Modern vis-à-vis Vedic approach to Management

The following article by U. Mahesh Prabhu was published by BW Businessworld magazine

Fredrick Winslow Taylor (1856-1925) and Henri Fayol (1841-1925) are two personalities who’ve shaped management as a subject taught in most business schools – ivy league including. While Taylor was a mechanical engineer; Fayol’s engineering qualification was in mining. While Taylor is regarded as the “first management consultant”, Fayol is regarded as the one who developed a “general theory” of business and administration. While Fayol’s work is branded as “Fayolism”, Taylor’s work is called “Taylorism”. Fayolism and Taylorism are identified as two pillars of “modern” management; although, Interestingly, neither of these isms are in complete agreement with each other.

In his book “The Principles of Scientific Management” Taylor suggested that “It is only through enforced standardization of methods, enforced adoption of best implements and working conditions and enforced cooperation that the faster work can be assured. And the duty of enforcing the adoption of standards and enforcing this cooperation rests with management alone.” According to him workers were “incapable of understanding what they were doing.” And this was “true” even for “simple task”. Taylor advocated in transferring control from workers to management. He set out to increase the distinction between mental (planning work) and manual (executing work). Not surprisingly introduction of his system was often resented by workers and provoked numerous strikes. At a Congressional hearing, in response to a strike at Watertown Arsenal, Taylor declared the following “I can say even without slightest hesitation that science of handling pig iron is so great that the man who is… physically able to handle pig iron and is sufficiently phlegmatic and stupid to choose this for his occupation is rarely able to comprehend the science of handling pig iron.”

Strange enough when Taylor became the president of American Society of Mechanical Engineer (ASME), between 1906-07, he tried – in vain – to implement his system of scientific management. Even his books were rejected by society for publishing! All that he succeeded, here, was in getting society’s publication department to recognize his work “partially”.

Contrary to Taylorism, Fayolism tried to synthesize and analyse the management in organizations. Fayol believed that by focusing on managerial practices he could minimize misunderstanding and increase efficiency in organizations. He enlightened managers on how to accomplish their managerial duties and practices in which they should engage. In his book “General and Industrial Management” Fayol observes “Everyone needs some concepts of management; in the home, in affairs of the state, the need for managerial ability is in importance of undertaking; and for individual people the need is everywhere in accordance with position occupied.”

Fayol is regarded as the father of “modern operational management theory” and his ideas have become fundamental part of modern management concepts.  While Fayol referred to Taylor as a “visionary” and “pioneer” in modern management organizations, Fayol differed from Taylor in his focus. Taylor focused on task while Fayol was more concerned about managing people. Fayol also had more respect for workers. This is clear in his proclamation that “workers may indeed be motivated by more than just money.”

The most well-known modern management personality – today – is Peter Drucker. Drucker’s “revered” work is “Management by Objectives” or MBO. Management by objectives or MBO is a process whereby superiors and subordinates jointly identify its common goals, define each individual’s majority of responsibility in terms of the results expected of him or her, and use these measures as guides for operating these units and assessing contribution of its members. In simple terms the assumption is that “what gets measured gets done.”

However, MBO hasn’t been much successful. The problem with MBO is that the approach isn’t properly set, agreed and managed by organizations, self-centred employees might be prone to distort results falsely representing achievement of targets that were set in a short term, narrow fashion. In these cases, MBO has often proven counterproductive. According to Dale Krueger MBO is not just difficult to implement but companies who try doing that often end up over emphasizing control, as opposed to fostering creativity, to meet their goals.

Generalization is defined as a broad statement or an idea that applies to a group of people or things. As many would agree generalization aren’t entirely true, because there can be examples of individuals or situations where in the generalizations don’t apply. In the aforementioned 3 concepts of “modern” management the efforts were being laid to find solutions by generalization, and then compartmentalization, of problems. Problems in those concepts are assumed to be similar. But how can they be? Also, when the very diagnosis is incorrect how can the solution be correct?

The “modern” approach to management by the way of separation. First organizations are separated from the society and then the various departments are separated from the organizations. The supreme emphasis is laid on processes, rather than people, to attain maximum profitability at all costs. As a result, while there are many “successful” (read profitable) institutions; people are more or less ignored. The idea is that profitability is the highest objective of organizations. While profitability is very much important; by defining it as an ultimate objective to be achieved at “all costs” organizations are often stripped of its moral, ethical as well as human values. As a result, there are scores of profitable enterprises while economies stagnate and societies and its citizens suffer (as with case with modern day USA, UK and Europe). This also reduces altruistic ideas and ideals like Corporate Social Responsibility (CSR) to insignificant levels in corporate view. Therefore, in many ways it’s modern view of management which is the source of most – if not all – ills facing the mankind, today, since it makes organizations infested with individual egos and greed.

Vedic view of life is based on the idea that man is an integral part of the global family – Vasudha-eva-kutumbakam. While (s)he has the right to determine her individual choices; (s)he must do that in a way not to harm others. Also, the law of Karma (causation) is heralded as a law of nature. It suggests that every action of an individual leads to set consequences. Therefore, it also offers a path for peaceful coexistence. This path is called Karma Yoga.  While need is accommodated in this path; greed is defined as a vice and therefore must to be shunned since it leads to catastrophic consequences.

At the intricate level Institutions are regarded as ideas designed to further the need of people not just working within it but living outside it. Therefore, institutions can never be greater than collective individuals working and running for it. Institutions therefore have three objectives, namely: sustaining, nourishing as well as enriching people (outside and within) in a way deserving of their efforts. Wealth (profits) is understood as an instrument to attain the said three objectives. If an institution does this in totality its regarded as Saatwic (blessed), if it attains to some of the said objectives its regarded as Raajasic (middling) and if adheres to none of the objectives and seeks only the wealth for the heck of it – it’s branded as Taamasic (evil).

Like the three kinds of institutions are three kinds of individuals. If an individual seeks to sustain, nourish and enrich all good around him to the best of his capacities – he is called Saatwic, if he chooses to sustain, nourish and enrich set group of people he’s Raajasic and if he chooses to work exclusively for himself – he’s called Taamasic. In simple words; greater the type of people in an organization that’s the obvious quality of the organization. Therefore, to build the kind of institutions it’s important to get the people with right quality. Also, wrong people don’t often do the right thing as a result of their quality. Once the right quality people are brought together, says Rig Veda (10:191), “May common be your prayers, common be your goal, common be your purpose through common deliberations. May united be your hearts, united be your intentions. Perfect be the union amongst you.

Processes, in cases where people are involved, are often futile since they emanate from generalized ideas. Vedic view of life is that it’s the intention that shape the efforts and, then, it’s the effort that shape the result. By separating individuals from institutions, and institutions from society the modern view of management has only wreaked havoc not just on economy and society but ecology as well. When Taamasic people are put in places of power they’ll take every trivial law made for betterment of mankind to achieve their own greed. History is replete with many tales to support this fact. The conundrum the world economy is in today owing to such Taamasic people in echelons of power. When American economy was on the verge of collapse these Taamasic people made personal gains of preposterous level. While people lost their years of savings; these individuals took millions in “performance appraisals”.

While modern management lays emphasis on power for key people; Vedic perspective on management’s emphasis is on credibility before deliverance of power and strict accountability after that. The objective of the organization isn’t just profitability at all costs; it’s profitability as well as prosperity of, not just its leadership or people, but also entire mankind.

Most of the “eminent” management thinkers don’t want to accept the role of prevailing management ideas and ideals for challenges facing the global economy as well as ecology. And since they’re unwilling to take accountability; we’ve a problem far from being solved.

The Vedic approach could be simplified in six simple steps: Lokasangraha (Human Welfare), Shubh Laabh (Profits through ethical means), Nishkaama Karma (Action without greed), VasudhaevaKutumkam (accepting the entire world as one family) and Ati-hyastha-varjayet (Avoidance of any extreme). The very quintessential ingredients missing in the modern management practices.

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