The Hindu Business Line : Trailer of a larger malaise

The fact is that in India you cannot just grow fast unless you compromise. Therefore, if any company or organisation is growing fast then be certain that there have been some serious compromises. There is just no other way.

PROF VARUN ARYA, A MEMBER OF IIM AHMEDABAD GOVERNING SOCIETY.

What has happened in the case of Satyam is actually just a trailer of a larger malaise within the Indian system in all walks of life which has come into existence, more prominently during the last decade or so, rues Prof Varun Arya, a member of IIM Ahmedabad Governing Society.

On the one hand, he observes, there is the ever-increasing rampant corruption everywhere and, on the other, there seems to be a race to make it big, bigger, and biggest.

“And hence all kinds of shortcuts and unfair means are employed. The fact is that in India you cannot just grow fast unless you compromise. Therefore, if any company or organisation is growing fast then be certain that there have been some serious compromises. There is just no other way.”

While that should be a telling tip for analysts and investors, Arya adds that the compromises may not always be direct; more likely, they may be indirect, “through the plethora of middlemen and brokers (euphemistically and to give respect, they are called ‘consultants’).” There are skeletons in the cupboards of far too many companies and other organisations, Arya bemoans, in the course of a recent email interaction with Business Line. However, “given the shoddy implementation of laws in India, and the Indian lawmakers and law-enforcers being actually the most prominent law-breakers,” he doubts if anything significant will happen in the Satyam case or as a fallout of it.

“Also, while in the short-term some façade of actions will be created for public consumption, actually in the long run there will be neither any actions nor lessons learnt.”

Excerpts from the interview:

At a time, especially post-26/11, when citizens seem to have lost faith in institutions in general, do you foresee that it will be long before corporates and regulators can regain public respect?

It is not the first time that such incidents have taken place. The main difference in 26/11 as compared to earlier occasions was perhaps just one — this time the venues and the people affected were the high-end ones. And this ensured that there was a massive hue and cry of its kind for the first time, especially against the system and politicians. There is a saying — the Government is elected by the masses, influenced by the classes, and run by the asses.

It is said that the Indian memory is typically short. Soon people will forget what happened and life would come back to its original position of continued trust.

We get to hear a lot about the values and vision and mission of corporates. Would it be of use if an independent agency were to do an audit of these values?

Yes, most of the top corporates have a set of core values declared and advertised. However, hardly any of these corporates actually walk the talk whole hog. They adhere to the core values as per their convenience and compromise as per the convenience — whether directly or indirectly.

One of my professors at IIT Delhi used to say 30 years back — spoons are really useful; the work gets done and our hands also do not become dirty. Therefore, when certain people are used as “spoons” (called more respectfully as consultants), they do all the dirty work. But still it is your work and you are the reason for the dirty work. Even Enron, WorldCom, Arthur Anderson of the world and Satyam of India also had the core values!

In today’s world, it is next to impossible to get a truly independent agency for the audit. Even in Satyam’s case, there was an audit agency of “reputation”! I have worked in a senior position of a top Fortune company, a large American multinational, and have seen from close quarters how the people even in top management give a go to the core values when it comes to their personal vested interests but inflict the core values deviation on the employees at lower level, if they are inconvenient to them personally.

Talking of values, again, to what extent can management education be value-based?

Today increasingly the management institutions are in the business of education and not in the education of business. When the education becomes a business then the fundamentals of education take a backseat and the fundamentals of business come to the fore.

Education, by definition, is based on ethics. And business by definition is based on competition, rivalry, fast track growth, market intelligence (actually theft of competitors’ information), getting the things done (by hook or by crook), the end being more important than the means, etc.. Most of these call for compromises on values. Hence there is conflict and dichotomy.

Management education can certainly be truly values-based and in fact should be. This alone will ensure that the business too is values-based. The values-based business will ensure that the business is sustainable in the long-run and manifests the traditional concept of “Shubh-Labh” of good old India, which basically means the profit is good profit and not bad profit. Good profit means earned out of values-based business and is for the larger societal benefit.

What are your suggestions on things to do in the wake of the Satyam episode?

There are many things which can be done in the aftermath of Satyam episode but it is difficult to suggest what could be done or should be done or rather would be done. First and foremost, the foundations and fundamentals of upbringing and education should be made values-based. The values have to be inculcated and ingrained in people right from the birth. A very difficult proposition but certainly doable.

Secondly, there should be exemplary punitive action taken against the offenders, irrespective of how mighty the person may be. In fact for it to be exemplary, the action must start at the top. It should not happen that the big fish gets away and small fish gets caught. Unfortunately, despite so many scams which India has seen in recent times, not a single person actually involved has been penalised. In fact a large majority of these offenders and criminals are not only roaming free but in fact ruling us.

Any other points of interest.

Despite all not-so-good things happening in India due to so many not-so-good people, there is still a silver lining! There are a number of really good people living in India. The need of the hour is for them to get together and work together with passion in a mission-mode.

It is said that it is easy for the bad people to come together and work together for bad causes but very difficult for good people to do so for good causes. But still it needs to be and must be done. If done, though there may be a small number of good people they can actually make a big difference.

I believe there are four ways to do things — right things the right way, right things the wrong way, wrong things the right way and wrong things the wrong way. The litmus test for values-based system is that always right things should be done only in the right way.

Bio: Prof Varun Arya studied at IIT Delhi (1976-81 batch) and IIM Ahmedabad (1981-83 batch). Thereafter, he worked for 16 years in senior positions with the leading companies like Indian Rayon, Reliance and American multinational DuPont. His work experience was primarily in sales and marketing, business development and profit centre (SBUs) management. For the last over nine years, he is associated with his dream project of establishing and shaping up a management institute in Jodhpur, in his home-state of Rajasthan.

Amongst the various positions held by Prof Arya, he has been the President of prestigious IIT Delhi Alumni Association – the apex body of over 20,000 member alumni based worldwide, alumni representative on the Senate of IIT Delhi, member of the Technology Business Incubation Units (TBIU) Board of IIT Delhi and Secretary of IIM Ahmedabad Alumni Association. He is presently on the Boards and Advisory Councils of some companies, educational institutions and other organisations.

D. MURALI

InterviewsInsights.blogspot.com

Related Stories:
L’affaire Satyam
Rs 7,000-crore fraud
Tighter regulation

More Stories on : Economic Offences | Interview | Insight | Software | Satyam Computer Services Ltd

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Trailer of a larger malaise