If I have seen further, it is by standing on the shoulders of giants” was what Christian thinker named Bernard of Chartres said in 1159 (later also attributed to Isaac Newton). This is how families, communities and societies progress. With visionary leadership, nations such as China can prosper with trillion-dollar reserves, earn global respect and neighbours fear their wrath. They build their own submarines, fighter pl­anes, nuclear power plants and send astronauts into sp­ace. Developed and strong nations like Germany keep them in good humour.

But, what if the future of the nation stands on the shoulders of pygmies who only eye self-perpetuation and the wealth of the nation itself, and nothing beyond? The nation ends up spending trillions in armaments and on importing oil, sending out precious raw materials to receive only expensive finished goods in return, selling precious spectrum and other national assets at a song to a chosen few, and indulge in frivolous expenses on uncontrolled populist schemes.

Little by little, corners are cut, boundaries of right and wrong get blurred, and then, it becomes a rat race to occupy privileged positions. In the process, institutional safeguards and governance fra­meworks become defunct, null and void. Every action and decision then becomes a question of catching votes rather than an outcome of a well-considered policy bulwark. Foresight is supplanted by short-termism, and democracy becomes a playground in the hands of muscle power, the corrupt, and the moneyed. Once this vicious cycle is on, there is little that individuals can do about it. A sense of déjà vu prevails accompanied with a gripping feeling of helplessness. Character becomes an expediency!

This despondency has transgressed into MBA and executive classrooms. We know and understand that vision, core values and ethical culture are central to strategy execution and corporate longevity. Every time, these concepts are discussed, we have either a stony silence or an aggressive audience. Some say these concepts are good for class discussions but “we need to be practical”. One MBA student said, “Everyday I am learning that success can only be had if I shed my inhibitions and leave my ethics at home.” A senior executive reminded the class, “I too want to be Satyawadi Raja Harish Chandra, but then, I have to support a family and pay my housing loans.”

While discussing the espoused core values of a respected international company, an executive raised the question: “Whether the companies maintain two sets of value statements — one for the public and the other for internal consumption!” On the topic of misselling and misleading advertisements by leading brands and companies, students see no issues or problems. The twisted logic is: “When everybody does it, we too have to do it!”

The huge chasm in theory and practice is a recent outcome of neo-crony capitalism where personal connections, deceit and beating the competition by any means are dominant values. The recent Sup­reme Court judgment on the 2G scam comes as a big relief to strategy scholars like me. The judgment for the first time brings to the fore, the collective failure of corporate and business leaders, including the well-established ones, to hold on to their stated values. It is also a timely reminder that corruption is a risky business.

Corporate excellence cannot be pursued without lofty ideals and willingness to create an ambience for people to go about their business with honesty, integrity, responsibility and fairness. Managers at various times are required to demonstrate good judgement, and this is possible only when the value system is rock solid. Integrity has to be supreme at all stages of value creation, be it supply chains, quality and performance of products, maintaining accounts and finance, IT systems and even interpersonal relationships. Without these values, the entire system will become unstable and risky.

The emphasis in MBA programmes on imparting knowledge without an appropriate perspective on character-bui­lding is dangerous because without the latter, the possibilities of misuse of the former grow manifold. Accomplishments without character are like eating gourmet food without salt. Excellence and satisfaction comes only when appropriate attitudes are in pl­ace, which in turn means a strong ability to distinguish the right from the wrong. These attitudes are not developed overnight, but they are outcomes of tacit and explicit observations of the ecosystem across prolonged periods of time, sometimes right from childhood. These observations then get ingrained in outward behaviours and expectations.

Excellence comes only wh­en companies are committed to responsible behaviour, op­en­ness and transparency, fairness, as well as to reliability, credibility and trustworthiness. These are compelling virtues that convert a business entity into an institution, such as for example, BMW. The brand would not be what it is today without these virtues. It has withstood the test of time for engineering excellence, machine performance and reliability. In India, it should not be difficult to understand that value-based management is the central basis of all strategic decisions. These ought not to be chosen or discarded as short-term convenience!

(The writer is a professor of strategy and corporate governance, IIM-Lucknow)

arunkumar@mydigitalfc.com