INTERNATIONAL ISLAMIC UNIVERSITY H-10, ISLAMABAD FACULTY OF MANAGEMENT SCIENCES DEPARTMENT OF BUSINESS ADMINISTRATION

Business Society & Ethics Gen 302 Assignment # 1 Case Summary Ehtics in an unethical environment or absence of ethics: Last date of Submission22/02/2011

Name Course Registration No.

Sundas Arif BBA(Hons.) 17 (B) 2026-FMS/BBA/F07

The case ethics in an unethical environment or absence of ethics describes the operations of businesses performed in crisis situations. How and why the businesses are compelled to indulge in unethical activities. In this case we have been told about the financial and political position of Belarus in two parts, first dealing with political, social and legal environment, and second dealing with the functions of Destinator. Part 1:Political. Legal and social environment for small businesses and entrepreneurships in Belarus: Belarus had to face financial crisis at the time of soviet transition when democratic leadership was replaced by one man control which was regarded as command economy without central planning. All he independent decisions were made by state. People hesitated in involving in any kind of entrepreneurial business as they ad lack of experience and confidence in success of such business. Only reason for which people were interested in enterprises was to gain financial security. Since very few people were willing to do so, enterprises could not succeed, also because market economy was in unstable condition. Belarus was overburdenized with excessive liabilities. It did not have enough funds to carry out industrial operations for which most of the firms were at shut down point. The dictatorship led to sense of insecurity among the people of Belarus who started believing that no one would ever help them in improving their financial position, except themselves. For this reason they ignored all the differences between ethical and unethical issues. Most of them indulged in forbidden activities that caused violation of the rules of business. Leading these activities was bribery which became a common practice for earning extra money. These unethical activities flourished because legislature and legal environment was very weak and unstable that raised the confidence in unethical operations. Business environment for financial operations in Belarus: Russia was the largest business partner or Belarus and it sold about 70% of its exports to Russia. The banking system did exist in Belarus but people did not have confidence in government as they believed ,keeping money in banks means forgetting about the returns. So they thought keeping money in liquid form was better option. Later they could convert it to hard currency. There were three forms of exchange rate systems at that time. One of

them was official bank rate, second was for citizens and third was black market rate. Black market rate was the true depiction of unethical activities as in this people used to hide their real assets from income tax department in order to avoid from paying tax. This exchange rate was the most in practice as compared to other two. Part 2: Destinator- a rescuer or a thief: In second part, there is explained about a financial service & consulting company Destinator run by two partners Vasiliy & Daniil. They began their business after facing rejection and threat of less return in money exchange system. Thus they decided to start their own business working as middleman for exchange rate transactions. There purpose was to help entrepreneurs find secure channels of money transferring and conversion into hard currency. This business was started after complete research and analysis so they were sure about the success of the business. Though it was an unethical business as it was based on return less than market rate, but they followed ethical rules and regulations. They knew a positive and constructive relation with employees was significant source of success. They considered clients as their assets but at the same time refused dealing with the criminal organizations as it was risky matter. They believed in helping small businesses to survive and prosper in hostile business environment through providing secure, timely and fair environment. During this period government started operations against black market organizations. Destinators owners had a conflict regarding continuing or closure of business and hence they ended up in closing their company. Later they started another company based on purely ethical operation. The company was named Jupiter group that worked for rendering services with complete support of international business and trade activities.

CASE STUDY 1 Answer: Sanjay should perform the task assigned by his chairman. Being an employee of an organization, it is his responsibility to defend the repute of organization and each and every person related to that. By not performing this task, he might create problem for himself as his chairman can go against him and he might make this job difficult for him that may result in quitting the job which is not a favorable activity for Sanjay keeping in view his financial situation and job market recession. Since ethics are very important for him, so in current situation the ethical requirement concerning his job is performing the job rather than giving priority to his moral values which can lead to difficulties in his life.

CASE STUDY 2 Answer: Yes, Amit taking his wife along with him on business tours is totally ethical in part of Amit as it is having positive impact both on his professional life and personal life. His job is not being affected by such activity. Also organization is not suffering any extra cost due to this because all the expenses are being incurred within the permissible limit. So for the betterment of himself and his personal life, the step he took is in favor of him and according the ethics.