ETHICAL PRACTICE

IN INDUSTRIES
A Presentation
BY

Miss Tanya Dutta

B. Tech. 2nd Year (Civil)
VIT - Chennai

INTRODUCTION

Ethics is defined as the rules or standards which govern

the conduct of an individual or an organization.

Every organization needs to develop the code of ethics.

The primal goal of the code of ethics is to focus on the

top ethical values needed in the organization and to
avoid potential ethical dilemmas.

The ethical practices followed by an industry are based

on certain basic ethical values.

These basic ethical values include the following

features:

INTRODUCTION

Trustworthiness : honesty, integrity, promise keeping.

Loyalty etc.
Respect : autonomy, privacy, dignity, courtesy,
tolerance, acceptance etc.
Responsibility : accountability, pursuit of excellence
etc.
Care : compassion, consideration, giving, sharing,
kindness etc.
Justice and fairness: procedural fairness, impartiality,
consistency, equity, equality, due process etc.
Civil virtue and citizenship: following laws, community
service, environment protection etc.

ETHICAL PRACTICES FOLLOWED IN

INDIAN INDUSTRIES

Inclusive Business:

All companies must refrain from undertaking projects or

activities that would be detrimental the wider interests of
the communities in which they operates.

Companies should respect the local culture, customs

and traditions in which it operates.

ETHICAL PRACTICES FOLLOWED IN

INDIAN INDUSTRIES

Accountable Business:

Companies must conform to trade procedures, including

licensing, documentation and other necessary
formalities, as applicable.

Practices and business conduct should be adopted that

shall:
(1)
(2)

Benefit the country, localities and communities, to

the extent possible and affordable, and
Be in accordance with the laws of the land.

ETHICAL PRACTICES FOLLOWED IN

INDIAN INDUSTRIES

Transparent Business Standards:

Companies must prepare and maintain its accounts fairly and

accurately and in accordance with the accounting and financial
reporting standards which represent the generally accepted
guidelines, principles, standards, laws and regulations of the
country in which the company conducts its business.

Internal accounting and audit procedures should be promoted

that fairly and accurately assesses all business transactions
and disposition of assets.

Internal controls to provide assurance to the companys board

and shareholders should be enforced to ensure that
transactions are accurate and legitimate.

ETHICAL PRACTICES FOLLOWED IN

INDIAN INDUSTRIES

All required information should be made accessible to

company auditors and other authorized parties and
government agencies. In this context:
1.

2.

3.

There should be no willful omission of any company

transactions from the books and records, no advanceincome recognition and no hidden bank account and
funds;
There
should
not
be
any
willful,
material
misrepresentation of and / or misinformation on the
financial accounts and reports shall be regarded as a
violation of the Code, apart from inviting appropriate civil
or criminal action under the relevant laws.
No employee should be allowed to make, authorize,
abet or collude in any improper payment, or unlawful
commission.

ETHICAL PRACTICES FOLLOWED IN

INDIAN INDUSTRIES

Commitment to Professed Quality and Representation

Accuracy:

The company should remain committed to supply goods

and services at world class quality standards, backed by
after-sales services consistent with the requirements of its
customers.

At no point should a company backtrack from delivering the

promised quality of goods and services to the customer;

At no point should a company wrongfully project the quality

of its goods and services.

ETHICAL PRACTICES FOLLOWED IN

INDIAN INDUSTRIES

In this regard, the following aspects must be adhered:

1.

Representation accuracy: Offers must be clear and truthful

and shall not misrepresent a product, service, solicitation or
program and shall not mislead by statement, or technique of
demonstration or comparison.

2.

Timeliness: Descriptions and promises shall reflect actual

conditions, situations and circumstances existing at the time
of the promotion.

3.

Evidence: Test or survey data should be competent, reliable

and must support the specific claim for which it is cited

ETHICAL PRACTICES FOLLOWED IN

INDIAN INDUSTRIES

4.

Identity: Every offer and shipment should identify the

marketer and provide the consumer with
information to be able to contact the marketer.

5.

sufficient

Disguise: No person should make offers or solicitations

in the guise of research or a survey when the real intent is
to sell products, services, or to raise funds.

6.

Disparagement: No offer shall attack or discredit, or

disparage products, services, advertisements or companies
using inaccurate information.

7.

Representation: Photography, artwork or audio-visual

representation must accurately and fairly illustrate the
product offered.

ETHICAL PRACTICES FOLLOWED IN

INDIAN INDUSTRIES

Fair Competition:
While fostering competitiveness, companies must
ensure that they do not engage in unfair trade practices.
This should include: restrictive trade practices, abuse of
market dominance or similar unfair trade activities.
Equal opportunities employer:
Companies should provide equal opportunities to all
qualified employees regardless of their race, caste,
religion, colour, ancestry, marital status, gender, sexual
orientation, age, nationality, ethnic origin or disability.
To meet this intent, human resource policies should
promote diversity and equality in the workplace, as well
as compliance with all local labour laws, while
encouraging the adoption of international best practices.

ETHICAL PRACTICES FOLLOWED IN

INDIAN INDUSTRIES

Upholding of Employee Human Rights:

Employees should be treated with dignity and efforts

should be made to make work environment free of all
forms of harassment- physical, verbal or psychological.
Employee policies and practices should be made
consistent with applicable laws and other provisions of
company code. Concerns related to respect for the right
to privacy and the right to be heard, and that in all
matters related to equal opportunity must be provided to
those eligible based on merit.
Employees must be allowed to raise their concerns to
the top-management without fear and intimidation; and
the rights of whistle-blowers must be respected

ETHICAL PRACTICES FOLLOWED IN

INDIAN INDUSTRIES

Health, Safety and Environment:

Companies should strive to provide a safe, healthy,

clean and ergonomic working environment for their
employees and indirect workers.

Prevention of wasteful use of natural resources should

be promoted and organizations need to commit to
improving the environment.

ETHICAL PRACTICES FOLLOWED IN

INDIAN INDUSTRIES

Corporate Citizenship:

Companies should remain committed to good corporate

citizenship by:

(1)

Compliance of all relevant laws and regulations

(2)

Actively assisting in the improvement of quality of life of

the people in the communities in which they operate

()The

company should foster and encourage volunteering by

its employees and collaboration with community groups .

()The

company should not treat these activities as optional,

but should strive to incorporate them as an integral part of
its business plan in a bid to attain inclusive growth.

ETHICAL PRACTICES FOLLOWED IN

INDIAN INDUSTRIES

Stakeholder Representation:
Companies should create provisions to ensure
representation of all stakeholders, at appropriate
forums.
This should also include indirect stakeholders like the
public and third party.
All information requirements of stakeholders must be
transparently disclosed.
Business Association:
Companies should ensure that all their business
partners conduct their business in accordance with the
code of ethics within their scope of operations.

ETHICAL PRACTICES FOLLOWED IN

INDIAN INDUSTRIES

Conflict of interest:

All forms of conflict of interest must be avoided. This tenet

should be equally applied from the top-management to
the workers. This would include

Assuming a conflicting position of responsibility in any

other enterprise and for not-for-profit organization without
specific sanction. The following may, however, be
exempted:
a) Nominations to affiliated enterprises,
b) memberships to professional bodies,
c) memberships in government committees, and
d) exceptional circumstances, as determined by a
competent authority.

ETHICAL PRACTICES FOLLOWED IN

INDIAN INDUSTRIES

Employees entering into agreements or contracts that

could benefit the individual at the cost of the companys
interest.

This should include all forms of transactional payments,

which need not be monetary in nature.

Influencing decisions from positions of authority.

Award of benefits such as increase in salary or other

remuneration, posting, promotion or recruitment of a
relative of an employee.

CORPORATE ETHICS Vs GROWTH

CORPORATE ETHICS Vs GROWTH

The Nike brand was created in 1972, the company went

public in 1980

ETHICAL CONCERNS

Due to increasing scope and costs, the company have had

subcontracts with cheaper labour markets in third world
countries such as Indonesia, China, Vietnam.
Since the mid 90s, Nike faced a barrage of criticism from
labour rights activists, the media and others for human
rights violations in their factories in the third world countries.
The accusations include: deficiencies in health and safety
conditions, extremely low wages, and indiscriminate hiring
and firing practices.

CORPORATE ETHICS Vs GROWTH

Roberta Baskins CBS report in 1993 brought out

several cases of human rights violations in the factories
located in Indonesia prominently owned by Koreans.

Another of Nikes problem was factory conditions in

Vietnam.

Ernst and young, commissioned by Nike to audit one of

its factories reported presence of unacceptable
standards of chemicals and cases of employee health
problems.

Nike hired Andrew young, a former UN ambassador to

visit and report the conditions of factories in third world
countries.

CORPORATE ETHICS Vs GROWTH

The 1997 Report stated that:

1.
2.
3.

there were no infringements of health and labour codes of

conduct,
the pay in Nike controlled factories was substantially
higher than minimum required wages,
Nike typically subsidized meals and medical treatments of
its employees.

However, in 1998, Marc Kasky - a corporate critic responded to the conflict between contents of this report and
the report submitted by Ernst and Young.

It was claimed that Nike was consciously misleading the

public by claiming itself to be provider of above stated
facilities.

CORPORATE ETHICS Vs GROWTH

FALLOUT

Public protests against Nike took the form of boycotts and

picketing of Nike stores.

universities began cancelling their deals with Nike to

produce branded athletic goods.

Nike had already established the Code of Conduct in 1992

but this was not enforced.

More recent efforts were made to enforce standards in the

form of monitoring by both Nike production department and
through independent consultants.

Suppliers were required to sign the code of conduct and

display it on their factories.

CORPORATE ETHICS Vs GROWTH

RESPONSE

Nike started extensive public relations campaign.

A workplace code of conduct was established to regulate

working conditions in foreign factories.

Nike finally intervened in the wage policy of its factories in

Indonesia and announced wage raises above minimum legal
wage in 1999.

Universities form a core segment of Nikes market and therefore

letters detailing the acceptable conditions in the factories and
stressing Nikes commitment to corporate social responsibility
were sent.

Representatives also visited university campuses stressing Nike

commitment towards corporate citizenship. Numerous press
conferences were also held with college newspapers across US
universities.

CORPORATE ETHICS Vs GROWTH

RESULT

Today Nike is one of the largest manufacturers of

athletic goods in the world.

Nike though identified as a footwear manufacturer, gets

approximately one-third of its revenue from apparel;

And the manufacturing mostly takes place in factories

located in Asia.

THANK

YOU

A
Tanyas creation