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The name Tata has always been synonymous with trust. The statement of purpose of the Tata Group explicitly seeks to improve the quality of life in the communities they serve. It says” our heritage of returning to society what we earn evokes trust among consumers, employees, shareholders and the community. This heritage will be continuously enriched by formalizing the high standards of behavior expected from employees and companies”.

The values and principles that govern the community were articulated for the first time in 1998. The company formally published its ‘Code of Conduct.’ It is a set of principles based on good ethical business practices by which all employees are expected to act. Signing of the Tata code of conduct entitles a company to use the Tata brand name. Awareness programmes were organized were organized for persons other than the employees who also deal with the company such as the shareholders, suppliers etc…

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It was felt that top management is likely to be faced by more temptations to violate the code of conduct due to greater level of authority and responsibilities. Hence, workshops for the family of the top management were organized to bring a sense of pride that they were part of an ‘ethical value based’ organization. [1] Impact of ethical behavior on an organization and at an individual level: Research shows that there is a positive relationship between ethical behavior leadership. An unethical organization at a societal level gives an organization a negative image. Unethical behavior leads to great loses, scandals etc…

Enron is an example of an unethical organization. Unethical practices have adversely affected the organization to such an extent that it ceases to exist. At an individual level the management responsible for the unethical practices may never hold high-level positions again due to the negative media coverage. [2]

On the other hand the trading firm Tata and sons that began in1867 approximately was a modest beginning for a brand that is valued in billions of dollars today.

It is clear from the above mentioned examples of business practices that for long-term profitability and sustainability ethical business practices is the way forward. Unethical business practices do bring about large gains unrealistic gains but cease to continue in the long term.

Mahatma Gandhi called business in the absence of morality a sin.  Contribution towards environmental sustainability: The Tata Group has always worked hard to make sensible and responsible decisions on environmental matters. Tata Steel was the first integrated iron and steel plant in India to be certified with the ISO 14001 Environmental Standard Act. At that time Tata was one of the few worldwide to have this accredit ion. Clause eight of the Tata Code of Conduct states:

‘ A Tata comapny shall strive to provide a safe and healthy working environment and comply in the conduct of it’s business affaires, with all regulations regarding the preservation of the environment of the territory it operates in. A Tata company shall be committed to prevent wasteful use of natural resources and minimize any hazardous impact of development, production, use and disposal of any of it’s products and services on the ecological environment.The main reason for such accusations is that when commercial interest and social responsiveness come into conflict the former takes first preference. Having analyzed Tata’ actions from the corporate social responsiveness point of view I strongly feel it’s often a “win-win” for most organizations such as Tata.

CSR may be an innovative way of marketing an organization but from the Utilitarian perspective it provides the greatest good for the greatest number of people. Moreover, no one party is being harmed. Having done so much for society it’s only human to want recognition for the same. An organization is not solely run by a proprietor or a group of shareholders. Neither is it run by the board of directors.

Organizations are run on systems and policies. Successful organizations have well established ethical policies. Ethical business practices bring about a great deal of trust in the minds all those who interact with the organization. In the absence of trust it is almost impossible to run a business. Managerial decisions and day to day activities should be based on ethical principles and managed by a responsible management team.


1. Maheshwari, S (2004) Ethics in organizations: The case of Tata Steel.

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