MORALS IN MANAGEMENT
June 1999
Leading Indian business houses are witnessing a resurgence of values and ethics that may, in the long run, help turn the tide of recession.
The intimation was as startling as a midnight telephone call. On a Friday morning, all the managers at Wipro Infotech and Wipro Systems in Bangalore, India, had a crisp communication awaiting them at their office desks: Aziz Premji, chairman of both the companies, was flying down to Bangalore to meet them that evening.
The meeting began at 4.30 p.m. sharp. The chairman’s opening gambit was candid. He said the matter on which he wished to speak was simple, therefore he did not wish to take up too much of the managers’ time. However, the subject was important, therefore he thought it fit to talk to all of them directly.
A senior general manager of the company was leaving, because he had inflated a travel bill. The amount involved was not huge. Nor was the general manager’s contribution to the organization insignificant. And yet, he was leaving because of one act of misdemeanor. It was a question of principle, of values. Premji said he was coming clean with the truth because he didn’t want any rumors doing the rounds about the general manager’s departure. The Chairman further clarified that the organization would come down with an equally heavy hand on anyone who sought to belittle the individual.
In an economy bedeviled by a slowdown, the market capitalization of Wipro places it among the top companies in the Indian corporate sector. Yet, to succeed in these hard times, Premji did not cut corners or discover ingenious shortcuts. On the contrary, he always had the image of being highly principled with an unbending adherence to personal and business values.
Your personal survival in a business enterprise today depends on whether you have contributed something tangible to the bottomline. Profit or perish—that is the motto. And yet, ethical values are receiving paramount importance in business discourse today more than ever before. Never mind the cash crunch.
If Premji has become conspicuous for his steadfast adherence to values, former Eicher Goodearth chairman Vikram Lal is even more of a stickler for ethics. In fact, Lal’s present sobriquet of a ‘former chairman’ bears testimony to his commitment to personal principles. Unlike a generation of industrialists who see no difference between ownership and management, Lal’s immediate family has no representation in the board of directors of any of the companies of the Eicher Group. Instead, Lal initiated a system of professional management. Once he was sure the system was in place, he opted out of the board.
It is also a matter of record that once Lal had allowed a protracted strike in one of the Eicher factories following the dismissal of a worker. Why was the worker sacked? He had committed the unpardonable crime of fudging a bill: he had overwritten an amount of Rs 13 as Rs 18. In any other company, the situation would have been the other way round. The factory manager responsible for loss of production due to such a flimsy reason would have probably got the pink slip. But for Lal, it was a question of not budging even slightly from certain basic values.
That was not all. Despite having been the chairman of a corporate group that was certainly in the big league during the ’80s, Lal was the epitome of simplicity. Senior executives of the Eicher group, driving to office in sleek limousines, were often taken aback by the sight of their chairman sitting on the pavement and changing a flat tire. If an executive stopped and offered to help, Lal would, without a tinge of affectation, request the executive to go ahead.
The question inevitably arises: how can an honest man survive in an increasingly corrupt society? Does not the system itself force you to be corrupt? Barely a few years ago, a few critical imported consignments for Wipro Infotech were waiting for clearance at Mumbai port on the eve of the Indian budget presentation. It was widely believed that duty rates on the items that Wipro was importing would go up in the budget. Regardless of whether the higher duty rates would be retrospectively applicable to already landed items or not, the customs guys thought they could tempt Wipro officers with the lure of speedily clearing the consignments in exchange for a small consideration.
The company officials did flirt with the idea, but they had to seek the permission of their bosses. Because of the irregularity of the transactions involved, the matter had to go right up to the chairman. Premji‘s stand was clear: ‘Go and plead with the customs officials unfailingly every day to speed up clearance of our imported consignments purely in the normal course. Do not part with a single rupee. If your efforts do not succeed, do not lose heart. If at the end we have to pay a much higher duty, never mind. We will pay. But make diligent efforts to clear our consignments only in the normal course.’
The customary corporate course of action in similar circumstances would have been precisely the opposite. Do whatever it takes, bargain and settle for a reasonable amount, preferably see what other companies are doing, and get the consignments out post haste.
However, it is these ethical exceptions that are increasingly becoming the rule. N.R. Narayana Murthy, the chairman of Infosys Technologies, the company with the largest market capitalization today, does not lounge in a Lexus or breeze through in a BMW to work. His office in Bangalore does not have an airconditioner. Murthy may have the vision and the drive to make it happen, but he does not know driving. So, on Saturdays, when his driver takes his weekly off, his wife drives him to the bus stop from where the venerable chairman boards the Infosys bus to work.
At the end of the millennium, we are back to basics. Even as society appears to be getting increasingly corrupt and criminal, many are beginning to realize that you cannot aspire to create value without deeply cherishing a sense of values. To add a lot of interest to your principal, you need to stick to your principles. To sustain your competitive advantage in an increasingly corporate world, you need character. Morals are more important than money, materials, marketing and management.