Phonics Electronics and Electricals Ltd.

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Both the giving and receiving of gifts and hospitality have an important role in facilitating business practice. A meal out with a supplier can help build a relationship; a pen with your firm’s name on it can remind a customer of you when they need a quote.

The acceptance of gifts, services and hospitality is related to the issue of conflicts of interest and can leave an organisation vulnerable to accusations of unfairness, partiality or deceit. Its commercial relationships may be subject to bias and its ethical reputation will be at risk.

A policy on the giving and receiving of gifts and hospitality should be consistent with other aspects of the organisation’s ethics policy in encouraging high standards of personal honesty and integrity. It would be unacceptable, for example, to offer or receive corporate hospitality which might violate the ethical values of the giver’s/recipient’s company such as discriminating or causing offence on the basis of race or religion

How to make the policy effective

To ensure a transparent culture around gifts and hospitality issues, open discussion in the workplace should be encouraged. It is worth considering:

• offering an advice line for staff to call for guidance;

• offering a training programme to provide staff with the tools to deal with dilemmas of this sort;

• asking questions in employee surveys to identify doubts and pressures on staff;

• regularly auditing the gifts register to ensure that the policy is understood.

• be aware of your organisation’s policy on gifts and hospitality

• be aware of the requirements for reporting offers and acceptance of gifts and hospitality;

• consult your line manager if in any doubt as to the right thing to do

• inform your line manager if you suspect that you have been offered a gift or significant hospitality with corrupt intent;

• Consider informing your line manager if you are concerned that a colleague may have accepted an expensive gift or significant hospitality that contravenes policy.

Case 5 – Crescent Chemical and Pharmaceuticals Ltd.

( A VA study in a chemical and pharmaceutical company)

Issue: Whether the sudden change in packaging could lead to customers doubting the authenticity and other properties of the medicine.

Question: Was the initial objection of the Marketing Manager Valid. Do you think alike and contribute to his views?

Analysis: The savings obtained from changing the packaging was 3% of the total packaging costs.

Total packaging cost = 60+4 Lakhs = 64 Lakhs

Savings = 3% of 64 Lakhs = 1.92 Lakhs

But there has to be investment in changing the technology used to pack the medicines. The whole process of packaging had to be updated along with huge investments in promotions; hence it is quite wise on part of the Marketing Manager to raise his objections.

The kind of packaging and the materials used for packaging must be chosen in such a way that:

The packaging itself does not have an adverse effect on the product (e.g. through chemical reactions, leaching of packaging materials or absorption). The product does not have an adverse effect on the packaging, changing its properties or affecting its protective function.

There are several important roles that Packaging plays for a pharmaceutical product:

- Protecting the product from environment and vice-versa: protection from dirt, bacteria, other volatilities, protection from mechanical damages, and protection during transit.

- Providing all necessary information: Identification, Constituents, manufacture and expiry dates, purpose and various other vital information

- Enabling accurate dosing and compliance: Dropper tubes, markings on the caps, dispensing devices etc.

- Authenticity: Labels, holograms, markings and other signs

The marketing manager’s concern whether the sudden change in packaging could lead to customers doubting the authenticity and other properties of the medicine, is valid.

Moreover, pharmaceutical packaging waste disposal can cause problems for the environment. There are several ways use of plastic in packaging could affect the sales of the product, which the board didn’t anticipate.

Making any substantial investment and change in a product without understanding the risk it may possess on the sales and consumer perception is precarious. A detailed cost to benefit analysis should be in place for such a step. It might be the case that the Sales figures have increased but the overall profit of the company might have reduced owing to the costs incurred in Selling and distribution, investment in new packaging technology etc. Any such step should be taken by understanding the market sentiments, which can be done by Market Research. A pilot launch, collecting the results and followed by detailed analysis of the customer data could provide statistical evidences.

Case 6: Alpha Mineral Prospecting and Exploring Drilling Company Ltd.

(A case in wrong specification, packing and despatch instructions)

Issue: Wrong Specification, packing and dispatch instructions

Question: Should the packaging be changed according to the requirement of suitability over necessity?

Analysis:

The errors committed by Alpha Mineral Prospecting and Exploratory Drilling Co. are of the following categories:

- Specifications- The Company did not specify any grounds such as spillage or quality on which the shipment would be rejected. Such clauses protect the buyer in case of mistakes such as the one which happened in the case. If the company had such a clause in place it would be able to reject goods which have been spoiled and are now unsuitable