Ethics of MBA's

Felt rather disgusted when I read this.

In a shocking case of corporate misgovernance, a senior executive of Samsung India Electronics, the Indian arm of the South Korean electronic giant, misappropriated funds worth several crores of rupees from his firm, using ingenious methods to achieve his task.

Vivek Prakash, vice-president, sales and marketing (IT division), had everything going for him. He was only 34 years old and, in the firm’s hierarchy, he was next only to the director, drawing a handsome salary. His total package amounted to Rs 40 lakhs per annum.

Yet, he put in his papers abruptly one fine morning. When he did so, his bosses in India and in South Korea were not surprised. From the past year, they could detect irregularities in his functioning. On scrutiny, they stumbled upon something to give them sleepless nights for many days.
 
Using R S Sahu, manager, accounts (receivables), an officer who was reporting directly to him, as an accomplice, Prakash had duped the company of Rs 18 crore. While the Delhi Police’s economic offences wing (EOW) had already laid its hands upon evidence on the embezzlement of this amount, there was a feeling that the magnitude of the fraud could be bigger.

Was even more disgusted when I learnt that this guy was an IIM grad (Bangalore - '95 batch).

Yes, on one hand there was Manjunath who sacrificed his life, unwilling to be bought out and on the other hand there was this Vivek Prakash who sacrificed his honour, who so willingly sold out.

And for what? Why would someone who had everything going for him take such a risk? I guess he thought he was just too smart to get caught.

But he did and the future looked pretty bleak. The Delhi high court refused his application for anticipatory bail.

Smarts vs Ethics
There was a hectic debate going on in some of the IIM e-groups and mailing lists. One alum wrote:

I suggest IIMs and alumni collectively should have taken the lead in denouncing this guy (and any other alumnus caught doing such things or worse)... take back the degree, etc. To send the message that while even IIMs may have black sheep, we strongly condemn such behaviour, and will take the lead in punishing him, in whatever ways we can.

Another adds: I just finished reading a book about the Enron collapse ("Smartest Guys In The Room"), where most of the fraudsters were very highly educated. Education is no guarantee for ethics... But still, it is a shock - coming so soon after Manju.


Of course in the case of Enron it wasn't one individual but an entire organisation built on a culture where the bottomline came first and nothing else mattered.

Oh, they did have an 'Official Code of Ethics'. As Michael Miller described it: The July 2000 booklet is nearly 65 pages of take-the-high-road legalese that must have made employees feel they were working for the Vatican or some other equally pure and clean organization...

As they say it's all about what you do and not about what you say or preach. And a conscience is something that ought to prick you when no one is looking. This is the very pride which destroys the image of IIM grads in the eyes of so many corporates and people who believe that they are snobbish and have an attitude many times rightly so.

IIMs are a great brand value and it fails us when it makes you think that its the place where characters can be moulded and ethics driven in. The students of IIMs are typically of the age 22-24 and a lot depends on their upbringing and the circumstances of their further work life that might make them get into the booby trap.

If you still believe that those 2yrs in an IIM are the reformatory period of an individual, then well God save all those grads.

We have made the IIM brand a tad different by choosing a different career line but by making ourselves stand out as belonging to a "privileged" community will only make all think of the IIM grads as snobbish.

One's level of education is only mildly correlated with one's ethics. One's ethics are a function of one's nature plus upbringing plus opportunity/context. When opportunities present themselves in the context of power that one possesses, the path down the slippery slope begins to beckon. It doesn't look slippery at first. The stakes are small, the temptation is small, the first transgression is small. This serves then to inoculate you against the next, bigger transgression. That's what happened to the folks at Enron, WorldCom, Tyco etc.

Another question which pops out is what does ethics have to do with the IIM's? Aren't students from other B-schools taught ethics? There are scores of management graduates pouring out into the corporate world every year and every once in a while we hear such instances. Would it have generated so much interest had he been from some other institiute? Agreed that the IIMs are great institutes and all but once you're in the corporate world for a few years it doesn't really matter any more, what counts are your actions. Besides, while two years in a B-school does alter the course of your life, it does not in any way guarantee whether or not a person will be caught with his hand in the cookie jar.


Solution offered : Let the IIM's make a policy of recording each student's PAN number (similar to SSN in the US). Any offence that this student commits should be reported to IIM, and the student given a chance to respond. The record of student offences should be public at the IIM. When any IIM alumni takes up a new job, the employer can look up his record...

But can the two years in a college change the fabric of ethics and values? Do we really believe it will override the 20 years of life before an IIM?


We have been privileged to attend these institutions; ethics and values are part of what we are meant to have imbibed there.

There is this old saying : more money = more problems , err maybe an old equation but now i would like to say more IQ = more problems, because eccentricity is the price you have to pay for being a genius.  

Great ambition is the passion of a great character. Those endowed with it may perform very good or very bad acts. All depends on the principals which direct them.--Napoleon Bonaparte 

To that extent IIM grads do have a 'role model' effect. Of course, every individual's acts are based on his own character. But if today people are talking about 'IIM graduate Manjunath' on its front page, tomorrow it may be referring to 'IIM graduate Vivek Prakash'.

There are some things money can't buy. The honour and respect of one's peers is one of them. "Character is what we do when no one is looking." Education doesn't guarantee you a place in the Hall of Integrity.
Corruption is a far big problem in India than what this case displays. All of us give or take money to get the routine work done. Everyday most of our politicians are eating our money by illegitimate means.

The crux of the problem is that most of the people who are not at these posts where corruption is an easily viable option, want to be here to do corruption. This means punishing these guys will not be enough but it requires a larger effort correcting the attitude of people.

The latest KPMG Forensic Integrity Survey says companies are more aware of ethics, but that unethical behavior is continuing unabated. That suggests companies are doing a fair bit of spin when it comes to ethics.
Regardless of his IIM status it should have come across as disgusting. But I find the reaction a bit typical (the one that you talk about on the e-groups) of the insular attitude taken by the A-list colleges.

This chap got caught. God knows how many people on that e-group are lurking around after years of deceit, or evading tax, or making bill-less purchases and killing the VAT. Mob-justice is as disturbing as lynching. It assumes a collective virtue (as opposed to collective intelligence).

IIM or any other college is a reflection of the society that feeds students into it. As a country, we accept bribery and swindle as long as we don't get caught in the act - It's getting caught that appears to be more shameful than the act of commission. It may upset some yes, but hhmm.. nothing extraordinary.

I believe that in India stealing from big organisations is considered cunning and not theft. Why do we think that IIM guys can't do anything wrong at all. Temptation maybe anything and in any form ...why do IAS officers become corrupt after all, even the IAS exam too is tough. In the IAS, honest offiecrs are hard to find. Why do Doctors sell kidneys? The list goes on perhaps why do people become spies and betray the nation? Nothing to do with the degree that they get. It's the values and ethics they nurture. 

Hardly feel that there is any connection between this guy having swindled the money and he being from IIM. That does not mean all the hundreds of IIM graduates who pass out are Mahatma Gandhis. There are Gandhis and Godses every where whether it be the medical field, IIT, IIM, XLRI etc.

This is the case which is to be condemned by one and all of the country. Mere a passout from a good B-schools doesn't ensure that he/she is ethical and is imbibed with good values. The whole system is creating and encouraging such individuals . After all, they are human beings too. There is nothing exceptional in them except for the two years of "extraordinary" education they go through. They too are driven by the whims and fancies of the mundane world and commit gross crimes, including non-payment of loans or fraudulent transactions.


But yes, in some small way his individual decision to embrace the Dark Side does leave a small blot on the collective brand equity of IIM graduates. Just like Manjunath's principled stand added a positive shine to it.

We, who condemn corruption at large should highlight the need for ethical practices in business. And along with Manjunath, include a case study on Vivek Prakash to be taught in B schools as well!