Ifany organization lingers on its ability to mobilize and utilize all kinds ofresources in order to meet the objectives, then the probability for the successof this organization increases multiple times especially when these are clearlyset as part of the planning process. There are two factors, internal andexternal and managing well depends on both of them. External factors include availability,cost effectiveness and technological advancement. But in today’s world, as thequality and transparency is decreasing it has resulted in the adaptation of internationallyaccepted ‘Best Practices’.
The acceptance of these Best Practices gave rise of’Corporate Governance’. It is a concept that encompasses commitment to valuesand to ethical business conduct in order to maximize shareholder value andwhile doing so it also ensures fairness to all stakeholders at large.Ifone talks about “Corporate governance” as a system, then one can refer to assomething through which any company can make its policy decisions and manage itsaffairs.
When any organization needs to take a corporate decision thencorporate governance acts as a framework under which any moral or ethicaldecision is taken. But in some of the cases mostly due to the lack oftransparency, frauds take place, directly or indirectly impacting the factorsaffecting that organization. Most of these frauds happen because of unethicalpractices done by stakeholders that take place in that company.Whenvarious stakeholders like customers, employees, investors, vendor partners,government and society come together the system is commonly known as acorporation.
It needs fulfill certain basic qualities as in general it shouldbe fair and transparent to all the stakeholders who are involved, and thisshould not only be limited for a single transaction but for every transactionthat takes place.Ethicsis basically an inception of two kinds of behavior which might be right orwrong and these types of behaviors defines our actions which can be eithermoral or immoral. The prime motive behind any kind of ethical reasoning is tosort or differentiate out the good and bad components within any interaction beit human or non-human. “Business ethics is the art and discipline of applyingethical principal to examine and solve complex moral dilemmas.” It proves thatany business done can be two things at a same time – ethical and profit making.
Talking about ethics, it is a word which is derived from a Greek word “ethocos”which means custom or character. This is defined as the science of morals whichdescribe a set of rules of behavior. Being concerned with the norms of thehuman conduct, ethics is also considered a normative science. It is completely distinguishedfrom formal science such as mathematics, logic, physical science such aschemistry and physics. Ethics should also follow some rigors of logicalreasoning as other sciences. Ethics on the other hand is also closely relatedto trust. Ethical behavior is necessity to gain trust and as a result the sametrust will be used as an indicator variable.
In India corruption is one of thebiggest problem to tackle as well as it is an all-embracing phenomenon. In thisscenario, if the respective players in the field adopt healthy practices ofgood corporate governance and avoid corruption then India can really become aless corrupt country and improving its global rank in corruption.Ethicalconduct in business is probably the most important thing in CorporateGovernance. It is all about values and principles which enables a person/ company/organization to choose what is the difference between right and wrong, and becauseof this we get to select from alternative courses of action for the setobjectives of an organization. Furthermore, when we talk about ethics, ethicaldilemmas play an important role as they arise from conflicting interests of theparties involved. In this context, the people who are responsible to makedecisions based on a set of principles are influenced by the values, contextand culture of the organization. Another concept that involves ethics is Ethicalleadership.
It is something that has been called good for the business asbecause of its presence the organization is seen to conduct its business inline with the expectations of all stakeholders. As the circumstances of acompany change with time and other external or internal factors, a goodcorporate governance will constitute a mechanism to evolve which would betailored to meet the changing circumstances. These changes have made people believein the fact that there are no fixed models of Corporate Governance.