Business Ethics: Kingfisher Airline

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(a) Business ethics is also known as corporate ethics providing a certain level of trust between different forms of market participants with business and consumers. It is the moral rules that administer how the companies reach decisions and operate in the market (Velasquez and Velazquez, 2002). It involves many areas from board strategies to how the firm should negotiate with the suppliers and it goes beyond legal requirements providing details of ethical approach in corporate and social responsibility (CSR) report. Key areas of corporate code of ethics revolve around employees, suppliers, society, shareholders and customer relations (Epstein, 1987). Firstly, employees of KFA (Kingfisher Airline) should not be seen as a means of producing…show more content…
Stakeholder theory Stakeholder theory has a purpose to create value for stakeholders not just shareholders and these stakeholders can come from inside or outside the organization. It aims to create value as much as possible to shareholders to keep the interests of executives aligned to the customers, suppliers, employees, communities and shareholders. Since KFA is so large and its impact on society is so substantial that it discharges accountability to many more sectors of society than solely its shareholders. However KFA failed not only in creating values to shareholders but also discharging accountability to stakeholders (Jones, 1995). After KFA got suspensions for all its international operations in the year 2012, employees of the KFA including pilots were not properly compensated and these problems led to strike resulting cancellation of flight. Furthermore, KFA was not even able to pay its debt to airport authorities and even after they auctioned Mallya’s private property. ( c ) Corporate governance includes balancing the interests of KFA’s many stakeholders. However some weaknesses were discovered in KFA that hinder facilitating effective management that lead to success of the company. 1. Board members of KFA were acting in…show more content…
The board of KFA not only had the incapable director but also had unaccountable independent directors. Board member included tennis player who has not provided any values to the company and they lacked an attitude of skepticism and accountability in running the board (Souster, 2012). To improve the situation, shareholders of KFA could have included more non-executive directors (NED) to provide guidance for Mallya. Inclusion of NED could have kept an eye on management team in check and provide objective view on how KFA should have been managed. Furthermore, nominating committee can be established in the firm to explore what composition is most likely to achieve its overall strategic

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