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Ecology, Ethics and Economics: The Emerging Convergence

A very important development in the corporate world is the growing convergence of what we may call the ‘3Es’: Ecology, Ethics and Economics. This convergence has crucial significance for the higher evolution of the corporate world and humanity as a whole. This article examines this convergence in the light of a deeper and a more integral vision of life.

The Economics of Ecology

Until recently and for a long time, it was believed that progress in ecological sustainability involves a certain amount of loss in economic performance. But currently there is a growing consensus, based on the facts and experience, that this trade-off is not inevitable and in fact sustainability ensures economic viability in the long term.

In an interesting article in Harvard Business Review (HBR), titled ‘The Sustainable Economy’, Von Choinad with co-authors Fick Ridge and sustainability consultant Jib Elison provide the big picture emerging in the landscape of sustainability. They talk about three major trends: What has the potential to make ‘the lowest priced T-shirt, causing the least damage to the planet’? The first trend is the attempt to quantify in monetary terms the value of the ecosystem services such as the forests, water, pollution caused from residuals, etc. Second is the growing environmental sensitivity of investor community. The third is the evolution of standard indices and ratings for the companies and consumers for making the right eco-friendly decision. Let us briefly examine these trends as described in more detail by Choinad et al. in their article in HBR.1

Is it right to put monetary value on ‘priceless’ natural resources such as rain forests? This is a major objection raised by idealistic minds. But from a corporate perspective the problem with this attitude is that these natural resources are regarded as ‘free’ and the negative impact of using, consuming or destroying these natural wealth are not incorporated in the accounting system, which means the cost of the product do not reflect its true impact on the environment. A product which causes maximum damage to the environment may be cheaper than the one which inflicts minimum damage. At present there are many initiatives and programmes all over the world for assessing the true value of natural resources and some companies are making the attempt to internalize them into their account books. For example, Gund Institute of Ecological Economics, with funding from US National Science Foundation, has developed a web-based tool which can help users in assessing the value of ecosystem services on multiple scales. Puma, a sports footwear and apparel company, announced in April 2011 that it would begin issuing an environment profit-and-loss account that will account for the full economic impact of the brand on the ecosystem and commissioned PricewaterhouseCoopers to help develop their economic statement.

The second trend is what is now called as ‘Socially Responsible Investment’ (SRI). Investor community is awakening to the long-term implications of sustainability. In general, investor community tends to rate companies on the basis of short-term financial measures. Investors are beginning to realize that companies that falter in the domain of ecological sustainability cannot prosper in the financial front in the long run, though they may show good returns in the short term.

A positive outcome of this awakening is that a growing number of progressive investors look for the environmental and social performance of a firm on many fronts, such as water use, carbon emission, stance towards labour, supply chain management practices, etc.

The third trend is the emergence of comprehensive indices and ratings for companies and consumers to make the right choices, for example Value Chain Index (VCI), which provides valuable data for companies to make comparison of products based on their impact in every stage of the value chain, from raw material to the finished product on a range of environmental and social indices such as land use, water, energy, carbon, toxics and social welfare. The VCI is a great help to companies for making nuanced comparison among products or vendors and arrive at the most environmentally and socially benign choice. A similar uniform and comprehensive rating for guiding consumer choice has not yet emerged, but may come up in the future. There are some examples in some specific areas, such as Energy Star rating in appliances which are very popular among consumers. Similarly, the electrical goods industry in US has created a much more comprehensive rating format which accounts for more than 50 environmental factors.

When all these three trends converge, grow and become reasonably well established in the corporate environment, and as a result funds and consumer choice gravitate more and more towards the environmentally and socially beneficial companies and products, then sustainability gets aligned with profit and market forces.

There is one more trend, which can further reinforce this alignment making ecology entirely compatible with economics. Many companies are finding that ecological practices have immediate economic benefit. This is now quite well known in corporate circles. Practices like recycling waste or reducing the consumption of energy or water saves money, but some progressive companies are going beyond such ad hoc practices and making sustainability into a profitable enterprise.

In another article in HBR, ‘Making Sustainability Profitable’, Krut Haanes and co-authors give many examples of companies in the emerging markets in Latin America, Africa, Middle East Asia, South Pacific and other parts of the world which are able to build a profitable business around sustainable products and practices.2,3

For example, in Egypt, Ibrahim Aboulesh founded Sekiem, Egypt’s first organic farm for producing organic cotton, which was more elastic than its conventionally grown counterpart. Ibrahim has evolved a business model which is at once sustainable and profitable and has generated healthy revenues. Sekiem is now one of the Egypt’s largest organic food producers with an annual growth of 14%.

Benefits of Goodness

More or less similar developments are happening in ‘Business Ethics’. After so many corporate scams and scandals, ethics and ‘integrity’ are now considered by many business leaders as important as or even more than the bottom-line and an indispensable part of corporate governance. For example, Pramod Bhasin, former president and CEO of GenPack, India, states “For an enterprise to be successful in the long term it has to be founded on a strong platform of integrity and values” and when asked how do leaders face up to scenarios where there could be a clash between values and pragmatism, especially in the face of competitive pressures, Bhasin answers simply: “The choice is easy if you really understand that integrity is not negotiable.”3 Some business leaders with deeper moral sense know intuitively that ethics pays in the long run. V. V. Raghavan, a former senior partners Ernst & Young, states: “If you are able to run any enterprise without selfish motive and with selfless service, then I believe that success will follow.” He goes on to further say: “What I mean is that my effort and involvement in doing something is not determined by return, and I know by my own experience this works.”4 But is there any empirical support for these beliefs and assertions? Interestingly, a recent research on leadership has found a correlation between ethical character and financial performance, which means ethics and economics!

KRW International, a Minneapolis-based leadership consultancy firm, conducted a study to determine the impact of character on performance, especially on financial performance measured in terms of four moral values: Integrity, Responsibility, Forgiveness and Compassion. Reporting on the study in HBR, Fred Kiev of KRW International states: “The researchers found that CEOs whose employees gave them high marks for character had an average return on assets of 9.35% over a two-year period. That’s nearly five times as much as those with low character ratings had: their RON averaged only 1.93%.”5

At the organizational level also there are now many studies which indicate that companies which are governed by some higher values at the social or moral level financially outperform those which are focused exclusively on the bottom line. For example, in their book Firms of Endearment: How World-Class Companies Profit from Passion and Purpose, Raj Sisodia talks about companies with humanistic profiles, which are loved by their employees, customers, communities and suppliers and invests a lot of money and effort in fulfilling their social and environmental responsibilities. When the financial performance of these companies are analysed, these companies not only did all the good things but also delivered extraordinary returns to their investors, outperforming the market by a nine to one ratio for ten years. Similarly, since 2007 an organization called Ethisphere has produced an annual list of the world’s most ethical companies. Collectively, the selected companies have outperformed the SP500 every year since the inception of the program in 2007 by an average of 7.3% annually.6

A good example of such corporate goodness in the environmental and social sphere with astounding financial performance is the Brazilian company Natura. The company works in close collaboration with suppliers, rural communities, local government and NGOs to develop ways to sustainably extract raw materials, create jobs and to build jobs in the communities. Natura trains managers to identify social and environmental challenges in the community, which they work upon, operate and turn into business opportunities, granting bonuses to managers on the basis of their social and environmental performances.7 From 2002 to 2011, Natura’s revenues grew by 463% and its net income by 3722%.

The Integral View

Let us now briefly examine the deeper significance of these trends in the light of a more integral vision. This convergence between ecology, ethics and economics is in sync with one of the central motifs of the ancient Indian epic, Mahabharata: Dharma is the foundation of Artha. In the popular conception it means morality or righteousness, Dharma, is the foundation of wealth, Artha. However, this motto of Mahabharata is based on a deeper and broader vision of Dharma. In Indian thought, Dharma is a pregnant and profound term with a multidimensional significance at various levels – physical, social, moral, and psychological.

In general, Dharma means the laws or laws of Nature that hold together all creation and in terms of ethics. Dharma is all the values, principles and standards of conduct which are derived from these laws. At the physical level, the discoveries of modern ecology are part of the Dharma of our material universe or in other words the material and biological dimensions of Mother Nature. In the Indian thought, Nature is not only physical but also psychological and spiritual. The physical, psychological and spiritual energies within our individual human being and in the universe are derived from and are part of the corresponding energies of universal Nature.

Just like there are laws or ecology which governs the physical or biological Nature, there is an inner ecology which governs the moral, psychological, spiritual dimensions of Nature. The ethical and spiritual values, ideals, principles and the disciplines discovered by great sages, saints and seers of the world are part of this inner ecology of consciousness. The Indian science of Yoga is the most comprehensive, scientific and systemic discipline for attuning our inner being with the higher moral and spiritual dimensions of universal Nature and its higher laws, which govern the inner worlds of consciousness. Based on this vision of Dharma, the ancient Indian epical wisdom taught that when our human life – individual and collective, inner and outer – is governed by the moral and spiritual values derived from the deeper, inner and higher laws of consciousness of universal Nature or Dharma, it leads to inner growth as well as outer prosperity and wellbeing.

Thus, in the Indian thought, Nature is not an inanimate energy but a conscious force with a physical, psychological and spiritual dimension. And we human beings are part of Nature not only physically but also in our consciousness. This idea holds the key to the next step in the evolution of environmentalism and also humanity as whole. The present convergence between ecology, ethics and economics, when it gets fully established, will lead to a decisive upward shift in the evolution of the corporate world and in the collective consciousness of the society from the mind-set of the industrial revolution which regarded Nature as a free reservoir of resources which can be exploited, polluted, robbed or ‘mastered’ as one desires and that old, traditional management paradigm of ‘get things done’ without any regard for ethics and values, to a more benign attunement with Nature with an emphasis on ethics and values in management.

But, for a decisive march into the future, we have to proceed further and take the next step towards psychological and spiritual sustainability. We have already indicated the key to this higher evolution. First step is to regard Nature as a conscious force which can respond to our aspirations. The second step is Yoga. What is ecology to physical Nature, Yoga is to the moral, psychological and spiritual Nature, within us and also in the universe. Yoga is the science for understanding and exploring our inner ecology of consciousness and attuning our inner being and outer life with the ecology of the inner universal and divine dimensions of Nature.

References

  1. Von Choinard, Jib Elison and Rick Ridgeway, ‘The Sustainable Economy’, The Harvard Business Review, October 2011, pp. 40–50.
  2. Knut Haanaes, David Micheal, Jeremy Jurgeons and Subramaniam Rangan, ‘Making Sustainability Profitable’, The Harvard Business Review, May 2013, pp. 110–113
  3. Pramod Bhasin, ‘The Power of Principles in a Leader’s Repository’, ISBInsight, Indian School of Business Magazine, 2004, pp. 19–20
  4. Peter Pruzan and Kristen Pruzan, Leading with Wisdom, Response, New Delhi, 2007, p. 20.
  5. Fred Kiel, ‘Measuring the Return on Character’, The Harvard Business Review, April 2014, pp. 14–15.
  6. John Mackey and Raj Sisodia, Conscious Capitalism, Harvard Business Press, Boston, 2013, pp. 277–278.
  7. Robert G. Eceles and George Serafieim, ‘The Performance Frontier: Innovating for a Sustainable Strategy’, The Harvard Business Review, May 2012, pp. 36–46.

By O. P. Dani & M. S. Srinivasan

(Published in a Golden Jubilee Souvenir of the Institute of Company Secretaries of India)

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13Jun/18

The Emerging Feminine Millenium and Building the Woman-Empowered Workplace

“Women are, in principle, the executive power.” —The Mother of Sri Aurobindo Ashram

“Executive, thy name is woman.” —The Economist

A former head of United Nations said in a conference of woman entrepreneurs: “The Future belongs to woman.” This may appear as a formal assertion of a cliché in an appropriate occasion. But at present, there are many well-researched studies and books which argue with facts and figures that millennial domination of men is coming to an end, and the other half is not only rising but beginning to dominate the world. This article is a brief review of this emerging trend and its strategic implications for the corporate world.

The Feminine Thrust

In a well-written article in Harvard Business Review, Alison Beard, reviewing books like The Athena Doctrine: How Women (and the Men Who Think Like Them) Will Rule the World talks about “an argument that’s been gaining stream for more than a decade” and elaborates further on this new idea or thesis.

“It started with Susam Falude’s 1999 book Stifled and continued with dozens of similarly titled books, from Lisa Mundy’s The Richer Sex and Hanna Rosins The End of Men, both release this year; to Helen Smith’s forthcoming Men on Strike. The message is simple and provocative. The feminist movement has been so effective in advancing women over the past several decades that the ability of men to thrive – indeed their fundamental role in society – is now in peril.” [1]

Are we in the midst of a shift in leadership from Men to Women in the World as a whole? This may be more of a future scenario or a possibility than the present actually. In the present scenario, men still dominate the world but their position is getting increasingly threatened or weakened by what Alison Beard calls as “growing sisterhood of leaders who are women”. The corporate world is still in the grip of men. According to a recent McKinsey study, men hold nearly 85% of corporate board and executive committee seats in the US and 90% of the world billionaires are men. But this situation is likely to change because as management consultants John Gersena and writer Michaek D’Antonia argue that feminine traits such as connectivity, humility, candor, patience and empathy are the new key to success. In other sectors such as education, media and marketing there is a decisive shift towards woman. For example in US woman outnumber men in education, and in many US universities there are more woman in higher education than men, which will change the leadership demography in the future.

Towards Inner Balance

However, “The End of Men” or swing towards the other extreme of domination of woman over men is not perhaps the evolutionary destiny of men or women. Some form of feminine domination for a few decades or even a few millenniums may be a temporary necessity for neutralizing the subconscious impressions of male domination for many millenniums. But we can feel intuitively that the ideal has to be a balance or harmony between the two poles of human species. For nearly three millenniums, man dominated the world and woman. Let woman dominate the world and men for few millenniums so that justice is done and both learn the shortcoming of a one-sided domination and feel the need for the balance. Such lesson learnt from a long experience of life is much more concrete and effective than the preaching of philosophy ad idealism.

In general, the higher ideal appears in the mind of a few awakened thinkers and then percolates slowly to the masses through the process of history. However, in the old world this percolation is slow, because it is mostly through speech and thought transmitted personally from the teacher to the disciple who in turn transmits the idea to their students and followers. But in our contemporary world we have the powerful medium of mass communication which can accelerate the process of diffusion by spreading the idea fast and wide through the masses.

In our present topic we are discussing, the ideal is to balance equality and harmony between the two poles of humanity. This doesn’t require a philosopher or a great mind but anyone with a minimum level of mental development who can perceive it intuitively. A still deeper intuition may tell us that it has to be an inner balance between masculine and feminine qualities. This higher intuition of humanity found that there is a man in every woman and a woman in every man, which means feminine and masculine qualities are present in every individual, through those who have feminine or masculine bodies may have an inborn and natural inclination for corresponding qualities or faculties.

This brings us to the question as to what are these masculine or feminine values qualities or faculties. When we examine human history since the dawn of human civilization (except perhaps in a few civilizations or epochs in history), the male psyche with its hard masculine values of power, aggression, authority, control, subjugation, rationalism, individualism, hierarchy, and self-assertion had more or less dominated the life of humanity. The time has come to restore the balance through an increasing manifestation of the “soft” or feminine values such as beauty, harmony, equity participative and inclusive organization or leadership. In terms of competencies, emotional intelligence, social sensitivity, pragmatic intuition, executive competence, caring for people, nurturing community, collaborative leadership are some feminine qualities and faculties natural to woman. On the other hand, conceptual intelligence, logical and analytical thinking, envisioning the long-term future, perceiving the big picture, philosophical and metaphysical speculations are some of the masculine competencies natural to men. There has to be a balanced development of feminine and masculine competencies in the workforce.

However, many recent studies and research on leadership effectiveness are converging on the idea or conclusion that in the future key to success lies in feminine qualities and competencies which we have discussed earlier. This means woman who have retained their inborn and natural qualities have an edge over men. But as we have indicated earlier, these qualities are not the exclusive preserve of woman. They are there also present in men and there are many men who manifest these qualities in their character. They can also be developed. Each individual, man or woman, has to attain a certain balance between these two sets of faculties but with a predominant stress on the powers of their inborn nature. And this happens quite often and more or less unconsciously in woman. For example, woman can also think like men but it tends less towards broad conceptual generalizations and more towards swift intuitive understanding of things, and practical application rather than abstract theories. Similarly, some recent studies indicate that while male leaders use more of their power, position and authority to get things done, woman leaders use more of their charisma, personal relationship and persuasion.

And this inner balance must express itself outwardly in terms of all parameters of gender balance and equity. There are some progressive companies in India and abroad, which are making this effort toward gender equality. IBM India has placed an executive, a Diversity Manger, to take care of gender and diversity issues. Mahindra and Mahindra has set the target of 50% woman in its workforce and has a recruitment policy stating that if all factors other than gender are the same, it will prefer to hire woman. At Infosys, Narayana Murthy has set up Infosys Woman Inclusive Network (IWIN) in 2003, with the following objectives:

  • Create a gender sensitive and inclusive work environment and thereby make Infosys the employer of choice for woman.
  • Help woman in their career lifecycles through support groups and policies and thereby enhance retention.
  • Develop women for managerial and leadership roles and thereby maintain gender ratios at all the levels of the organization.[2]

We need many such initiatives to make the workplace fairer to woman.

Building a Women-Friendly Culture

These corporate initiatives give an indication of what needs to be done. We have to create a workplace that is safe, fair and sensitive to woman, which means an environment that is free from all forms of harassment – sexual or social; free from every form of sexual discrimination; and sensitive to the unique and special needs of women like motherhood, caring for family member and elders, etc.

The most important part of this woman-friendly culture is the help it provides to women to achieve the right balance between work, career and parenting. The traditionalists argue that motherhood or bringing up the child is the most important responsibility of a woman and therefore she must confine herself to home and parenting. The first part of this argument, regarding motherhood, may be true but the second part and the conclusion derived from it is not true. There are women who have to work in order to support and sustain themselves and their families. And there are also millions of educated, talented, creative and enterprising women who can contribute effectively to economy and society and if they don’t enter into the workplace it is also a great loss to human life. For example, more than 40% of the American economy is powered by women entrepreneurs. Had these enterprising women confined themselves to home, it would have been a substantial loss to American economy.

We cannot dictate to woman what she should or should not do according to our conceptions, ideals or dogmas. Let her choose what she wants to do or be in complete freedom and manage the consequences of her choice. This freedom of choice is an integral part of empowerment. For example, when a high-performing woman executive becomes a mother, and leaves her job saying, “To me to be a good mother and bring up my child with right values is the most important duty of a woman. I want to focus all my attention and energies on this task”, it is her choice. If another woman executive after becoming a mother says, “I can manage both however difficult it may be” and takes up the challenge then it is her choice. If she gets sufficient help and support from her husband/partner, family and the organization she works for, a woman can do it. If she is able to do it effectively, it helps in her own evolution and development bringing forward her higher potentialities.

The task or the challenge before corporate managements is to provide whatever help they can to the working woman – with innovation, compassion and understanding – to achieve the right balance between her responsibilities as a homemaker, mother, corporate worker and above all as a human being who has to discover and manifest her highest potentialities.

Flexitime, telecommuting, day-care centres for children are some of the well-known practices adopted by progressive organizations for creating a woman-friendly workplace. However, these practices are only external aids. For a deeper and a more holistic engagement of women, work–life balance and responding to woman’s needs have to become part of the internal attitudes, values and culture of the organization as a whole and at all the levels of the corporate hierarchy. If a corporate management says to its woman employees, “We have provided all the facilities you need like flexitime and day-care centres. Don’t talk any more about work–life balance or bring your womanly problems to the work-place,” then it is not sensitive to woman. In a truly woman-friendly culture, work–life balance is not merely a matter of flexitime or day-care centres but a conscious, continuous and collective effort between the bosses, subordinates and peers, sustained through careful, considerate and sympathetic listening, dialogue, mentoring, counselling and mutual adjustment. For example, when a woman employee has a work–life problem or any problem or issue related to her needs, then she, her boss, her helpful peers and subordinates, and if required an officer from HR department, sit together and arrive at a mutually satisfactory solution. In other words, the workplace becomes an extended family/support base of the employee. Interestingly, this is what Indra Nooyi, CEO of PepsiCo, said about her company. She said in one of her interviews that PepsiCo was for her like an extended family. If every employee of PepsiCo feels like Indra Nooyi, then it is a great compliment to this Fortune 500 firm.

The other aspect of sensitivity is to be responsive to the unique potentialities of woman. As we have discussed earlier, the feminine nature has some unique competencies such as emotional intelligence, pragmatic intuition, sense of the community, collaborative leadership, empathy or “social intelligence”. The woman executive or the employee has to be given sufficient freedom, opportunities and encouragement to express her natural competencies in her work and should not be compelled or induced to imitate the male model of behaviour or attitudes. This will lead to greater creativity in the workplace because it will complement the male values, attitudes and competencies which dominate the present corporate life.

The Feminine Advantage

This brings us to an important and promising factor or trend which has the potential to end discrimination against woman – it is the recognition of the feminine advantage. There is a growing recognition among corporate executives that more women in the workplace, apart from its moral and social significance, will ultimately have a beneficial impact on the performance of the organization as a whole. Rajeev Dubey, President Group HR and Member of the Group Management Board of Mahindra and Mahindra, states, “We believe it is an advantage to have more women. We have observed that innovation is better. Often woman bring with them points of view not expressed by men.” [3]

References

  1. Alison Beard, ‘The Silent Sex’, Harvard Business Review, March 2013, pp. 126–127.
  2. Soumya Bhattacharya and Pooja Mehra, ‘In Good Company’, Business Today, 17 December, 2010, pp. 33–38.
  3. Ibid.

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M. S. SRINIVASAN & O. P. DANI

[Published in Chartered Secretary, Journal of the Institute of Chartered Secretaries of India]

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11May/18

How to Counter the Mindset of Bribery

Bribery has become a part of popular and official culture in India, which has created a mindset among the public that without giving bribes, you cannot get things done. How to counter this mindset? This article examines this question in a deeper perspective.

The Dubious Mindset

Before coming to the remedy, let us examine briefly the causative factors behind the mindset of bribery. The primary factors include inefficiency, incompetence, red-tapism and a lack of accountability in the government machinery. The second factor is greed on the part of the officials. The third factor is the lack of will on the part of the public to counter it. The fourth factor is an attitude of tolerance for corruption. The first factor is a matter of outer administration and management. The other factors are more psychological. What are the antidotes and solutions? How to counter it?

The Remedial Mindset

As we have mentioned earlier, the remedy for the first factor lies in better management and administration, which is quick, responsive, efficient and accountable. Anti-graft institutions such as lokpal and vigilance departments act as deterrents. But none of these outer remedies can lead to any lasting solution. Most of the current thinking on corruption tends towards this kind of external remedies, which are necessary but not sufficient. For a more long-term solution we have to tackle the deeper psychological factors. Let us now examine the remedies for the other three factors behind bribery and how to counter them.

The first factor is greed. There is no short-term solution to greed. It requires a change of mindset which wants more and more pleasure, comfort and acquisition from outside to a quest for inner richness and fulfillment, which can be achieved only through education. The second factor of lack of will on the part of the public has to be countered by highlighting the examples of the opposite character – individuals and groups who display a firm and persistent will not to succumb to the corrupt trend. Instead of taking the quick and easy solution through bribes, if individuals and groups take a firm stand against it (with a readiness to bear the hardship involved and persist in the struggle for the sake of truth), it contributes immensely for the progress of truth in the world. Here are some illustrative examples.

A building contractor, persuaded by his spiritually inclined wife and his Guru, decided not to give bribes and conduct his business with an entire honesty. The initial impact of the decision was negative. His business began to collapse. His financial condition deteriorated. But still he persisted in his resolution to be honest. His reputation for honesty spread in business and government circles. Again he started getting contracts; business flourished and became better than what it was when he was doing it without any scruples.

Another example is from the housing division of a Chennai-based firm well known for its value-based policies. The company was not able to hand over the flats to the customer at the promised date because of prolonged delays in getting sanction for electrical works from the electricity board. The company was determined not to take the easy and customary path of paying off the government officials. The company wrote letters to the authorities of the electricity board and also explained their principled position to the customer. A small group of understanding and sympathetic customers wrote letters to the highest political and government authorities, demanding immediate action. And finally the moral force behind the company’s decision triumphed. The company got the sanction for the electrical works without compromising on its principles.

In this task, collective bodies such as the associations of citizens, consumers and companies can play an important role because a collective action like the one in the second example is more effective than that of an individual. But this is from an external point of view. From a deeper perspective, every individual and collective effort against corruption has a subtle positive impact on the inner psychological atmosphere. When an individual or a collectivity battles against corruption and gains a victory, it sends a vibration which awakens a similar positive will in other human centers; it creates a new capacity in the mental atmosphere which makes possible similar victories and strengthens those who are engaged in this battle.

The third factor of tolerance for corruption exists not only among the public but also in big corporates. A young IT graduate joined as a trainee in a big corporate group respected for its values. He was shocked when a senior executive of the group proclaimed in a lecture that in the current competitive environment it is difficult to get business without a certain amount of bribing and everyone has to accept the fact. No amount of outer remedies can counteract this kind of corruption. It requires a radical change in culture, values and consciousness. Such a change can come only through a system of education which awakens the young mind in school to the importance of truth, honesty and transparency, not by preaching, but through stories, images and examples. The young minds have to be awakened to the long-term benefits of truth and honesty; the need to bear, persist and endure and fight in order to uphold truth; and how his individual victory has positive consequences for the entire humanity .

At the outer level, on the part of the government or governmental system, there has to be a conscious and concerted attempt to create an outer environment which encourages truth, honesty and transparency in every activity and transactions and zero-tolerance to corruption. The government should initiate and promote a massive research effort to collect examples of truth, honesty and transparency in every activity of national life – recognize and reward them – and highlight these examples through the mass media. In fact modern media can do this work much better than the government. Every media organization must have an anti-corruption wing where people can report cases of corruption and help and guidance to fight corruption.

Towards a Culture of Values

No virtue or value stands alone in its isolation. All basic values such as truth, beauty, goodness, harmony and so on are interrelated. A culture of beauty, goodness and harmony facilitates and sweetens the practice of truth. We have to build a system of education and inner awakening which helps individuals to first internalize these values in their consciousness and flow out spontaneously in behavior and action. And there is a divine element in the individual where these values are intrinsic to the very substance of consciousness. A culture of values attains its highest perfection when human beings can discover this divinity within them and express its verities spontaneously in their thought, feelings and actions.

M. S. Srinivasan

O. P. Dani

[Published in Chartered Secretary, a journal of the Institute of Company Secretaries of India]

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16Apr/18

Centralization and Decentralization: The Role of Government

The business of the State is to provide all possible facilities for co–operative action.

—Sri Aurobindo

The present trend of thinking in the progressive mind of our age is towards autonomy, decentralization and self-government. This thinking is in the right direction because in the future world, the creative progress lies not in more and more external government but in greater self-government. This brings us to the question what then is the role of central government? This article examines this question in the light of an integral vision.

Central Authority and Local Autonomy

How much can the central government decentralize? In trying to find the right answer to this question we must avoid the tendency of the average mind to float enthusiastically with the new fad and swing dogmatically towards massive decentralization and autonomy. There is a need and truth behind centralization. The purpose of centralization or central government is to enforce unity, order, stability and continuity of administration. But there are two ways of achieving this proposal: The first method is to create a psychological and cultural solidarity which unites the consciousness of the people through shared vision, values, ideals and a common purpose, and allows each subgroup within the nation or state to organize their life according to their unique economic, social and cultural characteristics. The main advantage of this method is that it promotes a free and rich diversity which is conducive to a creative flowering of the collective life. The main drawback of this method is that if the political consciousness of the community is not sufficiently mature and developed, the psychological and cultural solidarity of the community remains only a vague and weak sentiment without much power to weld the community into strong and enduring external unity which can safeguard it against external aggression or internal strife.

The other method is to create a strong economic, social and political unity through a centralized administrative organization and patriotic sentiment. The main advantage here is that it ensures peace, stability and security of the outer collective life. But the main drawback of this method is that it tends towards uniformity and mechanization of life and the concentration of power in the ruling elite and the upper classes and prevents the flowering of a free, rich and creative diversity of communal life diffused throughout the collective life. Now the problem is how to find the optimum balance which will minimize the disadvantages and maximize the advantages of both these methods.

The Balancing Act

The emerging new breed of political, social and organizational thinkers, with their ardent enthusiasm for autonomy, empowerment and decentralized functioning, tend to ignore the need to retain the capacity for centralized function. In fact there is no real dichotomy between a strong centre and autonomous states, if by strong we mean the capacity to impose unity and order over the nation—sometimes even by force if necessary—and ensure the sovereignty and solidarity of the nation under external aggression or internal conflict. As long as the spiritual and cultural unity of the nation or the state has not become a concretely conscious feeling in the consciousness of her people and remains only a vague subconscious sentiment, the outer unity of the nation cannot be entirely sound and secure. This is all the more true for a country such as India with its wide variety of ethnic, linguistic and cultural groups. Centrifugal and divisive tendencies can any moment gain the upper hand and jeopardize the unity of the nation. In such situations of internal or external emergency, a strong centre with sufficient power and capacity for centralized decision-making and action may be crucial for keeping the integrity of the nation. Instances of gross misuse of such emergency powers in modern India have provoked much controversy regarding whether such emergency provision is necessary in the Indian Constitution. We believe that an emergency provision should be there in the constitution, but with sufficient safeguards against the misuse of such powers. A day may come when humanity as a whole will rise to a higher level of consciousness beyond mind where it feels its unity and solidarity as a concrete fact of experience, and human life no more needs any external controls like constitutions and laws and government. Until that diamond moment of fulfilment arrives for humanity, some form of external organisation and controls for maintaining unity and order may be necessary.

So the problem here is not centralization as opposed to decentralization as an ‘either–or’ issue. The problem is how the advantages of both can be combined in an optimum proportion which is appropriate to the present and future evolutionary needs of humanity. The studies of futurist thinkers like Alvin Toffler indicate that modern society is moving towards an increasing complexity and diversity. And the past experiences of the political history of India and humanity as a whole indicate that a free diversity is essential for the power, richness and creative vitality of the collective life. So the decentralization and local autonomy will be the dominant trends of the future. This means the political power and initiative will pass more and more from the central government, administration and the bureaucracy to the state and the local people. We have to examine what are the minimum powers which the centre has to retain, and the principles which must govern the relations between the central and the local authority.

What are the minimum powers which the central government should retain? In the political field, foreign relation and national security—internal and external—can and should be under the central government. In economics some amount of central taxation which helps in funding the government is acceptable. In all other activities, the central government should assume the role of the coordinator, facilitator and promoter. The functions of the central government would be coordination, promotion and monitoring the progress of the states and the nation as a whole; minimizing conflict and maximizing cooperation between states; generating synergy by linking the unique strength and competence and genius of all states in a mutually complementing harmony; evolving a national consensus and vision on the long-term policy, goals, values, purpose and mission of the nation as a whole and in every department of national life. Finally keeping an overall eye on the material, social, and moral and spiritual well-being and progress of the nation as a whole with enough powers, resources and the capacity—under sufficient safeguards against misuse—to ensure unity, order and stability of the nation and a balanced development of all the organs the society.

In short, as the nation’s polity matures, the central government will become less and less a controlling and regulating authority and more of a coordinating and facilitating organ. All the rest of the nation’s life will come under the jurisdiction of the states, management of private enterprise and the self-government of the local people. Let us now examine how these tasks can be accomplished in the new and emerging world, where values such as democracy, diversity and autonomy are gaining increasing acceptance.

National Integration

Let us now examine briefly some of the important functions of government which need to be centralized. First is the task of national integration. Integrating the diverse steams of national life into a coordinated whole is an important function of central government. The first task here is to make each subgroup of the nation—the state, city, district and village—and each department of national life conscious of itself as part of a larger whole and an interdependent and interrelated organ of the organic unity of the nation. In the socialistic countries this was done by enforcing a uniform, mechanized and standardized pattern of life based on a single dogmatic ideology on the whole of the nation through centralized organization and a brain-washing propaganda. But such methods are now becoming out-of-date in the new and emerging social order which is moving towards a predominantly democratic, decentralized and highly diversified society. In such a free and diversified society the only durable path towards national integration is through education—not propaganda—which educes a free inner growth towards a conscious realization of the inner brotherhood and solidarity of the people or in other words to the realization of the psychological and spiritual solidarity which unites the heart and mind of the people. This fact is beginning to be recognized by the educated intelligentsia in India and all over the world. For example, the National Integration Conference report of 1961 mentioned that “national integration is a psychological and educational process involving the development of a feeling of unity, solidarity and cohesion in the hearts of the people.”

But this inner solidarity cannot be achieved by mere intellectual education or by sermons and lectures or by group-singing. This does not mean as some excessively “spiritual” people say that these things are “useless.” Man is at present essentially a mental being and any inner change has to begin with the change in the “thought process.” So anything which can give the true and the right idea and set the intellectual being in man thinking in the right direction is good and helpful for the inner change. But changing the “thought process” is not enough. What we need is a new system of education which can make the idea inwardly concrete, real and living to the consciousness of the people and galvanize the thinking, feeling and active faculties of the consciousness towards a harmonious and spontaneous realization of the idea in their inner as well as the outer life. An intellectual environment permeated with the right thought and idea, powerful technological instruments for the communication and diffusion of the idea, and an appropriate outer environment, organizations and institutions favorable to this task—all these are very helpful aids in this challenging task. But none of these can bring any lasting and permanent change without a system of education which leads to a psychological transmutation in the consciousness of the people. Such a psychological transformation can be achieved only through a system of education based on the principles of Indian Yoga.

Evolving a National Vision

The other function of government which requires to be centralized is building a national vision and purpose, which means to evolve a long-term national vision which can instill in the national consciousness a sense of direction, mission and purpose. This national vision should be based on a deep understanding of the history of our culture and civilisation, the inherent genius of the mind and soul of our nation and her evolutionary destiny; it should provide to the nation a moral and spiritual cause which can at once transcend and reconcile the economic, social, political, religious and ethnic interests of the various groups within the nation. But this national vision should not be narrowly nationalistic and chauvinistic, concentrated exclusively on national self-realization. There has to be a much-greater emphasis than that given by the ancients on the special contribution of India to the progress and solidarity of the international community and humanity as a whole.

Such a unifying national vision requires a long process of dialogue, discussion and debate to evolve and establish itself in the consciousness of the nation. In a democratic and “secular” society which permits freedom of thought and expression and with a bewildering diversity, this process of evolving a national consensus will be a long, slow and difficult process. But the time taken and the difficulties on the way do not matter. For once such a unifying vision becomes a conscious and integral part of our national mind, then it will create an enduring spiritual and cultural unity on the foundations of which any amount of free local diversity can be permitted to flourish.

Fortunately for us in India, we already have such a regenerating and unifying vision in the ancient ideal of Sanatana Dharma, in the all-embracing spiritual vision of our ancient Vedic sages, expanded and reinterpreted to suit the present conditions by our modern Rishis such as Sri Aurobindo and Swami Vivekananda. We have to explore further how to translate this spiritual vision into the economic, social and political life.

M. S. Srinivasan

Om Prakash Dani

[Published in Chartered Secretary Journal of the Institute of Company Secretaries of India]

 

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