Business Ethics

MET 1
What is happening?
Some wise sayings on the
subject
 So Far….
• 1. General intro to subject, what’s happening (a peep through),
some wise sayings on subject.
– Assignments – 1) individual paper cuttings (2) some 14 topics
group project – to be presented regularly by 2 or 3 groups in
each class)
• 2. Bus ethical issues – (price, product, A&P, etc)
• 3. Trusteeship (p 66)
• 4. Dev. various approaches towards ethical behavior (p82)
• NOW
• 5. Bus Ethics and Stakeholders (p109)
• 6. Decision making (p123)
 Arthashastra

• “In the Happiness of his Subjects lies

the King’s Happiness and in their
Welfare, his Welfare”.
• Kautilya’s Arthshastra
• Today we have “Kings” in the garb of
politicians …not good old kings like
• “slowly replaced by business barons?”
Who is a Customer – Mahatma Gandhi

• A customer is the most important visitor on our

premises. He is not dependent on us. We are
dependent on him. He is the purpose of it. He is not
an outsider to our business. He is part of it. We are
not doing him a favor by serving him. He is doing us
a favor by giving us the opportunity to do so”
• A simple lesson for any Business Enterprise –
customer is anyone whom you have to serve.
• Quality definition by Philip Crosby:
• “ Quality is respect to humanity”
 One world, one citizen

• In the South American mini-forest, there is

a tribe called the Desana, who see the
world as a fixed quantity of energy that
flows between all creatures.
• Every birth must therefore engender a
death, and every death bring forth another
birth. This way, the energy of the world
remains complete. When they hunt for
food, the Desana know that the animals
they kill will leave a hole in the spiritual
well.
 One world, one citizen

• But that hole will be filled, they

believe, by the souls of the Desana
hunters when they die. Were there
no men dying, there would be no
birds or fish being born. The closer
he gets to good bye, the more he
seems to feel we are all creatures in
the same forest. ……what
 The Desana story - Lesson

• WHAT WE TAKE, WE MUST

REPLENISH.
• “ IT IS ONLY FAIR” that we provide
sustainability” – The way we live, at least,
must be made available to those who follow
us”
 Selfishness .. What is the end?

• People are only mean when they are

threatened, and that’s what our culture does.
That is what our economy does. Even people
who have jobs in our economy are
threatened, because they worry about losing
them. And when you get threatened, you
start looking out only for yourself. You start
making money a god. It is all part of this
culture. ….
 Selfishness ..and the end

• Look, no matter where you live, the biggest defect we

human beings have is our shortsightedness. We
don’t see what we could be. We should be looking at
our potential, stretching ourselves into everything we
can become. But if you are surrounded by people
who say “I want mine now.” You end up with a few
people with everything and a military to keep the poor
ones from rising up and stealing it.” (any visible
examples?).
• If not for the fact RESOURES R SCARCE, everything
will be hunky dory.
 What is wrong with being No.2?

• In a basketball game, a team was doing well,

and its supporters began chanting “We are
number one, we are number one”. One
person was puzzled by the cheer. He rose up
and yelled “What is wrong with being number
two?” The partisan crowd stopped chanting.
The person looked triumphantly. After all it is
only a game, where one is supposed to give
his best. (no animosity)
 Concern for others – goodness of
collaboration
• It is not just others we need to forgive. We
need to forgive ourselves too.
• In business people negotiate to win. They do
that to get what they want. Maybe we are
used to that.
• But look, how different it would be, if you are
concerned about someone else’s situation or
as you are about your own. YOU CAN STILL
MAKE IT A WIN-WIN SITUATION.
• Good Businesses with Long Term Strategies achieve
that -- collaborate
 Business & Society –
the cyclical phenomenon waves
• This story is about a little wave, bobbling
along in the ocean, having a grand old time.
He is enjoying the wind and the fresh air –
until he notices the other waves in front of
him, crashing against the shore. “My god,
this is terrible,” says the wave. “Look what’s
going to happen to me!” Then along comes
another wave. It sees the first wave, looking
grim, and it says to him, “Why do you look so
sad?” …..
 Business & Society –
the cyclical phenomenon - WAVES
• The first wave says, “You don’t understand!
We’re all going to crash! All of us waves are
going to be nothing! Isn’t it terrible?” The
second wave says, “No, you don’t
understand. You are not a wave, YOU ARE
PART OF THE OCEAN. (little drops of
water…), and waves come and go, but never
lose your PEACE – SANTOOLAN mat ko
bhaitna”
 A Story – potential class conflict

• This is a story of
• A wealthy family (NRI in India now) staying on the 7th
floor of a posh Malabar Hill apartment, and
• The “coolie”, and
• The “Lift”, and
• The Fridge (luggage)
 James Baldwin on Bus & Society

• ..for nothing is fixed, forever and forever and forever,

it is not fixed;
• the earth is always shifting, the light is always
changing, the sea does not cease to grind down rock.
• Generations do not cease to be born, and we are
responsible to them because we are the only
witnesses they have.
• The sea rises, the light fails, lovers cling to each
other, and children cling to us.
• The moment we cease to hold each other, the sea
engulfs us and the light goes out.
 The Debate on US Bailout – The
virtue of Indian financial sector!!
• We are not troubled – isolated from worse –
• Is that good news?
• Fact is (BT) Indian financial sector is nowhere
near as reformed as it should be, resulting in
sub optimal allocation of resources and high
operating costs. To celebrate isolation, is to
worship at the altar of a very mediocre status
quo, as the opportunity cost (less visible now)
of not reforming is infinitely higher than the
actual loses that may indirectly result from
reforms.
 Financial market reform –
cross benefits, Yes.. but
• Financial market reforms, like pension, insurance,
banking etc. has been dragging its feet. Invariably
these result in greater economic activity – multiplier
effect, lifts the living standards of individuals not even
remotely connected to the sector. Example, a boost
to the power or road sector will make -- more funds
available for infrastructure projects, which will benefit
everyone from the tycoon, who implements the
project, to those sections of society whose lives
become easier as a result of better infrastructure, to
daily laborers who get assured work for longer
periods of time.
 Is it individuals’ honesty?

• Distinction needs to be made between institutions and

individuals.. Right institutions or instruments in the hands
of wrong individuals can lead to disastrous consequences.
(US situation partly explained by this... )
• So, regulation – as distinct from micro management (as in
India), has a lofty place in the world. It is nobody’s case
that Indian markets should be reformed to benefit the
investment brokers and bankers and other moneybags who
so visibly gain from such initiatives. We must reform our
financial infrastructure so that the housewife in some small
town, the laborer at a road building site and the vegetable
seller at the street corner can also look forward for a better
tomorrow.
 US bailout

• Some Congress members questioning Fed

Reserve chairman on why they did not get more
global support -
• “ I think it is a perverse pride thing… we don’t
ask for help. We are the big, strong father
figure. But let us be realistic. We are no
longer the dominant world power
• ”Is it a confession? World inter-action
(especially business should note).
 US melt down

• Lehman, AIG, WaMU, Bunty or Bubli

(Fenni & Freddie Mac)
• Merryl, European Banks, Japan,
Indonesia, etc.
• “More corporate on bankruptcies list
come to the fore”
• “A 14$ Tn economy is on its knees for
$700 billion”
• (Senate/Congress debate)
 US bail out-- “taloa me pani nahi”

• Some saw this as an enormous set-aside

of Taxpayer money as an unnecessary
intrusion into free market.
• Voters will hit back Senate members who
vote for bail out. They would be targeted
and defeated .
• if they stand side by side with predatory
politicians and bureaucrats and their
greedy friends whose job we are in this
mess.
 US meltdown – No – to first vote

• Came about . Due to .. of no supervision, no

discipline, no regulation of financial markets”,
the setback led to a global financial crisis
• Economy, Fell like nine pins
• Bailout defeat – why the US voted the way
they did goes to the heart of battle between
two streams of thought in America now”
 US bail out

• Michael Moore, the iconoclastic film

maker, calls it “the biggest robbery in
the history of this country”, and says
“that no guns are being used, 300 mn
hostages are being taken”
• They say bail out – we say get the hell out (worst
than terrorists?) – already 1 US + family of 4
suicide).
• My interaction with Harshadbhai, Ranina +++
 Comment on bailout

• Big banks, financial institutions and lenders

who admittedly lent money recklessly during
housing boom need to be scared with capital
infusion, because their situation has scared
others into withholding credit which is the
lubricant which drives the American economy.
“asking for $700 bn b/out moves without
accountability to Wall Street “richies”.
• INDIA SEES THAT NOW !!! Bandra Kurla
 Comment (contd)
• ..”After stealing a half trillion dollar to
line the pockets of their war-profiteering
hackers for the past 5 years, Bush and
his cronies – who must soon vacate, the
White House are looting the US
treasury of every $ they can grab. They
are swiping as much of the silverware
as they can on their way out to the door”
 Points – lesson from Meltdown
• Finance cos. They need much to build a robust
system – frequent check, reliability, review,
recoverability – to safeguard their assets than a
Company with tangible assets need
• ”Value of intangible asset – difficult to trade (Mfg)
• Requires a lot of character on Managers, directors,
auditors who are involved in managing systems
• Only a naïve like Lehmann would have fallen on the
way out … the process of insolvency would have
set a long before. (or were they naïve??)
• Was it vested interests, that prevented
“bringing this out?”
 Lessons to learn from US md

• Volatility of market situation “makes it difficult

for truth to come out early”
• it is a lesson that “big is not only always the
best” Hypes mis-guide you.
• Reliable flow of timely information is the key.
Any investment is only a value held.
(BOOKS)
• At the end of the day they are prone to
changes.
• “CHARGING BULL – RED BULL”
 What’s happening today

• Let’s look at some happenings most of

which are in one way or another
relevant to discussion of Ethics & CG.
Govt. not to regulate CEO salary, said Corp. Affairs
Minister: We believe in essential freedom in a
democracy.
• Ultimate decision should rest with Shareholders.
Existing Co. Act mandates govt. approval before
raising salaries of Directors beyond a threshold of
5% of annual profit, and raising more than 11% for
total remunerations of managerial positions. The
Minister said the Parliamentary Standing
Committee, scrutinizing provisions of new
Companies Bill that has been tabled in the LS
would be looking into the issue of CEO
remuneration as well as spends on CSR. “These
issues need to be debated threadbare for their
incorporation in Bill 2009. On voting issue the
Minister said 3rd Wk of Dec. India Corporate Week.
Govt. not to regulate CEO salary, said Corp. Affairs
Minister: We believe in essential freedom in a
democracy.
• Next year “Year of Investor Education. The e-
voting system launched by Control Depository
Service India Ltd. Which will empower
shareholders to participate in the decision
making process of companies thus making
their vote count. “Companies would also
benefit from this as the remote voting process
would become quicker accurate and would
also result in savings on various cost
overheads which are currently incurred for
postal ballots.”
 What.. (contd.)
• Winston Churchill remarked that the “Hun” – his disparaging
term for Germans) was either at one’s throat or at one’s feet, a
vicious adversary or a worshipful devotee.
• Moderation in emotional response is said to be the hallmark of
maturity while emotional polarity – between euphoria and
despair, love and hate, is a sign of immature adolescence.
• We as a nation: either over the top adoration, and our equally
unreasoning and unreasonable hostilities.
• e.g. Sachin, MF Husain, Sania Mirza feted as iconic genius,
equally disparaged for variety of reasons.
• There is an increasing climate of intolerance and hatred
permeating Indian society.
• Same coin – Homage and hatred (courtesy: Jug Saraiya)
 Women use 500 chemicals on face & body
every day –
A Question of product claim
• Most of which contain more than 20 ingredients
including additives that could lead to cancer and
various skin problems. – A study of deodorant
firm Bionsen.
• Beauty regimes have changed fro m “wash and
go to daily fake tan applications, manicures, false
lashes and hair extension.
• Lipstick, most commonly used, contains an
average of 33 chemicals. Perfumes contain a
cocktail of 200 chemicals with soe containing as
many as 400”.
 What’s…
• Jawans spend second night in pavement
• Security van driver flew with Rs.40L ATM
• HC slams Delhi govt. for giving selective
parole
• TN prisoners grow fat on jail food
• Ranbaxy recalls Acne drug from US mkt
Class III
• India can get Nobel for filth – J.Ramesh
 Clear the Air – editorial ToI 20-11-09

• Govt. announced a revised set of emission and pollution

standards applicable across the country. Govt wants us to
breathe easy. But noble intensions alone will not ensure
fresh air. A/g to CPCB almost 80% of 110 cities monitored
in the country do not even meet the existing norms.
Because they do not provide penalties to be imposed on
defaulters. Which is where credible and accurate
monitoring levels comes in – unfortunately we are crippled
in this regard. Models in UK and Europe and US (EPA)
works with federal state and tribal governments to ensure
compliance. Where environment agency and dept of env
food and rural affairs issue guidelines and give muscle to
local bodies. So Agencies should spell out specific targets.
Otherwise new norms will only give a feel good factor.
 What is …
• Farmers fake Bt Cotton as organic US, EU see red.
• Commerce Ministry tracks fraud in MP,
Maharashtra through new software.
• Cases of Bt. Cotton contaminating organic cotton
farms are on the rise.
• Adequate testing facilities lacking. “We are
working with customers to see tht every
consignment is checked.”
• Needs coordination between certification bodies,
their inspects, farmers, NGOs, govt.
representatives, “ monitoring and feeding
information”
 What is…
• Mahindra-Satyam gets legal notices
from 37 cos. Mahindra-Satyam says
it is legally untenable.
 Greatest mystery of all times and climes :
SCAMS – where did the money go??
• What has happened to all the money that gets unearthed in
Indian scams? Frauds?
• Everytime a new scam is know, the sum of the scam is in
multiples of earlier scams.
• Bofors ?? 25 years? “ ONLY” (like you say in AB’s
Emami pain relief ad) 60 cr
• 4000 cr. Harshad
• 7800 cr. Satyam fraud
• Madhu Koda – 4000 cr (slight decrease)
• 20000 cr. – Telgi fake stamp.
• How nice it would be if at least part of it is unearthed and
some of our deficit financing can be eased out.
 What’s …
• If you want to know what has
happened to these:
• Just send 5000 bucks in unmarked
used 100 rupee notes and you will
receive a sneak preview of the
devastating denouncement by return
post:
 Consumer Watch
Drive to make detailed servicing report a
must:
• An Ahmedabad consumer based CE&RC plans to
launch a campaign to make detailed service reports
compulsory.
• Even Whirlpool and Philips said they do provide
repair details on receipts, however, no uniform rules.
• “There are no mandatory laws governing service
obligations of manufacturers, not just of electronics,
but all products”
• “As a customer I would like to know what was wrong
(with a product), if the same problem recurs after
warrantee”
• It is therefore necessary to have a report recording a
product’s history.
Drive to make detailed servicing report
a must
• Normally the service centre could blame
the recurring problem on rough handling
of a product or voltage fluctuation.
• “If a product is repaired by an authorized
service person, the fault should not occur.
If it goes back it amounts to a deficiency
in service and shows there is a problem
with the product. Then the consumer
must take up the issue to a higher level”
 Let host nation regulate foreign
finance
• India’s system of host regulation, which makes
good economic sense has both empowered and
insulated the economy from some of the worst
excesses of current global crisis:
• Currently FI lending is partial; It is not on a level
playing field. Developed countries have easy
access, and cost of getting funds is much less
than for developing countries.
• The effect on the economy again therefore has
unequal effects.
• Even Basel II norms favor this.
 Let host nation regulate foreign
finance
• A host regulator can ensure that certain
institutions are not lending recklessly in a
manner that leads to artificial asset booms. Host
regulators can enable counter cyclical charges on
institutions creating such book within a broader
framework of national and macro prudential
regulation. So that they are both empowered
and insulate the economy from some of the worst
excesses of the crisis.
• Developing economies must make their own
choices in the world economy.
• Global warming, WTO, climate change !!! Disparity
Haves and have-nots
 Some paradoxes – in the Corporate World
and their thinking.

• Business – wants freedom, and less

intervention from Government
• They start ventures taking RISK.
• NOW ANYBODY CAN START ANY
BUSINESS.
• AFTER ALL THEY WILL BE BAILED
OUT.
 What is …
• Global meltdown – Bail outs in trillion dollars
• AIG, LEHMAN SUDDENLY FIND THAT
THEY ARE BANKRUPT !!!
• SATYAM BECOMES JHOOTA (juta nahi)
• MADHU KHODA AND HAWALA
• LAW MAKERS – LAW BREAKERS
• 3 AUTO GIANTS – WALK
 Squeeze at Top (headcount & wages)

• A clutch of CEOs resorted to pay cuts in a tough year. Not all

head honchos, however, were in such a spartan state of mind.
• Rahul Bajaj
• To the extent govt finds that CII or any other business
organization does not come out with a satisfactory volntary code
of conduct for remunerations of CEOs, I believe govt. could
keep in the Companies Act a cap on emoluments of Promoter
CEOs as a percentage of net profit of the co,. Currently, for an
individual CEO the figure is 5% and for the Board as a whole,
11%. The figure of the individual CEO, if he is a promoter, may
be fixed at 1 percent of the profits of the co. as calculated at
present. However, a promoter CEO may be allowed a certain
minimum emolument per annum in case of absence of
inadequacy of profits in a company.
 What’s….
• Vijay Govindrajan, Prof. of International Business.
• Reverse Innovation is the Key: Re-engg. Is passe
• Since 50’s MNCs have innovated in the US \However, one
can develop over the next 100 years with technology that is
available today. E.g. Cell v landlines today. The trajectory
of dev. Need not be the same.
• –RENEWABLE ENERGY, DECENTRALIZED POWER
GENERATION AND AFFORDABLE HEALTHCARE ARE
GOOD EXAMPLES OF SUCH BUS. OPP.
• In the half century after the II world war, the business
corporation has brilliantly proved itself as an economic
organization.. In the Next Society, the biggest challenge …
may be its social legitimacy: its values, its mission, its
vision”.= Peter Drucker
 What’s…
• Moists – liberate people from exploitation and
oppression – fight against state terrorism – Salwa
Judum – legitimate efforts??
• Fearing taunts, old dad dumps baby (45 year old)
• Sky Walks galore
• 25% city women have caesarean.
• CASUAL – careless – calamities – collapse
• Vegetables injected
• Post Office- receives cards with AID virus
• Patangrao Kadam – Rev Minister, land etc. release to
BVIDYAPEETH.
 What is…
• CII AND INDUSTRY WITH B. BOWLS ONCE
AGAIN
• MONSOON FAILURE
• SOCIAL CIVIC UNREST AX INDIA – WAR
WITH INTERNAL TERROR
• EXTERNAL TERRORISM
• DEFICIT FINANCING
• NOKIA – REPLACES CHARGERS (3rd
party!!)
 What is…
• Hadley seen in Lucknow, Trident
Mumbai
• SEZs – Monsanto & Dupont – accused of pressure
tactics
• Nano at Gujarat – shift from WB .. The NDTV debate
• Tata seeks capital to pay off its Corus deal
• M&A in some sectors
• Globalization – end of the road?
• PWH – SUIT 1 FILED IN USA
• Kingfisher flight – skids off the tarmac
 Next Section
• Ethical Issues
• Social & Econ. Value & Responsibility –
• The week
• Haiti earthquake,
• WHO officials collusion with pharma industry,
• Solar eclipse
• Then we will go to SH concept in MET 2
Ethical Issues in Management
• Intro:
• Moral Standards – What is Right, proper and just.
Different for different sets, groups based on
respective Value System of individual or group
• What’s Right or proper of just is far beyond theft,
bribery and collusion.
• Does it affect more people outside their own control?
• With increasing competition, issues become much
more complex. What we need is co-opetition.
• Managerial dilemmas represents – conflict between
economic performance & social obligation.
 Issues

• Pricing – Customer assumptions – Quality Trap -

Discounts (factored) – Bundling. VALUE?

• Advtg Messages – claims v actual value, wild,

loud & unreal, illegal & ineffective, without
scientific explanation, varying degrees of
truthfulness and deception – where do they draw
a line?

• Product promotions –advtg, free gifts, addl.

Flights, SMSs, bonanzas, (luring customers
greed)
 Issues
• Working conditions – temp, humidity,
noise, ventilation, lighting, safety hazards
& procedures, fumes, dust, child labor,
discrimination, etc.
• Customer Service & Product Quality –
product quality, response levels, social
responsibility of marketing, (holistic –
solutions acceptable to all?), goes beyond
customer, (acceptable by society?)
 Issues
• Workforce Reduction – with increase
in competition, VRS, downsizing,
lock outs, lean, Outsourcing, keep
happening. Human cost - trauma
• Suppliers Relationship Issues –
favoritism, (enquiries, GDP, Gifts,
right business conduct missing),
 Issues – how to resolve?
• Focus on Practical consequences –
Is action legal, socially acceptable,
does it govt. regulatory bodies
support?
• Do a Cost Benefit analysis – short
term or long term? Loss of image,
etc.
 Issues – how to resolve?
• Role of Leaders – personal goals? What
path adopted (Vision?), direction,
business cycles?, career planning and
success.
• What do we do – 2 years hence, 2
decades, fly by night operators?, product
safety -

• Next - Some other issues – HAS IT

HAPPENED TO YOU??
 Other issues
• Distributor – in limbo
• Scams – Now the benchmark is
>1000Cr
• Deceptive labeling
• Deforestation
• Building / construction standards
• Negotiations -- cheating
 Other issues
• Violation of Co. Act
• Taking credit for other’s work
• Violation of Co Act
• Price fixing, cartels
• Environmental concerns
• Bribery
• Whistle blowing
 Other issues
• Manipulation of expenses
• Consumer indifference
• Conflict of interest
• Unethical sales practices
• Theft
• Discrimination
• Demanding sexual favor
 Other issues
• Product pricing
• Insider trading
• Falsifying reports (GDP)
• ANY OTHER EXPERIENCE?
 Business Ethics - Require
• Integrity – wholeness, consistent,
backing up promises with commitment.
• Truth telling – not just the law (Buyer
Beware)
• Dependability – able to answer
• Business Plan – built on image (vision),
role in competition, clarity of direction
 Business Ethics - Require
• Apply – Internally & Externally – Respect in
the conference room, impartial evaluations,
negotiating in good faith, meeting obligations,
the scope is universal
• Value based - written SOPs, ideals and
aspirations, clarity of interpretation
• Comes from boss – cutting corners, own
aggrandizement, deception, disrespect
• STARTS AT THE TOP (King & Sight – BLUE)
 Advantages
• Substantially improved society – fairness,
past rectification, laws & regulations obeyed
• Workplace – abjures all evils not allowing
individual excellence and team work
• Ethical programs – maintaining moral course,
commitment, social and individual value
based
 Advantages
• Strong team work – openness
• Helps face reality – change, confidence to
meet
• Helps Quality Management – Str planning,
diversification mgmt, develop PPP, behavior
with value, training
• Strong Public Image – corner store, in
building a competition, successful and
responsible business
 • Next Section

• TRUSTEESHIP
 TRUSTEESHIP

• The Concept
• A Trust is normally created when a fund or asset is earmarked
for a specific purpose. A wealth person may set apart some
funds, and request a trusted individual or a corporation or a
bank to manage it, and make available the funds to
beneficiaries specified by him, either by name or class (my
children, or “those suffering from cancer” or students’
scholarship, or a NGO)
• Trustee entitled to charge a nominal fee for administering the
asset or funds, but cannot derive benefit from it.
• The Concept applied to business is a Gandhian concept.
• PTO for Gandhiji’s observations on this:
 Trusteeship (Gandhian concept
as applied to business)
• Ownership is a costly and illusory concept to ensure
permanency and succession.
• It gives birth to attachment, exploitation, possessiveness, great
exploitation and revenge.
• All assets must be held in trust and used for the good of all
• Distribution of assets and the benefits of the operations be
equitable, not equal.
• The owner of wealth has the right to a honorable livelihood. The
rest is that of the community.
• Let’s see some quotes from HARIJAN Oct. 1952, Pyarelal
• (next page)
 Trusteeship (Gandhian concept
as applied to business
• Quote from Harijan:
• “Trusteeship provides a means of transforming the present
capitalist order of society into an egalitarian one. It gives no
quarter to capitalism but gives the present owning class, a
chance of reforming itself. It is based on the faith that human
nature is never beyond redemption. It does not recognize any
right of private ownership of property, except so far as it may be
permitted by society for its own welfare. It does not exclude
legislative regulation of the ownership and use of wealth.
• “Thus, under State regulated ownership, an individual will not be
free to hold or use his wealth for selfish satisfaction or in
disregard of the interests of Society”
 Trusteeship (Gandhian concept as
applied to business
• Further, he said: If one has come by a fair amount of wealth,
either by way of legacy or by means of trade and industry, he
must know that all that wealth does not belong to him. What
belongs to him is the right to an honorable livelihood”
• Gandhiji’s concept of T was founded on non-violence.
• He thought very idea of ownership was at the root of violence.
• People can come together only when the rise above Cof
Interests, and T is a way to bring people together.
• This follows the Vedic dictum of RENOUNCE (rights and
pleasures of self) and ENJOY (the pleasures of others).
• This is also the basis of all religious commands – to share
one’s strengths and assets with others”
 Trusteeship (Gandhian concept as
applied to business)
• Mahabharata: The character of Vidura is embodiment of all that
is proper.
• His advice to Duyodhana (son of Dhritarashtra) – kingdomof Ayodhya..
Said
• Kingdom does not belong to the king. King has only duty and
responsibility of looking after the welfare of subjects.
• DEBATE ON THE SUBJECT
• 1995 – “PROPRIETY of top execs. Increasing their salaries and perks
many times over. John Kay and Aubrey Silberston persuaded the PM
to see placing some limits on the packages.
• “Corporate managers are not so much agents of shareholders, as
trustees of the Company”
• They asked for a Co. Law to impose duty on directors to
balance claims of investors, customers, suppliers and
employees.
 DEBATE ON THE SUBJECT (Trusteeship)
contd.

• 2002 – In India, “the highest salary shd not be more than 10 or

15 times the lowest salary”
• Of course, there is no consensus or law on this. (except
approval of appointment and remuneration at EGM-AGMs)
• But there is a law on minimum wages. How many comply?
• More recently, the PM exhorted the CEOs “not to flaunt”
 Principles of Trusteeship
• 1st attempt to put a practical shape to G’s thoughts on subject,
was at an International Seminar in 19085 in N. Delhi by the IIC and
the Gandhian Institute of Studies, Varanasi.
• Where a declaration was adopted:
• “All life is a trust and all power carries with it obligations. The G P
of T expresses the inherent responsibilities of a business
enterprise to its SH, and the mutual responsibilities of these to
one another. “
• JRD – conference on T in Mumbai 1977:
• “Elaborated the concept explaining that it did not focus on
matters of immediate concern such as distributive justice,
socialization, land reforms and ownership of shares, nor on labor
relations and handing over wealth to the nation for the common
good.
 Principles of Trusteeship
• T is a way of life, making you do whatever you do, for the good
of others or even of all.
• A sense of T us similar to a belief in religion or a philosophy,
manifesting in areas like:
• Lowering prices through efficiency and technology, even at
levels below the permissible in terms of law or competition,
• ensuring avoidance of adulteration after the product leaves the
factory,
• Devoting share of profits to provide employment in rural areas,
• Transferring skills and technology.
• E.g. THE EXCEL INDUSTRIES. C.C. Shroff
 Trusteeship & Accountability

• Centers around A/b of individuals to society.

• It is the simplest logic to make the individual aware of his
dependence on others for his satisfactions, his wealth, his
physical and mental capacities and to acknowledge his debt to
others.
• The acknowledgement of this debt results in sharing the
resources in the family and the community.
• In Indian family, sharing and a/b are inculcated in various ways:
• The KARTHA is a trustee. Who is generous and sacrificing for
the young, though the wealth may be in his name, he would not
use it for his personal enjoyment.
• In larger groups, the relationships become complex and
anonymous, and the individual’s obligation watered down. (cont)
 Trusteeship & Accountability

• So too, today’s Ministers expected to use funds at their disposal

not as per their whims, but that benefits the citizens.
• No company can deny that its current status (good or bad) is
due to the contribution of all its SH.
• The promoters would have flagged off the venture, but cannot
claim too high for subsequent growth.
• Innovative ideas resulting in product development, mktg str.,
cost reductions, lower inventory, increased efficiency, come
from employees at levels way below too, which provide a
competitive edge.
• During downturn, unfortunately, employees become the first
target for disposal. Layoffs, pink slips, retrenchment, etc. The
debt to them is not acknowledged. (contd.)
 Trusteeship & Accountability

• Very few acknowledge contributions of suppliers to their

enterprises.
• Only today, we have a strong ethos for better SRM.
• Similarly, the dealer too, pushes sales.
• The concept of T recognizes these debts also.
• What about relationship between social costs of benefits
received from public utilities? People seldom bother about it.
• E.g. aided schools, subsidized commuting and health facilities.
• This is a debt Cos owe to society, which is an entity, including,
but bigger than all other SH.
• Also RESOURCES are of the society, to be given back. Benefits
of enterprise there from that accrues should be used directly or
indirectly for society. EXCEL – Rs & Assets rests with Almighty.
 Trusteeship & Accountability

• T is an ideal, not easily amenable to models and doctrines.

• It is not a matter of structure, having employers, customers, etc.
Structures demand obedience to codes or behavior in
interpersonal and social relations. Individual and groups acquire
“vested” interests in the maintenance of the structures leading to
tyranny or corruption. (Satyam).
• ALL RULES OF BEHAVIOR, EVEN WHEN DETERMINED BY
MUTUAL CONSENT, ARE SOMEWHAT COERCIVE AND
THEREFORE, VIOLATE OF INDIVIDUAL’S FREEDOM.
• T IS therefore voluntary acceptance of accountability to others. It
Is an attitude that evolves over a period of times. Requires
awareness. Recognizes the interest of others. It does not rule
out changes to structures, but emphasis is on attitudes & values.
 Trusteeship & Accountability

• CROSBY – Q is Respect to Humanity.

• Some organizations – practice T – by transferring ownership of
Company to employees – with no retrenchment and fair pay,
products not for war related activities (Scott Bader Co,).
• This does not I believe ensure T concept in toto.
• For e.g. Cooperatives (Sugar, Milk, Bank) are akin to T but
provide plenty of instances of attempt at self-aggr. And
exploitation.
• Lijjat – Mahila Udyog
• Tata sale of TOMCO to HLL despite high bid from Nirma,
Godrej and Colgate, - belief the interests of employees best
protected.
 Trusteeship & Accountability

• One view of T – Corporate body is a person (citizen) made of 4

different components (organization, capital, work force (both
mgmt and labor), and the community.
• All these 4 are equally indispensable, and hence equal stakes,
make decisions together, (25% plough back to organization)
• Also at political level – legislatures
• – do not necessarily act as trustees in the interests of the larger
community.
• One somewhat successful – Amul Dr.Kurien – successful
performance of any organized economic activity – vision and
leadership who can manage the divisive forces that tend to
emerge from within or outside. (EVEN HE TOO!)
 Trusteeship

• In summary, therefore,
• T IS A PHILSOPHY THAT NEEDS TO BE BELIEVED IN BY
THE PERSONS in command
• By individuals collectively being aware of this, and willing to
work and live side by side with all Stake Holders, concerned.
• Next Section

• Approaches – developing various

orientations towards ethical business
behavior
 SOME MORE THOUGHTS ON
DECISION MAKING
• Despite the codes of Ethics, the ethics
programs and special departments-
Corporations don’t make The ultimate
decisions About ETHICS…..
• Ethical choices are made by INDIVIDUALS.

• M. Euel Wade Jr
 Decisions are:
• Knowing What’s Right
• Doing What’s Right
• Managing Competing Rights
• Everything Counts
• Closing Thoughts
 Knowing what is right
Use these guides …
• Laws
• Rules & Procedures
• Values
• Conscience
• Promises
• Heroes
 We
WE BELIEVE

It’s not enough…

…to just establish ethics

or talk ethics

• You have to DO ethics !

 Doing What’s Right

• 8 Behavioral strategies
• 1 Check BEFORE you act!
• 2 Master “The 3 R’s”!
• 3 Remember that little things…mean a lot!
• 4 Know what’s un-compromisable!
• 5 Say NO…with tact!
• 6 When in doubt, ASK!
• 7 Check yourself out!
• 8 “Walk the Talk!”
 Check BEFORE you act!
A. Is it legal?
B. Does it comply with our rules and guidelines?
C. Is it in sync with our organizational values?
D. Will I be comfortable and guilt-free if I do it?
E. Does it match with our stated commitments and guarantees?
F. Would I do it to my family or friends?
G. Would I be perfectly okay with someone doing it to me?
H. Would the most ethical person I know do it?
 Master “The 3 R’s”!
• RESPECT

• RESULTS

• RESPONSIBILITY
Common Rationalizations For Not
Doing What’s Right
“Everyone else does it”
“They’ll never miss it”
“Nobody will care”
“The boss does it”
“No one will ever know”
“I don’t have time to do it right”
“That’s close enough”
“Some rules were meant to be broken”
“It’s not my job”
3 Remember that “little things
mean a lot”!
• Examine your own ethical make-up
to see where you stand and where
you need to improve. Try looking
at…
 #4 Know what’s
uncompromisable
While different organizations provide
different guidelines on operating
latitude, there are several universal
areas where zero tolerance for
violations is appropriate:
• Laws and Regulations
• Public and Employee Safety
• Truthfulness of record and statements
 #5 Say NO…with Tact

Here’s How!
• State your objection and concern
without indictment.
• Propose an alternative action that you
feel is ethical.
• Ask for the person’s help and
agreement.
• Seek assistance from a higher authority
(if the person doesn’t agree).
 #6 When in doubt, ASK!
• “Forgiveness is easier to get than
approval”
• But on Ethical Issues …
• “Approval is easier to get than
forgiveness”
 #7 Check yourself out!
• Ethics Self-Assessment
 #8 WALK THE TALK
“Giving what you expect to get from others is
called integrity.”
Managing Competing Rights…
Ethical Dilemmas

Right vs. Right

It’s right to BUT It’s also right to

Tell the truth Be considerate

Create job security Be profitable

Be concerned with Focus on long-term
short-term results growth and stability
Others?
• Managing Competing Rights
• Eliminate the conflict
• Decide what’s “more right”
• Seek assistance
 The most challenging “Right vs. Right” of
all…

To be a good friend and team player

AND
To be willing to speak out when someone
acts unethically.
#8 Make Sure The Mission Matters

“Be about what the business says it is

about.”
• Removing Type 4 Manager was a
watershed for GE…the ultimate test
of our ability to WALK THE TALK
• Jack Welch Former CEO & Chairman
• Feast On Feedback
“If you don’t know how you’re doing,
it’s hard to know how to do it better.”
“One of the keys to our success
is a ‘self-assessing’ culture.”
Libby Sartain, Former Vice President
of people – Southwest Airlines
 Seal Employee Competence with a K.I.S.S.

• Knowledge
• Information
• Skills
• Support
 Provide “places to go”
“Make sure there are people within
your organization to whom
employees can turn to for guidance
and help with ethical issues-and for
reporting suspected ethics
violations.”
 Keys To Success

…our willingness to share

information with our employees
that most companies would
consider to be proprietary.
 10 Reasons Why Leaders
Should Model Ethical Behavior

• It reduces pressure on employees to

compromise ethical standards.
• It increases employees willingness to
report misconduct.
• It improves trust and respect at all levels.
• It protects the positive reputation of the
organization.
• It encourages early detection of problem
areas and ethics violations.
 10 Reasons Why Leaders
Should Model Ethical Behavior
• It fosters a positive work culture and improved
customer service.
• It provides an incentive and framework for
ethical decision making.
• It increases pride, professionalism, and
productivity.
• It enhances your ability to attract and retain
high-quality and diverse employees.
• It helps ensure the long-term viability of the
enterprise.
• Bonus Reason,
• 11. It’s purely and simply the right thing to do!
 New Section

• BUSINESS – Ethics & A VISION FOR

STAKEHOLDERS
BUSINESS – Ethics & A VISION
FOR STAKEHOLDERS
• HENRY FORD
• THE HIGHEST USE OF CAPITAL IS NOT TO
MAKE MORE MONEY BUT TO MAKE MONEY DO
MORE FOR THE BETTERMENT OF LIFE.

• PETER DRUCKER
• MANAGEMENT IS NOT ALL BUSINESS.
MANAGEMENT EDUCATION MUST DEVELOP TO
TEACH AND EXEMPLIFY THE VALUES, THE
METHODS AND THE TOOLS FOR ALL
LEADERSHIP.
BUSINESS – Ethics & A VISION
FOR STAKEHOLDERS
• WHAT ARE THE BUS. CONSTITUENCIES
WHICH MAKES ETHICS SO DESIRABLE?
• Customers
• Colleagues employees
• Shareholders Suppliers-Service providers
• Business partners
• Society
BUSINESS – Ethics & A VISION
FOR STAKEHOLDERS

• THROUGH WHAT NORMALLY A

COMPANY ANNOUNCES ITS
ETHICAL CHARACTER?
• Vision Statement
• Creed Statement
• Style Statement
• MIP
 BUSINESS – Ethics & A VISION
FOR STAKEHOLDERS
• WHAT DO EACH ORGANIZATION TRIES TO SAY BY THESE
STATEMENTS
• Innovative
• creative
• high quality products
• fast & first to opportunity
• Focus on what is important
• open & candid
• all dealings with integrity
• Adhere to the highest standards of ethical and just conduct
• Honest and integrity characterize our business activity
• Health & well being of all
• Provide an environment where all can excel
• Q. ARE THEY LIVING UP TO IT?
BUSINESS – Ethics & A VISION
FOR STAKEHOLDERS
• WHAT DOES A V. STATEMENT SIGNIFY FOR EACH
CONSTITUENCY?
• Customers:
– Anticipating needs, superior products, continued investment
• Colleagues:
– Attract & retain excellence,
– no discrimination,
– good work environment,
– equal opportunity,
– objective evaluation,
– fair & objective, etc.
• Shareholders:
– Fair & attractive returns, prudent risks to get sustainable
growth
BUSINESS – Ethics & A VISION
FOR STAKEHOLDERS
• Business Partners:
– Fair, equitable, recognize mutual interests.
• Society:
– Responsible corporate citizens,
– actively initiate & support efforts for keeping
health and environment,
– improve vitality of worldwide communities.
– All this with utmost integrity, adhering to the
highest standards of ethical & just conduct
BUSINESS – Ethics & A VISION
FOR STAKEHOLDERS
• Style Statement of a Business Enterprise that
sets forth goals, commitments and foundations
for Decision making, and sets forth guidance for
achieving these goals:
– Go for global reach, harvest ideas, be first, focus
resources on important challenges etc.
• To show restless discontent with the way we are
today and pursue better ways to serve customers.
• These are best achieved thru teamwork, sharing
information quickly, widely and candidly.
• Open communication, environment where true
success is well rewarded.
 BUSINESS – Ethics & A VISION
FOR STAKEHOLDERS
• MANAGEMENT INTEGRITY POLICY (Expectations from employees)
• General Integrity:
– Compatible with local laws & regulations, honesty, integrity &
character
• Political Contributions:
– Not admissible unless satisfied with legality
• Proper Accounting
– Accepted a/g rules and regulations and controls. Truly reflecting
transactions recorded.
• Fees /Commissions
– Should represent fair & reasonable consideration for services.
• Payment to Govt. Employees or Officials.
– To influence decisions of a judgmental nature.
• Specific responsibility
– Report, Consult, No violation allowed of any rules, no retribution,
environment concerns to be fully complied with.
BUSINESS – Ethics & A VISION
FOR STAKEHOLDERS
• OPERATING SPHERES WHICH CAN IMPACT THE ETHICAL
ASPECTS
• GMPs
– build quality into products from the start
instead of relying testing finished products.
• ANTI TRUST POLICY
– Will ensure no restraint on competition, the
formation of monopolies, Unfair business
practices. (fix prices, cartels, boycotts, below
cost prices, buy from a lower priced market
and sell at a higher price market
BUSINESS – Ethics & A VISION
FOR STAKEHOLDERS
• Reciprocity
– (buy product B only if they buy product A etc)
• INTELLECTUAL PROPERTY POLICY
– Patents Laws:
• processes, formulas, methods, techniques,
– Trade marks:
• Logos, words, names, symbols (distinction),
– Copyright laws:
• original written expression of ideas and reduced to
tangible forms like literature, art, music, computer
programs etc.
BUSINESS – Ethics & A VISION
FOR STAKEHOLDERS
• DISCLOSURE OF CORPORATE
INFORMATION
• CONFLICT OF INTEREST
– (Loans, fees or services, gifts, co. position for
personal advantage, working for competitors,
influence orders, kickbacks, Investing in
securities of others.
• SECURITY LAWS POLICY -
– Elimination of fraud and deceptive practices.
 BUSINESS – Ethics & A VISION
FOR STAKEHOLDERS
• 7 SINS IN BUSINESS
• BUSINESS WITHOUT MORALITY
• POLITICS WITHOUT PRINCIPLES
• EDUCATION W/O CHARACTER
• WORSHIP W/O SACRIFICE
• WEALTH W/O HARD WORK
• DEVOTION W/O AUSTERITY
• EXISTENCE W/O RE SCRIPTURES
BUSINESS – Ethics & A VISION
FOR STAKEHOLDERS
• Where noticed:
• Wiped out forest lands
• Wash out top soils, indiscriminate use of
chemicals
• Heavy amount allocated for development do not
reach targeted points
• Religion more for aggrandizement and division
• Ostentation even incurring with debts is not
considered undesirable.
• Business shaped by ethical behavior of individual
characteristics. (BUDDHA’s teachings??)
 New Section

• Decision Making
 Checklist for responsible
Decision Making
• Is something bothering you?
• Who are affected
• What ethical issues are involved
• Is It your responsibility?
• What are the compliances you shd. ensure?
• Whom should I seek for advice?
• Am I being true to myself?
• Is it consistent with my own personal values?
 Decisions taken
What should be your reaction
• This refers to both your working and
professional life
• Decisions taken by you and has not produced
results as expected
• Decisions taken by you and has produced
results as expected and more than expected
• Decisions taken by others in your life (both
working and personal life) which helps you
• Similarly, which affects you adversely.
What would be your decision?(1)

• I have observed a colleague in the

laboratory who is not recording data
properly. I know it is none of my
business, but this colleague has
violated the procedure on at least two
occasions that I have seen. What
should I do?
 Your decision (2/3)
• I have a relative who could supply some of
our raw materials for less than we pay now.
May I suggest to the purchasing manager that
we enter into a contract with him?
• I am responsible for booking hotels for
conferences for our marketing colleagues. A
hotel at which I recently organized a meeting
sent me a weekend voucher. Should I accept
it?
 Your decision? (4/5)
• A friend of mine works for a local
newspaper and is always asking me for
tips about new products for stores. If I
tell him things that I know are supposed
to become public eventually, what is the
harm?
• A reporter asked me information about
the Company? Can I answer?
 Your decision (6/7)
• My colleague was discussing the results of
some highly sensitive clinical trails which we
were having lunch in the cafeteria? Is this a
problem?
• Our mfg. plant sometimes purchases spare
parts for some machinery from parties other
than the original manufacturer. Is this
practice acceptable?
 Your decision (8/9)
• I used for work for a company where I
came up with some great design ideas
there, but they never used them. Can I
suggest them in my new company?
• My colleague and my friend has always
great ideas for improvements? Can I
suggest them here at work?
 Your decision (10/11)
• At a trade association meeting,
someone started a discussion about
future prices? Can I participate?
• What should our company do to protect
the environment? Or ozone layer.
 Your decision (12)
• One of our products is doing great – it
has got better than a 50% market share.
We were thinking abou locking ulp the
only two vendors who can supply us
with a key ingredient for the product.
We want these vendors to agree to sell
the ingredient only to us and not to our
compeitors.. Can we do this?
 Your decision? (13/14)
• Our production demands continue to
increase. Shall I take shortcuts to
achieve goals?
• If my manager tells a sexual joke that is
funny but not offensive, is that sexual
harassment? (female colleague)
 New Section
• Corruption & Indian Philosophy
 Corruption & Indian Philsophy
• Competitive market – a breeding place for corruption?
• LOBHA – greed – IP – an adharmic path. Desires – craving for
– more and more – new aspirations, breeds jealousy, inner
turmoil. A confused mind. STATUS, IMAGE, (do get respect,
but may be “uncharitable, and uncomplimentary.)
• Effect – poor people, innocents, straights, value minded.
SUFFER, They cannot get their job done – e.g. Education,
SMEs.
• Reason – “Preyas” (temporary pleasures) and “prayas” (gain
without effort). One with minimum of values, suffers “conscience
hurt) – loss of sleep.
• IP : concepts like “ ends..means, dharma, selfless work, sattvik
guna, param brahmam, self-motivation, bliss.
 Indian culture

• DEFINITION: Culture is the integral sum of values which, which an

individual or group of individuals and the society at large conceive and
practice. – Unique for each nation.
• C.R. (I Gov-General) “Sum total of the ways of living built up by groups
and human beings and transmitted from one generation to another”
• Accepted behavior, values, beliefs, perceptions, behavioral norms, and
expectations of a particular society.
• These believes and values have emanated from our precious s
scriptures like V, U, R & M, Koran, Bible. - family oriented,
• Western nations: individualistic in approach, non-interference, decision
making (even in family), (Ours – a consultative process)independence
and freedom (Conflicts therefore between 2 cultures – e.g. as in
marriages). Indians – more emotionally attached to family.
 Difference between Indian & Western
Culture
• Emphasis on personal relationship - Professional relationship is
important
• Family oriented, whole unit, guidance in decision making, young
would seek advice before independent action - Individualistic,
independent decisions, non-interference, siblings leave without
any hesitation to live life a/c to their liking.
• Belief in joint family (grandparents, uncle, aunt, children) -
Nuclear family, just parents and children (that too for a short
while)
• Respect to elders, teachers, etc - Does not have much concern
in this, praise for good performance, may still lack respect.
 Difference between Indian & Western
Culture
• Unique combination of materialism and spiritualism - More materialistic
• Giving and not asking in return – Give and take only
• Insist on proper balance between profit making & social welfare – Profit
maximization, To attract SH, it should fulfill social obligation.
• Means are given equal importance like ends (an ethical way) – ends
justify means, if an organization has attained its end, ethics don’t
matter. Now a change in perception, from the business’ long term
objectives.
• God, human beings interrelated (animate & inanimate- part of SS.- NO
BELIEF.
• Natural concern to take care of nature (treated as Mother), and so
environment – only to the extent , for our own sake, for our survival,
and maintaining the balance of ecosystem. (DUMPING??)
 Difference between Indian & Western
Culture
• Duty or moral obligation towards society, and so do good, and fulfill
SResp.- SELF-CENTRED, ONLY IF IT ENHANCES IMAGE.
• Belief in Tyaga (service attitude) – tolerance, contentment, peace,
harmony, simple living – high thinking, integrity, humanity, cooperation
and synthesis in dealing with society –Team spirit not only at work
place, beyond that. INTERNALISE and link to personal and
professional life. Whole nation is a team. - survival of the fittest,
competitive to deal with external world, team spirit, yes, but within
internal orgn.,- to meet its Goals and objectives.
• More assertive in approach – more aggressive
• Service attitude – confined to customer service, loyal to the product.
• Managers duty allow subordinates to not only grow, but as good human
beings. Skills upgradation is not the only motto, but values along with
skills – train and develop employees – O&Goals.
 Difference between Indian & Western
Culture
• IC probes deep into fundamental Q like “Who are you?” “What is
Universe?”, “What is the purpose of your being here?, “What is
the relationship with work and universe?” - IT DOES NOT
THINK OF LIFE IN TERMS OF THESE TYPES OF
FUNDAMENTAL QUESTIONS. But from point of view,
technology, search of existence, genesis, resource strength.
• ‘TO DO” IS NOT ENOUGH. “TO BE” IS THE KEY WORD.
• “JUST DO IT”
 New Section

Comparative study of
Value Systems
 Comparative study of Value Systems

• To understand, one should study the daily habits of a particular

society – lives, tradition, belief, perspective of the world, VS.
• Individual VS decides the dos and don’ts in their life. A
foundation of their character, and why they behave in a
particular manner.
• Culture differs between nations, although apparently looking
similar.
• Let’s study the VS of some countries:
• JAPAN, CHINA, AMERICA AND INDIA.
Comparative study of Value Systems

• JAPAN
• Dedicated to service. Quality is the Key. Work is worship (like
us) in practice!. KAIZEN – continuous, small improvements.
• Patriots – a natural macro vision, honest and dedicated – his
output help in nation building, growth & development of nation,
hence, personal obj. is second criteria.
• Emphasis on spiritualism: practice meditation, attend lectures
on spiritualism, belief in intuition, and sixth sense. Peaceful –
enhancing productivity
• Professional life kept away from personal life: Enter house
barefoot, external problems keep outside. We also do that.
Comparative study of Value Systems
• Bus. Ethics: Quality products – and no cheating, community
service. Profit yes, but not at the cost of quality.
• Team Spirit: As a provider of positive energy and harmony.
Team output better than individual output. Believe in joint
decision making. QC, etc.
• Holistic approach: Long term association with company
• Self management: Self-discipline and self-control – emp.
Expected to control anger, hared, selfishness, jealousy, greed,
etc. In face of challenges, expected to adapt or adjust
• Value system: courteous and gracious people, cannot express
one’s opinion openly or directly. “Honne” real opinion, and the
othr “tatemae” public opinion. Agreement with people around
important.
 Comparative study of Value Systems –
Japan
• Gratitude shown
• Non-interruption – while on phone, etc.
• Informal relationship –w/o hierarchical structure.
• Long Term relationship: employer, employee, trade,
kaizen, respect to elders.
 Comparative study of Value Systems –
America
• Materialistic – now slowly to spiritualism – realizing emptiness –
wish to enjoy the luxuries of life. Achievement oriented,
challenging goals, ambitious and hard working. U/stand
individual uniqueness, and depending on the drive,
management needs to motivate them in different manners.
• Relationship based on give and take: in work life, mutually
beneficial. Higher o/p higher return. So, work hard, give best
output and get rewarded. Believe in formal relationship in
professional life.
• Believe in non-interference: Not much inclined to family. Once
adult, individual decisions w/o bothering about parents.
• Equity and cooperation: While they encourage team spirit,
individual performance is rewarded.
 Comparative study of Value Systems –
America
• Prefer Top-dn approach: Decisions at top communicated down.
• Interest to develop employee skills: Skill upgradation, yes, More
output, more profit. Less care on instilling values.
• No job security – Unlike Japan, if good retain him. Employees
just a cog in the machine.
• Loyal to the profession: Not to the organization. Leave if not
happy.
 Comparative study of Value Systems –
CHINA
• Emphasize that people should be truthful, non violent, generous,
sincere, kind hearted, benevolent, courageous and selfless by
nature. They love the kith and kin.
• Jen & Yi : Jen – love, friendship, benevolence. Yi –
righteousness. Expect life to be full of harmony and peace.
• Wu Wei : Means w/o forcing, emphasized on accepting and
harmonizing with the flow.
• Thought counts: Man went on a long journey to visit friend with a
swan. Swan escaped, trying to catch it, he got hold of a feather
only. He explained to his friend what happened, but the friend
took the feather as a “priceless gift”. As the saying in chinese
goes, “the gift is nothing much, but it is the thought that counts”.
 Comparative study of Value Systems –
CHINA
• Punctuality : Value this much. Confucius, great chinese
philosopher: “there Is a time to act and a time to remain inactive.
When one is inactive, although consciously he is not working,
the subconscious mind continues the process, and work would
be accomplished. Too much action makes the job monotonous,
destroys the creative energy”.
• Zen: Tranquil, focusing the mind to bring harmony with nature.
Zen philosophy was based on simplicity of thought and action.
To attain this state, monks needed to be self-disciplines, relaxed
nd focused. Free from ego and relate to the elements of nature.
• Tao: Law of integration and nature balance.
 Comparative study of Value Systems –
CHINA
• Yin-Yang: symbol of harmonious balance. The polar opposites
define the duality required for all life to exist. Male-female;
flora/fauna, positive-negative; dark-light, wind-water. Without
one, the other cannot exist, the two forces cannot be separated.
Energy or Chi is the moment of yin-yang. Energy moves, flows,
encompasses everyone. Comes from the earth core and circles
the globe. Chi/energy can generate and destroy continents
through tectonic plates and land mass movement. Chi for the
environment nand our persona Chi are one and the same. We
should develop our sensitivity to use and direct the energy in
our bodies and environment.
 Comparative study of Value Systems –
CHINA
• Gunaxi: or Relationship is an imp. Chinese business element.
Right gunaxi will make business successful, minimize risks,
frustrations and disappointments. Right Gunaxi with rlevant
authorities will determine the competitive standing of an orgn. In
the long run. Unlike West, chinese business would like to deal
with people whom they know and rust. On the surface it may
not seem so, in reality Western cos. Have to make themselves
kown to the chinese people before any business can take place.
Also between individuals at a personal level. Not before sales
takes place, but an ongoing process. Trustworthiness.
 Greek – the Tragic Hero
• .. He is a man who is neither a paragon of virtue and justice nor
undergoes the change to misfortune through any real badness
or wickedness but because of some mistake.
• ..TRAGOIDIA – “SONG OF THE GOAT” depicts the downfall or
a noble hero or heroine.
• DIONYSUS was the Greek god of nature, wine, creativity,
intuition and imagination. His followers were a randy bunch of
goat-legged creatures called SATYRS. In a drunken state,
these creatures would sing songs that raised questions on
various cultural codes and notions of righteous and appropriate
social conduct. (the origin of the greek theare.)
 Greek – the Tragic Hero
• Anthropologists say, the function of drama was to reflect the
subconscious and cosmic patterns by re-enacting the everyday
world
• It was to acknowledge inherent conflicts of civilization that
demanded but defied easy resolution.
• In INDIA
• Natyashastra (Brahmanas)
• Drama as an integral part of religious rites – e.g. NAVRATRI
(Rama Leela), Xmas – Nativity plays.
• Throughout the play one enacts a holy event. As years pass, the
drama remains the same, but those watching are growing up or
growing old. They discover different layers of meaning in the
same play, in the same character, in the same dialogue. (contd.)
 Greek – the Tragic Hero & India
Plays
• With that consistent and repetitive
interaction with theater more light is
thrown on the meaning of life.
• The Goat’s song thus joins us in our
struggle to make sense of existence.
The Family and Values – lessons
from India
• The Ambani brothers
• The Raju brothers
• R Raju – built through skill, talent and dedication a great
company. There was a sense of purpose, dedication,
competency and leadership vision in him. People who had
business with Satyam even abroad paid glowing tributes to their
dedication to quality, reliability and integrity. No greater tribute
than a satisfied customer.
• Perhaps a reason at that time of India’s growth and economy.
• Why then such a lofty person turn to crime? Greed or low stake.
• Was it a family dispute? Based on ownership of LAND, etc.
• Or Was it that political nexus was essential to get what he felt
was his due? And not, from another angle, sharing it with family.
 The Family and Values – lessons from
India & mythology
• Real Estate & Infrastructure – two sectors, that are only half-
liberalized and possibly needed upfront bribes, so needed to dip
into funds.
• It would have worked out, but no one anticipated such collosal
economic downturn.
• Or does it mean that if it was fully liberalized economy, this
would not have happened?
• Was it greed or HUBRIS? (arrogant pride), like DURYODHANA
– thought himself as master of universe and get away with
anything. In Raju there was an infallibility, Entire Hyd thought
of him that way.
• Or was he like Dhritarasha – weakness for his sons. Leave
them much more even crossing the line of DHARMA.
 The Family and Values – lessons from
India & mythology
• Mahabharata challenges the old
• Sva dharma vs Sanadhana Dharma – teaches behaving
impartially with everyone.
• IS REGULATORY WAYS THE ANSWER? IS IT A
GOVERNANCE FAILURE. CAN IND. DIRECTORS’ BE
FAULTED?
• CAN MOST FOOL PROOF SYSTEM CAN STILL BE SIDE
STEPPED.
• SO WHY IMPROVE OR REFORM THE SYSTEM., OR BLAME
LIBERALIZATION? WHAT IS YOUR ANSWER?
 The Family and Values – lessons from
India & mythology
• Is there a lesson from when Yudhishtra insisted on taking a
stray dog into heaven, he performed an act of dharma, showing
that goodness is one of the few things of genuine worth in the
world that might take away some of the familiar pain of being
alive and being human in our post-liberalization times.

• NOW, LET US LOOK AT SOME THOUGHTS FROM STEPHEN

COVEY (7 HSP – 8th H) on
• HOW PRINCIPLES CAN SAVE COMPANIES.
Stephen Covey on Principles of Cos.
• Personal growth trainer. Widely accepted concepts, preacher of
values, like Prioritization, pro-active, synergy, win-win situation.
• He suggested from “Personality Ethics (b/day wish, first names,
eye contact, etc.) to CHARACTER ETHICS.
• His book is based on universal and timeless concepts –
basis of all religions incidentally –
• He says, during a downturn, internalize the principle, use them
to manage everything, allow and permeate the entire culture at
workplace
• Begin with being pro-active – begin with the end in mind, first
things first, synergize, and results will follow.
• His 8th Habit – is effectiveness to greatness.
Stephen Covey on Principles of Cos.
• He describes 6 types of Cancers:
• Cynicism, criticism, comparing, competing, complaining and
contending.
• These consume the mind, soul and heard, and infect our culture
DNA.
• Instead one can build a positive and cohesive culture.
• Practice it through shared learning, goals and functional ethics.
• Requires Parent, Teacher initiative.
• His children: 1 hr TV per day, Games only on weekend.
• He talks of identity threat due above viewing, a habit of
comparing and attendant cancers.
 Stephen Covey on Principles of Cos
• Accounting norms – so far: Machine as Assets, HR as expenses.
Knowledge do not find a place in the Balance Sheet.
• Sub-prime crisis US – due BROKEN TRUST.
• Have inside out appraisal. Spread inner circle through our circle
of influence.
• MAKE SURE PEOPLE DO NOT CONTROL US, OUR
PRINCIPLES CONTROL US.
• A FEW QUOTES
• “A country should be defended not by army but by ethical
behavior – Vinobha Bhave
• “Critics of the war have no reason to regret their views” Stephen
Cohen.
THANK YOU