Doing The Right Thing: Corporate India’s Need To Change Its Approach
Amitabh Bachchan’s tweet today quoting Peter Drucker, “It is more important to the right thing, than to do things right” … we try… sometimes it works, sometimes not!! This honest confession by the person of his stature surely forces you to reflect on it. If you are an entrepreneur, you are also as much responsible to another living being: your organisation. While profits may be the main thing, it cannot be the only thing that the entrepreneur is thinking while envisioning the organisation. Great entrepreneurs also consider the ethos, values, culture, vision, mission, et al.
Indian businesses lived through the licence raj for a better part of independent India. Businesses grew by tweaking the rules to their favor. For far too long, Indian businesses have been successful primarily because the offering satiated the need more in terms of its political relevance than in a manner that Peter Drucker would have loved it. Perhaps, doing the things the ‘right’ way was important for success than doing the right things.
Though there are several welcome exceptions, perhaps this overhang still lingers in the entrepreneur’s mind. As Indians, a majority of us still do not approach our businesses with the ethos of doing the right thing. As an enterprise owner, it is time that he/she begins thinking about the entire stakeholder spectrum as much as they think about their own profits and other personal gains. We need to measure the impact of our business decisions on our shareholders, employees, consumers, environment, poor & needy, society, etc. If we do not do it voluntarily, the government will enforce it upon us. The process by the government has begun in recent times.
The demonetization, amendments in the company laws, gender equality, rationalization of tax regime through GST, etc, are the steps in this direction. The government is keen that we do the right thing while doing our business. The governmental regulations so far believe that the entrepreneurs will comply and has, therefore, kept the onus of compliance is with the businesses. I guess the regulatory long rope will have a finite length and coercive methodologies may follow if the businesses do not comply it voluntarily.
Take, for example, the concept of independent directors. If the Board of Directors continues to be filled with uncles and friends as independent directors who act as mere yes-men to main promoters, then there might be an amendment in regulations which can be much more coercive in nature. If the regulation to keep 2% of profits to be invested into CSR by large enterprises is not implemented in letter as well as in spirit, then we may soon see a regulation forcing businesses to deposit these funds in Prime Minister’s Relief Fund. The impact of such a step may be very negative on the fund raising capabilities NGOs working genuinely on ground but the government may be left with no other option but to take such a step. “If you do not do the right thing voluntarily, then I will compel you to do so”.
Surely, doing the right thing makes more business sense now. Indian business enterprises need to change their approach.