Abstract

Many large corporations have added ethical framework to their business processes as these organizations have realised that in long run an ethical business has a bright future. This includes customers, employees, vendors and the public. Every decision made by the business is based on the effect it may have on any one of these groups of people, or the environment surrounding it.

In organizations ethics go beyond the legal requirements; organizations understand that ethical framework helps in making supple decisions making and it also guides organizational behaviour and culture. Morality governs private, personal interactions. Ethics governs professional interactions. Law governs society as a whole, often dealing with interactions between total strangers. The legal environment in India includes various laws regulating business activities like Companies Act 2013, Consumer Protection Act, 2019 and many other such legislations, policies relating to licensing and approvals, foreign trade etc. Ethics are a set of moral values an individual/organization establishes for one own entity and own culture and behaviour whereas laws are structured rules utilized to govern the entire society.

A good example of how advertising can become responsible unethically is: Volkswagen’s campaign that promoted environmentally friendly “Clean Diesel” vehicles that had low-carbon emissions. In India, the National Green Tribunal (NGT) had penalised car manufacturer Volkswagen with a “conservative” fine of Rs 171.34 crore, for contributing to air pollution in Delhi through excess nitrogen oxide (NOx) emissions and for causing extensive health damage. The company admitted to having installed software that manipulated emissions readings to make its cars appear as if they were environmentally friendly. Volkswagen erred by misleading consumers with false claims.

There’s a huge difference between using marketing to paint a product or service in the best possible light by outright lying. With traditional advertising, it’s easier to monitor if companies are using misleading language to target customers. With digital advertising, anyone can run an ad and face minimal oversight.

Airlines are notorious for advertising low prices to entice travellers, but some of them manage to keep things on the ethical side by disclosing when Jetstar and Virgin Airlines decided to forgo this disclosure, they were fined $745,000 for marketing false low prices in their ads. Whereas customers had to pay additional fees involved to finalize the booking.

The Wikipedia defines ethics as a branch of philosophy that involves systematizing, defending, and recommending concepts of right and wrong behaviour. It is also known as moral philosophy. For all of us ethics means living our life responsibly; to review whether our actions are right or wrong. Ethical behaviour is that which is morally accepted as “good” and “right” as opposed to “bad” or “wrong” in a particular situation. All of us live in an ethical illusion about ourselves. The ethical illusions are discrepancies between how we think and how we behave and how we take an action. It also includes our sense of reasoning for our behaviour. Laws are the regulations established, and usually written, by a governing power. Ethics are the morals of a culture, and often, they define the laws of the land. The distinction is that, while you may obey the law, you might not always act ethically. It would be a rare case for something to be ethical, but against the law. An important point to keep in mind is that ethics do not have any associated punishments when broken. A law, however, specifically sets the types of repercussions that should occur or should it be broken.

The fundamental of any business firm cannot claim to be ethical firm if it looks at profits and numbers while ignoring the legitimacy. Today, businesses and industries increasingly find themselves facing external pressure to improve their ethical practices. The alert and well-informed customers today scrutinize business activities. Pressure groups are a good example of this. They are external stakeholders they focus on activities & fair practice of industries with direct and indirect actions which at times has forced some firms to close down their shutters.

Ratan Tata, the then Chairman of Tata Group of Companies, did something that is totally out of the world. He in fact taught the world some lessons in business ethics. After the November 2008 Mumbai attacks which were a series of terrorist attacks that took place in Hotels Taj and Oberoi were badly hit, Ratan Tata went all out to help every single person who was affected in Hotel Taj including those like the pav bhaji vendor outside the hotel. Each one was offered compensation running into several lakhs of rupees. The education of children of those affected, free medical facilities for those survivors at Tata hospital for the rest of their lives, total education of the 46 children who were affected by the bomb blast but survived, has been taken up by the Tata group. A Trust has been formulated to shoulder responsibility for the rehabilitation of the families of the victims. Ratan Tata himself visited the families of each of the 80 employees affected by the bomb blast, and offered compensation running into several lakhs of rupees. Such examples define business ethics. Leaders like Ratan Tata establish faith in customers. He calls himself an industrialist not a businessman.  He has strong attachment to his businesses yet an executive’s ability to make rational decisions.

For leaders at all level, it’s more important to learn how to make the right decision while dealing with different kinds of feelings rather than suppressing those feelings.

Some of the top B Schools such as IIMs in India and other top rung B schools in the world are revamping their syllabus adding business ethics as a core paper, adding projects on ethical values. The process of revamping is for also pondering over and challenging the standard of business wisdom practiced for decades. Ethics and social responsibility seem to be in limelight by some serious thinkers and practitioners.

Chairman of Wipro ltd, Azim Premji, is another example of modesty and a man who doesn’t believe in extravaganza. He annoyed several other fellow industrialists when he said that rich people should pay more taxes, in response to some budget proposal. Not stopping there, he justified his views in many interviews as well. WIPRO has spent upwards of some nine hundred crores in Karnataka and in Andhra Pradesh, where it has helped build school infrastructure, improve standards of education and so on. Its donations to several Government hospitals in Tamil Nadu is very much an example of the highest quality of business ethics.

In the world-famous Enron scandal, which was a series of events involving dubious accounting practices that resulted in the bankruptcy of the energy company, the accounting firm Arthur Anderson got shut down. Enron executives used fraudulent accounting practices to inflate the company’s revenues and hide debt of its subsidiaries. The Securities and Exchange Commission credit rating agencies (SEC), and investment banks were also accused of negligence and outright deception that enabled the fraud. I think it’s symptomatic of a breakdown of the ethical values of business over a period of perhaps 20 years, a gradual erosion of business ethics.

Business organizations dillydally from ethical practices because of compelling and persuasive day-to-day organizational practices. Ethics take a backseat because of the multifaceted processes and practices of businesses which leaves little time or penchant to divert attention to the moral content of organizational decision-making. Morality in business appears to be so ambiguous and qualitative in nature that it lacks substance in relation to business objectives and goals in today’s world. Business relies on quantitative performance than qualitative performance. The pace leaves hardly any time for the managers in reworking their decisions based on ethical framework. Hence the entire framework and thinking of the managers lacks ethical decision making.

Scams such as Satyam Case, Enron Case, I Gate Case, 2 G, 3G, Commonwealth games, Bofors, Fodder scam, IPL, Citibank the list can go on and on. Our memories are so short, that by the time we are fatigued with one scam there appears another scam. The big money, the lifestyles of cheaters, their overstated personas, and the glamour that comes with money feature more prominently in the young students of Business Management if the ethical frameworks in these and many other case studies are not tackled in the classrooms.

Conclusion

Dear friends Socrates, Plato and Aristotle sadly have no place in the twenty first century business environment. A yawning gap exists between philosophical knowledge and business practices. Each generation has learnt ethics and morality with a divergence. Morality is just a dictionary word. Yet, like it or not, there has and will continue to be a surge of interest in ethics.

Crisis management is the process by which an organization deals with a disruptive and unexpected event that threatens to harm the organization or its stakeholders. The study of crisis management originated with large-scale industrial and environmental disasters in the 1980s

In September 2015, the US Environmental Protection Agency (EPA) found that in over 590,000 diesel motor vehicles Volkswagen had violated the Clean Air Act as the vehicles were equipped with “defeat devices” in the form of computer software, which was designed to cheat on federal emissions tests.

In April 2017, a US federal judge ordered Volkswagen to pay a $2.8 billion criminal fine for “rigging diesel-powered vehicles to cheat on government emissions tests”. As of 1 June 2020, the scandal had cost Volkswagen $33.3 billion in fines, penalties, financial settlements and buyback costs.

In India the authorities observed that Audi cars’ emissions for nitrogen oxide were 5-8 times the permissible limits and after the National Green Tribunal imposed a penalty of Rs 500 crore on VW, the irked customers realised that they had been duped of their hard earned money. Unfortunately, the way the company handled the scandal made things even worse. As the case progressed, the company’s response was seen inconsistent and, at times, contradictory to previous statements. Executives claimed they did not know about the cheating. Meanwhile, the company’s PR and social media team struggled to keep up. As the company set out to recall millions of vehicles, officials promised to reimburse some, but not all, customers for their troubles.

Had the brand acted maturely may be it would have fared better through this crisis if it had taken a few key steps: been up front and honest as soon as the story broke; kept its response consistent with an empathetic and apologetic tone; reimbursed all affected customers the same amount; demonstrated a commitment to change in some way by setting new emissions goals or partnering with an environmental organization to help combat air pollution. It took 4-5 years for the VW to return to normalcy.

The major principle to handle crisis is governing communications. To be upfront with customers, to talk the truth and keeping them informed of the correct and incorrect aspects of the same. The moral and immoral dimensions relevant to the communication are very important to handle crisis. The organization’s crisis response must be designed to move faster than social media which is not easy. It means having a crisis team that is well drilled and knows exactly what to do when a threat emerges. It means having technology built into the access and activation of organization’s plan. And it means co-opting social media as a tool for communication and not just let it dictate the threat.

India’s food regulator had banned Maggi in 2015 after tests showed it contained excessive lead and for alleged mislabelling over flavour enhancer MSG. Nestlé has since then removed the claim “No added MSG.” Indian food inspectors order Nestlé India to recall a batch of Maggi Noodles from the northern Indian state of Uttar Pradesh claiming that tests had  found Maggi instant noodles “unsafe and hazardous” and accused Nestlé of failing to comply with food safety law.

The initial response from the global FMCG Company rejected the accusation that the noodles were unsafe and said on their website and social media accounts that there had been no order to recall any products. A statement on their website said that “The quality and safety of our products are the top priorities for our Company. We have in place strict food safety and quality controls at out Maggi factories. We do not add MSG to Maggi Noodles, and glutamate, if present, may come from naturally occurring sources. We are surprised with the content supposedly found in the sample as we monitor the lead content regularly as a part of the regulatory requirements.” Nestle kept the customers informed about its response to the serious case, and action taken by the company continuously for four long years.  In January 2019, the Supreme Court of India allowed a test report to be the basis of proceedings in a almost four year-old class-action lawsuit over MSG, lead content in Maggi.

It’s difficult to handle reputational risk, the way threats emerge and are fanned by social media is difficult to handle. Yet the principles of the way an organization takes ownership and gets ahead of the problem largely depends on its culture. Customers don’t appreciate half-hearted apologies to the victims and lies hid behind corporate walls. It doesn’t work.

Amazon has been a crowned winner during the Covid crisis because it made corers of household’s life easy during pandemic. Its sales have soared due to the shutting of bricks-and-mortar shops and malls. Yet, Amazon has been bitterly criticized; the most serious accusations are made against it in the US and France. In France all Amazon warehouses were temporarily closed after a huge row about worker safety. In the US Amazon experienced lot of workers quitting over warehouse safety and conditions. Many of its workers pledged to stay home in protest because Amazon has failed to provide face masks, and has refused to pay sick leave. The fight intensified after Amazon fired four workers who had publicly criticized safety measures. In progressive countries such as US, UK and France customers gauge the behaviour of companies. 

Every committed buyer of a product/service observes it closely, they observe the organization’s behaviour towards society and in crisis they expect clear, concise, correct, coherent, complete and courteous communication with concrete actions.

As we face off the biggest pandemic in today’s modern memory, which is literally doctored and engineered in China, the fact is millions of lives are lost and life world is facing a chaos and disruption. Global economy is gone for a toss as never before. This pandemic is above all human crisis that calls for camaraderie. It has taught the world many lessons and one such lesson is about business ethics which starts with ethical communication.   

The importance of ethical communications has never been clearer. Much of the debate around media ethics in recent years has focused on far-reaching questions why business is important. The global COVID-19 pandemic has pushed ethical considerations back to the basics. Concerns about governmental transparency and corporate responsibility have become a fresh urgency. The implications are more immediate and those working in the media, now more than ever, have a responsibility for their role in shaping public debate.

As businesses go about their work, managers must continue to ask themselves whether it is their responsibility to communicate as they are. 

Businesses have a challenge on their hands. In an atmosphere of financial uncertainty, they have difficult decisions, first to make and then to communicate. They will have to consider both internal and external stakeholders. They must address concerns about safety and hygiene. They must clarify what they are doing in terms of business continuation and protocol. Before they get into the nitty-gritty of messaging, outreach and marketing spend, they must consider the ethical dimension of what they do.

With the global coronavirus outburst, business world is now grappling with ethical communication demanded by their consumers. The big brands of world are increasingly being tested for their moral backbone. Alert and observant consumers are refusing to support companies who are not honest in keeping their promises and are turning a blind eye to the complaints of customers. The Covid 19 pandemic has harnessed the power of social media like never before; customers are able to hold organizations directly and evidently accountable.

Prior to the pandemic, a paradigm shift towards digitization of the economy was already underway. The current scenario has accelerated the paradigm, as evidenced by the marked shift in spending towards digital businesses. As customers are already facing autonomy due to the virus, no longer they are willing to allow brands stay silent. They have a platform and a stronger network to discuss their issues.

The major principles governing communications, the correct and incorrect aspects of the same, the moral and immoral dimensions relevant to the communication are called ethics of communication. In other words, communication ethics is the notion that human beings are governed by morals which essentially affects communication. Simply any kind of moral good present in communication of any form is generally termed as communication ethics. It is important that whatever we communicate should be guided by certain ethical principles.

Amazon has been a crowned winner during the Covid crisis because its sales have soared due to the shutting of bricks-and-mortar shops and malls. It’s also interesting to note that its share price has risen by more than a third in the past few months. And, yet Amazon has been bitterly criticized although the most serious accusations are made against it the US and France rather than the UK. In France all Amazon warehouses were temporarily closed after a huge row about worker safety. In the US Amazon experienced lot of workers quitting due to over warehouse safety and conditions. Many of its workers pledged to stay home in protest because Amazon has failed to provide face masks, and has refused to pay sick leave (the US is one of the few wealthy countries in which companies are not required to), is not allowing workers proper time to wash their hands, and that too many people are working at once to allow for proper social distancing. The fight intensified after Amazon fired four workers who had publicly criticized safety measures. In progressive countries such as Us, UK and France customers gauge the behavior of companies. 

Even in India in a survey conducted by EY Earnest & Young presents response in favor of ethical communication. For example, at the onset of COVID-19 in India, an MNC promised its employees that the organization would retain all its employees during the hardship period but later started firing endless numbers of employees’ right from the lowest to the topmost rung of the ladder. This is a clear breach of trust and faith, no one who is still with the organization will ever trust the employer come what may. Any organization which breaches trust of any of its stakeholders, finds it difficult to get back the trust. Another survey conducted by Deloitte reports that employees do not need a perfect company but just want transparency and truthfulness more than anything else.

Ethical communication always helps organization in admitting openly that they fell short of their goals, they have committed some mistakes, which in long run lead to huge improvements and positive changes for the future which help to garner support from all stakeholders.

It is so important to acknowledge that clients cannot be cheated in the present problematic times; it is better to inform them the truth only. One of the news items in Miami News Times reported that a popular cruise line recently misled its guests about COVID-19 by having sales staff tell them the only thing they needed to worry about for their upcoming cruise was bringing enough sunscreen. The cruise line ignored the pandemic and the associated safety measures which the clients are worried about. Most of the customers who had booked for the cruise did not appreciate the irresponsible behavior of the cruise liner staff, and they decided to drop out of the cruise. Their response is a perfect example of what not to do during such difficult times. This response caused a media storm that generated negative press for the cruise line.

In acknowledging the current times, organizations can establish and build trust and confidence with others that can have a long-lasting impact. Avoiding the truth is bad practice for any business and providing relevant updates won’t cause a panic. When the state of the world returns to normal, individuals will remember how businesses responded to the pandemic and during this time of need.

The pandemic that has taken over our daily lives, businesses and society at large are forcing us to rethink how we react during times of crisis. Practicing empathy in statements, newsletters, social media announcements and other avenues of communication can help establish rapport with customers. It shows that businesses care. However, having empathy goes beyond a written statement.  It must be practiced in action. While many businesses choose to address COVID-19 solely online, on social media or with e-newsletters, it has been observed that organizations that pitch clients for stories on how to stay afloat throughout this pandemic, are appreciated the most. For instance, offering a client spokesperson for TV news segments to provide expert insight or resourceful information on what they are doing to stay in business can set an example for similar companies.

Conclusion: In a sea of statements, social media announcements and email newsletters, making presence felt is difficult. This is where sincere and realistic communication matters.

The Wikipedia defines ethics as a branch of philosophy that involves systematizing, defending, and recommending concepts of right and wrong behavior. It is also known as moral philosophy. For all of us ethics means living our life responsibly; to review whether our actions are right or wrong. Ethical behavior is that which is morally accepted as “good” and “right” as opposed to “bad” or “wrong” in a particular situation. All of us live in an ethical illusion about ourselves. The ethical illusions are discrepancies between how we think and how we behave and how we take an action. It also includes our sense of reasoning for our behavior. Laws are the regulations established, and usually written, by a governing power. Ethics are the morals of a culture, and often times, they inform the laws that are made. The distinction is that, while you may obey the law, you might not always act ethically. It would be a rare case for something to be ethical, but against the law. An important point to keep in mind is that ethics do not have any associated punishments when broken. A law, however, specifically sets the types of repercussions that should occur should it be broken.

Some of the top B Schools in the world are revamping their syllabus adding business ethics as a core paper, adding projects on ethical values. The process of revamping is for also pondering over and challenging the standard of business wisdom practiced for decades. Ethics and social responsibility seems to be in limelight by some serious thinkers and practitioners. Why?

Business organizations dawdle from ethical practices because of compelling and persuasive day-to-day organizational practices. Ethics take a backset because of the multifaceted processes and practices of businesses which leaves little time or penchant to divert attention to the moral content of organizational decision-making. Morality in business appears to be so obscure and qualitative in nature that it lacks substance in relation to business objectives and goals. Business relies on quantitative performance than qualitative performance. The pace leaves hardly any time for the managers in reworking their decisions based on ethical framework. Hence the entire frame work and thinking of the managers lacks ethical decision making. Dear folks, Socrates, Plato, and Aristotle sadly have no place in the twenty first century business environment. A yawning gap exists between philosophical knowledge and business practices. Each generation has learnt ethics and morality with a divergence! Morality is just a dictionary word. Yet, like it or not, there has and will continue to be a surge of interest in ethics.

Ethisphere, a US based Research Company dedicated to the creation, advancement and sharing of best practices in business ethics, corporate social responsibility published its 110 business houses all over world for their ethical behavior in 2011. Through in-depth research and a multi-step analysis, Ethisphere reviewed nominations from companies in more than 100 countries and 36 industries. Some of the ethical companies are Adidas, eBay, Microsoft and Colgate Palmolive. From India only HDFC Bank has entered the list.

In the world famous Enron case we saw when the legal noose tightens around the corporate; one question that arises is why the legal fraternity drag in Enron’s auditing firm Arthur Anderson? Is it possible for an entire auditing firm to be guilty of a crime in connection with an auditing engagement? I think the Enron scandal is symptomatic of something much broader than Enron. I think it’s symptomatic of a breakdown of the ethical values of business over a period of perhaps 20 years, a gradual erosion of business ethics that brought investors to an Enron. Friends haven’t we witnessed since then a whole host of Enrons as we moved down the road. So here goes my question -What ethical lesson should we teach our students? A Satyam Case, Enron Case, I Gate Case, 2 G, 3G, Common Wealth games, Bofors, Fodder scam, IPL, City Bank the list can go on and on. Our memories are so short, that by the time we are fatigued with one scam there appears another scam. The big money, the lifestyles of cheaters, their overstated personas, and the glamour that comes with money feature more prominently in the young minds if the ethical frameworks in these and many other case studies are not tackled in the class rooms.

The fundamental of any business firm cannot claim to be ethical firm if it looks at profits and numbers while ignoring the legality and legitimacy. Today, businesses and industries increasingly find themselves facing external pressure to improve their ethical practices. The alert and well informed customers today scrutinize business activities. Pressure groups are a good example of this. They are external stakeholders they focus on activities & fair practice of industries with direct and indirect actions which at times has forced some firms to close down their shutters.

In a recent editorial, the Wall Street Journal announced that ethics courses are useless because ethics can’t be taught. Although few people would turn to the Wall Street Journal as a learned expert on the teaching of ethics raised an objection. But, I am seriously asking: Can ethics be taught?

In conclusion, many aspects stimulate a person’s development in life; the early childhood when impressions are made, the culture at home, parent’s backgrounds, surrounding, his own experience, and one of the most crucial factors is education. Subjects like business ethics, morals or social responsibilities challenge students to look at issues from a universal point of view. These subjects move their thinking upward with intensity. I think ethics can be taught at any stage in life, but how a student absorbs it, observes it and examines it depends on his/her upbringing. However, the efforts of B Schools giving eminence to ethics in their curriculum cannot be overlooked because developing ethical leaders is both an academic imperative and a critical issue for business world.

Personal friendship, parental love, career progress, peer pressure often bring us down morally. In a do or die situation we battle ethical dilemmas; the danger may not come from your own ethics but from the ethics of people around you and the situation you are in. At your work place, you may be called upon to do things that turn out to be unethical or even deceitful. What should we do if such situation occurs? According to the old maxim, “the best defense is a good offense.” I think, the best defense would be stop participating in wrongdoing; be prepared to take on challenge go as per your personal values, moral beliefs, and commitment to doing the right thing. It is not at all easy I know.

Most people get confused with their faulty thinking of unethical behavior; they think that “bad” people do “bad” things and “good” people are ought to do “good” things. This good-bad tagging of people that we do misleads us in most situations. We see good people or good employees in organizations doing wrong things. So many good employees, good managers, and even good leaders falter. The real challenge therefore is trying to understand why good people do bad things. One reason is that they fail to decide that the problem they are confronting has an ethical component and is not solely a marketing or a finance or an operational problem. As a result, they often lack the ability to analyze the problem from an ethical viewpoint. Organizations therefore need to train their employees to become sensitive to ethics and not to change people’s ethics. The training should concentrate on enhancing people’s sensitivity to ethical issues and provide them with tools for resolving ethical dilemmas effectively.

Most organizations and entrepreneurs do not set out to make a defective product or service or they do not like to get involved in a massive fraud. Often, such situations begin in small ways, and with very small actions which seem inconsequential. It is also important for people to understand that most ethics scandals typically involve a number of people who are included in the decision-making process at each stage. As a result, responsibility becomes subtle among these individuals, making it difficult to point out accountability on any particular person. While people may feel uncomfortable in such situations as they start moving down on a slippery slope, they satisfy themselves saying that “as long as it is legitimate, it is ethical” or that they are doing what is expected of them. People rationalize to justify their behavior. And, this is the biggest moral failing.

When organizations state in their vision and mission statements that they want to create a culture of integrity and transparency, they require a well-defined, well-articulated code of ethics that clearly tells employees how they are expected to act, the manner in which goals and objectives are to be achieved, and the type of behavior which will not be tolerated. Consecutively, a culture of integrity requires an incentive system that is consistent with and promotes the organization’s values and vision. An incentive system has a tremendous impact on behavior, it must include criteria for promotions, pay raises, and bonuses that encourage and reward behavior that is consonant with the organization’s values.

Management requires regular monitoring and regulating employee conduct and this can be done by designing and implementing effective internal controls. Incentive systems without attention to ethics often result in unintentionally incentivizing unethical behavior. It is important to remember, however, that organizational cultures are fragile and can easily corrode as companies grow. Therefore, once a culture has been created, it must be constantly strengthened and updated in order to suit its vision. In smaller firms, start-ups, and family-run businesses it is easier to formulate and maintain ethical code of conduct because such organizations typically have founders who set the tone for the organizations and whose behavior serves as a constant reminder of how employees are expected to behave.

Leading B Schools in the world have realized that to earn a place at the top table of global business schools alongside Harvard, Stanford or INSEAD, they need to appeal to a global audience and to attract good professors and corporate partners. Business ethics have certainly been in the spotlight in B Schools over the last decade because of rising numbers of scandals involving money laundering, sexual harassment and breaking the rules around defaulted mortgages to name a few. Recently some famous business organizations have been lumped with hefty fines for questionable moral practices.  Should we accept that dubious morals are inevitable for successful business practices? Organizations suffer from ethical drift causing a gradual, unconscious lowering of moral standards. While businesses compete for profit, the boundaries between rights and wrongs become blurred and people’s ethical frame of references shift. Human biases like being unrealistically optimistic about an outcome, believing themselves to be all-powerful, all-knowing and unshakable, and the tendency to justify their own behavior.

So what can courses in ethics teach in a classroom? Different instructors will have different approaches to teaching ethics. But certain points such as a course in ethics must help students understand the dangers of rationalization. A lot of bad behavior goes on because people tell themselves that such behavior is not at all bad. In the majority of cases, such rationalizations are rooted in very poor reasoning. A course in ethics must give students an opportunity to look at some of the most important rationalizations, in order to examine them under the cold, detached light of logic.

A good instructor in ethics can simply give students the opportunity to talk at length, about their ideas on ethics, some of their experiences in life – something they likely wouldn’t otherwise have the opportunity to do. This can have several positive effects. For instance, it can make students more comfortable talking about topics that might otherwise be too awkward to raise. There are some practical insights to be gained by having students read theoretical, scholarly articles on business ethics. Such articles can have benefits; if chosen judiciously they can illustrate for students what first-rate reasoning about ethics actually looks like. Students who study such first-rate reasoning in the classroom stand a better chance of being able to engage in solid ethical reasoning in the workplace. A further benefit of exposure to scholarly articles is that such articles make the readers to think carefully about ethics, and to take the ideas of moral obligation seriously.

To sum up this article I would say that, ethics can be precarious to one’s career if he/she is not been trained to identify and analyze ethical problems and to resolve them effectively. Ethics can also be dangerous to a person’s career if the organization he is working in, does not support ethical behavior or, worse, encourages misbehavior. Finally, we should recognize that anyone can get caught up in unethical conduct under the right circumstances. Organizational forces are very strong, and we humans have many psychological weaknesses that make us vulnerable at times and we take unethical decisions. Preventive steps can be taken to improve both organizations and the individuals in them to avoid wrongdoing. But unethical behaviors cannot be eliminated totally.

The concept of a class action suit is originated in the United States. It offers a platform to investors facing common legal challenges to join hands and participate in a lawsuit. It is a cost-effective way to seek legal redress as otherwise it would be expensive for an individual shareholder to launch a lawsuit and seek compensation.

In India last year in August 2013 Parliament approved a long-awaited overhaul of the legislation vide the new company’s law which governs Indian business world. The amended law is aimed at easing the process of doing business in the country and improving governance by making firms more accountable, making this one of the few reform measures that the Congress-led United Progressive Alliance has succeeded in getting through the House. We should loud the efforts of minister of state for corporate affairs, Mr. Sachin Pilot for this historic move! The private companies, while maximizing growth, also have a greater responsibility towards society, besides balanced and sustainable growth of the country. Mr.Pilot’s efforts in getting the bill passed in parliament have ushered in a new era for the company law.

The new law will mandate the setting up of a National Financial Reporting Authority, which will monitor compliance with accounting and auditing standards. It will also have the power to investigate auditors that are registered under section 22 of the Chartered Accountants Act, 1949. And, the new legislation will, for the first time, also permit class action suits against companies. A class action suit is typically a lawsuit in which a group of people file a claim before a court in which a specific class of defendants is being sued.

About 10 years back, Indian companies used to take people from India to the US and give them lower salaries compared to the local employees. Many did not comply with minimum salary norms. The other problems such as racial, sex, colour-creed discrimination added to problems. The language used for running operations at times is foul. Some smaller Indian companies are seen to be not complying with local labour laws. This is lowering the image of the big Indian companies as well. But, there the class action law suit is a powerful tool for individual workers to seek justice.

In February 2013, Tata Consultancy Services had to settle a class action lawsuit brought against it by Indian former employees working in the US over what they claimed were unpaid wages. The lawsuit dates back to 2006, when TCS staff working onsite for US clients alleged that the company had unfairly docked their salaries and forced them to refund it for tax payments. TCS first tried to have the case moved to India, then twice motioned to have the lawsuit dismissed. In April last year, a California court ruled that the trial could proceed. The law firm representing the plaintiffs won the case. TCS agreed to set up a £29.75 million settlement fund available for all members of the class. TCS spokesperson said in a statement that they decided to end this case so that they could focus their energies entirely on continuing to provide world class service to their clients. Obviously, it agreed to settle this matter to eliminate any on-going distraction to its associates and management. The workers were lucky that the case was heard in US.

Between – March 2012 till May 2013, outsourcing firm iGate has been slapped with class action lawsuit in the US for alleged violations of federal securities laws in view of its sacked CEO Phaneesh Murthy’s “improper relationship” with a subordinate employee. The suit has been filed on behalf of persons or entities that purchased or acquired securities of iGate between March 14, 2012 and May 21, 2013. The shareholders have a say in moral conduct, decency and of honesty of the management and governance of the company in which they have invested  money.

Back home, four investors have filed a class action lawsuit against Financial Technologies (India) Ltd, Jignesh Shah, in Bombay high court to prevent it from selling its assets as the company’s unit National Spot Exchange Ltd (NSEL) battles a Rs.5, 574.35 crore payment crisis. The case has been filed as a representative suit under the Civil Procedure Code, 1908 because the new law enacted in August to regulate Indian companies, which provides for class action suits, but is yet to be notified.

So how will class action law suit be helping the Indian business environment?

The new Companies Bill allows class action suits, including a national financial reporting authority, gender equality on boards, and mandatory audit firm rotation. It is up to India Inc. to side itself with the new law that replaces the Companies Act of 1956. The new Companies Bill, on its enactment, will allow the country to have a modern legislation for growth and regulation of corporate India. The new law will facilitate business-friendly corporate regulation, improve corporate governance standards, enhance accountability on the part of corporates/ auditors, raise levels of transparency and protect interests of investors, predominantly small investors.

At present, India ranks 132 out of 185 countries in the World Bank’s ranking on the parameter for ease of doing business. Long periods and complex procedures in setting up, reorganizing and even winding up of businesses have contributed largely to this undesirable positioning of India on the global platform.  With the new law, a One-Person Company may get an impetus to structure its emerging business in a corporate form and what more – provisions of fast track approvals, measures of transparency and increased governance norms are expected to put companies on an easier and smoother ride.

The new legislation also permits inbound and outbound mergers with a simplified and fast-track process of merger/demerger in cases of specified small companies. This will also facilitate cross border mergers. An Indian company with prior approval of RBI may merge into a foreign company and vice versa by discharging the deliberation to the shareholders of the merging company in cash or Depository Receipts or partly in cash and partly in Depository Receipts.

In addition, the new legislation provides that companies would have to rotate audit firms over a ten-year period. This move may provide a solution to break the auditor-client nexus and the threat posed by the long-term association between firms-and-clients. At present we have approximately 1000 audit firms registered, so this legislation has paved way more auditors, lawyers, company secretaries!!  So, the new company’s law – 2013 has strengthened the corporate governance while widening the frontiers of trade and commerce.