In must follow the corporate governance attributes and

In
this research paper the author try to Relate Business ethics with corporate
governance. Governance important for ethics; if a company wants
to be an ethical player then Governance guidelines must be followed. It perhaps an important part
of ethics .Several challenges may be there while confronting
Business ethics and corporate governance. Both mechanisms  may contribute in very high level projects
.

The
relationship between Business ethics and corporate governance tried to explain
with the help of a simple example i.e. theoretical. Various concepts regarding
business ethics and corporate governance have been discussed for the purpose.

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The
discussion of relation between business ethics and corporate governance is very
contributing for business entities to understand the requirement standards for
the survival in the competitive global market. Business entities must follow
the corporate governance attributes and must behave in an ethical manner. In
this paper the author discussed the same.

Introduction

It
is a common perception that a business cannot be run ethically under current
conditions and so most businessmen would be essentially unethical. A major
reason for such misperception by the common man about ethics in business is the
vagueness regarding the meaning of the word ethics itself. If A steals Rs 1000
from B, A is happy. But if B steals from A the same Rs 1000, A becomes unhappy.
Therefore, ‘stealing’ is unethical .Let’s talking about the related concept
i.e. Corporate Governance. Corporate Governance comprises two words; corporate
– An entity formulated to earn  
Profit,   governance -The way that a corporate is controlled by the people
who run it.  Actually  Corporate Governance  is the code of practice for the companies. The purpose  of this Code of Practice is to ensure that
listed  companies implement corporate
governance that clarifies the respective roles of shareholders, the board of
directors and executive management more comprehensive than is required by
legislation.

In
this research paper the author try to Relate Business ethics with corporate
governance. Governance important for ethics; if a company wants
to be an ethical player then Governance guidelines must be followed. It perhaps an important part
of ethics .Several challenges may be there while confronting
Business ethics and corporate governance. 
But on the other hand both mechanisms  may contribute in very high level projects
.

The
relationship between Business ethics and corporate governance tried to explain
with the help of conceptual method. Various concepts regarding business ethics
and corporate governance have been discussed for the purpose.

The
discussion of relation between business ethics and corporate governance is very
contributing for business entities to understand the requirement standards for
the survival in the competitive global market. Business entities must follow
the corporate governance attributes and must behave in an ethical manner. In
this paper the author discussed the same.

Business
Ethics

 Business ethics has different meanings for
different people, but generally it is to decide what is right or wrong in the
business. Actually, Business ethics as a self-conscious way of looking at
business activities. For example , If a chemical production unit A pays the Pollution
control Inspector (B) a bribe to get a clearance without having done adequate
effluent treatment (action X), both A and B would be happy even after B takes
the place of A. But what about the farmers nearby (C) whose crop yield goes
down owing to contaminated water? Here, A interchanging with C will make A,
unhappy. Therefore, not treating the effluent properly is unethical. We thus
see that ethics is applicable universally amongst all human beings. It cannot
be different between different societies and over long periods of time .In
short, Ethics are universal. In the words of Crane & Matten (2004), “The
study of business situations, activities, and decisions where issues of right
and wrong are addressed”.

Business
Ethics has some aspects such as: Ethical values; shared beliefs about right and wrong, good and bad,
Govern the behaviour of a
person or a group.

Ethical
issues;
problems or dilemmas which
present a conflict of values, Pay a ‘living wage’ or personal financial gain. Ethical choices;
decisions about which
option to take in response to a problem or dilemma,
difficult decisions,
because each option has its own drawbacks.

Business
Ethics: In Practice

There
are many companies in the world, but not all do business ethically. Ethisphere
Institute, an American think-tank, has come out with a list that shows that 145
companies in countries like the US, Great Britain, Japan, Portugal and India
stood out for setting high standards of employee behavior and conduct. Let’s
take a look amongst two companies from India that has been rated most ethical
by the institute.

Tata
Steel Ltd. Nearly a century old, Tata Iron and
Steel Company Ltd. (TISCO), more popularly known as Tata Steel, is one of
India’s oldest companies. Established in 1907 by Mr. Jamshed ji Tata. It is
Asia’s first and India’s largest integrated private sector steel company. Since
its inception, the company has focused on the customer, operational excellence,
employee welfare, organizational leadership, and social responsibilities and citizenship.
Consistent with its thrust on these dimensions, the company is one of the most
respected companies in the country for its value-based practices, ethical and
dynamic practices, and competitive performance. The name ‘Tata’ has always been
synonymous with trust.

Various steps have been taken by the company with
regard to ethical activities. One of the activities for cause in the frame of
automotive industry. The government has passed laws
targeting the reduction in tailpipe emissions. However, this only looks at car
emissions in the ‘use’ phase, rather than those caused by manufacturing and
scrapping vehicles. Use-phase emissions are to make the car lighter as lighter
weight cars use less fuel. Materials such as aluminum, magnesium or
carbon-fibre reinforced plastics have high environmental costs in manufacturing
and they are not as easy to recycle as steel. The savings made from using them
are usually outweighed by the CO2 produced in the other life-cycle phases. Various steps for the same cause have been taken
by the industry. Tata Steel is now influencing the next generation of
legislation to move towards an LCA (Life Cycle Analysis ) approach rather than
just looking at ‘tailpipe’ emissions.

Second activity has been taken for Cause in the
frame of the packaging industry. Many consumer brands
are keen to give an image of environmental responsibility by reducing packaging
or its weight. LCA studies by Tata Steel have shown that focusing on weight
reduction does not necessarily make for more sustainable packaging. Targets
just on weight reduction could lead to the wrong decision, for example, to use
alternative packaging materials that could take more energy to produce and are
not always completely recycled when they are disposed of. So in this regard step for cause have been
taken by Tata Steel and its industry partners used their LCA approach to
persuade regulators to take a different view on steel used in packaging. This
resulted in national recycling targets taking a full life-cycle approach by
using actual recycling rate as the measure, rather than reducing the total
weight of cans.

Third activity has been taken by the Tata Steel
industry for the Cause in the frame of the construction industry. There
has been a revival in the use of timber frames for buildings such as
supermarkets, warehouses and schools. Timber is perceived as being a
sustainable and ‘green’ resource. However, when Tata Steel looked at the LCA of
timber in terms of where it came from and how it was recycled, it found that
carbon emissions were similar to a typical steel framed building. How the
timber is dealt with once the building as most timber from demolished buildings
is either land-filled or incinerated.So,
the Tata steel industry has been taken some steps for the cause.  The results from the LCA study of building
structures are being used to provide facts to architects, engineers and
legislators regarding material choice.

Tentative unethical behavior by Tata Steel Ltd.
Thyssen and Tata Sign Deal to Forge Europe’s No. 2 Steel maker (updated on 20 September,
2017)
Joint venture may create synergies of up to 600 million Euros. Companies flag
possible 4,000 job losses from combination. Unions, politicians concerned about
job cuts of planned merger .The headquarters of the new venture will shift to
the Netherlands, and the move could see 4,000 steel jobs cut from a combined
workforce of 48,000.ThyssenKrupp AG and Tata Steel Ltd. reached a
tentative deal to merge their European steel businesses in a bid to create the
region’s second-largest producer and tackle overcapacity in the industry. The
German and Indian companies have signed a memorandum of understanding for the
joint venture to be named Thyssen Krupp, Tata Steel which will be equally owned
by both parties. The transaction is expected to be finalized at the beginning
of next year and will require the approval of the European Union. The two
foresee annual synergies of 400 million Euros ($480 million) to 600 million
Euros and the venture will be closer in size to Europe’s top producer, Arcelor
Mittal. Savings will be made in areas including capacity utilization, sales, administration,
research and development. But, the
companies flagged the possible loss of as many as 4,000 jobs, from a newly
combined workforce of about 48,000.

 

Corporate
Governance: An Introduction

If we talking about another related concept with
business ethics i.e. Corporate Governance 
;Corporate
Governance comprises two words; corporate – An entity formulated to earn Profit,   governance -The way that a corporate is controlled by the people
who run it. Actually  Corporate Governance  is the code of practice for the companies. The purpose of this Code of
Practice is to ensure that listed 
companies implement corporate governance that clarifies the respective
roles of shareholders, the board of directors and executive management more
comprehensive than is required by legislation.Thus, The way in which organizations are directed and
controlled.   -Cadbury (1992) The process
by which corporations are made responsive to the rights and wishes of stakeholders   – Demb and Neuberger (1992), are referred to
as corporate governance.

 

Corporate
Governance: Principle Behind

Agency Theory;
One of the principle behind the concept of corporate governance is Agency Theory. Agency relationships arise whenever one
party delegates decision-making authority or control over resources to another.
This theory describes Principal-agent relationships where; Principal- Person
delegating authority, Agent- person to whom authority is delegated.  The
Agency Problem says, Agents and
principals may have different goals, Agents may pursue goals that are not in
the best interests of their principals, and Agents may take advantage of information asymmetries to maximize
their interests at the expense of principals. In agency problem there may be
some hurdles for principal while confronting with Agent in the context of
agency problem such as: Shape the behavior of agents so that they act in
accordance with goals set by principals, Reduce information asymmetry between
agents and principals , Develop
mechanisms for removing agents who do not act in accordance with goals and
principals .

The agency problem may be reduced if Principal try
to deal with these challenges through a series of governance mechanisms. Governance
mechanism could be a tool for combating agency problem. Governance mechanisms
serve to limit the agency problem by aligning incentives between agents and
principals and by monitoring and controlling agents.
For example: The Board of Directors
under the governance mechanism  ; Elected
by stockholders , Legally accountable, Monitors corporate strategy decisions,
Authority to hire, fire, and compensate, Ensures accuracy of audited financial
statements, Inside directors, Outside directors etc .

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