GROUP NO.

UNIVERSITY OF MUMBAI
THAKUR COLLEGE OF SCIENCE AND
COMMERCE

PROJECT –
ETHICS
 ACKNOWLEDGEMENT

We the student of Thakur college of Commerce and

Science, Second year in Management studies had a great
pleasure in presenting our effects of developing a complete
project in very satisfactory and appreciable manner.
Our efforts has been a success due to co-operation of an
entire department without which the project of this magnitude,
given restriction of time, could not have been possible.
We owe to project guide “PARUL Madam”, debt of
gratitude without help, expert guidance & invaluable co-operation
this project would not have been possible.
We are greatly thankful to my honorary BMS
COORDINATOR “Dr. Richa Jain” & management provided the
facility to complete the project.
 GROUP MEMBERS

NAME ROLL NO. DIVISION

Sonal Madrecha 5701 ‘A’
Karishma Shah 5702 ‘A’
Purvai Gupta 5712 ‘A’
Riya S. Garg 5713 ‘A’
Pratik Sharma 5724 ‘A’
Chirag Jain 5733 ‘A’

INTRODUCTION
Business ethics (also known as 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 business organizations
as a whole. Applied ethics is a field of ethics that deals with
ethical questions in many fields such as medical, technical, legal
and business ethics.
Business ethics can be both a normative and
a descriptive discipline. As a corporate practice and a career
specialization, the field is primarily normative. In academia
descriptive approaches are also taken. The range and quantity of
business ethical issues reflects the degree to which business is
perceived to be at odds with non-economic social values.

CORPORATE CODES OF CONDUCT AND ETHICS

Unlike labour law, corporate codes of conduct do not have any
authorized definition. The concept "corporate code of conduct"
refers to companies' policy statements that define ethical
standards for their conduct. There is a great variance in the
ways these statements are drafted.
Corporate codes of conduct are completely voluntary. They can
take a number of formats and address any issue - workplace
issues and workers' rights being just one possible category. Also,
their implementation depends totally on the company
concerned.
Potential authors of a code are the founder, board of directors,
CEO, top management, legal departments, and consultants. The
process can involve employee representatives and/or randomly or
otherwise selected employees.
The Conference Board distributes the formats in three categories:
• Compliance codes: directive statements giving guidance
and prohibiting certain kinds of conduct.
• Corporate credos: broad general statements of corporate
commitments to constituencies, values and objectives.
• Management philosophy statements: formal
enunciations of the company or CEO's way of doing
 business.
The United States Labour Department made a distinction between
the following kinds of formats:
• Special documents (typically referred to as "codes of
conduct") outlining company values, principles and
guidelines in a variety of areas. These documents are a
means for companies to clearly and publicly state the way in
which they intend to do business to their suppliers,
customers, consumers and shareholders.
• Circulated letters stating company policies on a certain
issue to all suppliers, contractors and/or buying agents.
• Compliance certificates, which require suppliers, buying
agents, or contractors to certify in writing that they abide by
the company's stated standards.
• Purchase orders or letters of credit, making compliance
with the company policy a contractual obligation for
suppliers.
Fundamentally, a code of conduct depends on its credibility:
The extent to which it is taken seriously by industry, unions,
consumers and governments. Credibility, in turn, depends
on monitoring, enforcement and transparency: the extent to
which foreign contractors and subcontractors, workers, the public,
nongovernmental organizations and governments are aware of
the code's existence and meaning.
A code can be made transparent through its posting and
dissemination and through training regarding its provisions.
Monitoring can be internal (e.g. through a committee,
ombudsman, regular reporting obligation, field visits, or hot lines)
or external (e.g. through an NGO, outside auditor, or
consultant). Responses to violations by employees, subsidiaries,
vendors or business associates can include: monetary fines or
penalties, the imposition of probationary status, demands for
corrective action, providing education to the violator (particularly
in the case of child labor violations), cancellation of an individual
contract, and severance of the employment or business
relationship. Positive reinforcement of respect for the
requirements of a code of conduct includes retention of current
contracts and awarding of additional contracts.

CORPORATE SOCIAL RESPONSIBILITY

Corporate social responsibility (CSR), also known as corporate
responsibility, corporate citizenship, responsible
business, sustainable responsible business (SRB), or corporate
social performance, is a form of corporate self-
regulation integrated into a business model. Ideally, CSR policy
would function as a built-in, self-regulating mechanism whereby
business would monitor and ensure its support to law, ethical
standards, and international norms. Consequently, business
would embrace responsibility for the impact of its activities on the
environment, consumers, employees,
communities, stakeholders and all other members of the public
sphere. Furthermore, CSR-focused businesses would proactively
promote the public interest by encouraging community growth
and development, and voluntarily eliminating practices that harm
the public sphere, regardless of legality. Essentially, CSR is the
deliberate inclusion of public interest into corporate decision-
making, and the honoring of a triple bottom line: people, planet,
profit.
The Ethical Trading Initiative (ETI) is a ground-breaking
alliance of companies, trade unions and voluntary organisations.
We work in partnership to improve the lives of workers across the
globe who make or grow consumer goods - everything from tea to
T-shirts, from flowers to footballs.
Our vision is a world where all workers are free from exploitation
and discrimination, and work in conditions of freedom, security
and equity. This year our corporate members' ethical trade
activities touched the lives of over 8.6 million workers.

What is ethical trade?

Ethical trade means that retailers, brands and their suppliers take
responsibility for improving the working conditions of the people
who make the products they sell. Most of these workers are
employed by supplier companies around the world, many of them
based in poor countries where laws designed to protect workers'
rights are inadequate or not enforced.
Companies with a commitment to ethical trade adopt a code of
labour practice that they expect all their suppliers to work
towards. Such codes address issues like wages, hours of work,
health and safety and the right to join free trade unions.

Why is ETI needed?

'Doing' ethical trade is much harder than it sounds. Modern
supply chains are vast, complex and span the globe. Labour
issues are themselves challenging. For example, what exactly is
‘a living wage'? What should a company do if it finds children
working in a supplier's worksite? Evicting children from the
workplace can, paradoxically, make their lives worse.
ETI brings corporate, trade union and voluntary sector members
together in a unique alliance that enables us to collectively tackle
many thorny issues that cannot be addressed by individual
companies working alone.

ETHICAL COMPANY.

LEVIS

Our success as a company is built upon an unwavering

commitment to responsible business practices. Integrity has
always been at the heart of how we operate and is one of Levi
Strauss & Co.’s (LS&Co.) core corporate values. For more than
155 years, we have demonstrated the highest ethical standards in
the conduct of our business.

Our Worldwide Code of Business Conduct reflects our

commitment to manage our business affairs responsibly, with the
utmost integrity and in compliance with all applicable laws. It
offers guidance to our employees on a host of potential business
situations and emphasizes the importance of making business
decisions through the lens of our values.

The Global Anti-Bribery and Anti-Corruption Policy provides

additional, specific guidance on two critical sections of the
Worldwide Code of Business Conduct — Compliance with Laws,
Rules and Regulations and Government Officials. Recognizing that
anti-bribery and anti-corruption laws vary by jurisdiction and are
not always easy to understand, our Global Anti-Bribery and Anti-
Corruption Policy is designed to help LS&Co. employees
worldwide identify and avoid situations that may potentially
violate ethics laws.

Compliance with the Worldwide Code of Business Conduct and the

Global Anti-Bribery and Anti-Corruption Policy is mandatory for
everyone at LS&Co. worldwide — from the back room to the board
room. An Ethics and Compliance Reportine allows LS&Co.
employees worldwide to report ethics concerns anonymously, and
company policies strictly prohibit retaliation against anyone for
raising or helping to address any issue related to the Worldwide
Code of Business Conduct or the Global Anti-Bribery and Anti-
Corruption Policy.

WHY IS LEVIS ETHICAL??

For the sake of the environment, you shouldn’t wash your jeans
each time youwear them; you should wait until you’ve worn them
two or three times. This somewhat unusual advice comes
courtesy of John Anderson, President and CEO of jeans maker
Levi Strauss & Co, a company promoting itself as a socially
responsible corporation that supports environmental and
humanitarian causes. CHampioning Levi’s ethos of ‘profits with
principles’, Anderson says the company’s values are rooted in the
communities in which it operates. “It’s always been very
important to us that we give back as much as we take out,” says
Anderson, who was the keynote speaker at an American Chamber
of Commerce luncheon in Singapore recently.
“Corporate social responsibility focuses on the responsibility to
people and to the environment which we work.”
But Anderson acknowledges that it’s easy for companies to talk
up their commitment to corporate social responsibility (CSR)
during the good times, until they hit rough patches.
“The real test is how companies live up to those values. How they
integrate them into their business and how they stay true to them
when times are tough; (it’s) much easier when times are good.”
The test of Levi’s commitment, says Anderson, came when the
company introduced its so-called ‘terms of engagement’, a code
of conduct for its employees, suppliers and contractors. This
details Levi’s expectations of workplace conditions, including the
prevention of child labour, and the promotion of the health and
safety of workers.
“The cost for us went up 50 cents a pair of jeans. Those days we
were making 400 million pairs of jeans,” Anderson recalls.
“Think about it, 50 cents, that’s what it went up. You can imagine
the furore within the company: ‘We can’t afford to do it’.”
“But from the top down, we said ‘we’re going to do this, we’re
going to take a leap of starts’ because we believe the industry will
follow us. And guess what? Ninety per cent of the industry today
is working with us after we implemented that. And our company
survived just fine.”
When asked why Levi’s management decided to accept the
significant increase in costs, Anderson explains that the Haas
family, which controls the privately-held company, strongly
supports CSR, and that management believed “it’s the right thing
to do”.
“As business leaders, we need to make the case that serious,
rigorous society-wide approaches to corporate social
responsibility are exactly what healthy companies do,” says
Anderson.
“We believe consumers will continue to vote with their wallets
and support companies who embed their values in their products
and work to create positive changes in the world.”
Certainly Levi’s CSR initiatives have incurred costs in the short
term, which would not be tenable without the support of key
stakeholders.
“I can also tell you it has to start from the top. Shareholders, the
board, management have to believe in this, because otherwise it
would not be successful.”
“Because consumers will find you out. They will find you out if
you’re only doing it in good times and you back off in hard times.
Consumers will find you out if you only go halfway down that
journey.”
To be sure, Levi has notched up numerous achievements in
championing humanitarian and environmental causes over the
years. More than two decades ago, it was among the first
companies to raise awareness about HIV AIDS. Anderson says
Levi pioneered workplace policies and practices that were
adopted by its employees around the world. “Our active
involvement in confronting the HIV AIDS problem in South Africa
through our Levi Red Tab For Life programme has helped to make
the brand number one in a country, with 75 per cent of the young
people saying this issue is important to them,”
“So we built the brand by aligning with an issue the government
struggled to confront. And that’s a commitment we still have
today.”
Anderson added that Levi has been working for the past two
years with other apparel brands, as well as non-governmental
organisations, to stop the practice of using child labour in
harvesting cotton in Uzbekistan. To that end, they have asked
suppliers not to use cotton from that country until the
government shows progress in ending the practice.

Turning to the environment, Anderson says Levi is aware that

cotton farming requires significant amounts of water and
pesticide. That has led Levi to produce apparel made from
recycled soda pop and blended organic cotton. Notably, Levi’s
recent marketing campaign asked consumers to trade in their old
jeans, which could then be recycled by Levi for its own
commercial use.
“Our vision is this: we will build environmental sustainability into
everything we do so that our profitable growth helps restore our
environment. So we wanted to link the environment through our
guided market process and we also want to tie it to profitable
growth,” says Anderson.
“And I think both can fit very closely together. If you do that,
people can really align behind what you want to do. But you have
to be pragmatic, you’ve got to demand profitable growth but you
can’t tie it to environmental and social issues."
In the final analysis, companies have to sustain their commercial
viability to be able to continue to “do the right thing”, says
Anderson.
“That’s why it’s very important we link it to profits with principles.
One of the dilemmas that we’ve been dealing with over time is
that there are many people who say ‘let’s do it regardless of the
impact on profit’.”
“No, can’t be done. I say to many people, ‘I can only guarantee I
can keep contributing to the community in which we operate, if
we deliver sustainably-profitable growth’. So you got to have that
tension there.”
“I’ll be honest,” he adds. “We do it because it’s the right thing to
do but it’s also got to make business sense.”

UNETHICAL COMPANIES

GAP(COMPANY PROFILE)
The Gap, Inc. (NYSE: GPS) is an American clothing and
accessories retailer based in San Francisco, California, and
founded in 1969 by Donald G. Fisher and Doris F. Fisher. The
company has five primary brands: the namesake Gap banner,
Banana Republic, Old Navy, Piperlime and Athleta. As of
September 2008, Gap, Inc. has approximately 135,000 employees
and operates 3,465 stores worldwide. Gap, Inc. remains the
largest specialty apparel retailer in the U.S., though it has
recently been surpassed by the Spanish-based Inditex Group as
the world's largest apparel retailer.
Despite its publicly-traded status, the Fisher family remains
deeply involved in Gap, Inc.'s business and collectively owns a
significant portion of the company's stock.
Donald Fisher served as Chairman of the Board until 2004 and
remained on the board until his death on September 27, 2009. His
wife and their son, Robert J. Fisher, also serve on Gap's Board of
directors. Robert Fisher succeeded his father as chair in 2004 and
also took over as president and CEO on an interim basis following
the resignation of Paul Pressler in 2007.
Glenn K. Murphy is the current CEO of the company. Previous
Gap, Inc. CEOs include Millard Drexler and Paul Pressler.

CASE STUDY FOR GAP

In 2003, Gap, along with 21 other companies, was involved in a
class action lawsuit filed by sweatshop workers in Saipan. The
allegations included "off the clock" hours, where workers were not
paid for working overtime, unsafe working conditions, and forced
abortion policies. A settlement of 20 million dollars was reached
whereby The Gap did not admit liability.
In 2007, Ethisphere Magazine (an industry publication) chose Gap
from among thousands of companies evaluated as one of 100
"World’s Most Ethical Companies." Gap, Inc. was ranked 25th by
CRO Magazine, another industry publication that is a successor to
Business Ethics magazine, in its “100 Best Corporate Citizens” list
in 2007.[citation needed]
Nevertheless, the company draws continued criticism over labor
practices. In May 2006, adult and child employees of Western, a
supplier in Jordan, were found to have worked up to 109 hours per
week and to have gone six months without being paid. Some
employees claimed they had been raped by managers. However,
most of these allegations were directed at Wal-Mart (who mostly
ignored the claims), while Gap immediately looked into the matter
to remedy the situation.
On October 28, 2007, BBC footage showed child labor being used
in Indian Gap factories. Gap has denied that it was aware of such
happenings and that it is against its policy to use child labour. The
one piece of clothing in question — a smock blouse — was
removed from a British store and will be destroyed. Gap also
promised to investigate breaches in its ethical policy.

NEXT (COMPANY PROFILE)

Next is a UK based retailer offering exciting, beautifully designed,

excellent quality clothing, footwear, accessories and home
products. Next distributes through three main channels: Next
Retail, a chain of more than 500 stores in the UK and Eire, the
Next Directory, a home shopping catalogue and website with
more than 2 million active customers, and Next International, with
more than 180 stores and growing website capability outside the
UK.

Corporate responsibility
Welcome to our 2010 Corporate Responsibility Report.
For Next, corporate responsibility(CR) means addressing key
business-related social, ethical and environmental impacts in a
way that aims to bring value to all our stakeholders, including our
shareholders. Continuous improvement lies at the heart of our
business and we are constantly looking for ways to be more
responsible, and run our business in a responsible way.
We are continuing to operate in a challenging commercial
environment with the current economic situation, covering an
increasingly complex set of issues we need to address for our
business, our customers, the suppliers we trade with, the
environment and the communities in which we operate. We
believe it is important our business is supported by a robust
approach to CR where we see no conflict between our approach
to corporate responsibility and good business practice.
The areas we have identified as having responsibilities are:
•Our Suppliers - we will work for positive social, ethical and
environmental improvements in our supply chain
•Our Customers - we will work to ensure we meet or exceed
our customers' expectations through the delivery of
excellent products and service
•Our People - we will work to provide an environment where
our employees are supported and respected, treated fairly
and taken care of, listened to and are motivated to achieve
their full potential
 •Community - we will work to deliver value through our
community contributions and support for charities and other
organisations
•Environment - we will work to actively reduce the impacts of
our business on the natural environment
Our CR programme touches on some big issues that are key to
how we do business, and I hope you find our report interesting,
useful and informative and hope we have met your expectations
Code of Practice
As a member of the Ethical Trading Initiative, Next works hard to
pursue a code of ethical standards throughout its global supply
chain, seeking to ensure the integrity of any product carrying the
Next trademark and the welfare of all workers involved.
Next identifies and engages with suppliers whose practices are
consistent with our own code of ethical standards. Through our
international audit team we work closely with our suppliers to
help them achieve compliance.
There are 10 key principles to our code:
•No child labour
•No forced labour
•Freedom of association
•Healthy and safe working conditions
•Reasonable wages and benefits
•Reasonable working hours
•Equal opportunities
•Employment security
•Respectful treatment of employees
•Effective management systems
MARKS AND SPENORS(COMPANY PROFILE)

Marks & Spencer (M&S) is a major British retailer, with over

895 stores in more than 40 territories around the world, over 600
domestic and 295 international. The company, with its head office
in the Waterside House in the City of Westminster, London,
England, is the largest clothing retailer in the United Kingdom, as
well as being an upmarket food retailer, and as of 2008, the 43rd
largest retailer in the world. Most of its domestic stores sell both
clothing and food, and since the turn of the century it has started
expanding into other ranges such as homewares, furniture and
technology.

In 1998 it became the first British retailer to make a pre-tax profit

of over £1 billion, though a few years later it plunged into a crisis
which lasted for several years. In November 2009, it was
announced that Marc Bolland, formerly of Morrisons, will take over
as chief executive from Stuart Rose in early 2010; Rose will
continue as chairman until mid-2011.

It is listed on the London Stock Exchange and is a constituent of

the FTSE 100 Index.
CASE STUDY OF MARKS AND SPENCOR,NEXT,GAP.
overall summary

Marks and Spencers , Gap, Next are the brands under scanner
here. these brands have flouted the rules of indian labour law as
well as the ethical trading initiative they all boast to follow.
the worker were made to work for almost 16hours a day and were
also not paid their due.
the workers were paid as low as 20rs an hour. workers who
refused to work for extra hours were told to find new jobs. the
companies blamed common wealth games for the shortage for
extra manpower.hte workers were hired using middle-men who
paid really less. workers were made to put in 8hrs of over-time for
which they claim to have paid at half the legal over-time price.
some workers claim that they were made to work for 7days a
week.

Companies like next, gap, marks and spencers have included the
point of forced labour in their corporate code of ethics.gap has
been previously involved in forced labour practices in year
2003,2006,2007.