Riding a Tiger

“It was like riding a tiger; not knowing how to get off without being eaten” This is how Raju, former chief of Satyam, described his cover up of the poor quarterly performance he started few years ago that grew to a multi-billion dollar accounting scam that finally engulfed him and his company.

I don’t claim to be privy to what happened nor do I know the complete details of the scam. But I don’t think that he is the only one who is into managing the books in some fashion to achieve or over achieve the targets. I am sure most of us would agree with me. May be he took it to the extreme; or maybe he just got caught?

See what happens when the year-end approaches. The extra effort and extra push to generate more sales is of course a great idea and desirable. But it doesn’t end there. Each industry has its own bag of tricks. Arm twist the distributer to take an extra consignment which he may not be able to sell in the coming quarter. An accommodating purchase manager could be asked to book an order which he can cancel in the next month. A conditional loan conformation from the client. Create a fictitious company to book an order that will one day be written off. This is not just a private sector phenomenon. Ask the tax-collector what tricks he has to reach the target. Anything goes for the sake of ‘numbers’; especially when the numbers lead to fat bonusus and or promotions. One of the primary reasons for the 2008 meltdown in financial markets was also this mad scramble.

The degree of accommodation may vary. Some will do a bit of arm twisting. Some will shift the next quarter sale to this quarter. (A short fall in the first quarter is understandable!) The degree of dishonesty varies from coercion to manipulation to absolute fraud. This is not just the handiwork of the sales manager. This is the culture we are inculcating and encouraging. This culture of deceit then becomes a part of the organisational DNA.Sometimes somebody gets carried away and goes all the way and occasionally a Raju gets caught. Just hard luck!

May be we should take the spirit of the “General Anti-Avoidance Rules” in taxation where admissibility of an item of expenditure is supposed to be based on whether it is a truly value adding transaction or a transaction just for the sake of tax avoidance. In the same fashion the top management could insist that only a true sale or true collection that brings revenue for the period under consideration is booked as the income. That could be the first step towards recognizing and encouraging honesty.

The problem is not just about managing the book for achieving target. It is about the culture of honesty in our business dealing or even governance. As Laurie Calhoun noted in his article The Problem of “Dirty Hands” and Corrupt Leadership “In thinking about this issue, it is important to distinguish self-serving opportunists from those who suffer corruption through their sincere efforts to govern well. Self-serving opportunists often rationalize their dubious measures to themselves through self-deceptive references to ‘the good of the whole,’ claiming that group loyalty demands moral sacrifice or that ‘the end justifies the means.’”

But we live in Kaliyuga when it is all about managing “The art and ethics of lying” (Read on Part 1 and Part 2)

The truth is never dangerous. Except when told. PHILIP MOELLER

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Some People All the Time.. Humour

Major Desai retired from the army and returned to his hometown. Many people wondered with the kind of network he claimed to have and the heroism in the wars that he boasted about why he did not go further up at least to be a brigadier. As per him he had got bored of being in the army and hence he decided to quit and be back where he belonged. Of course there are few skeptics who raise their eyebrows on this claim. Maybe they are just jealous of his charm and popularity; especially with the Municipal commissioner and the local Sub Inspector who are his drinking buddies.

In the second month after he returned home, his neighbor came and asked him whether he had any way to find out the results of the soldier selection in Indian Army, Neighbor’s son had appeared for the selection. Major Desai remembered that one of his old buddies Havildar Sharma from the army may be able to find out about the results. Havildar Sharma helped him and gave him list of all the five young lads who qualified from Major Desai’s home town. Major promptly informed all the five families and they were all impressed by the ‘connects’ Major Desai had. Now for the whole town Desai became Major Saab.

In the next selection season many parents approached Major Saab in advance to seek help for their lads. He offered to help on two conditions. He will first evaluate these lads as he would not like to recommend nincompoops to the Army. He should be given Rs 1 lac in advance for each lad who passes his evaluation. The money was not for him; but to make some in the selection committee happy! But he promised that he would return the money of those who do not get selected.

He interviewed about 30 lads and agreed to recommend for 10. When the selection team came to town he was there at the ground where physical examination was being held. He walked up to Captain who was the team leader shook hands and introduced himself. They had few army jokes to share. Major Saab of course knew by name many a colonels and brigadier’s who were his ‘batch mates’. Capt was impressed. The lads from his town saw Major Saab pointing his hands in their direction and were convinced that he had put in a word to the captain. Actually, Major Saab was describing the story about the temple that was behind the ground in the same direction as the prospective soldiers were standing. After these pleasantries Major Saab returned home.

When the selection process was completed, Havildar Sharma informed Major Saab in advance, before the results were announced, about the outcome. Seven lads from his town were selected. Out of these, five were from the lot who paid him. He met the parents of the other two and told them that they would not be selected unless some action is taken immediately. He asked for Rs 2 lac for each with the promise that he would return the money if they were not selected. Of course they were selected Five out of the original 10 who had paid him were also selected. Major Saab was a gentleman. He returned 1 lac to all the five who did not get selected. He made sure that every other person in the town knew about what he did for the lads of the town. Municipal commissioner arranged a felicitation ceremony in his honor.

Major Saab is not an exception.We come across some in all walks of life. When the stakes are high very often Major Saabs appear to manage a lead. Most of us have a small Major Saab hiding in us too, though we feel ashamed to let him loose. But then it is for us to choose! 


Shame is like everything else; live with it for long enough and it becomes part of the furniture. SALMAN RUSHDIE,

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