<p> Creating Value Based Business Leaders</p><p>Dr S S Narula [email protected], [email protected] Gitarattan International Business School, Rohini, Delhi Rajesh S Pyngavil [email protected], [email protected] Gitarattan International Business School, Rohini, Delhi Abstract What is successful business leadership? Is it maximizing wealth? It is focus on making more that leads to incidents like Bhopal Gas leak tragedy and Wall Street collapse. These top managers threw values and ethics out of the window in their desire to make more. The contemporary world requires business to be sensitive and sustainable both socially and environmentally. It is no longer enough to be efficient. It is also important to be good. To achieve this goal, ‘B’ schools need to go beyond pure theory and skill development and incorporate value development in their curriculum</p><p>Key words: Focus, Value, Curriculum.</p><p>1. Introduction Recent global events have created challenging business environment. Whether it was Bhopal Gas tragedy or the Wall Street melt down, it was all caused not so much due to lack of leadership but it was more due to focus on wealth maximization by means fair or foul. They lacked a sense of broader context and made decisions in isolation. A business leader has to understand the interconnectedness of their decisions to all other parts of the society and act in a responsible manner. The urge to make more is always a temptation but such a focus can help a business to grow in short term only and results may at times by disastrous in the long run. It is easier to shrink business to its narrowest definition that doesn’t contemplate role of business in society at large. However, it is no longer enough to be efficient in the present day challenging business environment. It is also important to be good. This is the need of the hour. Success in this mission would require some path breaking initiatives by ‘B’ Schools who are busy churning out Business Management</p><p>1 Professionals who are shallow, narrow and static technocrats rather than deep, broad and dynamic leaders capable of looking beyond the profit making of business to develop and grow with a clear vision of its future. While B Schools can help young professionals to develop their talent faster and further but these are neither the only ways to the top nor a guarantee for success. There are countless successful business tycoons who have never entered the precincts of ‘B’ Schools but rose to carve a niche for them in the business world. On the other hand, there are hordes of business school pass outs that have to run from pillar to post to earn their living. What the business schools teach today needs to be seen for relevance in present day business environment. Sound technical training in all the functional areas of management is necessary but it is not enough. We also need to develop the skills in the students to be effective in team work, leadership, communication & cross cultural conflict resolution without losing sight of values and ethics. The right curriculum with lots of real life learning is vital.. The B Schools must focus on equipping the future managers with creativity, innovation and entrepreneurial management to handle new products, technology and services without losing sight of values and ethics for growth and sustainability of business management. To perform at one’s best without sacrificing oneself to achievement is to operate from a foundation that is anchored solidly in what is most important and enduring in one’s life. Self awareness for a leader can be his understanding of his personality type, values, needs, habits and emotions. The basic premise of self awareness is the realization to give ourselves good and justifiable reasons to act the way we do. When we are aware of our personality type, it helps us align our behavior & goals to our values. What are values? In his book ‘Management by Values’ ken Blanchard explains that values have meaning only when those help determine how we interact and conduct ourselves. Values act as a guiding force for the people in an organization to work towards a common goal. To discover values, it is imperative for the top management to express their belief and attitudes on people, ethics, integrity, growth, stability, profit, innovation etc, and communicate to the rest of the employees.</p><p>2 Before one starts identifying the values for an organization, it is important to know about the sources of values, the factors that influence the values and identify the people to be involved in framing the values. Customizing ones’ values to his/her organization after taking into consideration one’s objectives and modus operandi is the first step in the process. Then comes the next step of communicating these values to the employees. Organizational values must make sense to all levels of the workforce; it should be free from ambiguity and kept simple. This alone will result in defining values which will be practiced and not remain a mere paper exercise. True contentment doesn’t ask us to end aspiration or advancement, but asks us to appreciate and enjoy what we have got before we can focus on getting more. Many, after getting something for which they hankered after, immediately begin a new search for something different; the process never seems to end. At times, we even forget why we needed something or someone. Discontent can thus become addiction. There seems to be a tendency to be dissatisfied with what ever we have, be it possessions or relationships. Is the grass green on the other side? Unlikely. We don’t know where do we draw the line and say enough is enough so that we can achieve balance between what we can acquire and what we can use, big or small? This paper primarily deals with various facets of value based leadership. Value based leadership is closely associated with ethical leadership. The highly turbulent economic, social, political and cultural instability across the globe triggered the need and importance of value based leaders to lead future organizations and corporate. The paper also proposes a suggestive framework in which value based leaders can be developed by business schools and management institutes. 2. Value Based Leadership Recent years have seen a plethora of new management approaches for improving organizational performance: total quality management, flat organizations, empowerment, continuous improvement, reengineering, kaizen, team building, and so on. Many have succeeded – but quite a few have failed. Often the cause of failure was performance targets that were unclear or not properly aligned with the ultimate goal of creating value.</p><p>3 Value-based leadership (VBL) tackles this problem head on. It provides a precise and unambiguous base upon which an entire organization can be built. VBL and ethics can go hand in hand. Ethics concern attempts to distinguish ‘right’ from ‘wrong’, ‘good’ from ‘bad’. How we can determine right and wrong – good and bad? The former Prime Minister A B Vajpayee declared “zero tolerance for corruption” in order to restore ethics. This cannot be turned into reality unless we work with the foundation of human values. The need to adopt a holistic approach to bring welfare and happiness is on ‘value system’ of an individual/ family and its spread in society follows. The values such as duty consciousness, caring, compassion, contentment, cooperation etc have their foundations in such philosophies as Nishkama Karma, Vasudheva Kudumbhakam, Lok Samgrah etc. Gandhiji’s concept of trusteeship got evolved to a relatively new concept called as ‘Corporate Social Responsibility’ (CSR) in India to which corporates, the state and courts have variously given expression. Corporate houses such as POSCOS, Tatas, Mittals and MNCs such as Pepsi and Coco Cola enjoy the mineral wealth and loot the country at will and then throw some crumbs as charity to help poor, helpless, wretched Indians who are thrown out of their homes and land. Is it corporate social responsibility? Alas! The answer is emphatic NO. Anti-POSCO agitation going on in Orissa, Protest by ‘adivasis’ against Tata Steel project in Kalinganagar, opposition and regular strikes by malabariees in Kerala against Pepsi for exploring ground water are some of the recent examples of value depletion by corporate. In fact, the first responsibility is to understand duties to be performed by each individual. For instance, in an industry, the duties of the mangers should include protection of the rights of the workers, while the duties of the workers should include the fulfillment of the expectations of the managers. It is the right blend of rights and duties of the managers and workers that ultimately contribute the best for the promotion of the industry. The concept of ‘Apna’ i.e “Mine” in people has to be restricted. Universalism, togetherness, Sayam, and Santhosh have to revisit our organizations to bring ultimate happiness and satisfaction to all the stake holders.</p><p>4 3. Value Education The overall purpose of education is to enable Value Education as a self exploration process. As the name proposes, it is the process of finding out what is valuable to oneself by investigating and exploring within oneself. While technology is an important human endeavor, it is only a means to achieve what is considered ‘valuable’ for human beings in an effective and efficient manner. “What is of value’ or ‘what is valuable’ to a human being’ is called Value Education. Values thus provide the basis for all our actions, performance and behavior. Values and skills need to be ensured in any education system, particularly business education where the students are taught that value based management deals only with the highest return on investment, capital appreciation and risk conducive to continued participation. It also should focus on to customers - desired goods and services in the quantity required, at the time they choose and at a competitive price; for employees - challenging work, reasonable hours/quantity of work, good working environment, respect and competitive compensation. The need of value education lies in the following aspects; 3.1 Correct identification of our aspirations Based on the correct identification of aspiration, one can frame goals and sub-goals appropriately and fulfill one’s basic aspiration. Business schools and management education should focus on identifying these aspirations of students and nourish them with social obligations and accountability. 3.2 Understanding universal human values to fulfill our aspiration in continuity Just identifying one’s aspiration is not enough. We need to know how to fulfill our aspirations. It is very important to explore the value domain in sufficient detail through value education. We also have to understand universality of various human values. Then only we can be assured of a happy and harmonious society. 3.3 Complementary Values and Skills First and foremost, one has to know what really is conducive for human happiness. This is what becomes universally valuable to human beings. This will help us to identify the set of right goals and to proceed in the right direction. Secondly, it becomes essential to</p><p>5 learn methods and practices to actualize the goals defined, to develop techniques to make this happen in real life, in various dimensions of human endeavor. So the values and skills have to go hand in hand. 3.4 Evaluation of our belief We are driven with ad-hoc individual beliefs and values. These ad-hoc values and beliefs determine our short term happiness. For example some one may believe that “a corporate job is the best kind of job”, IIT is the best institution to study technology, or “metro cities are the best place to live in” and so on. Once we get into a good job, doing well in that job and earning a lot of money may be important, but our happiness which is the result of an ad-hoc belief should not create unhappiness, instability and conflicts among others, their lives and their rights. 4. Ethical and Value Based Leadership (EVBL) The meaning of leadership has changed substantially over the course of the 20th century and early 21st century. Leadership is no longer exclusively associated or attached with top level managers but is a critical skill at all levels in the organization. Three types of leaders are there; transactional leaders, transformational leader and transcendental leaders. The first kind of leaders engages their followers in the relationship of economic influence. The second type, transformational leaders engage their followers in a professional relationship. They are charismatic and have determination and energy to implement the changes they have decided upon. Transcendental leaders, on the other hand, engage their followers in a relational personal influence. What about the fourth category, moral leaders or ethical leaders? The time has come to redefine the definition of leaders and leadership. The need of the hour is to create and develop leaders who are socially sensitive and morally sensible. There is a paradigm shift in the thinking regarding the prime objective of a business organization. The last century witnessed improper utilization and over exploitation of resources which resulted in many man made disasters and ecological disturbances. Lapses, ignorance and negligence led to large scale man made industrial disasters like</p><p>6 Bhopal Gas Tragedy, Chernobyl Disaster etc endangering public life and natural environment. Why such incidents are happening? It is commonly understood that the doctrine of business is ‘maximizing shareholders wealth’ or profit maximization. It is undoubtedly agreeable that the prime objective of any business organization is to earn profit. But it is not the sole objective. It is not bad to earn profit; in fact making profit is necessary for the long term survival and sustainability of any business organization and also to interact with all environmental elements. Survival and success of a business organization depends upon their successful interaction with both economic and non economic variables. But one important matter to be considered is how mangers and organizations must respond to improve and protect the larger welfare of the community and society members and take care of the social problems to justify their existence. For visionary companies and visionary leaders, profit maximization or wealth maximization is not the ultimate agenda. Such companies perform a cluster of objectives, of which making money and profit is one of them. They do make profits but they are equally guided by some core values and principles. These values and principles are beyond just making money. It may be surprising that these visionary companies make more money than purely profit driven companies. The visionary companies consistently take multiple values into account in their planning and decision making. In fact they are successful precisely because of their value driven activities without undue concern for short tem profits. It is this approach which must be ingrained in future business leaders and debunks the myth that highly successful companies exist first and foremost to maximize profit. This philosophy of value driven management will open new vistas of success for the future leaders and business organizations. 5. Leadership Role in Organizational Success How can we control all these mal practices and unethical activities which strongly influence every section of the society? Who is having the obligation to do the same? It’s truly said that a nation or an organization is molded by the youth. How can we develop</p><p>7 the youth to be ethical leaders? What constitutes ethical leadership? What kind of leaders can become ethical leaders? Ethical leadership requires people with high moral values and character. Ethical leaders influence the behavior of their followers and contribute to the economic success of their organizations. Unethical leaders destroy trust and confidence that are needed for employees. Ethical leadership is essential for the long-term success of an organization. There is a right blending between ethical leadership and organizational success. Becoming an ethical leader includes both knowing what to do and how to do. To become an ethical leader one must have a firm desire to do what is right, but takes more than simply wanting to be good. Ethical leaders recognize moral problems, know how to resolve them, and have an unwavering commitment to live morally. Consequences of ethical leadership in organizational success are explained below:- 5.1 Trust and confidence Ethical leaders create trust and confidence among the followers and make them confident enough to attain the goals and objectives. They inspire the followers with high integrity. Trust is an essential ingredient for employees to feel committed and dedicated. 5.2 Commitment and dedication Commitment and dedication are the internalized values that are voluntarily contributed by employees and will not exist if employees are not treated fairly. When employees feel committed, they feel a sense of ownership and are willing to work hard. This will result in high level of motivation, morale and improved efforts. But remember, short term incentives can only create temporary motivation, but long term motivation stems from the feelings of commitment and dedication. 5.3 Motivation and Effort Organizations are more effective when their members are highly motivated and willing to work diligently. The dynamic nature of organizations requires employees who are willing to do more than their assigned job in the organizations to help the organization to succeed in every stage.</p><p>8 5.4 Organizational Success Organizations with managers who make ethical decisions will have a competitive advantage over others whose managers behave unethically. Unethical behavior does not guarantee financial success over the long term. Ethical decisions will make an important difference in the survival and effectiveness of a firm. Figure 1: Consequences of Ethical Leadership Organizational Success</p><p>Motivation & Effort</p><p>Commitment Builds & Dedication</p><p>Results Trust & Confidence </p><p>Yields Ethical Leaders Create 6. Developing Ethical and Value Based Leaders –Academic Way The Military is exceptional in its leadership training, be it at National Defence Academy, Indian Military Academy or Officers Training Academy. This is the reason that the military officers lead their men to put their lives at stake, the most precious thing for a human being. This becomes possible only due to cherished values of commitment, competence, confidence, courage, dedication, responsibility, loyalty, discipline & selflessness which are ingrained and cherished by military officers. There is a need to encourage building of these values among future business leaders to be able to lead their business to success. </p><p>9 Business schools have great role in developing ethical and value based leaders in the corporate world. These business schools should act as a cradle for developing leaders from prospective pool of socially sensible students. Some of the suggestions to develop ethical and value based leaders are as follows-  Medical students take a pledge, Hippocratic Oath to work for the welfare and well being of their patients and society by and large. There is a crying need today for management professionals to take an oath on similar lines ensuring adherence to a code of conduct with emphasis of values and ethics without their ambition and greed overtaking their decisions in the business world. In this regard, NHRD Network asking its members to take oath to follow the code of conduct is laudable.  Business schools can invite spiritual leaders/ gurus to interact and speak to the students. Spiritual intelligence can be imparted as a topic of study. It is not necessarily religious or even dependent upon religion as its foundation. It helps to act with truthfulness, compassion, empathy and generosity. It will help the participants to follow the righteous path in their professional life and successfully face ethical dilemmas in decision making.  Screening of video films containing lessons on moral and ethical values.  Conduct regular workshop and symposia on value based management/leadership. The present initiative of conducting this conference is a commendable step in this direction.  Discussion on case studies of companies and leaders which created a niche for value driven activates and got success in both business and social activities. Even the case study on Raju Ramalingam of SATYAM can be very useful to bring out how unethical practices may take one to zenith of success in the short term with a bitter end of disgrace and total collapse.  Disillusioned by worldly and material gains, the western world is doing study of our epics to search for real meaning of life where as we are blindly aping the ways of the west in mad race for position, power and wealth. Let us encourage research of our great cultural heritage to relearn lessons of NISHKAM KARMA,</p><p>10 SELFLESSNESS, SAYAM and SANTOSH by imbibing true moral values in our lives.  A course titled Business Values and Ethics must be incorporated as a core paper for all courses conducted by business schools. Figure 2: Developing Value Based Leaders – A Suggestive Framework</p><p>Psychological Attitudinal Changes Conditioning</p><p>Ethical and B SCHOOL Spiritual Behavioral Value Based STUDENTS Development Changes Leaders</p><p>Academic Moral Progression Changes</p><p>Quality Management Education</p><p>7. Conclusion Ethical leaders must have firm commitment to high moral character. Moral character results in moral behavior. Moral behavior creates positive moral values. It creates trust among all the stake holders of an organization. Erosion of trust is the greatest challenge facing any organization. This is what happened in 2008- when businessmen and investors lost trust in Lehman Brothers pushing the US economy to the worst condition since the Great Depression of 1929. The aftermath of the same resulted in economic slowdown and recession and many countries are still struggling hard to come out of its fallout. We have to practice a life based on values and ethics; we have to follow ethics, but how? It needs a systematic approach. We have to ingrain our future managers and</p><p>11 corporate leaders with a strong foundation of values. They should be able to take decisions fearlessly in accordance with ethical principles and values. Our future leaders’ work ethic and values must be absolute and should override any human rationalization, weakness, and ego or personal faults. When all else fails, work ethic values should guard and guide them. It has become a common sight to see some body greasing the palm of a traffic policeman when caught jumping a red light at road crossing or paying a peon / clerk to move some file to the concerned officer. People take the escapism route by calling this practice as ‘suvidha shulk’, a dignified name to hide corrupt practices. It is time to put a stop to it. The question arises about who will take the lead. The only answer is the leader with moral values and ethics. It is no more time to think but act. Let this start with a trickle. These numbers will swell gradually and it will turn into a mass movement. The Hydra of corruption won’t survive against this movement and the Business leaders will be able to take their business as well as society towards growth & prosperity. So what are we waiting for? Let me and you be that some one to light the torch for this movement. 8. References 1. Bansal, Ipshita (2009), ‘Indian Management Thought for Developing Holistic Macro Level Management Systems’, Journal of Management & Leadership, Vol 1, No 1, pp 43-49 2. Bhatia S K (2003), Business Ethics and Managerial Values, Deep & Deep Publications, New Delhi 3. Cardona P and Rey C (2009), ‘Mission Driven Leadership’, Effective Executive, Vol 12, No 1 4. Cherrington D J (2010), ‘Ethical leadership: Principles for Developing Moral Leaders’, Effective Executive, Vol 13, No 7, pp 48-61 5. Dwarakanath B G (2009), ‘Ethics in Business Management’, Asian Journal of Professional Ethics & Management, Vol 1, No 2, pp 15-17 6. Gaur R R, Sangal R and Bangaria G P (2010), Human Values and Professional Ethics, Excel Books, New Delhi (1st Ed) </p><p>12</p>