Posts Tagged ‘WEF’
Combating the Cancer of Corruption
Posted in Management Lessons, tagged Bajaj Auto, Elaine Dezenski, Genpact, Godrej, India Inc, Infosys, Leadership, linkedin, M&M, Moral Compass, PACI, Ratan Tata, The Tata Group, UN, UN Convention Against Corruption, WEF, Wipro on April 14, 2013| 1 Comment »
Even though quite a few business houses from India had joined the World Economic Forum’s Initiative against Corruption in November 2012, not a single Indian company has so far become a signatory to the UN Convention against Corruption. This is deeply regrettable and projects the image of a corrupt business environment in India. It discourages foreign investments and erodes the brand value of Indian companies. In the absence of a level playing field, businesses shy away from potential opportunities. Mr. Ratan Tata’s lament on not having able to enter the field of aviation quite some time back is still fresh in our minds.
Companies can never be faulted for hiring Vice Presidents who are highly virtuous, law abiding and disciplined souls. Understandably, only those who follow high ethical standards and are in sync with the core values of the company would make the grade. However, in quite a few organizations, such qualities are merely necessary but not sufficient. When it comes to handling external agencies, incumbents who can either bend a few rules or interpret the fine print of law creatively to add to the bottom line of the company alone would be rated high and viewed with awe and reverence.
The Dr. Jekyll and Mr. Hyde Scenario
In other words, VPs should not only be ‘Virtue’ Presidents, but should also possess the flexibility of doubling up as ‘Vice’ Presidents while dealing with liaison matters. This stems from the core belief that businesses cannot be run successfully without back-stage dealing and wheeling, obviously with the aid of what many would euphemistically refer to as ‘appeasement initiatives’.
Appeasement of any kind is invariably geared towards either tweaking government policy to suit the ends of business, as also for specific time bound gains in the forms of large contracts, largesse, concessions and indirect favors. Organizations believe that advance knowledge of government plans, policies and rules is a great tool to deliver results to shareholders who not only look for long-term capital gains but also for better results quarter after quarter.
Sleeping with the enemy
If a professional gets stuck with an assignment which involves corrupt practices which do not match his or her personal core values, one option would be to escalate the issue. This would ensure that the matter is reviewed at a higher level in the organization.
If this option turns out to be impractical for some reasons – whether professional or personal – another one would be to start actively searching for career options with companies which value ethical practices in business!
A much better option, however, could be to work for a change from within the organization. This could be done either by presenting alternative business plans to management or by recommending an approach whereby the company could sidestep the issue by projecting its innate strengths in an aggressive manner. Let us consider some of the tactics in a professional’s arsenal which could be used to combat corruption in business deals.
Tackling Business Competition in the Market Place
The best strategy for a business to have is one which is based on avoiding government doles and concessions. By focusing on core competence and by fighting out the competition in the market place, the business can reduce its dependence on a wide section of the government policies. Surely this calls for rare qualities of leadership, statesmanship and openness. Inviting the government to play favorites and to resolve competitive business issues that are better dealt with in the market place could be a boon as well as a bane. However, this may not be possible in industries which are highly regulated.
Operating in an Unethical Environment
If one has absolutely no other option but to operate in an unethical business environment, the following steps might help to avoid corrupt practices.
- Building trust: An honest and humble approach, backed by a long relationship built on explaining the contribution of business can and does work. Investments made, employment opportunities offered and revenue generated are a few of the things that can be leveraged to secure favorable decisions without indulging in corruption.
- Reputation travels ahead: The fact that a business house does not stoop down to corrupt practice is generally well-known. It is a strategic advantage to have a squeaky clean image which ensures that a request from such an outfit is treated with the respect it deserves.
- Investing in underground cables: It never pays to flaunt one’s relationships. By keeping them underground, one not only wards off competition but also ensures that in case of a change of regime, the damage is minimal.
- Diversifying one’s liaison ‘assets’: One learns to be friendly with political opponents. In TN, one needs to be friendly with both the Dravidian parties. In WB, it is tough even if both CPM and TMC are one’s friends. In Maharashtra, Congress, NCP and both the variants of Sena must all like one for one’s business to make some headway. Business history teaches us the same lesson. In the pre-independence era, Tatas were funding Gokhale and engaging with the nationalist elements while British officers retired from ICS were being employed by the group. JRD had excellent personal rapport with Nehru. G D Birla had been corresponding with Winston Churchill for a long time. Churchill’s dislike for Mahatma Gandhi was well-known; even though he was being supported by Birlas. They gave a job to one of his sons. It is a fact that he was assassinated while staying as a guest at Birla House in Delhi.
- Be courteous, humble but firm: Most government officers take a dim view of business executives. Firstly, they are not viewed as being dependable. Secondly, they are thought to be paid exorbitantly high and generate a feeling of awe as well as jealousy in a public servant. Now, if one walks in with one’s latest cell phone and/or tablet in his office and starts showing off the latest Rolex watch, one would be surely shown the door promptly.
Setting the Moral Compass Right
The UN Convention against Corruption is a laudable initiative and deserves to be given a serious thought by our present day business leaders. It binds an organization to (a) reducing corruption risk in procurement and contracts, (b) engaging in competitive and transparent procurement processes and (c) disclosing all payments made in procurement deals. The global panel already has names such as Coca-Cola, Microsoft, Siemens and Accenture.
It is not that India does not have shining examples of groups which have demonstrated the strategic advantage of pursuing business goals while staying the ethical course. The Tata group has been at it for the past 120 years or so. Liberalization of the economy appears to have thrown up quite a few scams, but companies like Infosys keep our hopes alive. As per Elaine Dezenski, senior director at WEF and the head of PACI, Infosys, Godrej Industries, Bajaj Auto, Genpact, Wipro and M&M are already signatories to the initiative.
As argued in an earlier blog (Getting a Moral Compass Would be a Sound Business Strategy for India Inc, published on December 9, 2012), companies in India would do well to seize the opportunity to clean up their business deals. A beginning can be made by persuading major political parties to make their funding transparent. Those in real estate business can come out with a time bound plan to rationalize stamp duties all across India, thereby making their deals more transparent.
Hopefully, progressive companies in India would see the strategic benefits of committing themselves to such initiatives soon enough!
WHY I ADMIRE EUROPE!
Posted in The European Diaries, tagged CERN, EU, Euro, IMF, IPR, Nobel Prize, Patent Regime, Schengen, UN, WEF, WTO on February 27, 2013| 1 Comment »
When I say I admire Europe, I am not referring to the natural beauty it has on offer, right from the fjords in Norway to the Alps straddling Switzerland. Nor am I talking about the excellent civic infrastructure it has built up, backed by a deeply ingrained civic sense amongst a vast majority of its inhabitants.
I believe that Europe happens to be a great crucible of experimentation in the area of global governance, already practicing models which are likely to shape up the way humanity would control its global affairs in the times to come. Also, over the past few centuries, it has played a crucial role in a renaissance of sorts in the field of science and technology. It has done so by assimilating, enriching and disseminating major breakthroughs in science, making it accessible to the whole of humanity.
The European Union
The EU is an interesting organization. Of its 27 members, 22 have abolished passport controls under the Schengen pact. Only 17 share a common currency. They have a common market and work towards free movement of goods, services, capital and people and a common security policy. People cross over to Germany, splurge on goods there, claim a refund of excess VAT paid and drive back into Switzerland. There are a plethora of bureaucratic bodies which govern various aspects of a citizen’s life, while maintaining a distinct regional identity of their own. The continent also has nation-states like Luxemburg and Vatican City.
Recently, EU won the Nobel Peace Prize, indicating the potential an association of diverse nations has. Asia is already taking some baby steps towards aggregation, and one hopes a similar arrangement would pave the way for cessation of hostilities and for disabling the man-made borders in not so distant a future.
A Living Laboratory of the World
The future is the model of transnational cooperation that EU represents. Globalization is a process that enhances interdependence across the world. For such interdependence to produce in welfare but not chaos and frustration, the world needs governance structures that mediate this interdependence. As to how, guidance comes from EU’s myriad bureaucracies, apart from accepted transnational bodies such as the UN, the IMF and the WTO. Then we have the WEF, contributing to the thought processes aimed at improving governance globally.
Enriching Knowledge
In fact, scientists and thinkers in Europe borrowed key concepts from other civilizations of yore, built upon the same, and refined the way we look at the universe today.
The mathematical foundation of Western science is a gift from the Indians, Chinese, Arabs, Babylonians and the Mayans. Planetary astronomy also began with the Indians, developed further by the Chinese. Arabs built the first observatories. Five thousand years ago, the Sumerians said the earth was circular. In the sixth century, a Hindu astronomer established the reasons for the rising and setting of the sun.
Chinese alchemists realized that most physical substances were merely combinations of other substances, which could be mixed in different proportions. Islamic scholars are legendary for translating scientific texts of many languages into Arabic. Iron suspension bridges came from Kashmir, paper making from China, Tibet, India and Baghdad and printing from India, the Quechan Indians of Peru were the first to vulcanize rubber; Andean farmers were the first to freeze-dry potatoes.
European explorers depended heavily on Indian and Filipino shipbuilders, and collected sea-charts from Javanese and Arab merchants. The Mayans invented zero about the same time as the Indians, and practised a math and astronomy far beyond that of medieval Europe. Native Americans built pyramids and other structures which were larger than anything then in Europe.
Preserving and Propagating Knowledge
Europe has had a successful brush with Renaissance, which also covered the entire gamut of art and culture. State of art centers of learning came up, accompanied by libraries and research outfits. CERN is the latest feather in its cap. Above all, a patent regime got introduced. As someone who has dealt with intellectual property registrations the world over, in Europe I invariably dealt with a robust system of trademark laws. Most other countries have designed their own patent regimes based on the European system. This made our technical and scientific advances publically available, thereby ensuring that knowledge was not lost to humanity for posterity, like it happened in India where it got confined to limited circles.
Mighty Challenges Ahead
It would be naïve to believe that all is hunky-dory on the European front. Protectionism appears to be on the upswing. Whether it is immigration, transnational trade or environment, contentious issues are getting addressed only with restrictive policies. In quite a few countries – like in Greece, Italy, France, Spain, Austria and Denmark – right-wing sentiments appear to be on the rise. There is a clear tendency to discourage immigration, thereby accusing ‘outsiders’ of pinching jobs and being a ‘drain’ on the resources. UK is already at loggerheads with Romania and Bulgaria, and the issue may well land up at the doorstep of the European Commission.
The Euro’s roller coaster ride is another area of concern. Experts point out that for its long-term survival, a fiscal and banking union would be essential. However, without a more effective political union, this would not be possible. There could be two scenarios resulting into a heightened state of political engagement in the continent – either a visionary leadership with a statesman-like approach to problem solving, or a super-ordinate threat of some kind. As a well-wisher, one would like only the former possibility to fructify!
Real globalization lies in an interdependence which leads to a fundamental shift in our attitude towards fellow inhabitants of Mother Earth, recognizing each other’s equitable rights to the limited resources available to aggregate humanity. An equitable distribution also makes eminent economic sense, and that is what gives one hope of a truly globalized world order coming about sometime in the future.
In the immediate future, Scotland could soon be negotiating subsidiarity directly with the EU. So could Sindh and Chittagong in a South Asian confederation. By living out the pains of experimenting with transnational coordination, the EU leads the humanity’s quest for an effective governance of globalization.
























