Corporate Governance and Business Ethics

It is said that for an ethical work culture, there must be code of ethics in place in every organisation. To ensure value-based and compliance-based work culture, what suitable measures would you adopt in your work place? India is an emerging economic power of the world as it has

There is a technological company named ABC Incorporated which is the second largest worldwide, situated in the Third World. You are the Chief Executive Officer and the majority shareholder of this company. The fast technological improvements have raised worries among environmental activists, regulatory authorities, and the general public over the sustainability of this scenario. You confront substantial issues about the business’s environmental footprint. In 2023, your organisation had a significant increase of 48% in greenhouse gas emissions compared to the levels recorded in 2019. The significant rise in energy consumption is mainly due to the surging energy requirements of your data centres, fuelled by the exponential expansion of Artificial Intelligence (AI). AI-powered services need much more computational resources and electrical energy compared to conventional online activities, notwithstanding their notable gains. The technology’s proliferation has led to a growing concern over the environmental repercussions, resulting in an increase in warnings. AI models, especially those used in extensive machine learning and data processing, exhibit much greater energy consumption than conventional computer tasks, with an Expansion vs Carbon exponential increase. Although there is already a commitment and goal to achieve net zero emissions by 2030, the challenge of lowering emissions seems overwhelming as the integration of AI continues to increase. To achieve this goal, substantial investments in renewable energy use would be necessary. The difficulty is exacerbated by the competitive environment of the technology sector, where rapid innovation is essential for preserving market standing and shareholders’ worth. To achieve a balance between innovation, profitability and sustainability, a strategic move is necessary that is in line with both business objectives and ethical obligations. (a) What is your immediate response to the challenges posed in the above case. (b) Discuss the ethical issues involved in the above case. (c) Your company has been identified to be penalised by technological giants. What logical and ethical arguments will you put forth to convince about its necessity. (d) Being a conscience being, what measures would you adopt to maintain balance between AI innovation and environmental footprint?

What do you understand by ‘moral integrity’ and ‘professional moral integrity and efficiency in the context of corporate governance in India? Illustrate with suitable examples.

Discuss the role of the Competition Commission of India in containing the abuse of dominant position by the Multi-National Corporations in India. Refer to the recent decisions.

3) Examine the ethical dilemma involved in the case. Prabhat was working as Vice President (Marketing) at Sterling Electric Ltd., a reputed multinational company. But presently the company was passing through the difficult times as the sales were continuously showing downward trend in the last two quarters. His division, which hitherto had been a major revenue contributor to the company’s financial health, was now desperately trying to procure some big government order for them. But their best efforts did not yield any positive success or breakthrough. His was a professional company and his local bosses were under Corporate Espionage pressure from their London-based HO to show some positive vs Family Financial results. In the last performance review meeting taken by the Executive Director (India Head), he was reprimanded for his poor performance. He assured them that his division is working on a special contract from the Ministry of Defence for a secret installation near Gwalior and tender is being submitted shortly. He was under extreme pressure and he was deeply perturbed. What aggravated the situation further was a warning from the top that if the deal is not clinched in favour of the company, his division might have to be closed and he may have to quit his lucrative job.

generating wealth and employment is increasing. In doing so, they are bringing in unprecedented onslaught on the climate, environmental sustainability and living conditions of human beings. In this background, do you find that Corporate Social Responsibility (CSR) is efficient and sufficient enough to fulfill the social roles and responsibilities needed in the corporate work mandated? Critically examine.

You have done MBA from a reputed institution three years back but could not get campus placement due to COVID-19 generated recession. However, after a lot of persuasion and series of competitive tests including written and interview, you managed to get a job in a leading shoe company. You have aged parents who are dependent and staying with you. You also recently got married after getting this decent job. You were allotted the Inspection Section which is responsible for clearing the final product. In first one appreciated for your performance by the management. The company is doing good business for last five years in domestic market and this year it is decided even to export to Europe and Gulf countries. However, one large consignment to Europe was rejected by their Inspecting Team due to certain poor quality and was sent back. The top management ordered that ibid consignment to be cleared for the domestic market. As a part of Inspecting Team, you observed the glaring poor quality and brought to the knowledge of the Team Commander. However, the top management advised all the members of the team to Fraud & Retaliatory overlook these defects as the management cannot bear such a huge loss. Rest of the team members except you promptly signed and cleared the consignment for domestic market, overlooking glaring defects. You again brought to the knowledge of the Team Commander that such consignment, if cleared even for domestic market, will tarnish the image and reputation of the company and will be counter-productive in the long run. However, you were further advised by the top management that if you do not clear the consignment, the company will not hesitate to terminate your services citing certain innocuous reasons. 1) Under the given conditions, what are the options available to you as a member of the Inspecting Team? 2) Critically evaluate each of the options listed by you. 3) What option would you adopt and why? 4) What are the ethical dilemmas being faced by you? 5) What can be the consequences of overlooking the observations raised by the Inspecting Team?

A Reputed food product company based in India developed a food product for international market and started exporting the same after getting necessary approvals. The company announced this achievement and also indicated that soon the product will be made available for the domestic consumers with almost same quality and health benefits. Accordingly, the company got its product approved by the domestic competent authority and launched the product in Indian market. The company could increase its market share over a period of time and earned substantial profit both domestically and internationally. However, the random sample test conducted by inspecting team found the product being sold domestically in variance with the approval obtained from the competent authority. On further investigation, it was also discovered that the food company was not only selling products which were not meeting the health standard of the country but also selling the rejected export products in the domestic market. This episode adversely affected the reputation and profitability of the food company. 1) What action do you visualize should be taken by the competent authority against the food company for violating the laid down domestic food standard and selling rejected export products in domestic market? 2) What course of action is available with the food company to resolve the crisis and bring back its lost reputation?

The Chairman of Bharat Missiles Ltd (BML) was watching a program on TV wherein the Prime Minister was addressing the nation on the necessity of developing a self-reliant India. He subconsciously nodded in agreement and smiled to himself as he mentally reviewed BML’s journey in the past two decades. BML had admirably progressed from producing first-generation anti-tank guided missiles (ATGMs) to designing and producing state of the art ATGM weapon systems that would be the envy of any army. He sighed in reconciliation with his assumptions that the government would probably not alter the status quo of a ban on the export of military weaponry. To his surprise, the very next day he got a telephone call from the Director-General, Ministry of Defence, asking him to discuss the modalities of increasing BML production of ATGMs as there is a probability of exporting the same to a friendly country. The Director-General wanted the Chairman to discuss the details with his staff in Delhi next week. Two days later, at a press conference, the Defence Minister stated that he aims to double the current weapons export levels within five years. This would give an impetus to financing the development and manufacturing of indigenous weapons in the country. He also stated that all indigenous arms manufacturing nations have a very good record of the international arms trade. As the Chairman of BML, what are your views on the following points? 1) As an arms exporter of a responsible nation like India, what are the ethical issues involved in arms trade? 2) List five ethical factors that would influence the decision to sell arms to foreign governments.

Parmal is a small but underdeveloped district. It has a rocky terrain that is not suitable for agriculture, though some subsistence agriculture is being done on small plots of land. The area receives adequate rainfall and has an irrigation canal flowing through it. Amria, its administrative centre, is a medium-sized town. It houses a large district hospital, an Industrial Training Institute and some privately owned skill training centres. It has all the facilities of a district headquarters. A trunk railway line passes approximately 50 kilometers from Amria. Its poor connectivity is a major reason for the absence of any major industry therein. The state government offers a In 2010 Anil, an industrialist decided to take benefits to set up Amria Plastic Works (APW) in Noora village, about 20km from Amria. While the factory was being built, Anil hired the required key labour and got them trained at the skill training centres at Amria. This act of his made the key personnel very loyal to APW. APW started production in 2011 with the labour drawn fully from Noora village. The villagers were very happy to get employment near their homes and were motivated by the key personnel to meet the production targets with high quality. APW started making large profits, a sizeable portion of which was used to improve the quality of life in Noora. By 2016, Noora could boast of a greener village and a renovated village temple. Anil liaised with the local MLA to increase the frequency of the bus services to Amria. The government also opened a primary health care centre and primary school at Noora in buildings constructed by APW. APW used its CSR funds to set up women’s self-help groups, subsidize primary education to the village children and procure an ambulance for use by its employeed and the needy. In 2019, there was a minor fire in APW. It was quickly extinguished as fire safety protocols were in place in the factory. Investigations revealed that the factory had been using electricity in excess of its authorized capacity. This was soon rectified. The next requirement of production fell for four months. Anil decided that all employees would be paid regularly. He employed them to plant trees and improve the village habitat. APW had developed a reputation of high-quality production and a motivated workforce. Critically analyse the story of APW and state the ethical issues involved. Do you consider APW as a role model for the development of backward areas? Give reasons.

women employees was losing sales due to various factors. The company hired a reputed marketing executive, who increased the volume of sales within a short span of time. However, some unconfirmed reports came up regarding his indulgence in sexual harassment at the workplace. After sometime a women employee launched a formal complaint to the management against the marketing executive about sexually harassing her. Faced with the companies’ Sexual Harassment indifference, in not taking cognizance of her grievances, she Settlement Offer lodged an FIR with the police. Realizing the sensitivity and gravity of the situation, the company called the women employee to negotiate. In that she was offered a hefty sum of money to withdraw the complaint and the FIR and also give in writing that the marketing executive is not involved in the case. Identify the ethical issues involved in this case. What options are available to the women employee?

negotiate a deal with the manager of a large manufacturing company B. The deal is highly competitive and sealing the deal is critical for your company. The deal is being worked out over a dinner. After dinner the manager of manufacturing company B offered to drop you to the hotel in his car. On the way to hotel he happens to hit motorcycle injuring the motorcyclist badly. You know the manager was driving fast and thus lost control. The law Commercial Deal enforcement officer comes to investigate the issue and you are the sole eyewitness to it. Knowing the strict laws pertaining to road accidents you are aware that your honest account of the incident would lead to the prosecution of the manager and as a consequence the deal is likely to be jeopardised, which is of immense importance to your company. What are the dilemmas you face? What will be your response to the situation? An apparel manufacturing company having a large number of

Corporate social responsibility makes companies more profitable Corporate social and sustainable. Analyse.

business activities with a huge shareholder base. The company is continuously expanding and generating employment. The company, in its expansion and diversification programme, decides to establish a new plant at Vikaspuri, an area which is underdeveloped. The new plant is designed to use energy efficient technology that will help the company to save production cost by 20%. The company’s decision goes well with the Government policy of attracting investment to develop such underdeveloped regions. The Government has also announced tax holiday for five years for the companies that invest in underdeveloped areas. However, the new plant may bring chaos Industrial Expansion for the inhabitants of Vikaspuri region which is otherwise tranquil. The new plant may result in increased cost of living, aliens migrating to the region, disturbing the social and economic order. The company sensing the possible protest tried to educate the people of Vikaspuri region and public in general that how its Corporate Social Responsibility (CSR) policy would help overcome the likely difficulties of the residents of Vikaspuri region. In spite of this the protests begin and some of the residents decided to approach the judiciary as their plea before the Government did not yield any result. (a) Identify the issues involved in the case. (b) What can be suggested to satisfy Company’s goal and to address the resident’s concern.

a) Law and Ethics b) Ethical management and Management of ethics; c) Discrimination and Preferential treatment; d) Personal ethics and Professional ethics

A private company is known for its efficiency, transparency and employee welfare. The company though owned by a private individual has a cooperative character where employees feel a sense of ownership. The company employs nearly 700 personnel and they have voluntarily decided not to form a union. One day suddenly in the morning, about 40 men belonging to a political party gatecrashed into the factory demanding jobs in the factory. They threatened the management and employees, and also used foul language. The employees feel demoralized. It was clear that those people who gate-crashed wanted to be on the payroll of the company as well as continue as the volunteers/members of the party. The company maintains high standards in integrity and does not extend favours to civil administration that also includes law enforcement agency. Such incidents occur in public sector also. Assume you are the CEO of the company. What would you do to diffuse the volatile situation on the date of gate-crashing with the violent mob sitting inside the company premises? What could be the long-term solution to the issue discussed in the case? Every solution/action that you suggest will have a positive and a

negative impact on you (as CEO), the employees and the performance of the employees. Analyze the consequences of each of your suggested actions. One of the scientists working in the R & D laboratory of a major pharmaceutical company discovers that one of the company’s best selling veterinary drugs, B has the potential to cure a currently incurable liver disease that is prevalent in tribal areas. However, developing a variant of the drug suitable for human beings entailed a lot of research and development having a huge expenditure to the extent of 50 crores rupees. It was unlikely Spending vs Tribal that the company would recover the costs as the disease was rampant only in poverty-stricken area having very little market otherwise. If you were the CEO, then— (a) Identify the various actions that you could take; (b) Evaluate the pros and cons of each of your actions.

In the light of the Satyam Scandal (2009), discuss the changes brought in corporate governance to ensure transparency, accountability.

would adopt, giving reasons. Suppose you are the CEO of a company that manufactures specialized electronic equipment used by a government department. You have submitted your bid for the supply of this equipment to the department. Both the quality and cost of your offer are better than those of the competitors. Yet the concerned officer is demanding a hefty bribe for approving the tender. Getting the order is important both for you and for your company. Not getting the order would mean closing a production line. It may also affect your own career. However, as a value-conscious person, you do not want to give bribe. Valid arguments can be advanced both for giving the bribe and getting the order, and for refusing to pay the bribe and risking the loss of the order. What those arguments could be? Could there be any better way to get out of this dilemma? If so outline the main elements of this third way, pointing out its merits.

What do you understand by ‘values’ and ‘ethics’? In what way is it important to be ethical along with being professionally competent?

You are the Executive Director of an upcoming InfoTech Company which is making a name for itself in the market. Mr. A, who is a star performer, is heading the marketing team. In a short period of one revenues as well as creating a high brand equity for the Company so much so that you are thinking of promoting him. However, you have been receiving information from many corners about his attitude towards the female colleagues; particularly his habit of making loose comments on women. In addition, he regularly sends indecent SMS’s to all the team Corporate Revenue members including his female colleagues. One day, late in the evening, Mrs. X, who is one of Mr. A’s team members, comes to you visibly disturbed. She complains against the continued misconduct of Mr. A, who has been making undesirable advances towards her and has even tried to touch her inappropriately in his cabin. She tenders her resignation and leaves your office. 1) What are the options available to you? 2) Evaluate each of these options and choose the option you