Business Sutra |4.2| Can the End Justify the Means?

Business Sutra |4| Conflicts

We have covered three episodes of Devdutt Pattanaik’ TV serial on CNBC 18:  Business Sutra.

The first presented to us the most visible form of the business – the corporation: its meaning, its purpose and its action perspective. In the second episode Devdutt Pattanaik discusses Leadership: Role of the leader, Context of the leader and Leadership in different business cycles. The third episode relates to the Business Ethics and Morals:  business ethics and dilemmas, relationship between owner and the organization  and The Right (Dharma) – the Ramayana way and the Mahabharata way.

The present episode, 4th one in the series, deals with Conflicts, wherein we have looked at one of classic set of conflicts – that between the Board and the CEO.

Business Sutra |4.2| Can the End Justify the Means?

Cambridge Dictionary defines the phrase “the end justifies the means” as said about a situation in which the final aim is so important that any way of achieving it is acceptable.

With that in mind, although it isn’t fully misguided to attribute an ultra-realist grey area line of political thinking to the Father of Modern Political Science Niccolò Machiavelli, this consequentialist misquote is an over simplification of Machiavelli’s realist Republican philosophy and the phrase itself never appears in his work in the way in which it is often passed around in modern times (all an isolated and specific sentence “the ends justify the means – Period”).

Consequentialism is the class of normative ethical theories holding that the consequences of one’s conduct are the ultimate basis for any judgment about the rightness or wrongness of that conduct. Thus, from a consequentialist standpoint, a morally right act (or omission from acting) is one that will produce a good outcome, or consequence. In an extreme form, the idea of consequentialism is commonly encapsulated in the saying, “the end justifies the means“, meaning that if a goal is morally important enough, any method of achieving it is acceptable.

Consequentialism is usually contrasted with deontological ethics (or deontology), in that deontology, in which rules and moral duty are central, derives the rightness or wrongness of one’s conduct from the character of the behaviour itself rather than the outcomes of the conduct. It is also contrasted with virtue ethics, which focuses on the character of the agent rather than on the nature or consequences of the act (or omission) itself, and pragmatic ethics which treats morality like science: advancing socially over the course of many lifetimes, such that any moral criterion is subject to revision. Consequentialist theories differ in how they define moral goods.

Some argue that consequentialist and deontological theories are not necessarily mutually exclusive. For example, T. M. Scanlon advances the idea that human rights, which are commonly considered a “deontological” concept, can only be justified with reference to the consequences of having those rights.

A quick look at couple of videos:

Does the End Justify the Means

Learning to Love Machiavelli: Don MacDonald at TEDxBoston

Machiavelli’s Dilemma | Matt Kohut | TEDxBeaconStreet

In the introduction to The Bhagavad Gita According to Gandhi, Gandhiji writes:

He who is ever brooding after result often loses nerve in the performance of his duty. He becomes impatient and then gives vent to anger and begins to do unworthy things; he jumps from action to action, never remaining faithful to any…When there is no desire for fruit, there is no temptation for untruth or himsa. Take any instance of untruth or violence, and it will be found that at its back was the desire to attain the cherished end.

A few pages later he expounds upon the subject.

We should do no work with attachment. Attachment to good work, is that too wrong? Yes, it is. If we are attached to our goal of winning liberty, we shall not hesitate to adopt bad means. 

For such a complex topic, let us see what Devdutt Pattanaik has to say in Segment 2 of the episode 4 – Can the End Justify the Means?, as the Indian Mythology’s point of view.

Governance is always referred to as the spirit of governance because like we’ve said governance needs to go beyond what the rulebook says. It is not just a adhering to the rules, it is about taking into account and keeping in mind the interest of all stakeholders.  So I have a couple of questions that to me seem like governance conflicts and I want to know what our scriptures have to say about them. Can the end justify the means, because I think in various points in the Mahabharat and as laid out in your book as well, Krishna violates every rule of war and yet he does that so as to be able to help the Pandavs win.

Look at the assumption. If the rules are followed then good will happen. This is what we are saying. So rules are almost good. First of all this very idea is alien to Indian because rules exist in a context and the same rule in a different context may not apply. For example you have a rule that says that if you obey the father you are a good son. Now in the Mahabharat, Bhishma obeys his father’s. Father says one day that that he’s unhappy because he has fallen in love with a young woman. The young son Bhishma, a.k.a Devvrat, discovers his father has fallen in love with the a fisher woman. He goes to the fisher woman and says I want you to marry my father. The woman says that you know I won’t marry unless my children become kings and the only way my children become kings if you give up the throne. He says I give up the throne. She further says that  if your children may with fight my children. He says that I will never marry. So the son sacrifices for the father.

Now son sacrificing on father’s word seems good in the Ramayana has a terrible effect in the Mahabharat, because by that one act he destroys the family tree. Al children born after that are not born normally. They were born through the intervention of sages or the gods and what ends up is the Mahabharata the whole fight for the kingdom. So we have to be very careful when we say rules equal to good because as every good lawyer knows that not the letter of the law, but the spirit of the law is important.

Now coming to the Mahabharat, when you’re talking about ends and mean,s let’s ask us as what happens at the end of the Mahabharat? On one side you have the Kauravas and the other side is the Pandavas. Let us ask ourselves you know what the victory would be like. At the end of the war, 100 of the Kauravas are killed. Good, the villains are dead so that must be natural law. But let’s look at the narrative and this is unfortunately in modern retellings we don’t focus – each and every son of the Pandavas is killed.  Five sons born of Draupadi are also killed. Draupadi now argues all the villains have been killed but so are all of my sons too. What kind of victory is that?  I have got the kingdom but the children are dead. What happens to Krishna Hi is cursed that 36 years later his entire family will be destroyed. So in the end, everybody has lost.

The story of Mahabharat is not about winning the war but is about empathy. Remember when the war is being fought Krishna goes to Duryodhan and says I want peace. Duryodhan then says no I don’t want to have peace. At the end they enter into an agreement a contract that for 13 years these people who have gambled away the kingdom will go to the forest. When they come back they will get their kingdom again. It was a very clear contract right. Athe end of that period when the one part has been complied with the other party has to honour his end of the bargain. Duryodhan then violates the contract (defaults). He argues on calendar, he argues on time, he argues that you know maybe they didn’t really do it, for I caught them before that. He  keeps arguing about technicalities. Finally Krishna says enough is enough. How about giving them five villages and he says no. Krishna said how about the house with five rooms. Duryodhan says no not a needlepoint of territory will I give. This is where his intention is being released. Till then he was following the law, Even now, he was following the rules, what he said was well within the rules, but his intention was dishonorable. So he had to be pushed to the corner and when he was pushed to the corner, it resulted in war.

But that war, in turn, ended up destroying most people.

If the war had not been fought this King, who doesn’t care for anybody else, would have thrived. Resultantly, what kind of a society would have existed?

What kind of God do we worship in Krishna when he broke every rule of that war just to ensure that the Pandavas win? I understand that his intent was to restore fair and just governance, or to ensure that a king like Duryodhan does not get to continue. Yet how can the end justify the means?

What is the end of the Mahabharat not the war? You see that is the twelfth chapter of the Mahabharat. There are six more chapters after this which again is not part of common translation. Do you know what is the original name of the Mahabharat ? It is called Jaya, Jaya as in victory. There’s another word for victory in India – it is called Vijaya. Why have they given the strange name, Jaya, to this book? Because, the story does not end with the war, which was   the bloodshed where nobody is a winner.Krishna says a king who behaves like an animal then the societies that he rules is good as not existing. Kauravsa were killed, Pandavs suffer heavy damage.A the end of 36 years we are told that the Pandavas died and the eldest brother Yudhisthira, who is supposed to have created this wonderful Kingdom where all rules are followed, goes to heaven. As he enters the heaven, and can you imagine what, the first thing he sees there are 100 Kauravsa. This is called Swarga Aharonika Parva. Remember Yudhistithir has walked up the mountain; he has given up everything – his kingdom, his wealth, his cows, his gold. Even his wife dies, he doesn’t turn around. He have given up relationships His brothers die, yet he doesn’t look back. He just keeps walking upfront.. Now when he comes to the gates of heaven, this great man who’s given up everything, he sees Kauravas. He is furious. He says how these murderers can be kept over there when my brothers or my wife are not here. He keeps arguing. His brothers are in hell because in those 36 years perhaps they were not all that great. We don’t know much but there are stories about some details of misdeeds. For example, Drupadi favored one of the husbands, Bhim was a glutton and Arjuna was very insecure and conceited. So he is told that for each of the reasons, they were banished to hell. The gods asks Yudhisthira as to why is he so angry. He says the gods are being unfair because the villains cannot be in heaven.

Now imagine why Vyasa is putting this twist in the tale. Because he wants to communicate something deeper He says, Yudhistira, you have been a Great King, you have given up everything except your anger. You have you have already killed these bad guys. They have been punished. You have ruled a kingdom for 36 years. So why have you not forgiven them yet. If you can’t forgive them, if you can’t purge your heart of anger what have you actually given up? Why should heaven be yours?

Oh, so Yudhisthir doesn’t get a place in heaven?

No. he is being asked that unless you purge your heart of anger and fill it up with forgiveness you cannot enter Heaven. That is Vijaya, victory over others but not Jaya, the victory over you. That will only happen when there is empathy in your heart. Yudhisthira does not display empathy. He is unable to forgive the villain. It is not eternity. They have done the crime and have paid for it.

While Ramayana talks about perfect King, Mahabharat talks about the process of creating the perfect King.  The process of perfect king is for the CEOs and the leaders and managers to ask themselves why are they doing what they are doing?  Is it coming from exploitation of people and then make lots of money, travel in BMWs? Is that the point of living because then you’re no different from the lion the alpha male. In ancient India you were supposed to sit on the lion throne which means you are not supposed to be the lion. You have to outgrow the lion. You do not have to be this great alpha male and dominate society. It is not about Vijaya, defeating the other alpha males, It is about Jaya which is conquering the animal inside you that enables you to not be Duryodhan and say not a needlepoint of territory I will give, not an inch in negotiations. You get this false sense of triumph. It is about discovering that why do kings exist. You don’t exist to make money for yourself. You exist to ensure wealth is generated and distributed so that everybody in your kingdom can discover the purpose of life.

So does Yudhisthir still get a place in heaven?

Eventually everyone does

So, do the rest of the Pandavas, the four of them, are not in heaven?

There are infinite lives. This is just one of their many lives.

Okay at the end of that life does he get a place in heaven?

 I’m waiting for the next episode. 🙂

I have one last question on this I can understand why the Pandavs went to hell. You explained it. Draupadi favored one out of five husbands; Bhima was a glutton: Arjun was vain; Yudhisthir still held on to his anger, But then why did the Kauravs get into the heaven, considering that they are no better off.

It is like what happens during appraisals. I don’t think he’s good enough to get the raise. Or the guys whom you hate get the raise and guys whom you love don’t get the raise. So we decide we know the rules of God. The best time to meet people is post-appraisal. Everybody imagines who they consider as heroes and who they consider villains. Somehow it never matches that of the management. The management has heroes and villains of their own. The upstream and downstream gaze is very different. Everybody believes they know who belongs in heaven and who belongs in hell.

I am not saying that the Kauravs belong in hell. I am curious to know that despite everything that they did, denie the Pandavs their rightful Kingdom, why did they end up going to heaven?

Well, one the reason is because of the land on which they died. That was considered to be very auspicious. It was just luck , a very good luck to happen to die on a land which was considered to be holy, that’s all. But you see the fact is your stay in heaven is not permanent. It is not heaven with a capital H. It is heaven with a small h, which is a destination to stop over. You will live in heaven for only a limited duration of time and then you will move on to the next life and the next life. It is like you know that Swarg is a place where you go when you have got enough equity and hell is the place for you with has too much debt.

So, is a right means for a right is more a matter of chance?

It is like using equity or debt to fund your growth. Too much of either is likely to be dysfunctional. And what is ‘too much’ is matter of the context!  The end justifies the means” managers often are so blinded by their own success, they don’t see the limitations of their approach, they actually believe that they can continue like this, or they believe that this is the only way they can be successful.

In our journey of Devdutt Pattanaik’s TV serial Business Sutra, we will move on to the 5th episode – Education.

Note: The images used in this post are the irrevocable property of their respective creator. They have been taken up courtesy the internet, so as to illustrate the point under discussion.

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Business Sutra |4.1| Board versus CEO

Business Sutra |4| Conflicts

We have covered three episodes of Devdutt Pattanaik’ TV serial on CNBC 18:  Business Sutra.

The first presented to us the most visible form of the business – the corporation: its meaning, its purpose and its action perspective. In the second episode Devdutt Pattanaik discusses Leadership: Role of the leader, Context of the leader and Leadership in different business cycles. The third episode relates to the Business Ethics and Morals:  business ethics and dilemmas, relationship between owner and the organization  and The Right (Dharma) – the Ramayana way and the Mahabharata way.

The present episode, 4th one in the series, deals with Conflicts.

When one is looking at conflicts, we automatically seek answers. In this case, we want mythology to answer all our problems. After all it is the repository of ancient wisdom. But a repository does not offer prescriptions. It cannot offer prescriptions because every context is unique. All repositories can offer are principles and frameworks that facilitate decision-making. So, one feels that he is cheated by mythology. It is not the fountain of solutions, we hope it will be. It makes us skeptical.  As humans we seek prescriptions. In today world, gurus are becoming prescription-providers, rather than decision-facilitators, which not a good thing to have happened in the first place.

Business Sutra |4.1| Board versus CEO

A conflict of interest (COI) is a situation in which a person or organization is involved in multiple interests, financial or otherwise, one of which could possibly corrupt the motivation or decision-making of that individual or organization.

The presence of a conflict of interest is independent of the occurrence of impropriety. Therefore, a conflict of interest can be discovered and voluntarily defused before any corruption occurs. A conflict of interest exists if the circumstances are reasonably believed (on the basis of past experience and objective evidence) to create a risk that a decision may be unduly influenced by other, secondary interests, and not on whether a particular individual is actually influenced by a secondary interest.

A widely used definition is: “A conflict of interest is a set of circumstances that creates a risk that professional judgement or actions regarding a primary interest will be unduly influenced by a secondary interest.”

Few videos to further clarify the concept:

Ethics Defined: Conflict of Interest

Conflict of interest

Beware conflicts of interest | Dan Ariely

In this short talk, psychologist Dan Ariely tells two personal stories that explore scientific conflict of interest: How the pursuit of knowledge and insight can be affected, consciously or not, by shortsighted personal goals. When we’re thinking about the big questions, he reminds us, let’s be aware of our all-too-human brains.

Conflict of Interest

John is a successful business man and has many great things going on for him. Today however will challenge John in a way he never thought possible….he has to interview his ex-girlfriend that is applying for a job where he works for.

Conflict of Interest: A Discussion

Dr. Daniel Sweeney, Director of the Institute for Enterprise Ethics, Discusses “Conflicts of Interest,” with Professor John Holcomb, Department of Business Ethics and Legal Studies, Daniels College of Business.

Sample of Keith White’s Conflict of Interest presentation

We also examine a few articles that relate to the conflict between the Board and the CEO:

What CEOs Really Think of Their Boards  – Jeffrey Sonnenfeld, Melanie Kusin and Elise Walton : CEOs believe it is important to address problems and opportunities they are uniquely positioned to observe. They know that their strategic visions and personal legacies can be undone by bad governance, and they have plenty to say on the subject. … The conversations showed that the CEO–board relationship is more complicated and nuanced than the standard debates about corporate governance recognize. Undoubtedly, those debates will continue…. In the end, therefore, is the advice to the experts and advisers seeking to improve board performance: Turn the focus to the human level—to “what’s really going on in that boardroom,” in William Donaldson’s phrase. And listen to every informed perspective on what goes on there, including the CEO’s.

The Four Tiers of Conflict of Interest Faced by Board Directors by Professor Didier Cossin and Abraham Hongze Lu :

A tier-I conflict is an actual or potential conflict between a board member and the company. Major conflicts of interest could include, but are not restricted to, salaries and perks, misappropriation of company assets, self-dealing, appropriating corporate opportunities, insider trading, and neglecting board work. All board members are expected to act ethically at all times, notify promptly of any material facts or potential conflicts of interest and take appropriate corrective action.

Tier-II conflicts arise when a board member’s duty of loyalty to stakeholders or the company is compromised. This would happen when certain board members exercise influence over the others through compensation, favors, a relationship, or psychological manipulation. Under particular circumstances, some independent directors form a distinct stakeholder group and only demonstrate loyalty to the members of that group. They tend to represent their own interest rather than the interests of the companies.

A tier-III conflict emerges when the interests of stakeholder groups are not appropriately balanced or harmonized. Shareholders appoint board members, usually outstanding individuals, based on their knowledge and skills and their ability to make good decisions. Once a board has been formed, its members have to face conflicts of interest between stakeholders and the company, between different stakeholder groups, and within the same stakeholder group. When a board’s core duty is to care for a particular set of stakeholders, such as shareholders, all rational and high-level decisions are geared to favor that particular group, although the concerns of other stakeholders may still be recognized. Board members have to address any conflicts responsibly and balance the interests of all individuals involved in a contemplative, proactive manner.

Tier-IV conflicts are those between a company and society and arise when a company acts in its own interests at the expense of society. The doctrine of maximizing profitability may be used as justification for deceiving customers, polluting the environment, evading taxes, squeezing suppliers, and treating employees as commodities. Companies that operate in this way are not contributors to society. Instead, they are viewed as value extractors. Conscientious directors are able to distinguish good from bad and are more likely to act as stewards for safeguarding long-term, responsible value creation for the common good of humanity. When a company’s purpose is in conflict with the interests of society, board members need to take an ethical stand, exercise care, and make sensible decisions.

So we quickly take up what Devdutt Pattanaik has to say in Segment 1 of the episode 4 – Conflict – Board versus CEO, as the Indian Mythology’s point of view.

The Annunaki of ancient Sumerian texts were a council of gods and goddesses; perhaps the earliest known form of a consultative group – a concept that in modern business is referred to as the board of directors.

Mr. R. Gopalakrishnan, ED, Tata Sons: I would ask a question about corporate governance. I recognize that companies are social structures and we have imported the corporate concept from West. But at the end of the day, people interact between themselves within the corporation through the social mores of the society from which they have sprung up. We have devised corporate governance in the last 10 years based on the Anglo-Saxon model of  how the board should interact within  itself and with the management.  I wonder whether you have any suggestions on how the cultural moorings of Indians can be better played out in the way our corporate governance rules and procedures are currently laid out so that we can get a more effective form of corporate governance even if it’s not so efficient.

The question is how they are working together. If they are working well together then it’s fine. What happens when this conflict – who becomes more powerful. Usually it is not either or. What you have is a set of rules that are almost as if you have the commandments. You have the king and you have the prophets and each one is checking who is following the rules. There is a level of suspicion that you know the King on his own is perhaps not going to follow the rule.  Then he must be constantly watched.

Now if I’m the promoter. I have done the business on my own without board and have done a successful business on my own. Now as I grow in size per force the rules force me. Because I need more funds, I need to create a board of directors. Suddenly I  see that just because I’ve got access to  more funds my freedom is being taken  away from me – that same freedom that  enabled me to grow the business is being  taken away from me – and therefore the  relationship starts getting soured.

Let us look at the biblical examples. There are stories of King David of what he wants to do, but is constantly being warned by the prophets that you cannot do what you want to do; you have to align within the rules. Thus, there is this great tension between the King and the prophets. For example he has an extramarital affair which is forbidden; he wants to build a temple which is forbidden.  He is constantly doing things because he wants to fulfill his individual will rather than what is the appropriate conduct within the by the commandments and by the law and the voice of God.  That narrative is very strong in the Bible – you cannot be an individual you have to be subservient to an impersonal entity called the law.

These are the sources from which the idea of governance has come into India. The idea is relatively alien because the focus over here is on the king. If the king is an honest man then things will fall into place. The education of the kings played a lot of role. But today what we are saying is we want Ram and to create Ram, we will produce a set of rules. Rules don’t make Ram.

I’m curious. Even the Kings in ancient India must have had a council of ministers, ministers that advise the king and also kept the king in check, to some extent by offering him the right advice; nudging him constantly in the right direction. Is there a parallel in our scriptures that draws from the Western model of governance but Indianises that?

You see the king was never kept in check. The Council of Ministers was to counsel, to advise the king. But ultimately the king was like what is called a host (Yajman). He is performing the great sacrifice – a Yagya – and he is offering all the things to the fire (the Swaha). All his decisions are the swaha. Whatever comes from the Yagya is the result of his actions, his decisions, his swaha. What is the SWAHA. It is how you pour things into the fire.  Once you throw it out, it doesn’t come back.  It is your decision. What comes back to you is the direct result of your decisions. Nobody keeps you in check. There are ministers and there are the sages (rishis) and the wise men (pundits). Everybody sitting around you is supporting you to do the Yagya. Ultimately in the Yagya, who is the Yajman, who is the decision maker, who takes accountability? Is the Board taking the accountability or is the CEO taking the accountability?

It comes down to that that in today’s world and age it would be almost impossible to live without a set of rules, constantly telling people that hey if you’re not doing what these rules set out for you to do then you are doing the wrong thing. How do we leave companies entirely to the governance of an individual? How do we build in checks and balances through a board? And yet, how do we create equality between the board and the CEO or the promoter or the king?

Implicit in your questions is the premise that if the rules did not exist, there would be anarchy and chaos.

To some extent!

You see this is a Western construct. What do I mean by that?  The idea that laws create order, if we remove laws there is no order and there is chaos is a Western construct.  In the Indian construct, if there were no laws it’s not chaos. Therefore in the Western mythology the images of dragons exist if you read a Mesopotamian mythology or if you read Greek mythology, there is always this image of dragons, which exists and it is the great hero, the great king who comes and tames the dragon and creates order with rules.  But in the Indian context if you take away the human being completely what exists is nature – Prakruti. What is nature?  Nature is not disorganized, the nature is not chaotic. What you have in nature is the instinct of survival and only the fit survive and might is right. Now that is what exists in nature. So when I create culture I am creating the very opposite.  It is not might as right. Meek have rights, too. So it is about a world where I go out of my way to help the helpless.

Now how do I do that?  Will the rules make me do that or I genuinely want to do that? If I don’t want to help the helpless, despite being a human being if I behave like an alpha male which rule is going to control me.

In short, your response to Gopal’s question is that no there is no Indian code of governance that can be created or a code of governance that is contextualized to our conditioning. Here in India there is no such thing because no set of rules can actually help you be a better person.

Let me give you an example of rules and from our story. When you read the Ramayana, you know one of the most famous lines in the Ramayana is Raghukul Rit Sada Chali AAyee, Pran Jaaye Par Vachan Na Jaye – There always has been a custom in the Raghu lineage, you may lose life, but never break a promise. When you read this line you have to ask us the question – when Ran goes to the forest, is he obeying his father or is he obeying the law?

Well, his father’s word is the law. So, meekly follow that.

It is not what father has said. It is Raghukul Rit – the law of the clan is more important. It is the Ragu family, the dynasty to which he belongs to. So, is Ram obeying the father or is Ram obeying the law?

There is no conflict in obeying either one because the both are saying the same. The law is the custom of his family or the tradition is to follow what your father says. He is obeying the both right now.

Let us look at the same narrative as it continues over time. At the last chapter of the book the same law says: the King’s wife shall be of unblemished reputation.

He followed that as well, didn’t he?

Exactly and so what is the narrative inadvertently saying – be careful of laws. If you stick to them and not look at the spirit of the law, then there can be trouble at the other end.  Why did laws come into being?  It came into being to help the helpless; to move out of the animal desire to dominate. For the might to have rights you had the law so that the meek have rights too. But look at this law – an innocent pregnant woman has been told to leave to the forest because the law becomes more important and Ram is Maryada  Purshottam (100% Compliance. So here we see too much of alignment to the laws. Indian scriptures are always wary of laws because laws seem to be arcane, removed from context; while Indian thought is all about context.

In business we cannot create rules that are contextual to every business, its leader and its future. So we need something that is uniform.  That is the honest truth of this game.  So, is there anything that is more suited to the Indian way of thinking as opposed to importing what is a Western code of governance, and then trying to fit it onto Indian companies and saying, ‘hey, we understand that you guys are not all equal; but the board is supposed to stand up to the CEO and the CEO is supposed to defer to the board. So how to make it work?

I think this is where the humanity has to be worked out. Everywhere we are talking about a code transforming people into good people. I need a code to make me good. That is what it comes down to this one single argument – give me this law which would make me good. That is a very difficult thing to achieve. We have to ask ourselves – are we working towards creating leaders who know why they are doing what they are doing? These are things that are not even being addressed. We are focusing so much on the law because we have given up on human beings.  Missing human beings do not work.

The processes are important, structures are important, laws are important, conducts are important. You have constitutions being changed every day. You can change Indian constitution 20,000 times. That will not make a politician’s honest.

So the answer to Gopal’s question is that boards at best can play an advisory role but they cannot really keep the CEO in check, they cannot stop him from exploiting a loophole which he has decided to nor can they make him a better person than he actually is.

Yes, Absolutely.  You see, while it will not be there in the rational world, but in Indian thought it is that for every action there are consequences – if not in this life then in the next.

So, in the end, if there has to be a conflict, that conflict has to be about whether we have been able to create leader, who follow the law in spirit, who has not lost touch with the humanity whilst in the search for the results, who does not follow custom because he has to but because he inherently values a better world – for now and for the future.

In the second part of the 4th episode of Devdutt Pattanaik’s TV serial Business Sutra, we will see if The End Justifies The Means.

Note: The images used in this post are the irrevocable property of their respective creator. They have been taken up courtesy the internet, so as to illustrate the point under discussion.

Business Sutra |3.3| Ramayana and Mahabharata

Business Sutra |3| Business Ethics and Morals

In the first episode of the TV serial on CNBC 18, spread over three segments, Devdutt Pattanaik presented to us the most visible form of the business – the corporation : its meaning, its purpose and its action perspective.

In the second episode Devdutt Pattanaik discusses Leadership: Role of the leader, Context of the leader and Leadership in different business cycles.

The third episode relates to the Business Ethics and Morals. In the first part, a broad spectrum of business ethics and dilemmas of the leader has been covered. In the 2nd Part, a closer look at these issues has been taken up, in the perspective of relationship between owner and the organization. The present 3rd part deals the subject of The Right (Dharma) from two opposing points of view – the Ramayana way and the Mahabharata way.

Business Sutra |3.3| Ramayana and Mahabharata

The treatment of rules-based-principles-compliance (Ramayana-way) and principles-based-rules-compliance (Mahabharata-way) is fundamentally approached at very different levels in the Western world practices and in India’s mythological concepts.

The West seems to lay more emphasis on compliance as the goal of ethical and moral conduct, whereas Indian mythology approaches it as way of life. I have chosen three representative articles that effectively present the current Western thinking on the subject:

The shift from rules-based to principles-based companies : Lynda Gratton has been studying the behavior of corporations for more than three decades. But what she has observed in the past few years has surprised even her. Under the influence of megatrends such as globalization, hyper-connectivity and worldwide financial instability, the professor of management practice at the London Business School has witnessed the erosion of rules-based organizational models and the rise of companies driven by principles.

Principles-Based Regulation and Compliance: A Framework for Sustainable Integrity – To remain competitive and even to survive in this complex and uncertain environment, pioneer thinking and innovation must go beyond product lines and services. They must encompass active evolution and management of the corporate social value proposition. They must engage the engineering and design of compliance systems that grow organically. Essentially, they also must deliver incentives for cultures to take root that are defined by their integrity. In a dynamic risk environment, this all forges a foundation of adaptability and enterprise…. Increasingly, non-market aspects of business – social justice, environmental matters, income equality and the like – have become key components for long-term business success. At the same time, these considerations make business increasingly relational rather than purely transactional.

A 21st century model based on principles, not rules – The need for principles-based governance is fuelled by the pervasive public scrutiny of organisations, a trend that will only increase with advances in social media and technology. There are precious few remaining “dark corners” in which any organisation can operate. The manner in which government acts and business is transacted has been, and will be, transformed. Every organisation’s approach to governance, increasingly, will determine the organisation’s value.

So we quickly take up what Devdutt Pattanaik has to say in Segment 3 of the episode 3 – Ramayana and Mahabharat, as the Indian Mythology’s point of view.

We have discussed Dharma, we have discussed Dharma Sankat. Both the Mahabharata and the Ramayana talk of many different instances of what is the road to Dharma – the principle and what constitutes Dharma Sankat. We have a very interesting question from Ajay Piramal referring to both these great books and what he draws from that.

What are the learnings that we can get to apply in the modern world from the Mahabharata and also from the Ramayana. Sometimes on first reading it looks that there are several contradictions in to what is said in Mahabharat and what is said in Ramayana. Can you just explain that to us?

Ramayana and Mahabharat are both considered History (Itihaas). Itihaas is conventionally translated as history but what it actually means it is a tense agnostic term – which means so it was, so it is and so it will be. That means it is timeless. Second is the context of Ramayana and Mahabharata. They exist in two different contexts. So they cannot be seen as equals. That is the mistake the Western mind forces us to look at them that way.

West is obsessed with standardization, but our way is according to tastes – one is that of Dwapar Yug and the other is that of Treta Yug. Treta is the earlier, innocent, phase of the organization whereas Dwapar is the later, a little darker, phase in the life of the organization, which is slightly more corrupt.

Let us revisit the principal of Dharma again:

Now let’s do a simple 2 by 2 matrix to understand the Ramayana – Mahabharata:

You have rules on one side – the rules are followed or the rules are not followed. We have the principle (Dharma) on the other side – Principles are upheld or are not upheld.  Now look at the Ramayana – in Rama, Dharma is upheld and rules are upheld at the same time. Everything is about others, even, almost always,s at the cost of oneself. So it is misery in forest and misery in case of palace. His opposite is the great alpha male which somehow people seem to like today. That tells you about the times. He is Ravana. No Dharma no rules; no rules no Dharma. Your wife is my wife.  and I’m an animal. Even my son dies I will not let go of my little toy, my brothers die I will not let go of my little toy. That is Ravana.

Now look at the same thing – rules are broken, bent. Krishna always keeps bending the rules, breaking the rules but the principle is intact. It is always for the other. Now let us look at the most favorite character Duryodhana. He never breaks the rule but he’s constantly violating the principle – he is holding the letter of the law never the spirit of the law. Left side is the spirit, right side is the letter. The Top Left is the belief, whereas Bottom Right is the behavior.  He is Pretender.

Where does Yudhisthira fit in all of this?

Yudhisthira is someone struggling to be Rama, he moves from Ravana square to Rama square – this is the journey of Yudhisthira, with the help of Krishna. His honesty is about rules, not realizing it is all about rules as well as about principles. Mahabharat is the story of focus on the principle. When a woman is being disrobed, everybody discussing legal matters- is it okay or not okay to disrobe her. Bhishma and Drona watching a woman being disrobed and they are supposed to be very educated people and they are not doing anything this in the matter.

That brings me to a very interesting issue. You said that the Ramayana comes from an older age of more innocence whereas the Mahahabharat comes from a darker, newer, age.

Mahabharat represents a more matured organization, whereas Ramayana represents a very early phase organization, which has just tasted success. Everything is right – market is right. The principles have just been created. So it’s exciting and new, people are not smart enough to subvert it yet.

In the case of a mature organization, people have started forgetting the principles, now it is a slightly more rule focused organization.

The principles have been forgotten, rules have become more important. It has become bureaucratic. For a bureaucrat, letter of the law matters, not the spirit of law. Like any bureaucracy all the rules upheld but people still don’t have food. So the principle is forgotten the woman is disrobed but nobody is arrested.

People want Ram. So, the rules are created. But rules do not make Ram.

In our next session, we will take up the 4th episode – The Conflicts – in this Devdutt Pattanaik’s TV serial Business Sutra.

Note: The images used in this post are the irrevocable property of their respective creator. They have been taken up courtesy the internet, so as to illustrate the point under discussion.

Business Sutra |3.2| Relationship between Owner & Organization

Business Sutra |3| Business Ethics and Morals

In the first episode of the TV serial on CNBC 18, spread over three segments, Devdutt Pattanaik presented to us the most visible form of the business – the corporation : its meaning, its purpose and its action perspective.

In the second episode Devdutt Pattanaik discusses Leadership: Role of the leader, Context of the leader and Leadership in different business cycles.

The third episode relates to the Business Ethics and Morals. In the first part, a broad spectrum of business ethics and dilemmas of the leader has been covered. In the present, 2nd Part, a closer look at these issues has been taken up, in the perspective of relationship between owner and the organization.

Business Sutra |3.2| Relationship between Owner & Organization

Generally, business ownership can be classified as proprietorship, partnership or a limited liability company. The form, nature and complexity of working of the business have evolved ever since man learnt the barter system. The morality and ethics of a business organization and its owners also evolved in tandem. Then, as the form the State also started evolving, formal and informal legislations and regulations that governed the moral and ethical behavior of the business also entered the co-existing cycle of evolution.

Over the 19th century, scale and nature of the business started tilting more towards the large corporation with (legal) concept of limited liability. That, apparently, put the ownership and the management at an arm’s length and did get formalized under the law. However, that distance also brought the morality and ethics of both, the owners and management, severally and collectively, under my public glare. Like the excesses of East India Company, which prompted London to step in, the behaviour of Gilded Age (end of 19th century period) tycoons spurred new legislation to help modulate America being free-market economy. Today’s entrepreneurs operate in a drastically different world – one that is not only more global, but vastly more competitive, inclusive, regulated…[1]

As the more and more public debate took up the subject of corporation’s moral and ethical behaviour, and the associated role of owner as well as that of the management, more and more literature came to be published w.r.t. the moral ethics of the corporation’s owners – the shareholders – that of its management. However, there is not much of documented literature on internet in so far as moral and ethical relationship of a proprietor partnership form of ownership with the business organization that they operate.

It would be pertinent to remember here that we have not included the subject of Corporate Governance in our present discussion. Of course, that area also has evolved well in last few decades. But it views the subject of morality in ethics more from what ought to be THE corporate governance. We would like to look at the subject more from the point of view of an individual as what he or she perceives as his/her moral role as an owner of the business. I have selected two representative views, representing different points of view here:

Measuring Small Business Owners’ Differences In Moral Thought: Idealism Versus Relativism is a research study to measure small business owners’ differences in moral thought based on idealism and relativism. This is measured by determining the ethical ideological classification of individuals based on Forsyth’s ethical taxonomy. The research followed a quantitative analysis and an online survey questionnaire was used to collect the data from Small and Medium Enterprise (SME) owners in South Africa. The results found that the majority of SME owners fall in the situationist and absolutist category of Forsyth’s ethical taxonomy.

On the other hand, K.P. Kaiser in his post, Personal Morality vs Business Morality  looks at the more fundamental need of such business and their entrepreneur /owners.  Here is his question: What makes you think you know what’s better than an entire world full of people choosing where to spend their dollars?…. We have representative governments to impose moral order on the market. As a business person, you need to have a second set of morals. Your business morality should look to profit maximization above all else. Because the market doesn’t tell you the ways people imagine a fair world should work. The market tells you the way the world actually works. The beauty of the market is its amoral nature. We aren’t accountable to other people’s ideas of what we should be spending our money on.

Kaiser seems to be more concerned about the stakes – the livelihood – of the individual entrepreneur.

So we quickly take up what Devdutt Pattanaik has to say in Segment 2 of the episode 3 – Relationship between owner and the organization, from the Indian Mythology’s point of view.

The one predominant conflict that exists, at least in the context of business, is the relationship between the owner and the organization, management and ownership. I can find different ways of putting it, but that is the one key area of conflict. It is the one area that all the Western governance rules seem to actually try and control or mitigate. Yet, in India it is the biggest issue that we face when we talk about corporate governance, when we talk about organizational behavior or leadership traits, the whole relationship between the owner and the organization.

In the Western context, the organization is independent of the leader, while in the Indian context the organization is a manifestation of the leader. So Raja and Rajya are integral to each other. This is one fundamental thing.

Now let’s look at it in the form of a story in the Mahabharata, about this very honest person called Yudhisthira. Then we talk about a gambling episode. He gambled his kingdom. I have heard people talking about this episode, but not asking a very fundamental question – was it his?  It was Draupadi who asked the question – can he gamble the kingdom? What he and everybody is assuming that she’s asking about her. But she’s actually asking about everything. She says, on what basis has he gambled the kingdom away? Is the kingdom the King’s property?

Is it?

No.

Why does the kingdom exist, that is the fundamental question? Does it exist to mitigate my fear? Then it’s Adharma. If it is to mitigate my people’s fear, it’s Dharma. How are you mitigating fear – by gambling it away?

That is one extreme example. But if you were to look at modern-day business, the owner, or the promoter is the person who vests the most, invests the most in that business, both from a money point of view and from emotion, energy, risk everything. Why then does he not get, in some sense, stake for the rest of his life and treat this like his kingdom?

In India the relationship of the king and the kingdom was that between a cowherd and a cow.  If you see wealth as milk, where does the milk come from? It comes from a cow. What is good milk? Rich in bottom line? or Utterly Buttlerly Milk? The cow that gives that milk is a good cow. Now that cow’s milk belongs to the cowherd or does it belong to the cow?

It belongs to the cow.

There is a nice relationship between the cow and the cowherd. The cowherd takes care of the cow, and in exchange takes a portion of the milk. The king as the cowherd is the keeper of the cow, his kingdom. When a king gives a cow to another man, what has he done? He has given that person a lifetime of food and fuel with that milk and dung. This effectively means that you have given him survival; you have allowed him to live.

In other words, giving away a cow or Godaan, is job creation. I have created a job so that he can sustain himself forever. So the more cows I give, I basically create employment, so that more people can live. Why do they need to live? Otherwise they would be at the mercy of the elements. The great king distributes many cows. But does he own the cow? That relationship is one of trusteeship. He is the trustee of the cow.

This is very simple to understand when there is one king in one cow. If you were to expand it in the context of an organization, let us assume the king is the promoter or the entrepreneur, the founder. But thereafter, the king alone is not able to take care of the cows. The King needs the help of other people. and therefore the right on the milk he gets distributed amongst those other people who also help in taking care of the cow. Has it to be proportional? Should it be distributed disproportionately because it is the king actually who began the entire process of taking care of the cow, and  the others came on later? This is the question that constantly gets asked in India – can the promoter undertake actions that benefit himself as the shareholder, and by the way, benefit other shareholders as well ?Because they benefit him, the shareholder, should that be treated as fair or that is not fair? Should all his actions be taken from the other shareholders point of view?

The first thing is – what is fair is subjective. Fairness is a subjective concept. Second, it offered equality. In India you are equal at a soul level. So the soul (Atma) is equal, but the flesh is not.. There are inequalities based on our intellectual make-up, our emotional make-up and our material make-up.

So what you’re saying, then, is that the founder, the promoter, the entrepreneur rightfully deserves more based on the risks and the effort that he has undertaken.

The word right is not an Indian concept.  It is duty in Indian concept. Our entire culture is based on the concept of duty. Duties are for the other, right is for the self. So when you ‘this is my right’, you have in a way provoked the animal instinct of territoriality. It is mine. For what? So we’re celebrating the territoriality of our being. Which means we are surviving the animal which is celebrating the animal instinct – the imagination and amplification of fear.

Now the question is no law can say how much is fair. That is for you to figure it out. It is your duty to work out how much are you giving to people. Remember it goes to inner space, inner landscape.  No rule can tell me that. You should know that if you give me ten percent it is fair and if you give it twelve percent it is unfair. So the king has to decide. And that’s why the Kings were worshipped. Once upon a time they were put on a pedestal and the Abhishek – coronation, ablution – rituals were performed.

And yet they routinely gambled away their kingdoms or they lost their kingdoms in war which was the desire to expand their kingdoms. So if the relationship between the king and the kingdom was one of trust and trusteeship, we don’t have that many examples of Kings that actually upheld that principle.

This is because you see we are talking about the struggle to be perfect – the struggle to be human not even perfect, the struggle to step out of an animal desire, to dominate our animal desire to be territorial. 99% of our being is animal the struggle is to make 99 into 98. You never overcome your animal. If at you can do it, then you will be a living of god.

Can we make 99 into 98? That’s the Indian – introspective- method. Rules will domesticate animals. It will not fix your animal.

The episode seems to end, rather abruptly. In a way, that is because the 3rd part follows immediately and continues the link. However, if we look at the end as a poser to the questionCan we make 99 into 98?- , it provides us the food to ponder over our role of the owner and our relationship with organization that we run.

The laws of Corporate Governance are the rules that may domesticate the animal within us. But only we, with our own inner strength of our moral and ethical values, can really undertake the task of making 99 % of our animal-self into 98% animal. Be that in the capacity of proprietor or partner or the shareholder, or even that of the management.

In our next session, we will take up the further extension of the topic – Ramayana vs. Mahabharat – the two differing points of views of the Core Principles – Dharm – in the 3rd segment of the Third Episode of Devdutt Pattanaik’s TV serial Business Sutra.

Note: The images used in this post are the irrevocable property of their respective creator. They have been taken up courtesy the internet, so as to illustrate the point under discussion.

[1] SuperEconomies –  Raghav Bahl

Business Sutra |3.1| Ethical and Moral Dilemmas

Business Sutra |3| Business Ethics and Morals

In the first episode of the TV serial on CNBC 18, spread over three segments, Devdutt Pattanaik presented to us the most visible form of the business – the corporation : its meaning, its purpose and its action perspective.

In the second episode Devdutt Pattanaik discusses Leadership: Role of the leader, Context of the leader and Leadership in different business cycles.

The third episode relates to the ethical and moral dilemmas of the leader, and hence in turns that of the organization. The ethics and morality are the human concepts. Animals and plants belong to Prakriti or nature, where no one has choices. Everyone is fettered to their nature. Purusha or humans have the unique ability to make choices and hence reject what is ‘in their nature’ – the idea of dharma comes from this space, the core ethical and moral values of the human being. The concept is beautifully illustrated in the Ramayana and the Mahabharata. Dharma is a principle, not a rule, which is why in Ramayana rules are upheld and in Mahabharata rules are broken. Beneath the actions of Ram and Krishna is dharma – which may result in rule making or rule breaking, depending on the context.

Business Sutra |3.1| Ethical and Moral Dilemmas

Let us begin with first  things first and take a glance at what do values, ethics and morality mean- in the western management literature.

Bahaudin Mujtaba presents Understanding ethics and morality in business . He states that values are professed statements of one’s beliefs, ethics is delivering on one’s professed values and morals are actions of good conduct as judged by the society that enhance the welfare of human beings. ..With an understanding of values, ethics and morals while using ethical principles, a business owner or leader can form a framework for effective decision-making with formalized strategies. The willingness to add ethical principles to the decision-making structure indicates a desire to promote fairness, as well as prevent potential ethical problems from occurring.

Surbhi S has clearly presented the Difference Between Morals and Ethics . The word Morals is derived from a Greek word “Mos” which means custom. On the other hand, if we talk about Ethics, it is also derived from a Greek word “Ethikos” which means character. Put simply, morals are the customs established by group of individuals whereas ethics defines the character of an individual.

Basis for comparison Morals Ethics
Meaning Morals are the beliefs of the individual or group as to what is right or wrong. Ethics are the guiding principles which help the individual or group to decide what is good or bad.
What is it? General principles set by group Response to a specific situation
Root word Mos which means custom Ethikos which means character
Governed By Social and cultural norms Individual or Legal and Professional norms
Deals with Principles of right and wrong Right and wrong conduct
Applicability in Business No Yes
Consistency Morals may differ from society to society and culture to culture. Ethics are generally uniform.
Expression Morals are expressed in the form of general rules and statements. Ethics are abstract.
Freedom to think and choose No Yes

Business Ethics is a brief, structured, treatise on the subject.

Conventional Approach to Business Ethics  is a presentation prepared on the 7th Chapter – Business Ethics Fundamentals – from the book Business and Society. We get a quick-glance view of serval fundamentals of the subject.

12 Ethical Principles for Business Executives : Ethical values, when translated into active language, establishing standards or rules that describe the kind of behavior an ethical person should and should not engage in, are ethical principles. The following list of principles incorporates the characteristics and values that most people associate with ethical behavior. 

  • HONESTY – honest and truthful in all their dealings.
  • INTEGRITY – personal integrity and the courage of their convictions by doing what they think is right even when there is great pressure to do otherwise.
  • PROMISE-KEEPING & TRUSTWORTHINESS – worthy of trust.
  • LOYALTY – worthy of trust, demonstrate fidelity and loyalty to persons and institutions by friendship in adversity, support and devotion to duty.
  • FAIRNESS – fair and just in all dealings.
  • CONCERN FOR OTHERS – caring, compassionate, benevolent and kind.
  • RESPECT FOR OTHERS – respect for the human dignity, autonomy, privacy, rights, and interests of all those who have a stake in their decisions.
  • LAW ABIDING – abide by laws, rules and regulations relating to their business activities.
  • COMMITMENT TO EXCELLENCE – pursue excellence in performing their duties, are well informed and prepared, and constantly endeavor to increase their proficiency in all areas of responsibility.
  • LEADERSHIP – conscious of the responsibilities and opportunities of their position of leadership and seek to be positive ethical role models.
  • REPUTATION AND MORALE – protect and build the company’s good reputation and the morale of its employees.
  • ACCOUNTABILITY – acknowledge and accept personal accountability for the ethical quality of their decisions and omissions to themselves, their colleagues, their companies, and their communities.

The Seven-Step Path to Better Decisions : We make thousands of decisions daily.  Most do not justify extended forethought but when confronted by major decisions with no clear answers it can be easy to feel overwhelmed.  This seven-step guide to making good decisions is an excerpt from the book Making Ethical Decisions .

  • Stop and Think – One of the most important steps to better decisions is the oldest advice in the word: think ahead.
  • Clarify Goals – clarify your short- and long-term aims.
  • Determine Facts – You can’t make good decisions if you don’t know the facts.
  • Develop Options – make a list of options, a set of actions you can take to accomplish your goals.
  • Consider Consequences – Two techniques help reveal the potential consequences: “Pillar-ize” your options.  Filter your choices through each of the Six Pillars of Character: trustworthiness, respect, responsibility, fairness, caring and citizenship, and, “Identify the stakeholders” to determine how the decision is likely to affect them.
  • Choose – make your decision.
  • Monitor and Modify – re-assess the situation and make new decisions, if the outcomes do not follow the plan.

Having covered some details of the fundamentals of Ethics and Morals- as perceived by the West, we move on to what the present management literature has to state on the subject.

In a well presented article – How did Peter Drucker see Corporate Responsibility? –   in HBR, Frances Hesselbein notes that, according to Peter Drucker, “Leaders in every single institution and in every single sector … have two responsibilities. They are responsible and accountable for the performance of their institutions, and that requires them and their institutions to be concentrated, focused, limited. They are responsible also, however, for the community as a whole.”…Peter Drucker strived to make business leaders see the community as the responsibility of the corporation. He called on leaders to embody “the Spirit of Performance” by exhibiting high levels of integrity in their moral and ethical conduct; focusing on results; building on strengths; and leading beyond borders to meet the requirements of stakeholders, ultimately serving the common good.

In ‘What is Business Ethics?’, Peter Drucker  categorically states that the traditional Western moralist would probably treat Business Ethics as oxymoron. However, all the authorities of Western tradition are, however, in complete agreement on one point: There is only one ethics, one set of rules of morality, one code, that of individual behavior in which the same rules apply to everyone alike. They would accept the difference between what is ethically right or not would be grounded on social or cultural context. He then goes onto detail the evolution of term Business Ethics over 18th Century till now.

The individual ethical thinking and behavior in an organization has to be translated into the organizational level integrity.

Lynn S. Paine looks at the role of the organization in shaping the individual’s ethics in an HBR article, Managing for Organizational integrity.

We look at (only) some of the videos:

DuPont Sustainable Solutions  has compiled Workplace Ethics Scenarios that show, in the lighter style, the “wrong way” and the “right way” of handling 17 common ethics issues at the workplace.

Creating ethical cultures in business: Brooke Deterline at TEDxPresidio –

As Corporate Director for the Heroic Imagination Project (HIP), Brooke Deterline helps boards, executives, and teams at all levels develop the skills to act with courage and ingenuity in the face of challenging situations. This fosters leadership credibility and candor, builds trust, engagement and reduces risk.

Legal vs. Ethical Liability: A Crisis of Leadership and Culture | Mel Fugate | TEDxSMU

Professor Fugate argues that leaders at all levels and across industries need to focus on ethical liability above and beyond legal liabilities for themselves and their organizations. Ethical liability tests the true character of a leader and determines the character and quality of an organization’s culture. He illustrates this point in the context of higher education, where he contends a lack of accountability has led to a crisis of leadership and culture. Fugate uses scandals in college sports as common examples of a pervasive and larger problem of university leadership (at all levels) that fails to meet its ethical liabilities. He outlines a number of potential causes for the patterns of unethical behavior in higher education and also provides a few suggestions on how to overcome the challenges of this crisis.

We are now geared up to listen to what Devdutt Pattanaik has to say, in Segment 1 of the episode 3 – Dharma and Dharma Sankat.

Humans are the only creatures on earth that can choose to overturn the law of the jungle to outgrow the beasts within us. Firing this eternal struggle is our ability to imagine, imagine a better place.

But the problem with imagination is also that it amplifies our fears. I can think of the worst situations. I can imagine problems which do not exist. Even in times of abundance I can think of drought and go into a depression. So it is a tragedy of imagination, while I can imagine good things I can also imagine horrible things. It amplifies joy, it amplifies fear too. The most tragic and interesting thing about imagination is suddenly we ask ourselves and because you can imagine and because are aware we can die, we start asking the question what’s the point of it all. That is where everything starts. That is the home. That is the source of our solutions and our problems.

How is it connected to Dharma?

I can imagine not being afraid. If you look at all the gods, they have their hand sticking out and what they are saying is ‘do not be afraid’. This is the Fearlessness Pose (Abhaya Mudra). The fact is any deity, anyone, is holding the hand out. That is what a leader is supposed to do.

Just visualize a simple number chart. There is a positive axis and there is a negative axis. Now imagine the number zero as what is call in Sanskrit as Matsya Nyay, A Law of the Jungle. The big fish can eat the small fish in the sea.

This means I am allowed to be territorial. I can be dominating because I want to survive. That is an animal instinct. If I can outgrow this animal instinct of survival, then I start thinking about others. I empathize because I can imagine your fear, and because I can imagine your fear I can empathize with you. If I can walk towards empathy that is outgrowing the beast, But if I allow the fear to amplify my fear then in my fear I will say that I have to stay alive and I have to thrive and others don’t matter. Nobody else matters, but me. Then I start exploiting people. I will tame other people. I will dominate. I’ll become worse than an animal. Animals don’t exploit, humans do. Animals are not cruel, humans are. So exploitation comes or the empathy comes from the human imagination. Both these, the exploitation and empathy come from the same space of the human ability to imagine and be creative. So both are possible. If I move more towards positive scale, then this is Dharma. It is a work-in-progress.  It is not an endpoint, it’s not destination, it’s a process. If I move in the opposite direction, overwhelmed by fear, it is Adharma. The choice is ours and every choice has consequences, if not in this life, then in the next life.

What is the Dharma Sankat (Ethical or Moral Dilemma)?

Dharma Sankat is the ability to take this decision, What is life all about?  Every moment we have to take decisions. At a moment of time what do I decide? What decision do I take? Let me give you an example through a story.  Once upon a time there was an eagle. The eagle was chasing a dove and the dove came to a king and told the king: save me. The king said I will save you and the Eagle said what will I eat now. So the eagle ate another dove. That is cruel. King said do not eat dove, eat rat. So the Eagle said, that’s cruel why should a rat die to save the dove. Finally the king said because I say so. The Eagle then said you are foolish. How long can you feed me? Sooner or later you will die and I’ll have to eat the Dove. So you are just delaying its death. This is Dharma Sankat.

In nature nobody would have come to the rescue of the dove. Now the King thinks he is very noble in saving the Dove. King is imagining that by saving the dove I am being a nice man, but in effect he is cruel to the eagle. You decided that the eagle is bad, the dove needs saving. Now look what is happening – the Dove is calling the king a kind king and the eagle is calling the king a cruel King. Who is right?

What should the king do?

There is no prescription.

How do you fit this in a business or corporate context? What are the more common Dharma Sankat situations that business leaders face and how are they supposed to overcome them?

There is a recession. Company has to cut costs. I have two ways of cutting cost: reduce salaries of the top management or give pink slips to the bottom of the pyramid. Which way should I go?

The former sounds less cruel. But, to those people it is as cruel.

That would mean that the top management which is running your organization may leave and the company can collapse and the shareholders will withdraw money.

What do you do?

That IS Dharma Sankat. That is why you need a leader. If there was a prescription out there then why do you need a leader? You have to ask yourself – if I have to evolve, I have to ask myself: why do I take the decision? Where from comes a decision that I am taking? Am I taking a decision because I’m afraid? Am I doing it to protect myself? Am I doing to protect my self-image? Am I doing to protect my business, which is actually an extension of my self-image? Or, am I doing it for the good of the people? More often than not it is never for the good of the people.

We have, thus, seen that West and Hindu points of view broadly converge on the basics of Dharma – the Ethics and the Morality. They also do take cognizance of the reality that ethics or morality is not the absolute – they manifest in light of the then socio-economic-cultural milieu in which the human being lives.

When we look at the literature on the values that shape the ethics and morals, we do find a subtle difference in the approaches of the West and the East. For the present, that is beyond the scope of our discussion. However, both ideologies do converge and agree that it is the value system that drives the (ethical and moral) behavior.

In our next session, we will take up the logical extension of the topic – Relationship between the owner and the organization – in the second segment of the Third Episode of Devdutt Pattanaik’s TV serial Business Sutra

Note: The images used in this post are the irrevocable property of their respective creator. They have been taken up courtesy the internet, so as to illustrate the point under discussion.

Business Sutra |2.3 | Leadership in different Business Cycles

Business Sutra |2| Leadership

In the first episode of the TV serial on CNBC 18, spread over three segments, Devdutt Pattanaik presented to us the most visible form of the business – the corporation : its meaning, its purpose and its action perspective.

In the second episode Devdutt Pattanaik discusses Leadership. The first segment of the second episode dealt with the role of the leader and the second segment what impact the context has on the leaders. The third segment looks at the context in the light of different business cycles.

Business Sutra |2.3 | Leadership in different Business Cycles

Allison McSparron-Edwards, founder and managing director of Consultrix analyzes Business lifecycles and the need for different leaders at different times. It may seem fairly obvious but as companies grow they appear to follow a corporate life cycle including Creation, Growth, Maturity, Turnaround and Decline. [Kimberley, J. R., Miles, R. 1980, and associates The Organisational Lifecycle: Issues in the Creation, Transformation, and Decline of Organisations. San Francisco: Jossey-Bass.]…In tandem, it appears that, in order to be successful in each stage, companies need to employ different types of leaders including Creators, Accelerators, Sustainers, Transformers and Terminators. [Ward, A., The Leadership Lifecycle: Matching leaders to evolving organizations. Ebbw Vale: Palgrave MacMillan]

A Ward’s book – The Leadership Lifecycle – presents a model of the leadership process that identifies which factors create an effective leader at different points in the organisation’s lifecycle and which forces act as moderators to that effectiveness. The dimension of how the dynamics of leadership play out over time is what distinguishes this work from previous books on leadership.

So here is your challenge: Do you know whether your leadership behaviors suit your company’s growth cycle?

The Business Lifecycle & The 5 Phases of Leadership :

Phase 1: Innovation

During the startup phase, the leader is very single-minded and highly driven. Their enthusiasm and energy alone is enough to inspire others to shared greatness.

Phase 2: Entrepreneurial

Due to limited resources and a lack of deeper understanding, entrepreneurial leaders tend to surround themselves with followers and, sometimes, subservient players who are not necessarily leaders. A “my way or the highway” attitude could lead the business down the wrong road.

Phase 3: Managerial

The transition from entrepreneur to manager is very challenging. The entrepreneur tends to be a high energy, powerful, dominant, controlling leader. The entrepreneur also dislikes process and procedure. If we don’t transition to a managerial leader, the business will have a ceiling on its growth and potential. New team leaders may put ideas into play that don’t mesh with the original company vision. Getting On Purpose will ensure the business is not sacrificing passion for process, while ensuring a fluid transition of vision to the leadership team.

Phase 4: Administrative

While the administrative phase is generally successful from a business perspective, the success is unsustainable because the company can lose the On Purpose vision. Leadership must be vigilant and strive to allow innovation while constantly resisting the devolution/transition into the “Bureaucratic Phase”.

Phase 5: Bureaucratic

Unchecked, politics and bureaucracy become the accepted cultural norm, with a culture that operates on rules and guidelines. Strong, determined change through On Purpose coaching strategies can re-vitalize leadership, empower the team and bring the company back into the entrepreneurial, maturity or administrative phase.

Leadership Style and the Organization Life Cycle is a research paper and was executed to explore and test the belief that a transition of organization life cycle has a relationship to leadership style

Business Lifecycle and Leadership Fit By Eric Hansen

Leadership Style Lifecycle: Choose the Right Leadership Style for the Right Environment Rod King, Ph.D., AUTHOR of “Business Model Canvas: A Good Tool With Bad Instructions?“; CONSULTANT on Business Model Hacking (BMH):

In 6 Leadership Styles, And When You Should Use Them Robyn Benincasa notes that great leaders choose their leadership style like a golfer chooses his or her club, with a calculated analysis of the matter at hand, the end goal, and the best tool for the job. Here are the six leadership styles Daniel Goleman’s study that his Leadership That Gets Results  uncovered among the managers he studied, as well as a brief analysis of the effects of each style on the corporate climate:

If you take two cups of authoritative leadership, one cup of democratic, coaching, and affiliative leadership, and a dash of pacesetting and coercive leadership “to taste,” and you lead based on need in a way that elevates and inspires your team, you’ve got an excellent recipe for long-term leadership success with every team in your life.

Robyn Benincasa is a two-time Adventure Racing World Champion, two-time Guinness World Record distance kayaker, a full-time firefighter, and author of the new book, HOW WINNING WORKS: 8 Essential Leadership Lessons from the Toughest Teams on Earth, from which this article is excerpted. (Harlequin Nonfiction, June 2012)

Leadership and Life Cycles: Barbarians to Bureaucrats is an edited (20min) presentation on corporate life cycles and leadership styles by Lawrence M. Miller.

Now, let us look at what Devdutt Pattanaik has to say on the subject in the Segment 3: Leadership in different Business Cycles

Why is success so individualistic when we talk about in the context of business? Of course, in successful companies we almost always connect them to one overwhelmingly successful individual. Almost everything about the success of leadership connects to that leader. We rarely praise the board of Apple but Steve Jobs is God. Similarly for Microsoft Bill Gates is God and for Reliance Industries Dhirubhai Ambani is a legend for what he has achieved. Why is success so individualistic when everything in mythology seems to be talking about the community, the other, the outside.

Everything in Indian Mythology talks about other, the outside. The Western mythology is a complex combination between Greek ideas and biblical ideas. In the biblical idea there is God and there is a prophet. The Prophet brings the rules of God to man and we have to align to the rules. The prophet is subject to these rules. He is not independent of the rules. He is not creator of these rules. He is subject to these rules. The Greek model is very different. In the Greek model the hero is someone who challenges the gods, who fights the gods and who triumphs despite the gods.

Now when we use the word leader today in common parlance, these words have come from the Western context. When they are using the word leader they refer to the heroes of Greek mythology who challenge the gods, that is the status quo, who challenge the establishment and innovate and create something new breakthrough. Today there is the Hercules of modern times. Hercules is always alone. Have you seen him with family or Theseus or Jason?  None of them are with family. All of them are individuals. Some of them are kings but you never hear about the kingdom. You only know about their great adventures. All our leadership books that we have are basically Greek heroes.

When we are that individualistically oriented and if the board is not as responsible, as revered, then the Board is always going to come second to the individual leaders. If the Board always comes second to the individual leader, then let us go back to the conversation we had in the very first episode – how is the board ever going to be able to stand up to that leader.

This is the Great Western conflict – the individual versus the community.

In the Indian context how do you apply this concept?

It is not achievement which makes Ram worthy of worship; it is sacrifice that makes him worthy of worship. So I would actually argue a leader has to begin as Parshuram, then become Ram and then evolve into Krishna. Unfortunately many have to become Buddha or Kalki depending on the situation. These are the avatars Parshuram is rule-follower, he is like this very strict teacher who punishes you if you break the rules.  Then he becomes the model leader, Ram, who hopes that by being a model of sacrifice the people will understand the meaning of sacrifice. Because the whole kingdom is watching this great king serving them, making sacrifice in his own personal journey.

He leads by example.

He eventually becomes Krishna. Krishna is the ultimate coach, he is coaching and creating new talent and hoping that the Pandavas will become like Ram. They don’t.  They gamble away their own Kingdom thinking that Kingdom is property. So he has to put them through a great period of exile in the forest and sort of repair the damage and get them back on the trail. There is a lot of bloodshed which happens. So he is coaching them and finally becomes Buddha who switches off.  Or, he becomes Kalki who just breaks the system completely because it is not worth upholding.

So either you withdraw if it is worth sustaining or you destroy because it’s not worth maintaining anymore.

So it is a very beautiful narrative which is in a way saying the evolution of leadership. It is not becoming one style it is context driven. In the early phases, Parshuram, in the perfect phase Ram then become Krishna – create talent move out, go away. The world will continue without you it has been continuing without you.

If it does not continue it will self-implode. Leave it. Detach.

We thus observe that both, Western and the Indian view of leadership styles evolve in terms of the context.

In our next session next month, we will take up Segment 1 of Third episode – Dharma Sankat (Ethical Dilemmas) – of Devdutt Pattanaik’s TV serial Business Sutra viz. Dharma and Dharma Sankat (Ability to grow beyond animal instincts and Ethical dilemmas)

Note: The images used in this post are the irrevocable property of their respective creator. They have been taken up courtesy the internet, so as to illustrate the point under discussion.

Business Sutra |2.2 | Context of Leaders

Business Sutra |2| Leadership

In the first episode of the TV serial on CNBC 18, spread over three segments, Devdutt Pattanaik presented to us the most visible form of the business – the corporation : its meaning, its purpose and its action perspective.

In the second episode Devdutt Pattanaik discusses Leadership. The first segment of the second episode dealt with the role of the leader. In the present, second segment, what impact does the context have on the leaders.

Business Sutra |2.2 | Context of Leaders

Team Activ8 in its blogpost 4 leadership “weapons” used by great leaders states that ‘good business leaders display many traits but there are 4 leadership “weapons” used by great leaders:

  1. They use their “business binoculars” to provide CONTEXT
  2. They instill VALUES using their “moral compass”.
  3. They build TRUST with their “business shield”.
  4. They encourage MOMENTUM with their “business rocket booster”.

This gives us one dimension of the context of leaders wherein the leader sets the direction for the organization. Neither the leader nor the context impacts each other. Leader sets the sail w.r.t. to the given context.

In The Leadership Paradox, Jim Selman adds one more perspective.  He states that leadership is inherently paradoxical in that it is inclusive of both the individual and the group or team or community. If this is so, then leadership is a context, a powerful opening for innovation and something new to emerge. From this perspective, leadership isn’t about process, or technique, or some set of skills beyond the capacity to be authentic and committed to a possibility larger than oneself.
Leadership from this perspective is the ability to operate within the present and appreciate the larger context: that results and possibilities grow not from our individual choices only but from the power and contributions of those we lead.

Tony Mayo states that Context-based leadership manifests when environmental factors and individual action come together. And “come together” is the most important part…..The environmental factors create a specific and sometimes unique context for business. Within this contextual framework, some individuals envisioned new enterprises or new products and services, while others saw opportunities for maximizing or optimizing existing businesses, and still others found opportunities through reinvention or recreation of companies or technologies that were considered stagnant or declining….. In other words, it can be construed to reflect awareness of and ability to adapt to the contextual intelligence…..The ability to succeed in multiple contexts is based on what Warren Bennis and Robert Thomas in Geeks & Geezers called adaptive capacity — the ability to change one’s style and approach to fit the culture, context, or condition of an organization. Success in the twenty-first century will require leaders to pay attention to the evolving context.

That brings us to the theme of Victor H Vroom and Arthur G Jago’s paper:  The Role of the Situation in Leadership – Leadership depends on the situation. Few social scientists would dispute the validity of this statement. Three distinct roles that situational variables play in the leadership process are:

  1. Organizational effectiveness (often taken to be an indication of its leadership) is affected by situational factors not under leader control.
  2. Situations shape how leaders behave.
  3. Situations influence the consequences of leader behavior.

Looking at behavior in specific classes of situations rather than averaging across situations is more consistent with contemporary research on personality and more conducive to valid generalizations about effective leadership. If . . . then . . . relationships are not only at the core of attempts to understand what people do but are also the basis for attempts to understand what leaders should do.

In What the Best Leaders Know: Context Matters, John Kamensky sees ‘the traditional leader is seen as a charismatic hero, a lone figure, towering above the rest.  These are seen more in the military or business worlds – General George Patton, auto executive Lee Iaccoco, computer guru Steve Jobs.  But in reality, the success of a leader depends on the context or environment, in which they work – the deck they’ve been dealt….Today, new forms of shared leadership are evolving – where a leader serves as a visionary, a broker, a convener, a mediator.  And occasionally is recognized as a hero!  

In an in-depth study, Leadership in Context, Michael Bazigos, Chris Gagnon, and Bill Schaninger note that ‘even the best scripts can ring hollow in the wrong settings. (Their) research suggests that the most effective leadership behavior reflects the state of a company’s organizational health. Top-management teams that are serious about developing vibrant businesses and effective leaders must be prepared to look inward, assess the organization’s health objectively, and ask themselves frankly whether their leadership behavior is strong enough in the ways that matter most at the time. This question has implications not just for developing but also for assessing a company’s leaders. However much an executive may seem to have a leadership “it” factor, the organization’s health, not the claims of individuals, should come first when companies determine which kinds of behavior will be most effective for them. In short, they should spotlight different sets of actions in different situations. Fortunately for aspiring leaders, they don’t have to do everything at once.

Reams and reams of literature have been published on the subject of The Context of Leadership. Within the limitations of only one post on the subject, we have set up the stage for enlisting some of the articles and papers to know what the current Western thinking is on the subject.

In Leadership in Context, Kim Turnbull James sets the tone for the future. He states – the leadership literature has begun to identify that if leadership is to meet the organisational requirements of organisations with complex bureaucracies, with multiple stakeholders, multiple professional practices, politics (with small and big ‘p’), working across boundaries within and across organisations, then hoping for a few, or even a whole raft of individuals who can influence deep into an organisation will be insufficient. In addition to good strategic leadership from the top, leadership must be exercised throughout an organisation. Identifying individuals who have leader potential is not the (only) solution. Leadership development ‘in context’ does not just mean individual leadership development adapted to a specific locale, but means people from that locale coming together to learn to lead together and to address real challenges together.

Now, let us look at what Devdutt Pattanaik has to say on the subject in the Segment 2: Context of leaders: jaisa yug, vaisa avatar

Do various incarnations of Vishnu represent leadership at different stages of a corporation’s life cycle?

Before go into reply to the question of different incarnations, we need to understand Vishnu. Mythology is a method of communication of ideas through form. Let us look at image of Vishnu. Vishnu manages the world. He holds a conch with which he communicates with the people. He has a wheel on the other side. He also has a mace and a lotus flower, called Padma. The wheel in his hand is for review. Lotus flower is for appreciation whereas mace is for maintaining the discipline.

In a way this image represents ideal traits of leadership. We do not see any rule book here, but if he has to set the discipline, rules of reference are needed.

However rules exist in a given context only. Rules can thus be interpreted differently, but have to be interpreted with reference to a fixed principle. The concept of context is explained in mythology using the age (Yuga). Human cycle of life has four parts. There is childhood when we learn, then youth when we mature, then old age that represents systems slowing down and then comes death.

In many ways, this represents the phases that a corporation also undergoes. Each of the Age will have different set of rules based on a common principle called Dharma(loosely translated a Faith of morality). Dharma is a principle, not a code of conduct and certainly not religion. So you have to understand the principle of Dharma and then you have to understand the concept of The Age, and then the Incarnation in each of these. Each one is upholding Dharma but following very different rules. For example you have Ram who is monogamous, faithful to one wife and you have Krishna, lover of beautiful, many women. How do you reconcile the two who both are Gods and both are upholding the Dharma. For Parashuram, there is no wife around in his life.

So we have three gods and each has a different rule. In other words, there an overarching principle: different kind of leadership is required in different phases of the life cycle of an organization, but all are abiding one Principle.

All these are equal, they just represent different phases and different styles of leadership, then why is one greater than the rest? For instance, every time we talk of a perfect society we call it Ramrajya. It is supposed to be heaven on earth. There are many other leaders, there are many other gods, then why is Ram revered so much more than the rest?

Remember that’s the only form of God which is visualized as a king. Krishna is not King he’s a kingmaker. You worship Krishna as a cowherd and a charioteer not as a king. Ram is only deity of all the deities in India who has so many temples in India. He is only one deity who  was visualized as a king. He is the only one king who’s worshipped.

But it can’t be his position that draws the faithful. The fact is that being the king is not instrumental in why he is so visual. What is different?

Difference is in his role. Krishna is Vishnu but so is he the cowherd or the charioteer.

Why so much emphasis on the kingliness of Ram?

Because he is doing what a king is supposed to do; he’s living the life of as what a king is supposed to be. That is what Ram is associated with. And, what is that supposed to be? He is living for the people, to the point that when given a choice between an honest and faithful wife and cruel, unjust, unfair subjects, the King takes a decision to choose his cruel subjects and rejects his faithful wife. It’s the classic conflict between personal life and professional life. He chooses the professional life over the personal life. He sacrifices.

But he sacrifices the professional life for the good of the people not the professional life for his own personal advancement in the profession.

If you look at our legends, not mythology, people who have sacrificed their children are put on a higher pedestal, because we know how impossible that is.

So Ram Rajya is almost the attainment of the impossible, because it is about sacrificing what your love for your dearest, and chooses to love others.

We thus observe that both, Western and the Indian view of role of leadership are driven by the context. In so far as the leader does what the context has demanded to do in terms of the dictates of the fundamental principle(s), of is caring for others, first , he has done justice to his role of befitting the Leader.

In our next session next month, we will take up segment 3 of second episode – Leadership – of Devdutt Pattanaik’s TV serial Business Sutra viz. Leadership in different Business Cycles

Note: The images used in this post are the irrevocable property of their respective creator. They have been taken up courtesy the internet, so as to illustrate the point under discussion.