Corporate Culture and Spiritual Ethics


By

Dr. Devendra Prasad Pandey
Director
Rajiv Gandhi P.G. Colege, Kotwa
Allahabad
 


Gandhiji advocated trusteeship doctrine all through his life. It is based on the principle that all people having money or property hold it in trust for society. Society is to be regarded as a donor to the individual and accordingly the latter is required to share part of his acquired wealth with the society for mutual benefit. According to this doctrine business organizations have to be viewed as socio-economic institutions to be run and owned by 'Trust Corporation' with considerably diluted shareholdings. Most of the ideas of Mahatma Gandhi on trusteeship find expression in his speeches, short notes, and press interviews and informal discussions. In the Nov. 26, 1932 issue of Young India, Gandhiji made the following observations with regard to doctrine of trusteeship.

'My idea of society is that while we are born equal, meaning thereby that we all have a right to equal opportunity, all have not the some capacity. It is in the nature of things impossible. For instance, all cannot have same height, colour or degree of intelligence. Therefore, in nature of things, some will have ability to earn more and others less. Normally, people with talents will have more. Such people should be viewed to exist as trustees and in no other terms.'

Organization and individual possessing surplus wealth over and above their legitimate and genuine needs should spend it on community welfare programmers as part of their social responsibilities. Echoing such views on the subject, Gandhiji added:

'Suppose I have earned a fair amount of wealth either by way of legacy or by means of trade and industry. I must know that all that belongs to me is the right to an honorable livelihood no better than what enjoyed by million of others, the rest of my wealth belongs to the community and be used for the welfare of the community.'

Jesus Christ was greatly opposed to the idea of man possessing more wealth than necessary as mentioned in the Holy Bible.

'It is easier for a camel to pass through the eye of a needle than for a rich man to enter the Kingdom of God'.

Gandhiji's doctrine of trusteeship and concept of corporate social responsibilities find expression in following hymns of the Bhagvat Gita.

javata Priyate Dehuh Tavatsatva Hidehinam/
Adhikam yo bhibhanayat sa stano Dand marhati//

'As much as is necessary for one's own living only that much one entitled to have. One who has excess of this is a thief and deserves punishment.'

Ishtan bhogan hi wo deva dasyante yagna bhavitah/
Tairdattan pradaryabhyo yo bhangyakte sten aiv sah//

'Fostered by sacrifice (hard work) you will get all enjoyments. He who enjoys it without sacrifice and giving in return is undoubtedly a thief.

Na twaham kamep rajyam na swarnam na puparbhavam/
Kamaye dukh taptanam praninamarti nashwam//

'Neither I desire Kingdom nor do I crave for heaven or salvation, I simply desire the end of miseries of all creatures who are afflicted with grief.

The corporate leaders today seek a positive image, one which pictures business as part of the total society. Business houses seek to demonstrate not only their efficiency, but also their humanism, their social awareness, and their response to national problems. Reliance chairman Mukesh Ambani donated Rs. 5.5 crore to Prime Minister's Relief Fund as contribution towards tsunami relief. India Inc has not stopped at donations for victims affected by the tsunami. The entry of corporate India in the management of humanitarian aid has led to as many as 10000 companies jointly pooled resources for relief work across the country. CII has set up coordination units in Chennai and Delhi. Tamilnadu state government wanted 3000 blankets for victims in Nagapatinam. The message was conveyed to CII, which then passed it to its member-companies. A businessman from Ludhiana chipped in with entire requirement, which was transported to Delhi by a transport company. Finally, it was picked up by Blue Dart and cargoed to warehouses in affected areas. Logistics and transport firms have made processes easy by carrying relief material for free.  RPGs "Food World" chain in Chennai collected food, clothing and general provisions in their retail outlets, which were transported to relief camps by Samsung trucks.

In the last few years there has been much talk and hype about the subject of Corporate Social Responsibility (CSR). It has become one of the leading issues at World Economic Forum's meetings. Economist Adam Smith who wrote the Bible of capitalism "Wealth of Nations", more importantly also wrote "A Theory of Moral Sentiments", in which he emphasized that sympathy and proper regard for others was the basis of any civilized society. Mahatma Gandhi believed in the trusteeship model, whereby the wealth you create has to be ploughed back for the benefit of society. CSR may be defined as achieving commercial success in ways that honour ethical values and respect people, communities and the natural environment. In its simplest form it is "what you do, how you do it and when and what you say". Since corporates have to draw on the community in which they operate for all resources, they also have obligations to their multiple stakeholders. Stakeholders are defined as those who get affected by corporate policies and practices. Today, it is acknowledged that business has not just financial accountability but also has social and environmental responsibility popularly known as the triple bottom line of good governance.

Corporates involved in discharging social responsibility practices are true followers of 'Trusteeship Theory of Gandhiji". Mahatma Gandhi said, "I must know that all those wealth does not belong to me; what belongs to me is the right to an honourable livelihood….. The rest of my livelihood belongs to the community and must be used for the welfare of the community." In the Indian context social responsibility concept is age old and is imbibed in our national heritage since time immemorial. References can be drawn from Shantiparv, Mahabharata,, "Aish aiv paro dharmo yad raja rakshati prajah……"

References are also available in other ancient texts such as one from Arthashastra, "Praja sukhe sukham, Shrestha, prajanam cha hite hitam; Natmapriyam hitam shreshtha, prajanam tu priyam hitam" , i.e. There is the concept of the shreshthadharma – that the better off one is in society, the higher should be one's sense of responsibility. Corporate social responsibility implies that the focus of organization should not be limited to increasing shareholder's value but should be widened to take care of the needs of various other stakeholders of the company to create long term value and for sustainable development. These stakeholders include employees, community, local government, consumers, etc. A business organization is an organ of society and a symbolic relationship exists between organization and the society. Various constituents of the society contribute to an organization's creation, survival and growth. After the Singur episode, executives of Tata Motors accompanied local peoples' elected representatives to Jamshedpur where Tata Steel Rural Development Society is involved in the discharge of its obligations towards society and justify its continuance by fulfilling its responsibilities towards society. As per the recent World Business Council for Sustainable Development (WBCSD) report, those fortune 500 companies, which did not care for society did not survive over a long period of time.

The basic principles of Jainism are Ahimsa (non-injury), Satyam (Truthfulness),Astiya (non-stealing),Brahmacharya (celibacy) and Aparigrah (non-covetousness). According to Jainism, the soul is the divine spark in a living being, capable of thinking, feeling and knowing. It is an embodiment of eternal knowledge and has infinite capacity to throw off the Karmas which bind it. Soul is the first of nine principles in every living being. The others are Non-soul, Merit and Demerit. Merit or Punya is caused by actions which bring peace to mind and soul. It involves service done with sincerity. When soul is free from bondage of karma, it attains Moksha. One attains Moksha by climbing the ladder of fourteen steps, which may be summarized into four. First is the stage of impulsive life, of lust and enjoyment when soul is enveloped in darkness of ignorance. Second is the life of conscious selection and pursuit when goal and paths are not matched. The third stage is of conscience and faith when there is some harmony but it is still not complete. In the fourth stage all conflicts disappear and the soul shines forth in its purity and omniscience (Balchandran 2005).

 In the book, "Who says elephants can't dance", the author, Louis Gerstner says that corporations should play role far beyond simply writing cheque to charitable organizations. He also mentions Rosabeth Moss Kanter who calls that the corporations must bring their unique skills and resources to the solution of societal problems. She suggests that companies can move from social responsibility to social innovation by viewing community needs as opportunities rather simply seeing them as responsibilities.

The great Austrian economist Frederick Hayek explained why corporations cannot be permitted to define their role in society beyond that stated by law: "Once the management of a big enterprise is regarded as not only entitled but even obliged to consider in its decisions whatever is regarded as the public or social interest, or to support good causes and generally to act for the public benefit, it gains indeed an uncontrollable power". Later David Engel published in the Stanford Law Review three permissible corporate activities beyond profit maximization: (a) obey the law (b) inform the public about the corporation's impact on society, and (c) minimize corporate involvement in politics. Those become important in defining what can be considered socially responsible corporate activities. Socially responsible investing (SRI) is gaining ground based on two arguments:

1. Evaluating a company's environmental and social impact on the top of its financial performance provide an additional hedge against risk and (2) socially responsible companies offer long-term value. Whilst there can be no gain saying the first argument, the second is yet to be comprehensively tested in developed market. There has been inconclusive interpretation of results in these markets.

"I am aggrieved that I could not do anything for the welfare of poorest hence feels frustrated. I have a dream to devote major portion of my busy life to poor community." If such a statement is given by India's foremost business tycon Ratan Tata, we can realize the pain of industrial houses towards socio-economic problems. Founded by Jamsedji Tata, an exceptionally enlightened industrialist, the TATA group companies have a deep, abiding commitment to sharing its wealth with the community. It has always been guided by the principle that wealth must be ploughed back from where it is generated. The Social development is such important for the companies that ITC has a written policy on CSR, The board reviews the projects once a year and the corporate management committee, headed by Chairman Y.C. Deveshwar, twice a year. It spent Rs. 17.94 crore on various projects, including employment and education for weaker section.

Tisco (1999), Telco (2001) and Hindalco (2002) and Lupin(2003) are the few companies awarded with Businessworld FICCI-SEDF corporate social responsibility awards. The other companies in the top were ITC, Wipro, Indal, Canara Bank and Gujarat Abmuja Cement. Among those that applied were Infosys Technologies, Standard Chartered Bank, British Gas India, Novartis India, Grasim and Kinetic Engineering. There are still no estimates of how much Indian companies spend totally on CSR or rural development, but the list of firms that applied and evidence on the ground suggest that CSR is an idea whose time has come.

The UK-based International Centre for Corporate Social Responsibility (ICCSR) carried out a survey of CSR activity in seven Asian countries. The organization trawled the website of 50 large corporates in each of these countries to see the evidence of CSR reporting, which in turn indicated levels of CSR activity. India ranked at the top of survey-72% of the sample reported extensively on the CSR work done by them. A survey on corporate involvement in Social Development (Partners in Change, 2000) indicates that in 87% of the cases, companies involved in development preferred to implement programmes directly rather than in partnership with an NGO. Many Industrial houses have demonstrated successful intervention with civil society organizations in rural development. The survey also revealed that companies did rural development as part of social responsibility and philanthropy.

Ethics is related to issues of propriety; rightness and wrongness. What is right is ethical and what is wrong is unethical. Issues of right or wrong are related to one's 'values'. Values constitute the foundations of one's character. Religious teachings have strong influences in the creation of values and therefore, in the determination of ethics. The Upanishads, the latter part of the Vedas, teaches us ways of attaining the four goals viz, Dharma, Artha, Kama and Moksha. These contain the essence of vedantic Ethics.

According to Patanjali, Raj Yoga involves 8 steps , namely, Yama or Abstinence, Niyama or Observance of certain rules, Asnas or physical postures, Pranayama or Breath control, pratyahara or Withdrawal of the senses  from the external world, Dharana or Holding of the mind steadfastly , Dhyan or Meditation and Samadhi or Absorption. Management thinkers like Abraham Maslow have dwelt upon the Need Theory. These needs are physical needs, psychological needs, safety needs, and self esteem. In organizational terms, the equivalent of Raj Yogi would be someone with vision, strategies, courage, foresightedness, fearlessness and humanism. For a corporate executive, the equivalent of the 8 steps prescribed by Patanjali for a Raj Yogi, would be (i) getting detached from the fruits and results of daily routines. Although this is difficult in present business world which is driven by the results of share markets (ii) adherence to a certain discipline in action without being carried away by or buffeted by the pressure of circumstances, (iii) maintaining equipoise at all times without getting excited through too much jubilation or remorse, and (iv) focusing always on, or being constantly absorbed in, the long term concerns of the stakeholders for which Gandhiji advocated his trusteeship theory.

Management thinker, Peter Drucker, refers to profit not as the end of business, but as a score of its effectiveness. In ancient India, organizations such as the 'Sreni'(national guild),nigama (city guild) and samutthan( enterprise partnership) ,were expected to be profitable and viable, though their core objective was sarva lok hitam(well being of all people) . In the post-capitalist, post-communist world, we are returning to a similar social market economy concept, "meeting the expectation of all the stakeholders ". The work of business was seen as dharma karya, righteous contribution.

An important part of vaisya dharma, according to Arthasastra, written by Koutilya, was dana, philanthropy. The banking guilds facilitated donation and gifts for social causes. The businessman moved towards his Moksha by serving society through wealth creation and philanthropy including building educational institutions such as Tata Institute of Social Sciences; Temples, hospitals etc.    

Thus, we find that spirituality has been the motivational factor behind the involvement of corporates in the philanthropic work being undertaken by them. Corporate leaders like Bill Gates, Warren Buffets and many Indian businessmen have donated generously for the welfare of common man inspired from spirituality and the will to serve society.

References:

Aga,Anu R(2004): " Embracing CSR", Forum of Free Enterprises, Mumbai.

Parikh,Chetan(2005): "Beyond Profit Maximization", Businessworld, 24January.

Anu R. Aga(2004), Embracing CSR, Forum of Free Enterprises, Mumabi.

Ratan Tata, in an interview, Dainik Jagran; 17.10.2004.

Partners in Change (2000), Corporate involvement in Social Development.

Balchandran,S(2005): " Ethics, Indian Ethos and Management" Shroff Publishers, pp 48-50.
 


Dr. Devendra Prasad Pandey
Director
Rajiv Gandhi P.G. Colege, Kotwa
Allahabad
 

Source: E-mail June 11, 2008

           

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