A

PROJECT REPORT ON
“Environment of Corporate Ethics”

A REPORT SUBMITTED IN PARTIAL FULFILEMENT OF THE

REQUIRMENT OF (MMS) DEGREE

SUBMITTED BY:

Group No. -3

Sumit Bhatia B-03

Nitin Gupta B-13

Akshay Kharde B-23

Suren Paradkar B-33

Supriya Salgaonkar B-43

Mohit Singh B-53

SUBMITTED TO:

Prof. Preeti Duggal

Y.M.T COLLEGE OF MANAGEMENT

KHARGHAR, SECTOR -4, NAVI MUMBAI
UNIVERSITY OF MUMBAI
2009-2011

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GROUP NO: B-3

Roll. No NAME TOPIC

03 - B Sumit Bhatia Relationship between Ethics &

Business

13- B Nitin Gupta Morality in Ethics in Corporate World

& Corporate Excellence

23 - B Akshay Kharde Moral Responsibility of Corporate in

Business

33 - B Suren Paradkar Recognition of Corporate in areas of

Rights & Duties

43 - B Supriya Salgaonkar Maintenance of balance between

Ethics Value & Corporate Profit

53 - B Mohit Singh Case Study

ACKNOWLEDGEMENT

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 With immense pleasure, We would like to present this project report on

“Environment of Corporate Ethics”

It has been an enriching experience for us to undergo work on this project which would
not have possible without the goodwill and support of the people in our team.

As students of “YMT College of Management” Mumbai we would like to express our

sincere thanks too all those who helped us during our project. We would like to express
my gratitude to all those who gave us the encouragement to complete this project.

Our sincere and deepest thanks to Prof Preeti Duggal, Visiting Faculty Member of
YMT COLLEGE OF MANAGEMENT, Mumbai for having spared valuable time with us
and for all the guidance given in executing the project as per requirements. However, I
accept the sole responsibility for any possible error of omission and would be extremely
grateful to the readers of this project report if they bring such mistakes to my notice.

TABLE OF CONTENTS

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Sr.No Topic Page.No

1 Executive Summary 5

2 Introduction 6-7

3 Relationship between Ethics & Business 7-10

4 Morality in Ethics in Corporate World & Corporate 11-15

Excellence

5 Moral Responsibility of Corporate in Business 15-18

Recognition of Corporate in areas of Rights & Duties 18-19

6 Maintenance of balance between Ethics Value & 20-24

Corporate Profit

7 Case Study 25-26

8 Bibliography 27

EXECUTIVE SUMMARY

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Corporate Ethics is the backbone of any corporate organization. Corporate Ethics
teaches every modern organization t Corporate Ethics is the backbone of any corporate
organization. Corporate Ethics teaches every modern organization to recon Corporate E
If you can adhere to the ethics, many other corporate evils such as gossiping, cheating,
hiding, manipulating, complaining, will be discarded as well. Furthermore, you may be
pleasantly surprised by how successful you actually end up being, without ever being
greedy for success and power. All change begins with you, and if you can change then
the corporate world can change too. As my Father always say, the golden rule in life is
simply Do Good and Be Good, leave the rest to God.

Title:

“Environment of Corporate Ethics”.

Objective:

The Primary objective of our project was to study the Environment of Corporate Ethics.
In the study our intention was to go through the relationship between ethics & Busines,
Recognition of Corporate in areas of Rights & Duties, Moral responsibility of Corporate
in Business, maintenance of balance between ethic value & corporate profit between.
The secondary objective was to analyze the cases which related to Environment of
Corporate Ethics.

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 INTRODUCTION

Corporate

For businesses to reach financial stability, good morale and client satisfaction,
corporate ethics must be a guiding policy for all involved.
Have you ever heard of the old saying "with friends like that, who needs enemies"? That
is just the case where employees, managers or others working in a business are
jeopardizing corporate ethics. Many corporations entrust great confidential, important
issues and financial responsibilities to employees that could destroy not only their
business, but also their customers. If the employees of a business are not ethical and
loyal the results can be devastating.
Corporate ethics has come to the surface over the past several years with many
fraudulent transactions. When managers are skimming off the top or conducting
unethical actions with shareholders, customers or other employees it is sometimes
difficult to detect. Others such as employees may keep quite about what they know for
fear of losing their job or worse. In the past it has been so bad that those practicing the
criminal or unethical behavior have threatened to hurt the employee if they speak up. Of
course there is a "whistle blowers" law for protection, but law enforcement can not with

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them 24/7. Many of these people have families and fear not only for themselves, but
also their families.
The business itself can suffer from the loss of clients/customers, financial issues and
risk having to shut down operations when employees lack corporate ethics. Theft is not
the only problem or behavior that can risk the businesses stability either. The treatment
of clients/customers, their personal information and business dealings can also cause
detriment to the business. That is the exact reason that many corporations have been
implementing ethics training for all employees. There are many companies and
individuals that will work on sight to teach employees and managers how to remain
ethical, report violations and not fear in doing so. These topics may seem black or
white, but they are often not that easy. There are several different issues that are
commonly feared by those blowing the whistle. This person that they are "telling" on
may be a family member, friend or boss and that can make the decision that much
harder.
Corporation's should make sure that they have a clear cut policy about reporting illegal
or unethical activity. It is important that employees understand that by doing the right
thing that they will not be sold out or punished for protecting the business. Low level
employees are not the only ones that jeopardize corporate ethics, and the corporation
should keep that in mind. This can be handled by requiring all employees to undergo
ethics training and having a reporting system for them all, not only lower level
employees. There should always be a second in command that employees can bypass
their immediate supervisor to ensure they always have someone to report to. That way
there is less of a chance of an employee remaining quite.

RELATIONSHIP BETWEEN ETHICS & BUSINESS

The relationship between business and ethics is intrinsically entwined. A successful

company is one which can effectively recognize and cultivate the relationship which
exists between the two.
Businesses that exhibit and promote strong corporate codes of ethics are more
prosperous in the long run because they show a commitment to an expectation of
sound moral behavior. This demonstrates a dedication to society, customers,
employees and the business itself. It also enhances a company's reputation if they
become commonly known as an ethical company, and this brings more value to the
organization.

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The highly competitive environment in today's global economy puts pressures on
company leaders to remain profitable and to show a good return to stakeholders. Often
this pressure can result in unethical decisions being made in order to deliver positive
results. When this occurs it usually results in a pattern that gets passed down through
the organization.
As leaders show unethical behavior and perhaps even justify it even though they know
to be wrong, this eventually becomes a part of organizational culture. People follow by
example, and the lack of moral judgment will spread. It's easy to blame "the system",
yet many fail to realize the "system" is comprised of decision making individuals. The
relationship between business and ethics is inherently linked, but there are some who
fail to make this connection. To determine "business is business" is not accurate as
responsible (ethical) decision making is an important component of doing good
business.
Today's society is an instant gratification one and people expect immediate results. This
is perhaps part of the reason why some companies exhibit bad business practices. Not
the only reason, but perhaps a common one. Obviously one's individual moral compass
impacts choices made in a business, and when the cultural environment nurtures sound
moral philosophies and does not tolerate bad business practices, the immoral acts will
decline.
Granted the unethical companies may initially make significant gains financially and
deliver the profits, but at what cost? When companies make unethical decisions it can
result in defective or rushed products, unsubstantiated firing of employees, and false
presentations of products to consumers. Is this good for the company? The fact is it's an
illusion. Yes, these factors will all cut costs and give the appearance of profit, but it's
inevitable that poor choices will negatively impact the business and be more costly in
the long run.
While the immediate bottom lines show a healthy profit through immoral acts, the
reputations of these companies ultimately suffer which over the course of time and this
can really hurt a business and its' profits. All too often we hear about CEO's who have
either stolen funds or ruined a company's reputation due to corrupt practices. In the long
run, managers and leaders who promote an atmosphere with low ethical standards
bring harm the business. While it may not necessarily shut the business down, it will
impact the potential to increase revenues to the fullest potential.

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Good business practices starts with management setting standards of what's expected,
and they should lead by example. The establishment of higher levels of ethical behavior
within a business benefits the company in many ways. It displays strong values have
been set for a commitment to company philosophy and mission. There is no good
reason why a company cannot make ethically sound decisions and still turn a profit.
Cheating and/or lying do not bring value to a business, and it also affects employee
morale. Employees and reputation are two very valuable assets, and by promoting a
morally sound environment for both employees and customers; this can only enhance
those assets.
Consumer trust and confidence in a business can only serve to benefit the company.
Economic rules dictate that the larger a network, the more value is added to that
network. If customers can accurately rely on the fair treatment, expertise and
knowledge of a company, this will further expand their reputation as honest and as a
result attract more customers. This ultimately economically benefits the company as
well, and their network will grow. This being the case, it would be in a company's best
interest to promote universal ethically good behavior in the workplace.
A positive reputation leads to higher profits and provides better service for the public.
Ethics and business go hand in hand and cannot effectively be separated. Ultimately
implementing a strong ethical policy is a win-win situation for all. In today's competitive
environment why wouldn't a company want to do all they can do to promote success on
all levels?

The relationship between business and ethics can be compared to marriage and
morality. A good marital relationship has several essential moral ingredients:
commitment of loyalty to each other by the partners, none of the spouse ever having
any extra marital affairs, commitment to healthy upbringing of the children, taking care
of parents and elders in the family, earning decent money by unquestionable means for
running the family, maintaining a responsible relationship with the society and
contributing albeit in a small way for its welfare.
Almost in similar lines, business and ethics have their connection. Any family running
within the framework of above moral guidelines gets respect from the society. Likewise,
a business run within ethical framework gets respect amidst its stakeholders.

Let us analyze the equivalents of some of the moral aspects of a marital bond that we
listed above as applicable to business ethics and grasp their purport more.

Commitment to Loyalty

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Particularly if a business is run or partnership, the loyalty of business partners to each
other is extremely important. It covers mutual trust and respect too.

In a public corporation, the commitment of the management to the shareholders, or the

commitment of the business promoters to the rest of the share holders is very
important. Within the organization, the commitment and trust of higher management
towards the employees and the employee's loyalty and sincerity towards the
management are to be well established through good communication and well
articulated and understood codes of ethics.

Absence of Unethical Extraneous Relationships

If top level executives at the helm of affairs in a business organization have underhand
dealings and indulge in corrupt practices to siphon off the company's money and
resources to fulfill their selfish needs, or to unduly favor their near and dear ones, the
very ethical framework of the organization will get a jolt. Such practices can greatly mar
the image and trustworthiness of the organization in the eyes of its stakeholders.

Healthy Concern for Employee Welfare

Does the organization consider and treat its employees as human assets and not like
commodities? Do the employees at different levels in the organization feel that they are
treated like respectable individuals and not as herds of slaves? Just in case the
business faces some acute hardship (like a recession) and employees are to be
retrenched in large numbers, how decently and courteously is the unpleasant task
carried out?

The answers to such questions will reveal the level of ethical business standards
existing in the organization.

Ethics behind Profits

Any organization that tends to bulldoze the business scenario by corrupt practices may
make huge profits and even become adorable to the stakeholders, but such practices
will definitely mar the image of the organization in the long run. Other than corruption,
other channels of unethical profit making will cover large scale exploitation of scarcity,
stifling competition by means of unfair business practices, creating artificial scarcity to
manipulate the prices, compromising on product quality and safety for the sake of
maximizing the profits and so on.

Social Responsibility

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Engaging in the business to make profits by producing products that have harmful
effects on consumers, by creating pollution and consequently causing potential health
hazards to the society etc will be considered as poor business ethics from the point of
view of accountability to the society.

Any organization making huge profits by cheating the exchequer by circumventing the
tax laws will also be against ethics of social responsibility of the business. An
organization paying taxes and duties promptly and justly as per laws is in fact
contributing revenue to the Government and this revenue ultimately comes to the
society by means of welfare measures and infrastructural development. An ethically
sound organization may also contribute a portion of its profits by engaging in
philanthropic activities for the welfare of the society.

It is quite likely that profits may appear to have an inverse relationship with business
ethics. But ethically sound business can run smoothly like well oiled machinery and is
most likely to run longer and stronger when compared to immensely profitable
competitors who lack ethical standards.

MORALITY IN ETHICS OF CORPORATE WORLD

The moral absolutism approach presumes the existence of eternal moral values and
principles that are applicable at all times and at all places and circumstances. It
considers that the moral quality of the action or behavior lies on the quality of the act
itself (which means that something which is right is always right and something which is
wrong is always wrong) irrespective of the circumstances that cause the act or the
consequences that result from the act.

The corporate world is beginning to understand that ethics are important. With
companies like Enron, WorldCom, Martha Stewart Omnicom and Barron’s Bank,
executives are becoming increasingly worried whether their corporations are ethical.
Scandalous and unethical behavior has become so prevalent in the media that
executives have realized the impact of ethical behavior on both themselves and their
corporations. Corporate corruption, government investigations and excessive pay

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packages etc are some examples were corporate have to keep an eye on. The world
has become too complex and interconnected to tolerate unethical behavior.

A Good Ethical Approach Can Lead to Profitability

A good ethical approach creates a positive corporate culture that makes customers
happy and ultimately makes the company more profitable. “Ethical companies are more
efficient.” Ethics is responsible of creating a corporate culture. Clarifying expectations is
an important component of management and ethics is no exception. Spending time with
their subordinates to verbalize what the company’s ethical expectations are, managers
can instill ethical behavior from with the culture itself. In addition to creating an ethical
forum, managers should also maintain the ethical quality, in addition to confronting any
wrongdoers.

Many of the existing regulations and laws concerning environmental and social issues
in our country are lacking. As a result, it is up to the corporate community itself to
implement adequate standards, so as not to later be accused by indigenous
communities of immoral and unethical policies and procedures.

CORPORATE EXCELLENCE ACHIEVED THROUGH MORAL ETHICS:

In the new millennium, every element of business environment in India has been
changing. This transformation may be the result of economic liberalization, privatization
& globalization that has been introduced in 1991.In the process of this transformation,
every organization started searching for new ways and means of achieving excellence.
It is clear that mere Financial performance can't be a basis for measuring company's
excellence.

Corporate Excellence is defined as the ability of the company to outsmart Competitors

consistently over a long period of time. In this context, successful organizations are

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different from excellent organizations. Success may be of one dimensions but
excellence is of multiple dimensional in the company.

BUSINESS ETHICS AND CORPORATE EXCELLENCE

In order to achieve excellence, the companies should have basics positive values and
attitudes. Ethics deals with what is wrong and what is right in various disciplines of the
organization. Unethical practices may yield short term gains but organization can't be
successful in the long run. The organization should develop and formulate the right
approaches and strategies to excel. Because it is to be noted that being right in ethical
behavior always pays off.

Besides the above said elements, there are certain areas by which corporate
excellence is facilitated in the modern business world. Young entrepreneurs and
business mangers must pay attention to all these areas in order to see their
organization excel

(a) EXCELLENCE THROUGH MANUFACTURING :-

In the manufacturing area, a new concept called – World Class Manufacturing ( WCM )
has emerged recently. The companies adopting WCM are able to introduce the
products and services very much closer to the needs and wants of the costumer. This
helps the company to be successful because WCM has the following characteristics

I). Products of high quality

II.) Products with enhanced features

III.) Products at the right price.

(b) EXCELLENCE THROUGH MARKETING MIX:-

All organizations, irrespective of the product they offer and the service they provide are
always in search of achieving excellence. The basic area of concern to accomplish
corporate excellence is effective management of Marketing Mix of the company.
Innovation in product attributes, reasoning in prices, wide spread & easy reaches in
placing, the right distribution networks, and objective in promotion, is the fields that a
firm seeking excellence should concentrate on.

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(c) EXCELLENCE THROUGH HRM:-

Among all the organizational resources, the human resources are the most vital and
require constant refinement. Organizational objectives and strategies must match with
HR strategies. Since the change is the fundamental element in achieving corporate
excellence, change management is to be backed by human resources of the firm. The
change can be facilitated by means of HR activity- Training. Hence the training
programmes in the new age business organizations should focus on - Team work,
leadership, initiation, interpersonal communication.

(d) EXCELLENCE THROUGH INFORMATION:-

In this present networking era, information has become a major resource after physical,
financial, human resources of the organization. Proper management of information is
the best way to get competitive advantage. Computer based information systems help
the organization to convert raw data in to meaningful information, which helps the
manger in taking effective decisions, which in term improve business performance and
ultimately lead to corporate excellence. Information systems like TPS (Transaction
Processing System), MIS (Management Information Systems), DSS (Decision Support
Systems), ESS (Executive Support Systems) if used intelligently helps the organization
to reach the pinnacle in the competition.

Following are some suggestions for an ideal corporate to get Excellence in its field:

(a) Setting up of an independent, autonomous centre for corporate excellence,

with a view to accord accreditation and promote policy research and studies,
training and education and awards etc. in the field of corporate excellence
through improved corporate governance;

(b) Introducing measures for greater shareholders participation, through multiple

location meetings, or meeting through electronic media etc.

(c) Introducing formal recognition of corporate social responsibility with Triple bottom
Line Accounting and Reporting.

(d) Clear distinction between direction and management that would ensure that the
executive directors are held responsible for legal and other compliance with non-
executive directors being charged with strategic and overall responsibilities.

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 (e) Highlighting directional commitment and accountability through fewer and more
focused board and committee membership, tighter delineation of independence
criteria and minimization of interest –conflict potential.

(f) Suggesting application of corporate governance principles to public sector

undertakings, certainly in the case of listed companies and preferably even in the
case unlisted companies, in terms of their board with independent directors.

MORAL RESPONSIBILITY OF CORPORATE IN BUSINESS

The notion of corporate moral responsibility has expanded significantly in the past few
decades, according to Manuel Velasquez, chair of the Santa Clara University
Management Department. The Charles Dirksen Professor in Ethics provided a
theoretical look at the topic in a presentation for the June 13, 2006, meeting of the
Business and Organizational Ethics Partnership. Katie Tillman Buck, associate director
of corporate affairs and ethics at Affymetrix, followed Velasquez with a description of
how her company, a leading supplier of genetic diagnostic research equipment,
approaches corporate moral responsibility.

Moral responsibility can be interpreted two ways, Velasquez said: in terms of obligation
or duty; or in terms of culpability.

"The notion of moral responsibility that we have, both in the law and in our everyday
lives, is fairly straight forward," Velasquez explained. "A person or an agent or a party is
morally responsible for an injury if 1) they caused it, 2) they knew what they were doing,
and 3) they could have prevented it."

Expanding interpretation

This concept applies to corporations as well. Traditionally, a company was morally

responsible for injuries it inflicted provided the same three factors held.

However, the idea of moral responsibility has been expanding over the years. "During
the second half of the 20th century, a company was held responsible for injuries users
of its products inflicted on themselves," he said. "The company is held morally
responsible provided they knew about it in some way, or should have known about it,
and it could have prevented it."

This interpretation expanded even further with the idea of strict liability. "A company is
now held responsible also for injuries users inflicted on themselves, even when the
company could not have prevented it," Velasquez said.

Over the last couple of years, a company's scope of moral responsibility has even
extended upstream (to suppliers) as well as downstream (to end-users). "During the last

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20 years or so, there are a number of companies that have been held morally
responsible-not legally-but in the eyes of the public have been held morally responsible
for injuries that their suppliers have inflicted on some third party," he noted. Companies
in the apparel industry, toy manufacturing, electronics assembly, and others have been
perceived as accessories to the mistreatment of workers by their suppliers, even if they
have not been directly involved. Many now try to prevent that by doing onsite
inspections.

Downstream responsibility has also expanded in the last two decades or so.
"Companies have been held morally responsible for injuries which they did not inflict on
somebody else, injuries in which their product was not defective, but injuries in which
one of their customers used one of their products to inflict an injury on a third party," he
said. Gun manufacturers and bar owners are two notable examples.

"It's odd when you think about it, because this differs pretty substantially from that first
notion of moral responsibility with which we began, where a party is morally responsible
for an injury they inflict on another person knowingly and being able to prevent it. This is
a very stretched notion of moral responsibility that's being used today," he said.

This brings up two theoretical questions:

1) To what extent is a company morally responsible for the way in which its customers
use its products?

2) How can a company minimize its exposure to this kind of moral responsibility?

The second question is commonly dealt with before the fact by monitoring who buys the
products (for example, checking the background of potential gun buyers) or after the
fact by using publicists and lawyers. But as one attendee of the BOEP meeting noted,
many companies do not want to answer the first question because they are afraid of the
answer. By asking the question, they become responsible for monitoring their product's
use.

Corporate moral responsibility and Product Use or Misuse

Such reluctance has not been the case with the Santa Clara, Calif., company
Affymetrix. "There's this awareness in the general community as well as the genetics
community that genetic information is powerful," Buck acknowledged. The Affymetrix
technology; for example, can put 6.5 million discrete pieces of genetic information on a
single chip. "It can be used for a lot of great things, and it can probably be used for a
few bad things."

According to Buck, Affimetrix understands that exploring the ethics of how its chips are
used is ultimately in the company's best interests. "Our interests looking into these
issues of moral responsibility, looking at these ethical issues, really melds very well with
what our business goals are," Buck explained. "We're at the stage where not being

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thorough, getting embroiled in something that just feels bad to people, would be bad for
us and would be bad for the technology's ability to address all those markets we want to
be in.

The company has taken a proactive approach to these concerns, setting up an Ethics
Advisory Committee to address moral and ethical issues. The committee consists of
seven external participants who have varied backgrounds, including law, anthropology,
genetics, bioethics, and sociology. They offer independent, non-corporate views on the
issues. "They're very different. We actually picked them not with the idea that they
wouldn't get along, but with the idea that they wouldn't agree. Our goal at these
meetings is to really get everything out on the table," she said.

The committee meets four times a year. "We always have two or three executives in the
room, as well as a selection of people from throughout the organization," Buck said. Her
goal over the past five years has been to embed the idea in the corporate culture that
ethics are important and that this committee is available to people throughout the
organization.

Discussions vary at the meetings. "A lot of what we talk about at the Ethics Advisory
Committee is completely hypothetical. It's becoming less hypothetical over time. It's
becoming more and more realistic now," she said. "But we're really trying to get ahead
of the ball."

One issue the committee has looked at has been newborn screening-the practice of
automatically testing newborns for existing diseases and conditions before they leave
the hospital. Even though Affymetrix products are not currently used in newborn
screening, they could be, so the committee has addressed issues such as informed
consent, genetic privacy, storage of samples, the need for federal regulations, etc.

Putting ethics into practice

The committee has discussed less hypothetical situations as well. For example, the
company received a proposal from an Israeli company that intended to use an
Affymetrix chip to test for disorders common to that population, including Tay-Sachs
disease. It included several other disorders, as well, both treatable and untreatable, in
addition to late-onset diseases, with no indication of when the testing would be done.
The proposal also indicated that the company intended to market a Palestinian chip,
and even a Swedish chip.

The red flags this project raised (possible geopolitical implications and questionable
genetics, among others) concerned Affymetrix. Additionally, Affymetrix determined that
the company was more of a marketing firm than a genetic testing company, so they
declined to be involved with the project. "That wasn't really the first thing we wanted to
do coming out of the gate, so we passed on that," Buck said.

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The constant emergence of new markets for genetic technology means new questions
every day. "This is a new industry. This is new research people are doing," Buck noted.
Taking part not only in internal discussions about moral responsibility, but national
discussions as well, "being informed on what's going on and weighing in on the things
that are particular to the kinds of data that we're generating" is a way of helping shape
the moral climate of the industry as well.

RECOGNITION OF CORPORATE IN AREAS OF RIGHTS & DUTIES

The Concept of a Right

In general, a right is an individual’s entitlement to something. A person has a right

when that person is entitled to act in certain way or is entitled to have others act in
certain way towards him or her. The entitlement may be drive from legal system that
permits or empowers the person to act in specified way or that requires others to act in
certain ways towards that person; the entitlement is then called a legal right.

The rights which are called moral rights or human rights are based on moral norms
and principles that specify that all human beings are permitted or empowered to do
something or are entitled to have something done for them. Moral rights, unlike legal
rights, are usually not limited to a particular jurisdiction. Moral rights are the rights that
human being of every nationality possess to an equal extent simply by virtue of being
human beings.

Characteristics of Rights:

. A right is an individual’s entitlement to something

. Rights derived from legal systems are limited by jurisdiction

. Moral or human rights are based on moral norms and are not limited by jurisdiction

Features of Moral rights

1. Moral rights are tightly correlated with duties. This is because one person’s moral
right generally can be defined – at least partially – in terms of moral duties other
people have towards that person.

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2. Moral rights provide individuals with autonomy and equality in the free pursuit of
their interests. That is, a right identifies activities or interest that people must be
left free to pursue or not pursue.

3. Moral rights provide the basis for justifying one’s actions and for invoking the
protection or aid for others. If I have moral rights to do something then I have
moral justification for doing it.

4.

Negative and Positive rights

A large group of rights called Negative rights is distinguished by the fact that its
member can be defined wholly in terms of duties other have not interfere in certain
activities of the person who holds a given right. For example, if I have right to
privacy, this means that every other person, including my employer, has the duty not
to intervene in my private affairs.

In contrast Positive rights do more than impose negative duties. They also imply
that some other agents (it is not always clear who) have positive duty of providing
the holders of the right with whatever they need to freely pursue their interest.

Contractual Right and Duties

Contractual rights and duties (sometime called special rights and duties or special
obligations) are the limited rights and correlative duties that arise when one person
enters an agreement with another person. For example, if I contract to do something
for you, then you are entitled to my performance: You acquire a contractual right to
whatever I imposed, and I have a contractual duty to perform as I have a promised.

Contractual rights and duties are distinguished, first, by the fact that they attach to
specific individuals and the correlative duties are imposed only on other specific
individuals. Second, contractual rights arise out of specific transactions between
particular individuals. Unless I actually make a promise or enter some other, similar
arrangements with you, you do not acquire any contractual rights over me. Third,
contractual rights and duties depend on publicly accepted system of rules that
defines the transaction that gives rise to those rights and duties.

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 MAINTENANCE OF BALANCE BETWEEN ETHICS VALUE & CORPORATE
PROFIT

Every time in newspaper we find reports about controversies on business ethics of large
corporate houses and even government organizations. Today, ethics seems less
important than making profit, which is the ultimate goal all over the world. In this
scenario a question raises its head with timidity: 'is it not possible to make profit
ethically?' A question we all need to answer for ourselves.

In certain countries ethics comes on a poor second when it comes to doing business
successfully. "Successfully" here means generating large amounts of surplus. For this
purpose the business houses need to expand their territory, coverage and products to
capture large chunks of the market.

Creating a base for such activities can be done in two ways:

(1) Go the hard way - advertise, consolidate, build brand and image in the national and
international market segment you prefer. This involves money, effort and tremendous
perseverance
(2) Go the easy way - bribe your way through government and other corridors which
would help you create a niche market almost overnight. Often the amount of money and
efforts spent on bribes is less than

Which would be the best way, in your opinion? You would say, 'the ethical way', of
course. But you would be amazed at how many would still go the other way. Why?
Because, the keyword today is "results" and here "results" means profit. Corporate
houses feel that their stakeholders would appreciate the fact that they generate wealth
for them - by whichever means.

While it is true that the public does like a hike in the profits, the 'by whichever means'
acceptability is debatable. If you go down to the grassroots, ethics is still an important
threshold in the values of the common human being.

The general public still values basic business ethics more than profit, though globally
the consumerism movement makes it seem otherwise. Ethics to most is synonymous
with trust and truth without which no real value addition can be expected or enjoyed.

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CORPORATE PROFIT

Should an enterprise set-up for the purpose of rendering a service or making available a
product with the intent of making profit, or a return on investment for the shareholders,
have strong business ethics or should their primary consideration be profit? Can ethics
and profits co-exist in a business environment?

You can't deny that making a profit is the motivation behind any business! After all,
without sounding curt, they aren't there for their health! The heads of big corporations
and for that matter, leaders of any size company, are all watching their numbers, as
they say, and some spend endless hours writing reports, even drawing up those flow
charts, that they think are going to inspire the employees.
From my varied experiences of working in both large corporations and small
companies, the message is the same. Leaders preach the same story to their
employees to work harder and keep production rolling.
However, in most recent years, big business has felt the economic pinch and in an
effort to keep profits rolling, have had to cut corners to keep the numbers out of the red!
This has been defined as "down sizing". In some cases, the employees are the ones
who feel the pinch when those little extras are taken away, and bonuses are diminished,
and in worst cases, the inevitable happens; the staff must be cut.
As a company attempts to move forward, with less steam because fewer employees are
left to do the work of more than one employee, trying to pick up the slack of those that
were let go. Employees work twice as hard, but production is still threatened.
This starts a snowball effect. When more is expected of existing employees, to keep
longer hours by coming in earlier or staying later, sometimes working through lunch
periods in order to complete tasks creates what I like to call "internal combustion."
When employees are working harder, and probably for no overtime pay or other
compensation (I say that because I have come to learn that overtime pay is not
mandatory to a salaried employee), this creates stress, mental anguish, fatigue, low
energy and even conflicts among the staff. An employee is not only put in a bad
situation at work, but his home life is affected as well. A hard working employee now
has new pressures to face, perhaps missing time with children who have already gone
to bed, diet is jeopardized because this person either has to grab fast food on the way

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home, or eat a less nutritionally balanced concoction at late hours. Simple home chores
are neglected because this person is just too tired to do anything else around the
house. He goes to sleep and repeats it all again the next day. Needless to say, the
tensions and negativities lead to "low morale" at home and at work.
From this we can observed that how profit making can create desperate measures for
the leaders and also for the employees. Hard to know if the profits made, as a result of
causing so much conflict that trickles down, are really worth it. But it isn't a question of a
leader wanting to cause all these conflicts; it just happens because the leader is under
his own competitive pressures to keep the numbers soaring, to save his own neck.
There may have been more concern about the ethical demeanor inside the halls of a
company, but with economics taking precedence, it is often true that a company must
make a profit in order to exist. It may seem callous to say, but for those employees that
got let go during a financial crunch period, a business can always hire a new employee,
and often times, a younger, less experienced candidate who will suffice to get the job
done, at a lower rate of pay.
As far as moral ethics are concerned, most employees do try to make the most of their
time at the office and do try to keep their associations with co-workers congenial. But I
believe business ethics differ from the moral aspect of a business, and have an impact
on the status of the employees, which in turn influences production and ultimately, the
profits.
ETHICS VALUE
ETHICs are defined as "the principles of conduct governing an individual or a group."
Ethics are the moral fiber of business, which unless clearly laid down in a program, will
be defined by the behavior of top management, setting an example for employee
behavior
When corporations act unethically, they may improve their bottom line over the short-
term. But if their aim is to enhance their profits by dispensing with prudence - for
example, having their managers decree operational shortcuts that ignore standard
procedures and do not take safety into consideration - then over a longer period of time
such reckless behavior raises the odds of negative consequences. One can only tempt
fate for so long.
Here, the recent explosion involving the Deepwater Horizon rig, and the accompanying
dire environmental consequences for the Gulf of Mexico as support for this assertion.

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It’s like a Karmic Boomerang. In other words, bad behavior brings with it bad
consequences-said consequences arriving in a rather sudden, unexpected fashion.
Kind of like a boomerang does.
All corporations that were involved in the Deepwater Horizon oil drilling need to ask
themselves some serious, basic questions pertaining to how they do business. Our
legal system needs to take a very close look at these companies and in particular at
British Petroleum. For years now, this corporation’s track record in the area of public
safety has been called into question. There have been accidents that resulted in
employee deaths, property damage, etc. In the wake of these accidents, there have
been accusations of cost-cutting at the expense of worker safety.
Such a corporation- one that is arguably preoccupied with profit and not acting with the
public welfare in mind, will - sooner or later - receive a wakeup call that cannot be
ignored. And the event that is without question the worst consequence to date of BP’s
habitual cost-cutting, shortcut taking philosophy is the aforementioned explosion and
subsequent oil spillage into the Gulf waters. This open-ended spill is nothing short of
catastrophic.
The explosion that occurred five thousand feet below the surface of the ocean has so
far caused-by even the most conservative estimate, millions of gallons of oil to stream
into the Gulf of Mexico. This event raises a very troubling question; how is it that a
company with such a dicey track record for public and employee safety gets issued a
permit to drill a hole at such a depth? How did our government and the public become
so blind to the potential consequences of such drilling? And how could the corporations
involved in this operation have such little foresight for the contingencies involved?
When corporate negligence is suspected as playing a role in a disaster such as the Gulf
oil spill, the corporation has a choice. A good, honest, healthy corporate entity will
acknowledge their failure and attempt a good faith effort to deal with and to minimize
whatever damage they inadvertently caused. A dishonest, corrupt corporation, on the
other hand, will immediately set about to influence public opinion by denying blame,
diverting blame, and in general be less than forthcoming about their culpability in the
affair.
BP, Haliburton, and Transocean all owe the public and our government full cooperation
and full disclosure. Such trustworthy behavior is critical to our future as a nation. This is
not a time for business as usual. It is time for profit concerns to be put aside and for the
public good to take precedence, as should have been the case all along.

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 Sustainable business can only be built and nourished on the basis of a strong
atmosphere of trust between all team members and with all the involved stakeholders
i.e. the shareholders, the employees ,the employers, the vendors, the regulators and
last, but not the least, the customers. It is only when trust has been gained and merited
through the experience of past behavior and interaction, that all these stakeholders will
show increased involvement and commitment towards the shared vision of the business
enterprise. This enhanced involvement will see improved investment, business and
profits.

Since any business, not built on ethics and strong values, is always subject to
questioning, doubt, suspicion, investigation, and deteriorating relations, the trust of its
stakeholders will be eroded slowly and, maybe, as a sudden downslide of public
relations etc.

As economic upswings and downswings happen, a business built on strong ethics and
fundamentals will not just survive, but survive profitably with a strong network of
relationships with all stakeholders and will serve as a role model for all businesses who
have long-term vision of successful survival.

In short, not only is what an enterprise does or deals in important, equally important is
‘how' the enterprise does what it does. Especially as the economy moves away from the
recent turbulence, all stakeholders will perceive increased value in a business built on
strong ethical standards as well as business standards.

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 Case Study

Our analysis shows that we can expect a 7–19 percent population decline in sage-
grouse from future oil and gas development and that the impacts within our study area
will be greatest to sagebrush (3.7 million ha) and grassland (1.1 million ha) ecosystems
and the species that inhabit them. These results are based on the use of statistical
models to forecast future change and the many assumptions inherent to this process.
We based our build-out scenarios on projections from the most recent BLM planning
documents available at the time and on the oil and gas potential model. BLM estimates
are frequently revised from new field discoveries and as technological advances
influence resource extraction methods. Forecasted impacts to sage-grouse populations
could be revised lower if directional drilling to reduce well pad density at the surface
became more commonplace. Our build-out scenarios are applicable across whole
landscapes regardless of land tenure because we assumed that development could
occur on any parcel of land, public or private, with the previously noted exceptions. Our
estimates provide insights into the trajectory and eventual endpoint of oil and gas
development, but the rate and exact location of development will be subject to
additional factors not considered such as market demand, the capacity to transport oil
or gas to consumers, and federal air and water quality laws (e.g. Clean Air Act, climate
change legislation).

The analysis presented here can be used to inform planners and decision-makers about
where oil and gas development is anticipated and potential impacts to sage-grouse. It
provides a general framework for analyses using predictive models and build-out
scenarios to anticipate impacts to species and the type of information needed for those
making decisions about special protections for species, such as ESA listing in the US,
and for biodiversity offsets .The US Fish and Wildlife Service, the agency that oversees
ESA listing, faces difficult and complex decisions in determining if current or future risk
of species population declines warrants ESA protection. The economic ramifications of
listing species are substantial with estimated costs of recovery plans and their
implementation reaching into the multi-millions, if not billions of dollars for wide-ranging
species such as sage-grouse. Prevention of listing through thoughtful consideration of
threats and possible avoidance or mitigation strategies is likely to be less costly and
more effective. In the case of sage-grouse, 14–19 percent of the study area has high oil
and gas development potential but the development rights have not been sold;
development in these areas could be avoided by removing these leases for sale or
mandating other special protections by government management agencies. Areas

25
already leased and important for sage-grouse could be considered a priority for lease
swaps or buy-backs, where government, non-governmental organizations and other
private entities swap land or buy the lease back from the company that bought the
development rights. Alternatively, companies could also be encouraged to forfeit their
development rights with a perpetual NSO agreement, as part of the negotiation for
enhanced access to exploration and development in other areas. Done in the right
places, a creative combination of approaches could yield maximum benefit to species.

For many species experiencing population declines, multiple stressors are affecting
their populations. The framework we present could be modified to consider not just one
type of energy development, in this case oil and gas, but also wind, solar, coal, oil shale
and uranium, along with other stressors such as residential development, invasive
species, and pathogens. Because many of these stressors do not correlate spatially,
this approach would account for cumulative impacts. Models and maps of multiple
future threats are needed to fully quantify the future risk to biodiversity.

The case of sage-grouse and oil and gas development in the Intermountain West is a
preview of confrontations likely to occur across the globe with profound implications to
biodiversity. Incorporating the likelihood of future change into land-use planning can
alleviate uncertainty and ultimately make societal adaptation to change more efficient
and less costly. Quantifying anticipated future impacts can help to justify proactive
protection of places important to biodiversity and to underscore the ecological
consequences of failing to do so. We hope to inspire regulatory agencies and land
mangers to use technologies available in mapping and modeling to forecast new
impacts and for policymakers to use this information to avoid business-as-usual
development , in favor of proactive efforts to predict and avoid impacts in places crucial
for species conservation. In the long run, this is likely to be the more ecologically sound,
less costly, and more efficient—the more sustainable—course of action.

Corporate Ethics is the backbone of any corporate organization. Corporate Ethics

teaches every modern organization to reconcile the organizational profit motive purpose
with the needs and feelings of people—employees, customers, suppliers and every
individual. Keeping in mind, the world we live in—sustainability, environment, our
heritage, other culture Corporate Ethics is the backbone of any corporate organization.
Corporate Ethics teaches every modern organization to reconcile the organizational
profit motive purpose with the needs and feelings of people—employees, customers,

26
 suppliers and every individual. Keeping in mind, the world we live in—sustainability,
environment, our heritage, other cultures and societies and at all times acting with
probity—encompassing love, integrity, compassion, honesty, and truth. s and societies
and at all times acting with probity—encompassing love, integrity, compassion, honesty,
and BIBILIOGRAPHY:

Concepts and Cases- Manuel G. Velasquez

The Good, the Bad, and Your Business: Choosing Right When Ethical Dilemmas Pull
You Apart - Jeffrey L. Seglin

Perspectives in Business Ethics - Laura Pincus Hartman

Business Ethics Books – Raj Agrawal

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