· Mr Deep Kapuria, Chairman, CII National Council on MSME, felt that there was need to discuss and look into the matters of such concern; since most SME owners and managers are well-versed with the tangible benefits of adopting ethical business practices, many of them only arrive at an informal understanding with their workforce on how business is done. The values and ethical principles that they advocate are usually implicit than formally expressed through ethics policies, codes and programmes. In such organisations, the owners and managers through their presence, attitude and behavior set the tone for the business practices. As a result, most of these businesses tend to lack enterprise-wide ownership of ethical practices.
· Ms Christina, concentrated on removing corruption which would be one of the biggest steps to follow ethical business practices. By quoting certain facts that 90% of the 75 million enterprises in the world are SMEs and that corruption, including acts like bribery, takes away 3% of the world’s GDP (i.e. 1 trillion USD), proved that SMEs in India have big role to play against corruption. She mentioned about the guidelines laid down in the UNCAC as a convention and how corruption would be reduced if SMEs in India adhere to the same.
· Mr J M Garg, with his experience from the banking and the Government sector, brought in a 360° view about the problems faced by Indian MSMEs relating to corruption and adhering to ethical business practices. Ethics, according to him, stands for imbibing moral values taught to an individual at his/her early stage, being honest, believing in truth, adhering to values like not to cheat and harm anyone. A key takeaway from his side for the small business entrepreneurs was to ensure correct invoice to be done for any transaction they do.
· Similarly, the conference aimed at answering all the questions related to what is ethics in Business & various Codes of Conduct which is to be followed by MSMEs in our Industry, and in laying down a few important steps to build and implement a formal ethics policy. Some of the recommended steps are to - Identify and define core values of the business; draw up a code of ethics and then embedding the code.
· The conference later moderated by Dr Sudhir Kapur, Managing Director & CEO, Country Strategy Business, Consultant P Ltd, went into concluding a few guidelines for MSMEs in making a step forward towards Ethical Business Practices. Some of them are:
National Interest: All practices and business conduct of the company should have the foremost objective of serving the national interest. Ethics & Integrity: Employees should follow total integrity and ethical practices in their operations. Adherence to Values: Strict adherence to the concerns, values and interests of the organisation. Transparency & Openness: Transparency and openness in regard to the decision making process and use of resources. Avoiding Corrupt Practices: Prohibit money laundering and report unaccounted cash or suspicious transactions. Encouraging Competition & Competitors: With the expansion of business worldwide and new unknown markets, employees should learn to manage risks in the new environment. Following & Respecting the Code: Respect the provisions of the Code and adopt the ‘Zero Tolerance’ principle. Whistleblowers: Encourage whistleblow.
CII organized a Conference on ‘Developing Competitive Advantage for SMEs through Ethical Business Practices’ at in New Delhi on 26 January 2014. The panel for the 2 session conference was represented by eminent personalities like Ms Cristina Albertin, Head, UNODC Regional Office for South Asia, and Mr J M Garg, Vigilance Commissioner, Government of India, who in close discussion with more than 100 delegates realized and identified areas, where Code for Business Ethics in our industry can be implemented.
Compliance with Ethical Business Practices is extremely important for SMEs to integrate themselves with the Global Value Chain. Many national and multi-national OEMs are today considering business ethics as a major prerequisite while selecting their suppliers for various products and services. The Ethical Practices in Business have thus become a major component, which determines the competitiveness of a company.
While many Indian SMEs are aware about the need to follow ethical business practices by establishing policies and procedures in their respective companies, seldom they able to follow such practices due to internal and external working environment and non-conducive regulatory systems. The conference will deliberate on the challenges faced by the Indian SMEs, which act as impediments for adoption of globally recognized ethical practices in business; the regulatory and policy framework created by the Government or enabling ethical practices and challenges being faced by OEMs while selecting their suppliers.
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