When ‘B’ of a B-school Fails

In colonial America, they branded your palm with a ‘T’ for thief, so that in future everyone would know not to do business with you or work for you. These were the bad old days of overextending your credit. Today while going bankrupt is still a source of shame – is more like a personal finance management tool. Recently many b-schools seem to be going bust, what could be the reason? Almost a decade ago, setting up a b-school was a fashion. A decade later, personal debts of its owners has led to many of them shutting shop. But the ones who setup these institutions seem to be the biggest gainers out of the sale; simply because the value of the asset (real estate) had appreciated almost 400 – 500%

Getting it wrong is mostly not about ignorance or culture. The trend seems to give a hint that these b-schools don’t fail or get it wrong by mistake or ignorance. The answers of ‘why’ lies in studying how decisions are actually made, who gets to make them and why those people decide to do what they do.

An individual liability of the owner’s is conveniently transferred as organizational liabilities. Despite there being a blatant breach of trust demonstrated by the Trustee’s, there is no accountability whatsoever. It’s common to assume they’re deadbeats – spendthrift who’s kids enjoy expensive world tours (holidays), luxurious cars. Later they realize they can’t pay the mortgage. The mortgage is most often than not the Trust’s real estate. Now when the repayment is almost impossible, the easiest way out is selling the real-estate.

But somebody has to be held responsible for this mess. Yes, it’s the inefficient employees or even better the recessionary trends in the economy. The real culprits clearly get away scot-free.

When will this scenario change?

Jobs She is interested in!

Recently THE WEEK-MaRS Survey 2015 was published. The survey had some interesting findings. Gender was the demographic variable describing the differing patterns. Lets take a snapshot of the expectations of the females.

• Minimum salary expectations range between 20k - 25k
• Most preferred are Government Jobs and Public sector companies (Guess Why?)
• Banking & Financial sectors are the most preferred industries
• Aviation sector seems to be the least preferred; despite preference to female candidates
• No takers for the manufacturing sector amongst women (What happens to 'Make in India'?)
• Bangalore, Chennai, Pune are most preferred locations

Institutional Ethics

Recently an educational trust from Pune came under the IT scanner. Various irregularities and illegalities on the financial were identified. Tables seem to have turned; the very institutions where students deliberated upon the unethical and immoral acts of society are now facing the questions upon themselves. The trends are saddening and uninspiring.

Crores of rupees are stashed into the personal accounts of the trustees and executives of these institutions. Building personal wealth seems to be the only priority of these educational trusts. Thus, challenging the whole concept of trusteeship. But why do heads of such institutions succumb to such acts? They are well-paid already!

Research shows that majority of folks act based on the circumstances in their environment and standards set by their leaders or peers. Most of the times, these folks succumb to unethical acts even if it means compromising their personal moral ideals.

‘Good’ people do bad things when the environment around them doesn’t value ‘values’. Ethical behavior seems to trending towards being eyewash more than anything else. With the rise in unethical practices especially in educational institutions, it is clear that the environment is changing.

Being Environmentally Responsible

One of the major issues faced by most corporates has been directly or indirectly related to the environment. In the environment basket land forms a major component of the dispute. On one end of the continuum there is awareness of safeguarding natural resources. The other end is the ‘development’ lobby which seems to be presenting the inclusive growth and prosperity picture. But which end of the continuum is India inclined towards? Hopefully we do not have our two feet in two different boats, heading in different directions. Mining activity is one such business which is seems to be a stuck in the middle, a ‘double edged sword’ as many would remark.

Not long ago a state saw the shutdown of mining activities for illegalities such as extraction of ore more than permissible limits, cheating the exchequer by hiding the value of the exports, environmental degradation and encroachment into forest land. This has raised question marks on both the corporates as well as the certifying agencies. While the state is now gearing up for resumption of mining, experts ask whether all ambiguities in the system that triggered these misdeeds in the first place are rectified. Are the institutions that implement and monitor this business activity equipped to prevent the repetition of the illegalities? No change is possible until and unless these agencies are revamped and made more robust.

Balance between environment and development requires effective and vigilant agencies that can take evaluated decisions. If we are serious about inclusive growth and development, there ought to be institutions that have foresight and hindsight. This means not just gazing into the future, but also looking into the past and repairing what is broken. Issues such as restoration of the environment seem to never gain importance. The attitude is ‘what is done is done, forget it’. Accountability of past actions goes unimpeded as long as you promise to ‘Go Green’ in your future actions. Everyone seems to be going green. Well, if everybody is ‘Going Green’ how come all this pollution? It’s just like, none of us claim to be corrupt yet corruption exists!

The last decade has also seen the idea of ‘Green Stewardship’ gaining prominence. Issues pertaining to the environment such as resource depletion have caught the attention of many. Attitude towards environment is gradually leaning to foster innovation in areas of conservation, recycling and renewable energy. But here too there is no sign of restoration of the damage done to environment in the past. Whether the businesses join the trend voluntarily or out of pressure from the stakeholder, sooner or later it is proclaimed to be a win-win for all.

In the end, there is much talk about ‘Green Economy’ as a potential solution to the challenges of climate change, environment degradation and impact of economic uncertainty on the environment. Trends suggest that there is enormous awareness amongst all stakeholders, and an increasing demand for green products from the consumers. The success of ‘Green Economy’ however depends not only on the corporates, but also on the government agencies and economic institutions supporting the cause.

Globalization has led to the rise in aspirations of billions of Indians. These aspirations have put enormous pressure on the natural resources, in an attempt to fulfill them. Being environmentally responsible means the ensuring the balance between our needs and our wants. As Mahatma Gandhi aptly said “Earth provides enough to satisfy every man's needs, but not every man's greed.”

When CSR takes the back seat

A mining company recently announced the temporary closure of its CSR (Corporate Social Responsibility) initiatives in Goa. The company had already hinted of the shutdown due to paucity of funds. The paradox being, the company was awarded the ‘Best CSR Project’ just a few days prior to this announcement. While there is no direct revenue loss, the closure seems to be an offshoot of the suspension of the mining activities in the state. This is a major setback to the Football Academy and healthcare initiatives of the company.

Recently, the Govt. of India had made CSR mandatory for companies based on certain criteria. The norms were primarily based on its financials. It has been less than a year and we already have a company citing arguably valid reasons for abruptly discontinuing their CSR initiatives. CSR definitely seems to have taken the back seat. But are the company’s justified in taking such a step? On the other hand the company may argue, should the beneficiaries of the CSR initiatives also suffer when the company is making a loss? This raises the fundamental question of what CSR means to the company.

Can companies shun from their social responsibility only because part of their business is not economically viable any longer? Corporates often argue that challenging economic conditions forces them to take hard decisions. Also companies are exposed to external business environment which is not within their control. However, companies need to be held accountable for their actions or inactions with regards to their CSR activities.

CSR is most often than not misconstrued as philanthropy or charity. Maybe companies that perceive CSR as charity do not take CSR seriously until and unless the pressure to internalise the costs of these CSR initiatives reaches an excruciating level. Corporates need to recognize the fact that business is very mercenary and it has to be balanced with some missionary aspect. CSR can help in getting that balance right.

Even if you do the wrong thing for the right reason, it works. But if you do the wrong thing even for the right reason, it doesn’t. When embracing a CSR initiative the approach might be philanthropic, but abrupt closure of it would certainly be irresponsible and unethical. This would also indicate the lack of strategic planning of the initiative. This myopic vision towards implementation of CSR initiatives can be detrimental to the image of the company as well as the stakeholders. Most corporates focus their investment in Healthcare and education as a part of their CSR programmes. Abruptly ending these programmes have a cascading effect on the families benefiting from it.

Although the primary responsibility of any business is to be profitable, the prosperity of all stakeholders not only shareholders should be reflected in the company’s action. CSR is one such concept that nurtures this equality amongst all the stakeholders.

As Abraham Lincoln rightly put it “the probability that we may fail in the struggle ought not to deter us from the support of a cause we believe to be just.”

Helmet Please!!

Helmet Please!!

In a report published by World Health Organization (WHO), every year nearly 1.2 million people die as a result of road crashes. Many more injured and disabled permanently. In many middle income countries like India motorcycles are increasingly common means of transport. Two wheelers make up a large proportion of those killed in road accidents. In 2014, the death toll from two-wheeler casualties was over 151 in Goa. Unlike a four-wheeler, two-wheelers lack physical protection to its rider making them particularly vulnerable to injury in case of a collision.

In India 69% of total number motor vehicles are motorized two-wheelers. Although there is a lack of precise data of motorcycle rider fatalities, in countries like India head injuries are accounted for up to 88% of such fatalities. In contrast, wearing a helmet decreases the risk and severity of injuries by about 72%, a statistic that can’t be ignored.

Head injuries result in higher medical costs, while the disability that results from these head injuries incurs costs at an individual, family and societal level. In addition, the social costs of head injuries for survivors, their families and communities are higher as they require long-term care.

Now as far as the influence of wearing helmets on the economic activity of the state; it is definitely beneficial to the state as well as the citizens. The WHO report also indicates, road users killed in various modes of transport as a proportion of all road traffic deaths is highest in motorized two-wheelers. Places that are tourist attractions (viz. Thailand, Malaysia) show highest figure of two-wheeler deaths, almost 65%. Goa being a tourist destination we must take cognizance of the same. Another reason for tourist destinations being prone to accidents is that the driving/riding under the influence of alcohol is higher. Also implementing the mandatory helmet rule would send a positive message to the tourists in terms of the safety consciousness. Something we admire when of western countries.

There is also a myth that there is no need for helmets at lower speeds. On the contrary, research indicates that most over speeding occurs on artery roads rather than on highways. Besides, helmets help in preventing head injuries which is more frequent in case of minor accidents. There is a tendency of two-wheelers riders to be impatient on the narrower roads; they frequently attempt to make dangerous manoeuvres to overtake other four-wheelers. These overtaking manoeuvres lead to head-on collisions with vehicles in the opposite direction. A helmet would definitely avert major head injuries in case of such a collision.

One of the major irritants of helmet use is its discomfort. However there are solutions to this as well. There are various styles of helmets which offer different protection. The four most common types being: Full-face, Open-face, Half-head and Tropical use helmets. For riders who find the Full-face helmets uncomfortable, the Half-head or Tropical helmets can be perfect alternatives. These are helmets specifically designed for countries with extremely hot and humid climates like Goa. They are half-head helmets with ventilation holes to provide a maximum air flow so as to reduce heat.

The answer to the debate between no helmet and Full-face helmet could be the Tropical helmet.