It has been almost a month now, when the news was flashing in all the news channels and newspapers stating that the chairman of the fourth largest IT Company, Mr. Ramalinga Raju has been involved in inflating his balance sheet and has committed a fraud. Arguably, the biggest nightmare of the Indian corporate world has shocked the world and has left the investors, shareholders and a million of people in a dilemma from which they can never overcome. Millions of people who never ever dreamt of something like this to happen have lost lacs of rupees in time span of 24 hours and have experienced a shock of their lifetime. Although Mr. Raju has resigned and the consequences which Satyam is currently facing and will continue to face in the future is unexplainable but the so called India’s Enron has again raised the same question again “The existence of ethics in Indian INC.”
A similar blunder happened in America a few years back when Enron was found guilty. Enron Creditors Recovery Corporation formerly known as the Enron Corporation was an American energy company. Before its bankruptcy in late 2001, Enron was one of the world’s leading electricity, natural gas, pulp and paper, and communications companies, with claimed lots of revenues in its books. The Enron scandal was a financial scandal involving Enron Corporation and the accounting firm Arthur Andersen, which came into picture in late 2001. After a series of irregular accounting procedures conducted throughout the 1990s, Enron was on the verge of bankruptcy by 2001. Enron filed for bankruptcy on December 2, 2001. In addition, the scandal led to the dissolution of Arthur Andersen, which was one of the five largest accounting firms in the world at the time.
The concept of ethics is just like a Hindi movie in which there is a good guy and a bad guy and in the end the hero of the movie always wins. But in real life, unfortunately, it does not happen all the time. The same is the case with ethics because today most of the companies are show casing their values and ethics but in real life how many of them stick to their values and follow this tough path is still a big question mark. In today’s world, when almost all the companies are running behind maximizing their revenues and minting profits, the big buzzwords like ethics, values, corporate social responsibility etc. have been given a back seat. Most of the companies believe in a statement “To be the best, you got to beat the best”. Yes the statement sounds quite realistic and very true and you have to maximize the profits in order to remain in the business and compete in such a tough environment but it should be realized by all the companies that for a long term profitability and growth, the trust of the customers and of the target market should be on the priority.
It is always said that the world is very small and both the good and the bad exists here. There might be a number of examples when the companies have shattered the trust and faith of the people but still there are companies like the Tata and Infosys which are known for their integrity and who have always taken their decisions keeping the interest of the entire society into consideration. However, in the Kalyug of the corporate world, how many companies will follow the path of ethics is one question which most probably nobody can answer.
About the Author
Priyank Azad, Lecturer, Rai Business School, New Delhi