CHRIST UNIVERSITY INSTITUTE OF MANAGEMENT

HOSUR ROAD
BANGALORE 560029

ETHICS
CIA I

Submitted to:
Dr HEMALATHA R

Submitted by:

Associate Professor

ANKIT BHASIN

1527705

CUIM, Bangalore

CHANDRU M

1527713

RAHUL RAVINDRAN

1527721

GUNSHERAT KAUR

1527736

PHILIP CHETHALAN

1527614

CUIM, Bangalore

Unethical practices in manufacturing

Unethical behavior is an action that falls outside of what is considered morally right or proper
for a person, a profession or an industry. Individuals can behave unethically, as can
businesses, professionals and politicians
Businesses follow unethical practices

To face the competition and gain competitive advantage

Networking and relationship establishments required for smooth running of business
Create monetary value for organization
To follow the running practices in the business

Industry: Apparel (manufacturing)

Following are few unethical practices prevalent in apparel industry

Bribery in the purchase departments: Suppliers tend to bribe purchase touch

points of big giants such as Nike, to acquire raw materials from them. They have
fixed commissions. It is an unethical practice but to remain in business it is

important and inevitable.

Dumping Toxins: Textile firms may compromise public health by dumping
hazardous dyes into the water supply or by releasing toxins in the air far beyond

what is allowed by law.

Exploitation of labor:
1. Low wages according to work pressure: The workers are provided with
low wages as compared to the work load they as handling this is done to
2.

make better profit margins for the company.

Child labor: Child labor is more efficient due to active reflexes and fresh
minds. At the same time is cheaper, hence giants in manufacturing firms

3.

hire child labor to achieve competitive advantage.

No transparency of information: Workers are paid less and their salary is
substituted with food stamps and welfare schemes. This costs the

4.

company less and workers are left uninformed about the same.
Fixed monthly wages without overtime: Latest trend in the industry is to
fix monthly wages and avoid giving overtime for extra hours of

5.

production.
Producing in countries with less stringent labor laws: the companies
usually chose to produce in countries where laws are less strict or

nonexistent. This helps the manufacturing firm to be away from legal

battles and do as they wish.

6. Refusing to give final paycheck at due data
Tax loopholes: Gaps in the tax code exist in Indian tax structure that provides room
for individuals or businesses to take wrongful advantage without technically
violating the law. Some businesses exploit tax loopholes to avoid paying taxes,

while raking in billions in profits.

Bribing officials for utilities: Manufacturing business witness unethical practices of
bribing officials in charge (in cash and in kind) for basic utilities such as water,
electricity connections etc even for which company has legal right.

Legal but Immoral

Very often, a companys relationship with its stakeholders defines its ethical values.
McDonalds, despite its global success, remains the target of a spiteful public backlash owing
to what many perceive as bad business ethics in its relationships with employees and other
stakeholders.
This bad business ethics example of McDonald's is what is known as the "McDonald's
Legislation" in popular dialect. In 1972, Ray Kroc, the companys founder made a rare
donation of $250,000 to President Richard Nixon's re-election campaign and in return got a
favourable legislation that allowed companies such as McDonald's to pay the employees 20
percent less than the federal minimum wages. Most observers consider this a typical case of
corporate influence on lawmakers to enact legislation that serve their selfish ends and harm
society.

Illegal but moral

51 U.S. firms spanning Fortune 500 firms, tech companies, and SMEs answered the US
Presidents Call to Action and demonstrated American corporate leadership on the global
stage. They committed to investing, donating, or raising more than $650 million that will
provide support for over 6.3 million refugees across more than 20 countries including Syria
and Libya; education opportunities for more than 80,000 refugees, including through digital
content, mentorship, and classroom support; employment opportunities for more than
220,000 refugees, including through mentorship, training, and job placements; and greater

financial inclusion and economic integration for 4 million refugees. Importantly, the
commitments they announced reflect an approach not driven by giving charity but by tapping
core services and products to generate a social or economic return. Investment Strategies
CEO Lisa Leff Cooper pledged to recruit, hire, and train refugees in the financial analysis
sectors and LinkedIn CEO Jeff Weiner will develop a customized platform to match refugees
who are looking for work with employers interested in hiring them. Pearson has pledged to
extend its partnership, Every Child Learning, doubling their initial investment of $2.2 million
to work with partners to develop educational solutions and programs for Syrian
refugees and vulnerable Jordanian children. HP has pledged to establish six Learning
Studios in Lebanon and Jordan that will offer refugee students access to the latest education
technology. Underscoring the entrepreneurial talent of many refugees, George Soros
announced that he will invest $500 million in start-ups, established companies, and social
impact initiatives, including companies founded by refugees. Helping the cross border
refugees was illegal but corporations did come forward to help them

Learnings:
How situations affect decision making and what aspects one needs to see in order to be
ethical and at the same time take care of the legal aspects. Therefore a business must be legal
and at the same time morally right.