BECG Typical Problems

8/9/2019 BECG Typical Problems

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Typical Problems in Business

Ethics


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Ethical Issues in meeting

responsibilities towards society


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Responsibilities towards society

Negative responsibility should not do

something

Positive Responsibility should dosomething


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Positive responsibilities

Improve the standard of living TataSteel, Birla mandir

Generously compensate the dislocatedpeople Salem group investment inNandigram in Bengal

Charitable donations Tsunami, Earth

quake Help the local community Coke and

Atlanta Olympics


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Negative responsibility

Dont employ child labor Sivakasi fire

crackers factories

Dont bribe JRD Tata, Murugappa group,Eicher group

Dont exploit animals

But what about Clinical research? Dont spoil communal harmony and social

integration


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Negative responsibility

Dont exploit resources Coke in Kerala

Coke Plachimada in Palakkad Dt, Kerala


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Environmental Pollution

Regular wastage discharges

Chemical Industries,Paper industry- Directly results in

deforestation Uses Chlorine to bleachthe paper

Accidental pollutionsHazardous leak Leakage of mercury from

HLLs thermo meter plant in Kodaikanal


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Protecting Environment has

economic sense also Tata Steel 3000 litres of oil and grease

wastage everyday. Rs 2 per litre . In 2003-

invested Rs7 lakh to inject waste oil into

the furnaces. Every kilo of oil can replace

1.5 kg of coke which cost around Rs 10/kg

Jubilant Orgn, Carbon dioxide wate to

Soft drinks firms


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Ethical issues with Employees


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Responsibility towards employees

Adopt fair policies in the following issues

Hiring policies

Remuneration Promotion policies

Work place environment

Retrenchment


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Hiring policies

How do you select the employees?

Giving preferences to local community

Reservations is it ethical it is againstequal opportunity

Discrimination Referrals, Gender and age,

Credentials


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Remuneration

What basis Needs, Skill, Education

level, effort

Promotion Seniority, Loyalty or Talent


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Work place environment

Ethical issues at the workplace

Safety Accident prevention measures,

medical equipments, ventilation andlighting Protection from hazardous

chemicals and radiation


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Employees responsibility towards

organization Drug and alcohol abuse, Fiddling of expense accounts Intel India fired

250 employees in September 2005

Wasting office hours Sleeping at work BharatForge Ltd Sacked an employee in 1984- Hechallenged it in court Supreme Court dismissedhis plea in Jan 2005

Using abusive language and showing disrespect

Karnataka College Lecturer abused thePrincipal and was sacked- Supreme Courtupheld the decision December 2005


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Misuse of company assets

Receiving gifts which may result in conflict

of interests Loyalty and Integrity Espionage

Friendly behavior with customers The

PSU employees


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Ethical issues with Customers


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Responsibility towards

Customers/Consumers Right product (quality and quantity), right

time, right price, and right place


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Ethical issues 4Ps of Marketing -

Product

Unethical product - Cigarette, CFC

refrigerator, Infant milk products,

Safety of the product -Ford Pinto Recalling automobiles- Pfizer in India

Gelusil MPS, Pepsi and Coke Pesticide

controversy, Cadbury chocolates

Product Updating- Availability of spare

parts after updating products


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Ethical issues Price

Cross subsidizing King Fisher airlines

High prices taking advantage of patents-Pharma products

Arbitrary pricing cement companies

Mahyco Monsanto Biotech India Ltd BTcotton seeds are priced far higher than in

Chinese after adjusting for taxes MRP- not the final price


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Ethical issues Place

Not selling products in some places

Private Telecom players in rural India

Avoid selling certain products in somespecific places Liquor near schools and

places of worship


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Ethical issues Promotion

Exchange Offers - are they ethical?

Misleading claims -

ITC commercials for Sunfeast biscuits Unfair practices Airlines cancellation

scheme


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Ethical Issues with Business

Partners


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Trust the main issue

JV partners, Supply chain partners


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JV partners

They breakup when partners dont trust

each others


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Press Note 18- Foreign partner need

NOC from Indian partners before starting a

venture on their own in India.-

in 2005- replaced with Press Note 1-

needs NOC only if the new venture is in

the same business.


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Responsibility towards Suppliers

Ethical issues in dealing suppliers depends

on the type of relationship

Long-term relationship Japan

Professional relationship- Arms lengthrelationship- US


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Example of Automobile

manufacturers

Why Automobile firms as example?

Supplier management is complicated inautomobile industry

Three levels of suppliers Tier 1,2 and 3

Total number suppliers run into lakhsComponents are custom made


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Which is right .long term or arms length

relationship?

Long-term relationship proved to be better


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Features of Long-term supplier

relationship

Understand how their suppliers work.

Turn supplier rivalry into opportunity.

Supervise their vendors. Develop their suppliers' technical

capabilities.

Share information intensively butselectively

Conduct joint improvement activities.


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Responsibility towards Suppliers

Share information with suppliers Veryimportant in commodities sourcing

Pay suppliers on time

Be fair in pricing, Avoid unilateral price cut

Should not go for coercion (steel industryand Automobile industry)

Settle issues through negotiations, avoidlitigations

Ensuring safety in supplier premises


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Responsibilities Towards

Competitors

Adopt fair business practices


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Espionage

Spying the competitors

P&G and Unilever

Boeing and Lockheed Martin

Internet used to steal documents

Scan emails of employeesnow iPods and Mobiles are used for

steeling data


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Respect Property Rights

Coca Cola and Pepsi May 2006


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Comparative Advertisements

Totally banned in some countries like

Germany In India and US - Providing wrong

information about competitor is banned


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Predatory Pricing

Predatory pricing Times group- entry into

Delhi and Hyderabad markets- priced at

Rs 1

Retail Association of India

Aviation sector in India


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Poaching

Is it ethical?

Generally happens when there is suddengrowth in the industry

Telecom sector, Insurance sector, Retailsector, Indian Aviation sector

Documents

BECG Typical Problems