Eternal Indian Wisdom in Contemporary Management Practices

Kautilya Arthashaastra, 1.3.17

“Therefore, among whom the bounds of the Aryan rule are fixed….and who are guarded by (the knowledge) of the three Vedas, prosper, do not perish”.

The Arthashaastra is a scientific treatise on Behavioral Economics and Governance. Before this Sutra, the Chapter lists out the rules for the constituents of society:  corresponding to the four varnas (categories of socio-economic pursuit) and the four Aashrams (chronological stages of life) as also those rules, which are common to all. Further it clearly states that the Leader (i.e. a king in those times) has the duty to ensure and enable the social structure for the above rules.  As an outcome of strict compliance of this framework, livelihood first and thereafter. Therefore, prosperity of society, is but natural. This principle can be adapted to modern organizations to bring in ideal Governance!

The Modern Management Concept – Corporate Governance

 In the late 1990s and thereafter, Corporate Governance, as a concept/ practice became vital for the Business world, mooting “more demanding standards of behavior” for Leadership of companies. This amongst other things, was especially required in case of Executive Pay (for instance, regulating inordinate CEO pay) and board disclosures (like restraining excessive usage of perks and other benefits) – as the outbreak of Corporate scandals in that decade and beyond, exposed the deep malaise in a significant number of large global organizations. Corporate Governance demands higher responsibility (and also prevent abuse of power) of the organization and its board members, leaders, etc towards all its stakeholders – i.e. Employees, shareholders, investors, customers and society in general, especially laying down the principles for the ethical use of its wealth.

The idea articulated by a renowned practitioner

Gandhi ji had declared “I must confess I do not draw a sharp or any distinction between economics and ethics. That economics is untrue, which ignores or disregards moral values. The economic constitution of India, and for that matter, the world, should be such that no one under it should suffer from want of food or clothing. In other words, everybody should be able to get sufficient work to enable him to make two ends meet!” (The Mind of Mahatma Gandhi)

At first, these beliefs may sound impractical, but a deeper understanding will reveal that this is the primary responsibility of organizations, and society at large.

Maha Upanishad: Chapter 6, Verse 72,

“One is my brother and the other is not – is the thinking of a narrow-minded person. For those who are broad-minded, the entire world is one family.”

The Modern Management Concept: DEI

DEI is considered as a Business imperative by global organizations today. Diversity training first started in the 1960s in the US, as a way to combat the lingering racial tensions between black, brown, and white people as a result of the civil rights movement. The hope was that diversity education would give a voice to those previously silenced. Thereafter, Diversity data began as a way to communicate the racial composition of companies and later expanded to gender identity, sexual orientation, political affiliation, and other identifiers. In Timothy Clark’s The Four Stages of Psychological Safety, he shows that Inclusion Safety, or “species-based acceptance,” is indeed the first and arguably most crucial stage to creating a community in which its members feel safe and valued.. Inclusion introduced the idea that the value of humans should not be judged by what we can offer, but rather by the idea that humans have inherent value. In recent years, Diversity and Inclusion initiatives are bolstered by the addition of the concept of “Equity.” Unlike equality, which focuses on providing equal resources regardless of context, equity focuses on the process of just and fair consideration because of someone’s experience or social position.

 The idea articulated by a renowned practitioner

 Nelson Mandela, the Human Rights leader and former President of South Africa said – “It is not our diversity which divides us; it is not our ethnicity, or religion or culture that divides us. Since we have achieved our freedom, there can only be one division amongst us: between those who cherish democracy and those who do not.”

Nelson Mandela’s legacy is of acceptance, understanding, tolerance, and love, which are the foundational values of DEI. DEI goes beyond discussions of race and gender numbers, “business cases,” and “creating organizational value.” This work is meant to teach people, and develop within ourselves the ability to recognize, accept, and understand those things, outside of the comfort zone of what we know, feel, and believe.

 Hitopadesh: 1.3.71, Panchatantra: 5.3.37

“This is one of my own and that is a stranger” – such is the calculation of the narrow-minded; for the magnanimous, the entire world is (but a) family”

Upanishads are over 5000 years old. The above principles are the bedrock of any appreciation of inclusion and equity on this planet. It includes not just humans, but all our fellow beings as well. As is suggested in the Sutras, identifying with other beings as our own, or otherwise, originate in the mind. They are beliefs, which guide our living. We are all made of the same five elements – therefore, we must accept each other as co-inhabitators of the planet. Thus, its evident that everything else is just a label – gender, sexual orientation, ability/ disability, region, age, financial status, religion, social standing, title and so on. Having understood this, it is easier to cultivate productive environments where we can disagree, and still be able to reconcile our differences and grow together!                    

(Hitopadesh: 1.155), (Chanakya Neeti 7.14)

“Wealth earned has to be expended to keep it in circulation; giving it is the best way to preserve it; (just like) the water of the tank is retained fresh by the system of circulating it (through inflow and outflow)!”

The concept of social responsibility is very old in Indian wisdom and in stark contrast to much of the modern beliefs, it is the foundation of living itself. The practice of contribution to employees, their families and society is not contingent on organizational profits or individual affluences. Rather, as the above quote highlights, circulation is the sign of life and freshness too. Everything that is to be gained must be planned for investing back in the eco system from which it came. This in turn, creates a smooth and natural flow, back to the organization. As can be seen, this is the law of nature – air and water have to circulate in nature for sustenance, the human body is a system of circulation of vital airs and fluids, the universe is in constant flow. So wisdom lies in facilitating the flow of resources – that is the responsibility of corporations.

The Modern Management Concept: Corporate Social Responsibility

 Corporate Social Responsibility is a hard edged business decision – the commonest definition being provided by World Business Council for Sustainable Development – the continuing commitment by business to behave ethically and contribute to economic development, while improving the quality of life of the workforce, their families, as well as the local community and society at large. It is about the responsibility of organizations, and their Leadership, to manage business processes in a way, which will generate a positive impact on society. In fact, the Economist has published a two by two matrix, which showed that if CSR produced a win-win increase in social welfare and profits at the same time, then it was “simply good Management”. Law in many countries has mandated that organizations contribute a small portion of their profits to various causes of social welfare, as part of this CSR.

 The idea articulated by a renowned practitioner

 Gandhiji said: I am inviting those people who consider themselves as owners today to act as trustees…

Supposing I have come by a fair amount of wealth – either by way of legacy, or by means of trade and industry – I must know that all the wealth does not belong to me. What belongs to me is the right to an honourable livelihood – not better than enjoyed by millions of others. The rest of my wealth belongs to the community and must be used for the welfare of the community.

Idealistic as it may seem, it is in the benefit of the society to which organizations owe their genesis.