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Business Ethics
Case Studies
Case (20 Marks)
Unlike the West, in India declaring fat, carbohydrate and cholesterol content o1n food labels is not yet necessary. But the health ministry’s latest proposal is set to alter India’s archaic food regulation norms. The Central Committee of Food Standards (CCFS), a health ministry body, has recommended that labeling of nutritional value on all food products be made necessary under the Prevention of Food Adulteration (PFA) Act. Sources in the Government said that the move is aimed at the aligning Indian food products with global standards. “The new norms will also put a lid on companies making loose claims about selling ‘low fat’, ‘fat free’, and ‘low calorie’ foods. Consumers will be able to make informed choices,”ministry sources added. Industry experts say that the mandatory declaration of nutrition content will impact consumer off take of calorierich foods like ghee, icecreams, biscuits, cakes and so on, thanks to diet and health consciousness gaining ground. The new labeling norms are expected to hit smaller players the most, since they will have to incur additional labeling and packaging costs.
Answer the following question.
Q1. W.r.t the above facts, explain the various unethical issues relating to public safety.
Q2. What is the role of PFA act in the above case?
Case (20 Marks)
Isaac moved off campus his sophomore year into an apartment with his friend Jason. Isaac and Jason met in their dorm during freshman year. Isaac always thought Jason seemed like a really cool guy until he discovered that Jason was into cocaine. Not only was Jason a user; he also distributed cocaine to others on campus. Isaac doesn’t want to rat Jason out because they’re friends, but Isaac doesn’t want to run the risk of being kicked out of his apartment, or worse, going to jail.
Answer the following question.
Q1. Should Isaac confront Jason and tell him that he knows he has been using and selling cocaine? Comment.
Q2. Should Isaac tell a school counselor? or the police? Discuss.
CASE 2 (20 Marks)
Share price rigging is rampant during bull runs. To see how it happens, let’s check the modus operandi. The main format which evolved during Harshad Mehta’s time, involves three participants – promoters, operator and a broker syndicate. There are ancillary participants like fake billsellers, and also perhaps unscrupulous auditors and officials. The promoter first finds an operator or vice versa. The promoter should be interested in bumping up the share price, the motivation for which could vary from the basic – offloading his stake at a high price to gullible retail investors – to the more advanced – which comprises complex needs like getting better validation for a GDR issue or in an M & A. it works like this: the promoters commit to the operator not to sell the market while the operation is on. He gives about 10% of his stake to the operator of companies affiliated to the brokrs’ syndicate. The syndicate normally comprises 610 brokers, often dispersed in different cities so as not to arouse suspicion of SEBI or the stock exchange. Their role is to do circular trading which works like this: say broker A sells to B at Rs. 4.5; will sell to C at Rs. 4.65 and so on. The trades are designed to generate the impression of large liquidity. After taking prices to certain level, ‘news flow’ is created. The news is typically about large orders and capacity expansion. These days it is often about an acquisition or restructuring. Also, financial results need to show improvement. This is done by buying revenue. There are agents who sell fake bills at a certain commission, which could be between 0.5% and 10%. ET has learnt this market tends to boom at the same time as share markets.
After the price reaches the target, the syndicate exits. The gains are split between the promoter, operator and syndicate members. In this artificially created bull run, there is a new element: people trying to convert black money to white.
Answer the following question.
Q1. Give an overview of the case.
Q2. Discuss the ethical issues in this case
CASE 8 (20 Marks)
Thirty two sadhus from Punchamahal district, who were on a 72hour relay hunger strike at Godhra since Friday to canvass against the BJP candidate from the Lok Sabha constituency there, Mr. Shankarisinh Vaghela, from his role in the toppling of the Keshubhai Patel ministry after spearheading a revolt, called off their agitation today, reports PTI. Reports received from Godhra, about 80kms from here, said the mahanta and sadhus, along with the vice president of all India Shadhu Sant’s Samiti, Avichanddas Maharaj from Sarsa in Anand Constituency, withdrew the fast, which was to end at 2.00 p.m. tomorrow. It was not immediately clear as to why they called off the protest prematurely. The sadhus had said they wanted to ensure the defeat of Mr. Vaghela in the election and alleged that he had betrayed them by dethroning Mr. Patel last October. They also demanded an end to ‘Khajuraho Culture’ in the BJP and noted that Mr. Vaghela had flown dissident BJP MLAs to Khajuraho in Madhya Pradesh during the revolt by some rebels in the party. Meanwhile, the Chief Minister, Mr. Suresh Mehta, at a press conference at the Chhotaudepur town in Baroda district, appealed to the sadhus to end their program of dharna ‘in the interest of the BJP and the nation’.
Answer the following question.
Q1. Explain the unethical aspects in the above case
Q2. Suggest remedial measures in the above case.
Q3. What are your viewpoints on the above case
Q4. What do you mean by ‘ Khjuraho culture’ in the case? Explain.
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Project Report and Thesis contact
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