ETHICS AND CORPORATE SOCIAL RESPONSIBILITY

CODE: MBAUGMIN1101
UNIT-1 - INTRODUCTION TO BUSINESS ETHICS

MEANING OF ETHICS
The term ‘ethics’ defines the standards that bear on right and wrong issues of society. Business ethics is thus a
set of professional standards, which emphasize principles of honesty and duty to the business and the general
public. The other significant principles included in business ethics are:
 Fairness
 Integrity
 Commitment to agreements
 Broad-mindedness
 Considerateness
 Importance given to human esteem and self-respect
 Responsible citizenship
 Attempt to excel
 Accountability
These principles, if strictly pursued, lead to a decent business environment and create healthy relationships in
the organization. However, deviations from these principles can occur due to the following factors:
 Ignorance and indifference to issues
 Selfishness
 Imperfect reasoning
ETHICAL CONCEPTS
Ethics is the branch of philosophy that is used to evaluate human actions. Some basic ethical concepts in
business are as follows:
 Ethical subjectivism: This concept emphasizes that the ethical choice of the individual decides the
rightness or wrongness of his behaviour. The morally correct decision often depends on the circumstances
of the person making it. Even with the same moral standards, two individuals may consider different
decisions to be appropriate, if their individual circumstances are different. Ethical subjectivism argues that
what is ethically right or wrong for an individual depends on the ethical principles he or she has chosen. In
other words, for people who subscribe to ethical subjectivism what is ethically right or wrong is entirely a
personal matter. The problem with this argument is that it places no restrictions on the kind of ethical
principles a person might choose. While a person lives by the principles he chooses, it is not necessary that
these principles are ethical. To prove that one's principles are ethical, one has to give reasons, which must
be able to withstand public scrutiny. At this juncture, ethics no longer remains a personal matter.
 Ethical relativism: According to this concept, no principle is universally applicable and so it would be
inaccurate to measure the behaviour of one society with another’s principles or standards. Relativism
overlooks the fact that there may be enough evidence to believe that an ethical practice is based on false
belief, illogical reasoning, and so on.
People who support the concept of ethical relativism argue that there is no universal set of principles by
which to judge morality. Each society has its rules and it is inappropriate to compare the ethical rules of
one society with that of another. Just as subjectivists cannot comment on the actions of other individuals,
relativist cannot pass judgment on the actions of societies other than their own. Relativists thus rule out the
possibility of discussion across societies on ethical issues. They feel that the only alternative modes of
ethical interaction across nations and societies are tolerance and conflict. What relativism does not consider
is that there may be sufficient evidence to believe that an ethical practice is based on false beliefs, illogical
reasoning, etc. in that case, it is important to speak out against the practice even if it is pertaining to another
society.
 Consequentialism:
There are two central ideas associated with consequentialism. The first idea is the concept of value and the
second that of maximization of value. Thus, if happiness is considered to be a Value, an act is ethical only
if it maximizes happiness. An act, which does not maximize happiness, is not ethically permissible.
If, for example, honesty is considered a value, an act is considered ethical only if it maximizes this value.
An act, which does not maximize the said value, is not ethically permissible.

Unit-1: Introduction to Business Ethics 1

 Deontological ethics:
This concept stresses that ethical values can be developed from the concepts of reason as all rational
individuals possess the ability to reason. We may, for example, end up causing pain unknowingly while
trying to create happiness. Therefore, the ethical value of an action cannot be determined by its
consequences. Instead, it is in the motive that lies behind the particular action.
 Ethics of virtue:
This concept emphasizes those traits that give the individual a sense of satisfaction from ethical point of
view. It explores those traits that would help individuals lead a better life from an ethical point of view.
Virtuous acts are done willfully and not by chance. Also, virtuous acts are not done out of self-interest or
because they maximize pleasure. Examples of virtues include courage, tolerance, generosity and honesty.
Moral education is very important because it helps people to become virtuous by being taught to be
virtuous and also by modeling one's behaviour after virtuous persons. Institutions such as family, religion,
school and other legal & social institutions are of central importance in teaching virtue and making it
possible for the virtues to be taught. Ethical principles have an equally important role to play. Thus both
ethical principles and virtues need to be considered together. It may thus be correct to say that virtuous
people who lack ethical principles are ethically blind but ethical principles without virtuous people are
empty.
 Whistle blowing:
Whistle blowing refers to the attempt of an employee to disclose what he or she believes to be illegal
behaviour in or by the organization. From one point of view, this seems to deceive the principle of honesty
in business ethics, as it is taken for granted that the employees of an organization need to be loyal to its
workings. However, when loyalty to one’s organization in particular is perceived to be harming one’s
general loyalty to mankind, the act of whistle blowing is justified.
Failure on the part of the management of the organization to fulfil its social obligations calls for whistle
blowing. It is the responsibility of the whistle blower to be careful about revealing the organization’s secrets and
to consider the harm it may cause to his colleagues and shareholders. The steps that should be taken into
consideration by the whistle blower are:
 Ascertain the gravity of the situation before whistle blowing
 Scrutinize the purpose
 Authenticate and keep a record of the concerned information
 Determine the type of offence and to whom it should be reported
 Assert your claim in a proper way
 Stick to the facts
 Determine if the whistle blowing need be external or internal
 Decide if the whistle blowing should be anonymous or otherwise
 Make sure to follow proper rules in reporting the offence
 Consult a lawyer (if required)
 Anticipate and document vengeance
 Ethical dilemmas in business:
An organization’s ethical problems indicate a conflict between its economic and social performance. This
results in a dilemma for managers. Since people handle business, it is a crucial requirement to check and
ascertain ethical behaviour at a personal level. This will confirm ethically correct responses from the
organization to the mutual actions of individuals.
Ethical problems result in dilemmas for managers because they usually represent a conflict between an
organization's economic performance and its social performance. For an organization, social performance
implies various obligations such as protecting employment and pollution control. Since considerable
expenses may be involved in discharging these obligations, organizations often find it inconvenient to ignore
them. Instead, they become obsessed with economic performance as measured by revenues, costs and profits.
Thus it is important to develop a positive attitude towards resolution of the conflict. Since business is run by
people, it is important to ensure ethical behaviour at an individual level. Only then the collective actions of
individuals can result in ethically correct responses from the organization as a whole. Because of this reason,
the subject of business ethics has become particularly relevant today. Though different thinkers view the
concept of ethics differently, they all agree that, in essence, ethics deals with right or wrong behavior of
individuals.

Unit-1: Introduction to Business Ethics 2

TYPES OF ETHICS
1. Meta-ethics 2. Normative Ethics 3. Applied Ethics 4. Descriptive Ethics
1. Meta-ethics
Meta-ethics is the branch of ethics that seeks to understand the nature of ethical properties. statements, attitudes
and judgments. Meta-ethics is one of the four branches of ethics generally recognized by philosophers, the
others being descriptive ethics, normative ethics and applied ethics.
Eg.: What is goodness? Honesty, Courage? What is good or what is bad?.
Example: Cultural Differences in Moral Values
In certain cultures, practices like polygamy or arranged marriages may be considered morally acceptable, while
in others, they might be viewed as morally objectionable. The existence of diverse moral values across cultures
reflects the principles of moral relativism.
2. Normative ethics
Normative ethics is the study of ethical action. It is the branch of philosophical ethics that investigates the set of
questions that arise when considering how one ought to act, morally speaking. Normative ethics is distinct from
meta-ethics because it examines standards for the rightness and wrongness of actions, while meta-ethics studies
the meaning of moral language and the metaphysics of moral facts. Normative ethics is also distinct from
descriptive ethics, as the latter is an empirical investigation of people's moral beliefs. To put it another way,
descriptive ethics would be concerned with determining what proportion of people believe that killing is always
wrong, while normative ethics is concerned with whether it is correct to hold such a belief. Hence, normative
ethics is sometimes called prescriptive, rather than descriptive. However. on certain versions of the meta-ethical
view called moral realism, moral facts are both descriptive and prescriptive at the same time.
Eg.: What should I do? How should people act?
Example: Trolley Problem in Utilitarianism
In the classic philosophical scenario known as the Trolley Problem, a moral agent must decide whether to divert
a runaway trolley onto a track where it would harm fewer people. Utilitarianism would guide the decision based
on maximizing overall happiness, even if it means sacrificing one person to save many.
3. Applied ethics
Applied ethics is distinguished from normative ethics, which concerns what people should believe to be right
and wrong and from meta-ethics, which concerns. the nature of moral statements. Applied ethics is the
philosophical examination, from a moral standpoint of particular issues in private and public life that are matters
of moral judgment. It is thus the attempts to use philosophical methods to identify the morally correct course of
action in various fields of human life. Bioethics, for example, is concerned with identifying the correct approach
to matters such as euthanasia or the allocation of scarce health resources or the use of human embryos in
research.
Eg.: How do we take moral knowledge and put it into practice?
Example: Euthanasia Decision in Medical Practice
Medical ethics applies normative principles to practical situations. In the case of euthanasia, healthcare
professionals must navigate complex ethical considerations when deciding whether to assist a terminally ill
patient in ending their life, balancing principles like autonomy, beneficence, and non-maleficence.
4. Descriptive ethics
Descriptive ethics is the study of people's beliefs about morality. It contrasts with prescriptive or normative
ethics, which is the study of ethical theories that prescribe how people ought to act and with meta-ethics, which
is the study of what ethical terms and theories actually refer.
Eg.: What do people think is right?
Example: Gift-Giving Customs
In various cultures, the act of gift-giving carries different ethical meanings. For instance, in some cultures,
giving and receiving gifts is a gesture of goodwill and respect, while in others, it may be perceived as a form of
bribery. Descriptive ethics observes these diverse ethical practices without passing normative judgments.

Unit-1: Introduction to Business Ethics 3

BUSINESS ETHICS
Business is described as an activity done by humans to produce or acquire wealth where he buys and sells
goods. Business ethics and values are important for the successful development of a business organization.
Ethics in business refer to a code of standard by which one can determine what is wrong and what is right for
the business enterprise. Fairness, integrity, commitment to agreements, broadmindedness, considerateness,
importance given to human esteem and self-respect and many such principles determine business ethics.
Business ethics generally deals with what is right or wrong in the business. According to Wallace and Pekel,
‘attention to business ethics is necessary during times of fundamental change as the moral values that were not
taken seriously are strongly questioned at that time’. It is business ethics that enables the leaders and employees
to act in times of crisis and confusion in the business. Business ethics is a method of dealing with unclear
business problems.
BENEFITS OF BUSINESS ETHICS
The various benefits of managing ethics in a business are as follows:
 Business ethics helps in improving society by establishing government agencies, unions, laws and
regulations in the society.
 Business ethics helps an organization maintain ethical values during times of crisis. Business ethics
programmes guide leaders about the right or wrong ways of dealing with complex dilemmas and how
they should act during that time.
 Business ethics helps employees behave according to the ethical values that are preferred by the top
management of an organization. An organization discovers many differences between the values that
reflect in the actions of the employees and the values preferred. Employees experience a relationship that
is strong between the values of the organization and their values. Ethical values induce teamwork and
increase the efficiency of the employees.
 Ethics supports employee growth. When an employee pays attention to ethics, it induces confidence in the
employee to deal with reality and face both good and bad circumstances. Bennett, in his article ‘Unethical
Behaviour, Stress Appear Linked’, explained that the more an employee is emotionally healthy, the more
ethical he is.
 Ethics have become legal instruments. These days, there are several lawsuits regarding personnel matters
and the influence of the services of the organization on the investors and customers. Major ethical
principles that are applied in the organization are the laws that are made by the government. A greater
attention on ethical issues on the part of the government ensures high ethical procedures and policies in
the workplace. An employee, for example, is subject to breach of contract on non-compliance of the terms
and conditions of the contract.
 Business ethics helps to avoid criminal acts of ‘omission’ and it also helps in lowering the fines. Ethics
helps in ascertaining the violation of ethical issues and helps in rectifying the violation that is committed
by the organization. The guidelines set by an organization about ethical values helps to lower fines. An
organization, for example, that has knowingly violated a contract is considered to have committed a
criminal act and the organization is subject to penalty.
 Business ethics helps to identify and manage the values associated with quality management, strategic
management and diversity management. For managing these values, ethical programmes record the
values, develop policies and procedures and then provide training to the employees on these policies and
procedures. These ethical programmes manage certain values of quality management, such as reliability,
performance, measurement and feedback. Similarly, these programmes also manage various strategic
values, such as reducing cost and increasing market share.
 Business ethics helps in building a strong and positive public image of an organization. Ethical values
enable an organization to increase their goodwill in the market. Those organizations that value their
customers have a positive influence in the market. Ethical values are the milestones that enable the
establishing of a successful and socially responsible business.
 Business ethics strengthens organizational culture. Ethical values improve relationships between an
organization and its customers. They strengthen the organization by ensuring consistency in the standard
and quality of the product.
 Business ethics makes sure that the right activities are performed in an organization.

Unit-1: Introduction to Business Ethics 4

OBJECTIVES OF BUSINESS ETHICS
The various objectives of business ethics are:
i) To provide a comprehensive framework for ethical decision-making in business.
ii) To examine the intensity of ethical issues as an important element influencing the ethical decision-
making process.
iii) To introduce individual factors that may influence ethical decision-making in business.
iv) To introduce organizational factors that may influence ethical decision-making in business.
v) To explore the role of opportunity in ethical decision making.
vi) To explain how knowledge about the ethical decision-making framework can be used to improve ethical
leadership.
vii) To provide leadership styles and habits that promotes an ethical culture.
viii) To develop the power and influence of business in society is greater than ever before. Business ethics
helps us to understand why this is happening, what its implications might be. and how we might address
this situation.
ix) To provide a major contribution to the societies, in terms of producing the products and services that
people want, providing employment, paying taxes and acting as an engine for economic development and
thereby increases the goodwill.
x) To reduce the business malpractices that has the potential to inflict enormous harm on individuals, on
communities and on the environment. Through helping us to understand more about the causes and
consequences of these malpractices, business ethics helps to create mutual trust and confidence in
relationship.
xi) To help the demands being placed on business to be ethical by its various stakeholders are constantly
becoming more complex and more challenging. Business ethics provides the means to appreciate and
understand these challenges more clearly, in order that firms can meet these ethical expectations more
effectively,
xii) Business ethics can help to improve ethical decision making by providing managers with the
appropriate knowledge and tools that allow them to correctly identify, diagnose, analyze, and provide
solutions to the ethical problems and dilemmas they are confronted with.
PURPOSES OF BUSINESS ETHICS
Business ethics is important for the following purposes:
1. Business ethics improve customers' confidence
Business ethics are needed to improve the customers' confidence about the quality, quantity, price, etc. of the
products. The customers have more trust and confidence in the businessmen who follow ethical rules. They
feel that such businessmen will not cheat them.
2. Survival of business
Business ethics are mandatory for the survival of business. The businessmen who do not follow it will have
short-term success, but they will fail in the long run. This is because they can cheat a consumer only once.
After that, the consumer will not buy goods from that businessman. He will also tell others not to buy from
that businessman. So this will defame his image and provoke a negative publicity. This will result in failure
of the business. Therefore, if the businessmen do not follow ethical rules, he will fail in the market. So, it is
always better to follow appropriate code of conduct to survive in the market.
3. Safeguarding consumers' rights
The consumer has many rights such as right to health and safety, right to be informed. right to choose, right
to be heard, right to redress, etc. But many businessmen do not respect and protect these rights. Business
ethics are must to safeguard these rights of the consumers.
4. Stop business malpractices
Some unscrupulous businessmen do business malpractices by indulging in unfair trade practices like black-
marketing, artificial high pricing, adulteration, cheating in weights and measures, selling of duplicate and
harmful products, hoarding, etc. These business malpractices are harmful to the consumers. Business ethics
help to stop these business malpractices.

Unit-1: Introduction to Business Ethics 5

 5. Protecting employees and shareholders
Business ethics are required to protect the interest of employees, shareholders, competitors, dealers,
suppliers, etc. It protects them from exploitation through unfair trade practices.

6. Develops good relations

Business ethics are important to develop good and friendly relations between business and society. This will
result in a regular supply of good quality goods and services at low prices to the society. It will also result in
profits for the businesses thereby resulting in growth of economy.
7. It creates good image
Business ethics create a good image for the business and businessmen. If the businessmen follow all ethical
rules, then they will be fully accepted and not criticized by the society. The society will always support those
businessmen who follow this necessary code of conduct.
8. Smooth functioning
If the business follows all the business ethics, then the employees, shareholders, consumers, dealers and
suppliers will all be happy. So they will give full cooperation to the business. This will result in smooth
functioning of the business. So, the business will grow, expand and diversify easily and quickly. It will have
more sales and more profits.
9. Consumer movement
Business ethics are gaining importance because of the growth of the consumer movement. Today, the
consumers are aware of their rights. Now they are more organized and hence cannot be cheated easily. They
take actions against those businessmen who indulge in bad business practices. They boycott poor quality,
harmful, high-priced and counterfeit (duplicate) goods. Therefore, the only way to survive in business is to
be honest and fair.
10. Consumer satisfaction
Today, the consumer is the king of the market. Any business simply cannot survive without the consumers.
Therefore, the main aim or objective of business is consumer satisfaction. If the consumer is not satisfied,
then there will be no sales and thus no profits too. Consumer will be satisfied only if the business follows all
the business ethics, and hence are highly needed.
11. Importance of labour
Labour, i.e. employees or workers play a very crucial role in the success of a business. Therefore, business
must use business ethics while dealing with the employees. The business must give them proper wages and
salaries and provide them with better working conditions. There must be good relations between employer
and employees. The employees must also be given proper welfare facilities.
12. Healthy competition
The business must use business ethics while dealing with the competitors. They must have healthy
competition with the competitors. They must not do cut-throat competition. Similarly. they must give equal
opportunities to small-scale business. They must avoid monopoly. This is because a monopoly is harmful to
the consumers.
PRINCIPLES OF BUSINESS ETHICS
The Principles of business ethics developed by well known authorities like Cantt, J. S. Mill, Herbert Spencer,
Plato, Thomas Garret, Woodrad, Wilson etc. are as follows:
1. Principle of proportionality: This principle suggests that one should make proper judgment before doing
anything so that others do not suffer from any loss or risk of evils by the conducts of business.
2. Principle not to do any evil: It is unethical to do a major evil to another or to oneself, whether this evil is a
means or an end.
3. Principle of purity of means and ends: The first and most important principles of business ethics
emphasize that the means and techniques adopted to serve the business ends must be blessed and pure. It
means that a good end cannot be attained with wrong means, even if it is beneficial to the society.
4. Principle of non co-operation in evils: It clearly points out that a business should with any one for doing
any evil acts.
5. Co-operation with others: This principle states that business should help others only in that condition
when other deserves for help.

Unit-1: Introduction to Business Ethics 6

6. Principle of Publicity: According to W. Wilson, anything that is being done or to be done. should be
brought to the knowledge of everyone. If everyone knows, none gets opportunity to do an unethical act.
7. Equivalent price: According to W. Wilson, the people are entitled to get goods equivalent to the value of
money that he will pay.
8. Universal value: According to this principle the conduct of business should be done on the basis of
universal values.
9. Principle of Human dignity: As per this principle, man should not be treated as a factor of production and
human dignity should be maintained.
10. Principle of Non violence: If businessman hurts the interests and rights of the society and exploits the
consumer by overlooking their interests this is equivalent to violence and unethical act.
Difficulty in Making Code of Ethics Effective
Creating an effective code of ethics can be challenging due to various factors. Here are some common
difficulties:
1. Ambiguity and Lack of Clarity:
Challenge: Codes may be written in vague or complex language, leading to confusion.
Solution: Ensure the code is clear, specific, and easily understandable by all employees.
2. Lack of Employee Involvement:
Challenge: Employees may resist or ignore a code they did not contribute to.
Solution: Involve employees in the code development process to increase ownership and understanding.
3. Inconsistent Enforcement:
Challenge: Inconsistent application of the code can undermine its effectiveness.
Solution: Establish clear procedures for reporting, investigating, and addressing violations consistently.
4. Top-Down Implementation:
Challenge: If leadership does not embody ethical behavior, employees may not take the code seriously.
Solution: Ensure leadership sets a strong example and actively supports and promotes ethical conduct.
5. Length and Complexity:
Challenge: Lengthy or overly complex codes may discourage employees from reading and understanding
them.
Solution: Keep the code concise, focusing on critical principles, and supplement it with detailed policies
and guidelines.
6. Lack of Training:
Challenge: Employees may not be adequately trained on the code and its implications.
Solution: Provide regular training sessions and resources to educate employees about the code and its
importance.
7. Inadequate Communication:
Challenge: Poor communication can result in employees not being aware of the code.
Solution: Use multiple channels for communication, such as training sessions, workshops, emails, and
posters, to ensure widespread awareness.
8. Failure to Address Evolving Issues:
Challenge: Codes may become outdated and fail to address emerging ethical challenges.
Solution: Regularly review and update the code to address evolving ethical considerations in the business
environment.
9. Lack of Reporting Mechanism:
Challenge: Employees may fear retaliation or lack a safe mechanism to report ethical concerns.
Solution: Establish anonymous reporting channels and ensure employees feel safe reporting violations
without fear of reprisal.
10. Cultural and Diversity Considerations:
Challenge: A code may not consider cultural differences, leading to misunderstandings.
Solution: Develop a code that respects diverse perspectives and adapt it to different cultural contexts where
the company operates.

Unit-1: Introduction to Business Ethics 7

Conditions for making Code of Ethics Effective
It depends on various conditions and practices that ensure its meaningful implementation and impact. Key
conditions for making a Code of Ethics effective include:
1. Top Leadership Commitment: The commitment and endorsement of top leadership are vital. When
leaders actively promote and adhere to ethical behavior, it sets a precedent for the entire organization.
2. Clear Communication: The Code of Ethics should be clearly communicated to all stakeholders, ensuring
that employees understand the expectations and standards set forth.
3. Employee Involvement: Involving employees in the development and review of the Code fosters a sense of
ownership. Employees are more likely to adhere to ethical standards they have had a hand in shaping.
4. Training and Education: Providing regular training on ethical guidelines and conduct helps employees
understand the importance of ethical behavior and equips them with the knowledge to navigate ethical
challenges.
5. Enforcement Mechanisms: Clearly defined consequences for ethical violations and a fair enforcement
process are crucial. Employees should be aware of the repercussions of unethical behavior.
6. Regular Review and Updates: The business environment is dynamic, and ethical challenges may evolve.
Regularly reviewing and updating the Code of Ethics ensures that it remains relevant and effective.
7. Accessibility and Visibility: The Code should be easily accessible to all employees. Placing it prominently,
both physically and digitally, reinforces its importance in the organization.
8. Whistleblower Protection: Establishing mechanisms to protect whistleblowers encourages reporting of
unethical behavior without fear of retaliation, contributing to a more transparent and accountable
environment.
9. Integration with Corporate Culture: Aligning the Code of Ethics with the organization's values and
overall culture ensures that ethical considerations are integrated into daily operations.
10. External Stakeholder Consideration: Recognizing the impact of business decisions on external
stakeholders and incorporating ethical considerations into relationships with suppliers, customers, and the
community is vital.
11. Continuous Improvement: Regularly seeking feedback, conducting ethical audits, and fostering a culture
of continuous improvement contribute to the ongoing effectiveness of a Code of Ethics.

ETHICAL PERFORMANCE IN BUSINESS

ETHICAL PERFORMANCE OF TATA STEEL
Ethical behaviour is fundamental to the way we conduct our business and is part of our legacy from the founder
of the Tata Group, Jamsetji Tata, who believed that business must operate in a way that respects the rights of all
its stakeholders and creates an overall benefit for society.
Tata Steel believes in adopting the best practices in terms of corporate governance that have been and continue
to be developed. The company conducts all aspects of its business with full transparency and accountability.
i) Risk management
The Group regularly reviews and updates its risk management system to address the complex risks faced across
our global business. The risk management process is assured through the Group's corporate assurance and risk
management function with reporting to the Group chie financial officer and reports and recommendations made
to the audit committee of the Board.
ii) Business Ethics and code of conduct
Tata Group does not tolerate corrupt or fraudulent practices. It expects honesty, integrity and transparency in all
aspects of our business from our employees, contractors and other business counterparts.
The ethical principles are clearly and unambiguously articulated in the Tata Code of Conduct, to which all Tata
Group companies subscribe. Originally written in 1998, the Code was updated in 2008 to better reflect changing
expectations within society and the increasingly global scale of the Group's activities.
iii) Human rights
The Tata Steel Group is proud of its long standing reputation as a fair and caring employer, and respects all
human rights both within and outside the workplace. The Tata Code of Conduct stipulates that all employees
have a personal responsibility to help preserve the human rights of everyone at work and in the wider
community.

Unit-1: Introduction to Business Ethics 8

iv) Ethical container sourcing
The European packaging business produces tin plate for a global market. This include ethical sourcing protocols
in our tin supplier contracts and make a constant effort to have reliable and auditable information concerning the
origin of the acquired minerals so we can avoid the use of conflict minerals.
We are cooperating in the tin supply chain with the International Tin Research Institute (ITRI) and are also
involved in activities led by the Dutch Sustainable Trade Initiative (IDH). We also work with NGOs such as the
Dutch Friends of the Earth.
ETHICAL PERFORMANCE OF INFOSYS
The Company expects to exercise good judgment to ensure the safety and welfare of Infoscions and to maintain
a cooperative, efficient, positive, harmonious and productive work environment and business conduct. These
standards apply while working on our premises, at off site locations where the business is being conducted, at
Company-sponsored business and social events, or at any other place where you are a representative of the
Company. In addition, oft client locations, you may be required to adhere to the clients' code of conduct as well.
i) Honest and Ethical Conduct
Infosys expects to act in accordance with the highest standards of personal and professional integrity, honesty
and ethical conduct, while working on the Company's premises, at off site locations where the Company's
business is being conducted, at Company sponsored business and social events, or at any other place where you
are representing the Company.
It considers honest conduct that is free from fraud or deception. Also consider ethical conduct in conformance
with accepted professional standards of conduct and compliance with all applicable laws. Ethical conduct
includes the ethical handling of actual or apparent conflicts of interest between personal and professional
relationships.
ii) Equal Opportunity Workplace Free of Discrimination or Harassment
The Company is committed to providing a work environment free of discrimination and harassment. The
Company is an equal opportunity employer and makes employment decisions based on merit and business
needs. The Company policy prohibits harassment of any kind, including harassment based on pregnancy,
childbirth or related medical conditions, race, religious creed, color, sex, gender identity, national origin or
ancestry, physical or mental disability, medical condition, marital status, age, sexual orientation, or any other
basis protected by federal, state, or local law or ordinance or regulation. All such harassment is unlawful. The
Company's anti discrimination and anti-harassment policy applies to all persons involved in the operation of the
Company and prohibits harassment by any employee of the company towards other Infosys employees
including supervisors, outside vendors, and clients. It also prohibits discrimination or harassment based on the
perception that anyone has any of those characteristics, or is associated with a person who has or is perceived as
having any of those characteristics.
The Company believes in equal work opportunities for all employees and does not condone favoritism or the
appearance of favoritism at the workplace. If you believe that you have been discriminated against, harassed or
not given an equal opportunities at work, submit a complaint to your supervisor or the Human Resources
Department as soon as possible after the incident. You may also report your complaint to the committee
responsible for addressing grievances against harassment called HEAR (Hear Employees and Resolve) by
sending an email to [email protected]. Further, if you believe you have been sexually harassed, you can
submit a complaint to the Grievance Redressal Body of the Company by sending an email to
[email protected]. If you have any questions, relating to what constitutes discrimination or harassment, or if
you have any other questions or concerns pertaining to discrimination or harassment, please refer to the Policy
on Prevention and Redressal of Harassment at Infosys.
iii) Safety at the Workplace
The safety of people at the workplace is a primary concern of the company. Each of us must comply with all
applicable health and safety policies. We are subject to compliance with all local laws to help maintain secure
and healthy work surroundings. Please go through the safety instructions published on the company intranet
from time to time and contact the Unit HR representative for any clarifications.
iv) Dress Code
Since each of us is a representative of the Company, we must pay attention to personal grooming and adhere to
the recommended dress code. Employees are expected to dress ne and in a manner consistent with the nature of
the work performed. The employees follow Company's Dress Code policy made available on the intranet. When
visiting or working on client site, employees must adhere to the dress code maintained at that particular
customer site

Unit-1: Introduction to Business Ethics 9

v) Drug, Alcohol and Weapons Abuse
To meet our responsibilities to employees, customers and investors, the Company me maintain a healthy and
productive work environment. Substance abuse, or selling, manufacturi distributing, possessing, using or being
under the influence of illegal drugs and alcohol while work is absolutely prohibited.
The possession and/or use of weapons/firearms or ammunition on Company premises o while conducting the
business of the Company is strictly prohibited, except with the prie permission of the Company or as otherwise
required by applicable law. Possession of a weapo can be authorized only for security personnel when this
possession is determined necessary secure the safety and security of Company's staff and employees. The
provision of writte permission by the Company, however, is not meant to be an indication that the Company
claim any responsibility or liability for a person's possession and/or use of a weapon/firearm ammunition and
does not authorize the person to possess and/or use such weapon/firearm ammunition on the Company's behalf.
In addition to obtaining written permission from the Company, any person in possession of a weapon/firearm or
ammunition on Company premises is solely responsible for obtaining, and must have and maintain, any and all
licenses/permission that are required by applicable laws and regulations in the relevant jurisdiction. The person
possession of the weapons/firearms or ammunition maintains sole responsibility for ensuring the their
possession and/or use of such weapons/firearms or ammunition is in conformance with al such laws and
regulations.
vi) Solicitation and Distribution of Literature
In order to ensure efficient operation of the Company's business and to prevent disruptio to employees, the
Company has established a protocol on solicitations and distribution literature at the Company premises. No
employee shall solicit or promote support for any caus or organization during his or her working time or during
the working time of the employee employees at whom such activity is directed. No employee shall distribute or
circulate a written or printed material in work areas during his or her working time or during the workin time of
the employee or employees at whom such activity is directed. Under no circumstance will non-employees be
permitted to solicit or to distribute written material for any purpose at the Company premises.
Case Study on Corporate Governance Practices with Solution
Ethical Practices at MACROS Corporation
Ethical behavior is a cornerstone of MACROS Corporation's business operations, deeply rooted in the legacy of
its founder, who believed in conducting business that respects the rights of all stakeholders and contributes to
societal well-being. MACROS Corporation upholds high standards of corporate governance and transparency.
i) Risk Management: MACROS Corporation prioritizes a robust risk management system, regularly reviewing
and updating it to address the complexities faced in its global business. The corporate assurance and risk
management function, reporting to the Chief Financial Officer, ensures transparency. The audit committee of
the Board receives reports and recommendations, reinforcing the commitment to managing risks effectively.
ii) Business Ethics and Code of Conduct: Uncompromising on ethics, MACROS Corporation has a zero-
tolerance policy for corrupt or fraudulent practices. Employees, contractors, and business counterparts are
expected to uphold honesty, integrity, and transparency. The Tata Code of Conduct, subscribed to by all
MACROS Corporation entities, provides clear ethical principles. Originally drafted in 1998 and updated in
2008, it aligns with evolving societal expectations and the company's global footprint.
iii) Human Rights: MACROS Corporation values its reputation as a fair and caring employer, committed to
respecting human rights within and beyond the workplace. The Tata Code of Conduct mandates that all
employees take personal responsibility for preserving human rights in both work and community settings,
reflecting the company's dedication to social responsibility.
iv) Ethical Container Sourcing: In the European packaging business, MACROS Corporation, akin to Tata
Steel, embraces ethical sourcing in tin supplier contracts. The company actively seeks reliable and auditable
information on mineral origins, avoiding the use of conflict minerals. Collaborating with the International Tin
Research Institute (ITRI) and participating in initiatives by the Dutch Sustainable Trade Initiative (IDH),
MACROS Corporation engages with NGOs like Friends of the Earth, underscoring its commitment to ethical
supply chain practices.
Case Study Questions:
1. Risk Management:
Question: How does MACROS Corporation ensure the effectiveness of its risk management system, and
what role does the corporate assurance and risk management function play?
Solution: MACROS Corporation regularly reviews and updates its risk management system, with oversight
from the corporate assurance and risk management function. This function reports to the Chief Financial
Officer and provides recommendations to the audit committee, ensuring a transparent and comprehensive
approach to risk management.

Unit-1: Introduction to Business Ethics 10

2. Business Ethics and Code of Conduct:
Question: How does MACROS Corporation communicate and enforce its zero-tolerance policy for corrupt
practices, and what mechanisms are in place to uphold honesty, integrity, and transparency?
Solution: MACROS Corporation communicates its commitment to ethics through the Tata Code of
Conduct. The company conducts regular training sessions to reinforce ethical principles and expects
employees, contractors, and counterparts to adhere to honesty, integrity, and transparency, aligning with the
globally subscribed Code of Conduct.
3. Human Rights:
Question: In what ways does MACROS Corporation fulfill its responsibility to preserve human rights, both
within the workplace and in the wider community?
Solution: MACROS Corporation, guided by the Tata Code of Conduct, emphasizes the personal
responsibility of all employees to preserve human rights in the workplace and wider community. The
company's reputation as a fair and caring employer underscores its commitment to respecting human rights.
4. Ethical Container Sourcing:
Question: How does MACROS Corporation ensure ethical sourcing in its tin supplier contracts, and what
initiatives does it participate in to avoid the use of conflict minerals?
Solution: MACROS Corporation incorporates ethical sourcing protocols in its tin supplier contracts,
actively seeking reliable and auditable information on mineral origins. The company collaborates with
industry initiatives such as the International Tin Research Institute (ITRI) and the Dutch Sustainable Trade
Initiative (IDH) to avoid the use of conflict minerals.

Solution Approach:
1. Enhanced Training Programs:
Conduct periodic training sessions on risk management practices, ensuring all employees understand their
role in the risk mitigation process.
Introduce online modules and workshops to provide continuous education on emerging risks and risk
management strategies.
2. Transparency and Communication:
Implement regular communication channels, such as newsletters and town hall meetings, to reinforce the
company's zero-tolerance policy.
Establish a confidential reporting mechanism for employees and stakeholders to report any ethical concerns
without fear of retaliation.
3. Expanded Community Engagement:
Develop and implement community engagement initiatives that go beyond the workplace, demonstrating
MACROS Corporation's commitment to human rights.
Collaborate with local organizations to address broader societal challenges related to human rights and
community well-being.
4. Supply Chain Audits and Collaborations:
Conduct regular audits of the supply chain to ensure compliance with ethical sourcing protocols.
Strengthen collaborations with industry bodies, NGOs, and international initiatives to share information,
conduct joint audits, and stay abreast of evolving best practices in ethical supply chain management.
By addressing these aspects, MACROS Corporation can further enhance its ethical performance, ensuring
alignment with corporate goals and contributing positively to society.

Unit-1: Introduction to Business Ethics 11