The Hindu Business Line : `Make creative goodness part of professionalism'

Do you see a shift in the attitude of B-school students? This is the question I pose to Pradip Khandwalla, a former Director of IIM-A, who has taught organisational behaviour for nearly three decades.

We are meeting on the sidelines of the `Global Leadership Programme' organised recently in Chennai by Shree Mata Management Consultants, where his role is that of a mentor.

Khandwalla pauses. His answer is brief: "Mercenary." It sends a chill down the spine to hear an erudite Khandwalla observe sombrely that today's students of management are more mercenary in their approach and ruthless in their goals. Here's more that should interest students and practitioners of management:

On management education in India

Management education in India is suffering from many woes. There is at present a disproportionate emphasis on profit maximisation. Also, there is an over-emphasis on Western tools and techniques of management without the students learning how to adapt them to Indian conditions.

Exceptions apart, Indian businesses are miles behind international standards vis-à-vis productivity, product quality, customer service, business ethics and so forth.

The problem is of creating a major change in the mindset of corporate managers and staff so as to improve performance on these dimensions rapidly. This calls for transformational leadership and change agentry that are barely touched upon in our management schools. These need to be stressed much more.

On changes in curriculum that are necessary

Students need to be made aware that unbridled greed can lead to such disasters as at Enron, WorldCom, Parmalat, AIG, and BCCI. Paths of `goodness', especially corporate social responsibility, business ethics, domain development, democratic management and a spiritual approach to management need to be made part of the core curriculum.

Since the goodness paths may restrict options, innovative thinking and mechanisms that make the organisation successfully innovative need to be emphasised.

There are clear-cut mechanisms that can stimulate corporate innovativeness, which are not among the tools and techniques taught in most of our business schools.

Organisations can be so designed as to enable them to produce strong financials and show sustained and successful innovations. Such designs need to be taught.

On how `goodness' can be taught

Through the use of invited speakers, examples and case studies, willy-nilly management students internalise role models. Professors need to replace role models that stress ruthless pursuit of profits, such as Jack Welch of GE, by role models that successfully balance the pursuit of profit with the pursuit of goodness.

Ours is a developing society in which the entire burden of development cannot be placed on the government. Every institution of society, including business, has to share this burden. And this burden is not as heavy as management students may think it is.

Global research shows that goodness pays. If management schools aim at turning out professional managers, then creative goodness should become part of the model of professionalism.

On whether the young investor would do well to invest in goodness-oriented companies

This depends on the perspective of the young investor. As you know, the stock market has given a compounded rate of return of around 15 per cent per annum for the past 25 years or so. So, if a young investor wants to double wealth every 5 years for a long period, then he/she should invest in companies that are both profitable and moral.

The chances are that these companies will yield an even higher return, and an investment of Rs 1 lakh at age 20 may well be worth around Rs 30 lakh at age 40.

Profitable companies that don't have moral convictions may well give high short-term returns, but if investments are held in such companies for a long period, the return may well be much lower.

There is another factor that young investors may like to bear in mind. Increasingly, mutual funds in the West are using a `goodness' screen for deciding where to invest. In the US, the volume of investments of such mutual funds nearly doubled in just two years.

In 1995, the total screened investment was $629 billion; it was $1,185 billion in 1997. The volumes may have increased dramatically thereafter thanks to the scams at WorldCom and Enron.

Since mutual fund investments are one of the key drivers of stock valuations, it pays to invest in stocks that would pass a `goodness' screen.

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