Mini Courses of GS IV: Question and Answer

Mini Courses of Ethics, Integrity, Attitude, Aptitude and case studies for IAS Mains Examination

:: QUESTION AND ANSWER ::

Q. Explain the concept of human values and lessons from the lives and teachings of great leaders.

Ans. Classical literature does not make a distinction between values and human values. Perhaps there was no need for it then. Philosophical ideas on value enquiry were directed towards finding the nature, meaning and purpose of human existence. In the present century search for a theory of values has become a separate branch of modern philosophy and has been called axiology. Although the different realms of this value enquiry cover all areas of human concern like ethics, religion, art, science, social science, law etc., no separate or special significance is attached to the term human values.

One main approach to this classical value enquiry we would like to call the ideal-normative approach. In the Western tradition it is represented by Plato’s formulation of the absolute values of Truth, Goodness and Beauty. They are conceived as having independent existence of their own and are used as ideal norms for value judgement at the relative level of human existence In the Indian tradition absolute values are related to the absolute reality whose nature is described as Sat,Chit and Anand. Attainment of a state of eternal bliss by the realisation of identity of the individual self with the universal Self of this absolute reality is the highest and ultimate object of human striving.

Closely related to this absolutist perception is the theistic view which may be called a sub-group of the idealistic-normative approach. It is based on a metaphysical belief system which accepts the reality of a divine cosmic order and faith in the authority of a creator God who is also the upholder of all values. The basis of all ethical, social and other human values is sought in the enduring truths, either revealed or obtained through super conscious insights of sages, contained in the sacred religious literature. Although differing in their belief systems, rituals and customs, the great world religions have a large area of agreement on the basic moral values, conceptions of personal virtues and social group behaviour based on humanistic values of love, brotherhood, caring and sharing. Many leaders of the Indian renaissance, e.g. Swami Vivekananda, Sri Aurobindo, Rabindranath Tagore and Mahatma Gandhi, were inspired by the absolutist-theistic value system and used it as the basis for their efforts towards the spiritual, social and political rejuvenation of the Indian society In recent times the term ‘human values’ has been used for this theistic approach to value system. This is perhaps because of the need to highlight the universal humanistic aspects of this value approach, as against the merely speculative, mystical, or life-denying ascetic aspects.

The value approach the authors have shown its relevance and significance to the managers and other professionals. Another reason for the use of adjective ‘human’ before these values may be to distinguish this value approach from the modem, so-called scientific, approach to human phenomena and associated values.

Interpreted in its narrow sense this scientific approach robs man of the dignity of his divine association, his spiritual nature and reduces him to a biological organism of a random collection of atoms. It denies any meaning and purpose to life and rejects all considerations of faith, belief, feeling and intuitive religious perceptions. This mechanistic, deterministic interpretation makes man merely a malleable automaton, to be ‘programmed’ to meet the demands of the existing socio-technological order, through manipulation of his lower order needs and desires.

In the second sub-group of the idealistic-normative approach to human values we would like to place all the different strands of humanistic thoughts, ranging from love and compassion of Buddha to the radical humanism of Marx. Included in this sub-group are the ideas of humanists having varying degrees of theistic, non-theistic and atheistic leanings but attaching prime importance to man and to human values. As Fromm points out “There is a remarkable kinship in the ideas of the Buddha, Eckhart, Marx, and Schweitzer : their radical demand for giving up the having orientation; their insistence on complete independence; their metaphysical skepticism; their godless religiosity, and their demand for social activity in the spirit of care and human solidarity”. These humanist ideas and movements developed as protests against oppressive constraints on human spirit of freedom, creativity and dignity, imposed by religious dogmas or by dehumanizing social or technological orders at their day. They developed a new ethics of man based on interconnectedness of humankind, love and respect for life, the joy of sharing and caring, and the faith in man to shape his own destiny. They find deep reflections in the literary traditions of both the East and the West over the last few centuries, and gave rise to different kinds of social and political theories, like liberalism and socialism, for the betterment of humankind, particularly of the oppressed and the exploited. In recent times it has led to the declaration of Universal Human Rights by the United Nations. The term human values has generally been understood in this context of humanistic thoughts.

The second main approach to human values we would like to call the empirical-purposive approach adopted by modem psychologists and other social scientists like Rokeach (1973), Schwartz (1994) and Mukherjee (1965). It views the of values as a distinct component of the total human personality, which guide or affect attitude and behaviour of the individual and social groups. In Schwartz’s view values are “responses to three universal requirements with which all individuals and societies must cope : needs of individual biological organisms, requisites of coordinated social interaction and requirements for smooth functioning and survival of groups”. This approach is non-normative and is not based on any religious, philosophical system of ideas or world view, nor on any social-political ideology. Identification of values, their classification, and search for interrelationships between them is based on empirical methods of observation, attitude surveys, statistical validation techniques etc. . Conceptualisation of human values based on the findings of empirical research is fast becoming a distinct area of social science research.

These empirical studies and researches on human values are not merely idealistic or intellectual exercises. They are purposive in the sense that the knowledge gained by them is sought to be utilized for practical purposes in diverse areas like, management science (leadership and team building, human resource development etc.), socio-political policy decisions (welfare programmes, race relations, positive action programmes for minorities, population control programmes, environmental policy etc.). Hence the use of the term purposive in the descriptive title ‘empirical-purposive’ for this approach to human values.
Another way of classifying the different approaches to human values could be in terms of the level of aggregation they focus their attention on. These levels may be called the individual, the sociological and the ecological. The first level focuses on the individual human being, taken as an independent entity. Some illustrative value terms referring to this level are survival values, character, personal virtues, aesthetic appreciation, human rights, salvation, self-realization, etc.

At the second level individual values are subordinated to the sociological values. It is concerned with operation of values at the collective level of human society and includes values associated with family and other social institutions and professions; caring and sharing, sense of social responsibility, social and economic justice, sarvodaya, values of humanity and human interconnectedness, etc. Similarly the ecological level subordinates the first two and consists of values from the standpoint of human beings as a part of the total ecological system. In the reports commissioned by the Club of Rome there is a concern for developing a “new world consciousness..., a new ethic in the use of material resources, a new attitude towards nature, based on harmony rather than on conquest ... a sense of identification with future generations” to avoid global
catastrophe caused by unrestrained economic growth. “For the first time a demand is being made for an ethical change, not as a consequence of ethical belief but as the rational consequence of economic analysis”. Human values perceptions from this perspective focus on the inter-dependency of human beings and nature and include expressive terms like respect for and harmony with nature, concept of Mother Earth, sustainability, conservation etc.

Q. What is Persuasion? Explain the components of persuasion.

Ans. Scholars have defined persuasion in different ways. Persuasion, according to communication scholars, is :

• a communication process in which the communicator seeks to elicit a desired response from his receiver;
• a conscious attempt by one individual to change the attitudes, beliefs, or behavior of another individual or group of individuals through the transmission of some message;
• a symbolic activity whose purpose is to effect the internalization or voluntary acceptance of new cognitive states or patterns of overt behavior through the exchange of messages;
• a successful intentional effort at influencing another’s mental state through communication in a circumstance in which the persuadee has some measure of freedom;

Combining these definitions, we have : Persuasion is a symbolic process in which communicators try to convince other people to change their attitudes or behavior regarding an issue through the transmission of a message, in an atmosphere of free choice.

Q. Why has it become necessary for business houses to have a good corporate Governance? Discuss.

Ans. Recent corporate failures and scandals involving mis-governance and unethical behaviour on the part of corporates rocked the corporate sector all over the world, shook the investor confidence in stock markets, and caused regulators and others to question the assumption that most companies do the right thing most of the time. These incidences diminished reputation and goodwill of even those corporates who enjoy the trust and confidence of public at large. These factors highlight the importance of good corporate governance. On the other hand, corporate governance is important because corporate decisions impinge on its shareholders, customer, creditors, the state and employees. Globally the objective of corporate governance is to maximize long-term shareholder value. With the assumption that capital and financial markets are working properly, anything that maximizes shareholder value will necessarily maximize corporate prosperity For sound governance, managers need to act as trustee of shareholders, prevent asymmetry of benefits between sections of shareholders, especially between owner-managers and the rest of shareholders They also need to be a part of societal concerns about labour and environment. In fact stock market analysts see these days a greater correlation between governance and returns.

Investment analysts recommend a company based on strength or weakness of a company’s governance infrastructure. Confidence of investors, both domestic and foreign, is the need of the hour. This is to attract ‘patient’ long-term capital that will reduce their cost of capital. Thus, there is a need for intellectual honesty, integrity and transparency, which form the basis for good corporate governance.

Corporate governance has been much talked about in India particularly after 1993. Liberalization brought mixed results for Indian economy. Noticeably, it brought in its wake a spate of corporate scandals. Later on scores of companies made public issues with large premium and then disappeared; prospectus misled the public. The management of most of these companies diverted funds and investors had no option but to repent their lost money. Primary market literally collapsed in the after math of these failures. Slowly, many a family owned businesses moved to become widely held limited companies. The question, how to function in a corporate setup overriding family interest and obligations called for a code of governance. Similarly, corporate banks also came under strain due to scams; governance failure was total The story of UTI is also well known where millions of small investors lost their capital due to inadequate management practices and weak supervision.

Auditors were following questionable accounting practices on behest of the management and often advising on how doubtful accounting choices might be made so as to remain on the right side of law and at the same time, escape detection by users of financial information. All these factors put strong pressure on many corporates to evolve a good governance practice.

Over the period of time in India companies like Tata Group, Infosys. Wipro have evolved sound principles of governance, intertwining corporate governance with social responsibility. These companies have become global and it is common to find global norms of accounting and disclosure being followed in these corporate houses. Rights of employees, stock options, independent directors, meeting quality norms, price warranty and guarantee- all these have made room for quality governance. Managers have indeed become trustees of shareholders It began in 1998 with the Desirable Code of Governance- a voluntary code published by CII, and the first formal regulatory framework for listed companies, established by the SEBI in February 2000, following the guidelines enunciated by the Kumar Mangalam Birla Committee Report. On 21st August, 2002, the Department of Company Affairs under the Ministry of Finance appointed Naresh Chandra Committee to examine issues pertinent to governance. The committee looked into financial and non-financial disclosure and independent auditing and board oversight of management.

Apart from financial compliance or disclosure, the independent oversight of management is also important. Many companies have disappeared, vanished either due to fraud or poor quality of board resulting in lack of independent oversight. The Kumar Mangalam Birla Committee focused on the role of independent and statutory auditors and also the role of the board of directors.

SEBI constituted a committee on corporate governance under the chairmanship of Sri N R. Narayana Murthy The committee included representatives from the stock exchange, chamber of commerce and industry, investor associations and professional bodies, which debated on key issues related to corporate governance.

Thus we find that the corporate India is going through a great churning phase. New aggressive companies are doing business with global ambitions, placing a lot of emphasis on governance and transparency. FHs are very serious about good governance and disclosures. Liberalization brought great challenges, after initial jolts and pain of restructuring, companies are seeing profits more than before.

Q. What are the major recommendations of Narayana Murthy Committee?

Ans. In its zest to improve governance in the companies through the regulatory process SEBI also instituted a committee under the chairmanship of Mr. N. R. Narayana Murthy which recommended enhancements in corporate governance. The committee comprised of 23 persons and submitted its final report on 8th February 2003 The Narayana Murthy Committee has mentioned about correct approach for successful corporate governance. It has said :

“Corporate Governance is beyond the realm of law. It stems from culture and mindset of management, and cannot be regulated by legislation alone. Corporate governance deals with conducting the affairs of a company such that there is fairness to all stakeholders and that its actions benefit the greatest number of stakeholders.

It is about openness, integrity and accountability. What legislation can and should do, is to lay down a common framework- the “form” to ensure standards The substance’ will ultimately determine the credibility and integrity of the process Substance is inexorably linked to the mindset and ethical standards of management.”

Thus we see that the whole thing has got an ethical orientation now, and emphasis is laid on raising the ethical standards for good corporate governance. Some of the major recommendations made by the committee are as under :

• All audit committee members should be ‘financially literate’ and at least one member should have accounting or related financial management expertise.
• Mere explanation as to why a company has followed a different accounting standard from the prescribed standards will not be sufficient.
• Board members should be informed about risk assessment and minimization procedures.
• Board members should be trained in the business model of the company as well as the risk profile of the business parameters, their responsibilities as directors and best ways to discharge them.
• Use of proceeds of IPO should be disclosed to the audit committee
• There shall be no nominee directors when a director is to be appointed on the board and shareholders shall make such appointments.
• Board of Directors, limiting the maximum number of stock options that can be granted to non-executive directors in any financial year, may fix compensation paid to non-executive directors.
• Whistle Blowers should not be subject to unfair or prejudicial employment practices.
• A peer group comprising the entire board of directors, excluding the director being evaluated, should make the performance evaluation of non-executive board members.

Q. What do you mean by public services? Explain the public service values.

Ans. The Public Service is an important national institution, part of the essential framework of parliamen tary democracy. Through the support they provide to the duly constituted government, public servants contribute in a fundamental way to good government, to democracy and to the society.

The role of the Public Service is to assist the Government to provide for peace, order and good government. The Constitution and the principles of responsible government provide the foundation for Public Service roles, responsibilities and values. The democratic mission of the Public Service is to assist Ministers, under law, to serve the public interest.

Public Service Values :

• Public servants shall be guided in their work and their professional conduct by a balanced framework of public service values : democratic, professional, ethical and people values.
• These families of values are not distinct but overlap. They are perspectives from which to observe the universe of Public Service values.

Democratic Values :

• Helping Ministers, under law, to serve the public interest. Public servants shall give honest and impartial advice and make all information relevant to a deci sion available to Ministers.
• Public servants shall loyally implement ministerial decisions, lawfully taken. Public servants shall support both individual and collective ministerial accountability and provide Parliament and people with information on the results of their work.

Professional Values :

• Serving with competence, excellence, efficiency, objectivity and impartiality. Public servants must work within the laws of land and maintain the tradition of the political neutrality of the Public Service.
• Public servants shall endeavour to ensure the proper, effective and efficient use of public money.
• In the Public Service, how ends are achieved should be as important as the achievements them selves.
• Public servants should constantly renew their commitment to serve people by continually improving the quality of service, by adapting to changing needs through innovation, and by improving the efficiency and effectiveness of government programs and services offered in both official languages.
• Public servants should also strive to ensure that the value of transparency in government is upheld while respecting their duties of confidentiality under the law.

Ethical Values :

• Acting at all times in such a way as to uphold the public trust. Public servants shall perform their duties and arrange their private affairs so that public confidence and trust in the integrity, objectivity and impartiality of government are conserved and enhanced.
• Public servants shall act at all times in a manner that will bear the closest public scrutiny; an obliga tion that is not fully discharged by simply acting within the law.
• Public servants, in fulfilling their official duties and responsibilities, shall make decisions in the public interest.
• If a conflict should arise between the private interests and the official duties of a public servant, the conflict shall be resolved in favour of the public interest.

People Values:

• Demonstrating respect, fairness and courtesy in their dealings with both citizens and fellow public servants.
• Respect for human dignity and the value of every person should always inspire the exercise of authority and responsibility.
• People values should reinforce the wider range of Public Service values Those who are treated with fairness and civility will be motivated to display these values in their own conduct.
• Public Service organizations should be led through participation, openness and communication and with respect for diversity and for the official languages of the country.
• Appointment decisions in the Public Service shall be based on merit. Public Service values should play a key role in recruitment, evaluation and promotion.

This is Part of Online Coaching & Study Kit of IAS Mains General Studies - IV

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