Sunday, May 4, 2008



Modern Business Ethics and Dilemmas

Modern entities are acquiring large significance due to their size and the influence exerted by them. These business corporations have become a method of property tenure and means of organizing society’s economic life. The growth of business houses has evolved a corporate system. These corporate systems have gained prominence and have with it the attributes of power and can deal with itself as a major social institution. While making a decision, a manager has many questions which need to be answered- What is right, for whom the decision will help, for whom it will harm, what will be the gains and losses and what would be the optimal decision which would make everybody happy.

The most important people that are connected with the company are the stakeholders. These stakeholders include all individuals or groups who can effect or is affected by the actions, decisions, policies, practices or goals of the organization.

These stakeholders are divided into 3 categories:

1. Focal Stakeholders- Business house or the top management

2. Primary Stakeholders- Owners, customers, suppliers and employees.

3. Secondary Stakeholders- All sets of people other than those in 1 & 2. Includes consumers, government, general public, society, media etc.

Actions/ Demands of the entire all the above stakeholders exerts certain ethical dilemmas on the company which could be divided into two types:

· Open: Where the problem is open to the public and could be seen. For eg: theft, bribery, sabotage, espionage etc

· Concealed: Hidden. Complex and covered by rules and laws. Difficult to locate and becomes a potential danger to the corporate. For eg: Inside trading, bad HRM policies, corporate acquisitions and mergers.
Right in Theory, do ethics work in business?

Questions that are generally asked is whether all the theories really work in real life? Can these theories guide ethical decision making/ Do they work where the market is a battle field and where every product is fighting for a place in the market?

The surprising thing is that every manager thinks that the competition is breaking the rules of ethics except him and he has to take protective measures.
The question generally asked is that when the market is full of unethical companies following unethical routes how could a competing company remain ethical? The managers feel that the company would be put to disadvantage, if they follow ethical means. The stock markets and even the local auto repair shop is full of examples of the unethical practices followed by them.

However it has been proven time and again that if every organization commits itself to the path of honesty and culture, it can certainly overcome all the difficulties of enforcing ethical values and principles.

Is Business Bluffing Ethical?

Without truth as a guiding principle, any discussions become valueless. More often than not we lie, tell half truths or keep quite to some questions. We regularly distort, alter, and manipulate the true information in order to tailor it to the discussions. What words we say and how we say conveys a lot of meaning to the listeners. Truth is not always a wise policy. We need to keep certain things away from public eyes to avert greater disaster.

What is Legal is Ethical?

A decision that a manager makes has broadly three components:

· The company requirements like physical targets, financial requirements, profits etc.

· The moral standards of the company based on the social structure of the society, corporate social responsibilities and ethos of the company.

· Legal requirements of the company and particular situation.

Of these the most important is the Legal route. The legal route is essentially a compliance based approach where the decisions follow existing laws. Moreover the legal compliance route goes against the philosophy of empowerment. Empowerment gives the managers resources, discretion and the authority and then a trust to make good and ethical decisions in the interest of the company. Compliance to legal requirements simply kills the initiative and to follow on the dotted line of the law.

Law should be taken only as a guideline so that the decision maker is well within the laid down laws. The law gives only a level of acceptable behavior whereas it does not inspire human excellence that is required in business. A manager should be aware of the rights as well as the power he has in his hands for making ethical choices in decision making.

There are four types of justice based on larger principles of justice:

· Compensatory justice: Compensating someone for past losses or harm or injustice.

· Retributive Justice: Serving punishment to a guilty who has done harm to a person. The criterion is that the punishment should be in accordance to the crime.

· Distributive justice: Fair is equitable distribution of benefits and burden. Some should not get undue gain.

· Procedural justice: Good rules, fair decisions making processes, procedures and agreements among the parties. This is applicable in all cases especially in contracts.

Corporate Social Responsibility and Ethics

Social responsibility is defined as the intelligent objective concern for the welfare of the society. Social responsibility should lead to position contribution towards human betterment. The social responsibility restrains individual or corporate behavior from destructive activities even if it means losing immediate profits. There are 2 important elements of Corporate Social Responsibility (CSR)
· Business should take account of its responsibilities.
· Society to accept responsibility of setting ethical standards in the society
Adam Smith considered that making pure profit is a social responsibility of any business as long as some part of the profits is ploughed back to the benefit of the society. By ding this, the company earns a good RQ, which gives the company a better and lasting brand image and helps in its financial performances.

Is Maximizing Profits unethical?

In the high level of competitive markets and free economy it is seen that the function of business is economic and not social. The policies of the business should be guided by economic criteria and actions be dictated by the profit maximization within the social and legal framework. Considering any other factor other than profit maximization will be deliberately sacrificing profits. From the point of view of society the profit maximization may not be the best outcome from the business entity.

· Profit is necessary for the survival of the business. The growth of the business is dependent on the level of the profit earnings of the organizations. The company has to survive by making adequate profits for itself and for growth.

· Equally important is the fact the pricing policies of the firm have to be in line with the competitive advantage of the business entity.

· The next principle is the business has to take into account, is the fairness that is combining social activities with the established economic activities of the business.

· The final argument is the legitimacy that is the social issues are the concern of the government.



Indian culture is a diversified culture because of the varieties of customs, beliefs, festivals and traditions. Indian has a host of cultures: Vedantic, Buddhism, Jainism, Christianity, Islamic, Zoroastrianism and a host sub cultures. It is a veritable unity in diversity.

The important Vedic values in Indian society which is valid even today are:

1. Showing respect to elders

2. Not showing emotions outwardly

3. God fearing in all walks of life.

4. Marriages are made in heaven and are considered a lifelong bond. Some consider it a bond even after death.

5. Despite being under the rules of various foreign rulers, India has still maintained its Vedantic traditions.

6. Indian ethos was built and perfected long before others evolved them. The ethical thought process in Vedantic ethos starts with the Vedas, Upanishads, Smritis and the Puranas. These were told in many ways reflecting the day to day life in epics like the Ramayana, Mahabharata immortalized in the Gita. The ethical values were also told in story form in the Panchatantra, Hitopdesha, Katha Saritsagar, Bhojaprabhand, Chanakyo Neeti, Bhagvata, Sooktimuktavalli, Neeti Shastra, Neeti Shataka Manusmruti and the like.

7. According to the Puranas, the four goals of human life are:
· Dharma
· Artha
· Kama
· Moksha

8. The ethos in work life are:
· Man’s inner strength
· Holistic relationship between man and nature
· Cooperation with each other
· Yoga and meditation. That is excellence and concentration
· Spirit of sacrifice.

9. Internal orientation towards work as worship

10. A holistic grasp of Indian values or the Triumvirate as stated by the poet Kalidas:
· Satyam: Truth (Ethics)
· Shivam: Welfare (Economics)
· Sunderam: Beauty (Aesthetics)

11. The Indian Vedantic system has suggested four personality types based on a set of attributes. The classifications are:
· Daiva: Good attributes give Sattwa type of personality
· Rajas: Shows an angry and busy type
· Tamas: Thinking and doing destructive work.

12. The classifications of the three types of personality are shown below:

Sattwa Rajas Tamas

Truthfulness Jealousy Lust
Purity Dynamism Laziness
Forgiving Envious Drowsy
Compassion Crooked Enjoyment
Cooperation Back biting Procrastinating
Honesty Anger Action less dreaming
Sacrifice Cruelty Postponing
Renunciation Greed Indolence
Patience Covetousness Thinking ill of others
Poise Vanity Action less Raja

Means to Achieve Ethical Ends Kautilyan Ethics

Kautilya’s Arthashastra discusses branches of internal and foreign administration, civil and criminal laws well as art of warfare. As regards the term Neeti Shastra, it is used in the narrow sense of the science of polity as well as in the wider significance of the science of general morals.

Book 2 of Arthashastra is a veritable mine of information about the running of the bureaucratic system of government in an ancient Indian State. A few of some of the writings are:

No chief officer should be allowed to hold the office permanently, because it is hardly possible for officers for officers directly dealing with government finance and revenue not to enjoy even slightly the taste of money

He also prescribes measures against corruption.

He discusses various issues of practical importance which are valid even today. Some of the points are:

· Consider always long term view and objectives when there is a problem.
· On all occasions of conflict the king should support the weaker party with army and funds.
· Make a large organization with discipline and cooperation.
· In case of dilemma in decision making between the principles and religion, follow the eternal principles strongly.
· Follow sacred law and not the precedents. When here is a dilemma between a sacred law and rational law, follow the rational law of reasoning.
· Kautilya advocated a strong bureaucracy who is well trained and who are righteous in their thinking and working.
· Kautilya also recommended strong penalties and punishments for unethical work and immoral behavior for officers holding responsible positions.

Ethical Values in Gita

It is significant that the Bhagvat Gita calls itself Yoga-shastra and not Dharma-shastra though the scripture arises out of a moral problem. The question that is posed at the outset is whether, in the given circumstances, Arjun’s refusing to fight is an act of dharma or adharma.

In Hinduism, ethics is a science of human conduct and character. It is a study of what a man ought to do and what not to do. However what a man ought to do depends upon the end results and the aim of human life, which again depends upon the nature and purpose of the universe of which he is a part of.
Moksha is a negative expression as it signifies freedom from the bonds of the world. But Yoga as it is used in Gita is a positive expression for the same experience. The path of light begins with discrimination, goes through obedience to the law and moral action and thence through self forgetting love and service and ends in spiritual freedom where the individual realizes that he is a part and parcel of the all embracing spirit.

The Ethical values of Gita are:

· The ethos of work is worship is stressed as the driving force of life. to live and be happy one has to do his work in a ethical way. Those who do not work have no present or future. Work should be done for the larger good and not for short term gains.

· Be upright and moral. It is the only path to heaven.

· Conduct all activities ethically in spite of obstacles and constraints or whatever the end results, be.

· Do well to society

· Man is born in this life to play his role. One must perform prescribed duties with devotion, sincerity and humility.

· God comes wherever there is perfection and excellence. Manager, hence should be a total quality manager.

· Ethics is concerned with ends as well as means.

· Quality work of a man, say an employee in an organization is more on his mental attitude and inner satisfaction of having done his duty to the best of his ability.

· Proper knowledge, attitudes and skills are essential for an efficient management.

· Manager should be free from anger and all material desires.

· The personal life should be regulated in habits of eating, sleeping and recreation. Acts of sacrifice, charity and penance is performed without attachment or any expectations in return.

· Work should be done with devotion, pure soul and controlled mind.

Ethical Dimensions of Gandhi

Gandhiji’s life’s corner stone was of non-violence, of morality and of ethics. He has inspired not only the Indians but also people from other nations with his philosophy in every sphere of social and commercial life. Gandhiji not only spoke and wrote about his philosophies, but also followed them to the last alphabet. Some of the philosophical concepts of Gandhiji are:

I. Moral conscience – the moral conscience should be the inner guide to any actions of man.
II. Non-violence -
III. Greatest good for all – Whatever action is taken should be aimed at the greatest good for all.
IV. Sarvodaya Principle – Capital and labour should supplement each other. There should be a family atmosphere and harmony at work place.
V. Philosophy of trusteeship – Each businessmen, industrialist should consider himself as a trustee of the wealth that he possess, which he has taken from the society and it should be used for the greatest good of all.
VI. Labour as partners- Labour should be trained to develop moral and spiritual values and should be a partner to the success of the industry/ business.
VII. Ethical principles to be followed by labour –
· Workers should seek redressel of their problems only through collective action.
· Ballot authority should be taken for organizing a strike and it should be peaceful.
· Workers should avoid strikes in industries of essential services.
· Workers should avoid formation of unions in philanthropic organizations.
· Strikes should be resorted to only as a last resort, if all else fails.
VIII. Ends and Means – Goals and the means to those goals should be ethical.

Seven Sins advocated by Gandhiji

· Commerce without morality

· Wealth without work

· Education without character

· Science without humility

· Pleasure without conscience

· Politics without principles

· Worship without sacrifice

MBA in India

Tuesday, January 15, 2008
MBA in India
It’s the proverbial debate. Is an Indian MBA degree at par with global standards, or does one still have to look abroad for quality education? Here we are outlining a direct account of the advantages of pursuing an MBA at a premier institute in India.
As far as higher education is concerned, the educational scenario has changed dramatically in India in the last decade. In the debate of an MBA in India versus abroad, a student currently pursuing MBA in India believes that an Indian MBA scores over an international MBA on several counts.
The main advantage is the cost. An MBA from any good B-school in the US or UK cost anywhere between Rs 25 to 50 lakhs, whereas Indian MBA schools charge ten percent of the same amount. Secondly, when living abroad, a student has to spend far more than he would in India, and as a result need to work there for at least a few years to recover the amount. This severely hampers his prospect of returning to India after the completion of the degree.
On the other hand, a student from a reputed Indian B-School always has the option to work at either place, since all premier B-Schools have a significant amount of foreign placements taking place each year. Also, Indian is a vibrant economy today and corporate companies the world over value the pool of talent that exists here. In fact, people opt for position in India to be apart of the growing economy. Lately there has been an increase in the number of NRIs coming back to India. In this thriving scenario, it makes sense to get ones degree from an Indian B-School.
There has also been steady increase in the number of the tie-ups between Indian and foreign universities. Some of them include the SP Jain Institute of Management and Research with Virginia Tech, the Indian School of business with the Wharton School Kellogg School of Management, the management Development institute with Cambridge College, Great Lake & Yale, Wellingkar College with Temple University the institute of Management and technology with Fairleigh Dickinson University, Great Lakes and Yale University. Thus, with more and more premium international education its way to Indian shores one can experience the benefits a international education and a lesser cost.
Also, Indian MBA courses have been expanding and growing significantly in recent years. MBA graduates from Indian B-Schools have proved their mettle in the global working environment and are offered top positions in several organizations. Considering the purchasing power parity, initial expenditure (cost of the program), initial placements, and growth in salary as inputs in decision, MNCs do not have to think twice before coming to India in search of middle and senior management talent.
In every Indian B-school participants with two to five years of IT industry experience always fill a certain percentage of the batch. These students often have international exposure. Their multicultural experience adds value to the entire batch and program as a whole. And to a certain extent, it compensates for the rich diverse cultural experience that is associated with a US or UK MBA. Finally, Indian B-Schools are more open to non-experienced candidates than international B-schools, and thus prove to be an advantage to most people. Hence, keeping in mind today’s scenario we believe that an Indian MBA is the way to go.

By Pradip kakoti