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Monday, April 1, 2019

Highlights On The Ethical Dilemmas Of Standard Chartered Bank Business Essay

Highlights On The estimable Dilemmas Of measuring rod hired Bank occupation Essay exemplification hire plc ope enumerates as the leading emerging markets aver in the world. The vernacularing group, known by many in the canting industry as Stanchart, operates all over 500 plazas in 50 countries through protrude the Asia Pacific land, southeast Asia, the Middle East, Africa, the United Kingdom, and North and South the States. Its Consumer banking divisionresponsible for 58 percent of film profit in 2000provides clients with extension mailings, personal loans, mortgages, and investment renovations. Its Wholesale banking building block caters to corporate clients in the trade finance, cash solicitude, custody, lending, inappropriate exchange, interest rate management, and debt capital markets. In 2000, the majority of SCBs revenue stemmed from its Hong Kong and Asia Pacific region operations, while the Middle East accounted for 18 percent, North and South America and the United Kingdom secured 14 percent, and Africa claimed 9 percent of revenues. The bank derives more than 90% of its operating income and profits from Asia, Africa, and the Middle East, generated from its Wholesale and Consumer Banking transmission linees. The group has more or less 1750 branches and outlets located in more than 70 countries.The London-headquartered Group has operated for more than one hundred fifty years in some of the worlds most dynamic markets, leading the sort in Asia, Africa, and the Middle East. Its income and profits hurl more than doubled over the last five years, primarily as a result of total growth, supplemented by acquisitions. The group employs 75,000 people, nearly half of whom are women. Its employees are of one hundred fifteen nationalities, with 60 of these represented among sr. management.Highlights on the ethical dilemmas of standard hire BankAlthough pattern leased Bank is an international bank and countries go to trust it for i ts international standards, but being such a widespread company they have had their ethical criticisms. Some of the unethical dilemmas that the company has confront over the years are-Credit card complaints- Recently SCB has been facing broad disputes in Asia in particular in India and Pakistan regarding the marketing of their credit cards.Figure 11- Reduction of the handling of credit cards The governments trade watchdog, the Monopolies and Restrictive change over Practices Commission, has started an investigation of card-selling practices of certain banks including Standard contract Bank, HSBC and the local banks ICICI and HDFC. The commission has the condition to fine companies and limit their moving in dealings. All the banks involved say they have followed all appropriate trade practices and are cooperating with the requests for information. On May 7, the bashfulness Bank sent a letter to all commercial banks ensample about usurious interest rates, asking them to rec oncile sure be to the borrowers were justifiable. The ombudsmans office at the bank tell it received 3,700 consumer complaints about credit card lenders within just the first 5 months of 2006. News studys regularly sacking articles telling consumers how to laughingstockcel their cards, and some frustrated credit card users but stop paying their bills. (http//www.consumercourt.in/credit-card/2638-standard-chartered-bank-complaint.html)Stock market scandal (International Agenda)- A melodic theme on Indias biggest financial scandal during 1991 1992 criminates foreign banks of transacting dummy deals to cover up losses or camouflage transactions by favored Indian brokers. The report from the Reserve Bank of India (RBI) exposes what it calls the nexus between Indian brokers and twain foreign banks, Standard Chartered and Australia and New Zealand Banking Groups ANZ Grindlays Bank. The report accuses Standard Chartered of entering into fictitious transactions to cover up an ever- increasing takings of unaccounted deals on its investment portfolio. The central bank of India has issued fines of roughly $42 million to 10 foreign banks, including Citibank, Bank of America, American Express Bank Ltd. and Standard Chartered Bank, accusing them of involvement in Indias worst securities scandal. SCB violated its guidelines by funding certain stock market operations, as well as helping out a fathered broker, Harshad Mehta, by putting through a number of dummy transactions. (Sanjoy Zakaria, 1994, New York Times)Acquisitions and outsourcing threat- In Malaysia, Bank Negara Malaysia in the financial defeat plan encouraged outsourcing of non-core functions by Financial Institutions. Ever since, banks have been exploring outsourcing as a way to rationalize and streamline operation. period outsourcing is a way forward to reduce cost, manage manpower dependencies and to allow financial institutions to nidus on its core business of providing services and financial prod ucts, such outsourcing is through without prior consultation with turners representative namely SBEU. Reduction of staves non simply occurs to those directly affected by the outsourcing of the clientele functions, but also some early(a)(a) complementary staff areas. Example, outsourcing of Sales and Marketing job in Standard Chartered Bank has transferred jobs originally done by Special fool Clerical. Indirectly, this volition reduce career promotion prospect. The bank has also use rationalisation ( collectable to outsourcing) as an excuse to close branches and scale down others. In the case of Standard Chartered Bank, the bank has gone on shutdown 15 branches countrywide with twain in Sarawak according to Law Kiat Min, universal Secretary of Sarawak Bank Employees Union.Evaluation of the Ethical Dilemmas Faced by Standard Chartered BankCredit card complaints- The consumer court in India has been tackling problems regarding partial credit card charges and improper move r to withdraw the phony due amount, Credit Card Terms Prompt Indignation Arigit Sengupta, a hotel theater director in Bangalore, swears he is never using a credit card again. Skip to next paragraphAfter charging about 30,000 rupees ($743) to his card and paying his minimum residue on time, he said he wound up owe his bank more than three times that amount. The kind of interest they charge, not even a chartered accountant could understand, he said. Local and foreign banks are aggressively peddling credit card accounts in India, where a fast-growing meat class with disposable income has created the ideal card client nucleotide. (Refer to Appendix-2) Even though the firm is maintaining the contractual theory with a customer during selling these credit cards, which represents that firms have a responsibility to comply with the basis of the sale, inform the customers about the nature of the product, forefend misrepresentation of any kind, and not coerce the customer in any way. But on the other hand SCB is overlooking the due care theory which taperes on the coition vulnerability of the customer, who has less information and expertise than the firm, and the ethical responsibility that places on the firm. Customers must depend on the firm providing the product or service to live up to the claims about it and to exercise due care to avoid customer injury.The result is vocal and heated criticism from card holders, consumer advocates and the government. They accuse the banks of levying unfair fees and nuisance charges and of providing miserable customer service. These banks are cheating the public, said C. V. Giddappa, general secretary of the Credit Card Holders Association of India, a nationwide consumer group. Mr. Giddappas arranging estimates that Indian consumers are paying 16.4 million rupees a mean solar day (more than $406,000) in unfair charges, and is agitating for a debt-free India by 2020.Stock market scandal (International Agenda) Regarding the particular scandal in 1991 1992 in India a spokesman for Standard Chartered said some of the report was misleading, particularly the conclusion that ripened managers were aware of the fraud. Barry Northrop, who heads a Standard Chartered team trying to see the banks losses in the scandal, said the fictitious deals were created without the knowledge of senior management and in defiance of both internal and RBI guidelines. Individuals involved had been reject and procedures tightened. In equipment casualty of theories SCB has complied according to Milton Friedmans theory (1970) regarding corporate social responsibility, which interprets that the further legitimate purpose of a company is to create wealth and pursue their business effectively for the hit of their customers, whilst providing a profitable reward to their investors. be a foreign bank SCB acted upon their vanquish interest financially, according to Friedman its the share of the state to provide the legal framewo rk that regulated companies behaviour in relation to the rest of the fraternity, the government or any appointed observe entity should have foreseen such a scandal and prevented it from occurring. But in the context of Kants theory, deontology or duty-based ethics that judges morality by examining the nature of actions and the will of agents preferably than goals achieved or simply a deontological theory looks at inputs rather than outcomes. Therefore since this move of SCB was clearly unfavourable for the economy of India, it worked as a bad reputation for the bank as well as other foreign banks. (Refer to Appendix-3)Acquisitions and outsourcing threat- The practice of outsourcing is considered as a good option, since it provides guaranteed professional supporter for businesses without the expenses of maintaining fulltime employees, but it also poses as a threat for the domestic countries work force. Outsourcing for talent leads to lack of job security for the local employees . Standard Chartered bank and a few other international banks in Malaysia has been outsourcing extensively which has lead to an inconvenience for the employees of the nation. The provision in the Collective Agreement that requires the Bank to consult the Union prior to outsourcing. Outsourcing has inevitably reduced headcount of staff of financial institutions. Attempts by unions to negotiate with the bank to ensure that when staff moved over to the new entity (outsourcing company), and retain their seniority, pay and benefits has not been successful. While it is not possible to extent exact figure of employees who lost their job due to outsourcing, it is estimated that about 30% of employees are directly affected be about 1,000 staffs. This figure is expected to increase due to continued rationalization and system engineering. Outsourcing takes two forms, namely, transfer of job function to head office prior to outsourcing in the case of Bumiputra Commerce Bank ordirect outsourc ing which happened in Standard Chartered Bank. Based on such outcomes and considering SCBs flowing status as one of the best multinational financial institutions, Carrolls (1979) quadruple step model on CSR can be use to focusing the depth of the duty an organization needs to comply. The first two steps of the model remain evident, but the last two steps overcompensatees particularly to the dilemma SCB is facing. Since Carroll believes that because a company can affect the interests and even lives of people, it should be accountable/responsible, to societal interests over those of the owners and beyond the specific limits of the law.Best Ethical Values and Practices of Standard Chartered BankEven though Standard Chartered Bank has had a reputation of using unethical means to reach a much beneficial end in terms of the companys market expansion. Although the British Empire isnt as global as it used to be, that hasnt stopped Standard Chartered.Sustainability is integral to Standa rd Chartered. Worldwide and in Malaysia, the bank champions dedicated causes, one of them being environment. The organization believes that each person can make a difference, and through small steps, the collection action contributes to the general impact as the community unites to preserve the environment for future generations. The organization is cognizant of getting it right in the home, before moving out to the neighborhood. The strategy of embedding the environment consciousness among the staff was a key focus for SCB in growing green advocates. As such, their green agenda is twist into every level of the banks operations.Environmental and Social Awareness- Over the last two years, Standard Chartered has run multiple activities and programs focusing on self-awareness, cut down wastage and lowering carbon footprint under its umbrella theme, Go Green, Lets turn over a Difference. From cutting back on air travel to implementing shared-printer zeal between departments, the re sults have been very heartening. The bank has seen as much as 50% reduction in air travel, 20% in paper consumption, 50% reduction in air travel and 10% in electricity usage, and the introduction of e-statements with customers.Higher targets are set for 2011. The bank is already using recycled paper for their business cards, and sourcing to adopt recyclable paper in all their operationsTheir other programs, Seeing is Believing (preventing curable blindness), live with HIV/AIDS, Financial Literacy Programme, are being tackled on ground with opposite interaction given theres a higher level of social predisposition surrounding these causes. All the following mentioned to a higher place directs to the theory of Consequentialism consequentialist ethics bases decision-making on the best outcome for the largest group that also results in the least harm. It is a form of utilitarian ethics, which focuses on results rather than ingrained moral imperatives. The return principle requires th e decision-maker to weigh the possible consequences of his or her actions to select options that offer the best results for society. This has lead SCB in attaining the title of one of the worlds most ethical companies in four consecutive years till 2010 all in intelligence of its ongoing commitment to build a sustainable business for the benefit of customers, clients and the wider communities in which it operates. (Refer to Appendix-4)Workforce change- With more and more organizations going global, diversity at work is increasingly becoming an integral part of every organization. Diversity refers to any perceived difference among people like age, race, religion, profession, sexual orientation, geographical origin and lifestyle. SCB has started their journey of diversity and inclusion in India from 2006 with formation of the DI Council. SCB ab initio started by concentrating on three aspects of diversity, gender, disability and nationality. Some of the key concerns were the nucl eotide of the working women, work-life balance, and barriers to growth. A series of focused group discussions were conducted to understand and address these concerns to help position Standard Chartered as the employer of womens choice, states Rajashree Nambiar, GM scattering and country champion, diversity and inclusion, Standard Chartered Bank. From an ethical perspective the bank has been exercising virtue ethics which focuses on the respective(prenominal)s moral stature rather than the morality of the act itself. A moral actor will base his or her decisions on ingrained values rather than consequences or duty. However, the individual is part of a community so the virtues valued by the community affect the individual decision-makers thought processes. A cultures values are coordinated into the individuals ethical framework. As a global bank, the variety of markets they do business in makes them diverse inherently.In terms of gender diversity women make up to 46per cent of thei r total workforce and the number of women in senior management roles has also increased. To increase effeminate representation amongst senior management they focused on creating a pipeline of high- capability female employees at middle management. In 2008, they developed a mentoring programme for their middle management talent, with a specific focus on women. The Bank actively supports International Womens Day. Across their markets, and organize a variety of activities to recognize the achievements of women and spotlight role models.In 2008, SCB renewed focus on attracting and supporting potential employees with disabilities. Over the last 12 months, the Group trained and hired a number of blind employees in Pakistan, employed their first visually challenged employee in Indonesia and Sri Lanka. SCB also launched initiatives to support employees with family responsibilities, and new maternity and paternity leave policies were trilled out in Bangladesh, Lebanon, US and Australia in 2008.RecommendationAccording to the reasonings mentioned above it is clear that SCB initially made a lot of wrong moves which was mostly in their own interest, but gradually when they started being internationally recognised they have tried substantially to improve their ethical ways as a corporation. They not simply provided international job opportunities in the economies they settled in, they also came up with various social awareness activities e.g. fund-raising, and city beautification programs in the countries they are operating. Since they are a service based organization their only way of communicating to their customers should be through goodwill building and ingenuous publication of their intentions and actions. On the other hand the governments of the countries where MNCs like SCB operate should state more efficient and reliable monitoring bodies for convenience.ReferencesText Books/Articles-Fisher, C Lovell, A, subscriber line Ethics and Values Individual, unifi ed and International Perspectives, 3rd Edition, Pearson Education, 2009Crane, A Matten, D, Managing Corporate Citizenship and Sustainability in the Age of Globalization, 2nd Edition Oxford University Press, 2007Laurie J. Mullins, Management and Organisation behavior, eighth Edition, FT Prentice Hall, 2007Jacques P. Thiroux, Keith W. Krasemann, Ethics Theory and Practice, 10th Edition, Pearson Education 2009De Geaorge, Richard T., Business Ethics, 7th Edition, Pearson Education 2010Lawrence, P.R. and Lorsch, J.W., Organisation and Environment, Irwin, 1969Press statement April 2002 to Standard Chartered Bank on Closure and downsizing of branches -pages 7-9Websites-www.consumercourt.in/credit-card/2638-standard-chartered-bank-complaint.htmlwww.gbcimpact.org/itcs_node/0/0/member_profiles/434www.csrdigest.com/2010/08/going-green-using-social-media/www.newyorktimes.comwww.thetimesofindia.comwww.timesnewspaper.comwww.standardchartered.com

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