Values and Ethics in Private Institutions

By | November 14, 2014

A Case study of Tata Companies

‘Corporate Values’ may be broadly defined as that set of declared beliefs, which indicate the intended character of the enterprise. Some of these values in respect of TATA Steel are as follows:
1. Trusteeship
2. Respect for the individual
3. Integrity
4. Credibility
5. Excellence

Unlike the western companies, the emphasis is not on superior, return to share holders, or ‘profit making’, ‘trade’ and ‘commerce’ etc. The core area where the priority for TATA’s company is, 1. Customer orientation, 2. Integrity, 3. Trust, 4. Excellence and 5. Respect for individuals. Perhaps TATAs feel that profit, return, commercial viability will automatically come to the company as a byproduct.

In order to achieve these values TATAs have drawn-up an elaborate ‘code of ethics’ for their companies and employees, which are as follows:

(1) For the company:
1. To supply goods and services of the highest quality for customer’s total satisfaction.
2. To engage only in activities beneficial to the national interest of the country they operate in.
3. To be fully transparent in accounting and financial reporting.
4. To strive for a competitive market economy and abhor unfair trade practices.
5. To provide equal opportunities to employees.
6. To neither give nor take any illegal payment, remuneration, gift, donation or comparable benefits to obtain business or favours.
7. To comply with all environment preservation regulation.
8. To improve and make self-reliant the quality of life of the community as a compulsory part of business plan.
9. To cooperate and share physical, human and management resources with other TATA companies.

(2) For Employees:
1. To conduct themselves with professionalism, honesty and integrity.
2. To adopt high moral and ethical standards.
3. To be fair and transparent and be seen as such even by third parties.
4. Not to derive any benefit from insider information about the company.
5. Report to management any actual or possible violation of code that could damage the reputation or business of the company.
6. Could persue an active role in civic or political affairs only so long as it does not affect the business or interests of the company.
7. Failure to adhere to the code could attract the most severe consequences, including termination of employment.
8. If any ethical or professional standard set out in concerned laws or regulations is below that of the code, then the standard of the code shall prevail.
9. Disclosure of conflict of interest must be made in writing. Failure to do so will incur ‘disciplinary action’.

Conclusion
• The demarcation drawn between ethical rules for the company and those for employees makes the code more focussed.
• It appears that company expects a very high commitment from its work force as even the company code items ultimately have to be put into practice by employees only.
• Items 7 and 9 for the employees indicate a strong resolve in the group to uphold personal ethics and a zero tolerance for ethical violations.
• Normally in such big organizations, employees have much of the ‘ethical’ dilemmas, which has been clearly resolved in item no. 8.
• The company-related items basically outline care and concern for the interests of all stakeholders.
• Explicit statement about the duty towards promoting self reliant communities is a demonstrated value of TATAs. In this matter, they have no peers in India.
• Strikingly, share holders do no figure separately. It appears that TATAs are confident that share holders’ interest will be taken care of by the employees, customers, etc.
• Allowing active role in political affairs even through subjected to a caveat is however a welcome sign.

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