In today’s market being ethical takes a toll on you.

• People judge you on how much money you have and not on the basis of your morality.

Non ethical business is the quickest way to earn profit

No reward for ethical conduct

The number of business houses that comply with ethics to determine their conduct are shrinking in number

CONSEQUENCES OF UNETHICAL BEHAVIOUR

Damaged relationship between management and employees

Lower employee performance and productivity

Incurrence of legal issues (e.g.: suits)

Lack of organisational credibility

WAYS TO PREVENT UNETHICAL BEHAVIOUR

Hire the right peopleHave regular checks and auditsProvides incentives for doing the right thing

Promote open and transparent business practices

Leadership must walk the talk

UNETHICAL PRACTICE FOLLOWED BY COCA-COLA IN

KALADERA VILLAGE, JAIPUR

YEAR 2008

KALA DERA - THIRSTING FROM COCA-COLA

Kala Dera is a large village outside the city of Jaipur.

Agriculture is the primary source of livelihood.

Coca-Cola started its bottling operations in Kala Dera in 2004, and within a year, the community started to notice a rapid decline in groundwater levels

Kala Dera lies in an overexploited groundwater area and access to water has been difficult.

Summers are particularly intense in the area, when water shortages are most acute.

Moreover summer months are also when Coca-Cola reaches its peak production.

Coca-Cola bottling plant in Kala Dera continued to extract the most water, making already existing water shortages even worse.

The conditional license granted by the local panchayat authorized the use of motorized pumps. But the company drilled more than six wells & illegally installed high-powered electric pumps to extract millions of litres of pure water.

The level of the water table fell from 45 to 150 meters below the surface.

COMMUNITY RESPONSE

The community in Kala Dera organized itself to challenge the Coca-Cola company for the worsening water conditions - through extraction and pollution - and demanded the closure of the Coca-Cola bottling plant.

Farmers of the region blame the drastic fall on the bottling plant set up by Hindustan Coca-Cola Beverage, which allegedly draws far more water than can be naturally recharged.

The company, in usual fashion, denied any wrongdoing, blaming "outsiders" for the increasing local community opposition. They claimed to have conducted an environmental study and found the project safe to the village

COMPANY RESPONSE

GROUND WATER LEVEL : PUBLISHED BY CENTRAL GROUNDWATER BOARD

COCA-COLA'S RESPONSE - UNETHICAL AND DISHONEST

Coca-Cola took seven month to respond

Coca-Cola did not respond properly to the

concern raised

Unethical and dishonest campaign

Company chose to continue the operation

Continued in misery of thousand people

Coca-Cola was supposed to have conducted an

Environmental Impact assessment.

Coca-Cola, claims it recharges “at least nine times

more groundwater than it uses, thanks to the

rainwater harvesting potential created by the bottling

plant.”

According to Coca Cola, the decline in the

groundwater level is a regional problem and

attributing it to the plant will be unfair.

PRESENTED BY:

SIDDHARTH RANJAN

VIPLUV PATHAK

DIVYA BAWA &

MUSHARRAF FAROOQ