Ethics and Values and 2g Scam

Ethics and Value Management Project Report Table of Content 1. Abstr come 1. 1 Introduction 2. respectable make dos 3. Ethical dilemmas 3. 1. plight face by A. genus genus Raja 3. 1. 1. billet of A. Raja 3. 1. 2. Ethical Theories 3. 1. 3. Cost and Benefit psychoanalysis 3. 1. 4. passport for resolution the Dilemma 3. 2. Dilemma faced by somatics 3. 2. 1. Role of Corporates 3. 2. 2 Ethical Theories 3. 2. 3. Cost and Benefit analysis 3. 2. 4. Recommendation for resolving the Dilemma 3. 3. Dilemma faced by brass 3. 3. 1. Role of government 3. 3. 2. Ethical Theories 3. 3. 3. Cost and Benefit analysis . 3. 4. Recommendation for resolving the Dilemma 3. 4 Dilemma faced by Media 3. 4. 1. Role of Media 3. 4. 2. Ethical Theories 3. 4. 3. Recommendation for resolving the Dilemma 4. Recommendations for avoiding tax return of the issue 4. 1 Plan to avoid recurrence of such a scam 5. References 5. 1. Websites 5. 2. Books 1. Abstract 1. 1. Introduction The2Gspectrumscaminvolved politic ians and government officials in India illeg whollyy undercharging meandering(a) speech soundcompanies forfrequency al mavenocationlicenses, which they would then use to create2Gsubscriptions forcell phones.The shortf solely between the property compile and the property that the truth mandated to be collected is estimated to be176,645Crore(US$32. 15 billion), as valued by thecontrol and Auditor General of Indiabased on3G and BWA spectrum auctionprices in 2010. However, the exact loss is disputed. The Supreme judiciary decl ard allotment of spectrum as unconstitutional and arbitrary and quashed all the 122 licenses issued in 2008 during tenure ofA. Raja(then minister of religion for communications & IT) the main official accused in the 2G scam contingency.In 2011,Timemagazine listed the scam at piece two on their Top 10 Abuses of Power list. 2. Ethical Issues With the outbreak of the 2G spectrum scam, the avocation honorable issues on the part of the Government, Regulatory bodies, media and industry came into the forefront. * Spirit of collective responsibility non conserved An ethics of co-responsibility is required and can hardly be implemented through mechanisms well beyond the legal system. In the 2G scam, just about all of the entire media and nation has put the name of Mr A.Raja as the responsible person for the subversive activity that the actual decisiveness of telecom policy was passed through the cabinet. * Too lots billet in reach of very hardly a(prenominal) This is what actually happened in case of 2G scam. The entire decision fashioning power be in the hands of selected bureaucrats. * Middle men used for access to those in power Middlemen were used to by comp either officials and early(a)wise illicit bring to reach the ministers. People in power were lured by money. Those who did not bend to the power of money were any transferred or were threatened. Neutrality of media questionable In the2G Spectrum ScamCase, rather of providing valuable insights, the media is trying to become the judiciary. The media has tar drawed low-cal scapegoats, revolving their stories around a selected few because even they know that it is rough for them to target certain big label like the Tatas, Ambanis and Ruias. * Personal greed puts business ethics at s countRaja was the mastermind of this whole scam and his personalised greed made him do all the corrupt things. The 2 fundamentals of business i. e. air dealing and transparency was completely kept off to enjoy the false fruits. * Wrong use of power leads to a great turmoilRaja be the Telecom minister, tried to influence the senior officials of DOT by all means. Those who didnt get influenced were either transferred or removed from their posts. 3. Ethical Dilemmas 3. 1. Dilemma Faced By A. Raja Mr A. Raja was in a dilemma whether he should disclose the name of every main conspirator of the plot, or should he wait for his fellow mates having a reputed position in t he government and somatic globe to help him get out . 1. 1. Role of A. Raja A Raja has received3,000crore(US$546 million)as issue for bringing forward the cut-off date for applications for spectrum from the initial 1 October 2007 to 25 September 2007. At the time of pickings decision he might shit got influenced of the dilemma related to it but money made him art and despite of knowing the risk associated and at the s mob of his personal values, he took the decision of performing the 2G Scam. in that respect was too a clear conflict of interest among promoters, shareholders and other stakeholders of company.The conflict of semipublic shareholders and stakeholders put them in very interesting position. on that point was excessively a dilemma when the case reveal which was more or less can be termed as the prisoners dilemma as should he tell the names of all the person associated or only few because it was a very mellowed end case consisting of more a(prenominal) renowned politicians and bureaucrats 3. 1. 2. Ethical Theories Depending on the dilemma faced by dissimilar great deal in this case there are different honest theories that can be applied.Mainly we can apply 2 theories * Utilitarianism Utilitarianism is a opening in normative ethics holding that the proper course of action is the one that maximizes utility, specifi directy defined as maximizing happiness and reducing suffering. In this surmise person compares the benefits with its cost and take decision accordingly. * Hedonism It is a school of archetype that argues that pleasure is the only intrinsic healthy. In very childlike terms, a heathen strives to maximize net pleasure (pleasure minus pain).Ethical hedonism is the idea that all citizenry have the right to do everything in their power to achieve the greatest amount of pleasure possible to them. It is also the idea that every persons pleasure should far surpass their amount of pain. 3. 1. 3. Cost Benefit digest sledding b y the theory of utility, A. Raja might have done the benefit cost analysis as follows Benefits Loss A. Raja impart be getting lots of money A. Raja can be caught, but the chances are very less because in India politicians are never caught With money there forget be power.Moreover he pass on be a friend of big unified personalities. Shareholders will get affected with this decision The huge benefit of under-pricing or unfair subsidiary was given to the mobile telephone services The person who is not a shareholder or customer of any mobile telephony company has sell his share in spectrum on cheap prices and lost his money which would have been spent for the development of his nation The subsidy was given to all industry majors, who regularly lobby against the subsidy to prefatorial human need like food, water, education and shelter. When call rates were high, there would be an exclusion of heap from this information revolution. This is a innocent math not a magic formula to fool all stakeholders The huge benefit of under-pricing or unfair subsidiary was given to the mobile telephone services So, he might have found that he can easily escape by doing this scam and chosen to give away the licence at cheaper rate. Going by the Hedonism theory the pleasure that power and money will bring to him will be much more than that of pain so he thought of choosing the wrong path of earning money. . 1. 4. Recommendation for resolving the Dilemma The 2G Spectrum scam is at the final stage. Now as all the politicians, Bureaucrats, Major Telecom company officials have been exposed. But if would have followed the following simple tests or models they would have definitely selected the ethically right path and avoided the consequences that followed. * Peter Druckers Model Above all, do no harm. Peter Drucker wanted to convey to any individual that if any of his/her decisions harms any other person then that decision is unethical. Raja had thought of this philosophy then he would have avoided his actions and hold transparency in allocating 2G spectrum. * The government officials would have brought the issue in front of the judicial system if they followed this simple principle. Corporate executives would have refused help from A. Raja as profit fashioning is ethical but profiteering is not * Warren Buffets first page of the4 Newspapers Test If all the citizenry imagined the newspaper publisher headlines that were published all throughout 2010, 2011 and 2012, they probably would have not done what they did.Some examples are include below 1. Court issues notice to CBI on A. Rajas 2G spectrum scam plea 2. Why did not PM act on A. Raja SC 3. A. Raja informed Manmohan Singh about change in policy Siddharth Behura 3. 2. Dilemma Faced By Corporates The basic dilemma faced by the Corporates was whether to abide by the law of the nation and obtain the licenses they were capable of obtaining in an ethical manner or whether to unethically obtain lic enses in show to increase customer base and earn instant profits.On account of Utilarianism, benefits they achieved were that they were able to attain the shares at much lower cost and thereby incurring huge profits and it also and so provided them with an competitive beach over their competitors as they were able to outrun them that too in such short duration. Also if they did not buy these licences some other companies will buy and attain profits so without considering the harmful repercussions they went on with buying with the licences. 3. 2. 1. Role of Corporates India found itself in the centre of such protests in 2010-2011 over the scam in 2G spectrum allocation to telecom companies.The 2G scam went a long way to show how the Indian economy, one of the scurrying growing in the world, is dominated by a small set of tightly connected power players. Industry observers felt that if not checked soon, the deep-rooted problem of crony capitalism in the res publica could adversel y affect Indias growth and development. They wondered how the accountability could be fixed and the unholy nexus broken. The allocable justice states that equal sight should be treated equally. There is nothing wrong in, corporate devising profits but it should not be at the cost of other battalion.When the corporates involve in a scam like this, the tax payers are burdened which is not fair. Ultimately it is the tax payer, who pays for each Scam. Corporate as a part, of the lodge has got some genial responsibility which means, they have every right for making profit but not profiteering by harming the society. Their rights should not harm the interest of the greens man. The corporates by involving in the scam are not only cheating the common man but its own people like its shareholders. Transparency in the long run pays of great results.Here being ethical should not only an instrumental value to the corporates, but should be an intrinsic value. profession ethics plays a ve ry grave role. th legal frame work may not be always be ethical but here observing the legal standards provides an important ethical dimension. The business values like transparency, fairness and justice are universal. Observing these values as an intrinsic value would benefit the business in the long run. When business is ethically strong, it will have the same impact on its employees. When employees are ethically strong, consumer satisfaction will be high and so the business has to sustain. Corporations involved were Allianz Infra, Aircel, Dishnet wireless, loop mobile, Reliance communications, S Tel, Swan telecom, Tata Tele Services, Unitech Group, Videocon Telecommunications Limited, Vodafone Essar, Virgin Mobile India. * Corporate Personalities involved were Anil Ambani (Reliance Group-ADAG), Ratan Tata, Shahid Balwa (DB Reality and Etisalat DB Telecom), Vinod Goenka (Dinamix Group), Venugopal Dhoot (Videocon Group), and Prashant Ruia (Essar Group). 3. 2. 2. Ethical Theories * Utilitarianism Going by this theory, the corporates involved Utilitarianism i. e. aximising their profits, specifically defined as maximizing happiness and reducing suffering. For them what is good is that which produces pleasure, happiness, contentment or welfare and what is right is that which maximizes one or more of these things. Utilitarians call the method for maximizing good the principle of utility and they use the term optimific to describe the achievement of this maximization. The Corporates on their part in order to maximise their profits instantly and in an easy manner went on 2G scandal, without considering the ramifications. 3. 2. 3. Cost and Benefit Analysis Swan Telecom paid Rs. , 537 crore for 2G licences in 13 circles, they soon sold 45 per cent equity in this company to Etisalat for Rs. 4,200 crore. Unitech obtained licences in 22 circles for Rs. 1,658 crore and then sold 60 per cent equity in the company to Telenor for Rs. 6,100 crore. Thereby, providing them with instant benefits. 3. 2. 4. Recommendation for Resolving the Dilemma * Peter Druckers model Thou shalt not steal and Primum Non Nocere. Which in English means, above all (or first) do no harm. According to Peter Drucker wanted to convey that an individuals decision is unethical if it harms any other persons.Thus, abiding by the Peter Drucker model to resolve this ethical dilemma involved the corporate personalities involved should have rejected the proposal offered by A. Raja as achieving profit is fairly ethical but what turned out in this case was profiteering which is unethical. 3. 3 Dilemma faced by the Government In this context ethical dilemma was on the part of the government after the case got uncovered as it involved many politicians, bureaucrats, & ministers so either to put charge on all of them present the vulnerable state of the nation or to allege a single minister for the same. 3. 3. 1. Role of GovernmentThe list had many well known ministers like Dayanidhi Mara n(Union cabinet minister for textiles), P. Chidambaram(Union cabinet ministers for home affairs), Andimuthu Raja (Union cabinet minister for communication & information technology), Kanimozhi Aravindhan (Member of Rajya Sabha) and also many renowned bureaucrats like Siddharhta Behura, Pradip Baijal, R K Chandolia. 3. 3. 2. Ethical Theories * Utilitarianism Going by the this theory, it states that actions and policies should be evaluated on the basis of the benefits and costs they produce for everyone in society and also referred to as consequentialism.It holds that morally right course of action in any situation is the one that, when compared to all other possible actions will produce the greatest balance of benefits over costs for everyone affected. * Hedonism A school of thought that argues that pleasure is the only intrinsic good. In very simple terms, a hedonist strives to maximize net pleasure (pleasure minus pain). In this context going by the above mentioned theory in order t o maximize the net profits its better on the part of government not to disclose anything and spare from the pain that can incur f they do so. 3. 3. 3. Cost and Benefit Analysis In the context of 2G scam the cost and benefit analysis can be done as follows * Cost The major threat was the impact on stock market and investment in India. The mobile phone market is the worlds fastest growing making it a must-invest market for any major global operator but after looking at the corruption level and the people involved they might not willing to come over and invest. Moreover it will also sunder the trust factor of the citizens and they will not have any faith in the government. Benefit apocalypse of all the names involved in the scam will lead to a situation of distrust. In a globalized world such a situation will negatively affect the Indian corporate scenario and may even jeopardize the economy as a whole. Going by the above mentioned theory it was certainly better on their part to go f or benefits and not to disclose any names. 3. 3. 4. Recommendation for resolving the Dilemma To resolve the dilemmas 3 steps can be followed, they are * graduation 1 Analyze the consequences Assuming that the resolution to the ethical dilemma is to be found within the barrier of law.Ethical dilemma that arise should be resolved at least within the bare minimum of law and legal framework as otherwise it will lead to a sort of mafia business. single has to look at the consequences that would follow ones proposed actions. And when one has several options to choose from, there will be an array of consequences connected with each of such options, both positive and negative. Before one acts, answers to the following questions will help find the type of action that can be contemplated 1. Who are the beneficiaries of your action? . Who are likely to be harmed by your action? 3. What is the nature of the benefits and harms? (the answer to this question is important because some benefits m ay be more valuable than others. Letting one enjoy good health is better than let one enjoy something which gives trivial pleasure. Likewise, some harms are less harmful than others. ) 4. How long or how fleetingly are these benefits and harms likely to exist? * Step 2 Analyze the actions Once option is identified, concentration should be on the actions.Find out how the proposed actions measure against moral principles such as honesty, fairness, equality, respect for the dignity and rights of others, and recognition of the vulnerability of people who are weak, etc. Then there are questions of basic decency and general ethical principles and conflicts between principles and the rights of different people involved in the process of choice of the options that have to be considered and answered in ones mind. After considering all these possible factors in the various options, it is sensible to choose the one which is the least problematic.Step 3 Make a decision After considering all fa ctors that lead to various options, choose an option and discerp it carefully and then take a rational decision. 3. 4. Dilemma faced by Media It is medias responsibleness to show the truth to the public, moreover it also considered as a trustworthy source which helps in creating ken regarding the actual happenings in the world. The Media persons accused faced the ethical dilemma of whether to diligently follow the duties of a journalist and uncover the real truth or be loyal to their friends. 3. 4. 1. Role of mediaThe 2G spectrum scam, which has snowballed into a major line involving Indian politicians and businessmen, became hotter for journalists to handle when it allegedly involved two of their senior members. Media sources such as vindicated and arithmetic mean reported that two senior journalists Barkha Dutt (group editor of NDTV) and Vir Sanghvi (editorial director of Hindustan multiplication) knew that corporate lobbyist Nira Radia was influencing the decisions of appo intment of telecom minister. Radia wanted A Raja to be made telecom minister. The two magazines made public the telephone conversations between Nira Radia, Barkha Dutt & Vir Sanghvi.Radias phones were being tapped by the Income Tax Department. Critics allege that Barkha Dutt and Vir Sanghvi knew about nexus between government and the media industry but belt up they supported this corrupt activity and suppressed news reporting the discovery of the corrupt practice. In November 2010, OPEN magazine carried a story which reported transcripts of some of the telephone conversations of Nira Radia (a political lobbyist) with senior journalists, politicians, and corporate houses, many of whom have denied the allegations.The Central Bureau of Investigation has announced that they have 5,851 recordings of phone conversations by Radia, some of which line Radias attempts to broker deals in relation to the 2G spectrum sale. The tapes appear to demonstrate how Radia attempted to use some media p ersons to influence the decision to appoint A. Raja as telecom minister. Vir Sanghvi, editorial director of Indian national daily Hindustan Times and Indias television news channel NDTVs group editor Barkha Dutt are apparently feature in the transcripts.They are heard promising to fix things for Radia, who is known to be close to the sacked minister A Raja, and her clients besides her political cronies. While Sanghvi allegedly took notes from Radia on what he could point out in his weekly Sunday column of Hindustan Times even as Radia asked him to write against Reliance Groups Anil Ambani and the high court decision on the gas pricing issue. Barkha Dutt had allegedly assured Radia of getting ruling telling partys general secretary Ghulam Nabi Azad to talk to the supremo of his partys chief ally in the government M.Karunanidhi to fix portfolios for the ally according to wishes of Karunanidhis daughter Kanimozhi. One thing to be observe in this case was, initially the news gained p rominence following sustained pressure on social networking sites Twitter and Facebook against an attempted blackout orchestrated by many prominent Indian TV channels and newspaper. Initially, only handful of newspaper like Deccan Herald and The Indian Express wrote about the tapes. Some newspaper like HT Media, mint and NDTV told that the authenticity of these transcripts cannot be ascertained.Not Touching Corporate Biggies Now media is deliberately trying to sidle up a few names like those of Shahid Balwa, A Raja, Kanimozhi, Sanjay Chandra, Karim Morani, and Vinod Goenka while not touching corporate biggies such as Tatas and Ambanis. It is quite clear that in this 2G spectrum case, only a few are conspired to be indicted in the case while others are clearly kept out. Instead of providing valuable insights, the media is trying to become the judiciary.The media has targetted easy scapegoats, revolving their stories around a selected few because even they know that it is difficult f or them to target certain big names like the Tatas, Ambanis and Ruias. It is a well-known fact that the trial for 2G Spectrum case is going on, and nobody can be proved guilty unless and until it is proved in court, but, without taking it into account, our media has started blaming people and highlighting a only few names without mentioning the rest of the suspects. 3. 4. 2. Ethical Theories Utilitarianism If we apply utility theory on media then cost in hiding the facts was that people will not trust the media if they come to know that facts were hidden from them but the benefits were that they will not spoil their relations with big politicians and corporate biggies. So benefits were more than the cost, as it is said that common man has very short memory and you can cheat them. But as pressure started construction from opposite party and moreover opposite party had their friends in the media, the names of big politicians came into picture.But then also media maintain its silence o n corporate biggies. 3. 4. 3. Recommendation for resolving the Dilemma Laura Nashs model pastime the 12 questions that Laura Nash has raised in her model would have stopped media from taking the first step. Some of the 12 questions that would have helped the accused persons to clear their thought processes are * How would you define the problem, if you stood on the other side of the fight? * To whom and with what are your loyalties? What are your intensions in making this decision? * How does these intentions compare with the likely results? * Whom could your actions injure? 4. Recommendations for avoiding Recurrence of the Issue Modern scams are victimless in that the victims are not obvious. The victims of these crimes are the taxpayers and citizens of the hoidenish to whom this money and assets belong. The only unchangeable way for us to stop scams is to work on both prevention and deterrence. 4. 1. Plan to avoid recurrence of such a scam 1.Increase disclosure requirements by the government on all contracts and concessions involving public money or assets. 2. Improve the effectiveness of parliamentary oversight on government and executive by making parliamentary committees stronger as well as more transparent to the public. 3. It should be ensured that the Criminal Penal mark has amendments to deal with and enable rapid prosecution of white collar crimes and scams. Judiciary should be independent and separated of any external influence. It should be capable of taking strong action against the corrupt politicians.While severe penalisation is given to a poor village officer when he takes a bribe of Rs10, politicians who cheat the public and earn crores are many a time let free by the court of law. 4. There is a requirement of complete overhaul and changes in our criminal justice system that is still intentional around petty crime and criminals. There is a need for new and stronger laws for dealing with sophisticated financial crimes of the day. One s uch example is removing the Section 311 that requires prior sanction from the government to prosecute its officers. 5.Media played a very important role in forming an opinion among the citizens therefore there should be effective parliamentary oversight of the government and such oversights be transparent and available to media and citizens. 6. The government must have extracurricular legal and advisory help while negotiating contracts and not rely only on bureaucrats. There should be a creation of a new cadre of independent regulators, backed by parliamentary statutes that administer most of these sectors. 7. For example, bureaucrats must be chosen as regulators only in exceptional cases of high legality and capability.Such Independent Regulators must also have oversight on them to ensure that there is no regulative capture. 8. Ensure that government policy is always about the public and not about private and personal interests. 9. Legislation must be initiated to regulate lobb yists and business chambers, to prevent advocacy changing to corruption and to nurture against policy capture instead of policy advocacy. 10. Ensure government policies are not always orotund rhetoric and full of loopholes for exploitation. This will minimize administrative/political discretion. 1. Another way to stop corruption is to avoid the coalition form of governance. A single party must be allowed to rule the country independently without seeking the support of innumerous minor parties. In the 2G spectrum case, the accused, A. Raja is a representative of DMK which is financial support the congress. In such a situation, an able and efficient prime minister like Manmohan Singh could not take action but had to inadvertently support him as otherwise DMK would have withdrawn their support and thus follows an utter rout for the congress.Lastly and most importantly both media and the general public must create knowingness that the government is a trustee of public money and asset s and the people are the real owners. If trustees violate the trust, people should not sleep, but must react. A permanent solution, thus, to such scams and corruption is alert citizen and conscientious media. 5. References 5. 1. WEBSITES * http//aishmghrana. wordpress. com/2012/09/01/conflict-of-interests-among-stakeholders-in-2g-allocations/ * http//www. icmrindia. org/casestudies/ classify/Business%20Ethics/Indian%202G%20Spectrum%20ScamExce2. tmCan%20Accountability * http//www. isidelhi. org. in/hrnews/HR_THEMATIC_ISSUES/Corruption/Corruption-2011. pdf * http//www. scribd. com/doc/71816181/2g-scam-project * http//www. processexcellencenetwork. com/process-improvement-case-studies/columns/drucker-on-business-ethics/ * http//en. wikipedia. org/wiki/Radia_tapes_controversy * http//www. slideshare. net/amyberi/2g-spectrum-scam-casestudy * http//realitycheck. wordpress. com/2010/12/03/wheres-our-story-media-on-2g-spectrum-scam-shyness-or-something-more/ 5. 2. BOOKS * Business Ethics An Indian Perspective by A. C. Fernando