Morality & the Ango-Saxon Business model

After Rohini Nilekani, its now Arun Maira's turn to exhort the faithful to abandon what he terms the 'Anglo-Saxon' business model. Note: The tide has turned against the Anglo-Saxon model. In a recent poll in 20 countries for the World Economic Forum, over 60% of respondents said they want more government control over business activity.

Before I respond to the desire for 'governmental control', let me address the issue that Arun has with Business Schools. He states, 'The student asked whether business schools had caused the economic mess that America and the world was in. The student’s question forced the board to introspect on the fundamental ideas that business schools teach, and also on what they do not teach but should. They agreed that the concept of ‘responsibility’ underlying business management techniques taught in business schools is too self-centred. And also that business schools do very little, if anything, to help managers build their internal moral compasses.'

What Arun fails to see is the fact that 'moral compasses' don't and won't sprout up in Business Schools, despite what you teach or intend to. Morality is something that's learnt through life. The start is whilst one's growing up. And if during that stage, morality wasn't preached and practiced, let's say at a child's home, its going to be a herculean task to get that child who's now a Business School student, to take to morality. Note that I am in no way trying to say that morality doesn't need to be taught in business schools. What I am saying is, if that's where the start is to be made, its a lost cause.

When Arun states that the 'techniques taught in business schools is too self-centred' he again fails to realise that everything that one does in life, in all probability is going to self-centered. A departure from that can only be expected if the protagonist reaches what Abraham Maslow calls, the 'Self Actualisation' stage in life. All the preceding stages to 'Self Actualisation' are about 'Self-centredness'. From 'Physiological needs' right up to 'Self Esteem' all factors of motivation center around the individual. The long and short of the story? The most important person to us is us! Doesn't matter whether we play the role of a child, an adult, a business school student, a Business Executive, a spiritual guru, whatever, to us we are a precious commodity.

Coming to what Arun says about the Anglo Saxon Business Model. The irony to what we are now facing, is this. Socialism seems and sounds better. More so to those who have lost their jobs or have been hit by the downturn. The government seems to them, as their only saviour. The truth is just the opposite. Take public sector firms, for example. In spite of the lofty goals with which they were set up, these firms rarely operate efficiently. They don't need to. After all they aren't as answerable as private firms are, for the resources they expend. After all, its taxpayer money and who better than the public sector to waste such funds. Accountability is almost non-existent. Again, its not as if the private sector is infallible. Remember, greed is pervasive. But its just that its the private citizen who's best suited to the task of value creation, as he uses resources with greater responsibility and is accountable to investors who have put their money and faith at his disposal.

Countries that have encouraged the private citizen to start and run businesses have tasted levels of prosperity far greater than the ones that have the state running businesses. If for a moment you think only the former sort of countries have been hard-hit by downturn, you are mistaken. Note Swami Aiyer when he says, 'But hold the dirges. The most vocal critics of US capitalism are sinking too. Look at Latin American socialist regimes (Venezuela, Bolivia, Ecuador), Russia and Iran. For all their socialist rhetoric - President Chavez of Venezuela has long sworn to spearhead a socialist Bolivarian revolution in Latin America - their rival economic models look bankrupt too.

The IMF estimates that Venezuela and Iran needed an oil price of $90-95/barrel to balance their budgets. When the price rose to a peak of $147/barrel, these countries were awash in petrodollars, and made grandiose plans. Chavez offered half his oil to Latin American friends at concessional rates. But now, he is running down his forex reserves to survive.

President Ahmedinajad in Iran planned fancy welfare plans with oil revenue, and switched Iran's foreign reserves from dollars to euros to teach the Yankees a lesson. His spending plans have come unstuck after oil revenue plunged by two-thirds. Inflation is running at 26%. Ahmedinajad now looks like losing the coming Iranian election to his moderate rival Mohammad Khatami.'

If after all this you still think the 'state' is the way to go, I recommend your get your emigration papers ready. Destination, Cuba, Venezuela, Iran, Bolivia, Ecuador, Russia....


A nice read Sir.

Cheers !!

Popular Posts