Management principles and ethos: From India to the World


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Management principles and ethos: From India to the World

  1. 1. MANAGEMENT PRINCIPLES AND ETHOS: FROM INDIA TO THE WORLD Rishikesh Patil ( The industrial revolution in the 16th -17th century, the great depression of 1930, the fordist and post-fordist era in the 60’s, are all important eras in world history. They have had a major influence on world economies, large corporations and industrial giants. They had an impact on businesses and still affect the way we do business today. Every era brought in a new learning, some the hard way. Hundreds of years ago, India and China controlled around 50 percent of the world’s GDP. Culturally rich, these two countries had a major influence on world trade. However, the western domination was beginning to be felt by the 14th and the 15th century and gained momentum thereafter. The two eastern giants lost their power and a new era ushered in. For centuries, the western world dominated and the eastern economies followed. They defined the way businesses are done, we followed. They set principles, we followed. They succeeded, we tried to catch up. They faltered and fell, we limped. Today, the dynamics have changed. The focus has again shifted to the old superpowers, India and China. The western world is increasingly influenced by the eastern world economies and trying to cash in on their growth story. Having adopted a low-regulated capitalist economic system and faltered, they have now turned towards the other side of the world for management lessons. They are now looking towards us for solutions, ways to mend their businesses. The time has come when history will repeat itself and India is once again at the centre of the world stage. A land of diverse cultures, a country with a booming economic growth, a nation regarded as the world’s largest democracy, a rich cultural heritage, a country which taught the world the principles of life and science through its diverse scriptures, a country where management principles were laid long before the field of management came into existence. We are a paradigm of success despite the constraints. It’s time that India propagates the relevance of the ethos which have laid the foundation of our success. What are these and how can they affect the organizations? Let us analyze in brief.
  2. 2. ROOTS OF MANAGEMENT The concept of management has been changing over a period of time. Until recently, management was considered as an art and a state craft. With the advent of industrial revolution management became a science and an art was transformed into science. Subsequently, management became a discipline and a profession that could be formally taught to all those interested in becoming managers. In this discipline we find the convergence of various other disciplines such as economics, psychology, sociology, ethics, et cetera. The ‘core knowledge’ of the discipline of management draws heavily from other disciplines and through value addition, integration and synthesis of ideas from various disciplines a new discipline of management has been created with its own concepts at the levels of thought, discourse and action. Vedic integration of transitions in management thought from ancient times to modern times provides a Vedic integration of various intellectual traditions that have influenced the development of management ideas and concepts. Some integrative models of ‘transcendental management’ suggests the need to create an intellectual bridge between ‘Harvard’ and ‘Haridwar’ metaphorically representing the concepts of corporate management and self-management. The discipline of management has also been influenced by various ‘isms’ such as capitalism, socialism, feminism, et cetera. While its roots are largely in capitalism and the capitalistic mode of thinking, it could not avoid the influence of other ‘isms’ such as socialism and feminism. The corporate model, with its focus on maximizing returns to the shareholders, had its origin in capitalism. However, over the years, the corporate model itself has been undergoing a change. From a mere stakeholder’s organization it became stakeholders organization wherein it had to address itself to the concern of various stakeholders such as customers, employees, suppliers, government, society, et cetera. In its third stage of evolution, corporate are evolving as ‘corporate citizens’. They may further evolve into social institution as their influence on the society increases. They are no more mere business entities but are expected to play their role as social institutions wherein they care for the society and the social welfare. These concerns are finding their expression in ideas such as ‘corporate governance’ and ‘corporate social responsibility’. These concerns point to the need of new ideas in management thought. The intellectual roots of management and social thought can be traced to three major traditions, viz:  Pure materialistic/ Economist tradition
  3. 3.  Humanist-Materialist tradition  Transcendentalist tradition Pure materialist or economist tradition considers human beings as economic units. Humanist materialist tradition considers human beings as social beings for whose benefit the society exists. This tradition’s thought is rooted in the philosophy of justice, rights and duties (JRD) emphasized by many social thinkers. Transcendentalist tradition is rooted in the philosophy of love, compassion and devotion (LCD) emphasized in various spiritual traditions. This three step model also broadly corresponds to capitalism, socialism and spiritualism reflecting their major focus in terms of market, society and self. The three intellectual traditions also define three worldviews, viz:  Transactional- Primacy to calculative and acquisitive mindset or mode of thinking  Transformational- Primacy to liberation from domination, exploitation and expression, concern for others, et cetera  Transcendental- Primacy to helping others The fight between various ‘isms’ has given way to reconciliation, mutual understanding and co-existence of various ‘isms’. The integration has been happening through emergence of ideas such as corporate social responsibility, corporate governance, concern for the poorest and the weakest. This indicated that the world is moving towards holism wherein a holistic view is taken to integrate the contradictory world-views. ‘Ism’ stands for an idea or a set of ideas, its spirit and its manifestation.  I- ideas  S- spirit  M- manifestation Hence, we use them to connote ideas that give primacy to a central concept and not to represent an ideology PURPOSE OF EXISTENCE (ENVISIONING THE FUTURE OF AN ORGANIZATION) What is the purpose of existence? A transactional view of life considers struggle for existence and 'survival of the fittest' as purpose of existence. The transformational view considers struggle for social values such as justice, rights and duties as purpose of existence. The transcendental view
  4. 4. considers struggle for spiritual values such as love, compassion and devotion as purpose of existence. Further, 'struggle for grace of divinity (god)' is also part of transcendental view. Thus, there are four types of struggles for human beings viz. struggle for existence, struggle for human values, struggle for spiritual values and struggle for 'grace of divinity'. In transcendental management, an organization has to identify its higher order purpose of existence, in addition to its vision and mission. In absence of linkage of vision and mission with higher order purpose, an organization may not contribute towards social objectives. Purpose of existence in the social context is reflected through Negative - Positive Karma of human beings. Individuals driven by higher order purpose of existence tend to be more positive - karma oriented. In contrast, believers in 'survival of the fittest' tend to resort to unethical actions and thereby tend to be negative - karma oriented. The best example of this would be the fordist era. Henry Ford was the first one to bring in the assembly line system of production. The main motive was to increase production to high levels. In this process, however, employees lost value. They were simply seemed like mechanized robots that were programmed to do specific tasks. Employee job satisfaction levels were the lowest in this fordist era. The, transcendental philosophy of HOPE (Higher Order Purpose of Existence) tends to motivate people towards synergy creation. Even one man or women with well defined Higher Order Purpose of Existence can change the society or shape the history. There are many examples of the same from history of the world. In fact, every age produces a new prophet i.e. individuals who articulate a Higher Order Purpose of Existence, according to the needs of the times and create mega-changes in the society and shape history. This has been the experience of the history and seems to be a law of nature, wherein natural mutation may favour an individual with highly developed mind. This is also reflected in the concept of 'arrival of the best to lead the rest' in contrast to Darwinian concept of 'survival of the fittest to eliminate the rest'. ETHOS THAT SHAPE THE FUTURE Human Welfare or the Loksangraha This idea implies that individual and corporate actions should be driven by the criterion of the overall benefit of the society. It draws our attention towards the social responsibility of the corporates. 'Sarve bhavantu sukhina, sarve shantu niramaya' is an ancient Sanskrit sloka outlining the basic philosophy of life applicable not only at the individual level but also at the corporate level. It implies 'welfare of all' and 'survival of all'. It should be
  5. 5. contrasted with the social Darwinism which believes only in the 'survival of the fittest'. Ethical Profits or the Shubh Labh Wealth generation through ethical means or the Dharma driven Artha has been an ideal principle for the conduct of business. Indeed wealth generation has been given positive importance in Indian secular texts and scriptures. The very fact that India was known as Golden bird at one point of time in the world history, indicates that wealth generation had its due importance in the overall scheme of life. The conditionality imposed on the wealth generation was in the form of an ethical principle that wealth generation should be driven by dharma or the ethical ways. Hence, the idea of shubh-labh was developed. Unattached Action or the Nishkam Karma The idea of nishkama karma is unique to Indian thought. Formulated centuries ago, the concept is at the core of leadership concept in corporate context. Detached action without longing for the immediate results is the essence of this concept. Modern leadership literature is coming close to this idea as a fundamental quality of enlightened leaders. Work as Worship The ideal concept of work ethics is inherent in the well-known Indian phrase, 'work is worship'. Hence, the attitude in performing one's task should be in the form of worship. When work is treated as worship it leads to excellence in task performance. Manifestation of this idea can be seen in many fields of art and literature wherein most people ascribe their achievements to their attitude towards work in the form of work as worship. It may be indicated that the difference between 'work religion' and 'personal religion' should be understood. In the idea of 'work as worship', the 'work religion' gets a priority over the rituals of the personal religions. When personal religion is adjusted to the requirements of work religion, then only proper work ethics develop in an organizing context. Divinity in Human Beings 'Every soul is potentially divine' declared Vivekananda. This philosophy is at the core of Indian thought. Vivekananda's idea has also been repeated by many others in one form or other. It also represents the essence of self- development. Similar ideas have now been expressed in the concept of Spiritual Quotient (SQ). The Concept of Family ( Kutumbh)
  6. 6. 'Vasudhaiv kutumbkam' – Entire world is one family, is an important message from Indian thought. The idea of kutumbh is unique because each family member has a say in decision making as well as a role to play which changes according to situation and requirements. When organizations are viewed as a family, the joys and sorrows are shared equally and members are part of the 'corporate community'. Avoidance of Extremes Avoidance of the extremes is an idea formulated long time ago. Also popularly known as Buddha's middle path, it implies balancing and steering through the middle or alternative approaches to the extreme solutions. Hence, Indian models seek to evolve new ways rather than being carried away by the 'only way' approaches to problems of humanity. LEADERSHIP MODELS Vijigshu Model of Leadership Vijigshu means Vijaya (victory) ikshuk (desirous). Thus, leader must be desirous of victory. Developed in the context of 'Kingdom Management', model required the king or the leader to be self motivated and driven by 'victory' orientation. Vijigshu uses the persuasion (sam), economic incentive (dam), power division (bhed) and punishment (danda) as instruments to achieve his objective of loksangraha (welfare of the world). In this model, power (danda) is to be used for loksangraha i.e. enlightened collective interest and not for self-interest. Workship Model of Leadership Rooted in the concept of Karmayoga, the workship model of leadership considers, 'work as worship'. Workship "signifies that when work is done in the spirit of worship, the quality of work undergoes a metamorphosis. As a result, even ordinary work is transformed from a mere chore to an extraordinarily reality". In the workship model of leadership, there are four roadmaps that take the leader towards workship. "These are inner paths leading to the same destination which is the self". These paths are (i) Discipline; (ii) Righteousness; (iii) Sacrifice; (iv) Transcendence. In this framework, transcendence is defined as 'a state of realization in action'. Workship creates conditions for effortless effort and the leaders practicing workship become the inspirational models. Wisdom Leadership Model
  7. 7. The model of 'wisdom leadership' is rooted in the ancient 'rajrishi' model wherein a leader has a touch of 'rishi' or the touch of sacredness in all his actions. According to this, "This line of leadership development has continued unbroken from mythology to history, to the present times; from King Janak to Budha, Ashoka to Chandragupta, Vivekananda to Gandhi". It considers the 'raj-rishi' concept as quintessential Indian model of leadership. To substantiate his argument, he provides empirical evidence in the form of dialogues with leading corporate leaders and he finds many of them practicing 'raj-rishi' model in one form or other. Problem with such dialogues is that at times, people in senior positions tend to give socially desirable answers. Hence, many times it is extremely difficult to make firm conclusions about the true nature of leadership. In spite of such limitations, the 'rajrishi' model as a concept is a useful benchmark for leaders. Since, 'rajrishi' is an embodiment of 'wisdom', We refer to this model as 'wisdom leadership'. However, the expression wisdom could have different meaning for different individuals. Some 'wisdom leaders' are known for their authoritarian approach. However, wisdom is largely a feminine quality, hence, to capture the 'rajrishi' concept through the expression 'wisdom leadership' may not be an exact formulation. Nevertheless, it could be considered a close equivalent. There is a need for a new metaphor that takes us beyond the male-centric, authoritarian 'wisdom leaders'. Rishi as Re-see Model This model is rooted in the interpretation of Rishi concept as Re-see concept. A rishi is one, who can re-see the things, events, and actions around him or her in a new perspective in addition to providing a touch of humanness. He / she is also Self Responsible Individual (SRI) and she is Matured - Self Responsible Individual (MS). This model considers knowledge creation in terms of rationality, intuition and revelation in a hierarchical order. Rationality is at the lowest step, intuition is the next step and revelation is the third step. Through re-see approach, leaders use their intuition effectively and thus arrive at new interpretations and revelations that lead to radical changes in the organization and society. Re-see leaders use the radial approach for being always in touch with happenings around them and also for envisioning the future. We can also refer to them as 'full circle leaders', as they see and re-see the environment through full circle radial visioning approach.
  8. 8. INDIAN ETHOS OR INTERNATIONAL ETHOS - THE RIGHT PATH In order to bring out the differences between Indian ethos and international ethos, we need to first classify ethos based on 3 attributes:  Universal system of ethos  Duty  Goals In the universal system, we try to define certain taboos which an individual organization should avoid at all costs. These are strict no-no’s. As per the Indian religious scriptures, we define 3 ethos which are taboos: ‘parastri’, ‘par-dravya’, ‘par-ninda’. In the duty system, we are given certain principles which help us in deciding the course of action. Religious scriptures and works help us in understanding our real duties. As stated in the Bhagvad Gita, “Karmanye Vadhikaraste, Ma phaleshou kada chana” Which simply means that one should not work for tangible future benefits, but should do so as a duty. In the goal system, we consider one aspect that will in turn lead to a long- term ‘shreyas’ and introspect. In Hinduism, four goals are mentioned for which one should strive for all life: ‘dharma’, ‘artha’, ‘kaama’, ‘moksha’. Based on the above points, we try to bring out differences between Indian and international, rather western, ethos:
  9. 9. INDIAN WESTERN Money, not obtained at the expense of others When I win, someone else’s loss is inevitable Defaming competitors is not considered a ethical practice Defame when necessary to gain advantage Businesses are responsible towards all parties or stakeholders, viz. employees, suppliers, customers Goal of business is to maximize long term ‘wealth of equity’ for shareholders Goal needs to be high on profit margins along with focus on social welfare Focus on high profit margins Sustainability is a key factor What matters is growth Employee is a part of the organization, viewed as one family Hire and fire if necessary Hostile takeover not well received Takeovers necessary for expansion The best example of an organization displaying true practice of Indian ethos is the TATA group. Jamshetji Tata once said, “I don’t want India to be a superpower, I want India to be a happy nation”. From the time of its inception, the TATA group has been high on values and ethics. It has earned a great name owing to its ethical practices and work for the society at large. It incorporates almost all the ethos and principles mentioned above, viz. sustainability, social welfare, organization as one family, hostile takeovers a strict no, et cetera. ACCEPTANCE OF INDIAN ETHOS BY THE GLOBAL COMMUNITY The Western world has stood up and taken notice of the Indian ethos, principles and management practices in the last few decades. But there still is a long way to go. Before this, however, the Indian businesses themselves followed the western model. End result was the only thing that mattered. A certain parallel system of business was developed in India during this
  10. 10. period. This has its roots in the Mahabharatha. During the war, Lord Krishna said to Arjun ,“end goal needs to be achieved in any way possible”. To cope with bureaucracy and ‘license raj’, businesses had to resort to bribery. The common word used for this was ‘jugaad’. However, not all business houses in India followed ‘jugaad’ way of getting work done. There are some corporations which took the rough path but emerged as successful. The world took notice and lauded them for their extraordinary work practices.  Tata acquired JLR It was feared that the employees would lose jobs and the JLR group would lose its image. However, even during the recession, not a single employee was fired.  ITC e-Chaupal For years, the poor farmer had to suffer. He never got the right price for his crop as most of the profit was raked in by middlemen. ITC e-Chaupal empowered the farmer and made him independent. The farmer was informed about the market prices and was able to get the right price for his harvest eventually. CARVING FUTURE MANAGERS The world has changed in the last few decades and the power has now shifted to the new engines of growth, India and China. There are many factors that India will have to consider before it is ready to take on the responsibility of a world superpower. These are:  Inclusive growth  Entrepreneurship for creating more jobs  Tackling corruption and encouraging ethical practices B-schools will have the responsibility of shaping leaders of tomorrow who will face these challenges as soon as they enter the corporate world. Making them future ready and competent enough to tackle these issues without sacrificing ethics will be a huge challenge. Following are some of the practices which we suggest B-schools should adopt:
  11. 11.  Entrepreneurship As attitudes and cultural references take shape at an early age, education can play a major part in successfully addressing the entrepreneurial challenge. Education should therefore develop awareness of entrepreneurship from an early age. Introducing young people to entrepreneurship develops their initiative and helps them to be more creative and self-confident in whatever they undertake and to act in a socially responsible way. Statistics show that enterprise education is a task in which we, as a nation, are failing. Educators need to face up to the fact that our current model is broken. The common belief that a single pathway from school to university is the only way to get a good job no longer holds true. We must challenge and inspire young people with the idea that they can make it happen for themselves, by nurturing a new culture of enterprise education, embedding the key ingredients of entrepreneurship in the curriculum. 1. A coherent framework: national and regional authorities should establish cooperation between different departments in order to develop a strategy with clear objectives and covering all stages of education. School curricula should also be revised to explicitly include entrepreneurship as an objective of education. 2. Fostering entrepreneurship in higher education: entrepreneurship should be incorporated in various subjects, particularly within scientific and technical studies, in order to provide students with specific training on how to start and run a business. B-schools should be given practical support and incentives to incorporate entrepreneurship in their curricula, through a range of different instruments (distribution of teaching materials, funding of pilot projects, dissemination of best practice, promotion of partnerships with businesses, support for dedicated organizations conducting entrepreneurship programmes with B-schools, et cetera.). 3. Support for teachers: it is essential that teachers be given initial and in- service training as well as practical experience. Awareness should also be raised among heads of schools to ensure that teachers are allowed the time and resources to plan, run and evaluate activities. 4. Participation by external actors and businesses: educational establishments and the local community, especially businesses, should cooperate on the subject of entrepreneurship training, and firms should
  12. 12. regard this as a long-term investment and as an aspect of their corporate social responsibility. 5. Practical experience: one of the most effective ways to promote entrepreneurial mindsets and skills is through learning by doing  Educating on Ethics Probably the most important learning of all for any future management student. This is an issue that has been troubling us for years and the whole system has begun accepting corruption as a norm. Students need to be told about the importance of ‘karma’ without expectation and the need to have a long term vision by sacrificing short term benefits for a long term one. Subjects like Vedanta should be introduced to management students which tells them about the importance of ethics in work and introduces them to the management principles laid out down by rishis and scholars of ancient times.  Corporate Social responsibility One of the yogas discussed in the Gita is karma-yoga or the “Path of Selfless Action”. Karma means action, work or deed, and Krishna speaks to Arjuna about the importance of performing selfless actions. Krishna tells Arjuna that action is better than inaction, and people need to live in the world rather than in their minds. He also warns Arjuna about becoming attached to the objects of the world. B-schools can inculcate the value of selfless work by including CSR activities as a part of the curriculum. Tie-up with NGOs for social activities could be initiated. Students should be encouraged to take up internships in NGOs.