Talk delivered by G. Suresh at the International Seminar on Organisational Ethics on 29th February 2008 organised by the Department of Management Studies, Sri Venkatesware University, Tirupathi, India
“Light a candle, the darkness vanishes. There is no point in cursing the darkness”, said Rabindranath Tagore. I believe this International Seminar on a vital theme “Organisational Ethics” is designed exactly to do the same. The fact that the Department of Management Studies is organising this Seminar indicates that the theme is of very much relevance and important today. It also sends a strong message that “Business of business is no longer just business, but is in doing ethical business”.
This Seminar has yet another unique feature. I do not think that there could be a better way to accolade a Master like Prof C.S.G. Krishnamacharyulu, than commemorating his superannuation by organising an International Conference and that too on ‘Organisational Ethics’. This is a sheer reflection of the inspiration of the sreshta on his followers in addition to the contribution he made in building the Department of Management Studies right from its inception. My compliments to the organizers, particularly Dr. Raghunadha Reddy, in providing this platform to chant and learn the ethical mantra!
As mentioned earlier, the very fact that an International Seminar is being organized on the theme “Organisational Ethics” and that also by the Department of Management Studies talks all for itself! Nevertheless, in this paper, we will be exploring why Organisational ethics has become important and what is the relevance to Managerial Decision making! We need to look at the issue from a macro level and then to go on to the micro level.
Macro level - global
The world is rediscovering the fact that honesty is the best policy. Good governance is perceived globally as the antidote for corruption. As long as the world was divided between the two ideologies of East and West, corruption was not considered as a major issue. The two camps were not bothered about corruption. “Corruption is fine, as long as you are in my camp” was the attitude of the two super powers.
However, with the end of the cold war the countries have become interdependent. As a result, the resources started moving across the borders and today the world has become a global village and we are witnessing the process of globalisation.
Globalization necessitated liberalization and the economic reforms which started in India in 1991. The investment of government in public sector, which was once considered as compulsion, had become an option in the hands of the government with the entry of private sector and their contribution in the economic development of the nation. This has slowly pushed the private players in to the reality of competition and at the same time to be self reliant. This situation perhaps has led to the outburst of financial irregularities and scams across the world which led to the disappearance of companies from the Fortune 500 list. Enron, WorldCom, Global Crossing, Tyco International, Parmalat and Arthur Andersen are the big names which vanished from the scene due to financial irregularities and scams.
The big challenge for the private sector has been to cope up with the competition, while ensuring profit making and at the same time hold accountable to their stake holders.
Added to this factor, there was another interesting development taking place after the end of cold war. The tax payers of the donor countries and societies who provide aids to the developing countries are now very vigilant and are particular that the funds are spent properly without any misappropriation. They are very keen that the countries receiving aids are well governed. So the buzz words, governance and corporate governance have become very relevant and gained prominence in the present scenario. There is a paradigm shift in the thinking from ‘business of business is business’ to ‘business of business is ethical business’.
There are three basic parameter which are considered to determine good governance or good corporate governance. They are :
(i) Accountability – when it comes to corporate houses, the accountability is towards the Stake holders;
(ii) This accountability can not be determined unless there is transparency in the system. So, ‘transparency in operations’ becomes the second parameter which determines good governance or good corporate governance; and
(iii) Thirdly, the ethical and moral framework on which the entire transparent system works.
Thus, accountability and transparency built over ethical standards have to be ensured to achieve good governance or good corporate governance.
So, in order to ensure accountability, we need to have transparent system based on high ethical standards. Thus it becomes necessary to understand what the ethical standards are and how they influence in managerial decision making. It is very interesting to see how we could narrow down to ethical standards in individual from the global scenario. After all, the atom bomb is powerful because of the atoms and not because of its size!!!!!
So there are two sets of values:
In fact, the ethical values possessed could be demonstrated through the moral behaviour. This perhaps is the best way to understand ‘ethics’ and ‘morality’. However, supreme oneness is the rationale of all ethics and morality. The fundamental theme of ethics and morality is “Do not injure others, love everyone as your own self, because the whole universe is one’.
Practically, values can be looked at both from an individual’s point of view as well as from the society point of view. It will be worthwhile to know the factors which determine them:
Value Determining factors
Individual’s sense of Value Integrity
o Intellectual integrity
o Moral integrity
o Financial integrity
Honesty & Truthfulness
o Individual Character
Self Confidence to hold character
Societal Value From Individuality to Collectivity
It is very much relevant here to look at the seven principles identified by Dr. Lord Nolan in Britain for good governance. This is very much applicable to the Business Management as well. These principles can be knit into the moral framework or the ethical reference point for building or judging good governance or good corporate governance. They are:
Holders of public office should take decisions solely in terms of the public interest. They should not do so inorder to gain financial or other material benefits for themselves, their families, or their friends.
Holders of public office should not place themselves under any financial or other obligation to outside individuals or organizations that might influence them in the performance of their official duties.
In carrying out public business, including making public appointments, awarding contracts, or recommending individuals for rewards and benefits, holders of public office should make choices on merit.
Holders of public office are accountable for their decisions and actions to the public and must submit themselves to whatever scrutiny is appropriate to their office.
Holders of public office should be as open as possible about all the decisions and actions that they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly demands.
Holders of public office have a duty to declare any private interest relating to their public duties and to take steps to resolve any conflicts arising in a way that protects the public interest and
Holders of public office should promote and support these principles by leadership and example
So, here we are, with the basic dynamics of how ethical values can be built into an Organisation. After all, what constitute an organization? The atom bomb is very powerful not because of the size of the atom bomb, but because of the action that is taking place inside the atoms. Similarly, in an organization, the individuals matter the most in every thing that is happening at the macro level. Therefore, the journey which we started from the macro level and which necessitate moral and ethical framework has to be knit over the individuals at the micro level. Therefore, we are now discussing about the individuals at the micro level.
Micro level - individuals
Human life is nothing but full of making choices. Every moment in our life we are provided with choices or options. Choices are nothing but an opportunity given to us for taking decision between the given options. So, every moment, we take decision, immaterial what it is, what for it is and what it is worth. Recently I heard an interesting talk by Mr. S. Mahalingam, Executive Director & Chief Financial Officer of Tata Consultancy Services (TCS) mentioning about the ‘knowns’ and ‘unknowns’ within us. Another Executive Director of TATA Sons, Mr. R. Gopalakrishnan, in his book “The case of the Bonsai Manager”, also refers to this aspect of ‘knowns’ and ‘unknowns’. What we know we know is knowledge. What we know we don’t know is intuition. When we integrate the knowledge with intuition, it moves towards wisdom. We are pretty sure about the knowledge and the ways and means to acquire it. How about the intuition, which cannot be taught? What is it which lies at the core and makes the intuition work? The simple answer is that it is the set of understandings that we have within us which we do not know. Perhaps, this could be termed as the value system within us. It is Henry David Thoreau who said, “ What lies before us and what lies behind us are small matters compared to what lies within us. And when we bring what is within out into the world, miracles happen”. So let us try to explore what lies within us which makes the value system in us.
It is interesting to see how a value system develops in a particular individual. We have the four inner instruments called the Antakarana and the five senses (outer instruments) – Hearing, touch, seeing, tasting and smell - in each one of us. The following diagram indicates how these nine instruments determine every human act:
This can be understood in a much better way by comparing it with the ‘systems approach’, which is as follows:
So it all boils down to the human behaviour and human acts based on the input that goes into the human and the processing by Antakarana. Here comes the question of integrating and holding the possessed and acquired values and so we talk about ‘integrity’.
Integrity is ‘dharma’. To bring anything together is ‘dharma’. When people come together in any form is the first pulsation of divinity. In other words, to bring people together in any form is dharma. One which holds together is dharma. For example, the solar system, the innumerable stars that are around are following certain principle or set of principles, some rules, some laws and they are subject to change that is dharma. In a family, the family members are held together; that is dharma. In a locality, in a society, various types of people following very many things, various economics, political, social, cultural, religious functionalists for a society, can pull on together, which is dharma. Dharma is a principle of life. And this principle of life is in everything. Similarly, in human beings, when the set of values are held together and demonstrated for good causes and producing harmony and peace, it becomes a dharma and which is known as integrity.
The human nature has almost got into the mode of democracy. It is the infamous words of Abraham Lincoln, which described the democracy as the government ‘of the people, by the people and for the people’. Similarly, the human nature can be ascribed as ‘of the mind, by the mind and for the mind’. This democratic way of influence of the mind prevents the human being from realizing his real nature, which ultimately leads to all the human sufferings.
Human sufferings are none other than disorderliness in human nature. One of the reasons why the disorderliness in human nature occurs, particularly in the present knowledge driven world, is undoubtedly lack of integrity. “Mind food”, to borrow the words of David J. Schwartz, has become a crucial factor which contributes to integrity and lack of integrity. Obviously, the lack of integrity, particularly, financial integrity leads to corruption and which has a direct bearing on the moral fibre of the society. When it comes to corporate sector, it has a direct bearing on the profitability and reputation of the company.
The situation of lack of integrity is a self-centered activity with the sole objective of satisfying the ego (bundle of desires). The solution perhaps lies in what I would call the MIME management!. (MIME stands for Mind, Intellect, Memory and Ego).
One way of MIME Management is to have ideals, particularly higher ideals. To fix a higher ideal in life, we must look beyond the self-centered boundary. One should conceive a goal beyond the precinct of the narrow mind. The intellect must aim for something higher than the mind’s pretty attachments and desires. The higher the goal, the greater the potency in action. The goals set by higher ideals produce fruitful results rather than those of lower ideals towards accumulation of wealth and indulgence in earthly pleasure. The necessity arises to man to resort to a corrupt or dishonest act because of his ideals being lower or entirely absent.
It is also true that the control of mind can be exercised only through the mind itself. So, the next method of MIME Management is: control of desire through another desire, now with a stronger and a positive one. They could be ‘organizational ego’, the desires of the organization or the ‘national ego’, the desires of the country and so on. Therefore, the act like corruption or dishonesty or lack of integrity can be eliminated only by making the individuals to imbibe the organizational or national ego, and allow it to overpower the individual ego. That way the organizational and national interest will be protected and acts like corruption and dishonesty or lack of integrity could be eliminated.
The litmus test
There is a three-point test, which is being advocated by the stalwarts who had seen great success amidst adversities to confirm whether we have integrity and our acts are ethical. It is a three-point test prescribed by Norman Vincent Peale and Kenneth Blanchard in their book, ‘The power of ethical management’. Any decision taken or any act performed has to be subjected to this test. The first test is, is it legal? If it is not legal, it is not ethical. The second test is, is it fair? Whether the decision or act is fair enough to all the parties involved in the process. In other words, it should lead to a win-win situation. Then the third test is, if our decision or act is made public subsequently, will it bring shame or embarrassment to the individual or organization. If the answer to these tests is affirmative then the decision is ethical and one can be sure of integrity intact. Else, it is a serious issue for introspection!
SIV-G : Self Imposed Vigilance for good Governance
Ultimately, who is going to monitor and certify that one is passing all these litmus tests and one has ethical and moral values in practice? “The thief is an artist and the policeman is only a critic”, said Oscar Wilde. The real glory will come only when the thief takes over the role of the policeman to criticize his own art and reform himself. This is the utmost need towards good governance.
It is in this context, I invoke SIV-G : Self Imposed Vigilance for Good Governance. SIV-G is now taken the shape of a Movement. One could log on to www.siv-g.org and become part of this Movement.
I was recently interviewed by the Hindu Business Line after seeing the website www.siv-g.org. One of the questions for me was, “Suresh: What, according to you, can be the five guiding principles (or techniques) that can be put to practice by a fresh graduates entering a job, and a budding entrepreneur?” The following was my reply to this question and I find it very much relevant to the participants in this conference as well. :
The five guiding principles which I can suggest to put into practice are:
(i) Self disclosure – speak out or send out clear signals right at the beginning of your career that you stand by certain ethical values and demonstrate such values in your work and exhibit your honesty. Remember, honesty is doing the right thing even when no one is watching! For entrepreneurs, it is important to come out with a code of ethics while evolving the systems for the enterprise and equally important is to stand by those laid down codes;
(ii) Be sure that you do not become an object for blackmailing – do not do anything which gives room for others to blackmail;
(iii) Be fair and transparent in all your actions. Fairness comes when your action or decision does not make the other party to lose. Such fairness must be visible to others. If at all you had to violate any of the existing system and procedure, it has to be only to benefit the organization and do it in a transparent way. Soon you will find such violations gets updated to the existing systems and procedures!;
(iv) Learn how to call a spade a spade and learn to tell ‘no’. Do not be a ‘yes’ person and allow ‘yes’ persons around you; Remember Tata once scrapped one of his proposals after a board meeting when everyone said ‘yes’ to his proposal!
(v) All the above four principles can be put into practice only when you know yourself and believe in yourself. With this belief, comes an absolute faith in God, no matter what, you are bound to succeed.
Wake up the vigilance officer within!
Ultimately, there is an easy way to adopt whatever we discussed so far. The story of lamb and tiger comes in handy. Moving amidst the lambs, the lone tiger behaved like a lamb, until one day another tiger made it to realize the fact that it was a tiger and not lamb. The same way, everyone should realize that they are the vigilance officers or watch dogs for themselves to watch their own acts and deeds at the first place before start watching others.
In the ultimate analysis, the best course of action to adopt is in the direction set by Swami Vivekananda, when he said: ‘Teach yourselves, teach every one, his (or her) real nature, call upon the sleeping soul and see how it awakes. Power will come, glory will come, goodness will come, purity will come, and everything that is excellent will come, when this sleeping soul is roused to self-conscious activity’.
Let us wake up the vigilance officer within us and apply SIV (Self Imposed Vigilance) in passing the litmus tests not only in our managerial decisions but in every walk of our life. All that we need is:
Let us act and not wait for any Act to guide us what is right!!!!!!!!!