Business Case Studies,Corporate Governance & Business Ethics Case Study, Flour Corp's Business Ethics Practices: Creating Six Sigma Standards in Staying Corruption-Free

Code : GOV0005

Year : 2004

Industry : Business Law, Governance and Ethics

Region : India

Teaching Note:Not Available

Structured Assignment :Not Available

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Introduction: Trade reforms and liberalization initiated in 1991 aimed at opening the gates of the Indian economy to the outside world. Successive reforms brought in Multinational Companies (MNCs) to the country who triggered competition in the Indian market. Indian companies were forced tomatch the quality standards delivered by theseMNCs.Apart fromcompelling the old economy firms to restructure themselves in terms of shedding labor, designing new products and improving management, the MNCs brought with them a concept that had started evolving globally – the concept of Corporate Governance.

For a firm to raise capital, both from domestic and foreign markets, investors’ confidence had become imperative. Investors had started viewing CG as a yardstick for evaluating risks associated with investing in a particular firm. Transparency and accountability standards raised the investors’ confidence and subsequently, enabled companies to raise capital at a lower risk premium. As a result, more and more Indian companies started voluntarily incorporating CG practices from late 1990s. CG Reports started becoming essential part of the annual reports of most of the listed companies in India. Infosys3 was one of the first Indian companies to adopt such a procedure and it went to the extent of including country-wise CG reports.