Due to globalization several parts of the world are influencing each other, thus leading to the incorporation of Eastern and Western thoughts in the architecture of business.
Main trends worldwide
The world today undergoes rapid changes in many areas leaving business and world leaders to face the challenges of climate change, resource depletion, disparity of wealth and possibilities of global nuclear waste. If we focus on the business world we see many trends in society that not only change our view of the way we do business but also require a deeper reorientation of economics, management and the role of the financial sector. Furthermore, due to globalization, several parts of the world are influencing each other, thus leading to the incorporation of Eastern and Western thoughts in the architecture of business. Let us first look at a few main trends worldwide.
About three decades ago companies began initiating business practices in the name of doing good for society, corporate philanthropy or business ethics. Anita Roddick, founder of The Body Shop, was one of the entrepreneurs who promoted fair trade and ethical consumerism. Shell took the initiative by launching the report on the triple ‘P’ for ‘People, Planet and Profits’. They applied the notion of sustainable business practices to a new method of reporting, which measures and analyzes not only the company’s financial goals and results, but also its ecological and social goals.[ms-protect-content id=”544″]
Another trend we note in the last ten years is a sharp increase in consumers, producers, not-for-profit organizations and governments, which are paying more attention to health and environmental living factors in consumer societies. This is the sign of a modest tendency to move away from long-term depletion and degradation of the planet.
We notice the rise of “Cultural Creatives”, people who see themselves as whole beings with altruistic beliefs and behaviors, connected to the world and society.
A trend we notice on the consumer side, is the rise of a subculture of people who see themselves as whole beings with altruistic beliefs and behaviors, connected to the world and society, through the consumption of healthy, fair-trade and environment- friendly goods. They are labeled as Cultural Creatives (in USA 50 million and in Europe about 80 million).
We also notice that sustainable ventures and entrepreneurship are on the rise, which is witnessed by the emergence of national and local organizations that subscribe to such business principles. Business for Social Responsibility (BSR), the national organization in the USA, now represents companies with over $2 trillion US dollars in turnover and 6 million employees. Corporate Social Responsibility Europe is a similar organization in Europe.
Yet another trend in the direction of a new and sustainable economy is the growing interest of spirituality in the financial world. In the beginning of 2008, the Dow Jones Dharma Index was launched. This is the world’s first index tracking the financial performance of companies world-wide that comply with Hindu and Buddhist ethical principles. The Index originated after collaboration between Dharma Investments and the Dow Jones Index and is currently evolving in form. In the Indian tradition, the pursuit of wealth or ‘artha’ and pleasure or ‘kama’ is balanced and guided by dharma or ethical living, universal values, moral duties as well as cosmic harmony. Recently with the huge rise in standards of living in many countries and rapid economic growth, the unbridled pursuit of wealth and consumerism is prevailing over universal values and ethical principles. Similarly in China, South East and East Asia which were traditionally influenced by Buddhist values, fast economic growth is leading to some genuine development but also to corruption, environmental destruction and mindless consumerism. Those businesses and investors who feel socially and ethically concerned do not always have well defined alternative evaluative norms and options. The Dow Jones Dharma Index tries to provide such an alternative option.
While the USA has traditionally been the largest and most entrepreneurial economy in the world, in recent decades, other regions, for instance Asia and Europe, have witnessed measurable and continuing growth in entrepreneurship activity and value creation, stimulated by private as well as public parties. These entrepreneurial societies have their own approaches and assets. India, for example, has traditionally been seen as a spiritual country. One can expect that a country like India, with its diverse economic and social makeup, has different perspectives on the place of work in one’s life, the role of companies and the role of management. As they play a role in the global entrepreneurial arena today, the vision they uphold is destined to influence Western models of management due to its sustainability.
In Europe the number of lifestyle companies, micro enterprises, mama and papa shops is increasing. This is driven by the search for more balance in people’s professional and personal lives. Earning an income is important but there needs to be a balance between personal needs- such as relationships, motherhood, health, well-being and hobbies- and pursuing a professional career.
The late C.K. Prahalad used the term ‘inclusive capitalism’ to promote the idea that corporations can simultaneously create value and social justice. This has developed into the movement called Karma Capitalism.
There is another emerging trend among big corporations and business schools to embrace Indian philosophy. Today, phrases from ancient Hindu texts such as the Bhagavad Gita and others have started to appear in management courses and training programs. Top business schools abroad as well as in India have introduced ‘self-mastery’ classes that use Indian methods to help managers boost their leadership skills and find inner peace in their increasingly work-dominated lives. The late C.K. Prahalad, an influential management guru used the term ‘inclusive capitalism’ to promote the idea that corporations can simultaneously create value and social justice. This has developed into the movement called Karma Capitalism.
Furthermore, the positive impacts of spiritual techniques such as Yoga and Meditation in clinical settings have encouraged psychologists to study the less tangible parts of human nature in several settings including business.
These trends enrich society and business. A holistic or spiritual approach where Eastern and Western approaches are integrated, can bring about a balanced vision leading to the development of tools which can help tackle the impact of the ecological and financial crises faced by the business world. Spirituality provides a competitive advantage for attracting and retaining good employees and conscientious customers; for developing creativity as a resource; for the development of unique ideas that are not substitutable nor imitable and that all together represent a ‘social economic DNA’ for companies.
Spirituality provides a competitive advantage for attracting good employees and conscientious customers; for developing creativity and unique ideas that are not imitable and that all together represent a ‘social economic DNA’ for companies.
The main dilemma in business
Despite these trends new ways of doing business are not yet the dominant practice in the business world. In fact many businesses today have lost track of their main reason for existence, their original vision and values. They are primarily dealing with questions such as: how do we maximize our profit; how do we increase our shareholder value; how do we win over our competitors. On a secondary level, they are also dealing with questions such as: how to deliver the best quality and how to build an ethical climate and a sustainable business. And only few realize that they are skipping the most important question: what is best for the common good and how can we maintain and sustain business processes with this in mind. As all individuals at one level, have a mission in life involving serving the common good, businesses are no exception. What we notice is that businesses have been functioning under the illusion of maximizing profit as their main mission. This is the case where all the corporate scandals are concerned: Enron, WorldCom, Lernout & Hauspie, Ahold and, Satyam as well as in the current financial meltdown that started in 2008. Maximizing profit did not start out as, and was never meant to be the main mission for businesses. The lesson we have learned is that it is important for executives to be motivated by a broader purpose than merely maximizing profit.
No economist has defined maximizing profit as the main objective of business. Instead, they define it as a means to value creation. While seeking profit is not a negative goal, maximising profit at the cost of people and the planet all too often involves fostering unethical practices, selfishness, and harmful greed. Profit has both short and long term uses in business. In the short term they need to generate profit in order to survive. In the long term profit is needed for research and development which allows improvement and innovation of products and services. This in turn, ensures
sustainable development. Maximizing earnings based on one’s talents and abilities in a certain area is not a bad thing compared to maximizing earnings based on unethical and irresponsible beliefs, attitudes and behaviors. Great economists such as Adam Smith assumed that individuals try to maximize their own good (and become wealthier), and by doing so, through trade and entrepreneurship, society as a whole will be better off. Adam Smith said that man intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for society that it was no part of his intention. By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it. Thus pursuing one’s own interest also has outcomes for society due to the invisible hand. The type of interest he referred to is ‘earning an income for his talents’. Another great economist and strategist, who is perhaps less well-known was the Indian Kautilya who lived about 20 centuries ago. He observed that individuals will always try to pursue their own interest. Therefore the state should try to serve the needs of its citizens in such a way that as many people as possible can benefit from welfare. He was aware of the possibility that executives will engage in unethical and irresponsible behavior and therefore he formulated this view on coercive authority. In his perspective, making profit was also part of the state’s objective but not without an ethical foundation. This ethical foundation gives room for ethical values that awaken altruistic behavior, compassion, strategic alliances, integrity, honesty, accountability and trust in people. These in turn are relevant for creating welfare in businesses and society as a whole.
If we turn to the philosophical literature we also find criticism of the practice of maximizing profit as the sole objective. Sri Aurobindo, (1872-1950) one of the great philosophers stressed that we should not deny the material world as it is part of Universal existence (Brahman). He says, “Matter also is Brahman, and from Matter all existences are born, in Matter they increase and enter into Matter when they pass to another stage.” “The Brahman, resides in all of us, in our material or physical being.” (Sri Aurobindo, 1939:8 The Life Divine). Sri Aurobindo stressed that Matter and Spirit may seem irreconcilable. They may produce the dualistic thinking of Spirit on the one end and Matter on the other end but in fact they are part of the same and only by studying them separate can we fully understand them and find the synthesis. The process of this synthesis is not an easy one. It requires a transformation of consciousness.
The Indian Kautilya observed that individuals will always try to pursue their own interest, therefore the state should try to serve the needs of its citizens so that as many people as possible can benefit from welfare.
Reconciling matter and spirit: the social economic DNA
Reconciling Matter and Spirit is not about change but about transformation and for the long term this even applies to evolution. So the next question is ‘how do we reconcile them? Here, the need for meaning in life is becoming a requirement, in addition to the macro economic trends mentioned above. What we are talking about here, is the quest to fulfill spiritual needs which in the past was the domain of religion. Spirituality therefore has close ties with theology and is often assumed to be synonymous with religion. Religion has ebbs and flows but in spite of that, there is an increasing trend over the last few decades for individuals to find their spiritual solace in other ways than traditional religion and consider themselves ‘spiritual but not religious’. The social economic DNA consists of one’s levels of consciousness (including outer levels such as the physical, vital, mental, psychic and inner deeper forms of consciousness). This is, mostly expressed in a person’s core values and the way he is being perceived in his social settings, his economic drives and the way he acts. In this approach, it is a non-denominational form of spirituality that can be adapted to many areas of life as a source of enrichment and meaning. Spirituality is the social DNA, the bridge between one’s inner core (his DNA) with one’s outer beliefs, attitudes, words and actions (his social environment). The same goes for companies. An increasing number of disciplines, mainly psychology and management (there are some books also in economics) are now exploring and developing a non-denominational view of spirituality in order to address the increasing need for meaning and congruence in business. By defining conceptual models and by measuring it with surveys and interview techniques they make it possible to examine it as a part of management science.
Following the several levels of consciousness, spirituality can be experienced and expressed both outwardly and inwardly. The same consciousness, addressed macrocosmically is expressed in terms of relationship to others, to the world and through spiritual qualities, concepts and worldview. On the other hand, spiritual consciousness at its inner core is perceived through direct, inner experience and is then conveyed according to each individual’s capacity, worldview and most of the time with at least some influence of social, cultural and historical context.
Inner spirituality reflects an inner, transformative process which involves transcending our habitual state of being, expanding our consciousness to encompass more subtle aspects of our being. The outer approach to spirituality refers to adapting the mind to spiritual concepts; our relationship to others and the world. The existing research on spirituality in the context of business deals mostly with the outer side of it as this is approachable through the mainstream scientific frameworks. The inner side however goes beyond the mind and is therefore less approachable for scientific research.
Social economic DNA creates competitive advantage
Bringing the spiritual dimension into business involves a shift to an entirely new paradigm; one in which spiritual or soul consciousness presides over ego consciousness or maximizing profit. This inner transformation then translates into our outer actions in the form of congruent thoughts, attitudes and behaviors which creates value instead of profit, thus contributing to the question what is the common good and how do I contribute to it?
Spirituality is the social DNA, the bridge between one’s inner core (his DNA) with one’s outer beliefs, attitudes, words and actions (his social environment).
It is not about change but transformation that comes from within. While change can be helped by activities such as reading inspirational materials and attending lectures, these activities rarely go beyond the cognitive to the inner, experiential levels and therefore are not enough. In the business context change is doing what we do now but in a more efficient, productive and quality enhancing way. Transformation is not a different way of doing but a different way of being. It awakens the deepest levels of beliefs, assumptions and values. Business leaders can thus seek transformation, an inner shift in consciousness, through activities such as introspection, yoga, meditation, breathing work and integral coaching.
Bringing the spiritual dimension into business involves a shift to an entirely new paradigm; one in which spiritual or soul consciousness presides over ego consciousness or maximizing profit.
Transformation is a lifelong committed process involving engaging in thoughts, attitudes and actions that gradually strip away our attachment to the outer appearances of things to reveal deeper, more subtle levels of truth within. It requires a fundamental shift in personal beliefs, attitudes and actions, corporate behavior, organisations’ structures and systems. Being committed to this process, business leaders may begin to integrate the new ideas, visions and attitudes they gradually discover through their expansion of consciousness into all levels of their personal and professional life. In their companies, this can transform at all levels: from processes, people and strategy all the way to values and vision. Implicit in this transformation is the reconciliation between matter and spirit. Shifting their attention to a social economic DNA requires them to consider the primary question: how do we want to contribute to society in order to build the bridge with our inner core. This should be followed by the secondary, mainly general business related questions such as: who are we, what are our capabilities, what makes us unique, what is our inherent ability, what is our authenticity, whom do we know, how do we generate economic value and whom do we want to contribute to. Part of employing a social economic DNA implies being in touch with one’s inner core and authenticity and applying that to all areas of one’s work and life. This means that just copying tools or policies successfully used in other companies does not guarantee success. This means that what works for MacDonald’s will not work for New York Pizza or Starbucks in the same way, what works for Hewlett Packard does not automatically work for Boeing, what seems to be successful at Infosys does not guarantee success at Wipro, what works successfully for Toyota does not work for BMW. By focusing on the social economic DNA a CEO strengthens his competitive advantages and creates resources that are not imitable by others. This holds true for entrepreneurial companies as well for managerial companies. No matter where a company is in their growth cycle, social economic DNA help them navigate towards success. Transformation is inherent in this it. Evolution is a long lasting process of change and transformation. If companies shift their view from maximizing profit to making use of their social economic DNA the business world will realize value creation in a sustainable and just way benefitting society and enriching nations.
Dr Sharda S. Nandram, a Dutch resident, born in Surinam, and is of Indian origin. She has two masters’ degrees. One in Work and Organizational Psychology at the University of Amsterdam and the other in General Economics at the University of Amsterdam, The Netherlands. She completed her PhD in Social Sciences at the Vrije University of Amsterdam. Sharda is Professor of Entrepreneurship at the University of Applied Sciences HAN, Associate Professor of Entrepreneurship at Nyenrode Business University, Founder of Praan Solutions, trustee of the Foundation of Critical Choices for India, Member of the Steering Committee of the Spirituality Economics and Society (European SPES), and co-chairwomen of GOPIO.