NEED FOR INDIAN MANAGEMENT MODELS

India is an ancient civilization with a proud history of continuous prosperity. Even during the previous two millennia, she was the most powerful economy in the world, till the Britishers started destroying her. India was a poor nation at the time of Independence, and within a period of just decades she is emerging as major economy at the global level. The reason for the prominence and rise of India is her backgrounds and native management models. With the ascent of the West during the recent centuries, their concepts and practices came to be used throughout the world due to historical reasons. Now they are facing serious difficulties as their foundations are weak. Hence it is no use copying them. Instead we have to recognize the functioning Indian models, develop newer ones and create theories that are suited to our conditions, to go forward in the right direction.

Introduction

We are witnessing two major developments at the international level during the recent years. One is the large scale failure of the western economic, business and management models. Second is the rise of India and China in the economic and business fields. Among these two countries, India is democratic with a very long history of economic prosperity since the earliest times. In recent times, she has emerged as a major economic force at the global level in a period of just six decades after independence. Indian business sector has been growing and is spreading its wings successfully across the globe.

The economic crisis that erupted in the US in 2008, and devastated the west, has shown that their models have failed in their own country. As a result serious questions are now being raised against their models, particularly with regard to their applicability in other countries. In fact reputed economists such as Paul Krugman, who is the 2008 Nobel laureate, are questioning the very fundamentals of the western theories. At the same time many experts have started to admit that that the Indian models would be better than the western systems. During the past few decades, there have been attempts by a few concerned experts to create awareness for developing an Indian system of management, primarily based on the ethos and spirit of the nation. Voices have also been raised, on different occasions, regarding the suitability of the western models to the Indian conditions. The time is ripe now to examine the position in the changed circumstances and create a suitable climate for evolving native models for better performance and sustainable development.

Management concepts and theories – Developments in India and the West

India is an ancient civilization. India remained a powerful economy, with successful business and trade practices since the ancient times. Even when we take the last two millennia, we could find India as the most vibrant and prosperous nation for most of the period. Economic historian Maddison (2003) notes that India was contributing 32.9 percent, almost one third of global GDP, during the beginning of the Common Era, i.e. 2009 years back. We understand that India’s position as a premier economy continued uninterrupted, till the Britishers started interfering and destroying the native systems.

An economy that remained as the most prosperous one for many centuries with successful businesses must have had very good management systems. We have to remember here that India was not just the major economic power, but also the premier centre for educational, scientific, intellectual and spiritual activities with pioneering contributions in diverse fields. We understand that the management concepts were predominant in the ancient literatures and scriptures. In fact we could see various management concepts discussed in different books, apart from the well recognized works such as the Bhagawat Gita, Arthashastra and Thirukkural. More than two thousand years ago, Thiruvalluvar had written on what are now considered as the modern management concepts such as human relations development, norms of good governance and communication skills. Hence Nanda (2006) asserts: “The scholars in Europe and America have to be informed that management thought in ancient India are not limited to one book i.e. Kautilya’s Arthashastra. This is one of the many books of knowledge in relation to management.” One could see the usage of management concepts and principles in the form of sayings and proverbs in the day to day lives of the ordinary citizens across the country, even today. These proverbs explain different management ideas in just a few words beautifully. They are available in many Indian languages. Nanda notes: “In ancient India, we find a lot of definition of subjects relating to management in some way or other.” So the management concepts are not new to India; they seem to have been used even among the common people since the earlier periods.

Later when the Britishers began to adopt their methods and introduce their systems after their arrival, Indian economy and businesses declined. As a result the time tested concepts and systems that were developed over many hundreds of years of experiments were neglected and destroyed. Finally when India got independence after more than two hundred years of alien domination, she was a poor nation with a host of problems.

Most of the modern west is comparatively new. Maddison notes that Britan did not even have clearly defined borders till about five centuries years ago. The most predominant of them today, namely the US, was ‘discovered’ in 1492 and it was only later that the Europeans settled there. Economic historians such as Andre Gunder Frank emphasized that the rise of the west in the later centuries was not due to any of their superiority such as technology. He notes that even their claim to the philosophy of ‘capitalism’ is far-fetched. To quote Frank (1998), “ Until about 1800 the world economy was by no stretch of imagination European-centered nor in any significant way defined or marked by any European-born ( and European-borne) “capitalism”, let alone development. Still less was there any real “capitalist development” initiated, generated, diffused, or otherwise propagated or perpetrated by Europeans or the West. That occurred only by the stretch of the Eurocentric imagination, and even that only belatedly after the nineteenth century…………”

Experts note that the Europeans could emerge at the global level only due to their colonial policies. As a result Europe, and mainly the British, could improve its economic position at a rapid speed in the eighteenth and nineteenth centuries. Subsequently the US emerged as the major economic force in the twentieth century. Management theories of the west started emerging in Europe and America from the final decades of the nineteenth century. Cole (2004) notes: “The Classical school of management thought and thinkers emerged from 1880s to 1930s. It was the result of unprecedented growth during the industrial revolution. Large and complex organizations created the organizational complexities, and problems of operational efficiency.” Practising managers such as Taylor and Henry Fayol, and social scientists such as Mayo and McGregor had contributed to the earlier management theories. It was the academicians and the management consultants who have been predominantly contributing in the later periods. To quote Cole: “Most of the contributors to the theory and practice of management nowadays are academics with strong research backgrounds, and most are from USA. Of the practitioners, almost all are practicing management consultants, indeed most also hold positions in American universities.” Here it is relevant to understand that the western management theories are of recent origin, and the later ones have mostly been contributed by the US academicians.

As India and the rest of the world were under the dominance and influence of the European thinking, their management practices came to be adopted in the colonies across the world. Later when America began to dominate the global economic scene, they began popularizing their management systems. They supported the establishment of management and business schools in different countries such as India. As a result, the US model of management appeared to be the appropriate model for all the other countries. The increasing spread and influence of the multi national corporations during the last few decades have also helped the U.S. and the western management systems to spread out to different parts of the world.

Different models of management

Basically there are two types of thoughts with regard to the approach towards life. They could be broadly classified as the western and the eastern types of thought. They are based on the outlook, views, ideas and lifestyles of people in these parts of the world. The economic, business and management models of different countries are based on these thoughts and approaches. Hence we have to keep this point in mind, when we discuss the management models of India and the west. Otherwise any analysis or comparison of management models would not be meaningful. The most prolific contributor to the value based Indian management thoughts, Professor Chakraborty (1991), notes: “It is prejudicial to the real interest of Indian management not to know or to choose to ignore the two fundamentally different streams of human temperament in the world: the western (especially since the renaissance) masculine, logical, rational aggressiveness and the Eastern feminine, intuitive, receptive realization.”

As the eastern and western management systems rest on different foundations, it might be difficult to find universal management models applicable to all the countries in these parts of the world. Sharma (2001) writes: “There is no single model that is applied everywhere in different countries. “Pascale and Athos in their book, The Art of Japanese Management, have contrasted the approach adopted by the professional managers of the Western and the Eastern world, in solving their problems. The principal difference between the Eastern institutions and those in the West is that ours is tuned to organizational structure and formal systems to cope with those challenges. In contrast, Eastern institutions, while until recently advancing more slowly in thinking about organizational forms and formal systems paid more attention to social and spiritual means.” Experts note that culture plays a vital role in shaping the management approaches. Parthasarathy (2006) asserts that “Management is predominantly culture specific.”

How relevant are the western models for India?

When the attitudes and approaches of people in India are vastly different from that of the Western countries, it might not be advisable to adopt their methods. Sharma asks: “Can a society, which has spirituality as its dominating characteristic, adopt the ‘management philosophy’ developed in the West per se.” The contemporary functioning economic, business and management systems of India are different from that of the West (Kanagasabapathi, 2009). Against this background, if India tries to emulate the western models she might not be able to attain full success. To quote Chakraborty (1991): “Authentic success in Indian organizations will remain an elusive purple patch if superficial emulation of techniques springing from the western temper remains the mainstay.”

Flaws in western models

Cut-throat competition and too much of individualism have created irreparable distortions in the western system. Even the organizational loyalty, which is important for any system to succeed, is considered as incorrect by the west. Chakraborty (1991) notes: “Western thinking, by and large, prompts us to treat organizational loyalty as an anti-professional value. The truth is that today professionalism is almost a byword for loyalty towards personal mercenary aims. Yet no great achievement is ever possible without a focus of loyalty which transcends the individual self. Besides, in the long run, life itself loses meaning if every thought and action remains centered on the little self only.” The top management is only bothered about garnering the maximum benefits for themselves, even at the cost of the larger interests of the employees, shareholders and the society.

Many of the western experts themselves voice opinions with regard to the problems associated with their management practices. For example, Salamon (2002) from U.K., “…… candidly admits that there are several flaws in the western model of managing a business.” Self-centric approaches, maximization of profits at all costs, little concern for the larger environment and a narrower view of life are some of the major flaws in the system. What could be the main reason for the flaws in the western models? Chakraborty (1991) asserts that it is the absence of ethical principles. To quote: “A survey of the managerial and administrative processes also reveals the same dominating paradigm as in economics. …. It is the invasion of this credo into management which causes it to leave out the ethico-moral man in managerial processes.”

Functioning management models

Studies reveal that Indian and Indianised management models exist and are successfully functioning in India. The non-corporate sector plays the dominant role in the Indian economy and businesses, with a contribution of about 57% to the national income. Different studies on the management styles and practices in the non-corporate sector show that the management models are native. Studies of different economic centers, including highly successful industrial and business clusters covering different types of organizations including companies, and society based business initiatives provide important clues to the functioning of native management systems.

Let us take for example, the field of personnel management which is a very important area in modern management. In almost all the successful centres, the overall management approach towards employees is friendly and not antagonistic. On the whole there is a personal orientation beyond the employer-employee relationship. The entrepreneurs try to keep their employees satisfied by helping them, whenever such help is required. In many instances there is a ‘fraternal approach’ to the employees. In the course of time, most of these factory/business relationships get extended into personal and family relationships. One could notice the established entrepreneurs in different parts of the country taking it as their duty to promote and develop new entrepreneurs by helping them in all possible ways. This is the highest forms of assistance to anybody who wants to start a business.

There is an industrialist in western Tamil Nadu, who has promoted more than 10 textile spinning units, all by himself during the last two decades. He has more than 10000 employees working for him. There has been no strike, and not a single protest by the employees during these years. But he is not a HR professional, and not even a qualified textile expert. How could he maintain such a high level of human relations and extraordinary success in business? It is all due to his personality as a concerned and a humane employer, moving closely with everyone irrespective of their status. He knows the names and background of all his employees and remains as a source of support in times of difficulties.

‘Indianised’ styles in corporate sector

One could notice more of a traditional orientation in a majority of the corporate sector. In many places one can still notice the traditional office systems devoid of a luxurious outlook, elderly promoters attending work and helping the subsequent generations in all possible ways, and in a few cases loyal employees contributing sincerely well after retirements. All of them have adapted to the modern times, without losing the inherent value systems. It is a common feature to see the managements updating themselves with the operations and performance of the companies using latest technologies. Subsequent generations have acquired minimum qualifications or more, and have learned to use as much technology as they require for operations and management. In many cases the heirs to the business try to get technical and management qualifications in the relevant fields from good institutions.

As far as the big corporations are concerned, though there has been an outward tendency to emulate the West, the attitudes and approaches of those who control are primarily Indian. During the previous decades, the earlier generations tried to steer the businesses without losing track of their value systems. Though the modern generations remain a bit confused, they would certainly prefer to follow the Indian ways in the changed circumstances after the crisis. There is also a mix of the Indian and the Western methods in different instances. Even the multinational enterprises that operate here know that India is a ‘culturally tough’ nation. Hence they Indianise their practices, as much as possible, to establish their business and succeed. These Indianised approaches seemed to have worked well in different cases as they combine the other approaches with the India approach approaches and make suitable combinations of practices.

Cultural foundations of Indian management

The contemporary achievements of India are mainly due to the cultural backgrounds. In such a situation, Chakraborty (2003) presents that India would be able to achieve greatness only by following the management systems based on the cultural traditions and native spirit. “The need for authentic management, management that is true to cultural roots, is becoming clearer daily in both the East and the West. The United States, for instance, cannot meet Japan’s great industrial challenge by copying Japanese methods. Japanese methods do not fit the American ethos. The graft will not take. America must regain its industrial excellence through methods that are compatible with its own unique character and values. Similarly, India will not realize its material potential through copying the US, Britan or Japan. India will be great only by being India. Neither a country nor a person can achieve greatness through imitation. Greatness cannot be achieved through imitation. It can only be achieved through authenticity. The Bhagavad Gita says, “Better in one’s own dharma, though imperfect, then the dharma of another well performed. He who does the duty ordained by his own nature incurs no sin.”

Higher ideals in management practices

It could be seen that the Indian society always governed its actions by reference to higher ideals, even while engaging itself in routine activities. Maharishi Aurobindo notes: “Indian society developed with an unsurpassed organizing ability, stable effectiveness, practical insight into its communal coordination of the mundane life of interest and desire, kama and artha; it governed always its action by a reference at every point to the moral and religious law, the dharma; but it never lost sight of spiritual liberation as our highest point and the ultimate aim of the effort of Life.” What could be the reason for this? The answer might be found in the words of Tagore: “We still know that only in ……. spiritual wealth and welfare does civilization attain its end, and not in a profile production of materials, not in the competition of intemperate power with power?” It is India’s obligation not just to herself but to the world for a transformation in the management approach. Chakraborty (1999) notes: “The irrefutable commandment is that the secular and the material must be informed and invested with the sacred and spiritual. ….. India’s obligation to herself and to the world is to relive this sacro-secular symbiosis for effective transformation in every epoch.”

Management education based on western notions

Modern management education in India has a background of about seventy years. The management schools rely almost only on the western concepts and practices for teaching. Ojah (2005) notes: “Post graduate management education as we know it today has been strongly influenced by similar education in the U.S. ever since Harvard Business School and Sloan Business School, Massachusetts Institute of Technology, helped with the establishment of the Indian Institutes of Management at Ahmedabad and Kolkata respectively in the early 1960s. Continued recruitment of faculty in the IIMs, and other similar institutions, from universities in the west, particularly the U.S., has ensured that most of the prominent post graduate programs in management in India have followed the norms that emerged in the US environment, although with a lag.” As the emphasis remains more on the western theories and approaches, the candidates are not exposed to the realities of the functioning Indian systems. .

Need for India oriented approach

It is time the management institutions did some serious thinking. The western business and management models are facing serious problems, prompting them to go for deeper understanding of the issues. Saraswat (2005) noted earlier: “Widely publicized financial and accounting scandals at large multinational corporations such as Enron and WorldCom in recent years have brought issues of corporate governance, ethical conduct, and social responsibility to the forefront of the academic debate in the United States. Market-rigging scandals at other global corporations such as Italy’s Parmalat demonstrate that the problem is not confined to any one country or culture; its dimensions are global. The growing public awareness of these transgressions has exposed the inadequacy of management education in universities and management practices in corporations. The existing parameters of academic discourse and time-honoured principles of organizational behavior seem to ignore the underlying spiritual and human values on which important management decisions are based. Consequently, individuals in positions of great responsibility in corporations are often unable to either recognize the norms and boundaries of accepted ethical behavior or deliberately trespass them. Academic and corporate establishments in the US are, therefore, recognizing the need for a deeper discussion and understanding of the underlying causes of unethical behavior”

Against this background, there is no use copying the western models. It becomes imperative to reformulate our attitudes towards the western approaches, depending on their applicability and usefulness to India. If necessary we might even have to challenge their models that are not relevant. In this connection, Chakraborty (1991) asks : “… have we Indians ever thought of challenging its wholesale transmission to our students and managers. Could it be that post-independence Indian culture has been so character-less, and our intellectual spinelessness so shameful, that the well intentioned Americans have never really faced a solid and genuine challenge to review the intellectual wares they have brought over to do us good?”

For any country the native models are the most suitable ones. They have their roots in the native soils and are sustainable. It is all the more true in our case. India being a unique country with a proud record, it is necessary to recognize and nurture the functioning models, and develop better ones to suit our conditions. It is to be remembered that the basis for all attempts towards newer models should revolve around the core principles of the nation. To use the words of Chakrabotry (1991): “India has never been a mercenary or colonial culture like many western nations. Materialistic cultures may be glamorous, but not happy. So we are told today that ‘Americans are not getting enough happiness for their money’. The ‘Protestant ethic’ has been associated with the promotion of several exploitative, mercenary colonial cultures. It is therefore likely to be unsuitable to the hidden grain of the Indian temper. The limited sociological perspective tends to miss the woods for the trees. The ‘deep structure’ remains untouched. Courage is required to go to the root of the matter and construct or re-construct our own models. If the endeavour is uncompromisingly honest and sincere, we need not worry about immediate results.”

So we have to create new theories and evolve newer models wherever required, as the foreign models, by nature, are bound to create discord in an ancient country such as India. Moreover we would be able to get the necessary results, only when we follow models that are suitable for our lands. History shows us that as long as India followed her models she was prosperous. The movement they were neglected or thrown out, the system suffered. The solutions for many of the contemporary difficulties could also possibly lie in our inability to understand and develop the native models. Hence it is time that we resolved to create a suitable climate to appreciate and develop native Indian models. In this connection, it is worth noting the words of Samir K Baura (2009), the Director of IIM-A, in a recent interview: “It is high time that we started creating Indian knowledge. We must ask how many management theories have Indian B- schools produced.”

References

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11. Parthasarathy, Swami. (2006). Human Values Management- 20 Key Principles for Modern Management. Ane Books India: New Delhi.

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(Published in Global Management Review, Sona Institute of Management, Vol.3, Issue 5, Nov.2009)