Ethics In Business – Only For Classroom Discussions?

Posted on April 15, 2014 in Business and Economy

By Syed Kazim:

On the one end, we have big brand names, big MNCs, big turn overs, big employment generators and what not. But on the other hand, their greed has led them to earn profit by exploiting the resources of the country by bribing the governments. These companies are filthy rich but the greed to earn more and more money does not die. Ethics in business has become a matter of discussion only in class rooms. The million dollar question is, when will it become a reality?

Tata Motors’ Nano plant at Sanand in Gujarat is lying idle. It has utilized just a fraction of the Rs. 2000 crore facility. It has been only two months when Tata Motors utilised more than 25% of its installed capacity at Sanand.

So how did it all begin? Tata built a huge infrastructure for Nano in Singur, West Bengal, which faced tremendous resistance from the locals backed by Mamata Banerjee’s Trinamool. The farmers alleged that their fertile land was forcefully grabbed by the ruling left front. In November 2008, Gujarat CM Narendra Modi offered Tata Motors an eye-popping deal, a deal which convinced the auto giant to choose Gujarat over other states as the alternative for the Tata Nano’s plant. The incentive was Rs 9,570 crore soft loan over 20 years – close to 25% of Gujarat’s annual budget. Tata Motors will repay the loan in 20 years, at 0.1 per cent interest rate and will repay the land price in eight equal annual installments. That’s not all. The state government also provided four-lane road connectivity and exempted Tata’s from electricity duty, registration and transfer charges of land. The state also put up a waste disposal plant, supplied natural gas through a pipeline and provided 100 acres of land near Ahmedabad for a township. As if so much was not enough, Modi used some more public money to give Mr. Tata free publicity for his Nano car when Modi put up hoardings featuring him and Mr. Tata with Nano all over Gujarat.

However, the real deal is still in the dark. Besides appreciating Modi’s investment friendly policies and telling the nation that he is PM material, one might wonder what else Mr. Ratan Tata had to dish out to get this dream deal which might have costed the state in excess of Rs. 30,000 crores for a mere Rs. 2000 crores. Rs. 30,000 crores of public money drained out for a private project whose total worth is less than one-tenth of the money spent. How much money did Mr. Ratan Tata give Mr. Modi for all these favours?

Recently, a protest broke out at the Manesar plant of Maruti Suzuki, the country’s largest car maker. The management had stopped electricity, gave no water and food, no access to medicines and three thousand odd workers were forced to share only one toilet. The worst part was that the labor department too lacked the minimum courtesy to bother about it.

All this began when eleven workers were expelled from the company for their efforts to form a new union, Maruti Suzuki Employees Union (MSEU) as the existing union, Maruti Suzuki Kamgar Union (MSKU) was a puppet of the management. On the other hand, the management had forcibly taken written undertakings from workers that they are happy with the old union. The labourers could not do much as the Government also started speaking the language of the management. Now, what can the laborers do when the law makers support the law breakers?

The villagers of Jagatsingpur district in Odisha have been protesting against land acquisition for POSCO, the South Korean steel giant’s $12 billion steel plant since the last seven and half years. The government is going ahead with the land acquisition process for POSCO, even when the environmental clearance given by the Ministry of Environment and Forests stands suspended by the order of National Green Tribunal (NGT).

POSCO project no longer has a memorandum of understanding with the state government. The state, which clearly has no legal basis to acquire land for the POSCO project, continues to terrorize, attack, destroy livelihood resources, arrest and file charges on the villagers on behalf of a Korean company. ‘Don’t steal in the name of steel’ is what the villagers have to say.

Google, a company knows for giving us answers to all our questions. It earns money by violating your privacy. They go through every word of your personal email so they can target you with ads. Every word of every email. Even the most private ones, like messages about relationships, health care, finances, and more. Even if you don’t use Gmail, Google will still go through emails you send to Gmail addresses in order to sell ads, despite you never having agreed to their terms of service. There is absolutely no way to opt out, whether you use Gmail or not. Can’t Gmail search for an ethical way to advertise by googling on its very own search engine?

Just a few years ago, the situation for workers in Florida’s tomato farms was so bad that one federal prosecutor called Florida “Ground-zero for modern slavery.” With the implementation of the Fair Food Program, we’re now on the verge of eliminating slavery in Florida’s tomato fields.

That’s because the Fair Food Program has made historic progress in tackling forced labour and exploitation. Wendy’s, one of the biggest international fast food chain from US refuses to join the Fair Food Program to ensure slavery is not in its supply chain. If Wendy’s joins the Fair Food Program, their immense purchasing power could help bring the last 10% of farms to the table and ensure the tomato industry never sees another case of modern slavery. Feed the rich at the cost of modern slavery is the order of the day.

Target is one of America’s biggest retailing company. How do they keep their prices so low? Turns out some of Target’s products might be so cheap because they are made with slave-picked cotton from Uzbekistan or purchased from Daewoo International, a company that accounts for approximately 20% of all cotton processed in Uzbekistan. Every year, during the harvest season, over a million children and adults are ripped from their homes, schools and jobs, and forced to work in the cotton fields of Uzbekistan to meet daily picking quotas. They are often threatened and beaten.

Target pledged not to buy slave-picked Uzbek cotton. Now, they’re following up on their pledge by joining the Daewoo Protocol, declining to do business with Daewoo, until it takes serious steps to stop sourcing slave-picked Uzbek cotton. Despite its promise, Target has not yet signed the Daewoo Protocol. A company that takes pride in holding the highest ethical standards for itself and for its business partners has indulged in such an unethical act. Is all this only to earn more money, what is Target targeting at?

Nigeria’s lucrative oil industry is dominated by Shell, a multinational oil and gas company incorporated in the United Kingdom, which in conjunction with the government, controls most of the country’s oil wells. It is also in part responsible for the thousands of spills, many enormous, which have occurred in Nigeria since the 1970s. Sued by some of the people whose lives have been destroyed by the pollution, Shell is still arguing about just how much oil pollution it is liable for, claiming sabotage is behind most.

Debatably, the corporations in charge of an industry are responsible for everything that happens in that industry, regardless of the specifics of each individual case. Shell, of course, is not going to have any of that. However, since the corporation has earned huge profits at the expense of Nigeria’s people and environment, it should at the very least, stop spinning and provide compensation to the victims. With Shell, ‘all is well’ but their attitude is ‘let others go to Hell’.

When Warner Bros., an American producer of film, television, and music entertainment, announced that it was bringing Harry Potter’s favourite chocolate treat to life, muggles throughout the world rejoiced! The only problem is that outside of the wizarding world, Chocolate Frogs have a sinister side, they could be a product of modern slavery. In the Ivory Coast of Africa, children as young as 7 are forced to work long hours collecting cocoa beans, often beaten if they don’t meet their quota. Their supplier Behr’s Chocolates scored 1 out of 48 possible measures to ensure their operations are slavery-free. When Warner Bros. is asked what steps were taken to ensure there was no slavery in Harry Potter Chocolates, they refused to respond. The chocolates might be sweet but the process is dam bitter, why doesn’t Warner Bros. make film on this?

Most of the business management students have a dream to join these big companies. Are they going to support this system after joining them? How effectively and practically are they going to implement business ethics which they studied in their subject? After witnessing all this, one question strikes my mind, are these companies the new rulers of the world? I would conclude with a small poem – ‘greed is on the lead, which many companies are ready to breed, how much do their bellies need and where will all this lead?’