Business Ethics Blogpost

-Kolyaani Gupta

Liberal Economic policies have led to the emergence of a new aspect of business organizations and corporations. With the advent of globalization, business organizations have moved from the constraints of geographical boundaries, whereby they are not affected by the legal constraints of a particular country. This makes it easy for corporations to fidget with the aspect of accountability. A business setup is a key element in generating employment, paying taxes and acting as an engine for a country’s economic development, which means that business cannot be limited to be defined as only an exchange of transactions. Business ethics is defined as the study of business and its key features to assess the moral standing of these features, wherein ethical theories are applied to evaluate and weigh the right and wrong. This enables to generate an optimal relation between the business and sustainability (Crane & Matten, 2016)

The infamous incident at Rana Plaza,[1] located in a small town in Bangladesh, where approximately a thousand workers died due to the building crumbling down in 2013. A fast fashion company owned the building and in spite of being declared unfit for habitation, the workers were forced to come. A utilitarian (Mill, 1998; Ryan, 1990) business approach would actually justify the means if the end served the greater good. This theory would actually look at the greater good of generating maximum output, thus, increasing their chance to generate maximum output. The means to reach that potential of generating the highest profit could be justified by the end as it secures the happiness for the greater good. However, Kantian Ethics (Guyer, 2007), also known as deontological ethics, characterizes duty as a categorical imperative rather than a hypothetical one, and the Kantian ethical theory would condemn the Rana Plaza incident as a violation of the cardinal imperative of duty, thereby deeming it to be completely unethical.

Business organizations are obligated to the consumers for the transparency of transactions; however, the obligations are not only restricted to the consumers. Corporations and organizations have a duty towards their workers and members. Triple Bottom Line is a concept that states that businesses and organizations cannot solely focus on only adding economic value (Elkington, 1999). They have to uphold social and environmental values as well, thereby building an ecosystem of sustainable growth and development

[1] http://www.ethicalcorp.com

The Preamble of the Indian Constitution reads, “WE, THE PEOPLE OF INDIA, having solemnly resolved to constitute India into a SOVEREIGN SOCIALIST SECULAR DEMOCRATIC REPUBLIC and to secure to all …”. One of the principal pillars of Indian democracy is the character of secularism which it beholds. “Secular” means which has no religious basis or is separate from religion, and a secular person is the one who does not owe his moral values to any religion. An individual’s values are primarily product of his rational and scientific thinking. The key features of secularism embody within itself the equal respect and recognition of all religions by the State, no official religion in India, an individual has the right to profess, propagate and practise any religion, and no discrimination by the State on the basis of religion. In other words, secularism means segregating the religion from political, socio- economic, and cultural aspects of life.

With the rise in judicial activism and the enforcement of fundamental rights through the High Court and Supreme Court, the question of defining secularism strikes one’s mind. The recent Hijab Ban Judgement by Karnataka High Court, wherein the honourable High Court upheld the Karnataka Government order to ban wearing hijab in the educational institutions. While quoting the difference between ‘Freedom of Conscience’ and ‘Religious Expression’, the three judges Bench at the High Court explained that while conscience is an internal belief, religious expression is an outward expression of this belief. The Court also upheld that wearing the hijab is not an essential religious practice and therefore does not fall within the umbrella of protection under Article 25 of the Constitution of India, 1950. However, the hijab ban judgement has been criticised on various grounds. Post this judgement there have been noticeable pleas in the Supreme Court to declare the acceptance and adherence of a uniform dress code for schools and educational institutions. And these extended pleas raised in light of such judgments definitely raise an alarming question that needs to be answered; one of them is defining what secularism is. Is it the acceptance of all religions and living in coherence with other religious diversities, or is it to bring uniformity amongst all religions and practices.

Uniformity and diversity are two different terminologies wherein uniformity means “sameness”, or “absence of diversity”, whereas diversity means, “state of difference or variety”, or “noticeable heterogeneity as opposed to homogeneity”. Uniformity of religions, as opposed to diversity of religions, makes one question the concept of secularism. The concerning issue that can exist in the aims of religious education is to cast a fine line of demarcation between the desire to encourage open‐minded, critical thinking through exposure to diverse traditions, ideas and cultures, into uniformity wherein the learners take on the values of a particular tradition, culture or ideology (say of religion, family or school). Religious uniformity is usually seen where the government promotes one State’s religion, denomination, or philosophy to exclude all other religious beliefs. Religious uniformity was common in many modern theocratic and atheistic governments. But, one can always question this by stating that secularism means that the State does not prioritise any one religion over the exclusion of others, especially in a diverse culture. All institutions rather have regard for all religions, by recognising and accepting all religious diversities and respecting pluralism.

It is definitely a debatable question that is to be pondered upon. Defining secularism will certainly involve judicial interventions, and research by scholars and academicians, while considering secularism as the cardinal principle of the Indian Democracy.

The world is thriving on innovation. Consumer needs are evolving like never before. We are witnessing an unprecedented rate of technological transformation driven by cognitive computing, artificial intelligence, and big data, leading to a plethora of innovative products and services. Solution orientation and problem-solving abilities are the key skills that organizations consider crucial to succeed. The development of an entrepreneurial mindset is one such approach that can help organizations to inculcate an entrepreneurial spirit among employees and create growth opportunities.

Having an entrepreneurial mindset encompasses a set of beliefs and perspectives that leads to the identification of opportunities and solutions to the problems faced by the world. It is a solution-oriented approach to view the world focused on developing innovative and efficient solutions that generate value for society. Curiosity, creative problem solving, originality, and decisiveness are the key abilities that help build a mindset that enables entrepreneurs to approach events, situations, and problems by identifying opportunities and generating value. Adopting an entrepreneurial mindset leads to the development of resilience, persistence, and problem-solving abilities that help foresee potential problems and convert them into opportunities. It instills the intent to think outside the box for creative solutions, experiment, and take risks. One can develop an entrepreneurial mindset by inculcating the following skills.

Creative problem solving

It is a way of problem-solving that encourages novel perspectives and innovative solutions. It is adopted when the conventional way of problem-solving does not yield effective solutions. It is more than brainstorming and involves a systematic approach for problem definition, creative idea generation, and implementation. It is an indispensable skill for developing an entrepreneurial mindset that can help identify undiscovered opportunities and solutions.

Solution orientation

It is a way of looking at any given situation in terms of not only problems but also relevant solutions. Solution-oriented people are proactive and driven to generate a solution rather than waiting for its discovery. Critical thinking and feedback are integral parts of the process. The focus is on the actionable steps that would lead to accomplishing the end goal.

Vision

A roadmap for the future is essential to direct the efforts in the desired direction. An entrepreneur’s vision enables them to align their activities and decisions with their goals and objectives. It helps to make a choice when faced with alternative pathways in order to serve the purpose defined in the vision.

Risk handling

An ability to deal with uncertainty and risk is one of the key skills which can be inculcated to develop an entrepreneurial mindset. Creative and innovative solutions have an inherent risk in terms of implementation and performance. An appetite for taking and managing the associated risks is essential for the development of innovative solutions.

Collaboration and team skills

Teams play an important role in problem-solving and brainstorming. An understanding of various team functions and group dynamics is necessary to handle the associated group dynamics. Working together in teams requires skills such as effective communication, empathy, leadership, and critical thinking.

Adaptability

The business and technological landscape is fast evolving. An entrepreneurial approach toward problem-solving requires a dynamic outlook toward the changing context and the associated issues. An ability to identify the current and future prospects and challenges in relation to a solution is crucial for its successful implementation. An entrepreneurial mindset encourages a flexible approach toward problem-solving, taking into account the evolving nature of the business environment.

An entrepreneurial mindset is an essential capability that can be inculcated in order to effectively handle the challenges of the current times. Such a mindset is essential for a shift towards a more solution-oriented culture in organizations.

Recently the International Bar Association has demarcated the changing practice that has been introduced in commercial dispute resolution due to the outbreak of the Covid-19 pandemic. It has reflected on the study of substantive and temporary laws as well as its regulations, which have been incorporated during this pandemic across twenty-three nations. The study shows how developing and developed nations have welcomed or have come across different forms of challenges while practicing the “new normal” approach by using technology.

It is to be noted that the United Nations Commission on International Trade Law has highlighted the concept of ODR. Under this emphasis has been made on the practice of resolving disputes by using electronic communications and using other information as well as communication technology. Interestingly in 2021 and 2020, this Commission has reflected on the use of dispute resolution while using the digital economy for practicing their future programs. To have a check on conducting litigation guidelines have been issued. It has been observed that arbitral institutions have played a significant role in this pandemic as they have issued guidelines on the way the arbitral proceedings should take place. For instance, it has elaborated on how online arbitral hearings can take place. It seems that few nation’s laws have permitted award’s enforcement by following the online process wholly.

(i) Developed Nation

Singapore: The Supreme Court as well as the state court has allowed certain types of hearings, which can be in-process and would be conducted by online mode, and has also mentioned that all others have to be under physical presence. For instance, when there are civil trials and their hearings the witness can be examined in the state courts and the videoconferencing can take place when all the parties consent to it. Moreover, when the matter is in the Supreme Court under this situation the whole trial or hearing can be done by online mode. The courts can have total control over deciding what types of specific hearings can be conducted online among one or more parties. With the introduction of “pilot programs,” an effort has been made to welcome the practice of ‘online hearing’ to lessen the burden of the court. The aim is to have court services, which would promote the use of online mode.

(ii) Emerging Nation

Egypt: The courts are encouraged to value the presence of virtual courts while delivering their judgments. By adopting precautionary steps emphasis has been made on ensuring proper functioning of the ongoing proceeding and filling process. Conducting virtual hearings shows the ODR services have been boosted up in this country. By introducing the Egyptian Centre for Voluntary Arbitration and Settlement of Non-Banking Financial Dispute along with mediation and arbitration rules through December 2020 decree now electronic registry is possible concerning mediation or arbitration procedure. An Arbitral tribunal can examine the witness virtually. Even online memorials, statements of claims, defence statements can be submitted by online mode.

This reflects several nations have welcomed many changes in their legal system. Among them has been to encourage the use of conducting online proceedings. Such practice has indulged these nations in enhancing the practice of arbitration as well as mediation. Despite this, there is an urgent need to have a transparent and efficient mechanism that could uplift the performance of this system where at the moment global multilateral agencies are making an effort.

Today the entire globe is working on the technology that is trending, and the environment in organizations is a dynamic one based on the change in the technological world. In most organizations, be they in the manufacturing sector, logistics based firms or educational institutes, most of the day to day operations in almost all the functional areas are carried out through technological support. Most areas are software-driven. This has boosted all businesses, saved time, brought transparency, brought about a structure in all processes and provided time and space for innovation and research. Does this mean that the conventional role of managers has ceased to exist? Not exactly. A manager has to manage the functional areas,

But in this highly structured and technologically guided environment, the relevance of a leader is debatable. Today all tasks are usually carried out by technology and duly fitted into the system, either software system or machine or process system. In this scenario, has the role of the leader faded away or has it become even more challenging, it is something to analytically think.

Leadership is a partnership, partnership with stakeholders, with subordinates, and with the team. As a consequence of technology orientation, individuals start loving their profession rather than their organization. Hence a leader faces the challenges of motivating, retaining and controlling them. The challenge of a leader is, thus, whether to be a task-oriented leader or a relationship-oriented leader. If the leader possesses charisma, will they be able to pull strong followership? Charismatic leadership in the current business environment where technology is the master may sound to be irrelevant. But the case is not so. The art of integrating the processes, technology and worth creation will demand charisma to be displayed by the leader.

At the time of technology change, which style is more relevant? Authoritative or democratic? Again, in this paced up, competitive, dynamic business environment, entrepreneurial leadership will be in demand. A leader will have to prove through his new ideas keeping the bottom line- increase in profit intact. Most importantly, CREATIVITY will count for organizational sustenance and growth.

What risk does a leader take in this structured, technology-driven business world? This is a clear case that risk has increased. Investment in technology expects more profit. On the other hand, technology fosters competition in the market, leading to the risk of diminished market share. In this irony, the role of the leader becomes crucial – the leader needs to be a visionary with strong cognitive command, and he should also possess high tenacity and high resilience. Hence leader and leadership are there to stay.

A real leader believes in a relationship, transparent management, trustworthiness and task orientation. They deserve to be powerful through high emotional intelligence, integrity and practising work ethics. He is a conflict minimizer and decision-maker.

But what is the degree of their power? Do they have any influence on the people, system or process? Yes, he does. Even the highest tech-savvy organizations have to prevent hacking, avoid internal and external politics and keep the workforce glued together.

Finally, leadership pays its part in maintaining a balance between the existing status quo, pulling the rope tight when change is accelerated, creating worth, and creating strong relations amongst stakeholders. Maintaining a happy workforce an enthusiastic & motivated team still remains a significant task for the leader. Flexibility to diversify and courage to change is still the forte of the leader.

The world will always look forward to a leader who can lead towards something better.

On November 05, 2021 the Ministry of Law and Justice issued a circular placing the Draft Mediation Bill, 2021 dated October 29, 2021 in public domain, inviting comments and suggestions from all stakeholders.

The Bill aims to facilitate and promote mediation in India, particularly institutional mediation for the resolution of disputes, encourage community mediation, and make online mediation an acceptable and cost-effective process. It proposes to bring about a standalone law on mediation and contemplates the international practice of using the terms ‘conciliation’ and ‘mediation’ interchangeably as India is a signatory to the Singapore Convention on Mediation. This blog aims to provide a brief analysis of the Bill, highlighting some of its significant provisions and the gaps that exist in the legislation which require further deliberation.

Mediation is a form of alternative dispute resolution (ADR), where parties attempt to settle their dispute (outside courts) with the assistance of an independent third person (mediator).  The Bill seeks to promote mediation (including online mediation), and provide for enforcement of settlement agreements resulting from mediation.  The Bill will apply to mediation proceedings conducted in India where: (i) all parties reside in, are incorporated in, or have their place of business in India, (ii) the mediation agreement states that mediation will be as per this Bill, or (iii) there is an international mediation (i.e., mediation related to a commercial dispute where at least one party is a foreign government, a foreign national/resident, or an entity with its place of business outside India).  In these cases, if the central or state government is a party, the Bill will only apply to: (a) commercial disputes, and (b) other disputes as notified by such government. Some key features of the Bill include:

Pre-litigation mediation: In case of civil or commercial disputes, a person must try to settle the dispute by mediation before approaching any court or certain tribunals as notified.  Even if the parties fail to reach a settlement through pre-litigation mediation, the court or tribunal may at any stage of the proceedings refer the parties to mediation if they request for the same.

Mediation process: Mediation proceedings will be confidential.  A party may withdraw from mediation after the first two mediation sessions.  The mediation process must be completed within 180 days (even if the parties fail to arrive at an agreement), which may be extended by another 180 days by the parties.  In case of court annexed mediation (i.e., mediation conducted at a mediation centre established by any court or tribunal), the process must be conducted in accordance with directions or rules framed by the Supreme Court or High Courts.

Mediators: Mediators only assist the parties to settle their dispute, and cannot impose a settlement on the them.  Mediators may be appointed by: (i) the parties by agreement, or (ii) a mediation service provider (an institution administering mediation).  Mediators must disclose any conflict of interest that may raise doubts on their independence.  Parties may then choose to replace the mediator.

Mediation Council of India: The central government will establish the Mediation Council of India.  The Council will consist of a chairperson, two full-time members (with experience in mediation or ADR), three ex-officio members (including Secretaries in the Ministries of Law and Justice and Finance), and one part-time member (from an industry body).  Functions of the Council include: (i) registration of mediators, and (ii) recognising mediation service providers and mediation institutes (providing training, education and certification of mediators).

Mediated settlement agreement: Agreements resulting from mediation must be in writing, signed by the parties and authenticated by the mediator.  Such agreements will be final, binding, and enforceable in the same manner as court judgments (except agreements arrived at after community mediation).  Mediated settlement agreements (besides those arrived at in court referred mediation or by Lok Adalat or Permanent Lok Adalat) may be challenged only on grounds of: (i) fraud, (ii) corruption, (iii) impersonation, or (iv) relating to disputes not fit for mediation.

Community mediation: Community mediation may be attempted to resolve disputes likely to affect the peace and harmony amongst residents of a locality.  It will be conducted by a panel of three mediators (may include persons of standing in the community, and representatives of RWAs).

The Bill places international mediation in the part dealing with domestic mediation being conducted in India, which will result in these settlements losing the benefit of the Singapore Convention for enforcement of commercial mediation settlements across the world. Hence, the parties in such cases would prefer to mediate their disputes out of India, and our hopes to build a robust capacity to handle such disputes will come to naught. In conclusion, mediation, being the cheapest and simplest option available to the public at large, can be described as a tool of social justice. A separate legislation for mediation and rules will indubitably address most concerns around the mediation process and pave the way for making mediation the first-stop dispute resolution method for domestic and cross-border disputes. In addition to the reforms discussed above, a great deal of shift in mindset of stakeholders, awareness about the process, and redefining our approach to mediation is essential for growth and sustainability of the mediation practice in India.

Why is Sustainable Fashion Demanded in Today’s World

Sustainability means meeting our own needs without compromising the ability of future generations to meet their own needs. In addition to natural resources, we also need social and economic resources.

Sustainable fashion refers to clothing designed, manufactured, distributed, and used in environmentally friendly ways. The word sustainable is defined as “capable of being sustained.” Therefore, the sustainable fashion industry must operate in ways that can continue working for years and decades to come.

Unfortunately, this is not true of today’s dominant ‘fast fashion,’ which refers to clothing that’s intentionally designed to be consumed quickly at cheap prices, leading shoppers to view clothes as being disposable—wearing them just a few times before throwing them out or moving on to newer and trendier cheap clothes.

The fast fashion cycle is far from sustainable because it depletes the Earth’s natural resources at exponential rates, exploits workers worldwide, and results in overwhelming waste. In contrast to traditional fashion houses that only have a few seasonal collections per year, fast fashion brands may churn out as many as one new collections per week (or more) in efforts to drive continuous, mindless consumption.

What is fashion key to the discussion around sustainability?

1. Design & Development
2.  Raw Material
3. Processing
4. Manufacture
5. Transportation
6. Retail
7.  End of Use
8. Use

The word ‘Sustainability’ in the context of fashion most prominently refers to the environmental impacts of making (raw material creation, processing and manufacture), wearing and caring for (use) and the disposal of clothing (end of use). We take resources and use water and chemicals along the way, to create a garment. You buy and wear the garment and then throw it away (or donate it) when you’re done…. But then what happens? Generally it goes to landfill or is incinerated.

Today, only 20% of all clothing is recycled. In order for the fashion industry to really become more sustainable, brands need to work towards developing circular systems whereby garments become fully recyclable after use, reducing the need to create virgin fibres.

The Rana Plaza tragedy sparking global awareness: Today, the slow and sustainable fashion movement is on the rise in large spurred by the biggest garment industry disaster the world has ever seen—the collapse of Rana plaza factory in Bangladesh

(2013).

This globally known tragedy resulted in over 1,100 deaths, showing many in the western world just how costly their cheap clothing really is. As it turns out—there are just many social and environmental costs from fast fashion that are hidden behind the glossy facades of clean and pristine fashion stores.

Shedding light on “The True Cost” of fashion:

Shortly after the factory collapse, a documentary film called “The True Cost” was released, bringing to light even more information about the devastation caused by the fashion industry.

Following these tragic events and a deeper understanding of the industry’s true costs, many activists and organizations began tirelessly bringing attention to the problems caused by fast fashion, encouraging both consumers and brands to change their ways and be accountable to the social and environmental impacts of their choices.

Hope for a more sustainable future in fashion

With all of the above said, fashion can be made more sustainable in numerous ways—from using organic materials, using biodegradable dyes, to engineering patterns that create zero waste. The sheer number of different ways to improve the industry, though, means that shopping “more sustainably” can be overwhelming at first, with many factors to consider.

My recommendation for you is to think about which social or environmental concerns you feel most passionate about and then to first prioritize those focuses as your entry point into sustainable fashion. The industry is still learning how to best elevate its social and environmental standards. Because the movement is still evolving, it definitely helps us to focus on continuously doing better, rather than striving for and expecting perfection right now.

In light of this, below are some simple things you can look for too slowly green your wardrobe.

1. Buy Less and buy better : Before making a purchase ask three questions from yourself “What are you buying and why? What do you really need ?”
2. Invest in sustainable fashion brands
3. Shop second hand and vintage
4. Try renting: Instead of buying wedding garment which are worn only once, one can any time rent something to wear instead.
5. Be conscious about Vegan fashion
6. Take care of your clothes
7. Upcycle your wardrobe