Information technology is the most exciting sector in India. The BPO sector particularly is perceived to be highly relevant and significant for India. This is one sector, which provides a ready opportunity for employment to fresh graduates who are fluent in English and offers them attractive remuneration packages. Students and graduates barely out of college are able to win handsome salaries and earn as much as what their parents did at the end of their career.
This enormous level of income to the youth especially when they do not have the traditional burden of running a family and so on has created both positive and negative results. The most positive aspects of IT and BPO sector is the dramatic change it has brought about in our attitude to the way we look at humans. There was a time not long ago when India’s large population was considered as a problem. Today, the same fact is seen as an opportunity. The majority of our population of more than a billion is below the age of 35 and is seen as a demographic dividend. Compared to the graying population of the developed countries like those in USA, Japan and Europe, India’s youthful vigor is seen as providing a competitive edge.
The employment opportunities in the IT / BPO sector puts enormous purchasing powers in their hands. This in turn has led to a virtuous cycle of educated youth getting productive employment with attractive remuneration and this purchasing power acts as a engine for the economic growth. India is perceived to be one of the four countries BRIC (Brazil, Russia, India and China) who are perceived to be the emerging economic giants of the 21st century.
The social consequences of the BPO sector are even more than the economic impact. Most important of course is the sudden elevation in the style of living and the quality of life for a very large number of the people who were in the lower middle class or even below the poverty line. The second most important aspect is the opportunities this sector has provided for girls particularly, to make a decent living. Nearly 60% of the students taking IT courses in the southern states in India are girls. My experience as a chief guest in many functions in colleges and schools is that most of the prizes in academics are won by girls. Perhaps they have less distraction and are more dedicated to studies. When it comes to the cerebral contest between men and women, I am afraid, the women are proving to be much better than men. This is reflected in the employment pattern of the BPO sector, where a significant percentage are women. I am sure the figure must be double the average in any other sector if not more. There is no glass ceiling so far as the BPO sector is concerned.
The presence of economically empowered women is brining its own consequences in society. DINK families – double income no kids, are common. Opportunities provided in the IT sector for men and women to work together also leads to marriages among colleagues which is a positive impact. The negative side is the increasing scope for sexual harassment in the work place. Thanks to the 24 x 7 culture of the IT sector, women also have to work in the night shift or the grave yard shift. There have been tragic cases of murders of innocent women workers in the BPO sector. There is another largely negative impact on both men and women. This is the problem of unrelenting stress at the work place because of intense competition and the race to the bottom of the prices. The tension at work leads to the burn out of the young people. In their mid thirties they face serous health problem including heart attack. Those who are married face the problem of divorce or worse. The children are a constant source of anxiety.
The primary driving force behind the BPO sector are economic. In the developed countries particularly USA the cost of skilled human resources is much higher. The companies are forced to offshore or outsource a part of their business processes. The world has become borderless and to borrow the words of Thomas Friedman, it has become flat. In this world, ultimately, it is cost, quality, productivity and speed in meeting deadlines that decide success in the market place. The identification of India as a vast country with people fluent in English, the universal language for the IT sector, was a happy coincidence and has led to the dramatic growth of this sector.
But what about the people working in this sector? If the economic factors have been the prime consideration in the growth, should economic factors alone remain the concern of the people in the sector, and more importantly the enterprises themselves? There is a dominant view that ultimately, a business enterprise exists to ensure that the capital invested in it yields a healthy return. Concepts like the economic value added have further refined this to show that wealth has to be created and not destroyed. The EVA has concept has led to identification of practices which have been shown to be in fact destroying wealth rather than creating wealth. Tremendous competitions and the quest for continuously improving profitability and success in terms of market capitalization, profits measured every quarter have created a situation where those who are running the enterprises are put under tremendous psychological pressure. Stress leads to situations where in Japan, people are dying of overwork. It used to be said that nobody died of over work. But ‘karoshi’ is the specific word in Japanese to describe people dying of excessive stress.
This brings us to one of the operational paradoxes of the BPO sector. This sector depends mainly on human resources and brain power. The main challenge of the sector is attracting and retaining the right type of people. Attracting and retaining talent is the main challenge for every executive in this sector. Attracting talent means creating an environment where talent will be nurtured. The reputation of an enterprise becomes increasingly important in this context. Organizational culture becomes a key factor in attracting talent. Nevertheless, it is not enough to attract talent alone. Once talent is attracted has to be retained by continuous motivation. The potential talent of the people us must be made kinetic by continuously creating a stimulating environment where creativity can flourish. The operational dynamics of the BPO sector throw a number of challenges especially when it comes to management of human resources. Where does ethics come in all these? How is ethics relevant in daily life?
Ethics is the moral code or the framework of values which guides our action in everyday life. Human society has evolved over generations. Darwin pointed out that it is the survival of the fittest that leads to the success of any type of life in the process of evolution. Nevertheless, mere selfishness and competitiveness is not enough for life to survive and evolve. A certain degree of altruism and cooperation is necessary if any type of life has to succeed. This particularly so in the case of humans who are social animals. Right from the stage of hunter gatherer groups through agriculture and development of civilization, it has been found that the members of the society have to observe certain norms or values, if it is to be for the common good. Selfishness alone is not enough for survival but enlightened self interest becomes an operational necessity for human society to survive. This reality is likely to be forgotten in the day to day operations of business enterprises facing global competition in a 24 x 7 culture. As the competition spread and the world became a global market, it is increasingly realized that the success in the market place depends not only on the good corporate management but what is being called good corporate governance. Corporate management refers to the management of the physical resources, financial resources and human resources available to the enterprise to get the best results in terms of profitability, productivity, market capitalization and so on. Soon it was found that unless this is backed with a set of proper values, the success may be very doubtful. The dramatic collapse of Fortune 500 companies like Enron, Worldcom, Anderson in the year 2000 brought home the fact that it is not enough to have good corporate management and meeting the targets in terms of profitability, productivity and market capitalization so on, it is increasingly important to be ethical for the enterprise to survive. As the Economist in a review of the developments in the 1990s and the early part of the 21st century pointed out, the global economy was discovering certain basic truths. Honesty is the best policy. Be fugal; Be prepared. These three lessons highlight the need for looking beyond mere economic, financial or monetary consideration and look into set of ethical values.
Values are basically the principles which underlies each one of our action. Life is a continuous exercise in making choices and the type of choice one makes is depending upon the values one cherishes. Hence, the increasing realization about the importance of morals and values in globally competing enterprises.
There is an obvious reason why morals are becoming important in this context. Ultimately, business is a win-win exercise. Unless all parties to a business transaction gain equally, there will be no successful business. If we take an organization like a stock market or a capital market, unless the investor have confidence that the money they invest will give them reasonable returns and their money will be safe and there will be accountability, investments will not take place at all. We have seen the collapse of the South East Asian market in 1997 and the dotcom burst in the year 2000 and the subsequent gyrations of the stock market. Ultimately there must be a degree of trust between people if business has to flourish. Corporate governance, a term which is being increasingly used, refers to the moral framework under which business enterprise operate. This is predicated upon three factors. The first is transparency in operation. If there is no transparency, there will be no accountability. If there is no accountability, there can be no trust. In the absence of accountability, investment may not take place. Hence the supreme importance of transparency and accountability. Accountability ultimately has to be to those who are investors in an enterprise and all the stake holders in an enterprise. In the global context, the stake holders in an enterprise includes not only shareholders but customers, suppliers, employees and society at large particularly the environment. The increasing realization that the threat of global warming from economic activities of industries has alerted the whole global market about the need for adopting policies which are friendly to environment. Even the World Bank has pointed out that while growth may be welcome, there are certain types of growth that are not welcome. These are (i) jobless growth, where growth takes place without creating jobs. (ii) Rootless growth, where growth takes place leading to a total detachment from local culture. (iii) Futureless growth, which means the growth which damages the environment in such a way that the industry can not survive in the long run. (iv) Ruthless growth, where growth takes place by hurting the other parts of the society.
In short, ethical issues are becoming increasingly important in the highly competitive globalised world. This brings us to the basic issue of ethical values in daily life.
In their book, “the power of ethical management” Norman Vincent Peale and Kenneth Blanckshard gave a three point test to find out whether a decision taken is ethical. The first test is, is it legal? If the action is not legal, then it is not ethical. The second test is, is it fair? If the decision taken is such that not all parties in any contract benefit equally, then to that extent it is unfair and unethical. The third test is, if the decision taken becomes public, will it cause embarrassment to the organization or the people concerned? This test can be called as the 11th commandment test. Cynics say that while there are 10 commandments in the Bible, there is a 11th commandment, which supersedes all the 10 commandments. This unwritten 11th commandment says “you can violate all the 10 commandments but not the 11th commandment “thou shall not be found out”. This shows that if anyone commits an act which when exposed lead to embarrassment or shame that in itself shows that it is not ethical. These three tests can always be used for every situation to ensure that the decision taken are ethical.
As we have seen earlier, the basic issue and challenge continuously is attracting and retaining talent. In creating a healthy atmosphere, the first issue to be tackled is how much can be the remuneration? The enormous gap in the remuneration between the rest of the society in other sectors compared to the BPO in turn leads to stress and jealousy and as a result, the tension. The tension turn leads to lack of productivity and it is not surprising that people in their mid 30s face the problem of burn out. The increasing popularity of gyms and keep fit movements shows that there is increasing realization that stress at work place leads to lifestyle diseases which have to be tackled.
If we go to the root of the problem, we find that ultimately, it comes to a question of the attitude a person possess to life and whether the value to be cherished should be only measured in financial or economic terms. There are other dimensions of life which have to be realized of healthy balance is necessary if one has to be successful.
The issue of corporate governance and ethics in business has two dimensions. One is the external dimension where the enterprises has to build a reputation in the market and that is necessary to retain its element of trust and attract investment. This is created by two factors. One is external factors like the regulatory agency like SEBI and legislation like the Companies Act and so on. These legal framework and the regulatory directories about the operating in the market create external pressures on the enterprise to observe the norms to retain credibility. But far more important is the internal dynamics of creating a healthy organizational climate so that the enterprise stands for certain values. Certain enterprises have built reputation for integrity and values and in the process they have not only grown from strength to strength but they have also been able to emerge as model corporate citizens. In the Indian context so far as the IT sector is concerned, Infosys has established a reputation for integrity, the TATAs in not only in IT sector but in others sectors built a century old records of integrity and ethics in performing business and these reputations have helped these companies in attracting talents. Increasingly in recent times, corporate social responsibility is emerging as a new dimension of an enterprise. In other words of an enterprise today is measured not only in terms of purely financial parameters but also social parameters. Under this combined impact of both the social and economic dimensions, ethics in enterprise therefore becomes increasingly central to development of corporate strategy. In this context, the primary responsibility are of those who lead the organizations. Because ultimately as the Bhagwat Gita says, it is the leaders who set the patterns.
Yad yad acharathi sreshta tat tat deve itharojanah
Saieet pramanam khurute lokotha dhanuvarthete
The way the leaders behave others follow and the techniques they adopt are copied by others. So it is increasingly incumbent upon the leaders of the enterprises to lay down the ethical standards we should nurture a corporate culture. But then who is a leader? Potentially every human being is a leader. Many of those who rise to the leadership position in a society in any sphere have to start from somewhere. Dr. Abdul Kalam in his book “Wings of fire” points out that when the missile project work was given to a group of scientists, one of them said that they need not have any big shots in their group. Dr. Kalam pointed out that remember that the big shot also was a small person to begin with. The need for observing ethical standards is not only restricted to the top but devolves on each and every individual.