Management

Business Ethics & Corporate Leadership

By Prabhakar SJB Rana

Business leaders, however successful, can evolve themselves further. Tycoons of the past, who attained great heights by sheer personal magnetism, are being gradually replaced by a new breed of corporate executive, whose leadership qualities derive from his ability to get the best out of a team. It also confirms the axiom of the survival of the fittest.

In a developed market there is a constant pressure on innovation and delivery of products that are both attractive and customer friendly. This style of operation is quite beyond the capability of the heroes of the past, who shared technological knowledge only among themeselves as delivery of communication was limited. But when the customer is king in an over–crowded technological jungle, it is difficult to pass off sharp practice as good enterprise, nor can one take refuge under state patronage. This is what makes the business leaders of today act in a self–consciously ethical mode.

Ethics, at its simplest, means concern for others. "Others" for the business world includes the consumer, the stockholder, the employee and even the environment. Morality’s existence could be in isolation as a private virtue. Ethics must operate in relation between people. Ethics should demonstrate a realistic satisfaction of the concerned "others" who are implicated by the act.

Business ethics in the corporate sector is directing organisations to create a new breed of entrepreneur, who is discarding his skills to buy peace either from patrons or from a closed market. They will also not while away their production hours plotting how to bend the rules. The success of Indian companies close to home such as Eicher, Infosys and Ranbaxy is an indicator of a healthy effect on a sector that has long been moribund. These new motivated enterprises breathe fire from wanting to be leaders in the field and not from concerns regarding the bottom-line alone.

Is a good leader one who breaks all the rules and builds an empire powered by sheer personal charisma? Or is a good leader one who leads by example and vision, such that these can be replicated and adopted by the organisation’s employees in general? The problem with charismatic leaders is that they cannot be cloned. Every aspect depends on him and him alone. A mistaken move can bring the whole edifice crumbling down. A modern, diversified corporate sector must avoid at all costs this self–defeating risk. The new leader must adopt a position as a team person, who helps others to realise their own potential.

It is true that not everybody can achieve leadership. However, leadership qualities can be cultivated in the corporate sector today due to the technological revolution through quicker and complete information systems. In the modern corporate sector, a conqueror in a grey striped suit would cause complete havoc. The new corporate leaders are deceptively easy on the eye, far from pompous, and yet can oversee top business management graduates with substantial brains. Their success story derives principally from their ability to direct and run ethical enterprises. In an ethical enterprise, the leader’s goal is communicated to the rest through the medium of properly laid down procedures that can easily be appropriated and assimilated by others in that organisation or perhaps even beyond.

Leadership in an ethical organisation first and foremost abhors shortcuts to financial success. If profit margin is the be all and end all, then the total emphasis would be on trimming costs, cutting down on R & D,dodging taxes, seeking loopholes in the laws and encouraging a breed of smooth talkers and palm greasers. This could bring in larger profits but success would be extremely short-lived. Large sections of the staff would be permanently disgruntled as it is not possible to buy off everybody. Compromised service and production methods breed shoddy work habits, which will lead to further cutbacks until eventually there is nothing left to slice away.

In today’s environment, the CEO is also the Chief Ethical Officer. Mere speeches and double standard will create a cynical effect on the majority of employees in an organisation, if the top management does not live up to its own credo. The ethical leader, therefore, will command due respect for what he does and how he does it and not for who he is. The reaction of people working under this leadership makes or breaks an organisation. Their feeling about the company and leader they work for becomes paramount to the concern of that organisation. A hierarchical principal of leadership needs, therefore, to be replaced by a team spirit where the leader leads from the front.

Leadership can be ethically demonstrated in a variety of ways. The cardinal truth for the boss is to apply the same standards to himself or herself as to the employee. This means that the executive powers of the CEO merges with ethical norms. The leader too has the responsibility of initiating dialogues across a wide range of levels and functions so as to operationalise values into practical policies, which have desirable effects. Finally, the leader can make routine jobs challenging by skilfully delegating responsibilities. In the corporate world this is known as delegated entrepreneurship.

Ethical practice is not simply a moral posture that one can privately indulge in and feel good about. Ethics, by definition, involves a collective that is drawn in together by sentiments of membership. A code of conduct that emerges out of it takes its natural course to become a normative commitment to the culture of the enterprise.

A modern corporate leader is not a superman but a person dedicated and committed to principles of excellence. From this unwavering commitment, the leader generates a culture within the organisation to which every member feels a sense of loyalty and belonging and have no inferiority complex before the boss. Unlike the earlier tycoon, the ethical leader pulls with the rest and raises the self–esteem of the side. This is the principle emerging trend in the advanced segments of the contemporary corporate world. It is time that we in Nepal learn it and learn it fast.

(Rana is the Chairman of Soaltee Group and this article is adapted from his acceptance address while receiving the Outstanding Management award presented to him by Management Association of Nepal)

Send your feedback to the editor: bizline@mos.com.np 1999 © Mercantile Communications Pvt. Ltd. P.O. Box 876, Durbar Marg, Kathmandu, NEPAL. Tel : 977 1 220 773, 243 566 . Fax: 977 1 225 407. Reproduction in any form is prohibited without prior permission. No part of the articles which appear in the internet version on BUSINESSAGE may be reproduced without the permission of Mercantile Communications Pvt. Ltd. For reprinting rights, please write to us. Send us your feedback:contact us . This site is best viewed at : 800 X 600 resolution