Life Style Management Term III : Lesson No.

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(Source : -Economic Times Dated 22nd October, 2009 [Thursday])

IIMs open new chapter on ethics, post-global crisis

India's top B-Schools are doing some soul Searching after the world's colossal financial folly. They are asking some fundamental questions : Are a curriculum recast and tectonic shift in the science of management in order as a response to the worst crisis in recent times ? Should students be taught differently now that it's all too well-known that greedy alumni from prestigious schools were as much responsible as any other factor in the collapse of firms like Lehman Brothers ? Or should institutions effect changes just for the sake of it ? One of them found the answer in the apostle of peace. Sometime in June, many months into the global financial crisis and the trudge back to recovery, when Marx and Keynes returned to global economic discourse, their teachings dusted off the shelves, the Indian Institute of Management (IIM), Indore, chose to listen to the Dalai Lama. Inviting His Holiness was part of its many efforts to address a dilemma that B-schools across the world have been grappling with. We believe that managers need to have strong ethical convictions to not get swayed by greed during boom times, said Prof. Ganesh Kumar of IIM Indore. The Dalai Lama's message to strengthen honesty, self-justic and equality and the importance of truth and trust, he said, was part of the institute's ethical remodelling in teaching. An abject relfection of the fact that India's top B-schools have put aside the normal course taken by peers, economists and analysts elsewhere in the world of studying the history and precedence of the crisis and taken recourse to an issue that was almost anathema during the boom days: the moral and ethical fabric in business. So, as part of the renewed interest in values in the business world, IIMs have been tweaking their courses to inculcate corporate and social responsibility. They are also offering electives on subjects such as social entrepreneurship with greater emphasis on the personal development of studnets. IIM I, for instance, didn't just hear out the Dalai Lama. It had conducted a seminar on corporate goverance in March too, inviting Swami Bodhmayananda of Ramkrishna Mission, Chennai to speak on corporate spirituality. The same month, Prof S. K. Chakravarti, founder, Center for Human Values at IIM Calcutta, gave a talk on what else, ethics. The institute followed up those efforts in July by inviting Swami Brahmavihari of Akshardham Temple, New Delhi to speak on excellence in spirituality. Similarly, IIM Kozhikode, in its first year microeconomics course, has emphasised on the problems of asymmetric information, including the problem of 'moral hazard', which was one of the underlying factors in the US financial crisis.

Clearly, India's hallowed B-schools believe that greed has spawned the financial crisis and with due apologies to Gekko, it is anything but good. In economics, a problem of 'moral hazard' is said to exist when different actors have differential access to information, giving an opportunity to informed actors to act in ways that hurt uninformed actors, and in turn leading to a breakdown of potentially beneficial economic relationships, In the case of the financial crisis, moral hazards occurred at different levels between regulators and financial institutions that originated mortgagebacked securities and institutions which bought them. We used these as examples in our classroom discussion, said Prof. Radhakrishna Pillai of IIM Kozhikode. After the crisis, the issues of corporate governance, right strategy, corporate value system, preparedness to adjust to macro environmental changes etc are re-emphasised or understood better, he added. Corporate ethics, no doubt, has become a highly contentious issue for business schools with many media reports laying the blame for the financial crisis squarely at the doors of business schools. The Financial Times even ran a front-page story headlined : Blame it on Harvard : Is the MBA culture responsible for the financial crisis? Meanwhile, IIM Shillong has re-oriented its discussions to address issues in terms of assignments, projects and case studies for courses in its second year like behavioral finance, organisational governance and business ethics, among other topics. Introduction of such courses has had a positive impact on the thought process of students and they are of view that such type of courses should be continued in future addressing economic and financial crisis, said Prof. D. K. Agrawal, Dean (academics), IIM Shillong. All these don't mean that institutions have only been harping on ethics and social values. Each IIM has in different ways incorporated the meltdown and the aftermath in their curriculum. So if IIM Kolkata has set up a Financial Lab to address issues related to the financial crisis, IIM Lucknow is teaching the changed Business Environment as a compulsory paper. Others like IIM Indore are considering a back-to-basics approach by offering a full fledged course on economic history and occurrence of business cycles as an elective in 2010 11. Indeed, institutions are clearly demarcating a change in attitude from Creating a Hype to Working on Ground Reality. A major change in the mindset I could see is the growing relisation that the need of the hour is to have a value-driven business model addressing the latent needs of consumers as well as the citizens, said IIM Shillong's Prof. Agarwal. The Dalai Lama would agree. Incidentally, this drift in moral values at IIMs comes after demands from students themselves. It is a reflection of the changed circumstances in the financial world, the happenings in the recent past, Said Ankit Saxens, a student of IIM Lucknow. Students are not only conscious of the developments, but also cautious. The are asking professors to talk about real-life experiences and bring to light the developments in case studies. he said. Thus Dalai Lama's visit ended in a four-fold path : to learn from the modesty of an extraordinary monk like him; to learn from the manner in which Tibetans have preserved their culture despite all adversities; that the purpose of life is more important than the final outcome; and the only way to lead life is to be fully in line with one's inner self and to exercise compassion and non-violence.