Atypical is a product that has emanated from Raj’s research and teaching of ‘Strategic Stewardship’, a course designed by him for management students at IIM Bangalore. The book consists of twenty chapters under five Rules (0+4), each taking us through what the author considers as challenges that are atypical and generally cannot be resolved through past rules and assumptions. ‘We need new rules of progress, where maximizing the dignity of life and nature is the bottom line, not merely profit or GDP growth’ (p. xiii).
The five Rules include: Valuing Empathy; Leading from the Ground (not Top); Pursuing a long-term goal, namely, Innovation rather than Profit; Listening to fringe (atypical) voices; and the capacity to Nurture, where, among other things, the establishment and nurturing of fair public goods and commons are crucial for businesses to flourish. The book does not merely philosophize; each chapter is replete with concrete examples that make clear both the pros and cons of the strategies (historical and current), followed by business organizations that have either benefited or harmed society at large. I reproduce a few of the examples to explicate why these Rules not just matter individually but need to come together for sustainable and inclusive development.
The Valuing Empathy Rule begins by highlighting the health consequences to the world following China’s refusal to share crucial information about COVID-19 pandemic virus which was traced to its laboratory in Wuhan. China also silenced doctors and other healthcare workers from disclosing any information that could have otherwise enabled health organizations across the globe to get their act together. A similar sinister attitude on the part of American chemical giant DuPont that did not disclose the health dangers of the chemical used in the manufacture of cookware appliances manufactured by it (but known to its executives way back in 1981), wreaked havoc on the lives of not just humans but also cattle. Only in 2015, following a bitter and long-drawn lawsuit, did DuPont accede to phase out the harmful chemical, by which time considerable damage had been done.
Drawing upon the above and going further, the author enjoins us to cultivate the art of ‘immersive learning’—which requires us ‘to sit with someone or a group and give patient attention to their stories and emotions, suspending judgement and holding genuine conversations that allow us to immerse ourselves in their worlds’ (p. 13). An equally important observation which has particular relevance for students of Economics is the need to eschew the obsessional pursuit of GDP which very often disallows engagement with ordinary people’s struggles with issues regarding as water and the environment.
On the theme of ‘Lead from the Ground’ (Rule 1), the author highlights two factors: industry structure and capabilities that influence performance. Citing the example of Indigo Airlines, the author highlights how ‘operational efficiency’ (p. 27) for the ‘On Time’ tag line developed by Indigo over several years and not easily replicable by others, has bestowed cost advantages and enabled Indigo to outperform other airlines. Similar is the case with the technology giant, Apple, whose ‘well-curated ecosystem and resourceful supply chain’ are unique to its organizational structure; this has allowed the creation of a brand capable of bringing out ‘premium products at scale’ (p. 29). The author terms these as ‘inimitable capabilities’ that provide sustained competitive advantage for businesses. The question then arises: where are these capabilities located in an organization and what brings them out?
An entire chapter devoted to discussing the evolution of the Tata brand since 1868 provides readers with a fascinating account of how the founder Jamsetji Tata pioneered and instituted forward-looking strategies way ahead of his times—a legacy carried forward by subsequent chairpersons of the group. To illustrate with one example: Jamsetji Tata’s steel plant set up in 1907 in present day Jharkhand instituted worker-friendly policies such as the eight-hour workday long before the ILO came into existence; nor were these policies occasioned by struggles of workers. Besides, in the early 1900s to have created a town in the middle of a forest that offered a good life to the employees and their families was beyond a daring enterprise; it stood for a vision succinctly stated by Jamsetji Tata as, ‘in a free enterprise, the community is not just another stakeholder in business, but is in fact the very purpose of its existence’ (p. 41). It is the pursuit of this philosophy rooted in a deep sense of responsibility towards the community and the nation that underpins the varied renowned institutions set up by the Tata family across the country. The author ends his discussion about the enviable brand created by the Tatas with the example of the 26 November 2008 attack on Mumbai’s Taj Mahal hotel, wherein the Group took ‘exemplary steps for the welfare of those employees’ families who died in the attack. Tata’s Chairman, Ratan Tata, personally visited each victim’s family and paid them the salaries they would have received in their entire lifetime’ (p. 43).
A scathing observation that captures the current focus on pursuing profits to please shareholders at the expense of stakeholders (primarily workers) brings out an important aspect of the relational approach highlighted by the author. The author asserts that ‘Stakeholderism prioritizes long-term stability, ethical practices and widespread benefits (that, in the author’s opinion, sums up the Tata story), while shareholderism focuses on immediate returns, rapid growth and competitive advantages albeit with higher risks and potential ethical compromises’ (p. 46).
Under the theme of ‘Innovation’ (Rule 2), we are exposed to what the author terms as ‘Dirty Strategies’ that consist of, for example, not addressing but ‘managing’ pollution by lobbying against regulations; by ‘being opaque about the quality and effects of their products’ (p. 65)—a strong case being that of the food industry where fruit juice companies claim their products to be made from fresh fruits, which in fact contain high percentage of water, added sugars and artificial flavours. A range of examples are also provided on how companies raise entry barriers with impunity. While some of the ‘Dirty Strategies’ are amenable to correction through markets (through the power of buyers and suppliers, employees and competition), the author discusses the need for some external regulation while cautioning about the ‘capture’ of regulators themselves, nowhere more visible than in the Indian construction industry: ‘the rampant and haphazard construction of apartment complexes in Indian cities, usually bypassing planning and environment norms, could not have come about without various forms of capture and corruption in the system’ (p. 85).
In discussing the strategies that promote innovation, the author contrasts the approaches of Toyota and Foxconn, both of which require massive investments in infrastructure and logistics with support from governments. However, while Toyota is built on a relational model developed over a long period—a hallmark of Japanese culture, the Foxconn model, though efficient, runs at the expense of worker rights. ‘The Foxconn model can only survive in autocratic regimes and flawed democracies in which workers have low incomes, and their protests are suppressed’ (p. 93).
In Rule 3 titled ‘Hear the Atypicals’, the author highlights the importance of how activities and products are ‘Designed’, which in turn will decide for whom the ‘design’ is suitable and/or how inclusive it is. The author provides an interesting chart (spread over pages 120 to 124) that lists industries in one column, the externalities that are specific to that industry in the second column, and the atypical stakeholders (who may be affected) in the third column. Thus, for example, the externalities associated with the mining industry include land degradation, habitat destruction, and water pollution. The atypical stakeholders here are indigenous and tribal communities, who are the first ones to be adversely affected when the design of such activities does not include them as stakeholders.
Chapter fifteen provides a variety of testing options available to businesses and governments to give voice to internal and external stakeholders which could act as checks and balances to curb malpractices within an organization, while also emphasizing the need to understand the nature of power in a business, since ‘knowing how power is distributed directly impacts how a business functions, including the products and externalities the business produces’ (p. 151).
The theme of ‘Nurture’ (Rule 4) is significant for stressing the importance of public goods and commons as vital for the development of free enterprise capitalism (the latter defined as being antithetical to cronyism and monopoly power). While adequate provision of quality public goods is essential to cover and service all, the author highlights how countries such as India are characterized by chronic underfunding of civic amenities, including education and healthcare. This leads to expensive private sourcing of these facilities, thereby contributing to inequality and making it difficult for the poor to escape from the poverty trap. The author’s elaborate discussion of public goods is to stress the point that ‘capitalism’ which locks out large populations from many basic services cannot be designated as free enterprise capitalism, since by being devoid of community and equality of opportunity, it denies large sections from rising up through ‘bootstrapping and innovating’.
In the ‘Future of Business’, the author takes us through the theme of ‘Philanthrocapitalism’ where wealthy business owners have made/make large donations to public charities. Contrasting philanthrocapitalism from enterprise foundations, the author states that while on the one hand philanthrocapitalists could still pursue ‘dirty strategies’ and then use ‘philanthropy for reputation laundering to improve their business and personal legacy’ (p. 170), ‘enterprise foundations are unique since they are philanthropies that own businesses, enabling them to influence the objectives and operations of these enterprises directly’ (p. 187). In his penultimate chapter, the author stresses the need for organizations to work with a vision that brings communities together and use their resources to create products and process innovations that contribute to solving challenges of our times (p. 205). The conclusion comes back to the vision created by Jamsetji for the Tatas ‘which has lasted for nearly two centuries and has shaped the direction of the conglomerate he founded’ (p. 206).
The book is a must read not just for students of management studies but also for students of economics and development studies. The author needs to be commended for the manner in which he has anchored his exploration of businesses and their practices in the broader community to emphasize the aspect of responsible behaviour. The latter requires businesses to think and move beyond the narrow focus on profit-making and transcend from ‘shareholderism’ to ‘stakeholderism’.
Padmini Swaminathan is an independent researcher based in Chennai. She is former Director, The Madras Institute of Development Studies, Chennai, and was Chairperson of the School of Livelihoods and Development, Tata Institute of Social Sciences, Hyderabad. Her recent publications include (co-authored) Reverse Subsidies in Global Monopsony Capitalism: Gender, Labour, and Environmental Injustice in Garment Value Chains (Cambridge University Press, 2022); (co-edited:) Telangana Social Development Reports, 2017 and 2018, Council for Social Development, Hyderabad.