PRESENTATION

ON
EVOLUTION OF BUSINESS ETHICS IN FREE
MARKET ECONOMY
• PRESENTED BY
 AASIF JAMAL
 AMIT KUMAR SINHA
 ARVIND CHAND
 ANUSHRUTI DASH
 BIPLAB KUMAR SAHU
 DEEPAK KUMAR PATNAIK
 DEBASIS PATI
 EKANTA PRIYA BISOYEE
 HEMA DEVI
 JAVED IQBAL KHAN
 KRISHNA PRASAD MOHANTY
 CONTENTS
 DEFINITION OF ETHICS
 WHAT IS BUSINESS ETHICS
 WHAT IS FREE MARKET ECONOMY
 ISSUES OF BUSINESS ETHICS
 RENAISSANCE
 INDUSTRIAL REVOLUTION
 PHASES OF INDUSTRIAL REVOLUTION
 LINKAGE BETWEEN BUSINESS ETHICS AND
FREE MARKET ECONOMY
 CODE OF ETHICS OF TATA
 INDIAN LICENSE RAJ TO GLOBALIZATION
(FOUR PHASES)
 CONCLUSION
 DEFINITION OF ETHICS

• Ethics means two things.

1) Ethics refers to well established standards of right and
wrong that prescribe what humans ought to do, usually in
terms of rights, obligations, benefits to society, fairness, or
specific virtues.
Ethics, for example, refers to those
standards that impose the reasonable obligations to refrain
from rape, stealing, murder, assault, slander, and fraud.
Ethical standards also includes virtues of honesty,
compassion, and loyalty. And, ethical standards includes
standards relating to rights, such as the right to life, the
right to freedom from injury, and the right to privacy. Such
standards are adequate standards of ethics because they are
supported by consistent and well founded reasons.
Cont..
2) Ethics refers to the study and development of one's ethical
standards.
As mentioned above, feelings, laws, and social
norms can deviate from what is called ethical. So it is
necessary to constantly examine one's standards to ensure
that they are reasonable and well-founded. Ethics also
means the continuous effort of studying our own moral
beliefs and our moral conduct, and striving to ensure that
we, and the institutions we help to shape, live up to
standards that are reasonable.
 DEFINITION OF BUSINESS ETHICS

• Business ethics is a form of those examined ethical rules and principles

which exists in a commercial context, the various moral or ethical
problems that can arise in a business setting, and any special duties or
obligations that apply to persons who are engaged in the field of
commerce.
• Business ethics can be both a normitive and a descriptive discipline. As
a corporate practice and a career specialisation, the field is primarily
normative. In academics, descriptive approaches are also taken.
 FREE MARKET ECONOMY
• A free market is a market where price is
determined by unregulated demand and
supply.

• According to a more philosophical

definition, a "free" market is a market where
trades are morally voluntaries and therefore
free from the interference of force and
fraud.
 ISSUES IN BUSINESS ETHICS

• General business ethics

• Professional ethics
 Ethics of finance and accounting
 Ethics of human resource management
 Ethics of sales and marketing
 Ethics of production
 RENAISSANCE
 The term Renaissance means rebirth, used to indicate the
flourishing of artistic and scientific activities beginning in Italy in
the mid 1300s.

 It first appears in the Vite, published in 1550 by Italian artist

Giorgio Vasari. It is the French word for the Italian rinascita,
used by French historian Jules Michelet, and expanded upon by
Swiss historian Jacob Burckhardt (both in the 1860s).

 Rebirth refers to both a rediscovery of ancient classical texts and

learning, and to the widespread revitalization of European culture
resulting from the application of this classical knowledge in the
arts and sciences. Thus Renaissance can refer to this rebirth of
classical learning and knowledge or to the ensuing rebirth of
European culture.
 Renaissance Humanism
• Renaissance humanism was a European
intellectual movement beginning in Florence in
the last decades of the 14th century.

• Its focus was on human dignity and potential

and the place of mankind in nature.
 European Economy
• In the thirteenth century, Europe in general was experiencing an
economic boom. The trade routes of the Italian states linked with
those of established Mediterranean ports and northern regions of
Europe to create a unified European economy for the first time.

• The city states of Italy expanded greatly during this period and
grew in power to become de facto fully independent of the Holy
Roman Empire.

• During this period, the modern commercial infrastructure

developed, with Joint stock companies, an international banking
system, a systematized foreign exchange market, insurance, and
government debt. Florence became the centre of this financial
industry and the gold florin became the main currency of
international trade
 INDUSTRIAL REVOLUTION

The Industrial Revolution was the major shift of

technological, socioeconomic and culture
conditions in the late 18th and early 19th century
that began in Britan.

It began with the mechanization of the textile

industries and the development of iron-making
techniques, and trade expansion was enabled by
the introduction of canals, improved roads and
then railways.
 Cont…

4 phases
–1st phase: Textile
–2nd phase: Railroads & steels
–3rd phase: Electricity & Chemicals
–4th phase: Information technology
 SOCIAL EFFECTS

Industrial Revolution triumph the middle

class of industrialist and businessman.
Ordinary working people got increased
opportunity for employment.
Industrial workers were better paid than
those in agriculture.
 CHILD LABOUR
 Death rates declined and the distribution of age in population became
more youthful.
 There were less opportunity for education and children were expected
to work.
 Employers got cheap labour.
GOVT INTERVENTION
 ‘The Factory Act 1833’ the first child labour law was passed in
England.
 Children younger than 9yr. Were not allowed to work, they were not
permitted to work at night and the work day for youth under 18yr was
limited to 12 hours.
 This law decreased the child labour up to some extent.
 OTHERS EFFECTS

 Better infrastructure. E.g. Railways, cannels, better roads.

 Helped to improve in literacy rate.
 The life expectancy of children increased dramatically.
 Emergence of the modern capitalist economy
 Exponential increase in carbon dioxide emissions from
fossil fuels, due to high demand of energy
• LINKAGE BETWEEN
BUSINESS ETHICS AND
FREE MARKET ECONOMY
• IT HAS BOTH POSITIVE & NEGETIVE
ASPECTS.
POSITIVE ASPECTS

• INVOLVE IN SOCIAL DEVELOPMENTS

NEGETIVE ASPECTS

• IPO SCAM

• SHIP BREAKING INDUSTRY

 CODE OF ETHICS OF TATA

• National Interest

A Tata company shall be committed in all its actions to

benefit to the economic development of the countries in
which it operates and shall not engage in any activity that
would adversely act 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..
 Cont…

• A Tata company shall conduct its business a 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
 Cont…

 Financial Reporting and Records

 Competition

 Equal Opportunities Employer

 Gifts and Donations

 Government Agencies

 Political Non-alignment

.
 Cont….

 Quality of Products and Services

 Corporate Citizenship

 Cooperation of Tata Companies

 Public Representation of the Company and the Group
 Third-Party Representation

 Use of the Tata Brand

 Group Policies
 LICENSE RAJ TO GLOBALISATION
Phase I (1947 – 1965):

The focus was on Government led investment

in manufacturing.

• Several large public sector units in steel,

chemical and power setup
•e.g. SAIL
Phase II (1965 - 1980):

Government involvement in industry increases

• Strong licensing laws and a sustained focus on import

substitution introduced.

• Public sector units and formation of several low scale

private sector manufacturing entities grow.
Phase III (1980 - 1990):

The Government partially opened its economy to

external trade and delicensed some key sectors for
private participation leading to a strong growth in
some few sectors.

• A key event was formation of Maruti Suzuki.

Phase IV (Began early 1990s):

• The industry was liberalized further

• The scope of licensing was significantly

reduced

• Custom duties slashed

• FDI in various sector was allowed

 INDIA’S COMPETITIVENESS IN
MANUFACTURING

India’s competitiveness in manufacturing is more

broad-based and involves these key factors:

• Labour cost advantage: labour wage level in India

are among the lowest in the world. This advantage is
likely to continue.

• Skilled manpower: 3 million graduate pass out of

universities every year. A large pool of talent, and
cost advantage.

• Raw material: India has one of the richest source of

iron ore and strong edge in bauxite, aluminium and
textile.
 Conclusion
• Across the globe, businesses are expected to be
responsible—to improve their performance, to make
profits, and to contribute to the economic progress.

• Every business has profit motive imbedded with their

ethics and values

Globalization makes rich richer and

poor poorer. Is this a reality?