Introduction Business ethics is the foundation of any successful business. Any business organization that seeks to serve the society, its employees, its suppliers, and not merely the promoters or owners, will survive as an institution known for business ethics of a tall order. There are three essential qualities that need to be nurtured by any such business organization. These are: a) looking at ethics and all that it stands for, as more important than the business itself b) institutionalizing processes that clearly communicate business ethics as the most important bedrock of the organization, in totality and c) making business ethics, a way of life in the organization.
There are some superb examples in India. These examples are sought to be discussed in some detail, with reference to the essential qualities outlined above.
Business Ethics more important than the business itself When business ethics becomes more important than the business itself, magic happens. The business organization attains a stature totally unheard of, in the history of business ethics itself.
Take the Tata group, as an example. Some years ago, the Tata group suffered a set back, when one five star property in Mumbai was caught in the terrorist attack. The Government stepped in and the militants were shot dead. However, the damage to the property ran into several thousands of crores.
Ratan Tata, the then Chairman, did something that is totally out of the world. He in fact taught the world some lessons in business ethics. Every single person who was affected, including those like the pav bhaji vendor outside the hotel, was offered compensation running into several lakhs of rupees. The education of children of those affected, free medical facilities for those survivors and dependents at Tata hospitals for the rest of their lives, total education of the 46 children who were affected by the bomb blast but survived, to be taken up by the Tata group, in total, and formation of a Trust for the rehabilitation of the families of the victims. 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.
This was business ethics at its best. The story did not end there. Rs.10,000 per month was also offered as compensation for policemen who had nothing to do with the blast at the hospital, but were involved elsewhere. Ratan Tata had clearly spelt what the Tata group stands for, to this day.
Ditto for the WIPRO group. Its Chairman, Azim Premji, is firm in his views. He annoyed several other fellow capitalists 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.
Within the organization, ethics is a way of life. Several years ago, a trade union leader was sacked on the spot in Mumbai when he faked a bill for Rs.20/-. A big strike followed. The strike went on for six months, but the employee was not reinstated. Azim Premji said that he would rather close the office than reinstate the trade union leader. The employees called off the strike, after a period of six months.
Institutionalizing processes to communicate business ethics Institutionalizing processes that clearly communicate business ethics is an art, fine tuned by the best companies. For instance, in Chennai, a TVS group company called Sundram Finance would serve all its senior citizen customers in ten minutes flat. No questions asked. Free financial advice is given on tax matters. It has over two thousand crores in fixed deposits, mostly collected from senior citizens. The deposit interest is not high, slightly more than what is offered in banks. Still, the money comes in. The interest is credited one day in advance, if the 1st of the month is a holiday. Not a single amount of interest has ever been unpaid to any customer, at any point in time. The organization has a huge network of borrowers, who also repay dues on time, as they know the value of TVS, which actually stands for Trust, Values and Service.
The different TVS group companies have one thing in common in all their factories. Each employee carries home a small gift, in the form of some eatable, like a small biscuit packet, a packet of banana chips, or potato chips and so on. This is illustrative of the philosophy of the TVS group: care and share. This is also reflected in the fact that there are third generation employees happily working in the same TVS group. The quality of the products of the TVS group is world-class, which itself communicates the best to the best-in-class customers like General Motors and Ford: our ethical standards will always produce such products.
The Murugappa group of companies in Chennai is another outstanding example of business ethics. They never bribe a single official. Everything is done in a very transparent manner. The owners are all people well known for their business ethics. In TVS and the Murugappa group, even very small amounts are paid only through cheques or through bank transfers.
Business ethics also means that the organization's employees pay all their taxes in time, and in total. In each of the aforesaid employees, Income tax is deducted and paid to the Government authorities, right on time.
Making Business Ethics a way of life Making business ethics a way of life naturally follows. In each of the outstanding examples discussed above, one would notice that it is possible for business ethics to have a continuous flow, as it is built into the DNA of the organization itself. Asian Paints is another organization, well known for its business ethics. Similarly, the Hero group is also well known for its high quality business ethics.
The outstanding organizations offer such a good variety of experiences in business ethics in a world where values are being eroded all over. However, such short term successes will never stand the test of time. Only those organizations that follow business ethics in every walk of life, like the Tata group, the TVS group, the WIPRO group or the Murugappa group, will continue to survive and grow as highly ethical organizations for generations to come. And be admired for such high class values forever.
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The author has detailed how some companies are having ethics and how they see that they will be of help to needy and also see that nobody will lose because of them. All the examples given by the author are very well known companies and very big groups. But there are some organisations which are doing very small business but doing very good help to his village or town and seeing that their place will come up.
In Hyderabad, I know a person who is running his own business here. It is an SSI and the turn over is around 10 crores. The person took a pledge that he will use 20 % of his profits for the upliftment of his village which is a small village in East Godavari District of Andhra Pradesh. Every year from the profit he reserves that percentage for that village. All the roads in the village were cemented with that money. He arranged good buildings for school and a junior college. Any person wants any financial help for their necessity he will do that. All Engineers from that village are being accommodated somewhere with his influence on jobs. He helps poor people in their education and marriages. The village is having all the amenities and the people of the village always admire him as a God. He is very humble and always says that will has given him the life and hence he is trying to do whatever bit he can do.