ETHICS Lecture 3 Gandhian Philosphy

8/10/2019 ETHICS Lecture 3 Gandhian Philosphy

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THE PROPERTYLESSMANAGER: CULTURE &

ETHICS IN INDIA The Gita concept --- Doing ones !t"

without seeking for the fruits

Man!s p#ecept$-- Of inhe#itin% etsas well as property

Ma!#"an iea$$$ Of acco!ntai'it"provides a basis for Gandhis belief

Ganhis e'ie($$$$ That po'itics an!siness )!st *o#+ han in hanfor thedevelopment of the nation.


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Ethics in the Gita In the Bhagavad Gita !rishna laid down the rights and

obligations of ea"h one of us.

!rishna says that a manager must look upon the taskthat he has been set or that he sets himself not inte#)s o( pe#sona' %ain o# p#o,t but purely in terms ofits ful#llment and the satisfa"tion that he gets out of that

. There "an be no better de#nition of an ethi"al manager

$.g. %r. &rakash Tandon and 'ord (eyworth meetingfrom (industan 'ever

)n )meri"an s"holar E''iot -ac.!es "reated anew termfor this kind of professional manager (e "alled himp#ope#t" 'ess )ana%e# / one who manages the"ompany but does not own any part of it as his personalproperty


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Man! & Inhe#itance In the A#"an ethi"al "ode there were rights

and obligations for the sons who inherited their

fathers property.

They also inherited his debt and the debt went

down to two generations so that if the #rstgeneration did not "lear it the se"ondgeneration had to do so.

This is similar to *oman law whi"h +, yearslater laid down similar obligations. %anu"reated our "aste system and gave a separatefun"tion to the trader or the mer"hant


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0!has theo#"

(e said the trader is like a honeybee whi"hsu"ks honey out of the ower but does notharm the ower.

Buddha of "ourse did not reali/e what wemoderns know namely that the beea"tually helps the pro"ess of fertili/ation.

0hat Buddha did see was that while takingpro#t out no harm must be done as onemight do when in 1uest of personal gain.


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Ma!#"an Acco!ntai'it" The "on"ept of acco!ntai'it"of mangers

was laid down for the #rst time .

In a "omple2 but "arefully de#ned

operational framework the A#tha Shast#alays

it down as a duty of a manager that heshould be sub3e"t to an audit that hisa""ounts should be looked at every nowand again for their "larity and truth


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In later "enturies India su4eredvarious invasions

$thi"s weakened be"ause the traderwas often held to ransom and hadre"ourse to e2tortion so as to be ableto fend for himself

(en"e $thi"s no longer played thesame role.


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A+a# an the Ope#ationa'1#a)e*o#+

(owever ethi"s did "ome ba"k in )kbarstime be"ause )kbar gave us somethingindispensable for regular ethi"al fun"tioning 5

A c'ea# an sta'e co))e#cia' set !p2

0e in the management know today thatthere "an be no proper performan"e of duty

no ethi"al and so"ial responsibility unless theframework in whi"h one operates has beenwell de#ned for 1uite often it is thevagueness that leads to loss of ethi"s.


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The 0#itish pe#io

)kbar laid down an e2"ellent land revenuesystem

British emulated )kbar in three things6

+7 in giving India unity and a wholeness

87 ) land revenue system and

,7 Trying to bring about (indu 5%uslim unity.

British su""essful in #rst two but failed in thelast


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The 0#itish pe#io3cont4

This brings us to the British $ast India9ompany where ethi"s wavered.

The British government operating till+:;< gave India a co)p'e5 !t a%oo s"ste) of rights obligations

duties an operational framework su"has we had in )kbars time

and %auryan time.


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Gandhis philosophy = >ewIndia

The British rulers had looked down upon trade andindustry be"ause traders "ame from a "lass of so"ietywhere trading

was "onsidered to be an o""upation suitable for the'o*e# c'asses o( societ"2

But Gandhi belonged to the trading "ommunityhimself so he renewed the ne2us between governmentand trade and industry of the %auryan times and%anus time.

(e openly 3oined with the business "ommunity? he felt

there should be intera"tion between theadministrators the intelle"tuals and the businessmenwho should no longer be sidelined.

t t


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o!n at ons o o#po#ateSte*a#ship

0ho owns the "orporation@

*esponse would simply beSha#eho'e#s

Ahareholders own a shareC in the "apital of the"orporation whi"h entitles them to vote on "ertain

ma3or de"isions and importantly represents a kindof property whi"h "an be owned sold orotherwise disposed of as the owner desires .

But under no "ir"umstan"es does the shareentitle a shareholder or a shareowner to "laim ashis own property a proportionate sli"e of theassets of the "ompany whi"h stri"tly remain itsproperty.


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The Indian position on "orporateresponsibility towards stakeholders also fullysupports the per"eived needs to balan"e

shareholder and stakeholders interests .

The SE0I %!ie'ines e2pressly provide forstakeholders interests to be addressed even

while pursuing "ompanys prin"ipalob3e"tive of ma2imi/ing shareholders wealthon a long term basis.


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Au""essful "orporations have a balan"edapproa"h to "orporate governan"e

$g Gene#a' E'ect#ic 3 GE4 ca''s its top)ana%e)ent a t#!stee #esponsi'e formanaging the enterprise in the best balan"edinterest of shareholders "ustomers

employees suppliers= plant "ommunity "ities. The alue statement of Tata G#o!p sets out

its purpose as improving the .!a'it" o( 'i(eo( the co))!nities *e se#6e7

8ip#o Co#po#ation among the top + interms of market "apitali/ation puts 9 Itspeop'e 1i#st7


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s 'eadership "ompanies around the world feel

that their boards role is to steer a middle"ourse that while prote"ting = enhan"ingshareholders wealth they also ensure that the#ea' sta+eho'e#s aspi#ations a#e (acto#ein 2

In re"ent times it is be"ome evident thatorgani/ation in pursuit of their pro#ts "annot

ignore their impa"t on the other two dimensionsof their interfa"e with the en6i#on)ent anthe societ" in *hich the" ope#ate 2


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Inspite of all this a no of high pro#le banksthat su4ered in the aftermath of the subprime

mortgage triggered #nan"ial meltdown whi"hlead to 1uestions as to whether the boards =dire"tors e2er"ise ne"essary levels of "are ="aution that as trustees of other peoples

monies they were re1uired to .

Taken together all these are symptomati" of ageneral state of indi4eren"e to "ertain values= morals many of whi"h Gandhi stressed asthe "ornerstone of good responsible human

behavior in a "ivili/ed so"iety .


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Ganhi & Socia' Responsii'it" e" concepts Gandhi advo"ated = lived by

whi"h are indeed adaptable = e2tendable to the

world of pro#t making "orporations . TRUSTEESHIP6

) trustee is a person to whom anothers propertyor the management of anothers property is

entrusted . (e had no problems with people = business

"reating wealth = working for pro#t

Gandhi did not look down upon the wealthy so

long as the a""umulation or a""retion was throughwhat he "alled pureC means .

Gandhi was rigidly "on"erned with the means ofmaking money that they should be fair =

pra"ti"al


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(aving legitimately madeE or inherited 7 themoney Gandhi felt beyond what was re1uired for

maintaining oneself and ones immediate family inline with their so"ietal norms the rest should be"onsidered held in trust for so"iety .

(e asked the ri"h "lass to redu"e its needs to abasi" minimum "onsistent with what the average"iti/en of the "ountry "ould a4ord .

(e argued against overly "onspi"uous "onsumption= e2penditure on wedding feasts = "elebrations ongrounds of their being immoral in the "onte2t of alarge part of the "ountrys population su4eringfrom starvation = malnutrition

P#incip'e (o# t#!stee ship


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P#incip'e (o# t#!stee shipconcept

The prin"ipal ground for trusteeship"on"ept was that su"h wealth "amefrom so"ietal "onstituents and

E beyond modest personal needs 7truly belonged to them and hen"eshould be kept in trust prudently

and produ"tively used for the bene#tof so"iety

# nc p e o #!s ees p o


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# nc p e o #!s ees p oco#po#ates

0hile they should optimi/e pro#ts for their

shareholders after addressing their other stakeholders interest they need to put all thesurpluses to produ"tive use to "reate morewealth = hold them in trust for theirshareholders until they are distributed to them .

$g the prin"ipal shareholders in Tata Sons amulti billion dollar worth unlisted parent

"ompany of Tata group in India are a "lut"h of"haritable trusts whose wealth = in"ome weredefrayed to support so"ietal welfare pro3e"ts two thirds of every rupee earned by Tata sonsthus goes to "harity


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TRUTH : There was no ifs = buts in the Gandhian le2i"on

where truth was "on"erned

Gandhis view was that truth resides in everyhumans heart and one has to sear"h for it thereand be guided by truth as one sees it .

)s given in the %ahabharata To sa6e othe#s(#o) ein% +i''e is the )ost e5a'te ha#)a2I( " spea+in% a 'ie / a 'i(e is p#otecte / thenspea+ the 'ie / & p#otect that 'i(e

Gandhi "hose a )i'e co!#se . (e was "lear thatone must never tell a lie but one may refuse totell people what they want to know when they are

likely to put the information to evil purpose

N ;i ' Ahi


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Non$;io'ence o# Ahi)sa

)himsa means non-in3ury = of "ourse in"ludesnon-killing it would also ree"t abstaining inthought word and a"tion from "ausing in3ury orviolation to any living being

(is "on"ept of violen"e was not limited tophysi"al violen"e alone but "overed other formsof violen"e as well for eg psy"hologi"al or

traumati" violen"e involved in instan"es ofgender based or work- pla"e harassment =dis"rimination as well as a"1uies"en"e either bya"tive support or ta"it ina"tion in the fa"e ofsu"h violen"e .

Sat"a%#a a o# T#!t


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Sat"a%#a a o# T#!t1o#ce

Aatyagraha was a missile or

me"hanism that Gandhi employed todevastating e4e"t .

The important element insatyagraha is the e)phasis on theiss!e rather than the personaeresponsible for it

Ganhian tho!%ht & co#po#ate


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Ganhian tho!%ht & co#po#ateResponsii'it"

9orporations bear a strong resemblan"e to so"ial =

politi"al networks of willing = resour"eful people "omingtogether for produ"tive purpose albeit for private gain .

The shareholders espe"ially those not in operational

"ontrol part with their monies of their own free will toinvest in the e1uity of the "orporation

in this sense they do bear a striking similarity to the"iti/ens of a "ountry foregoing part of their individual

freedom to 3oin in with other like minded people into apoliti"al entity to safeguard their "ommon interests withgreater "ertaininty than if they were on their own .


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Ganhian tho!%ht & co#po#ateResponsii'it"

The employees bring in their skills =

e2pertise the "ommunity provides themwith their san"tion to operate = serve theneeds of the so"iety . %odern "orporates areso large = powerful that they truly resemble

nation states in their "omple2ity =operation .

0ith su"h power "omes also the potentialdanger of abuse = it is in that ba"kgroundwe e2plore the appli"ation of Gandhian

prin"iples to "orporate governan"e .


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O


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I)po#tance o( 0!siness Ethics

Drive home that business is6

not only for growth of businessman alsofor long term growth of business itself

long term "reation of wealth

"reation of better so"ial image and

build investor "on#den"e

S i i ' ( 0 i


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So)e p#incip'es o( 0!sinessEthics

Take "are of stakeholders owners employees

"ustomers suppliers "ommunity and environment

Fair dealings and fair pra"ti"es in business

)void e2ploitation of "onsumers

)void pro#teering

$n"ourage healthy "ompetition

)""ept so"ial responsibility


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8hat is P#o,t=

0!siness Ethics is not a%ainst P#o,t

The P#o,t is:

*eturn on "apital

*eward for risk

&lough-ba"k for growth It is a driving for"e in business but without

e2ploiting market "onsumers = otherstakeholders


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0!siness Ethicsco)p#ises

$thi"s of the %anager

9orporate $thi"s

Industry $thi"s


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Co#po#ate Ethics:

9orporations develop their own "ode ofethi"s based on their mission andprevalent industry spe"i#" ethi"s.

Au"h ethi"al framework provides strategi"

advantage over "ompetitors helps thema"hieve long terms business results in allthe markets they operate.


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8HAT IS CREDO=

- 9odi#ed ethi"al prin"iples for "arrying on

business.

- Di"tionary %eaning6

8este# Inte#nationa' Dictiona#":

) strongly held or fre1uently aHrmed belief or"onvi"tion? a generality or system adopted as aguide to a"tion or a"hievement? tenet? do"trineC.

O5(o# Dictiona#":

) statement of belief? a "reedC


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RELE;ANCE O1 CREDO 9redo will help "orporations to fa"e "hallenges of

today and tomorrow and help them to stay on"ourse and a"hieve their mission.

9redo of ohnson = ohnson helped them to

a"hieve their mission

Co#po#ate Mission o( -&- 5

JTo be the best and the most "ompetitive and"omprehensive health "are "ompany in theworld.


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-ohnson & -ohnson

has e)oie its ethica'p#incip'es

in thei# *e'' +no*n oc!)ent

Ca''e

9O!# C#eo7


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CREDO

0e believe our #rst responsibility is to the do"tors nurses andpatients

to mothers and fathers and all others who use our produ"tsand

servi"es.

In meeting their needs everything we do must be of high1uality.

0e must "onstantly strive to redu"e our "osts

in order to maintain reasonable pri"es.

9ustomersK orders must be servi"ed promptly and a""urately. Our suppliers and distributors must have an opportunity

to make a fair pro#t.


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0e are responsible to our employees

the men and women who work with us throughout the

world.

$veryone must be "onsidered as an individual. 0e must respe"t their dignity and re"ogni/e their merit.

They must have a sense of se"urity in their 3obs.

9ompensation must be fair and ade1uate

and working "onditions "lean orderly and safe.

0e must be mindful of ways to help our employees ful#ll

their family responsibilities.

$mployees must feel free to make suggestions and

"omplaints.

There must be e1ual opportunity for employmentdevelopment

and advan"ement for those 1uali#ed.

0e must provide "ompetent management

and their a"tions must be 3ust and ethi"al.


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0e are responsible to the "ommunities in whi"h

we live and work and to the world "ommunity as well.

0e must be good "iti/ens 5 support good worksand "harities

and bear our fair share of ta2es.

0e must en"ourage "ivi" improvements andbetter health and edu"ation.

0e must maintain in good order

the property we are privileged to use

prote"ting the environment and naturalresour"es.


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Our #nal responsibility is to our sto"kholders.

Business must make a sound pro#t. 0e must e2periment with new ideas.

*esear"h must be "arried on innovative programs

developed

and mistakes paid for. >ew e1uipment must be pur"hased new fa"ilities

provided

and new produ"ts laun"hed.

*eserves must be "reated to provide for adverse times.

0hen we operate a""ording to these prin"iples

the sto"kholders should reali/e a fair return.


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1o!# Responsii'ities

L *esponsibility to 9ustomers

L *esponsibility to $mployees

L *esponsibility to 9ommunity

L *esponsibility to Ato"kholdersEAhareholders7

S S O C S O S


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ANALYSIS O1 EACH RESPONSI0ILTY

Responsii'it" to C!sto)e#s

&rodu"e high 1uality produ"ts and servi"es.

In order to maintain reasonable pri"es be "ost"ons"ious in everything we do to redu"e the pri"es.

9onstantly strive to provide value for money in ourprodu"ts and servi"es.

Give an opportunity to our suppliers anddistributors to make a fair pro#t.

Aervi"ing our "ustomers orders promptly anda""urately.


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Responsii'it" to E)p'o"eesL$a"h one to be "onsidered as individual by respe"ting

hiMher dignity.

L*e"ogni/e the merit of the individual and provideopportunity for promotionM advan"ement.

L&rovide "lean and safe working "onditions.

L&rovide fair and ade1uate "ompensation.

L(elp "reate a sense of se"urity and provide anenvironment to make suggestions and also"omplaints.

L$n"ourage ways to help employees ful#ll their family

responsibilities

L&rovide e1ual opportunity for employmentdevelopment and advan"ement for those 1uali#ed.

L$n"ourage open "ommuni"ation in the organi/ation.

L&rovide "ompetent 3ust and ethi"al management.


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Responsii'it" to Co))!nit"L Be a good "orporate "iti/en by following

the laws of the land.

L Aupport good works and "harities.

L $n"ourage "ivi" improvements and betterhealth and edu"ation.

L Take "are of the property we are using.

L Take steps to prote"t he environment and

natural resour"es.

Responsii'it" to Stoc+ho'e#s


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Responsii'it" to Stoc+ho'e#s The business must make a sound pro#t.

L $2periment with new ideas and develop innovativesystems and pra"ti"es.

L )"tivities related to resear"h and development.

L Investment in new e1uipment and fa"ilities.

L 'aun"h new produ"ts

L *eserves must be "reated for adverse times

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ETHICS Lecture 3 Gandhian Philosphy

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