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Case Study On Ethics and Values

The board of directors of a cosmetics company is questioning the CEO's leadership abilities due to rumors about his personal affairs, including alleged infidelities and favoritism towards female employees. While the CEO has transformed the company and increased profits, his behavior outside of work may negatively impact the company's reputation and culture.

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Subhasish Mitra
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318 views2 pages

Case Study On Ethics and Values

The board of directors of a cosmetics company is questioning the CEO's leadership abilities due to rumors about his personal affairs, including alleged infidelities and favoritism towards female employees. While the CEO has transformed the company and increased profits, his behavior outside of work may negatively impact the company's reputation and culture.

Uploaded by

Subhasish Mitra
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Case Study 3

A QUESTION OF CHARACTER
For the most part, Pakme's board has been thrilled with CEO Jitesh Raina's
performance. Raina, after all, had transformed the private-label cosmetics
company into a retail powerhouse with flashy outlets from Mumbai to Delhi.
In addition to saving the company from bankruptcy shortly after his arrival
in 1992, Raina had made Pakme a fun and exciting place to work,
increasing workers wages and creating boundless opportunities for anyone
willing to work hard and think out of the box. He had also brought more
women and people of color on board. And he had made many employees
wealthy, with generous stock giveaways and options for the most senior
employees down to the most junior. Pakme's stock price had grown tenfold
during Rainas tenure. But Raina's personal affairs were beginning to call
into question his leadership abilities. The local paper's gossip column
recently ran a photo of Raina a married man leaving a gala event with a
beautiful young woman from the company, with the headline Whos That
Girl? Indeed, rumors about Rainas philandering were starting to take on a
harsher edge. Some people believed his secretary left because Raina had
sexually harassed her. Others believed a mailroom employee had been
promoted to factory supervisor because of her affair with the CEO. Having
warned Raina several times about his alleged infidelities, the board is stuck.

QUESTIONS
1. What should the board do about Rainas extracurricular behavior?
2. Does Rainas personal behavior even affect the company?
3. Is what Raina does outside the office the board's concern?

The content of this document is copyright to Altius Institute of Universal Studies

Guidelines for Case Study 3


Case summary in brief: The case revolves around a question of morality and ethics
where ones behaviour outside the company premises is questioned. Despite his
stellar performance, the board is unhappy with his conduct. How does his behavior
affect the company and should he be allowed to continue?
Discuss ethics and code of conduct of a company: Most of the companies
have code of conduct. They should and they do adhere to it. It is given whenever
an employee joins them and remains the same set of rules irrespective of who the
person is.
Discuss the importance of corporate governance amongst investors and
regulators: Since the Enron debacle, corporate governance has shot into lime
light. Though it has more to do with financial disclosures and independence of
directors it falls in the larger framework of ethics
Discuss how Rainas behavior might affect the business (quote the
mailroom e.g.): If Raina takes favors from employees in return for better
compensation or better positions, it will be disastrous for the performance of the
company. Fairness and equity will go for a toss.
Explain the concept of image of company / reputation of company: A
lot of investors invest in companies which have spotless reputation. Credit rating
of a company largely revolves around reputation of the company. Sales of the
company might also go down given the dubious behavior of Raina
On the other hand, question the proof of his infidelities: It is always good
to question the assumptions of case. Here Raina just walked out of a gala event
with a beautiful woman. Though reporters and board alike has been talking about
his alleged philandering, there is no proof or confession which substantiates this
fact
Discuss the unceremonious exit of Phaneesh Murthy of Infosys, Bill
Clinton: Phaneesh Murthy was once the head of the sales of global delivery of
Infosys. He was talked as the other Murthy who drives Infosys. He was also alleged
to have sexual escapades with some female there and the Infosys management
was unequivocal about his exit. Though he has started a successful venture again
(IGate) which shows his managerial capabilities, this real case is an insight into
how business acumen and ethics is better separated.

The content of this document is copyright to Altius Institute of Universal Studies

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