Has 21st Century Competition led to the Abolishment of Business Ethics?

Has 21st Century Competition led to the Abolishment of Business Ethics?

“In a time of universal deceit, telling the truth is a revolutionary act”- George Orwell

On September 18th, 2015, United States Environmental protection agency issued a notice of violation of Clean Air Act against Volkswagen for tweaking its diesel engine in order to bypass the emission test. 11 million Cars, worldwide, between model year 2009 and 2015 were identified to have faulty systems. This proves how contemplating an unethical decision with its apparent short-term benefits is eventually a recipe for disaster.

For a business entity, ethics can be categorised as its responsibilities towards (i) its customers, (ii) its employees, (iii) the government and (iv) the ecological balance of our planet. We need ethics as they are vital for the proper functioning of the economic, political and social network which will eventually lead to the overall development of the human race.

So, how and why does unethical behaviour creeps into a system and make highly intellectual business leaders lose track of their ethical responsibilities? The answer lies in the fact that any deviation from ethical practices is mostly the result of the current competitive corporate culture or pressure from the higher managerial food chain, which can emerge when a company is unable to live up to its financial expectations. To overcome these bottlenecks, leaders eventually end up bending the rules and this is when ethics and policies collide.

Let us take an example of child labour. If a firm hires children as its major workforce, it can drive down its prices. Now to remain competitive, the rival firm has to relook into its cost structure and come up with an optimized price point. Should the firm also look to hire children in its workforce? Is it ethical? Will this help in cutting costs? The instinctive answers to these questions may be yes but in the long run, it will not serve the purpose of growth. History is full of references to organisations which have linked good ethical practices with their performance and have eventually outperformed their competitors financially.

Ethisphere Institute, a global leader in defining and advancing the standards of ethical business practices has listed Tata Steel and Wipro as one of the World’s Most Ethical Companies for the year 2017 and 2018. Points are awarded to an organization based on; ethics and compliance program (35%), culture of ethics (20%), corporate citizenship and responsibility (20%), governance (15%) and leadership, innovation and reputation (10%). Prior to 2017, the Indian Steel giant, Tata Steel had also bagged this award in years 2012, 2013, 2015 and 2016. Over decades, ethics has been a major driver for Tata Group. One of the core ethic business principles that the company follows is to fully support the development and operation of competitive open markets. It may be pointed out that this policy hampers the organization’s revenue, but In the long run, these policies promote a strong public image based on trust and relationship.

The challenge for those in business is to identify ways to do what is ethically correct while maximizing a shareholder’s wealth. Before taking any decision, the leadership of an organization must introspect what impact their decision will have on the organization and society as a whole in both the short and long run. The importance of ethics has been reinforced into business organisations and business individuals time and again.

As Henry Ford once said, “A business that makes nothing but money is a poor kind of business”. Ethics in businesses is present; the difficult question is how to make it more prevalent.

 

Authors: Saurav Dhar & Rishi Raj

PGPM, Class of 2018, Great Lakes, Gurgaon

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Rise of the Great Lakers

There cannot be any value associated with the learning that we gather in our life. But, certainly the rewards for the toils of the hardwork that one puts in is always welcome. It is a great news for all of us to know that at Chennai-based Great Lakes, Microsoft has offered Rs 28.5 lakh for an India-based profile.

All IIMs are not in the same ranking when it comes to quality, and for companies, hiring the top 10 percentile of management colleges lower in the order makes more sense than picking up from the bottom percentile of an IIM. Top Indian as well as international companies such as Goldman Sachs, Wipro, Accenture, Cognizant, Infosys, Microsoft, Deloitte, Crisil and RBS seem to subscribe to this thinking, making offers at Great Lakes Institute of Management.

It is important to understand that the purpose and reason for going for a professional course like MBA has not to be only about the monetary growth but a closer look at the professional upliftment brings the truth worth to the time and effort that one spends in one year at a reverend and premier institute.

With the experience that one comes in for a one year MBA at Great Lakes, it is needed to keep ourselves continuously updated with all that is happening around and at the same time, learn to apply what you are good at with the new things that you gain in through the discussions and lectures at campus. There is a great deal of involvement that is expected when inside so that we can make the most of the flying by time. Afterall, it is also going to be almost the last learning destination in our professional journey outside the office environment for most of us.

The beauty of the course is the way it is imparted to the pupils and that is the case-based learning. Pioneered by Harvard Business School, and one of the highlights of the HBS experience, the case method is a profound educational innovation that presents the greatest challenges confronting leading companies, nonprofits, and government organizations—complete with the constraints and incomplete information found in real business issues—and places the student in the role of the decision maker. This same approach is taken up at Great Lakes to empower the students’ business-readiness.

There are no fixed or right solutions to such cases. Therefore, it hones the skills of leadership in the students  in different perspectives countering and defending points, and building on each other’s ideas and becoming adept at analyzing issues, exercising judgment, and making difficult decisions.

With such able guidance and support, we rightfully qualify to lead the change in the dynamic business environments and seek the rewards of a successful career building the pathways for a better and brighter tomorrow.

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