Description
Mcom project
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CHAPTER 1: Introduction to Corporate culture and Ethics
Corporate culture is thus a set of values, beliefs and behaviour patterns that form the core identity of organizations, and which help in shaping the behaviour of members. Deal and Kennedy (1982) put it simply as a set of values that underlie how we do our things around here. One type of corporate culture that has gained popularity in the human resource management literature is consensual corporate culture. Because of its nature I prefer to call it cooperative corporate culture. In that type of culture loyalty to the organization, personal commitment to the values and goals of the organization, teamwork and socialization are important (Deshpande & Farley, 1999). They are what Achebe calls the palm oil with which they eat their lives in the organization. I wish to use this platform to recommend cooperative corporate culture to higher education institutions seeking commitment to quality moves. Following a close scrutiny of Kurt Lewin‘s (1948) group dynamics, Johnson and Johnson, (1978; 1983) identified certain features of the internal dynamics of groups and organizations that have the consensual or cooperative corporate culture. These features are; • • • • • Interdependence Interaction Group processing Social skills Accountability
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Equal participation, and Shared leadership
Consequential actors in the higher educational institution must all perceive that the organization in which they are embedded is characterized by these conditions. This perception naturally, will energize and motivate them to gear their efforts to achieve the goals of the institution. Interdependence, or positive interdependence, is the recognition that no one actor can succeed in their tasks unless every other actor succeeds in theirs. Most or all actors must accept the fact that as they strive to achieve and sustain quality in academic standards and output, and as they strive to achieve effective management of their institution, they are in a position where they can swim together or sink together, depending on the total effect of their individual efforts. Interaction or promotive interaction is the mutual help that members offer to one another as they interact as members with a common objective. There should be a platform for actors to share camaraderie and experiences, ask questions, offer or receive explanations and seek clarifications. In other words, consequential actors in the institution must as a habit discusses their activities, experiences, problems, and successes with colleagues so that they can learn from one another. Meetings at the staff club or the senate/academic board can be suitable for formal and informal interactions. Group processing is the monitoring of the performance of the institution as a whole, as well as monitoring of the performance of groups and individual actors. Members of the institution
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must occasionally and periodically meet and reflect on how well they are achieving their goals. There is the need for periodic self-appraisal to determine the extent to which the institution is making success both as a corporate entity and as individual actors.
Accountability is the acceptance of the fact that each consequential actor in the institution is accountable to the group for tasks assigned to them. The lecturer, the head of department, the director, the dean, the senior administrator, and the student must recognize that they are individually and severally accountable to the institution for the roles they are supposed to play in the quality direction. By holding actors accountable, and by monitoring one another, free riders and social loafers can be identified and made aware of their non-performance.
Social skills are the tact and diplomacy with which actors monitor and thereby reprimand non performing actors. Reprimands and awareness creation must be made so tactfully that the pride of those in question will not be hurt. Therefore social skills must be applied when reprimanding actors for non-performance.
Equal participation is a condition in which all or most actors perceive that no one acts as a free rider, a social loafer, or a sucker. There should be no room for anyone to brood the idea that some actors are working while others are goofing. Nor should others see themselves as doing almost all the work. All must be perceived to be involved.
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Finally, shared leadership is the condition in which all or most actors perceive themselves to be leaders at their levels of operation. They must feel that each actor has a role as a leader in the local constituencies they operate. Each incumbent of a position must have initiative to offer the leadership that will contribute to the achievement of the goals set by the institution. Therefore, even though leadership is reposed in the Vice-Chancellor or President, in actual practice, leadership must be perceived to be diffuse and contextual (Opare, 2007).
Corporate/ Business Ethics: Ethics, also known as moral philosophy, is a branch of philosophy that involves systematizing, defending, and recommending concepts of right and wrong conduct. The term comes from the Greek word ethos, which means "character". Ethics is a complement to Aesthetics in the philosophy field of Axiology. In philosophy, ethics studies the moral behavior in humans, and how one should act. Ethics may be divided into four major areas of study: Meta-ethics, about the theoretical meaning and reference of moral propositions and how their truth values (if any) may be determined; Normative ethics, about the practical means of determining a moral course of action; Applied ethics, about how moral outcomes can be achieved in specific situations; Descriptive ethics, also known as comparative ethics, is the study of people's beliefs about morality;
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Business ethics (also corporate ethics) is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations. Business ethics has both normative and descriptive dimensions. As a corporate practice and a career specialization, the field is primarily normative. Academics attempting to understand business behavior employ descriptive methods. The range and quantity of business ethical issues reflects the interaction of profit-maximizing behavior with non-economic concerns. Interest in business ethics accelerated dramatically during the 1980s and 1990s, both within major corporations and within academia. For example, today most major corporations promote their commitment to non-economic values under headings such as ethics codes and social responsibility charters. Adam Smith said, "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices." Governments use laws and regulations to point business behavior in what they perceive to be beneficial directions. Ethics implicitly regulates areas and details of behavior that lie beyond governmental control. The emergence of large corporations with limited relationships and sensitivity to the communities in which they operate accelerated the development of formal ethics regimes.
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CHAPTER 2: Importance of Ethics and Values
Most of us would agree that it is ethics in practice that makes sense; just having it carefully drafted and redrafted in books may not serve the purpose. Of course all of us want businesses to be fair, clean and beneficial to the society. For that to happen, organizations need to abide by ethics or rule of law, engage themselves in fair practices and competition; all of which will benefit the consumer, the society and organization.
Primarily it is the individual, the consumer, the employee or the human social unit of the society who benefits from ethics. In addition ethics is important because of the following: ? Satisfying Basic Human Needs: Being fair, honest and ethical is one the basic human needs. Every employee desires to be such himself and to work for an organization that is fair and ethical in its practices.
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Creating Credibility: An organization that is believed to be driven by moral values is respected in the society even by those who may have no information about the working and the businesses or an organization. Infosys, for example is perceived as an organization for good corporate governance and social responsibility initiatives. This perception is held far and wide even by those who do not even know what business the organization is into.
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Uniting People and Leadership: An organization driven by values is revered by its employees also. They are the common thread that brings the employees and the
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decision makers on a common platform. This goes a long way in aligning behaviors within the organization towards achievement of one common goal or mission.
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Improving Decision Making: A man‘s destiny is the sum total of all the decisions that he/she takes in course of his life. The same holds true for organizations. Decisions are driven by values. For example an organization that does not value competition will be fierce in its operations aiming to wipe out its competitors and establish a monopoly in the market.
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Long Term Gains: Organizations guided by ethics and values are profitable in the long run, though in the short run they may seem to lose money. Tata group, one of the largest business conglomerates in India was seen on the verge of decline at the beginning of 1990‘s, which soon turned out to be otherwise. The same company‘s Tata NANO car was predicted as a failure, and failed to do well but the same is picking up fast now.
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Securing the Society: Often ethics succeeds law in safeguarding the society. The law machinery is often found acting as a mute spectator, unable to save the society and the environment. Technology, for example is growing at such a fast pace that the by the time law comes up with a regulation we have a newer technology with new threats replacing the older one. Lawyers and public interest litigations may not help a great deal but ethics can. Ethics tries to create a sense of right and wrong in the organizations and often when the law fails, it is the ethics that may stop organizations from harming the society or environment.
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CHAPTER 3: Impact of Values and Ethics on Corporate Strategy
Financial excellence results when a corporation's values and its ethics support its strategy. Many companies, unbeknownst to their leadership, operate with at least three separate and usually non-aligned value systems: the Values that management communicates both orally and in writing, the Values that employees believe drive management's conduct, and the Values that actually underpin the interpersonal dynamics of the organization. To gain strategic advantage, these three systems must first be identified, and then integrated into one system of values.
The Role of Ethics in Strategy Financial excellence results when a corporation's values and its ethics support its strategy. Ethics is a component of strategy because every business secures its future by making a contribution. The act of making a contribution is fundamentally an ethical activity. Identifying that contribution and maximizing its value is the field of strategy. Profit is the value the market attaches to an organization''s contribution and the efficiency with which it makes that contribution.
Employees, who see their company making a valued contribution (with profits as the outcome) rather than merely generating shareholder wealth, commit to their work with greater passion. This leads to a partnership between employees and corporate leadership that boosts innovation and uplifts performance. Ethics plays a vital role in the preservation of this priceless partnership, which can thrive only in an atmosphere of trust and integrity. Trust and
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integrity result from integrating an organization‘s disparate value systems and aligning them with the organization‘s strategic objectives.
What is Ethics and how does it Differ From Values? Values are beliefs about what is good and what is bad, what is right and what is wrong. Even people of different cultures differ very little about these beliefs (1). Nearly all people would like their children to be honest, fair, courteous, charitable and so on. People do however differ substantially when it comes to the "price" they are willing to pay for what is right (2). Ethics is the "cost" that a person will pay to uphold his values. It is the way a person translates his or her beliefs into actions (or abstentions) that entail a cost. Most people differ in their ethics rather than in their values. Thus, adopting a change in values alone will not impact on any aspect of organizational performance. Rather, the way an organization translates its values into an ethic will impact on its strategic objectives.
Integrating Disparate Corporate Values Many companies, unbeknownst to their leadership, operate with at least three separate and usually non-aligned value systems. Measuring the degree of alignment between these value systems, and determining what drives each of them, highlights the opportunities for change.
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The three value systems are: 1. The Espoused Value System - The Values that management communicates both orally and in writing. 2. The Perceived Value System - The Values that employees believe drive management's conduct. 3. The Actual Value System - The values that actually underpin the interpersonal dynamics of the organization. Management may have never previously articulated these values and employees may never have identified them.
To gain strategic advantage, these three systems must be integrated into one system of values. Furthermore, in order for these values to impact on financial performance, senior management must translate them into an ethic that supports the organization's objectives, that is aligned with its strategy and is understood at all levels of the organization.
Identifying Espoused, Perceived and Actual Values An organization's espoused values are either implied or articulated in its published materials (3). But the way employees' honestly perceive management's values are often very different from the values that management espouses. Qualitative research methodology can probe employee perceptions. However, exposing the actual values and ethics that drive the
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organization requires that one analyze the reasons for those perceptions in light of various management decisions and behaviors.
Espoused, Perceived & Actual Values in One System It is at times difficult for an organization's leadership to acknowledge the existence of divergent value systems and to understand the implications of the divergence. It is even more difficult for leaders to confront the truth of what are the values that really drive their organization. Yet this confrontation with the truth is a vital step in crafting an integrated value system that can transform an organization and impact its performance.
An integrated value system takes into account the strategic objectives of the organization, the personal values of leadership and the diversity of its employees. It aligns employee perceptions with management's espoused values. A system such as this can translate into the actual ethic that drives management decisions and conduct. This ethic differentiates the organization in all that it does.
Translating Value System into a Corporate Ethic Choosing values is easy. However leaders often rethink their organizations' values when they confront the behavioral and organizational changes that those values would compel when translated into a living ethic. They need to examine how congruent the chosen values are and
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how they promote or undermine corporate intent and strategic objectives. Only then can leadership comfortably commit to a new system with all of its defined implications.
How Values and Ethics Undermine Strategy We shall describe three cases of organizational values actually or potentially undermining organizational strategy and describe Strategic Business Ethic's approach to resolving the situations. The first case is in the Health Care Industry, the second in the Banking Industry, and the third is a case of Mergers and Acquisitions.
Case Study 1: The Health Care Industry The people in an organization who develop its strategy are not usually the same people tasked to develop the organization's values. Even when the same people undertake both of these tasks, they do not often appreciate the intricate relationship between values and strategy, nor do they have the expertise to translate values into ethics.
Conflicting Values Priorities The Vice-President of Human Resources of a large Health Care Organization was energetically imparting the value of caring in the organization. All of the staff espoused this
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value and the Chief Executive supported it. However, the Vice-president of Operations was driving a relentless strategy of cost reduction to ensure the survival of the organization in a tumultuous phase of the Health Care industry's evolution. Both leaders are people of impressive intellectual and moral stature, and drove their campaigns hard. Both initiatives were vital for the organization. Their two departments enjoyed excellent relations. Yet the value of caring undermined the efficiency strategy. Staff could not align the need to reduce patient/nurse ratios with the value of caring. They could not relate to the downsizing of certain departments in an organization that claimed to care not only for its patients but also for its staff. Not only did the organization fail to achieve its cost-cutting goals, but it was also experiencing reductions in standards of caring. More serious however was employees' loss of respect for leadership's integrity. The values initiative lost credibility, and employees saw the cost focus as the only thing that really counted. Patients were not the only ones who suffered from this deterioration. Everyone suffered, including the organization's capacity to sustain its dominant competitive position.
An Integrated Solution We changed cost-consciousness from a survival tactic to a value that integrated with patient caring. Nursing staff began to seek their own ways to cut costs as part of their patient caring, realizing that doing so would extend quality medical care to more people. Staff reductions initiated by the nursing staff themselves, did not cause resentment and did not impact negatively on the quality of patient caring. We translated these and other supporting values (beliefs) into an ethic (conduct) that management began to live by. Even senior personnel responsible for large amounts of revenue were counseled when they transgressed
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organizational values. No longer was rainmaking seen to be more important than quality in interpersonal conduct. Very soon this work began to impact achieving astonishing results in employee commitment to both cost efficiency and excellence of care.
Case Study 2: The Banking Industry
Loyalty vs. Excellence Throughout its long history, a prominent banking institution entrenched the values of fairness and loyalty among its managers and employees. When globalization and technology transformed the Financial Services industry, these values began to inhibit the Bank's drive for efficiency and excellence. The Bank downsized and started to reward peoples' performance rather than their loyalty. Employees felt alienated from the organizations' traditional ethics and began to passively sabotage the company's objectives.
An Honest Integration of Values We redefined the implications of loyalty and explained it as 100% mutual commitment during an employee's career at the Bank, but not lifetime employment. We taught the reasons why lifetime employment was neither strategically nor ethically appropriate. We explained fairness as treating all people according to the same value system rather than as treating all people the same. The value system dictated that greater contributors be treated more favorably than smaller contributors. This was not unfair. The impact on morale and employee
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retention during the changes was remarkable. It enabled management to focus on the Banks pressing strategic needs rather than pacifying disgruntle but key employees.
Case Study 3: Mergers and Acquisitions Growing Value by Merging Values The pressure to "close the deal" in mergers and acquisitions should never undermine the greatest imperative - delivering shareholder value. Often the most critical cause of failure is the clash of cultures and incompatible strategic thinking. Successful merging requires synchronizing the diverse skills of all employees into a vision for a new company that is greater than the sum of its parts. Architects of successful mergers and acquisitions should always diagnose the ethical dynamics of both companies and qualitatively evaluate the strategic thinking of each of them. This forewarns them of the potential pitfalls of the merger and assists them to design a merger strategy that extends beyond structure; a strategy to build an integrated ethic for the new corporate entity. When employees see this process of incorporating ethics into strategy they gain faith in the direction of the new entity, the integrity of its leadership and the brilliance of its future.
A Merger of Values In a recent merger, two successful banks were struggling to convince each other of the merits of their respective strategies in an attempt to truly merge rather than merely "take over". Our ethical and strategic diagnosis clarified to the combined management team why each strategy served the cultures of each bank in the past, but neither could serve the culture of the new
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entity. After understanding the value system of the new entity and we designed a strategy different to either of the original two but tailored to the new organization. In harsh conditions this accelerated revenue generation beyond expectation.
In Conclusion Organizations optimize their productivity when employees view their work as much more than the mere trading of skills for money. To achieve this heightened commitment, organizations should integrate their values, translate them into an ethic and align that ethic with their strategies. When an organization achieves this, its employees see their work as a vehicle with which to fulfill their own higher spiritual quests to make rare and needed contributions. The money they earn reflects the value of their contribution and provides them with both economic security and emotional self-esteem. This leads employees to invest their intellects and their passion in the work they do, driving their organizations' thinking to the very edge of competitiveness, and their performance... beyond that.
Footnotes: 1 - This theory was confirmed in research conducted by Strategic Business Ethics among 10 000 people of 10 different cultures and all management levels. (Lapin, B.D. 1992 The Impact of Cultural diversity on Corporate Ethics and Financial Performance. Research Report for JCI Ltd., Johannesburg.)
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2 - Everyone believes in honesty, for example, but in situations where honesty could entail substantial loss, many people will compromise their honesty. The point at which a person will make that compromise, varies from one person to another.
3 - These values are generally listed rather than presented as a system. A list reveals what values a company has chosen but it does not reveal the way that company thinks about values. When values are systematized, a moral philosophy emerges. The espoused values need systematization to reveal the thinking behind them.
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CHAPTER 4: Social Responsibility of Business
Social responsibility is an ethical or theory that an entity, be it an organization or individual, has an obligation to act to benefit society at large. Social responsibility is a duty every individual or organization has to perform so as to maintain a balance between the economy and the ecosystem. A trade-off always exists between economic development, in the material sense, and the welfare of the society and environment. Social responsibility means sustaining the equilibrium between the two. It pertains not only to business organizations but also to everyone whose any action impacts the environment. This responsibility can be passive, by avoiding engaging in socially harmful acts, or active, by performing activities that directly advance social goals. Businesses can use ethical decision making to secure their businesses by making decisions that allow for government agencies to minimize their involvement with the corporation. For instance if a company is and follows the United States Environmental Protection Agency (EPA) guidelines for emissions on dangerous pollutants and even goes an extra step to get involved in the community and address those concerns that the public might have; they would be less likely to have the EPA investigate them for environmental concerns. ?A significant element of current thinking about privacy, however, stresses "self-regulation" rather than market or government mechanisms for protecting personal information?. According to some experts, most rules and regulations are formed due to public outcry, which threatens profit maximization and therefore the well-being of the shareholder and that if there is not outcry there often will be limited regulation. Critics argue that Corporate social responsibility (CSR) distracts from the fundamental economic role of businesses; others argue that it is nothing more than superficial window-
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dressing; others argue that it is an attempt to pre-empt the role of governments as a watchdog over powerful Tricorp corporations though there is no systematic evidence to support these criticisms. A significant number of studies have shown no negative influence on shareholder results from CSR but rather a slightly negative correlation with improved shareholder returns.
Corporate social responsibility (CSR, also called corporate conscience, corporate citizenship, social performance, or sustainable responsible business/ Responsible Business) is a form of corporate self-regulation integrated into a business model. CSR policy functions as a built-in, self-regulating mechanism whereby a business monitors and ensures its active compliance within the spirit of the law, ethical standards, and international norms. CSR is a process with the aim to embrace responsibility for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere who may also be considered as stakeholders. The term "corporate social responsibility" came into common use in the late 1960s and early 1970s after many multinational corporations formed the term stakeholder, meaning those on whom an organization's activities have an impact. It was used to describe corporate owners beyond shareholders as a result of an influential book by R. Edward Freeman, Strategic management: a stakeholder approach in 1984. Proponents argue that corporations make more long term profits by operating with a perspective, while critics argue that CSR distracts from the economic role of businesses. Others argue CSR is merely window-dressing, or an attempt to pre-empt the role of governments as a watchdog over powerful multinational corporations. CSR is titled to aid an organization's mission as well as a guide to what the company stands for and will uphold to its consumers. Development business ethics is one of the forms of
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applied ethics that examines ethical principles and moral or ethical problems that can arise in a business environment. ISO 26000 is the recognized international standard for CSR. Public sector organizations (the United Nations for example) adhere to the triple bottom line (TBL). It is widely accepted that CSR adheres to similar principles but with no formal act of legislation. The UN has developed the Principles for Responsible Investment as guidelines for investing entities.
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CHAPTER 5: Corporate Culture and Ethics of Tata Group
Introduction Tata Group is an Indian multinational conglomerate company headquartered in Mumbai, Maharashtra, India.[3] It encompasses seven business sectors: communications and information technology, engineering, materials, services, energy, consumer products and chemicals. Tata Group was founded in 1868 by Jamsetji Tata as a trading company. It has operations in more than 80 countries across six continents. Tata Group has over 100 operating companies each of them operates independently out of them 32 are publicly listed. The major Tata companies are Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata Power, Tata Chemicals, Tata Global Beverages, Tata Teleservices, Titan Industries, Tata Communications and Taj Hotels. The combined market capitalisation of all the 32 listed Tata companies was $89.88 billion as of March 2012. Tata receives more than 58% of its revenue from outside India. Tata Group remains a family-owned business, as the descendants of the founder (from the Tata family) owns majority stake in the company. The current chairman of the Tata group is Cyrus Pallonji Mistry, who took over from Ratan Tata in 2012. Tata Sons is the promoter of all key Tata companies and holds the bulk of shareholding in these companies. The chairman of Tata Sons has traditionally been the chairman of the Tata group. About 66% of the equity capital of Tata Sons is held by philanthropic trusts endowed by members of the Tata family. The Tata Group and its companies & enterprises is perceived to be India's best-known global brand within and outside the country as per an ASSOCHAM survey. The 2009, annual survey
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by the Reputation Institute ranked Tata Group as the 11th most reputable company in the world. The survey included 600 global companies. The Tata Group has helped establish and finance numerous quality researches, educational and cultural institutes in India. The group was awarded the Carnegie Medal of Philanthropy in 2007 in recognition of its long history of philanthropic activities.
History The Tata Group was founded as a private trading firm in 1868 by entrepreneur and philanthropist Tata. In 1902 the group incorporated the Indian Hotels Company to commission the Taj Mahal Palace & Tower, the first luxury hotel in India, which opened the following year. After Jamsetji‘s death in 1904, his son Sir Dorab Tata took over as chair of the Tata Group. Under Dorab‘s leadership the group quickly diversified, venturing into a vast array of new industries, including steel (1907), electricity (1910), education (1911), consumer goods (1917), and aviation (1932).[14] Following Dorab‘s death in 1932, Sir Nowroji Saklatwala became the group‘s chair. Six years later Jehangir Ratanji Dadabhoy Tata (J.R.D.) took over the position. His continued expansion of the company into new sectors—such as chemicals (1939), technology (1945), cosmetics (1952), marketing, engineering, and manufacturing (1954), tea (1962), and software services (1968)—earned Tata Group international recognition. In 1945 Tata Group established the Tata Engineering and Locomotive Company (TELCO) to manufacture engineering and locomotive products; it was renamed Tata Motors in 2003. In 1991 J.R.D.‘s nephew, Indian business mogul Ratan Naval Tata, succeeded him as chairman of the Tata Group. Upon assuming leadership of the conglomerate, Ratan aggressively sought to expand
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it, and increasingly he focused on globalizing its businesses. In 2000 the group acquired London-based Tetley Tea, and in 2004 it purchased the truck-manufacturing operations of South Korea‘s Daewoo Motors. In 2001 Tata Group partnered with American International Group, Inc. (AIG) to create the insurance company Tata-AIG.
This section lists the Tata companies and details their business: Chemicals ? ? ? ? ? ? ? Tata Chemicals Rallis India Tata Pigments Limited General Chemical Industrial Products Brunner Mond Advinus Therapeutics Magadi Soda Company
Consumer Products ? ? ? ? ? Tata Salt I-shakti Casa Décor Tata Swach Tata Global Beverages
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Tata Tea Limited is the world's second largest manufacturer of packaged tea and tea products.
? ? ? ? ? ? ? ? ? ? ? ? ? ?
Eight O'Clock Coffee Tata Ceramics Infiniti Retail (Crom?) Tetley Tata Coffee Tata Industries Titan Industries Trent (Westside) Tata Sky TajAir Tata International Ltd. Tanishq Tata Refractories Westland
Energy ? ? ? ? ? Tata Power is one of the largest private sector power companies. Tata BP Solar, a joint venture between Tata Power and BP Solar Hooghly Met Coke and Power Company Jamshedpur Utilities and Services Company Tata Power Delhi Distribution Ltd (Formerly Known as North Delhi Power Ltd)
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? ? ?
Powerlinks Transmission Tata Power Trading Tata Projects
Engineering ? ? ? ? TAL Manufacturing Solutions Tata AutoComp Systems Limited (TACO) Hispano Carrocera Tata Motors, manufacturer of commercial vehicles (largest in India) and passenger cars ? ? ? ? ? ? ? ? ? ? ? ? ? ? Jaguar Land Rover (Manager of Tata's British brands Jaguar cars and Land Rover Tata Daewoo Commercial Vehicle Tata Projects Tata Consulting Engineers Limited Tata Cummins Telco Construction Equipment TRF Voltas, consumer electronics company Voltas Global Engineering Centre Tata Advanced Materials Tata Advanced Systems Tata Motors European Technical Centre Tata Petrodyne Tata Precision Industries
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Telcon Construction Equipment
Information Systems and Communications ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Computational Research Laboratories INCAT Nelco Nelito Systems Tata Business Support Services Tata Consultancy Services Ltd. (TCS) is Asia's largest software company. Tata Elxsi Neotel Tata Interactive Systems Tata Technologies Limited Tata Teleservices Virgin Mobile India Tata Communications CMC Limited VSNL International Canada Tatanet, Managed connectivity and VSAT service provider Tata Teleservices Tata Teleservices (Maharashtra)
Services ? Tata Sons
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? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?
TKM Global ( Logistics and Supply Chain ) www.tkmglobal.net The Indian Hotels Company Ginger Hotels Roots Corporation Landmark Bookstores Tata Housing Development Company Ltd. (THDC) Tata Limited TATA AIG General Insurance TATA AIG Life Insurance Tata AG Tata Asset Management Tata Financial Services Tata Capital Tata International AG Tata Investment Corporation Tata Advanced Systems Limited Drive India Enterprise Solutions Mjunction services Tata Quality Management Services Tata Realty and Infrastructure Limited Tata Interactive Systems Tata Africa Holdings Tata AutoComp Systems Tata Industrial Services
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? ? ? ? Steel ? ? ? ? ? ? ? ? ? ? ? ?
Tata NYK Tata Services Tata Strategic Management Group Taj Hotels
Tata Steel Tata Steel Europe Tata Steel KZN Tata Steel Processing and Distribution JAMIPOL NatSteel Holdings Tata BlueScope Steel Tata Metaliks Tata Sponge Iron Tayo Rolls The Tinplate Company of India TM International Logistics
Core Sciences ? ? Tata Institute of Fundamental Research Tata Institute of Social Sciences
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CHAPTER 6: Tata Culture
One of the greatest frustrations for consultants and others is in getting organisations to change, and in particular at the top. If you get a chance to work with a senior team who can see that culture needs to be changed, then here is a model and a method that you can use to get to the core. 'TATA' means 'management Thinking and Acting that leads to employee Thinking and Acting. This is a very simple model of organizational culture that is easy to understand and can be used to help change the culture to something more powerful. It is often a good idea to discuss what you are going to do with the senior manager as this person's support may be important if the rest of the team start to dig their heels in during steps 3 and 4.
1. Employee Action The easiest place to start with the top team when discussing culture is what they see and hear. Just ask them: What do you see and hear in this culture that you'd like to change? Then stand back as they list all the things that have been frustrating them about their employees over past year or more. Typical moans include: ? ? ? ? People not sticking to commitments Lack of loyalty Not understanding strategic needs Lack of real concern for customers
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? ?
Resistance to new ideas Lack of creativity
...and so on. Write these down on a flipchart. If the list gets long, help them reduce it to the 'top five' (or even three).
2. Employee Thinking Culture is not just about how people act -- it is also about attitudes, values, beliefs, mental models, emotions and so on. Next talk about this and how thinking leads to action and draw the basic cultural model:
With this you can discuss how employees think drives what they do. Again, this is simple logic that is easy to understand and accept. Depending on how rational or open the team is, you can also 'and feeling' after 'thinking'. List the top five actions under 'employee action' and now ask the management team to list how they believe employees are thinking in ways that leads to the identified action. This is a little harder task but most managers will have few problems coming up with assumptions about what the employees may be thinking. Remind them as necessary that their employees are human and that employee thinking will make sense, at least to them. Typical thinking could include:
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? ? ? ? ?
What's in it for me Do what I'm told No point rocking the boat Do least work for maximum pay Keep your head down
3. Management Action Now it starts to get more interesting and stage 3 ideas may require some discussion before you start listing. The primary principle is that a significant driver of what employees thinks is what managers say and do. Of course there are other forces on employees but what managers say and do has a huge effect -- sometimes more than managers may think (and if employee thinking is not affected by what managers say and do then there would be an even bigger problem). This can be shown as below. Putting 'Management Action' above 'Employee Thinking', rather than to the left, is subtle hints of superiority that may help managers find it easier to accept the ideas.
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Now you can ask 'What are you saying and doing that is leading to what employees think?' This can be a very difficult moment for managers who do not want to accept responsibility for what employees think and do and you may need to keep the dialogue going for a while before you write anything down. You may need to press them on this, asking such as 'Are those actions really leading employees to think like that?' until you get to realistic information. Discussions can include such as whether managers actually follow 'company values' as published, and what employees think about this. As appropriate, you can change or extend the 'Employee Thinking' box. Ask permission, then write down the words and actions they tell you about, above the 'Management Action' box. If a longer list appears, then help them prioritise for the top three to five actions that have the greatest effect on employee thinking. If this segment worked, there should be a significant number of 'aha's in recognizing what managers say and do affects culture and hence how it must change.
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4. Management Thinking If step 3 was difficult, then step 4 may well be even more difficult again, although it may also be easier if the penny has dropped and the principle accepted by now. Just as employee thinking drives employee action, so also does management thinking drive management action. So the question now is 'What are your thoughts that are leading to what you say and do?' Draw in the last box as below. There should be no debate about whether this is valid as the 'Thinking - Action' principle has already been established.
Again, this may require some dialogue before you start to write things down (when you do, put them above 'Management Thinking'). The critical message is that how they think and feel is at the root of a causal chain that leads directly to what employees say and do, and hence to change the culture of the organisation they must change what and how they think - which can be a very scary subject and hence need plenty of space and support to happen. Discussions can include questions about what they think about employees, what their values really are, and so on. In this session do not try to get it all out but just enough for them to realize how what they think is very important.
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Further possibilities This is a simple but powerful model which you can use in a number of additional ways. Deeper stuff about thinking From this session additional sessions can be held to explore what and how the management team thinks. If the first session has provided the wake-up call and an understanding of the importance of how they think then these sessions can be used to dig into personal and interpersonal drivers and dynamics. Management and Employee cultures Taking the simple 'thinking and acting' culture model, management culture and employee culture may be explored separately and reasons for differences discussed.
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Influence and spirals Management Action that changes Employee Thinking is pretty much what leadership is. A powerful discussion about leadership can therefore be had by considering this link. An additional link may be added between Employee Action and Management Thinking. How we think is driven by what others say and do and the way managers think is often strongly affected by how employees act. This link completes a causal circle, which means there can be spirals of thinking and acting that can both improve and degrade the power of the organisation.
An interesting part of this discussion may be about how strong the Management Action Employee Thinking link is, as compared with the Employee Action - Management Thinking link. Ideally, both exist but the biggest influence is the manager to employee direction. Sometimes management thinking is more strongly influenced by a wilful workforce and effectively the 'tail wags the dog'.
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The balance of appropriate strengths between these two links depends on the industry, for example in intellectual and creative businesses a strong upward link might be a good idea. The question is to find the best balance for the business the company is in.
Theory of mind Another area for possible exploration is in how we think others are thinking. We all use a great deal of 'theory of mind' in guessing what others are thinking and we often get it very wrong.
The question may thus be discussed about how managers think employees think and what employees think that managers think. This is a ripe topic for realizing that how you think others think is often a long way from how they are really thinking.
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A session on theory of mind is best done as a facilitated dialogue between managers and employees. It is critical for this to succeed that an atmosphere of trust and openness is created. Multiple levels The model as presented divides simply along the 'manager-employee' line, which is often a significant cultural divide. Depending on the organisation, more than one level of analysis may be completed. The framework can also be used to examine any connected cultural systems, for example between marketing and R&D or between the local company and headquarters. As-is and To-be The first session (or sessions) is about how things are at the moment and should probably be kept that way. If you have energized the team then a future session to think about how things could be different may be held. Go through the same steps but now think about how they would like things to be. Thus ask: What do we want employees to say and do? So what must they think and feel that will drive this action? So what must managers say and do to lead employees to these thoughts? And how must managers think and feel in order that they will act in the appropriate way? Of course the next question is, 'Now that we know where we are and where we want to go, how do we get there?' Which is a whole conversation or more.
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CHAPTER 7: PHILANTHROPY AND SOCIAL ENGAGEMENT
The last specificity of Tata is the fact that nearly two-thirds of the equity of Tata Sons is held by philanthropic trusts. The Sir Ratan Tata Trust was established in 1918 following the death of Sir Ratan Tata, the younger son of Jamsetji Tata, and it operates to further ?the advancement of education, learning and industry in all its branches?. The Sir Dorabji Tata Trust was established in 1932 by Sir Dorab Tata, Jamsetji‘s elder son, who bequeathed all his wealth, including the famed 245-carat Jubilee diamond, just before his death. The Trust is known for promoting pioneering institutions of national importance. The ?allied trusts‘ component of the Sir Dorabji Tata Trust comprises the Tata Social Welfare Trust, the RD Tata Trust, the Tata Education Trust, the JRD Tata Trust, the JRD Tata and Thelma Tata Trust, the Jamsetji Tata Trust, the JN Tata Endowment, the Lady Meherbai Tata Memorial Trust, and the Lady Meherbai Tata Education Trust. The MK Tata Trust, set up in 1958 by Minocher K. Tata with his personal resources, delivers research grants and scholarships for the advancement of learning in all its branches as well as donating medical and other relief during natural calamities. The Tata Social Welfare Trust and the Tata Education Trust were founded in 1990. The Trusts‘ trustees mostly belong to the family, although selected executives (such as Krishna Kumar) are also appointed.
In a 2005 interview to The McKinsey Quarterly, Ratan Tata clearly expressed the corporate philosophy: ?I think it is wrong for a company in India to operate in exactly the same way, without any additional responsibilities, as if it were operating in the United States, let‘s say. And even in the United States, I think if you had an enlightened corporation that went into the Deep South, you would see more of a sense of social responsibility, of doing more for the
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community, than the company might accept in New York City or Boston. Because it is inevitable that you need to be a good corporate citizen in that kind of environment. And companies that are not good corporate citizens — those that don‘t hold to standards and that allow the environment and the community to suffer — are really criminals in today‘s world.? In FY 2007, Tata Trusts‘ total grants amounted to U$58 million and the Tata companies‘ ?contribution to social welfare? was US$61 million. Individual companies‘ examples are illustrative of the scale and scope of this engagement. In 2001, Jamshedpur Utilities and Services Company Limited (JUSCO), a wholly owned subsidiary of Tata Steel, was running 23 schools with 22,474 pupils and a hospital with a capacity of 1,200 beds. Tata Motors‘ code of conduct is formulated around the ILO Declaration on Fundamental Principles and Rights at Work. The company requires its SME vendor companies to guarantee freedom of association and compliance with national labor legislation, also with regard to minimum wages. Telco was found to provide apprenticeship training to more than the prescribed number of apprentices (Dagaur 1997). Tata-AIG has developed an innovative microinsurance delivery model. Building around TBEM, the Tata Council for Community Initiatives (TCCI) helps Tata companies in streamlining social development, environmental management, biodiversity restoration and employee volunteering objectives into corporate processes. TCCI is headed by Kishor Chaukar, a member of the Tata Group Corporate Centre, and counts 43 chief executive officers of Tata companies among its members. The Tata Index for Sustainable Human Development, crafted in collaboration with the United Nations Development Programme (India), aims at directing, measuring and enhancing the community work that group enterprises undertake. TCCI is also involved in assisting Tata companies address the sustainability subject through the United Nations‘ Global Reporting Initiative.
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CHAPTER 8: Code of Ethics in TCS
The Tatas, have used the maxim 'leadership with trust' to promote ethical conduct throughout the group, and this is borne out by its longevity. The group's embedded values have been unity, integrity, excellence, responsibility and understanding. Since 1999, the group has circulated to all its employees a document called the 'Tata code of conduct', which is simple, easy to understand and easy to follow. In its journey towards institutionalization, the substance of the code is constantly communicated at all levels of the organisation, apart from parties with whom the Tatas do business.
The content of the code covers such areas as commitment towards national interest, maintaining harmonious relations with employees, abhorrence of bribery and corruption, avoidance of conflicts of interest, and emphasis on corporate social responsibility. The Tata code enhances internal and external trust and confidence.
The key pitfall to avoid while drawing up such codes is that the contents should not give employees a feeling that these are a set of dos and don'ts, or that they are too complex. In fact, whenever employees are faced with ethical dilemmas, the code should offer clear integrity standards to follow. The organization (through its senior leadership) should communicate often that it has formally adopted a specific position or set of beliefs regarding these fundamental values or principles and that it expects (and wants) employees to use them as the basis for business decision-making.
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A code's credibility depends largely on setting up an effective compliance programme, the key elements of which should include:
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Clear, established standards, policies and procedures that are reasonably capable of reducing the likelihood of violations of the code.
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Assigned supervision to high-level personnel. Each CEO should be the principal ethics officer, with the process being delegated, top down, to credible individuals in each company.
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A clearly designated ethics counselor officer. At Tatas the role of the ethics counsellor is well defined.
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Encouragement to whistleblowers to report violations, or possible violations, to the ethics counselor.
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Communication and training to all employees. This is the ultimate guarantee of the success of the ethics code.
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Establishment of an advisory channel so that employees can obtain advice regarding possible ethics dilemmas.
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Establishment of uniform disciplinary actions in case of violations and taking preventive steps to head off future violations, after understanding the 'root' causes of such violations; for example, by forming appropriate organisational policies.
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CHAPTER 9: TATA Code of Conduct
National Interest A Tata company shall be committed in all its actions to benefi t the economic development of the countries in which it operates and shall not engage in any activity that would adversely aff ect such objective. It shall not undertake any project or activity to the detriment of the nation‘s interests or those that will have any adverse impact on the social and cultural life patterns of its citizens. A Tata company shall conduct its business aff airs in accordance with the economic, development and foreign policies, objectives and priorities of the nation‘s government and shall strive to make a positive contribution to the achievement of such goals at the international, national and regional level as appropriate.
Financial Reporting and Records A Tata company shall prepare and maintain its accounts fairly and accurately in accordance with the accounting and fi nancial reporting standards that represent the generally accepted guidelines, principles, standards, laws and regulations of the country in which the company conducts its business affairs. Internal accounting and audit procedures shall fairly and accurately refl ect all of the company‘s business transactions and disposition of assets. All required information shall be accessible to company auditors and other authorised parties and government agencies. There shall be no willful omissions of any company transactions from the books and records, no advance income recognition and no hidden bank account and funds.
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Any willful material misrepresentation of and/or misinformation on the fi nancial accounts and reports shall be regarded as a violation of the code, apart from inviting appropriate civil or criminal action under the relevant laws.
Competition A Tata company shall fully strive for the establishment and support of a competitive open market economy in India and abroad and shall cooperate in the eff orts to promote the progressive and judicious liberalisation of trade and investment by a country. Specifi cally, a Tata company shall not engage in activities,which generate or support the formation of monopolies, dominant market positions, cartels and similar unfair trade practices. A Tata company shall market its products and services on its own merits and shall not make unfair and misleading statements about competitors‘ products and services. Any collection of competitive information shall be made only in the normal course of business and shall be obtained only through legally permitted sources and means.
Equal Opportunities Employer A Tata company shall provide equal opportunities to all its employees and all qualifi ed applicants for employment, without regard to their race, caste, religion, colour, ancestry, marital status, sex, age, nationality, disability and veteran status. Employees of a Tata company shall be treated with dignity and in accordance with the Tata policy to maintain a
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work environment free of sexual harassment, whether physical, verbal or psychological. Employee policies and practices shall be administered in a manner that would ensure that in all matters equal opportunity is provided to those eligible and the decisions are merit-based.
Gifts and Donations A Tata company and its employees shall neither receive nor off er or make, directly or indirectly, any illegal payments, remuneration, gifts, donations or comparable benefi ts that are intended to, or perceived to obtain business or uncompetitive favours for the conduct of its business. However, a Tata company and its employees may accept and off er nominal gifts which are customarily given and are of commemorative nature for special events.
Government Agencies A Tata company and its employees shall not off er or give any company funds or property as donation to any government agencies or their representatives, directly or through intermediaries, in order to obtain any favourable performance of offi cial duties.
Political Non-alignment A Tata company shall be committed to and support a functioning democratic constitution and system with a transparent and fair electoral system in India. A Tata company shall not support directly or indirectly any specific political party or candidate for political office. The
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company shall not offer or give any company funds or property as donations, directly or indirectly, to any specific political party, candidate or campaign.
Health, Safety and Environment A Tata company shall strive to provide a safe and healthy working environment and comply, in the conduct of its business affairs, with all regulations regarding the preservation of the environment of the territory it operates in. A Tata company shall be committed to prevent the wasteful use of natural resources and minimize any hazardous impact of the development, production, use and disposal of any of its products and services on the ecological environment.
Quality of Products and Services A Tata company shall be committed to supply goods and services of the highest quality standards backed by efficient after-sales service consistent with the requirements of the customers to ensure their total satisfaction. The quality standards of the company‘s goods and services should at least meet the required national standards and the company should endeavor to achieve international standards.
Corporate Citizenship A Tata company shall be committed to be a good corporate citizen not only in compliance with all relevant laws and regulations but also by actively assisting in the improvement of the
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quality of life of the people in the communities in which it operates with the objective of making them self-reliant. Such social responsibility would comprise: to initiate and support community initiatives in the fi eld of community health and family welfare, water management, vocational training, education and literacy, and encourage application of modern scientifi c and managerial techniques and expertise. This will be reviewed periodically in consonance with national and regional priorities. The company would also not treat these activities as optional ones, but would strive to incorporate them as an integral part of its usiness plan. The company would also encourage volunteering amongst its employees and help them to work in the communities. Tata companies are encouraged to develop social accounting systems and to carry out social audit of their operations.
Cooperation of Tata Companies A Tata company shall cooperate with other Tata companies by sharing physical, human and management resources as long as this does not adversely aff ect its business interests and shareholder value. In the procurement of products and services, a Tata company shall give preference to another Tata company as long as it can provide these on competitive terms relative to third parties.
Public Representation of the Company and the Group A Tata company honours the information requirements of the public and its stakeholders. In all its public appearances, with respect to disclosing company and business information to public constituencies such as the media, the financial community, employees and
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shareholders, a Tata company or the Tata Group shall be represented only by specifically authorized directors and employees. It will be the sole responsibility of these authorized representatives to disclose information on the company.
Third-Party Representation Parties that have business dealings with the Tata Group but are not members of the group such as consultants, agents, sales representatives, distributors, contractors, suppliers, etc. shall not be authorized to represent a Tata company if their business conduct and ethics are known to be inconsistent with the code.
Use of the Tata Brand The use of the Tata name and trademark owned by Tata Sons, shall be governed by manuals, codes and agreements issued by Tata Sons. The use of the Tata brand is defi ned in and regulated by the Tata Brand Equity & Business Promotion Agreement.
Group Policies A Tata company shall recommend to its board of directors the adoption of policies and guidelines periodically formulated by Tata Sons.
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Shareholders A Tata company shall be committed to enhance shareholder value and comply with all regulations and laws that govern shareholders‘ rights. The board of directors of a Tata company shall duly and fairly inform its shareholders about all relevant aspects of the company‘s business and disclose such information in accordance with the respective regulations and agreements.
Ethical Conduct Every employee of a Tata company, which shall include whole-time directors and the managing director, shall deal on behalf of the company with professionalism, honesty, integrity as well as high moral and ethical standards. Such conduct shall be fair and transparent and be perceived to be such by third parties. Every employee shall be responsible for the implementation of and compliance with the code in his professional environment. Failure to adhere to the code could attract the most severe consequences including termination of employment. Regulatory Compliance Every employee of a Tata company shall, in his business conduct, comply with all applicable laws and regulations, both in letter and in spirit, in all the territories in which he operates. If the ethical and professional standards set out in the applicable laws and regulations are below that of the code, then the standards of the code shall prevail.
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CHAPTER 10: Conclusion
To sum up, I believe that there is still a long way to go in terms of linking the view of organizations as cultures to the idea of business ethics. We have barely begun to map out the trail that should be followed. It certainly seems difficult to refute the assumption that the vision of the organization as a culture (and everything this implies) makes a significant contribution towards a de facto understanding of organizations. It also appears difficult to reject the idea that ?applied ethics is not just a matter of applying general principles, but also in discovering the internal good which each of these activities should provide to society, what goals each should pursue and what values and habits must be inculcated in them in order to reach these goals?. What‘s more, the consideration of business and organizations could be seen as one of the ?social spaces‘ in which it might be possible to regain a sense of belonging; as a ?social space‘ in which it is possible to forge bonds and create identities in relation to certain ends, and also as a ?social space‘ in which it is possible to create an added value understood and experienced as the personal contribution — through the organization — to society and the common good. In this way, businesses and organizations could reach a point where they are also ?ethical spaces‘ understood now as the social space where organizational particularities are the basis for shaping ?an ethos as a space for innovation, cooperation and responsibility?.
When taking the organization into consideration we must attempt to address the totality of persons and their interactions and relations. In this sense I feel that we can speak of ethics as a factor in integrating people in a corporation. But this must not be done from a purely individualistic vision but from a corporate understanding of dialogue because, among other
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things, integration always has a strong relational component. The idea, in short, is to not confuse integration with standardization but to make it possible for shared diversity to exist in the organization, jointly promoting belonging and autonomy. In the final instance, ?the value of a shared mission is not the outcome of the shared agreement itself, but the opportunity it creates for the tolerance of discord, for creative individual expression. Agreement, in fact, is never identity, and so even the appearance of unanimous agreement is only a comforting fiction?. I therefore believe that ethical integrity (and ethics as integration) in an organization must also be linked to dialogue, to the recognition of diversity and to promoting development processes and not be viewed simply as a way to make everyone alike or cut down coordination costs. I believe that on-going discussions between advocates of the view of companies as cultures and proponents of Aristotelian tradition not only facilitate the affirmation of the individual as a moral subject but also affirm the need to develop conventional morals which make the business ethics discourse meaningful and relevant. However, before this point is reached, we must accept the need to overcome that ambiguity that is always latent in any approach to corporate cultures: we must overcome the tendency to identify ethics with corporate culture. To sum up, then, my hypothesis is that unless a corporate culture is developed it will be impossible for either business ethics or organizational change and development processes to materialize. But identifying corporate ethics with corporate culture ultimately leads to the disappearance of ethics as such. The way this is handled will prove whether or not there is any truth in the idea of organizations or companies as ethical spaces.
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BIBLIOGRAPHY
PAINE, L.S. (1991), ?Ethics as Character Development, Reflections on the Objective of Ethics Education‘ in R.E. FREEMAN (ed.), Business Ethics. The State of the Art. Oxford, Oxford University Press, p. 67-85. PASCALE, R. (1985), ?The Paradox of ?Corporate Culture?. Reconciling Ourselves to Socialization‘ in California Management Review, 27(1985)2, p. 26-41. PETERS, T.J., WATERMAN, R.H. (1982), In Search of Excellence. New York, Harpers & Row. [En busca de laexcelencia. Barcelona, Folio, 1992]. PETTIGREW, A. (1979), ?On Studying Organizational Cultures‘ in Administrative Science Quarterly 24(1979), p.570-581. PETTIGREW, A. (1990), ?Studying Strategic Choice and Strategic Change. A Comment on Mintzberg and Waters, ?Does Decision Get in the Way?‘ in Organizations Studies (1990), p. 7-11. PHILLIPS, N. (1991), ?The Sociology of Knowledge, Toward an Existencial View of Business Ethics‘ in Journal of Business Ethics 10(1991), p. 787-795. Price Waterhouse — Cranfield (1992), Informe de conclusiones Barcelona. ESADE. RITCHIE, J.B. (1988), ?Organizational Ethics, Paradox and Paradigm‘ in N.D. WRIGHT, Papers in the Ethics of Administration. Provo, Brigham Young University, p. 159-184.
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Jones, Geoff and Peter Miskell (2007), ?Acquisitions and Firm Growth: Creating Unilever‘s Ice Cream and Tea Business,? Business History, vol. 49, no. 1: 8-28. Kedia Ben L., Debmalya Mukherjee, and Somnath Lahiri (2006), ?Indian business groups: Evolution and transformation,? Asia Pacific Journal of Management, Vol. 23, No. 4: 559– 577. Khanna, Tarun (2007), ?Tata-Corus: India‘s New Steel Giant,? The Economic Times, 14 February.
Deal, T.E & Kennedy A.A. (1982). Corporate Cultures. Reading, MA: Addison-Wesley.
Deshpande, R. & Farley, J. (1999). Executive Insights: Corporate Culture and Market Orientation: Comparing Indian and Japanese Firms. The Journal of International Marketing. Vol.7 No. 4 pp 111-127
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CHAPTER 1: Introduction to Corporate culture and Ethics
Corporate culture is thus a set of values, beliefs and behaviour patterns that form the core identity of organizations, and which help in shaping the behaviour of members. Deal and Kennedy (1982) put it simply as a set of values that underlie how we do our things around here. One type of corporate culture that has gained popularity in the human resource management literature is consensual corporate culture. Because of its nature I prefer to call it cooperative corporate culture. In that type of culture loyalty to the organization, personal commitment to the values and goals of the organization, teamwork and socialization are important (Deshpande & Farley, 1999). They are what Achebe calls the palm oil with which they eat their lives in the organization. I wish to use this platform to recommend cooperative corporate culture to higher education institutions seeking commitment to quality moves. Following a close scrutiny of Kurt Lewin‘s (1948) group dynamics, Johnson and Johnson, (1978; 1983) identified certain features of the internal dynamics of groups and organizations that have the consensual or cooperative corporate culture. These features are; • • • • • Interdependence Interaction Group processing Social skills Accountability
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Equal participation, and Shared leadership
Consequential actors in the higher educational institution must all perceive that the organization in which they are embedded is characterized by these conditions. This perception naturally, will energize and motivate them to gear their efforts to achieve the goals of the institution. Interdependence, or positive interdependence, is the recognition that no one actor can succeed in their tasks unless every other actor succeeds in theirs. Most or all actors must accept the fact that as they strive to achieve and sustain quality in academic standards and output, and as they strive to achieve effective management of their institution, they are in a position where they can swim together or sink together, depending on the total effect of their individual efforts. Interaction or promotive interaction is the mutual help that members offer to one another as they interact as members with a common objective. There should be a platform for actors to share camaraderie and experiences, ask questions, offer or receive explanations and seek clarifications. In other words, consequential actors in the institution must as a habit discusses their activities, experiences, problems, and successes with colleagues so that they can learn from one another. Meetings at the staff club or the senate/academic board can be suitable for formal and informal interactions. Group processing is the monitoring of the performance of the institution as a whole, as well as monitoring of the performance of groups and individual actors. Members of the institution
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must occasionally and periodically meet and reflect on how well they are achieving their goals. There is the need for periodic self-appraisal to determine the extent to which the institution is making success both as a corporate entity and as individual actors.
Accountability is the acceptance of the fact that each consequential actor in the institution is accountable to the group for tasks assigned to them. The lecturer, the head of department, the director, the dean, the senior administrator, and the student must recognize that they are individually and severally accountable to the institution for the roles they are supposed to play in the quality direction. By holding actors accountable, and by monitoring one another, free riders and social loafers can be identified and made aware of their non-performance.
Social skills are the tact and diplomacy with which actors monitor and thereby reprimand non performing actors. Reprimands and awareness creation must be made so tactfully that the pride of those in question will not be hurt. Therefore social skills must be applied when reprimanding actors for non-performance.
Equal participation is a condition in which all or most actors perceive that no one acts as a free rider, a social loafer, or a sucker. There should be no room for anyone to brood the idea that some actors are working while others are goofing. Nor should others see themselves as doing almost all the work. All must be perceived to be involved.
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Finally, shared leadership is the condition in which all or most actors perceive themselves to be leaders at their levels of operation. They must feel that each actor has a role as a leader in the local constituencies they operate. Each incumbent of a position must have initiative to offer the leadership that will contribute to the achievement of the goals set by the institution. Therefore, even though leadership is reposed in the Vice-Chancellor or President, in actual practice, leadership must be perceived to be diffuse and contextual (Opare, 2007).
Corporate/ Business Ethics: Ethics, also known as moral philosophy, is a branch of philosophy that involves systematizing, defending, and recommending concepts of right and wrong conduct. The term comes from the Greek word ethos, which means "character". Ethics is a complement to Aesthetics in the philosophy field of Axiology. In philosophy, ethics studies the moral behavior in humans, and how one should act. Ethics may be divided into four major areas of study: Meta-ethics, about the theoretical meaning and reference of moral propositions and how their truth values (if any) may be determined; Normative ethics, about the practical means of determining a moral course of action; Applied ethics, about how moral outcomes can be achieved in specific situations; Descriptive ethics, also known as comparative ethics, is the study of people's beliefs about morality;
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Business ethics (also corporate ethics) is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations. Business ethics has both normative and descriptive dimensions. As a corporate practice and a career specialization, the field is primarily normative. Academics attempting to understand business behavior employ descriptive methods. The range and quantity of business ethical issues reflects the interaction of profit-maximizing behavior with non-economic concerns. Interest in business ethics accelerated dramatically during the 1980s and 1990s, both within major corporations and within academia. For example, today most major corporations promote their commitment to non-economic values under headings such as ethics codes and social responsibility charters. Adam Smith said, "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices." Governments use laws and regulations to point business behavior in what they perceive to be beneficial directions. Ethics implicitly regulates areas and details of behavior that lie beyond governmental control. The emergence of large corporations with limited relationships and sensitivity to the communities in which they operate accelerated the development of formal ethics regimes.
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CHAPTER 2: Importance of Ethics and Values
Most of us would agree that it is ethics in practice that makes sense; just having it carefully drafted and redrafted in books may not serve the purpose. Of course all of us want businesses to be fair, clean and beneficial to the society. For that to happen, organizations need to abide by ethics or rule of law, engage themselves in fair practices and competition; all of which will benefit the consumer, the society and organization.
Primarily it is the individual, the consumer, the employee or the human social unit of the society who benefits from ethics. In addition ethics is important because of the following: ? Satisfying Basic Human Needs: Being fair, honest and ethical is one the basic human needs. Every employee desires to be such himself and to work for an organization that is fair and ethical in its practices.
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Creating Credibility: An organization that is believed to be driven by moral values is respected in the society even by those who may have no information about the working and the businesses or an organization. Infosys, for example is perceived as an organization for good corporate governance and social responsibility initiatives. This perception is held far and wide even by those who do not even know what business the organization is into.
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Uniting People and Leadership: An organization driven by values is revered by its employees also. They are the common thread that brings the employees and the
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decision makers on a common platform. This goes a long way in aligning behaviors within the organization towards achievement of one common goal or mission.
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Improving Decision Making: A man‘s destiny is the sum total of all the decisions that he/she takes in course of his life. The same holds true for organizations. Decisions are driven by values. For example an organization that does not value competition will be fierce in its operations aiming to wipe out its competitors and establish a monopoly in the market.
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Long Term Gains: Organizations guided by ethics and values are profitable in the long run, though in the short run they may seem to lose money. Tata group, one of the largest business conglomerates in India was seen on the verge of decline at the beginning of 1990‘s, which soon turned out to be otherwise. The same company‘s Tata NANO car was predicted as a failure, and failed to do well but the same is picking up fast now.
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Securing the Society: Often ethics succeeds law in safeguarding the society. The law machinery is often found acting as a mute spectator, unable to save the society and the environment. Technology, for example is growing at such a fast pace that the by the time law comes up with a regulation we have a newer technology with new threats replacing the older one. Lawyers and public interest litigations may not help a great deal but ethics can. Ethics tries to create a sense of right and wrong in the organizations and often when the law fails, it is the ethics that may stop organizations from harming the society or environment.
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CHAPTER 3: Impact of Values and Ethics on Corporate Strategy
Financial excellence results when a corporation's values and its ethics support its strategy. Many companies, unbeknownst to their leadership, operate with at least three separate and usually non-aligned value systems: the Values that management communicates both orally and in writing, the Values that employees believe drive management's conduct, and the Values that actually underpin the interpersonal dynamics of the organization. To gain strategic advantage, these three systems must first be identified, and then integrated into one system of values.
The Role of Ethics in Strategy Financial excellence results when a corporation's values and its ethics support its strategy. Ethics is a component of strategy because every business secures its future by making a contribution. The act of making a contribution is fundamentally an ethical activity. Identifying that contribution and maximizing its value is the field of strategy. Profit is the value the market attaches to an organization''s contribution and the efficiency with which it makes that contribution.
Employees, who see their company making a valued contribution (with profits as the outcome) rather than merely generating shareholder wealth, commit to their work with greater passion. This leads to a partnership between employees and corporate leadership that boosts innovation and uplifts performance. Ethics plays a vital role in the preservation of this priceless partnership, which can thrive only in an atmosphere of trust and integrity. Trust and
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integrity result from integrating an organization‘s disparate value systems and aligning them with the organization‘s strategic objectives.
What is Ethics and how does it Differ From Values? Values are beliefs about what is good and what is bad, what is right and what is wrong. Even people of different cultures differ very little about these beliefs (1). Nearly all people would like their children to be honest, fair, courteous, charitable and so on. People do however differ substantially when it comes to the "price" they are willing to pay for what is right (2). Ethics is the "cost" that a person will pay to uphold his values. It is the way a person translates his or her beliefs into actions (or abstentions) that entail a cost. Most people differ in their ethics rather than in their values. Thus, adopting a change in values alone will not impact on any aspect of organizational performance. Rather, the way an organization translates its values into an ethic will impact on its strategic objectives.
Integrating Disparate Corporate Values Many companies, unbeknownst to their leadership, operate with at least three separate and usually non-aligned value systems. Measuring the degree of alignment between these value systems, and determining what drives each of them, highlights the opportunities for change.
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The three value systems are: 1. The Espoused Value System - The Values that management communicates both orally and in writing. 2. The Perceived Value System - The Values that employees believe drive management's conduct. 3. The Actual Value System - The values that actually underpin the interpersonal dynamics of the organization. Management may have never previously articulated these values and employees may never have identified them.
To gain strategic advantage, these three systems must be integrated into one system of values. Furthermore, in order for these values to impact on financial performance, senior management must translate them into an ethic that supports the organization's objectives, that is aligned with its strategy and is understood at all levels of the organization.
Identifying Espoused, Perceived and Actual Values An organization's espoused values are either implied or articulated in its published materials (3). But the way employees' honestly perceive management's values are often very different from the values that management espouses. Qualitative research methodology can probe employee perceptions. However, exposing the actual values and ethics that drive the
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organization requires that one analyze the reasons for those perceptions in light of various management decisions and behaviors.
Espoused, Perceived & Actual Values in One System It is at times difficult for an organization's leadership to acknowledge the existence of divergent value systems and to understand the implications of the divergence. It is even more difficult for leaders to confront the truth of what are the values that really drive their organization. Yet this confrontation with the truth is a vital step in crafting an integrated value system that can transform an organization and impact its performance.
An integrated value system takes into account the strategic objectives of the organization, the personal values of leadership and the diversity of its employees. It aligns employee perceptions with management's espoused values. A system such as this can translate into the actual ethic that drives management decisions and conduct. This ethic differentiates the organization in all that it does.
Translating Value System into a Corporate Ethic Choosing values is easy. However leaders often rethink their organizations' values when they confront the behavioral and organizational changes that those values would compel when translated into a living ethic. They need to examine how congruent the chosen values are and
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how they promote or undermine corporate intent and strategic objectives. Only then can leadership comfortably commit to a new system with all of its defined implications.
How Values and Ethics Undermine Strategy We shall describe three cases of organizational values actually or potentially undermining organizational strategy and describe Strategic Business Ethic's approach to resolving the situations. The first case is in the Health Care Industry, the second in the Banking Industry, and the third is a case of Mergers and Acquisitions.
Case Study 1: The Health Care Industry The people in an organization who develop its strategy are not usually the same people tasked to develop the organization's values. Even when the same people undertake both of these tasks, they do not often appreciate the intricate relationship between values and strategy, nor do they have the expertise to translate values into ethics.
Conflicting Values Priorities The Vice-President of Human Resources of a large Health Care Organization was energetically imparting the value of caring in the organization. All of the staff espoused this
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value and the Chief Executive supported it. However, the Vice-president of Operations was driving a relentless strategy of cost reduction to ensure the survival of the organization in a tumultuous phase of the Health Care industry's evolution. Both leaders are people of impressive intellectual and moral stature, and drove their campaigns hard. Both initiatives were vital for the organization. Their two departments enjoyed excellent relations. Yet the value of caring undermined the efficiency strategy. Staff could not align the need to reduce patient/nurse ratios with the value of caring. They could not relate to the downsizing of certain departments in an organization that claimed to care not only for its patients but also for its staff. Not only did the organization fail to achieve its cost-cutting goals, but it was also experiencing reductions in standards of caring. More serious however was employees' loss of respect for leadership's integrity. The values initiative lost credibility, and employees saw the cost focus as the only thing that really counted. Patients were not the only ones who suffered from this deterioration. Everyone suffered, including the organization's capacity to sustain its dominant competitive position.
An Integrated Solution We changed cost-consciousness from a survival tactic to a value that integrated with patient caring. Nursing staff began to seek their own ways to cut costs as part of their patient caring, realizing that doing so would extend quality medical care to more people. Staff reductions initiated by the nursing staff themselves, did not cause resentment and did not impact negatively on the quality of patient caring. We translated these and other supporting values (beliefs) into an ethic (conduct) that management began to live by. Even senior personnel responsible for large amounts of revenue were counseled when they transgressed
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organizational values. No longer was rainmaking seen to be more important than quality in interpersonal conduct. Very soon this work began to impact achieving astonishing results in employee commitment to both cost efficiency and excellence of care.
Case Study 2: The Banking Industry
Loyalty vs. Excellence Throughout its long history, a prominent banking institution entrenched the values of fairness and loyalty among its managers and employees. When globalization and technology transformed the Financial Services industry, these values began to inhibit the Bank's drive for efficiency and excellence. The Bank downsized and started to reward peoples' performance rather than their loyalty. Employees felt alienated from the organizations' traditional ethics and began to passively sabotage the company's objectives.
An Honest Integration of Values We redefined the implications of loyalty and explained it as 100% mutual commitment during an employee's career at the Bank, but not lifetime employment. We taught the reasons why lifetime employment was neither strategically nor ethically appropriate. We explained fairness as treating all people according to the same value system rather than as treating all people the same. The value system dictated that greater contributors be treated more favorably than smaller contributors. This was not unfair. The impact on morale and employee
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retention during the changes was remarkable. It enabled management to focus on the Banks pressing strategic needs rather than pacifying disgruntle but key employees.
Case Study 3: Mergers and Acquisitions Growing Value by Merging Values The pressure to "close the deal" in mergers and acquisitions should never undermine the greatest imperative - delivering shareholder value. Often the most critical cause of failure is the clash of cultures and incompatible strategic thinking. Successful merging requires synchronizing the diverse skills of all employees into a vision for a new company that is greater than the sum of its parts. Architects of successful mergers and acquisitions should always diagnose the ethical dynamics of both companies and qualitatively evaluate the strategic thinking of each of them. This forewarns them of the potential pitfalls of the merger and assists them to design a merger strategy that extends beyond structure; a strategy to build an integrated ethic for the new corporate entity. When employees see this process of incorporating ethics into strategy they gain faith in the direction of the new entity, the integrity of its leadership and the brilliance of its future.
A Merger of Values In a recent merger, two successful banks were struggling to convince each other of the merits of their respective strategies in an attempt to truly merge rather than merely "take over". Our ethical and strategic diagnosis clarified to the combined management team why each strategy served the cultures of each bank in the past, but neither could serve the culture of the new
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entity. After understanding the value system of the new entity and we designed a strategy different to either of the original two but tailored to the new organization. In harsh conditions this accelerated revenue generation beyond expectation.
In Conclusion Organizations optimize their productivity when employees view their work as much more than the mere trading of skills for money. To achieve this heightened commitment, organizations should integrate their values, translate them into an ethic and align that ethic with their strategies. When an organization achieves this, its employees see their work as a vehicle with which to fulfill their own higher spiritual quests to make rare and needed contributions. The money they earn reflects the value of their contribution and provides them with both economic security and emotional self-esteem. This leads employees to invest their intellects and their passion in the work they do, driving their organizations' thinking to the very edge of competitiveness, and their performance... beyond that.
Footnotes: 1 - This theory was confirmed in research conducted by Strategic Business Ethics among 10 000 people of 10 different cultures and all management levels. (Lapin, B.D. 1992 The Impact of Cultural diversity on Corporate Ethics and Financial Performance. Research Report for JCI Ltd., Johannesburg.)
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2 - Everyone believes in honesty, for example, but in situations where honesty could entail substantial loss, many people will compromise their honesty. The point at which a person will make that compromise, varies from one person to another.
3 - These values are generally listed rather than presented as a system. A list reveals what values a company has chosen but it does not reveal the way that company thinks about values. When values are systematized, a moral philosophy emerges. The espoused values need systematization to reveal the thinking behind them.
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CHAPTER 4: Social Responsibility of Business
Social responsibility is an ethical or theory that an entity, be it an organization or individual, has an obligation to act to benefit society at large. Social responsibility is a duty every individual or organization has to perform so as to maintain a balance between the economy and the ecosystem. A trade-off always exists between economic development, in the material sense, and the welfare of the society and environment. Social responsibility means sustaining the equilibrium between the two. It pertains not only to business organizations but also to everyone whose any action impacts the environment. This responsibility can be passive, by avoiding engaging in socially harmful acts, or active, by performing activities that directly advance social goals. Businesses can use ethical decision making to secure their businesses by making decisions that allow for government agencies to minimize their involvement with the corporation. For instance if a company is and follows the United States Environmental Protection Agency (EPA) guidelines for emissions on dangerous pollutants and even goes an extra step to get involved in the community and address those concerns that the public might have; they would be less likely to have the EPA investigate them for environmental concerns. ?A significant element of current thinking about privacy, however, stresses "self-regulation" rather than market or government mechanisms for protecting personal information?. According to some experts, most rules and regulations are formed due to public outcry, which threatens profit maximization and therefore the well-being of the shareholder and that if there is not outcry there often will be limited regulation. Critics argue that Corporate social responsibility (CSR) distracts from the fundamental economic role of businesses; others argue that it is nothing more than superficial window-
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dressing; others argue that it is an attempt to pre-empt the role of governments as a watchdog over powerful Tricorp corporations though there is no systematic evidence to support these criticisms. A significant number of studies have shown no negative influence on shareholder results from CSR but rather a slightly negative correlation with improved shareholder returns.
Corporate social responsibility (CSR, also called corporate conscience, corporate citizenship, social performance, or sustainable responsible business/ Responsible Business) is a form of corporate self-regulation integrated into a business model. CSR policy functions as a built-in, self-regulating mechanism whereby a business monitors and ensures its active compliance within the spirit of the law, ethical standards, and international norms. CSR is a process with the aim to embrace responsibility for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere who may also be considered as stakeholders. The term "corporate social responsibility" came into common use in the late 1960s and early 1970s after many multinational corporations formed the term stakeholder, meaning those on whom an organization's activities have an impact. It was used to describe corporate owners beyond shareholders as a result of an influential book by R. Edward Freeman, Strategic management: a stakeholder approach in 1984. Proponents argue that corporations make more long term profits by operating with a perspective, while critics argue that CSR distracts from the economic role of businesses. Others argue CSR is merely window-dressing, or an attempt to pre-empt the role of governments as a watchdog over powerful multinational corporations. CSR is titled to aid an organization's mission as well as a guide to what the company stands for and will uphold to its consumers. Development business ethics is one of the forms of
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applied ethics that examines ethical principles and moral or ethical problems that can arise in a business environment. ISO 26000 is the recognized international standard for CSR. Public sector organizations (the United Nations for example) adhere to the triple bottom line (TBL). It is widely accepted that CSR adheres to similar principles but with no formal act of legislation. The UN has developed the Principles for Responsible Investment as guidelines for investing entities.
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CHAPTER 5: Corporate Culture and Ethics of Tata Group
Introduction Tata Group is an Indian multinational conglomerate company headquartered in Mumbai, Maharashtra, India.[3] It encompasses seven business sectors: communications and information technology, engineering, materials, services, energy, consumer products and chemicals. Tata Group was founded in 1868 by Jamsetji Tata as a trading company. It has operations in more than 80 countries across six continents. Tata Group has over 100 operating companies each of them operates independently out of them 32 are publicly listed. The major Tata companies are Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata Power, Tata Chemicals, Tata Global Beverages, Tata Teleservices, Titan Industries, Tata Communications and Taj Hotels. The combined market capitalisation of all the 32 listed Tata companies was $89.88 billion as of March 2012. Tata receives more than 58% of its revenue from outside India. Tata Group remains a family-owned business, as the descendants of the founder (from the Tata family) owns majority stake in the company. The current chairman of the Tata group is Cyrus Pallonji Mistry, who took over from Ratan Tata in 2012. Tata Sons is the promoter of all key Tata companies and holds the bulk of shareholding in these companies. The chairman of Tata Sons has traditionally been the chairman of the Tata group. About 66% of the equity capital of Tata Sons is held by philanthropic trusts endowed by members of the Tata family. The Tata Group and its companies & enterprises is perceived to be India's best-known global brand within and outside the country as per an ASSOCHAM survey. The 2009, annual survey
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by the Reputation Institute ranked Tata Group as the 11th most reputable company in the world. The survey included 600 global companies. The Tata Group has helped establish and finance numerous quality researches, educational and cultural institutes in India. The group was awarded the Carnegie Medal of Philanthropy in 2007 in recognition of its long history of philanthropic activities.
History The Tata Group was founded as a private trading firm in 1868 by entrepreneur and philanthropist Tata. In 1902 the group incorporated the Indian Hotels Company to commission the Taj Mahal Palace & Tower, the first luxury hotel in India, which opened the following year. After Jamsetji‘s death in 1904, his son Sir Dorab Tata took over as chair of the Tata Group. Under Dorab‘s leadership the group quickly diversified, venturing into a vast array of new industries, including steel (1907), electricity (1910), education (1911), consumer goods (1917), and aviation (1932).[14] Following Dorab‘s death in 1932, Sir Nowroji Saklatwala became the group‘s chair. Six years later Jehangir Ratanji Dadabhoy Tata (J.R.D.) took over the position. His continued expansion of the company into new sectors—such as chemicals (1939), technology (1945), cosmetics (1952), marketing, engineering, and manufacturing (1954), tea (1962), and software services (1968)—earned Tata Group international recognition. In 1945 Tata Group established the Tata Engineering and Locomotive Company (TELCO) to manufacture engineering and locomotive products; it was renamed Tata Motors in 2003. In 1991 J.R.D.‘s nephew, Indian business mogul Ratan Naval Tata, succeeded him as chairman of the Tata Group. Upon assuming leadership of the conglomerate, Ratan aggressively sought to expand
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it, and increasingly he focused on globalizing its businesses. In 2000 the group acquired London-based Tetley Tea, and in 2004 it purchased the truck-manufacturing operations of South Korea‘s Daewoo Motors. In 2001 Tata Group partnered with American International Group, Inc. (AIG) to create the insurance company Tata-AIG.
This section lists the Tata companies and details their business: Chemicals ? ? ? ? ? ? ? Tata Chemicals Rallis India Tata Pigments Limited General Chemical Industrial Products Brunner Mond Advinus Therapeutics Magadi Soda Company
Consumer Products ? ? ? ? ? Tata Salt I-shakti Casa Décor Tata Swach Tata Global Beverages
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?
Tata Tea Limited is the world's second largest manufacturer of packaged tea and tea products.
? ? ? ? ? ? ? ? ? ? ? ? ? ?
Eight O'Clock Coffee Tata Ceramics Infiniti Retail (Crom?) Tetley Tata Coffee Tata Industries Titan Industries Trent (Westside) Tata Sky TajAir Tata International Ltd. Tanishq Tata Refractories Westland
Energy ? ? ? ? ? Tata Power is one of the largest private sector power companies. Tata BP Solar, a joint venture between Tata Power and BP Solar Hooghly Met Coke and Power Company Jamshedpur Utilities and Services Company Tata Power Delhi Distribution Ltd (Formerly Known as North Delhi Power Ltd)
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? ? ?
Powerlinks Transmission Tata Power Trading Tata Projects
Engineering ? ? ? ? TAL Manufacturing Solutions Tata AutoComp Systems Limited (TACO) Hispano Carrocera Tata Motors, manufacturer of commercial vehicles (largest in India) and passenger cars ? ? ? ? ? ? ? ? ? ? ? ? ? ? Jaguar Land Rover (Manager of Tata's British brands Jaguar cars and Land Rover Tata Daewoo Commercial Vehicle Tata Projects Tata Consulting Engineers Limited Tata Cummins Telco Construction Equipment TRF Voltas, consumer electronics company Voltas Global Engineering Centre Tata Advanced Materials Tata Advanced Systems Tata Motors European Technical Centre Tata Petrodyne Tata Precision Industries
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?
Telcon Construction Equipment
Information Systems and Communications ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Computational Research Laboratories INCAT Nelco Nelito Systems Tata Business Support Services Tata Consultancy Services Ltd. (TCS) is Asia's largest software company. Tata Elxsi Neotel Tata Interactive Systems Tata Technologies Limited Tata Teleservices Virgin Mobile India Tata Communications CMC Limited VSNL International Canada Tatanet, Managed connectivity and VSAT service provider Tata Teleservices Tata Teleservices (Maharashtra)
Services ? Tata Sons
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? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?
TKM Global ( Logistics and Supply Chain ) www.tkmglobal.net The Indian Hotels Company Ginger Hotels Roots Corporation Landmark Bookstores Tata Housing Development Company Ltd. (THDC) Tata Limited TATA AIG General Insurance TATA AIG Life Insurance Tata AG Tata Asset Management Tata Financial Services Tata Capital Tata International AG Tata Investment Corporation Tata Advanced Systems Limited Drive India Enterprise Solutions Mjunction services Tata Quality Management Services Tata Realty and Infrastructure Limited Tata Interactive Systems Tata Africa Holdings Tata AutoComp Systems Tata Industrial Services
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? ? ? ? Steel ? ? ? ? ? ? ? ? ? ? ? ?
Tata NYK Tata Services Tata Strategic Management Group Taj Hotels
Tata Steel Tata Steel Europe Tata Steel KZN Tata Steel Processing and Distribution JAMIPOL NatSteel Holdings Tata BlueScope Steel Tata Metaliks Tata Sponge Iron Tayo Rolls The Tinplate Company of India TM International Logistics
Core Sciences ? ? Tata Institute of Fundamental Research Tata Institute of Social Sciences
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CHAPTER 6: Tata Culture
One of the greatest frustrations for consultants and others is in getting organisations to change, and in particular at the top. If you get a chance to work with a senior team who can see that culture needs to be changed, then here is a model and a method that you can use to get to the core. 'TATA' means 'management Thinking and Acting that leads to employee Thinking and Acting. This is a very simple model of organizational culture that is easy to understand and can be used to help change the culture to something more powerful. It is often a good idea to discuss what you are going to do with the senior manager as this person's support may be important if the rest of the team start to dig their heels in during steps 3 and 4.
1. Employee Action The easiest place to start with the top team when discussing culture is what they see and hear. Just ask them: What do you see and hear in this culture that you'd like to change? Then stand back as they list all the things that have been frustrating them about their employees over past year or more. Typical moans include: ? ? ? ? People not sticking to commitments Lack of loyalty Not understanding strategic needs Lack of real concern for customers
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? ?
Resistance to new ideas Lack of creativity
...and so on. Write these down on a flipchart. If the list gets long, help them reduce it to the 'top five' (or even three).
2. Employee Thinking Culture is not just about how people act -- it is also about attitudes, values, beliefs, mental models, emotions and so on. Next talk about this and how thinking leads to action and draw the basic cultural model:
With this you can discuss how employees think drives what they do. Again, this is simple logic that is easy to understand and accept. Depending on how rational or open the team is, you can also 'and feeling' after 'thinking'. List the top five actions under 'employee action' and now ask the management team to list how they believe employees are thinking in ways that leads to the identified action. This is a little harder task but most managers will have few problems coming up with assumptions about what the employees may be thinking. Remind them as necessary that their employees are human and that employee thinking will make sense, at least to them. Typical thinking could include:
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? ? ? ? ?
What's in it for me Do what I'm told No point rocking the boat Do least work for maximum pay Keep your head down
3. Management Action Now it starts to get more interesting and stage 3 ideas may require some discussion before you start listing. The primary principle is that a significant driver of what employees thinks is what managers say and do. Of course there are other forces on employees but what managers say and do has a huge effect -- sometimes more than managers may think (and if employee thinking is not affected by what managers say and do then there would be an even bigger problem). This can be shown as below. Putting 'Management Action' above 'Employee Thinking', rather than to the left, is subtle hints of superiority that may help managers find it easier to accept the ideas.
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Now you can ask 'What are you saying and doing that is leading to what employees think?' This can be a very difficult moment for managers who do not want to accept responsibility for what employees think and do and you may need to keep the dialogue going for a while before you write anything down. You may need to press them on this, asking such as 'Are those actions really leading employees to think like that?' until you get to realistic information. Discussions can include such as whether managers actually follow 'company values' as published, and what employees think about this. As appropriate, you can change or extend the 'Employee Thinking' box. Ask permission, then write down the words and actions they tell you about, above the 'Management Action' box. If a longer list appears, then help them prioritise for the top three to five actions that have the greatest effect on employee thinking. If this segment worked, there should be a significant number of 'aha's in recognizing what managers say and do affects culture and hence how it must change.
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4. Management Thinking If step 3 was difficult, then step 4 may well be even more difficult again, although it may also be easier if the penny has dropped and the principle accepted by now. Just as employee thinking drives employee action, so also does management thinking drive management action. So the question now is 'What are your thoughts that are leading to what you say and do?' Draw in the last box as below. There should be no debate about whether this is valid as the 'Thinking - Action' principle has already been established.
Again, this may require some dialogue before you start to write things down (when you do, put them above 'Management Thinking'). The critical message is that how they think and feel is at the root of a causal chain that leads directly to what employees say and do, and hence to change the culture of the organisation they must change what and how they think - which can be a very scary subject and hence need plenty of space and support to happen. Discussions can include questions about what they think about employees, what their values really are, and so on. In this session do not try to get it all out but just enough for them to realize how what they think is very important.
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Further possibilities This is a simple but powerful model which you can use in a number of additional ways. Deeper stuff about thinking From this session additional sessions can be held to explore what and how the management team thinks. If the first session has provided the wake-up call and an understanding of the importance of how they think then these sessions can be used to dig into personal and interpersonal drivers and dynamics. Management and Employee cultures Taking the simple 'thinking and acting' culture model, management culture and employee culture may be explored separately and reasons for differences discussed.
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Influence and spirals Management Action that changes Employee Thinking is pretty much what leadership is. A powerful discussion about leadership can therefore be had by considering this link. An additional link may be added between Employee Action and Management Thinking. How we think is driven by what others say and do and the way managers think is often strongly affected by how employees act. This link completes a causal circle, which means there can be spirals of thinking and acting that can both improve and degrade the power of the organisation.
An interesting part of this discussion may be about how strong the Management Action Employee Thinking link is, as compared with the Employee Action - Management Thinking link. Ideally, both exist but the biggest influence is the manager to employee direction. Sometimes management thinking is more strongly influenced by a wilful workforce and effectively the 'tail wags the dog'.
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The balance of appropriate strengths between these two links depends on the industry, for example in intellectual and creative businesses a strong upward link might be a good idea. The question is to find the best balance for the business the company is in.
Theory of mind Another area for possible exploration is in how we think others are thinking. We all use a great deal of 'theory of mind' in guessing what others are thinking and we often get it very wrong.
The question may thus be discussed about how managers think employees think and what employees think that managers think. This is a ripe topic for realizing that how you think others think is often a long way from how they are really thinking.
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A session on theory of mind is best done as a facilitated dialogue between managers and employees. It is critical for this to succeed that an atmosphere of trust and openness is created. Multiple levels The model as presented divides simply along the 'manager-employee' line, which is often a significant cultural divide. Depending on the organisation, more than one level of analysis may be completed. The framework can also be used to examine any connected cultural systems, for example between marketing and R&D or between the local company and headquarters. As-is and To-be The first session (or sessions) is about how things are at the moment and should probably be kept that way. If you have energized the team then a future session to think about how things could be different may be held. Go through the same steps but now think about how they would like things to be. Thus ask: What do we want employees to say and do? So what must they think and feel that will drive this action? So what must managers say and do to lead employees to these thoughts? And how must managers think and feel in order that they will act in the appropriate way? Of course the next question is, 'Now that we know where we are and where we want to go, how do we get there?' Which is a whole conversation or more.
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CHAPTER 7: PHILANTHROPY AND SOCIAL ENGAGEMENT
The last specificity of Tata is the fact that nearly two-thirds of the equity of Tata Sons is held by philanthropic trusts. The Sir Ratan Tata Trust was established in 1918 following the death of Sir Ratan Tata, the younger son of Jamsetji Tata, and it operates to further ?the advancement of education, learning and industry in all its branches?. The Sir Dorabji Tata Trust was established in 1932 by Sir Dorab Tata, Jamsetji‘s elder son, who bequeathed all his wealth, including the famed 245-carat Jubilee diamond, just before his death. The Trust is known for promoting pioneering institutions of national importance. The ?allied trusts‘ component of the Sir Dorabji Tata Trust comprises the Tata Social Welfare Trust, the RD Tata Trust, the Tata Education Trust, the JRD Tata Trust, the JRD Tata and Thelma Tata Trust, the Jamsetji Tata Trust, the JN Tata Endowment, the Lady Meherbai Tata Memorial Trust, and the Lady Meherbai Tata Education Trust. The MK Tata Trust, set up in 1958 by Minocher K. Tata with his personal resources, delivers research grants and scholarships for the advancement of learning in all its branches as well as donating medical and other relief during natural calamities. The Tata Social Welfare Trust and the Tata Education Trust were founded in 1990. The Trusts‘ trustees mostly belong to the family, although selected executives (such as Krishna Kumar) are also appointed.
In a 2005 interview to The McKinsey Quarterly, Ratan Tata clearly expressed the corporate philosophy: ?I think it is wrong for a company in India to operate in exactly the same way, without any additional responsibilities, as if it were operating in the United States, let‘s say. And even in the United States, I think if you had an enlightened corporation that went into the Deep South, you would see more of a sense of social responsibility, of doing more for the
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community, than the company might accept in New York City or Boston. Because it is inevitable that you need to be a good corporate citizen in that kind of environment. And companies that are not good corporate citizens — those that don‘t hold to standards and that allow the environment and the community to suffer — are really criminals in today‘s world.? In FY 2007, Tata Trusts‘ total grants amounted to U$58 million and the Tata companies‘ ?contribution to social welfare? was US$61 million. Individual companies‘ examples are illustrative of the scale and scope of this engagement. In 2001, Jamshedpur Utilities and Services Company Limited (JUSCO), a wholly owned subsidiary of Tata Steel, was running 23 schools with 22,474 pupils and a hospital with a capacity of 1,200 beds. Tata Motors‘ code of conduct is formulated around the ILO Declaration on Fundamental Principles and Rights at Work. The company requires its SME vendor companies to guarantee freedom of association and compliance with national labor legislation, also with regard to minimum wages. Telco was found to provide apprenticeship training to more than the prescribed number of apprentices (Dagaur 1997). Tata-AIG has developed an innovative microinsurance delivery model. Building around TBEM, the Tata Council for Community Initiatives (TCCI) helps Tata companies in streamlining social development, environmental management, biodiversity restoration and employee volunteering objectives into corporate processes. TCCI is headed by Kishor Chaukar, a member of the Tata Group Corporate Centre, and counts 43 chief executive officers of Tata companies among its members. The Tata Index for Sustainable Human Development, crafted in collaboration with the United Nations Development Programme (India), aims at directing, measuring and enhancing the community work that group enterprises undertake. TCCI is also involved in assisting Tata companies address the sustainability subject through the United Nations‘ Global Reporting Initiative.
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CHAPTER 8: Code of Ethics in TCS
The Tatas, have used the maxim 'leadership with trust' to promote ethical conduct throughout the group, and this is borne out by its longevity. The group's embedded values have been unity, integrity, excellence, responsibility and understanding. Since 1999, the group has circulated to all its employees a document called the 'Tata code of conduct', which is simple, easy to understand and easy to follow. In its journey towards institutionalization, the substance of the code is constantly communicated at all levels of the organisation, apart from parties with whom the Tatas do business.
The content of the code covers such areas as commitment towards national interest, maintaining harmonious relations with employees, abhorrence of bribery and corruption, avoidance of conflicts of interest, and emphasis on corporate social responsibility. The Tata code enhances internal and external trust and confidence.
The key pitfall to avoid while drawing up such codes is that the contents should not give employees a feeling that these are a set of dos and don'ts, or that they are too complex. In fact, whenever employees are faced with ethical dilemmas, the code should offer clear integrity standards to follow. The organization (through its senior leadership) should communicate often that it has formally adopted a specific position or set of beliefs regarding these fundamental values or principles and that it expects (and wants) employees to use them as the basis for business decision-making.
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A code's credibility depends largely on setting up an effective compliance programme, the key elements of which should include:
?
Clear, established standards, policies and procedures that are reasonably capable of reducing the likelihood of violations of the code.
?
Assigned supervision to high-level personnel. Each CEO should be the principal ethics officer, with the process being delegated, top down, to credible individuals in each company.
?
A clearly designated ethics counselor officer. At Tatas the role of the ethics counsellor is well defined.
?
Encouragement to whistleblowers to report violations, or possible violations, to the ethics counselor.
?
Communication and training to all employees. This is the ultimate guarantee of the success of the ethics code.
?
Establishment of an advisory channel so that employees can obtain advice regarding possible ethics dilemmas.
?
Establishment of uniform disciplinary actions in case of violations and taking preventive steps to head off future violations, after understanding the 'root' causes of such violations; for example, by forming appropriate organisational policies.
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CHAPTER 9: TATA Code of Conduct
National Interest A Tata company shall be committed in all its actions to benefi t the economic development of the countries in which it operates and shall not engage in any activity that would adversely aff ect such objective. It shall not undertake any project or activity to the detriment of the nation‘s interests or those that will have any adverse impact on the social and cultural life patterns of its citizens. A Tata company shall conduct its business aff airs in accordance with the economic, development and foreign policies, objectives and priorities of the nation‘s government and shall strive to make a positive contribution to the achievement of such goals at the international, national and regional level as appropriate.
Financial Reporting and Records A Tata company shall prepare and maintain its accounts fairly and accurately in accordance with the accounting and fi nancial reporting standards that represent the generally accepted guidelines, principles, standards, laws and regulations of the country in which the company conducts its business affairs. Internal accounting and audit procedures shall fairly and accurately refl ect all of the company‘s business transactions and disposition of assets. All required information shall be accessible to company auditors and other authorised parties and government agencies. There shall be no willful omissions of any company transactions from the books and records, no advance income recognition and no hidden bank account and funds.
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Any willful material misrepresentation of and/or misinformation on the fi nancial accounts and reports shall be regarded as a violation of the code, apart from inviting appropriate civil or criminal action under the relevant laws.
Competition A Tata company shall fully strive for the establishment and support of a competitive open market economy in India and abroad and shall cooperate in the eff orts to promote the progressive and judicious liberalisation of trade and investment by a country. Specifi cally, a Tata company shall not engage in activities,which generate or support the formation of monopolies, dominant market positions, cartels and similar unfair trade practices. A Tata company shall market its products and services on its own merits and shall not make unfair and misleading statements about competitors‘ products and services. Any collection of competitive information shall be made only in the normal course of business and shall be obtained only through legally permitted sources and means.
Equal Opportunities Employer A Tata company shall provide equal opportunities to all its employees and all qualifi ed applicants for employment, without regard to their race, caste, religion, colour, ancestry, marital status, sex, age, nationality, disability and veteran status. Employees of a Tata company shall be treated with dignity and in accordance with the Tata policy to maintain a
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work environment free of sexual harassment, whether physical, verbal or psychological. Employee policies and practices shall be administered in a manner that would ensure that in all matters equal opportunity is provided to those eligible and the decisions are merit-based.
Gifts and Donations A Tata company and its employees shall neither receive nor off er or make, directly or indirectly, any illegal payments, remuneration, gifts, donations or comparable benefi ts that are intended to, or perceived to obtain business or uncompetitive favours for the conduct of its business. However, a Tata company and its employees may accept and off er nominal gifts which are customarily given and are of commemorative nature for special events.
Government Agencies A Tata company and its employees shall not off er or give any company funds or property as donation to any government agencies or their representatives, directly or through intermediaries, in order to obtain any favourable performance of offi cial duties.
Political Non-alignment A Tata company shall be committed to and support a functioning democratic constitution and system with a transparent and fair electoral system in India. A Tata company shall not support directly or indirectly any specific political party or candidate for political office. The
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company shall not offer or give any company funds or property as donations, directly or indirectly, to any specific political party, candidate or campaign.
Health, Safety and Environment A Tata company shall strive to provide a safe and healthy working environment and comply, in the conduct of its business affairs, with all regulations regarding the preservation of the environment of the territory it operates in. A Tata company shall be committed to prevent the wasteful use of natural resources and minimize any hazardous impact of the development, production, use and disposal of any of its products and services on the ecological environment.
Quality of Products and Services A Tata company shall be committed to supply goods and services of the highest quality standards backed by efficient after-sales service consistent with the requirements of the customers to ensure their total satisfaction. The quality standards of the company‘s goods and services should at least meet the required national standards and the company should endeavor to achieve international standards.
Corporate Citizenship A Tata company shall be committed to be a good corporate citizen not only in compliance with all relevant laws and regulations but also by actively assisting in the improvement of the
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quality of life of the people in the communities in which it operates with the objective of making them self-reliant. Such social responsibility would comprise: to initiate and support community initiatives in the fi eld of community health and family welfare, water management, vocational training, education and literacy, and encourage application of modern scientifi c and managerial techniques and expertise. This will be reviewed periodically in consonance with national and regional priorities. The company would also not treat these activities as optional ones, but would strive to incorporate them as an integral part of its usiness plan. The company would also encourage volunteering amongst its employees and help them to work in the communities. Tata companies are encouraged to develop social accounting systems and to carry out social audit of their operations.
Cooperation of Tata Companies A Tata company shall cooperate with other Tata companies by sharing physical, human and management resources as long as this does not adversely aff ect its business interests and shareholder value. In the procurement of products and services, a Tata company shall give preference to another Tata company as long as it can provide these on competitive terms relative to third parties.
Public Representation of the Company and the Group A Tata company honours the information requirements of the public and its stakeholders. In all its public appearances, with respect to disclosing company and business information to public constituencies such as the media, the financial community, employees and
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shareholders, a Tata company or the Tata Group shall be represented only by specifically authorized directors and employees. It will be the sole responsibility of these authorized representatives to disclose information on the company.
Third-Party Representation Parties that have business dealings with the Tata Group but are not members of the group such as consultants, agents, sales representatives, distributors, contractors, suppliers, etc. shall not be authorized to represent a Tata company if their business conduct and ethics are known to be inconsistent with the code.
Use of the Tata Brand The use of the Tata name and trademark owned by Tata Sons, shall be governed by manuals, codes and agreements issued by Tata Sons. The use of the Tata brand is defi ned in and regulated by the Tata Brand Equity & Business Promotion Agreement.
Group Policies A Tata company shall recommend to its board of directors the adoption of policies and guidelines periodically formulated by Tata Sons.
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Shareholders A Tata company shall be committed to enhance shareholder value and comply with all regulations and laws that govern shareholders‘ rights. The board of directors of a Tata company shall duly and fairly inform its shareholders about all relevant aspects of the company‘s business and disclose such information in accordance with the respective regulations and agreements.
Ethical Conduct Every employee of a Tata company, which shall include whole-time directors and the managing director, shall deal on behalf of the company with professionalism, honesty, integrity as well as high moral and ethical standards. Such conduct shall be fair and transparent and be perceived to be such by third parties. Every employee shall be responsible for the implementation of and compliance with the code in his professional environment. Failure to adhere to the code could attract the most severe consequences including termination of employment. Regulatory Compliance Every employee of a Tata company shall, in his business conduct, comply with all applicable laws and regulations, both in letter and in spirit, in all the territories in which he operates. If the ethical and professional standards set out in the applicable laws and regulations are below that of the code, then the standards of the code shall prevail.
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CHAPTER 10: Conclusion
To sum up, I believe that there is still a long way to go in terms of linking the view of organizations as cultures to the idea of business ethics. We have barely begun to map out the trail that should be followed. It certainly seems difficult to refute the assumption that the vision of the organization as a culture (and everything this implies) makes a significant contribution towards a de facto understanding of organizations. It also appears difficult to reject the idea that ?applied ethics is not just a matter of applying general principles, but also in discovering the internal good which each of these activities should provide to society, what goals each should pursue and what values and habits must be inculcated in them in order to reach these goals?. What‘s more, the consideration of business and organizations could be seen as one of the ?social spaces‘ in which it might be possible to regain a sense of belonging; as a ?social space‘ in which it is possible to forge bonds and create identities in relation to certain ends, and also as a ?social space‘ in which it is possible to create an added value understood and experienced as the personal contribution — through the organization — to society and the common good. In this way, businesses and organizations could reach a point where they are also ?ethical spaces‘ understood now as the social space where organizational particularities are the basis for shaping ?an ethos as a space for innovation, cooperation and responsibility?.
When taking the organization into consideration we must attempt to address the totality of persons and their interactions and relations. In this sense I feel that we can speak of ethics as a factor in integrating people in a corporation. But this must not be done from a purely individualistic vision but from a corporate understanding of dialogue because, among other
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things, integration always has a strong relational component. The idea, in short, is to not confuse integration with standardization but to make it possible for shared diversity to exist in the organization, jointly promoting belonging and autonomy. In the final instance, ?the value of a shared mission is not the outcome of the shared agreement itself, but the opportunity it creates for the tolerance of discord, for creative individual expression. Agreement, in fact, is never identity, and so even the appearance of unanimous agreement is only a comforting fiction?. I therefore believe that ethical integrity (and ethics as integration) in an organization must also be linked to dialogue, to the recognition of diversity and to promoting development processes and not be viewed simply as a way to make everyone alike or cut down coordination costs. I believe that on-going discussions between advocates of the view of companies as cultures and proponents of Aristotelian tradition not only facilitate the affirmation of the individual as a moral subject but also affirm the need to develop conventional morals which make the business ethics discourse meaningful and relevant. However, before this point is reached, we must accept the need to overcome that ambiguity that is always latent in any approach to corporate cultures: we must overcome the tendency to identify ethics with corporate culture. To sum up, then, my hypothesis is that unless a corporate culture is developed it will be impossible for either business ethics or organizational change and development processes to materialize. But identifying corporate ethics with corporate culture ultimately leads to the disappearance of ethics as such. The way this is handled will prove whether or not there is any truth in the idea of organizations or companies as ethical spaces.
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BIBLIOGRAPHY
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