INSTITUTE OF HOTEL MANAGEMENT AURANGABAD,INDIA

Portfolio-2 Business Ethics

Corporate

Culture of ITC Group

Aakarshak Mehta (H-17002) Submitted in fulfilment of the requirement for B.A. (Hons.) in Hotel Management

THE UNVERSITY OF HUDDERSFIELD, UNITED KINGDOM

December, 2011

Business Ethics Introduction

The outcomes delivered by Asia symposium of direct selling gives an idea that topics such as industry regulation, consumer protection policy, corporate governance & ethics, and relationship building suggest an underlying theme of an industry looking to assure new markets of - The value and integrity of its operations, and - Respect for their legal and cultural traditions Business corporations are increasingly important for wealth creation, and how companies are operated will influence society as a whole.To serve this wealth creation function, companies must focus on their objectives and be accountable for their actions through the structure of good corporate governance arrangements . Corporate governance is the function of a companys compliance with regulatory requirements and, to the extent that it is not required by law, its adherence to standards that define relationships between a companys management, its board, shareholders and other stakeholders provide a structure through which the companys objectives are set, and how they are achieved and monitored recognize the value of business ethics and corporate awareness of society interests to reputation and long-term success (www.scribd.com, 2010) ITC defines Corporate Governance as a systemic process by which companies are directed and controlled to enhance their wealth generating capacity. Since large corporations employ vast quantum of societal restheirces, we believe that the governance process should ensure that these companies are managed in a manner that meets stakeholders aspirations and societal expectations. ITC's Corporate Governance initiative is based on two core principles. These are : i. Management must have the executive freedom to drive the enterprise forward without undue restraints; and
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ii. This freedom of management should be exercised within a framework of effective accountability. ITC believes that any meaningful policy on Corporate Governance must provide empowerment to the executive management of the Company, and simultaneously create a mechanism of checks and balances which ensures that the decision making powers vested in the executive management is not only not misused, but is used with care and responsibility to meet stakeholder aspirations and societal expectations. (ITC limited, 2011)

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Business Ethics Customer Services

FMCG ITC is one of India's biggest and best-known private sector companies. In fact it is one of the World's most high profile consumer operations. Its businesses and brands are focused almost entirely on the Indian markets, and despite being most well-known for its tobacco brands such as Gold Flake, the business is now diversifying into new FMCG (Fast Moving Consumer Goods) brands in a number of market sectors - including cigarettes, hotels, paper, agriculture, packaged foods and confectionary, branded apparel, personal care, greetings cards, Information Technology, safety matches, incense sticks and stationery. It is ITC's strategic intent to secure long-term growth by synergising and blending the diverse pool of competencies residing in its various businesses to exploit emerging opportunities in the FMCG sector. The Companys institutional strengths deep understanding of the Indian consumer, strong trademarks, deep and wide distribution network, agri-stheircing skills, packaging know-how and cuisine expertise continue to be effectively leveraged to rapidly grow the new FMCG businesses. Over the last few years, ITC has rapidly scaled up presence in its newer FMCG businesses comprising Branded Packaged Foods, Lifestyle Retailing, Education and Stationery products, Personal Care products, Safety Matches and Incense Sticks (Agarbatti) with Segment Revenues growing at an impressive compound annual growth rate of 38% during the last 5 years. The Companys unwavering focus on quality, innovation and differentiation backed by deep consumer insights, world-class R&D and an efficient and responsive supply chain will further strengthen its leadership position in the Indian FMCG industry. Cigarettes ITC is the market leader in cigarettes in India. With its wide range of invaluable brands, it has a leadership position in every segment of the market. It's highly popular portfolio of brands includesInsignia, India Kings, Lucky Strike, Classic, Gold Flake, Navy Cut, Players, Scissors, Capstan, Berkeley, Bristol and Flake, Silk Cut and Duke.
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Business Ethics
Food The Foods business carries forward this proud tradition to deliver quality food products to the consumer. All products of ITC's Foods business available in the market today have been crafted based on consumer insights developed through extensive market research. Apart from the current portfolio of products, several new and innovative products are under development in ITC's state-of-the-art Product Development facility located at Bengaluru. The Foods business is today represented in 4 categories in the market. These are:

Ready To Eat Foods Staples Confectionery Snack Foods Aashirvaad - India's most popular atta brand with over 50% market share. It is also present

in spices and instant mixes. Mint-o - Mint-0 Fresh is the largest cough lozenge brand in India. Bingo! - a new introduction of finger snacks. Kitchens of India - pre-prepared foods designed by ITC's master chefs. Sun feast - is ITC's biscuit brand (and the sub-brand is also used on some pasta products). Lifestyle Retailing

ITC's Lifestyle Retailing Business Division has established a nationwide retailing presence through its wills Lifestyle chain of exclusive specialty stores. Wills Lifestyle, the fashion destination, offers a tempting choice of Wills Classic work wear, Wills Sport relaxed wear, Wills Clublife evening wear, fashion accessories and Essenza Di Wills - an exclusive range of fine fragrances and bath & body care products and Fiama Di Wills - a range of premium shampoos and shower gels. Wills Lifestyle has also introduced Wills

Signature designer wear, designed by the leading designers of the country.

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Business Ethics
Personal Care In line with ITC's aspiration to be India's premier FMCG company, recognised for its worldclass quality and enduring consumer trust, ITC forayed into the Personal Care business in July 2005. In the short period since its entry, ITC has already launched an array of brands, each of which offers a unique and superior value proposition to discerning consumers. Anchored on extensive consumer research and product development, ITC's personal care portfolio brings world-class products with clearly differentiated benefits to quality-seeking consumers. ITC's Personal Care portfolio under the 'Essenza Di Wills', 'Fiama Di Wills', 'Vivel UltraPro', 'Vivel' and'Superia' brands has received enctheiraging consumer response and is being progressively extended nationally. Education and Stationery ITC made its entry to the education and stationery business with its Paperkraft brand in the premium segment in 2002; and later expanded into the popular segment with its Classmate brand in 2003. By 2007, Classmate became the largest Notebook brand in the country. Together, Classmate and Paperkraft offer a range of products in the Education & Stationery space to the discerning consumer, providing unrivalled value in terms of product & price. TC is the manufacturer of India's first Ozone treated environment friendly Elemental Chlorine Free (ECF) pulp, paper and paperboard. It blends its knowledge of image processing, printing and conversion garnered from Packaging & Printing Business with its brand building and trade marketing & distribution strengths resident in its FMCG business to offer superior value products to consumers. Paperkraft Business paper and the papers used in Classmate and Paperkraft notebooks are superior in quality and environment-friendly. Other offerings available in education and Stationery range are safe and certified non-toxic. Safety Matches As part of its strategic initiative to create multiple drivers of growth in the FMCG sector, ITC commenced marketing safety matches stheirced from the small-scale sector. The Matches business leverages the core strengths of ITC in marketing and distribution, brand building,
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supply chain management and paperboard & packaging to offer Indian consumers high quality safety matches.ITC's range of Safety matches include popular brands like i Kno, Mangaldeep, Stylites, Aim and Aim Mega. Agarbattis As part of ITC's business strategy of creating multiple drivers of growth in the FMCG sector, the Company commenced marketing Agarbattis (Incense Sticks) stheirced from small-scale and cottage units in 2003. This Business leverages the core strengths of ITC in nation-wide distribution and marketing, brand building, supply chain management, manufacture of high quality paperboards and the creation of innovative packaging solutions to offer Indian consumers high quality Agarbattis. With its participation in the business, ITC aims to enhance the competitiveness of the small and medium scale sectors through its complementary R&D based product development and strengths in trade marketing and distribution. Mangaldeep Agarbattis are available in a wide range of fragrances like Rose, Jasmine, Bouquet, Sandalwood, Madhur, Durbar, Anushri and Mogra. New launches include Fragrance of Temple, Champa and Tarangini in an attractive pouch format. Fragrance of Temple is a flagship sub brand in the Mangaldeep portfolio with Superior fragrance and high quality sticks in an industry-first canister pack. The canister pack also contains a metal agarbatti stand which has been highly appreciated by consumers.

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Business Ethics
HOTELS In 2007, ITC Hotels entered a new phase in its collaboration with Starwood Hotels & Resorts. ITC Hotels now has an exclusive tie-up with Starwood in bringing its premium brand, the'Luxury Collection', to India. WelcomHotels offer five-star hospitality for the discerning business and leisure traveller. Currently there are three hotels under this brand namely, WelcomHotel Rama International Aurangabad,WelcomHotel Vadodara and WelcomHotel Grand BayVishakhapatnam. Two other WelcomHotel Sheratons - Sheraton Park Hotel and Towers, Chennai and Sheraton New Delhi offer warm, comforting services to the global traveller and a chance to connect. Fortune Hotels operates mid-market to upscale properties in the first-class, full-service business hotel segment all over India, in major metros, mini metros, state capitals and business towns, promising business and leisure travelers a wide choice of destinations and accommodation. WelcomHeritage brings together a chain of palaces, forts, havelis and resorts that offer a unique experience. Welcome Heritage endeavtheirs to preserve ancient royal homes and the historical Indian grandeur and opulence for the future Indian generations. (www.itcportal.com, 2011)

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Business Ethics Customer Care and Complaint Handling

At ITC, the customer is their top priority. We are continually focused on how to better service you. Their business is about keeping their business running cost-effectively and without interruption, with the added assurance of continuous and personal support. Their top level consultants work with you to find solutions specific to their IT business needs. After implementation, these same consultants will maintain an on-going open dialogue with you and offer regular assessments to keep you better informed.

All of their consultants have been handpicked for both their expertise and their dedication. Each member of their team has held senior IT positions in blue-chip companies, giving them firsthand knowledge of their IT business needs and issues. This insight helps them to better understand and effectively service the diverse needs of their clients. Throughout the life of the project; clients have direct access, 24/7, to a senior consultant who takes complete responsibility for every aspect of the account. This is why their customer base has grown so rapidly; the expertise and dedication of their team, continuous support and personal service. We dont merely design a solution. At ITC, their aim is to go above and beyond their clients expectations. Their consultants deliver expert advice, continuous support, regular assessment, and open communication - Top IT business services all on a personal level.ITC created a solution that has absolutely suited TMGs needs. In fact, during and following integration, the specification incurred dramatic changes, yet due to the scalability of the solution these additional requirements were easily incorporated. ITC have become a critical asset in continually meeting their business mission John Taylor, Managing Director, Trans Market GroupITC continually meet our demands, working seamlessly around our timescales, demonstrating the flexibility and foresight to provide a manageable, cost effective solution Mark Briggs, Facilities Manager, Capita Insurance Services

(www.itcsecurity.com, 2011)

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Business Ethics Conclusion

Corporate governance is a term that refers broadly to the rules, processes, or laws by which businesses are operated, regulated, and controlled. The term can refer to internal factors defined by the officers, stockholders or constitution of a corporation, as well as to external forces such as consumer groups, clients, and government regulations. In recent years, corporate governance has received increased attention because of high-profile scandals involving abuse of corporate power and, in some cases, alleged criminal activity by corporate officers. An integral part of an effective corporate governance regime includes provisions for civil or criminal prosecution of individuals who conduct unethical or illegal acts in the name of the enterprise. (searchfinancialsecurity.techtarget.com, 2010)Creating a strong corporate identity is a priority for every business. However, there arent many companies who are able to create the desired identity or image in the minds of their target audiences. The right corporate identity is paramount in creating a strong brand and is part of the strategic image building process, which sits upon the reputational platform. The reputational platform helps to identify their organisations story, like a theme behind what their organisation is all about. Over the years, ITC has evolved from a single product company to a multi-business corporation. Its businesses are spread over a wide spectrum, ranging from cigarettes and tobacco to hotels, packaging, paper and paperboards and international commodities trading. Each of these businesses is vastly different from the others in its type, the state of its evolution and the basic nature of its activity, all of which influence the choice of the form of governance. The challenge of governance for ITC therefore lies in fashioning a model that addresses the uniqueness of each of its businesses and yet strengthens the unity of purpose of the Company as a whole. . Equally, in the resultant competitive context, freedom of executive management and its ability to respond to the dynamics of a fast changing business environment will be the new success factors. ITC's governance policy recognises the challenge of this new business reality in India. (ITC limited, 2011)

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Business Ethics Biblography

(2010). Retrieved december 2011, from www.scribd.com: http://www.scribd.com/doc/36630407/Corporate-Governance-and-Ethics-2 (2010). Retrieved December 2011, from searchfinancialsecurity.techtarget.com: http://searchfinancialsecurity.techtarget.com/definition/corporate-governance (2011). Retrieved december 2011, from www.itcportal.com: http://www.itcportal.com/itcbusiness/index.aspx (2011). Retrieved december 2011, from www.itcsecurity.com: http://www.itcsecurity.com/aboutitc/customer-care ITC limited. (2011). Retrieved december 2011, from www.itcportal.com: http://www.itcportal.com/about-itc/itc-values/corporate-governance.aspx

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