They couldn’t do better than to turn to the advice of an Indian-born management scholar and writer who, through the 1990s, argued for a kinder corporate culture where compassion and understanding was the cornerstone of the relationship between companies and their employees.
The man, Sumantra Ghoshal, would have been 76 on 26 September. He passed away tragically early in 2004 when he was professor of strategic leadership at the London Business School. But by then he had done enough to be rated among the world’s top management thinkers. Dubbed “Euroguru” by The Economist, Ghoshal wrote and spoke extensively, advising companies that they needed to shift from transactional relationships with their employees to one of mutual respect. It is a message that rings loud amidst the growing debate around the employer-employee relationship.
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Across the world, the prevailing capitalist model exemplified by modern multinational corporations is facing criticism from its adherents for deviating from the path, and from opponents for revealing its malevolent nature. It was something that Ghoshal constantly warned of, most notably in his book The Individualized Corporation.
The Calcutta-born physics graduate studied at Ballygunge High School before, aided by a Fulbright Fellowship and Humphrey Fellowship, he arrived in the US in 1981 and went on to secure PhD degrees from the MIT Sloan School of Management and Harvard Business School.
Having cut his professional teeth in a bastion of state control – Indian Oil Corporation – before going on to become global teacher, he valued the opportunities capitalism threw open and was no corporate-basher. But he was no cheerleader of companies in the way many management consulting firms set themselves up to be. Companies, he believed, were capable of doing great work by encouraging talent and innovation. Equally, they also created toxic work environments that stifled creativity and initiative.
The man with the booming voice and a mesmerising presence set himself up as the spoiler-in-chief, ever ready to call out the ills of large corporations, even at their own seat of power. Thus his famous “Smell of the place” speech, in which he urged companies and their bosses to change the context that they created around their executives, was delivered at the 1995 Davos meet, in front of the world’s corporate elite.
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In what has now become a part of business folklore, Ghoshal compared the lassitude and fatigue-inducing smell of his hometown Calcutta in July, when humidity and temperature rose to unbearable highs, with the crispness of air and the smell of trees in the forest near Fontainebleau where he was based as a professor at Insead in 1985. The former, he said, forced you into passivity whereas the latter inspired you to jump or run with joy. Companies, he said, have created a Calcutta for their employees with their insistence on constraints, compliance and contracts.
It was quintessential Ghoshal, who rarely used jargon to explain his management ideas. A brilliant theoretician, he nevertheless saw his role as that of helping leaders make their workplaces better places and their companies greater forces for good. That’s because he believed it was managers who had to do the hard work of taking the decisions that mattered. Academics like him, he felt, could only be observers who looked into companies with “authenticity, respect, curiosity and speculation”.
His standard workday comprised plenty of walking, much smoking, and working with people. On that he had no barriers, often collaborating with students and other writers, especially his co-author Christopher Bartlett of Harvard University. The two co-wrote seminal books such as Managing Across Borders: The Transnational Solution, and Transnational Management: Text, Cases & Readings in Cross-Border Management. The best expression of his personal credo is in Individualised Corporation, published in 1997, for which Ghoshal researched dozens of companies to postulate his core belief that individuals have the power to drive value creation for companies.
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Twelve books, and numerous articles and case studies cemented Ghoshal’s formidable reputation, which he harnessed to write a new playbook for management. That’s because he saw the discipline in its current form as stuck in a rut, “under-socialised and one-dimensional, a parody of the human condition more appropriate to a prison or a madhouse than an institution which should be a force for good”. For that he held business schools responsible, since they had “actively freed their students from any sense of moral responsibility”.
It was something he hoped would be avoided by the Indian School of Business in Hyderabad, which he helped co-found. On the occasion he wrote, “Business schools do not need to do a great deal more to prevent future Enrons. They need only to stop doing a lot they currently do,” in a paper provocatively titled ‘Bad Management Theories Are Destroying Good Management Practices’.
That he died before the debate could become more fierce and lead to some real change is a pity. But, by then, Sumantra Ghoshal, agent provocateur, had already set the warning bells ringing.
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