Take Home Assignment 2

Second take-home assignment

GMP 2014-15

Submitted By:
Kavit Sharma, 10.2
Keshav Gupta, 10.1
Peeyush Singh, 10.3
Rohit Bhargav, 10.1
Sahil Baweja, 10.2
Vikram Singh, 10.3

G14024
G14084
G14033
G14103
G14046
G14060

Case 10.1: Indias Super-rich in 2104

1. Update these cases with your findings from past and current developments, and clearly document your
sources.
As per a recent study conducted by Kotak, on the Spending Mechanisms of the Uber Rich Class of India, more
than 70% equated vacationing with retail therapy, and their discretionary spending was dominated by 44%
splurged on jewellery, clothing, and gadgets combined, with a mere 14% distributed between art, luxury
watches and wines. Extravagance items such as private jets, yachts, and super cars also form an integral part of
the aforementioned spending.
Traditionally, the inclination was towards investing the money in low-risk assets such as Gold, Government
Bonds, Fixed Assets etc. there has been a radical shift in priorities towards riskier avenues with regards to
investing their wealth.
According to another study by wealth research firm Wealth-X of Indias richest individuals released on August
14, 2014, the top five Indian billionaires, headed by Mukesh Ambani of Reliance, collectively control $85.5
billion in personal wealth; that is nearly half of half of the countrys total billionaire wealth. While asserting that
entrepreneurialism is the key to attaining financial success in the
India, the study further observed that the 5 men heading the list have got their riches from businesses in sectors
such as oil and gas, steel and pharmaceuticals.

2. Answers to questions
i.

Discuss the ethics of legitimate wealth enrichment outcomes at the individual level
The question of the ethicality of legitimate wealth enrichment outcomes at the individual level can be analysed
from 2 diametrically opposite viewpoints:
For: As per the rights argument, wealth enrichment by individuals is an element of human freedom and
curbing that is a violation of an essential aspect of human freedom. All ethics is focused on individual
opportunity; it is concerned with ensuring that individuals have the liberty to seek and pursue whatever goals
and money they deem fit and societal concerns are relegated to a lower pedestal.
The strategy of growth pursued by the super-rich is ethical if the business is itself a moral and human
endeavour. At an individual level, the super-rich have demonstrated substantial amount of prudence and
fortitude, which is essential to grow industries. The pursuit of personal wealth by legitimate means thereby
cannot be considered unethical. On the contrary, it adds up to the nations wealth and serves as an example for
others to emulate.
Against:
If the massive amount of money earned by the super-rich is not shared with the society especially in a
country like India where inequality is stark, it proves that the super-rich clearly did not show much
temperance in their appetite for growth and ate off the plates of the less fortunate.
The ethical concept of beneficence states that it is a duty to help others when doing so requires no
unreasonable sacrifice of self interests. Thus, considering the thousands of crores that the aforementioned
people have at their disposal, parting with a reasonable sized slice of pie, to uplift the downtrodden does not
seem unjustified.
Aristotle, while not discounting material possessions as essentials for life, proposed two virtues related to
wealth, Liberality (giving money to the right people for a good cause) and Magnificence/philanthropy and
called for a high level of moral consciousness.

ii. Discuss the ethics of legitimate wealth accumulation outcomes at the collective country level.
Going with Joseph Alois Schumpeter, we can look at wealth accumulation through creative destruction as
renewing, through new innovation, societys dynamics that would lead into higher levels of economic
development and welfare. At the same time we ought to recognize that this destroyed a few of the incumbents to
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the benefits of many more newcomers and increased value creation for broader society.
Today it seems we are caught in quite the opposite of the aforementioned, where it benefits a few rather than the
many. This often destroys or greatly damages the usage value of existing products and services much before it
becomes optimal to actually do so, and in the process, incurs quite significant costs not taken into account at the
time but have consequences that negatively affect parts of society
How much the super-rich earn is irrelevant with respect to the issue at hand . What matters for moral
predication is that the super-rich consistently seeks to do well for all its stakeholders
Since the entire community is dependent on the wealth available to it, efforts must be made to ensure an
equitable distribution. When the disparity between the Haves and Have-Nots is massive, it can lead to
marginalization of the have-nots by the haves leading to strife, unrest and instability. Thus, according to this
argument, the social rancor of inequality is not worth the benefits provided.

To reconcile the different schools of thought, as long as the legitimate wealth accumulation at the individual
level serves the interest of the country and society in the long run, the social happiness created by such
endeavours far outweighs the social unhappiness created due to wealth imbalances. Thus the accumulation of
personal wealth acts as a powerful motivating factor for these promoters.

iii. Discuss the ethics and morality of wealth accumulation in the hands of very few promoters in India.
India provides unbelievable paradoxes; on one hand we have the Antillas and the mansions, while on the other
hand, every third poor person and every second malnourished child in the world is also an Indian.
As per a recent report, between 2000 and 2012, spending and consumption by the richest 5% rocketed up by
over 60% while the poorest 5% saw an increase of just mere 30%. These statistics paint a picture of stark
contrast between the haves and the have-nots in India.
Kants Deontological theory of ethics
As evident from the case, wealth accumulation in the hands of the select few is becoming the game for the elite
to make money, corner markets, achieve monopolistic positions etc. and these promoters are not affected by
their implied responsibility of creating jobs, building communities and stay insulated from the burden of
Greater Good/
Even within the Super Rich, we see stark difference in priorities and these differences are evident in how they
go about their lives. The Tatas are much more inclined towards Social sustainability than the Ambanis. And
thus, covering all of them under the same umbrella is unfair and immature.
Morally, since quite a few of them were born into Elite families, their Genetic Lottery Winnings is the reason
for their opulence and thus it is not unfair to say they have a moral obligation to act as agents of change and
bring about positive transformation in the society.
iv.

When can individual wealth aggrandizement outcomes be unethical and harmful to the country, and
why?

Individual wealth aggrandizement outcomes can be unethical and harmful to the country in if wealth has been
accumulated through illegal or unethical means, such as by circumventing laws, paying bribes etc.
Moving beyond the genesis of the wealth accumulation, if the personal wealth accumulation births and
nourishes extremely high levels of disparity, it is economically damaging and inefficient as it stints and
stifles the growth of the country and restricts the benefits of the growth to only a handful.
Hence, reducing inequality is the key to sustainable growth as it percolates down to all the strata of the society.
v.

Besides being philanthropic, how can the rupee or dollar billionaires of India mobilize
wealth to evenly spread job, income and wealth opportunities across the board in India?

their

Although ruppee or dollar billionaires in India have been doing a lot of philanthropic work but some part
of the money generated by these billionaires can also be distributed in BoP by many other ways. With this
money, various job opportunities can also be created that will be sustainable upliftment of the poor and
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will empower them in future. Following suggestions can be employed in this direction1. To set up various skills enhancement and training centers across the country to empower BoP people. More than
65% on total population of the country is below 35 years of age and this human asset can be utilized to produce
tremendous growth provided they be trained.
2. To contribute in funding various Self Helping Groups in the rural India who are desperately looking for funds to
sustain their ideas/business.
3. To involve the BoP people in their business cycles and share some part of the benefits with them. Ex- Reliance
Fresh directly procure vegetables from farmers at reasonable prices and thus provide wealth to farmers.
4. Govt. Of India can also increase some tax on the super riches and pass on the benefits for the development of the
poor.

Overall development of the country can be achieved only when there will be an inclusive and sustainable
growth of all people in the country.
vi.

Discuss the role of creativity, imagination, innovation and risk taking venture in creating wealth
ethically and morally both individually and nationally.
In todays technology dominent world, innovation, creativity and imagination are biggest creator of
wealth. Apple values innovation a lot in all his employees and thus has been consistently able to create
the value for its stakeholders. Apple CEO Tim Cook believes that everybody at Apple is reponsible to
be innovative and create the value for end customers. When a product or service has reached its
maturity stage in the life cycle then it becomes utmost important for the leaders of the company to adapt
innovative strategies to differentiate their product from the competitors.
At the national level, innovation, creativity and adoption of risk taking ventures from the leaders often
result in sustainable growth and employement opportunity for the countrymen. We have seen many such
persoanlities such as Ratan Tata, and Dhirubhai Ambani who created the wealth and opportunities not
only for himself but for the country as a whole.

vii.

Explore some ethical ways of creating wealth for the bottom of the pyramid in India.
1.

By adopting various macrofinance measures- It can includea) To promote and improve efficiency of various existent Self-Helping Groups (SHGs) in the country.
b) To promote various fiscal policies targeted at BoP such as- Right to Food, and Pradhan Mantri Jan Dhan
Yojna.
c) To empower the BoP people by educating them.
d) Many projects such as BASIX have achieved sustainable and inclusive growth in their business.
2. By creating employment opportunities for rural people in the village itself. This will decrease their dependency on
agriculture and thus improve their way of living. Ex- MANREGA
3. By improving the output of agriculture by adopting various modern technology and educate the rural people about
these modern measures.
4. By encouraging different corporate houses for their share of Corporate Social Responsibility. Companies such as
Tata and ITC have been doing justice consistently with their responsibility towards society.

Case 10.2 Dubious Outcome At Starbucks Coffee Company

Starbucks CEO Schultz believes that every company must push for self-renewal and reinvention,
constantly pushing the status quo, and that is what Starbucks followed especially after Schultzs return
as CEO in 2008. From 2001 to 2007 - when Schultz has served as the chairman though the company
had diversified and grown from 5000 to 15000 stores, Starbucks was losing its signature traits and the
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stock dropped 42% in 2007. Over time, the company had been expanding the brand beyond its core
into various media like music, books, and film. Plus, there was intense pressure to maintain high
annual revenue and profits, and amidst all the cries for growth, the team had lost the focus and clarity
of what the Starbucks experience was all about. Schultz, after becoming the CEO again in 2008
brought the focus of employees back on customers and quality of products, rather than factors like
speed of delivery. Some of the major steps taken by the company to get back to its previous position
were as below:

The company closed 7100 US stores to re-train its employees on the art of making the perfect
Espresso. Starbucks lost $ 6 million as a result but this step was required to take the company
back to its roots.
The company sought candid feedback from its customers, on the factors that Starbucks should
improve on. Also external consultants were hired to the first time in the history of the company
on how to revive the company.
Starbucks update its website and improved its overall media presence.
The breakfast sandwiches were interdicted from the menu as they were overpowering the
aroma of the coffee. Sandwiched were brought back in the menu after a few months with
healthier ingredients.
600 stores were closed in 2009, 70% of which were opened within the previous three years.
The company also retrenched 70% of its global workforce. As a result of these steps, costs
were cut down by $ 850 million.
The old espresso machines were replaced with sophisticated Swiss-made machines.
Additionally, the outdated cash registers and computers were also replaced.
To retain its existing customers, Starbucks started created customers reward cards. Within a
few months since the inception, $ 150 million had been loaded into these cards.
New design was rolled out for many stores, and the CDs and books were scaled back.
The annual purchase of fair trade coffee was doubled to 40 million pound in 2009. Also, the
partners salaries were increased according to the merit.
Many of the measures adopted by Starbucks during this period were successful and
consequentially revenues and profits started to increase. In fiscal 2010, Starbucks revenues
increased to a record $10.7 billion, and its operating income increased to $1.4 billion, up from
$562 million in fiscal 2009.After this success in US, Starbucks started to look for opportunities
for growth in other parts of the globe. Since then, Starbucks has implemented many tailor made
strategies to succeed in Europe Asia and Australia. Currently, Starbucks has 20,100 locations
worldwide, and is planning to expand its evening alcohol and light bites menu to thousands of
stores.

1. In general, discuss the ethics of outdoor dining in the context of social exclusivity of those
who can afford it.

The disposable income of the people in developed as well as developing economies has
increased over the past few years. The idea of outside eating has become more prevalent with
expanding wealth of the individuals, which empowered spending too much of wage on
exercises like open air feasting, consumerism and so forth. At the same time the thought of
open air eating is basically an expansion of the standard of social selectiveness as it can't be
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managed by the poor individuals in a society. However this new practice cannot be merely
termed as extravagant display of wealth, this debate requires cultural and political context also.
Even though the act may look unethical, but the agent who is performing this act cannot be
blamed.
This is a new trend and the people who are following this are not the culprits. On a second
thought, people have full freedom to spend their wealth in any manner they want, unless it is
legally allowed. The agent is paying hefty price for this act, and also indirectly paying taxes to
the government, which will ultimately be utilized for the betterment of the society, and that
includes people at the better of the pyramid. So, the act may look as an extravagant display of
wealth, but on a closer look, this act and the agents involved are not doing anything unethical.

2.

In general, discuss the ethics of the culture of fast food restaurants in the context of more
organic and healthier homemade meals and fellowship that strengthen family solidarity.

If we try to analyze the growing culture of fast food chains from the lens of the ethical
frameworks taught in the class, it turns out that this practice is unethical on many fronts. First
of all, the trend of going out frequently and eating fast food chains has become much more
prevalent in the past few years, especially after the increase in the disposable incomes of the
people, as in the previous question. There are many factors responsible for this act like 1) busy
schedule and fast lives of people in big cities 2) Promotion of fast food and portraying this
trend as a cool thing by the fast food chains 3) Growing trend of spending leisure time in
shopping malls
Out of these factors, let us try to analyze the second factor in detail. The agent i.e. the fast food
chains advertises fast food as an easy and a cool option , where they ignore to inform their
customers about the nutritional deficiencies of these foods as compared to home cooked food
and fresh fruits and vegetables. While the agent is doing a good job by providing valuable
service to the people, they should go beyond their selfish motives and think about the heath of
its customers. These days, however, many food chains have started to display the detailed
nutritional contents of the foods they provide, which is a very positive step as people have
become much more health conscious, and with enough due diligence, they shall be able to
decide what food to eat.
The other agent involved that is the person eating the junk in a fast food chain is equally
responsible if in-spite of the availability of home-cooked food, he /she goes out and prefers to
eat fast food. Not only this is detrimental to the persons health, this also steals away the
valuable time from the persons schedule which could have been very well spend with the
family.

3. Discuss the ethics of Starbucks in overextending its capital resources by over-expanding both
domestically (USA) and abroad.
The decision to expand both in US and abroad must have been a well thought upon, and was
taken at the time when the economic situation was stable. For a company with booming sales
record at that time, growth and diversification is an obvious step. The decision cannot be flatly
said as unethical or immoral because it was in the best interests of its stakeholders. This could
have meant an increase in the shareholders wealth, an increase in employment opportunities,
valuable services to the society etc. However expansion should have been driven by the needs,
demands and capacity of the company, rather than to achieve some overambitious growth
targets.
Most of the resources of the company were being utilized to expand and to do acquisitions and
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diversify the portfolio. The focus of the company has shifted from the customer centric values
that it held in the past, and amidst all the cries for growth, the team had lost the focus and
clarity of what the Starbucks experience was all about. The company had failed to deliver the
quality of products and the services for that it was once known for. The ambition to expand,
rather the greed to expand at a very fast pace, had blindfolded the management, and the
company had lost its focus to deliver best services to its customers.
Thus the decision was not immoral in itself, but the fast pace of the targeted growth and the
negligence of the existing resources and the customers was unethical on the part of Starbucks.
4. Starbucks wanted to increase faster and bigger than McDonalds in half the time. Is growing
bigger, better and always? Is aping McDonalds in this context healthy competition?
Kants Deontological theory of ethics
The theory of deontology states that all of us are morally obligated to act in agreement with a certain
set of values and rules regardless of consequence.
The firm broke no laws in the first place. But the reasoning behind the decision of growing bigger and
bigger without a strategy was a big mistake. The company did not analyse the market risks and market
demands associated with the growth. They jeopardized the future of its employees and stakeholders
who depend on the company for their livelihood.
As the business grew haphazardly, there was no scope of sustainable long term growth. The end result
for Starbucks was a debacle. The firm due to its inability to maintain momentum had to cut down
numerous orders, jobs and operations. The firm failed to fulfil its duties towards its employees,
suppliers and numerous stakeholders. In this way, although Starbucks did not break any deontological
laws per se, but its actions were against the principles of Kants theory of ethics.

5. Its recent over-expansions ended up locating stores too close together and cannibalization
raged. Starbucks misjudged the risks of planting stores close to each other leading to decline
in store sales. Discuss the ethics of establishing Starbucks stores so close together in the
context of cannibalization.
The middle and top management decide parameters such as number of stores, location of stores and
density of stores in a particular area. Therefore, the executives were responsible for making sure that
the companys profits grow in line with the rapid expansion plan that the company had undertaken.
As mentioned in the previous question, the company did not analyse the market risks and market
demands associated with the growth. Allowing stores to open up very near to each other created a
condition where each store became less profitable and this led to cannibalization within the firm.
Instead of working together to meet the organization goals, the management decisions led to conflict of
interest. The stores were quick to resort to malpractices to attract more crowds and remain profitable.
Thus unethical and unplanned strategy at the management level trickled down the ranks and led to
unethical functioning throughout the organization.
The firm failed to fulfil its duties towards its employees, suppliers, customers and numerous
stakeholders.
6. Starbucks desecrated its original unique Starbucks coffee image by adding commoditized
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products like over-the-counter food, thus instantly eroding its brand and uniqueness. Discuss
the ethics of this commoditization as a brand-deception strategy.
Prior to 2008, Starbucks was a boutique caf with each store unique its own way. In 2008, Starbucks
changed its dominant strategy. From a boutique store, it took a U-turn and became a fast food chain
serving commoditized products. Starbucks lost its uniqueness and the competitive advantage and soon
started competing with the McDonalds in a bid to grow rapidly. Starbucks started practising brand
deception and tried to deceive its customers into thinking that Starbucks were a fast food chain.
Customers did not perceive this move well and the brand dissonance drifted the customers away from
Starbucks. The customers rejected the new Starbucks and this started the downfall of Starbucks.
Starbucks disregarded ethics and indulged in deceiving its customers through brand repositioning. This
spelled disaster for Starbucks and in the process Starbucks jeopardized the future of its employees,
suppliers, customers and numerous stakeholders.

Case 10.3: Plant Relocation and Possible Labor Displacement at Bajaj Autos
Chakan Plant near Pune
UPDATION OF CASE FACTS:

Bajaj Auto was recently listed in the Forbes Magazine as one of the 100 most Innovative companies in
the world. The company also donated 20 crores to the PM Relief fund for the recent floods in the
Jammu and Kashmir. Despite all these accolades and positive brand enhancing activities, Bajaj Auto
was mired in an important controversy. The workers had stopped work over demands for a wage
increase, the allotment of shares at a discounted rate and the reinstatement of 22 workers suspended by
the management on disciplinary grounds.
A strike led by their worker union Vishwa Kalyan Kamghar Sanghatana (VKKS) started on 25th June ,
continued for 49 days before finally ending on 14th Aug,2014. The strike was called off
unconditionally. The 900 or so workers who were agitating since 25 June returned to the factory on
14th Aug and production subsequently returned to normal. The decision to end the stir was taken at a
joint meeting between members of VKKS and Shramik Mahasabha, which is an umbrella organization
VKKS. VKKS president Dilip Pawar, who led the agitation, said, With no support from anyone
labour office or other local authoritieswe cant fight alone.
The management had first set 12 August as the deadline for the resolution of the crisis, failing which
Bajaj had said that they would consider the permanent transfer of 50% of the Chakan factorys
production to other plants in Aurangabad and Pantnagar. The deadline was extended by three days
before the strike was called off
The Chakan plant employs 1,486 people and produces the Pulsar, Discover and KTM brands. Bajaj
had been producing some of its high-volume brands at its Waluj factory in Aurangabad. On 26 July,
Bajaj announced a production loss of 25,000 bikes.
Source:http://www.livemint.com/Companies/fMDWLaBYD29VLKYragRpGJ/Bajaj-Auto-extends8|Page

deadline-for-resolution-of-labour-dispute.html

1. You are hired as an HRM external consultant to resolve this issue before it escalates into a
major strike that could force close down the Chakan plant or block its transfer of operations to
Aurangabad or Pantnagar. What will you do?
First of all, I would have delved deep into the matter to understand the reason for the workers specific
demand. Although the demand of reinstatement of fellow workers was reasonable, the issuance of 500
shares to each of the worker was certainly an unreasonable demand. The same could have been used to
incite the management to issues at least some shares. There must have been certain deeper issues
which were the real reason for the strike, which were required to be understood. A proposal could have
been made regarding the hike in the wages of the workers over a period of time on the basis of
performance and seniority in the organization. However, meeting the demand regarding share
allocation was outright unjustified. The union and management could have been brought together on a
common platform and a viable solution ensuring the common good of both the parties could have been
worked out. A general offer to workers could have been made in which they would have signed an
agreement to not strike for a fixed period and a compensation could have been given to them.
2. What is the moral dilemma in this case? What is the moral trilemma or multi-lemma that
you can convert the Chakan case to and why? Accordingly, what is your strategic plan of
action? Why and with what intended effect?
The dilemma in this case was that of profit maximization and worker welfare. The management
along with the shareholders want maximum return on their investment. It was not in the
management and shareholders interest to give in to the workers demand as that would taken a hit
on the companys top and bottom line. At the same time listening to the demands of the workers was
important as not doing the same would have stalled the operations of the company for a long period
of time. Especially in a place like Maharashtra where the worker unions are heavily influenced by
the regional and national political parties, it was imperative for the organization to take their
demands seriously, no matter how much unreasonable they were.
The strategic plan of action would have included not only talking to the union but also consultation
with their affiliated parties to reach a common ground of consensus. The intended effect would have
been to reach at a reasonable resolution for the issue, which took almost 50 days to resolve and
costed both the workers and organization heavily.
3. Specifically, what are the legal rights and duties of management versus labor (Unions) in this
regard at the Chakan plant, and why?
The company had allegedly made the workers do overtime and had not paid for the same. The same
was done despite stiff resistance from the union for quite some time before the strike broke out. This
practice by the management to force their workers to do work against their will and also not paying
for it was definitely an illegitimate practice under the various contract and labor laws of the country.

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The Section 54 of the Factory Act, stipulates that no worker shall be required or allowed to work in a
factory for more than nine hours on any day, subject to the approval of the chief inspector.
Additionally it also specifies that the daily maximum specified limit in this section may be exceeded
only in order to facilitate the change of shifts. The company breached the section 54 consistently for
a prolonged period of time which led to the unrest and consequently a strike.
4. What are the underlying assumptions, presumptions, suppositions and presuppositions,
biases and prejudices of the workers and the management, and in resolving the strike how
will you eliminate them progressively?
A major underlying belief that prevailed in the worker union was the payment of wages lower than
the industry standards and not as per the work being done. Another underlying assumption was
regarding the working conditions. Although, the Chakan plant is one of the most advanced
motorcycle manufacturing plant in the world, the unjust overtimes and workloads led the union to
stand up against the management and raise a demand for appropriate compensation.
On the other side, it was managements belief that they are providing reasonable working conditions
and compensation to their workers as per the industry standards. They also could have had an
underlying feeling that they have provided the workers with a means of living and hence and seasonal
demand in terms of overtime and other factors is justified.

5. How can you legally, ethically and morally defend Rajiv Bajaj, the Managing Director of
Bajaj Auto, and his stance on this issue?
Mr. Rajiv Bajaj was right on his moral stance that no shares allocation would be done(A demand of
500 shares) , as that was a ludicrous demand which not only would have made an impact on the
companys top and bottom line, but would have also given wrong signals to other unions in the
country working for other organizations. An agreement to their demand would have made the
situation worse for the overall manufacturing sector as it would have set a wrong precedence.
Ethically, he has been providing good working conditions and reasonably competitive salary to this
employees and any conflict arising out of a difference in opinion is subject to discussion. Legally he
breached certain clauses of the Section 54, but that was probably due to negligence on the part of his
management team. The remedy for the breached was therefore justified but not by allocation of
shares, but agreeing to the unions other justified demands.
6. Following Frederick Taylors theory of motivation (1907) you could treat labor as mere
factors of production. But following Maslow, Herzberg, McGregor, and others thereafter,
you could treat workers as human beings with dignified human personhood endowed with
immanence, individuality, sociality and transcendence. Hence, how will you strategize your
consultancy plan so that both workers and management win in the long-run?
Despite Taylors theory of motivation in which he considered treating labour as mere factors of
production, he clearly specified that there is a need of cooperation between the management and the
workers. This was clearly not the case here, because the management had breached this critical
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requirement and had in fact just focussed on treating workers as the factor of production, without
considering their needs. It made the workers do compulsory overtime and even worse, did not paid
for the same.
Applying Maslows theory of motivation or theories of Herzberg or McGregor, is can be stated that
the workers should have been treated in a more just manner and not merely as factors of production or
machines. The company could have focussed on the troubles that were simmering up in the worker
fraternity much before the actual strike broke out. Obviously it took some time before things got out
of control and the workers had to resort to strike. Treating the workers in a dignified manner and
acknowledging their basic needs would have led to a different situation. The management could have
introduced a Grievance platform for their operation to express grievances which had been occurring.
It was important for the organization to have regular discussion with its union to prevent the matter
from escalating this level of criticality.

Analysis of the three cases with AOL4

1. Analyzing Cases against various definitions of Virtue
Dimensions
Virtue

of

Executive Indias Super Rich in Dubious Outcomes at The Bajaj Case

2014
Starbucks

Socrates: Virtue is both knowing the

good and willing the good of our
actions.

These billionaires were

viruous as they created
wealth
under
lawful
profession and shared wealth
with stakeholders.

Starbucks was losses and stock

prices have dropped 42% in
2007. Howard Schultz who
had become the CEO took
many bold steps to bring the
company back on track. His
actions were in the best
interests of the company and
its stakeholders.

Plato: Four cardinal virtues of

prudence, justice, fortitude and
temperance.

Showing prudence, super

riches created wealth from
their ideas. However, justice
can
not
be
proved
completely as riches have
shared
only
marginal
benefits so far with the
society.

Prudence: The measures they

had adopted were focused on
reviving the company in the
long run. Fortitude: The bold
steps taken by Howard after
2008. Justice and Temperance:
While
considering
the
extension of the retirement
year of thousands of its
employees.

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Democritus (460-370 BC) held that to

call a person good one had not
only to do the good but also want to
do it because it was good. Aristotle
maintained that a virtuous person is
not one who does virtuous acts once
in a while, but one who does them
regularly over long periods of time
and does them as second nature.
(p.19)

The super riches can be

termed as good for creating
job opportunities and wealth
with their efforts. But this
goodness
would
be
amplified if they were more
generous in sharing the
profits with BoP.

The customer-centric values

and focus on the providing the
best services and coffee taste
can be called as good,
whereas the overambitious
growth targets that ultimately
hampered the company was
bad.

Aristotle: Virtue is an acquired

character trait that manifests itself in
habitual action of doing good.

These business hunks have

been maintaining consistent
growth and thus hunger for
the growth can be termed as
their virtue.

From 2001 to 2007, Starbucks

focused on expansion and
diversifications, and neglected
the existing customers and
quality services. This was
unethical on Starbucks part.

Aquinas: Moral and intellectual

virtues are produced in us by
humanly reasoned acts, and they
perfect us through the doing of
good deeds.

Although these riches have

been creating the wealth
consistently but contributing
only marginally in the
betterment of the society.
Ex- Reliance Foundation has
been working for the
betterment in BoP. ITC has
shown incredible sustainable
contribution in BoP.

Howard had taken the

company from small coffee
shop to 10 billion dollar
company. And this was
achieved by his customer
centric values and focus on
quality services and best
coffee. Thus these acts were as
a result of Howards virtues.

Foot: Virtues are specific dispositions

determined by the need to correct
certain deficiencies

The super riches have shown

this virtue by consistently
generating
revenue
in
adverse economical and
political situations specially
when whole world has gone
through
economic
downtime.

Howard showed the right path

to Starbucks as the company
had digressed from their long
standing values.

MacIntyre: virtues are skills internal

to activities or practices that are
necessary for the performance of
certain roles or offices in society.

These riches have been

holding key decision making
roles in their organizations
and have been doing justice
to the responsibilities given,
thus they are virtuous.

Howards vision and deep

entrepreneurial expertise are
essential
for
Starbucks
success.

2. Viewing the case against major developments of Executive Virtue

Dimensions
Virtue

of

Executive Indias Super Rich in Dubious Outcomes

2014
Starbucks

at The Bajaj Case

According to Aristotle, moral virtues are

habits that enable a human person to live
according to reason (see p. 9).

Moral virtues able these

riches to perform well and
achieve their pre-set goals
irrespective of the market
conditions.

Howards laser sharp focus on

customer centric values of the
company, tell about his strong
moral virtues.

Aristotle argued that a proper control of

our reason and passions should not just
repress them completely nor indulge in

These super riches have

managed
the
wealth
efficiently. They maintained a

The bold decision taken by

Starbucks- retrenching employees,
closing some stores and investing

12 | P a g e

them freely. Rather a good virtue is to

seek the mean between two extremes, both
of which are vices. Prudence is the virtue
that enables us to know the mean in a
given situation (see p. 10)

proper balance in re-investing

the profits in the business and
sharing the profits as
dividends
with
the
shareholders.

huge
capital
for
modern
equipments display prudence and
Planning.

Aristotle also said that a virtue is a

character state concerned with choice
ruled by the golden mean determined by
prudence or the practical reason. It is
not possible to be fully good without
having practical wisdom, nor practically
wise without having excellence of
character (p. 11).

These riches have been

creating wealth from the
business and sharing some
part of it with the society.
They need to increase their
contribution to the betterment
of the society though.

All the measures taken are for

betterment of the company and
impact all its stakeholders, and not
only the top management. So, the
measures are justified.

An agent is praised not merely for the

possession of virtue, but for its exercise
and
exemplification
in
concrete
circumstances. The virtuous person is
one who knows how to act and feel in
ways appropriate to the circumstances
(p.11).

These riches are virtuous in

that they take business
decisions such as divestment
& investment as per adversity
of
the
circumstances.
However, some riches must
learn to contribute to the
society.

Firing must have been a well

thought decision. If not done, this
could have an even worse impact
on the company as it was already
suffering losses.

All
perceptions,
reactions
and
assessments are contextual.
The
virtuous act that hits the mean is
directed toward the right persons, for
the right reasons, on the right occasions,
and in the right manner (p. 12).

In favourable market, their

businesses
have
shown
considerable growth. These
riches need to sustain this
growth rate even in adverse
conditons and it might be
challenging.

The decline in the wealth was the

result of some not so good
decisions, like expansions and
huge growth targets, and neglect of
existing stores and customers.

The end of life that all human beings

should aim is happiness (eudemonia). The
virtues are not merely means to
happiness, but constitute it; that is,
happiness does not merely consist of what
we get in life but also includes who we are
(p. 13).

Sometime journey become

more
interesting
and
meaningful than destination.
So riches should also
concentrate in inclusive
growth that would result in
eudemia to all shareholders
and society.

Howards decisions were aimed at

the betterment of the stakeholders
of the company. He wanted to add
value to the customers by
providing best coffee and services,
and to the employees by increasing
profits of the company.

Real virtue presupposes that what we do

is not only good for one self at a given
time but is really good for ones self as a
human being. It is for the sake of
achieving the latter good that we practice
the virtues and we do so making right
choices about means to achieve that end
(p. 14).

Considering this virtue, many

riches have been trying to
achieve inclusive growth by
involving BoP in their
business cycle. Reliance
Foundation, Tata Foundation
& ITC are some examples in
this section.

Starbuckss actions will touch

many human lives including the
current and future employees of
the firm, the customers of
Starbucks and the shareholders of
the company.

3. Viewing the cases against major processes of ethics of Executive Virtue

Dimensions of Executive Virtue

13 | P a g e

Indias Super Rich in Dubious Outcomes at The Bajaj Case

2014
Starbucks

Developing a virtue-based ethics for

business, Solomon (1992a: 104) argues
that mere wealth creation should not
be the purpose of any business.
Instead, we must conceive of business
as an essential part of the good life,
living well, getting along with others,
having a sense of self-respect, and
being part of something one can be
proud of (p. 17).

Riches should not only

concentrate in creating wealth
but also improve the lifestyle
of people in the society. By reinvesting some part of the
profit in the betterment of the
society, upliftment of the
whole
country
can
be
achieved. By doing so, they
will also get some sort of self
respect and self satisfaction.
Global leaders such as Bill
Gates have been following this
path since last few years.

It was Schultz responsibility

that the firm doesnt only
concentrate on revenues.
Schultz was more worried
about the business it seems
from his strategy.

Individuals
are
embedded
in
communities and that business is
essentially a community activity in
which we work together for a common
good, and excellence for a corporation
consists of making the good life
possible for everyone in society
(Solomon 1992a: 209) (p.17).

The immense efforts of the

super riches will be more
fruitful if they be able to pass
on the fruits on the profit to the
betterment of the society.

The terminating of a few

employees was done to ensure
that the company remains in
business
and
all
the
employees do not suffer the
same fate. In other words, it
was done for the betterment
of the stakeholders and
society at large.

According to MacIntyre, internal

practices with goals and results can
change, expand, diminish, but not at
the expense or gain of another. These
internal goods are not competitive,
not objects but outcomes of
competition to excel; they are unique
to the internal practices; the more one
has them, the better off is the
corporation and the community
thereof (p.17).

From
whatever
limited
available resources online, we
can conclude that riches have
been abiding by the law and
trying to adopt good working
practices. But on the other
hand, sometime these riches
get involved in rule amending
or breaking process. Ex- Coal
Allocation Scam where riches
tried to bend the rules as per
their benefits.

The steps taken by Starbucks

were for the best interest of
society.

Business should be a human endeavor

in which executives ought to find
fulfilment, and therefore, emphasize
the need for virtue in business. This is
a valuable reminder that business is
part of human and moral life (p.18).

For the successful rendering of

human and moral life, all
riches should contribute in
betterment of the society by
creating more employment
opportunity for the backward
class, empowering the poor
and
educating
the
underprivileged people.

Starbucks has added value to

the lives of all the
stakeholders. This is as per
the virtues of a good business.

According to Hauerwas (1981), moral

business management decision is not so
much of what one is obliged to do, but
the kind of person one would be by
doing it . To act rightly is to act rightly
in affect and conduct. Discerning the
morally salient features of a situation is
part of expressing virtue and part of
the morally appropriate response (p.
18).

If these riches will employ

legitimate business tactics and
contribute in upliftment of the
society then discerning the
morally salient feature of their
actions will be appropriate.

The company acted morally

and hence took certain short
term
decisions
which
guaranteed survival of the
company and welfare of
majority of the stakeholders in
the long run.

14 | P a g e

There may be a strategic virtue in

doing things rightly, but there is a
moral virtue in doing right things
rightly (Aristotle 1985) (p. 19).

If the profit is achieved

legitimately and will be reinvested in betterment of
society then riches would show
a moral virtue in the behavior.

The company executives tried

to do things rightly by
considering welfare of its
stakeholders
through
sustainable growth.

4. Viewing the case companies against major antecedents of Executive Virtue

Dimensions of Executive Virtue

Indias Super Rich in Dubious Outcomes at The Bajaj Case

2014
Starbucks

Contemporary moral philosophers argue

that executed acts are not necessary for
the moral description of persons. That is,
goodness (or badness) is not consequent
to questions of rightness or wrongness
but antecedent to it, distinct from it,
determinative of it. Persons are good
who strive to realize the right, and
actions are right when they satisfactorily
fulfil the demands of protecting and
promoting values (pp. 20-21).

Assuming that riches have

been creating wealth by
adopting legitimate business
strategies, if these riches will
also share the benefits of the
businesses with the BoP
people then the overall benefits
will be more sustainable and
society will be more balanced
in its structure and well being.

Under Schultz, the company

tried to improve stakeholder
value by taking measures for
long term growth.

Thus, a person who performs a wrong

action can be called good for performing
the action, as long he strives to do the
right. Thus, we no longer call people
good if they do good actions, rather we
call them good when they strive to realize
rightness (p. 21).

Super riches can be called

good in tow conditions- First,
if they consistently aim at
improving the profits for all
stakeholders. Second, if they
also contribute in betterment of
the society by reinvesting
profits in BoP.

Intentions of the decision

make it a good or bad
decision.
Schultz
took
decisions with a good intent
and this will always be
remembered.

Conversely, people are bad not when

they perform bad actions but when
they fail to strive to perform the right.
Badness, then, is not simply acting out of
selfishness or malice; prior to act,
badness pertains to the failure to strive
for rightness (Keenan 1992). [p.21]

Efforts are more relevant than

results. Sometime riches may
try to fool their shareholders
for their personal benefits.
Such practices would deem
them as bad.

If Schultz intentions behind

retrenchment were bad, then
his decision would have
been deemed evil.

Contemporary understanding of moral

goodness is fundamentally related to the
concept of human freedom. Due to
nature, nurture, economics, luck, and
other external causes, some people are
more capable of realizing right activity
and goodness.
Some have a ready
disposition to be temperate, or just or
prudent (p.21).

Given
the
considerable
freedom to these riches, so far
they have operated for the
betterment of their businesses.
In last 1 year, positive political
factors and relative stability in
the country also resulted in
better annual growth for the
businesses.

Schultz had the qualities

which made him an
exceptional leader. This is
evident from the exceptional
results which the company
has put up for many years.

15 | P a g e

A good decision even if it

fails
will
always
be
attributed positively to a
leader.

In general, people perform right activity

based on their strengths, and wrong
activity from their weaknesses. Since
each person has a different set of
strengths and weaknesses, each person is
differently inclined to right or wrong (p.
21).

Among these riches, each have

their own course of actions.
Some focus on inclusive
growth while others on
increment in their annual
profits. For ex- ITC and Tatas
are renowned for their
sustainable efforts while others
are lagging in this arena.

It could be said that

Schultzs weaknesses might
be exposed in the coming
times. But as of now, he
went from strength to
strength and led the firm
effectively.

One could improve upon ones strengths

and reduce ones weaknesses this is the
exercise of virtue by which one orders
oneself. The more a person enjoys
personal freedom, the more is that
person rightly ordered, and vice versa
(p.21).

Increasing their strengths and

eliminating their weaknesses,
these riches can employ
continuous improvement or
Kaizen. The super riches can
further leverage their strengths
in better decision making
processes aim at increasing
profits in their businesses.

Schultz was able to improve

his strengths and reduce his
weakness due to his
commanding position as
chairman of the company.

16 | P a g e