New Delhi: A year ago, a senior manager at Dabur India Ltd took his boss and peers by surprise when he exceeded his growth targets by a hefty margin in a business segment that was not growing too well. An impressed supervisor decided to find out how the manager accomplished the feat.
Only then did it came to light that the manager had “bought” sales by extending discount schemes to distributors beyond permissible limits. Dabur, which sells consumer products, promptly asked the manager to leave.
“We cannot allow anyone to use unethical means even if it is for achieving business results,” says A. Sudhakar, executive vice-president, human resources, Dabur. “We are a responsible company and our reputation is something that we thrive on.”
In another instance, a senior scientist at Dr Reddy’s Laboratories Ltd was asked to leave for not living up to the value of “respect for individuals”, which is one of the corporate values at the pharmaceutical company.
Knowledge process outsourcing company Evalueserve.com Pvt. Ltd fired an executive working as assistant vice-president when it was discovered that he had provided inflated house rent bills for tax deduction purposes.
No compromise: The Wipro campus in Bangalore. An increasing number of Indian companies including Infosys, Wipro, Dabur, Crompton Greaves and Murugappa Group are adopting a zero tolerance policy on violation of organizational ethics and values. (Photo: Hemant Mishra / Mint)
“Being legal is integral to the kind of business we are in,” says Alok Aggarwal, chairman and co-founder, Evalueserve. “And, we cannot afford to keep an employee who does not appreciate the seriousness of legal obligation.”
Companies such as Wipro Ltd and Infosys Technologies Ltd regularly audit and sack any employee who might have provided false information on their resumes.
As corporate behaviour takes centre stage in the world of business, companies are waking up to the reality of driving corporate values and ethics to the last person representing the organization.
Indeed, some human resource managers say long-term organizational sustainability has its basis in the reputation it builds for itself.
“No stakeholder, be it investors, customers, suppliers, employees or the community at large, will trust an organization for long if it is not seen as ethical and fair,” says Prabir Jha, global head, human resources, Dr Reddy’s Laboratories.
While multinationals such as Hindustan Unilever Ltd (HUL), Shell Companies in India, E.I. DuPont India Pvt. Ltd, and GlaxoSmithKline Pharmaceuticals Ltd have long espoused the cause of corporate ethics, an increasing number of Indian companies such as Infosys, Wipro, Crompton Greaves Ltd, Murugappa Group, Lalbhai Group, Eicher Group and Dabur, for instance, have started adopting a zero tolerance policy on non-conformity with regard to corporate values and organizational ethics.
“In a fast-growing economy, there’s a rush among companies to get there first, make themselves visible and grab more market share. Getting it right, is not always the focus,” says Gauri Sarin, president, Approach Talent Solutions Pvt. Ltd, an executive search firm. But, with Indian businesses getting more globalized than ever, there is now an increasing consciousness among companies to get their act together.
“Globally, companies are increasingly feeling the pressure of being ethical,” says J. Robert Carr, chief professional and business development officer, Society for Human Resource Management (SHRM), a Virginia-based human resource consulting company.
“Among the companies adopting a code of ethics in India are mostly the ones wanting to do business in the US or other regulated market environments,” says Carr, who has earlier worked as SHRM’s chief ethics officer and also served as deputy counsel to the ethics committee of the US House of Representatives.
Some observers, however, maintain that for most Indian companies an ethical conduct largely remains a rhetoric.
“Around 90-95% companies in India don’t follow code of ethics,” says Dharmesh Srivastava, partner and a human resource and employment specialist at Fox Mandal Little, a leading law firm. Out of 100 companies in India, around 10 would have a written code of ethics and perhaps only four or five of them will effectively follow it, says Srivastava.
Some companies, however, disagree with this assessment.
Dabur and Dr Reddy’s say they have a comprehensive code of conduct that expects its employees to conduct themselves with integrity and aim for high level of quality in whatever they do. Similarly, at Wipro, employees are expected to avoid unfairness in action at all cost. HUL expects its workers not to gain for themselves or others through misuse of their positions.
Although there are no studies to establish the correlation between business growth and ethical conduct, experts say stakeholders at large, including customers, favour companies that demonstrate responsibility and ethical practices.
“There’s a competitive advantage to this,” says Anjali Bansal, managing director of Spencer Stuart, US-based executive search firm that specializes in senior level recruiting for companies globally. In addition to creating a differentiator, ethical behaviour helps in better staff attraction and retention.
“An increasing number of Indian companies, therefore, are putting in place a code of ethics to attract high-quality talent,” adds Bansal.
See Mint’s own Code of Conduct at www.livemint.com.