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BUSINESS ETHICS: A CASE STUDY ON VIOLATION OF BUSINESS ETHICS BY COCA COLA COMPANY IN PLACHIMADA
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This chapter explores the case of bottled water industry in India where over-exploitation of groundwater by industrial giants in the sector leaves the right-holders unprotected, thwarting their enjoyment of the right to water. Soft drink manufacturing companies and bottled water companies have been progressively establishing manufacturing units all over the country, exploiting, primarily, groundwater for their production needs. Water mining practised by these companies affects the communities dependent upon these resources, but the regulatory atmosphere of groundwater is weak and allows no voice to the dependents of a resource on water use. Decisions regarding groundwater management and exploitation are taken far away from these communities, and institutional structures have not created the spaces for the representation of their interests. In this context, the chapter explores the legal possibility for an alternate approach, namely, decentralised groundwater management, one that is based on the local self-government institutions. Groundwater in India: The Contexts Beyond the six decades that has passed since independence, majority of Indians continue to lack access to public piped water supply. Groundwater , extracted through open and bored wells, is relied on to meet the water needs of 80 % of all population (Planning Commission 2010), and by some estimates the fi gure could be as high as 90% (Hoering 2008). The World Bank estimates that 80 % of all drinking water demands in the country are met exclusively through groundwater extraction (World Bank 2010). However, the water demands that we must be concerned about are not just domestic ones. Irrigation, for agricultural purposes, also relies on groundwater. The Government of India offi cially acknowledges that 58 % of all
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In recent years, scholars and managers have devoted considerable attention to the strategic implications of corporate social responsibility (CSR). CSR can be defined as situations where the firm goes beyond compliance and acts to further some social good, beyond the interests of the firm and that which is required by law. CSR activities have been posited to include incorporating social characteristics or features into products and manufacturing processes (aerosol products with no fluorocarbons, environmentally-friendly technologies), adopting progressive human resource management practices (promoting employee empowerment), achieving higher levels of environmental performance through recycling and pollution abatement (reducing emissions), and advancing the goals of community organizations (working closely with groups such as United Way). In this context I have studied the theoretical aspect of CSR including the Global Reporting Initiative and CSR Legislation norms and globalization of CSR in the including India. I have also studied few specific cases of CSR activity and CSR violation in India.
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Although there are various challenges (like, lack of community participation, non-transparency, non-availability of well-organized NGO and clear cut CSR guidelines, lack of consensus on implementing CSR issues etc.), corporate social responsibility (now “CSR”) has become a sine-qua-non for sustainable corporate development. Since CSR and corporate sustainability are so closely intertwined,
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Conceived as Transverse Solidarity, the Cola Quit Plachimada struggle in a rural hamlet in the Indian state of Kerala reveals how the socioeconomic sustainability of communities is of as much importance as environmental, cultural, and political justification for a social movement and its success. The implicit theoretical notion is further enriched and elucidated by the ethnographic narration of a plurality of contested issues and struggles at multiple sites of power. The study addresses how a water-based subaltern movement gradually grew into transverse solidarity within the space between civil society and the state/governing institutions, politicizing them and consequently making allies of them, and how the discursive and material practices of structure-authorities and macro-power relations were contested.
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This paper analyses how businesses affect the right to water and the right to food. It looks primarily at businesses as water users, rather than as water providers, and as food producers. It examines the private sector impacts on these rights through the “Protect-Respect-Remedy” framework developed by the Special Representative of the UN Secretary General on business and human rights. As the Framework affirms, the corporate responsibility to respect rights applies to all human rights, and involves due diligence to understand potential impacts on rights and put systems in place to prevent and address any violations. Thus, the private sector’s responsibility to respect, and its attendant due diligence obligations, apply to the rights to food and water. Delving into the normative content of the rights to food and water, and looking in particular at the minimum core content of these rights, makes clear that those who suffer from violations of the right to food or the right to water are typically those who are poor, vulnerable, and experience a “rights deficit” more generally. Commercial agriculture and industry compete with other users of water, including individuals. The amount of water needed to fulfill the right to water for an individual is very small, as is the amount of water needed by subsistence farmers to produce food for personal consumption. However, examples abound internationally of disproportionate water use and pollution by businesses that significantly impacts access to water for surrounding communities. This paper discusses examples which show that where a business adversely impacts access to water through its operations, it is also highly likely to be contributing to abuses of the right to food for individuals in the local area. Private sector impacts on water and food are, of course, situated within and mediated by the regulatory regime and policy choices made by the State, the primary duty holder vis-à-vis human rights. Weak regulation may generate opportunities for profit, but it can also create the potential for violations of the rights to food and water, and this is a dilemma that companies have to navigate. Moreover, macroeconomic forces also influence how a business impacts access to food and water for individuals, and given the global nature of food markets, these impacts are often felt by communities located far from a company’s site of operations. In light of this, how should companies strengthen their due diligence to ensure that they are respecting the rights to food and water? The paper presents a set of questions for companies to consider, which encompass efficiency, waste disposal, ensuring adequate supply of water in the area of operations to other users, working conditions, use of free, prior, informed consent, and fair dealings with local communities.
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Corporate india’s ethical challenges accelerated by the covid-19 crisis: ey global integrity survey 2020, india, mumbai, 25 june 2020: the covid-19 crisis has magnified the risk of unethical conduct in corporate india as businesses face severe and widespread disruption in operations, supply chains and workforce, states ey’s global integrity survey 2020..
Multidisciplinary professional services organization
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- 98% believe that disruption, as a result of COVID-19, poses a risk to ethical business conduct
- 76% say maintaining integrity standards in periods of rapid change or difficult market conditions is challenging for organizations
- 92% say they would be concerned if information about decisions taken by management were subject to public scrutiny
India, Mumbai, 25 June 2020 : The COVID-19 crisis has magnified the risk of unethical conduct in corporate India as businesses face severe and widespread disruption in operations, supply chains and workforce, states EY’s Global Integrity Survey 2020, Is this the moment of truth for corporate integrity? Declining financial performance (37%), disruption to traditional working patterns (36%), reduced focus on ethical behaviour from senior management (34%) and weakening compliance processes and controls (20%) are some of the greatest risks to ethical business conduct because of the pandemic. Over one third of the respondents believe that unethical behaviour will increase further. The survey further states that 64% believe that unethical behaviour is often tolerated when involving seniors or high performers.
Arpinder Singh, Partner and Head – India and Emerging Markets, Forensic & Integrity Services, EY said, “The COVID-19 pandemic struck the business ecosystem to its core, propelling management to deal with operational distress and business continuity with urgency. As tough decisions are being taken amid the crisis, the risk of unethical behaviour and compliance infractions has increased and can weigh heavily on organizations. Turbulent times like these can have corporate integrity becoming a true differentiator as organizations concentrate on encouraging ethical conduct, building trust in third party partnerships, protecting data and circumnavigating the risks present now, next and beyond.”
The survey research reveals insights from business leaders on the myriad of ethical challenges facing organizations, both in the lead-up to and at the height of the COVID-19 crisis. Key survey findings for India include:
Unethical conduct on a downward spiral
A significant number of employees remain willing to act unethically for personal financial gain, and the global pandemic is only exacerbating this by increasing the incentives and opening new avenues for them to do so. Senior employees are more likely to justify unethical behaviour such as ignoring misconduct in their team, misleading external parties or offering/accepting a bribe to boost their own career progression or remuneration. COVID-19 and the ensuing economic crisis will uncover their unethical behaviour and actions, leaving organizations exposed to the threat of reputational damage and financial losses.
- 69% believe that there are managers in the organization who would sacrifice integrity for short term financial gain. This was higher than the global figure which stood at 43%.
- 57% would be prepared to act unethically to improve their career progression or remuneration package. 32% would be willing to falsify customer records, 31% would ignore unethical conduct by third parties and 29% would provide false information to management.
- 77% state that integrity standards have improved in their organization in the last two years, and 90% say it is important to be able to demonstrate that their organization operates with integrity
- However, 92% say they would be concerned if information about decisions taken by management were subject to public scrutiny, much higher that global (54%)
Integrity issues soar during mergers and acquisitions
Organizations can face significant risk during mergers and acquisitions (M&A), joint ventures, when partnering with or investing in other businesses. As investors start to look again to the emerging markets for greater returns, it is important to remember that integrity plays a significant role in M&A due diligence.
- Globally, 95% of respondents believe integrity-related risks are among the most significant when undergoing a transaction
- According to respondents from India, future commercial viability (27%), management’s integrity at the acquired organization (24%) and fraudulent business activities (21%) are some of the key risks in M&A
- Only 37% conduct detailed background checks on promoters or key management personnel
- Only 31% perform compliance or integrity related reviews, and 26% conduct bribery and corruption reviews before buying another organization
Data breaches and privacy risks in the new normal
COVID-19 has increased data security risks as the shift to employees working remotely provides significant opportunities for cybercriminals to target unwitting employees who are not prepared to handle sensitive data securely.
- Cyber-attacks and ransomware (36%) and pandemics (36%) are perceived as the greatest risks to the long-term success of organizations, followed by bribery and corruption (24%) and fraud (21%)
- Only 56% train employees on applicable data privacy regulations, such as the General Data Protection Regulation (GDPR)
- Only 32% had an incident response plan in the event of a data security breach
- Only 47% conduct data security audits of suppliers and 41% perform Privacy Impact Assessments
- 68% say that the current data protection and privacy legislation is a barrier to the success in business
- A majority (90%) say the level of enforcement of data protection and privacy legislation will increase in future
Notes to Editors About EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data and a description of the rights individuals have under data protection legislation is available via ey.com/privacy. For more information about our organization, please visit ey.com.
This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients.
About the survey
Between January and February 2020, researchers—the global market research agency Ipsos MORI—conducted 2,948 surveys in the local language with board members, senior managers, managers and employees in a sample of the largest organizations and public bodies in 33 countries and territories worldwide.
A further 600 interviews in total were conducted in April 2020 using the same respondent profile across China, Germany, India, Italy, UK and the US during the COVID-19 pandemic.
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EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.
EY | Assurance | Consulting | Strategy and Transactions | Tax
EY is a global leader in assurance, consulting, strategy and transactions, and tax services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.
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This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.
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Business Ethics ICMR Case Collection provides teachers, corporate trainers, and management professionals with a variety of teaching and reference material. The collection consists of case studies and research reports on a wide range of companies and industries - both Indian and international.
Business Ethics Cases. ICMR regularly updates the list of free cases. To view more free cases, please visit our site at frequent intervals.
The collection consists of Business Ethics case studies and research reports on a wide range of companies and industries - both Indian and international, cases won awards in varies competitions, EFMD Case Writing Competition, Global ECCH Case Awards, Baylor-USASBE Student Case Research Competition, Dark Side Case Writing Competition, oikos ...
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BLOC helps B- school students with case studies examples to analyze business problems, business ethics case study, MBA in marketing subjects, entrepreneurship case study for top...
In this context I have studied the theoretical aspect of CSR including the Global Reporting Initiative and CSR Legislation norms and globalization of CSR in the including India. I have also studied few specific cases of CSR activity and CSR violation in India. Download Free PDF. View PDF.
The COVID-19 crisis has magnified the risk of unethical conduct in corporate India as businesses face severe and widespread disruption in operations, supply chains and workforce, states EY’s Global Integrity Survey 2020.
Find ethics case studies on bribery, sourcing, intellectual property, downsizing, and other topics in business ethics, corporate governance, and ethical leadership. (For permission to reprint articles, submit requests to [email protected].)