The Hindu Business Line : Why ethics and all that?

In our personal lives we do not expect deceit from our relationships. Similarly, in our commercial lives that span the realm of buying and selling, we do not like deceit. This is the basic ethos.

A key concern: Ethics is so important in business that Harvard Business School (in picture) has included ethics classes in its main curriculum.

The India-buzz is becoming high-decibel as of now. What does it mean to the foreign investor eyeing India?

- Timothy Salve, Belgium

Timothy, India is fast emerging into a tri-polar world. I do believe the country is poised to emerge as one of the big production and consuming powers. This makes for the difference and this makes for the buzz. We are not only going to be big producers, we are going to be consuming big as well.

We have the world’s second largest population, which means we have the second largest numbers of bellies and bladders in the world. Thus far, we have always looked at our population numbers as a bane. Today, I view this very issue as a big boon for the India of the future. We have a robust demand for branded foods, beverages, clothing, accessories, automobiles, ‘shelter’ products such as branded housing ventures and more. Today, our population numbers are big blessing.

The global marketer is salivating, as are investors. For the foreign investor the opportunity is right there today, and tomorrow is a boom era. Indian demographics are changing and a huge middle class with big purchasing power is emerging. What used to be a pyramid in the old days with a very small segment at the top of the pyramid being rich, and a very large poor class at the bottom of the pyramid, is fast morphing into a diamond with a small segment of the super rich and a very large segment of the middle class and a chunk of the poor at the base.

For the investor, this means disposable income that will move into products and services. India has just turned a $1 trillion economy, last month. Of this, only 20 per cent of our GDP today comes from agriculture. A robust 56 per cent comes from the services sector that includes transportation, trading, communication and sundry services. The remaining 24 per cent comes from the manufacturing sector.

To the investor, the opportunity lies in the services and the manufacturing sector at large, as India is getting into a consuming mode. People want to buy into brands and quality. The market is in upgrade mode. The intermediary device of organised retail is also on the growth path. Foreign direct investment norms are just about being eased, and I expect investors to come into the country in hordes.

For the investor, India is a “not to be missed” opportunity if the investor is looking for healthy multiples on his investment. This market is a must on the portfolio.

If you are an investor, please invest. And invest deep.

What are the differences between the rural market and the urban market?

- Jyothi Ramalingam, Chennai

Jyothi, no differences whatsoever as of now. The same bellies and the same bladders exposed to the same set of media inputs and largely the same amount of money in their pockets, whether urban or rural.

I see no difference. The differences we used to see in the years past are but myths built by unintelligent marketing men and women who didn’t know their rural onions from their rural potatoes.

I do believe there are segments rich, middle class and poor in each of these segments we define as rural and urban. We need to get beneath the skin of it all to understand that basic human needs, wants, desires and aspirations are reasonably evened out as of today.

The future promises even more flatness. More flatness and less differentiation. The urban-rural caste divide will go into a limbo, sooner than later.

What is the need for a company to play the ethical route in business? What is the commercial interest behind this?

- Ramesh Kuppa, Mangalore

Ramesh, some would believe this question to be a bit naïve in this politically correct day and age. I do, however, see this to be a very intelligent question that comes from a mind that questions everything.

Let me start on my reply.

Ethics are the lowest common denominator items for a corporate enterprise or a business of any kind. Businesses essentially deal with consumers, and consumers are human beings like you and I.

Human beings love the truth. Human beings love fair play. In our personal lives we do not expect deceit from the relationships we get into. Similarly, in our commercial lives that span the realm of buying and selling, we do not like deceit. This is the basic ethos.

The human being is a truth-seeking animal. When you buy a cake of soap, you expect honesty from it. You expect it to deliver to its promise. If it doesn’t that is brand deceit. No one likes brand deceit. Corporate organisations that practice ethical business succeed the most.

External customers respect the company that much more just as internal employees, existing, past and prospective, respect and value the corporate that much more. Companies need to be ethical in any realm of operations as they are dealing with human beings that expect it all the time.

(Harish Bijoor is a business strategy specialist and CEO, Harish Bijoor Consults Inc.)

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