INTEGRAL MANAGEMENT-AUDROBINDO ASHRAM JULY-2009
Transcript of INTEGRAL MANAGEMENT-AUDROBINDO ASHRAM JULY-2009
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The Enron SyndromeEditorial
Despite the strictest regulations and legislations, Enrons and Satyams may continue to erupt till we recognize and
deal with the true source of the problem, which ultimately lies within us...
In the past decade the corporate world was rocked by a series of scams beginning with Enron in US and with
Satyam in India as the last Avatar of what we may call as the Enron Syndrome. The Avatars of Enron will
appear again and again until the inner and outer causes of the disease are understood and rectified. What are the
inner motives or the mindset behind the Enron syndrome? The minister of corporate affairs of Govt. of India,commenting on the Satyam scam, said that it is an example of need and greed. Greed is a well-known factor
behind most of the unethical behaviour. Much has been said and written about it in the media. But is there also a
need to be dishonest?
What are the pressures, compulsions and temptations in the corporate environment or in our too human nature,
which push us inspite of our good intentions into the unethical path or pretend to be what we are not? Some of
the external factors are fierce competition and the need to impress the investor, analyst, shareholder and the
stock market. The enlightened and long-term approach to sustainable competitive advantage is through ethics,
values, innovation, excellence, quality, social responsibility, human development and above all delighting the
customer. But if the entire corporate culture is oriented towards showing short-term revenue and not on long-term performance, then it is difficult to resist the temptation to take the easy and crooked path. For example, a
company may talk about ethics and values, but the managers of the company are assessed and rewarded not by
their ethics and values but by the short-term results. Inwardly, lack of sincerity and firmness in the will for truth
is a major factor behind unethical deviations. Without this firm, sincere and persistent commitment to truth in
the will, ethics and values remain only in thought, words and intentions but will never be translated into action.
The other major lacuna in the modern financial world is lack of human touch. In the Indian thought Money or
wealth is considered as an instrument for fulfilling the basic needs, legitimate desires and the higher aspirations
of human beings. This human factor is totally obscured when the main focus of financial management is
quantitative number-crunching and speculative manipulation. The bean-counter and manipulator havevanquished the humanist in finance.blunt the corrupting edge of power, it has to be put under the yoke of some
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uplifting values. The manifesto of corporate governance must provide such an integrated, value-based vision of
leadership and governance.
But all these remedies we have outlined above are only helpful and preparatory steps and not the true, long-term
solution. The lasting solution to the problem lies in a transformation of human consciousness though an inner
discipline.
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The Human Face of FinanceM.S. Srinivasan
One of the major causes of the present turmoil in the world of finance is that most of the captains of wealth have
forgotten the true purpose of money, which is to fulfill human needs. There is at present an urgent need to
understand the nature and purpose of money in the context of human development. This article is an attempt to
understand the human face of finance.
The Circulating Interchange
The historians of money trace its roots to the barter system of interchange of goods and services by the
producers. Later, with the advent of the middleman or intermediary between the producer and the consumer,
came the currency note as a symbol and indicator for the value of the interchange. So the first character of money
is interchange. And when we probe further and ask what is the deeper cause of this interchange we will hit upon
one of the fundamental laws of life: interdependence.
We are all part of an interacting, interdependent and interlinked unity of life. So no individual or collective
human organism can be fully independent. Every human organism will have something which others don't have,
and lack something which others possess. This creates the need for interchange. This constant and repeated
interchange driven by this law of interdependence creates a circulating force in the vital life of humanity. Here
comes the second character of money, circulation. A fluid force of circulating interchange is the essential nature
of the money-force. Thus we can see that money is a universal force proceeding from a universal law of life.
The Evolutionary Perspective
In a psychological perspective, money is an instrument for the satisfaction of human need or desire. No one seeks
money, except a few foolish misers, for its own sake. We seek money because it fulfills some human need or
desire. The nature of this need or desire changes as we progress in the path of human evolution.commands
spontaneous obedience from others. So self-governance is the most fundamental function of leadership.
In the early stages of human development when we are predominantly physical beings we seek for the basic
needs of our body like food, clothing, shelter, survival. When these basic needs are reasonably satisfied we seek
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for a better enjoyment of life or a more efficient and productive utilization of life or for power and mastery over
life. As we progress further, and grow in our mental, moral and spiritual development we seek for knowledge, values, and ideals or for some form of inner fulfillment. We use money as an instrument for the fulfillment of
these evolving needs or desire for enjoyment, efficiency, productivity, power, mastery, knowledge or inner
fulfillment.
The Quality of Economic Life
Thus, Money or the financial force has three dimensions. First is the material dimension, which is the currency
note or dollar; second is the vital dimension, which is the circulating force, created by the interchange of goods
and services; third is the psychological dimension made of desire for fulfillment. In a quantitative sense, the
velocity of circulation of the vital force behind money is an important factor in the prosperity of a community.The more it circulates, and faster, the more it grows. But for a balanced prosperity it must be a productive
circulation which adds tangible wealth to the community or fulfill legitimate human needs and not a speculative
circulation which fills the pockets of a few financial manipulators.
In a qualitative perspective, the nature of the economic life of a community depends mainly on the psychological
dimension, which means the nature of the needs, desires and motives of people. When the needs are
predominantly physical, as in most of the tribal communities the economy is simple and primitive. If the desires
are mainly material or sensuous enjoyment and the driving motives are the greed for wealth, power, enjoyment
or self-interest of individual and collective ego, the quality of the economic life still remains gross, though less
primitive and simple. If the technological and pragmatic mind of the community is well-developed, the economymay be more efficient and productive, but if the desires and motives of people are material, sensuous and
exclusively centered around the competitive self-interest and greed of the individual and collective ego of the vital
being in man, then it will not lead to any qualitative improvement in the economic life; it will also be subjected to
all the turmoil, turbulence and instability of this part of our human nature, full of scams, meltdown, depressions,
swings in "sentiments" leading to irrational booms and busts in the stock-market.
The economy acquires stability, balance and qualitative upliftment only when it is regulated and governed by the
higher mental, moral, aesthetic and spiritual nature in us, which seeks for truth, beauty, harmony and goodness.
However, these universal values of the higher self in us have to take a form which is appropriate to the unique
and intrinsic nature of the economic life of the community. The seeking for truth will take the form of greaterhonesty, transparency and integrity in all financial transactions. The other aspect of truth is to seek for the
deepest, highest and the holistic truth, law and purpose of business, commerce and finance and regulate the
economic life according to this greater and truer knowledge. The quest for beauty and harmony must lead to a
more beautiful and harmonious equipment and organization of the material and economic life of the society and
a more balanced financial system. The aspiration for goodness will manifest itself as a generous flow of funds to
the task of eradication of poverty and inequality, creating social capital, ecological sustainability and to all
activities which lead to the mental, moral, aesthetic and spiritual growth of the individual or the collectivity.
The author is a Research Associate at Sri Aurobindo Society and on the editorial board of Fourth Dimension
Inc. His major areas of interest are Management and Indian Culture.
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Recent Corporate Disasters: A Deeper InsightSaikat Sen
In todays world corporate scam is not at all a new happening. Its quite common to all of us. After each scam
we investigate thoroughly and come out with some superficial and mechanical solutions. That is why its
intensity of occurrence is increasing day-by-day. We are not at all interested to find out the true reason behind
the deep rooted problem. This article has tried to go deep into the crisis and search for some long-term lasting
solutions.
In past two decades, scams and frauds have become dime a dozen in the corporate world. Some of the biggest
names in business have come to associated with multi-billion dollar bust ups including the likes of Enron,
Worldcom, Tyco, Marconi, Swissair and so on. Although most of the names on this rogue roster are fromdeveloped economies, the emerging world is beginning to get its own share of blue chip scams as the list keeps
growing longer and longer. Last year one of the biggest scams to rock the corporate world was 100% home grown
Indian. Satyam Computers was always a well known brand name. So it's infame hit everyone, stakeholders and
otherwise, harder.
But why did it happen?
All of us know exactly how the Satyam drama unfolded. The chairman of India's fourth largest IT company B
Ramalinga Raju shocked its investors and the general public when he announced in a signed statement that the
company's profit figures have been falsely inflated over the years. He wrote a 5-page letter to the former Boardoutlining the deception in detail.
Shocking though the revelations were, the truth is that Raju managed this enormous fraud even though Satyam
did everything according to the rulebook. An international firm audited its books, accounts were declared in
accordance with Indian and US standards. Its board included some independent directors with excellent
credentials, including a Harvard business school professor and a former federal cabinet secretary. All that
analysts and experts could manage by way of explanation was that there were "systemic flaws" in accounting and
audit practices.
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So what were Raju's biggest violations? Here's a short ready reckoner:
Fudging Numbers: Pumped up revenue, profit, bank deposits and cash reserve numbers.
Undisclosed Pledges: Procured a loan of Rs. 1,230 crore without disclosure.
Insider Trading: Sold most of his 26% stake while tweaking numbers to keep the share price high.
Take over Code: Probable violation if he knew when his stake fell below 5%
Foreign Exchange Management Act: Converted fictitious export income into cash.
What kind of man would indulge in such elaborate fraud even while he and his company was being feted in India
and across the world? Lets check out Raju's educational background and corporate career. Ramalinga Raju did
his B. Com from Andhra Loyola College at Vijayawada and MBA from Ohio University, USA. He also did an
Owner / President course at Harvard. Way back in 1977 he started his venture with a spinning and weaving mill.
Then he moved into the construction business. Ten years on, in 1987, he founded Satyam Computer Services.
Satyam became the first company to enter the Indian internet service market with the brand Satyam Infoway
(Sify).
In the next 12 years, Raju and his company attracted a variety of national and international awards. These
include:
Ernst & Young Entrepreneur of the Year Services Award 1999
Dataquest IT Man of the Year Award 2000
CNBCs Asian Business Leader - Corporate Citizen of the Year award in 2002
E&Y Entrepreneur of the Year 2007 (revoked after the scam)
Golden Peacock Award for Corporate Governance 2008
One look at this high profile career, and the best education at some of the most premiere institutions in India and
the world is enough to convince anyone that lack of education was not the reason why Raju did what he did. The
reason lies elsewhere. The Institute of Chartered Accountants of India (ICAI) President Ved Jain said, I have
been telling constantly that Satyam is not a system failure... Satyam is an aberration. It is human greed, human
desire, which made all this (Satyam fraud) possible... it was Satyam's founder B Ramalinga Raju, who was
involved in the financial manipulations in the company's accounts. (1)
Greed is what triggered the Satyam scam. Greed for money is not the only greed: greed for power, competition,
success, prestige (as mentioned Mr. Raju did win many accolades and awards) may have compelled the highly
educated chairman of Satyam to ride the tiger. In many ways he was like the proverbial man the killed the goose
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that laid the golden egg. Greed can trigger growth but ultimately it consumes what it creates. In this context, it is
pertinent to recall a famous Sanskrit saying of the Manusmriti:
samtosham paramasthaya sukharthi samyato bhavet |
samtoshamulam hi sukham duhkhamulam viparyayah ||
(Manusmriti, 4.12)
One who desires happiness must strive after a perfectly contented disposition and control himself; for happiness
has contentment for its root and the root of unhappiness is a contrary disposition.
Greed itself has many avatars. Personal greed is of course the obvious evil that triggers the collapse of big
institutions. But theres also professional greed. Greed for growth. Greed to stay a step ahead of the totallyfictitious race that corporations create for themselves. Greed and fear of failure... the manic need to stay on top of
competition is a perfect Molotov cocktail that breeds unethical behaviour. In the post liberalisation era, the
Indian IT industry grew at a lightening pace. According to a research report by McKinsey & Company, its export
revenues jumped from $2 billion in 1998 to $47 billion today. The sector now employs over 20 lakh people. (2)
Top IT companies consistently reported higher percentage of profits in each quarter. Could it be that part of what
triggered Satyams suicidal slide towards self destruction was thanks to the pressure of growth and satisfy
investor expectations. In todays go-go growth grab companies are often compelled to show off, window dress to
convince customers and attract investors. Managers are evaluated not by values but short-term goals and fear
that if they are transparent, investors will be skeptical. This has to change. An ethically or socially responsible
company should be judged by its overall activity and outlook and not just by some isolated CSR or philanthropicwork. Some isolated CSR or philanthropic activity cannot be yardstick for measuring how ethical a corporation is.
In an interview, Mr. Narayana Murthy, the founder chairman of Infosys, said:
Q: What do you think went wrong in the case of Satyam, and how did it affect you?
I was disappointed, disgusted. The IT industry has done a pretty good job of raising the country's image in the
world and Satyam has hurt it. Satyam is a classic example of a company with a feudal culture where there are
different sets of rules for the king and the rest of the employees. There is opacity due to a centralised authority
and in such an environment best practices are subordinated to quick profits. Opposition is impossible. In such aculture, the rest of the people are afraid to question the king even if they perceive something is going wrong.
This is not a case of failure of entrepreneurship... It is a case of greed and ego of some super managers. That is
not capitalism. Capitalism is all about creating an environment where individuals can leverage their innovation
and entrepreneurial skill to create better opportunities. The real character of the person can be known only
through what he does when nobody is watching. It is the value system that determines the core of an individual.
(3)
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Madoff: what happened?
Well-known American businessman Bernard Madoff was born in 1938. In 1960 he founded Bernard L. Madoff
Investment Securities LLC. The company soon became a successful Wall Street trading firm known for its reliable
returns of over 10% each year. In 1980 the company was one of Americas largest trading firms. According to a
March 13, 2009 filing by Madoff, he and his wife were personally worth around $126 million. His business was
valued at another $700 million approximately.
After a four decade-long dream a run, BLM Investment Securities LLC ran out of luck. On December 11, 2008,
federal agents accused Madoff of scaming investors out of $50 billion. It is the largest ever investor fraud
committed by a single individual. The fraud affected many people (BLMs 4,800 clients as on Nov 2008)
including Hollywood celebrities like director Steven Spielberg. One such affected investor actually killed himselfafter losing $1.5 billion. After the trial, Madoff was convicted of running something called a Ponzi Scheme. A
Ponzi scheme as defined by New York Times, is a type of fraud in which earlier investors are paid off with money
raised from later victims until no money can be raised and the scheme collapses. The name Ponzi comes from
an Italian immigrant Carlos Ponzi, who ran a similar scheme during the 1920s for over two decades. Madoff only
followed in his footsteps.
The ingenuity of the con scheme becomes understandable when one considers Bernard Madoffs profile. A
graduate in political science from Hofstra University, USA, he was the non-executive chairman of NASDAQ, the
second largest Stock Exchange in America and headed the board of directors of the Sy Syms School of Business at
Yeshiva University, New York. Apart from his professional profile, Madoff was also a renowned philanthropist.He had donated money to many hospitals and charities including about $ 6 million to lymphoma research and
was on the board of many non-profit organisations. These institutions entrusted his firm with their endowments
and trusted his judgement and integrity implicitly. Clearly lack of education was not the reason why Madoff
showed such a marked indifference to business ethics. (4)
Why it Happened?
Recently, reflecting on events taking place on Wall Street, a reporter for CNN made an unusually bold statement.
Markets are run by two things, he said, fear and greed. During the good old days of the Cold War, a similarly
dichotomous observation might have been made about the two types of government that prevailed on the planet:the communist system was run on fear and the capitalist system on greed. After the demise of communism, greed
was the only game left in town. The developed world was no longer balanced by its slightly shriveled, less
developed twin system on the other side of the world: all those people living in a state of noble poverty, where
ordinary cars and telephones were considered luxuries, where literature copied out in samizdat had a value that
exceeded that of any currency. We didnt realize it at the time, but the capitalist markets of the West needed that
other system as ballast to their greed. They needed it to give the wealth they generated meaning and dignity, to
make it possible to equate wealth with freedom, wealth with democracy. Now, without that ballast, the ideals of
freedom and democracy have somehow lost their shimmer, and all that remains is greed. (5)
Stewart Hamilton (Professor of Accounting and Finance at IMD, Switzerland since 1981) and Alicia Micklethwait(well-known accounting professional of U.S.), in their famous book Greed and Corporate Failure: The Lessons
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from Recent Disasters, examine the root causes of the problems faced by corporations on both sides of the
Atlantic.
It seemed that, once again, the brutal rules of capitalism were being played out.... We postulate that the reasons
why companies fail are few, and common to most, and that this holds irrespective of industry or geography. We
believe that the main causes of failure can be grouped into six categories: poor strategic decisions; over expansion
and ill-judged acquisitions; dominant CEOs; greed, hubris and the desire for power; failure of internal controls at
all levels from the top downwards; and ineffectual or ineffective boards. (6)
People tend to be naturally greedy, rarely content with what they have achieved. High achievers, such as top
executives, are particularly ambitious and eager for more power and wealth.... In 2004, average CEO earnings in
leading US corporations were $11.8 million or 431 times more than those of the average worker. But it is not onlyCEOs who are driven by greed... (7)
Worldwide, there was something rotten at the core of corporate life. Politicians and financial commentators alike
pronounced themselves to be aghast at the unfolding tale of excess, corporate wrongdoing, misled shareholders,
shoddy accounting and supine boards. They should not have been. In his classic book, A Short History of
Financial Euphoria, J K Galbraith commented:
There can be few fields of human endeavor in which history counts for so little as in the world of finance.
Yet again, Galbraith had been proved right.(8)
Search for a Solution
As long as the going is good, the world fetes CEOs like Madoff and Raju for their educated entrepreneurship. Not
only are they highly educated but they are also the alumni of some of the best institutions globally. Yet their
primal predatory nature is not improved by their education. As The Mother said,
It is an error or superstition to believe that an external thing or circumstance can be the cause of anything. All
things and circumstances are the accompanying results of a Force that acts from behind the veil. The Force acts
and each thing reacts according to its own nature. One must not take consequences for causes. Never take
physical happenings at their face value. They are always a clumsy attempt to express something else, the true
thing which escapes your superficial understanding. (9)
In their research on the subject, Chakraborty and Chakraborty explained this phenomenon further.
Common assumption is that it is reason or intellect, called buddhivritti, which controls or subdues good values,
is not supported by reality. The intellectual mind or Buddhivritti has been failing in what it is expected to do.
The world knows that the greatest scandals, scams, atrocities, ethical transgressions in business, politics, etc., in
the past twenty five years have been committed by people of top class intellect and reasoning power... high IQ or
sharp intellect, empowered by polluted emotions, is the uniform theme of all the above events. (10)
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Every human being whether a child or a grown up, has a world of his own. Unless one is willing and able to do
what ought to be done no amount of sermonizing can have a positive or enduring result. In the same way withouthaving the readiness of the inner mind, spontaneous and sincere effort can hardly be expected of an individual.
What is needed in this respect is whole-hearted acceptance. And if that is lacking, even a morally sound idea of
great value will ultimately fail to have the desired result. In the circumstances, moral teaching is a sort of vanity
or delusion.
Mental instruction of values and ethics hardly have a direct impact on the heart unless one is capable of getting
ones nature on ones side. High-thinking ideas are generally mechanical and artificial and wont work in the long
run for the heart is not the mind. As a consequence, conformity to a set of imposed rules seems to be a yoke of
discipline. And a cowardly compliance does not have any enduring effect. In fact, moral discipline and perfection
comes only by following through the fundamental impulses of ones essential nature with right action. And thatcan be effective only by resorting to inner awakening and not by mental or intellectual training alone.
According to Swami Vivekananda:
The intellect is only the street-cleaner, cleansing the path for us, a secondary worker, the policeman; but the
policeman is not a positive necessity for the workings of a society... the intellect is blind and cannot move of
itself... it is an inactive, secondary help; ... (11)
Lets see the idea in the penetrating light of Sri Aurobindo:
It is true that the rational man has tried to reduce the ethical life like all the rest to a matter of reason, ... by some
law of reason. He has never really succeeded and he never can really succeed; .... Such was that extraordinary
system of utilitarian ethics discovered in the nineteenth century - the great century of science and reason and
utility - by one of its most positive and systematic minds and now deservedly discredited. Happily we need now
only smile at its shallow pretentious errors... (12)
... whatever might have once been hoped, that education and intellectual training by itself can change man; it
only provides the human individual and collective ego with better information and a more efficient machinery for
its self-affirmation, but leaves it the same unchanged human ego... to hope for a true change of human life
without a change of human nature is an irrational and unspiritual proposition; it is to ask for somethingunnatural and unreal, an impossible miracle...
... what has to be developed is there in our being... is an awakening to the knowledge of self, the discovery of self,
the manifestation of the self and spirit within us and the release of its self-knowledge, its self-power, its native
self-instrumentation...
.... What is necessary is that there should be a turn in humanity felt by some or many towards the vision of this
change, a feeling of its imperative need, the sense of its possibility, the will to make it possible in themselves and
to find the way. That trend is not absent and it must increase with the tension of the crisis in human world-
destiny; the need of an escape or a solution, the feeling that there is no other solution than the spiritual cannotbut grow and become more imperative under the urgency of critical circumstance. (13)
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We are undergoing an evolutionary crisis. We are in the transitional stage. Therefore, transformation of human
consciousness is the only remedy for the present crisis. From the present surface ordinary egoistic mentalconsciousness we have to ascend into the higher consciousness beyond mind. This higher Divine consciousness is
the only true guide - the inner guide. One has to keep a regular and continuous contact in right earnest with this
inner guide. Then and then only one will be able to distinguish between good and bad. Should one obey the silent
thing within one, it will spontaneously prevent one from doing what is contrary to it. Without contact with the
divinity within, moral training of values and ethics through mental and intellectual education will be futile as well
as abortive. We can conclude with the Mothers words,
Nothing but a radical change of consciousness can save humanity from the terrible plight into which it is
plunged.
All the so-called practical means are a childishness by which men blind themselves so as not to see the true
need and sole remedy. (14)
The author has formerly served as Assistant Professor and HOD in some reputed Indian Business Schools.
Presently Senior Associate of Sri Aurobindo Foundation of Integral Management, the Training and Research
Institute of Sri Aurobindo Society, Pondicherry.
References
1. Hindustan Times, 10 Apr 2009 issue
2. The Hindu, April 22, 2009, p.14
3. http://www.rediff.com/money/2009/apr/27slde4-narayana-murthy-interview-part-3.htm
4. www.wikipedia.org
5. http://www.usnews.com/articles/opinion/2008/10/16/fear-greed-and-the-financial-crisis--an-american-expats-view-from-abroad.html
6. Stewart Hamilton, Alicia Micklethwait, Greed and Corporate Failure: The Lessons from Recent Disasters, Mcmillan (2006),p.4
7. ibid, p.9
8. ibid, p.11
9. The Mother, Complete Works of The Mother, Sri Aurobindo Ashram Publication, Pondicherry(1885),Vol-14, p.229
10. Chakraborty S.K. and Chakraborty D., Human Values and Ethics: Achieving Hollistic Excellence, ICFAI University Press, Hyderabad
(2006), p.18
11. http://www.ramakrishnavivekananda.info/vivekananda/volume_2/practical_vedanta_and_other_lectures/practical_vedanta_part_i.htm
12. Sri Aurobindo, The Suprarational Good, Sri Aurobindo Birth Centenary Library Edition, Sri Aurobindo Ashram Publication (1972),
Volume-15, p.138-142
13. Sri Aurobindo, The Life Divine, Sri Aurobindo Birth Centenary Library Edition, Sri Aurobindo Ashram Publication (1972), Volume-19,
p.1053-1059
14. The Mother, Complete Works of The Mother, Sri Aurobindo Ashram Publication, Pondicherry(1885),Vol,15,p.67
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The Process of Inner PurificationThe Mother, Sri Aurobindo Ashram
The importance of ethics and values is now well-recognized in modern management thought and in business
schools. But the conceptual rigmarole of Business Ethics made of intellectual discussion and case studies,
though helpful, is not enough to build a deep and strong moral character. The modern ethical education has to
progress beyond mental discussion to the actual practice of an inner discipline of mental purification. This
article describes this discipline with passages taken from the Mothers conversation with children.
Four-fold Discipline
There are four movements which are usually consecutive, but which in the end may be simultaneous: to observe
ones thoughts is the first, to watch over ones thoughts is the second, to control ones thoughts is the third and to
master ones thoughts is the fourth. To observe, to watch over, to control, to master. All that to get rid of an evil
mind, for we are told that the man who acts or speaks with an evil mind is followed by suffering as closely as the
wheel follows the hoof of a bullock that ploughs or draws the cart.
Thus there are four successive stages for the purification of the mind. A purified mind is naturally a mind that
does not admit any wrong thought, and we have seen that the complete mastery of thought which is required to
gain this result is the last achievement in the four stages I have spoken of. The first is: to observe ones mind.
Do not believe that it is such an easy thing, for to observe your thoughts, you must first of all separate yourself
from them. In the ordinary state, the ordinary man does not distinguish himself from his thoughts. He does not
even know that he thinks. He thinks by habit. And if he is asked all of a sudden, What are you thinking of ? he
knows nothing about it. That is to say, ninety-five times out of a hundred he will answer, I do not know. There
is a complete identification between the movement of thought and the consciousness of the being.
To observe the thought, the first movement then is to step back and look at it, to separate yourself from your
thoughts so that the movement of the consciousness and that of thought may not be confused. Thus when we say
that one must observe ones thoughts, do not believe that it is so simple; it is the first step.
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We have to learn how to watch over these thoughts. First you look at them and then you watch over them. Learn
to look at them as an enlightened judge so that you may distinguish between the good and the bad, betweenthoughts that are useful and those that are harmful, between constructive thoughts that lead to victory and
defeatist thoughts which turn us away from it. It is this power of discernment that we must acquire now.
Thought-control is the third step of our mental discipline. Once the enlightened judge of our consciousness has
distinguished between useful and harmful thoughts, the inner guard will come and allow to pass only approved
thoughts, strictly refusing admission to all undesirable elements. With a commanding gesture the guard will
refuse entry to every bad thought and push it back as far as possible. It is this movement of admission and refusal
that we call thought-control.
The Positive and Negative Side
There are two sides to the discipline: you have certain faults, you know, things which prevent you from
progressing. So, the negative side is to try and get rid of your defects. There are things which you have to be, to
become, qualities which you must build in yourself in order to realise; so this side of construction is the positive
side.
You have a defect, for example, a tendency not to speak the truth. Now this habit of falsehood, of not seeing or
not speaking the truth, you fight against it by rejecting falsehood from your consciousness and endeavouring to
eliminate that habit of not speaking the truth. For the thing to be done, you must build in yourself the habit of
speaking only the truth. For the thing to be done, you must build in yourself the habit of perceiving and alwaystelling the truth. One is negative: you reject a fault. The other is positive: you build the quality. It is like that. For
everything it is like that. For example, you have somewhere in your being that kind of habit of revolt, ignorant,
arrogant, obscure revolt, of refusing what comes from above. So, the negative side is to fight against this, to
prevent it from expressing itself and reject it from your nature; and on the other side you must build positively
surrender, understanding, consecration, self-giving and the sense of a complete collaboration with the divine
forces. This is the positive side.
The same thing again: people who get angry... the habit of flying into a rage, of getting angry... one fights against
that, refuses to get angry, rejects these vibrations of anger from one's being, but this must be replaced by an
imperturbable calm, a perfect tolerance, an understanding of the point of view of others, a clear and tranquilvision, a calm decision-which is the positive side.
Catch It and Change It
Each time one makes an egoistic movement or does those things which should not be done, one must
immediately catch it as though by its tail and then put it in the presence of one's ideal and one's will to progress,
and put the light and consciousness upon it so that it may change. To catch each thing that should not be done,
catch it like that, and then hold it firmly in front of the light until the light can act upon it to transform it: this is a
work which one can do all the time. No matter what one is doing, one can always do this work. Each time one
becomes aware that there is something which is not all right, one must always catch it like this, prevent it from
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hiding, for it tries to hide: catch it and then keep it like this before the light of one's conscious will, and then put
the light upon it so that it changes.
The Light of Sincerity
My experience is like this: whenever you sincerely want to know the truth, you do know it. There is always
something to point out the error to you, to make you recognise the truth. And if you observe yourself attentively
you find out that it is because you prefer error that you do not find the truth.
Even in small details, the very smallest-not to speak of the big things of life, the big decisions that one has to take-
even in the smallest things, whenever the aspiration for the truth and the will to be true are wholly sincere, the
indication always comes. And precisely, with the method of the Buddhist discipline, if you follow up within yourself the causes of your way of being, you always find out that persistence in error comes from desire. It is
because you have the preference, the desire to feel, to act, to think in a particular way, that you make the mistake.
It is not simply because you do not know what is true. You do not know it precisely because you say in a vague,
general, imprecise way, Oh, I want the truth. In fact, if you take a detail, each detail, and put your finger on it,
you discover that you are playing the ostrich in order not to see. You put up something uncertain, something
vague, a veil, in order not to see behind it.
Whenever there is sincerity, you find that the help, the guidance, the grace are always there to give you the
answer and you are not mistaken for long. It is this sincerity in the aspiration for progress, in the will for truth, in
the need to be truly pure-pure as it is understood in the spiritual life-it is this sincerity which is the key to allprogress. With it you know-and you can.
There is always, somewhere in the being, something which prefers to deceive itself, otherwise the light is there,
always ready to guide, but you shut your eyes in order not to see it.
The Strength of Faith and Will
What the Dhammapada means when it speaks of faith is not at all the belief in a dogma or a religion, it is not even
faith in the teaching of the Master; it is faith in ones own possibilities, the certitude that whatever the difficulties,
whatever the obstacles, whatever the imperfections, even the negations in the being, one is born for therealisation and one will realise.
The will must never falter, the effort must be persevering and the faith unshakable. Then instead of spending
years to realise what one has to realise, one can do it in a few months, sometimes even in a few days and, if there
is sufficient intensity, in a few hours. That is to say, you can take a position within yourself and no bad will that
attacks the realisation will have any more power over you than the storm has over a rock.
The will has to be made strong in the same way one strengthen muscles by a methodological exercise. You take
one little thing, something you want to do or don't want to do. Begin with a small thing, not something very
essential to the being, but a small detail. And then, if, for instance, it is something you are in the habit of doing,
you insist on it with the same regularity, you see, either not to do it or to do it-you insist on it and compel yourself
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to do it as you compel yourself to lift a weight - its the same thing. You make the same kind of effort, but it is
more of an inner effort.
And after having taken little things like this - things relatively easy, you know - after taking these and succeeding
with them, you can unite with a greater force and try a more complicated experiment. And gradually if you do this
regularly, you will end up by acquiring an independent and strong will.
The Fragrance of Purity
In reality, even for a purely egoistic reason, to do good, to be just, straight, honest is the best means to be quiet
and peaceful, to reduce one's anxiety to a minimum. And if, besides, one could be disinterested, free from
personal motives and egoism, then it would be possible to become truly happy.
You carry with you, around you, in you, the atmosphere created by your actions, and if what you do is beautiful,
good and harmonious, your atmosphere is beautiful, good and harmonious; on the other hand, if you live in a
sordid selfishness, unscrupulous self-interest, ruthless bad will, that is what you will breathe every moment of
your life and that means misery, constant uneasiness; it means ugliness that despairs of its own ugliness.
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Balancing Short and Long Term PerformanceJanamitra Devan, Anna Kristina Millan and Pranav Shirke
In this article, three senior McKinsey consultants, provide a brief and crisp review of a research study by
McKinsey on a vexing problem in Management.
Many corporate leaders struggle to increase long-term shareholder value. This comes as no surprise, given an
increasingly competitive environment in which financial markets often evaluate a company and its CEO by themost recent quarterly results. But the cost of neglecting long-term performance can be high in todays rapidly
changing business world, where most companies either do not survive or are acquired.
Our research into companies listed on the S&P 500 from 1984 to 2004 shows that some do achieve strong results
in both the short and the long term. We identified 266 companies and grouped them in four quadrants:
companies that recorded strong short and long-term performance, those that performed poorly in the short term
but well over time, others that were strong in the former but lackluster in the latter, and companies that were
mediocre in both. (exhibit)
We then examined how the companies in each quadrant performed along four dimensions: long-term totalreturns to shareholders (TRS), survival rates, the tenure of current CEOs, and the volatility of share prices
reflected in the beta deviation from the industry average.
Clearly, the ability to balance short and long-term performance pays off handsomely.
On average, companies with strong overall performance beat companies in all the other quadrants on most
measures. The average TRS of the top corporations was 9.4 percentage points higher than the average of
companies with mediocre short and long-term performance, and the survival rate of the former was substantially
higher: 73 percent were still around in 2004 - the end of the analysis period - as opposed to 57 percent of the
companies with mediocre performance. Moreover, a CEO at the top performers remained in office almost threeyears longer, and those companies stock prices were substantially less volatile.
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Companies with robust long-term but lackluster short-term performance had survival rates almost equal to those
of the top performers but scored lower on each of the other measures. Companies with strong short-term but
weak long-term performance had marginally less volatile stocks than did companies with strong performance
overall but were weaker on the other three measures.
Living up to investor expectations for any length of time is usually demanding. Our analysis showed that, of the
high-performing companies in our sample, a few owed their success to a prolonged sweet spot for their products
or services rather than to a deliberate attempt to achieve balance. The rest skillfully juggled current opportunities
with others providing for long-term growth. This approach was relatively painless for companies with large pools
of capital to finance long-term options. The majority of corporations, however, balanced both objectives only by
making difficult trade offs with limited resources and in the face of unrelenting shareholder pressure for an
immediate return on equity.
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Even sweet spots turn sour over time, and overflowing pools of capital occasionally run low. Regardless of
whether (and how) companies may be juggling short and long-term performance today, those aiming forlongevity need to balance trade-offs between current earnings and shareholder value over an extended period of
time. How can these goals be achieved?
We found that many successful companies instilled a long-term mind-set. They tended to appoint CEOs who kept
an eye on short-term operational performance, for example, while also constantly emphasizing innovation that
could produce long-term growth. These companies also typically introduced dynamic strategic processes to
evaluate growth initiatives on an ongoing basis, thus enabling management to be nimble when it decided to
abandon, reorient, or accelerate them. 2 Successful companies also used financial incentives to attain both short
and long-term targets. While none of the levers, on its own, guaranteed success - a plethora of other factors was
involved, such as managerial talent, organizational flexibility, and strong execution skills - they are a startingpoint.
Janamitra Devan and Anna Kristina Millan are consultants in McKinsey's Washington, DC, office, and Pranav
Shirke is a consultant in the Singapore office. Copyright 2005 McKmsey & Company. All rights reserved.
By 1998, the average estimated tenure of a company listed on the S&P 500 was ten years. If history is a guide, over the next quarter century
no more than a third of today's major corporations will survive in an economically important way. See Richard N. Foster and Sarah Kaplan,
Creative destruction, The McKinsey Quarterly, zooi Number 3, pp. 40-51 (www.mckinseyquarterly.com/links/1 5591)
For a wide-ranging view of how to pick and manage the right set of long-term growth initiatives, see Lowell L. Bryan, Just-in-time strategy for
a turbulent world, The McKinsey Quarterly, 2002 special edition: Risk and resilience, pp. 16-27 (www.mckinseyquarterly .com/links/i5592);
and Lowell L. Bryan and Ron Hulme, Managing for improved corporate performance, The McKinsey Quarterly, 2003 Number 3, pp. 94-105
(www.mckinseyquarterly.com/ links/15593).
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The Upside of RecessionM.S. Srinivasan
The massive financial meltdown has created an atmosphere of gloom with dark forebodings. But what is not
fully recognized is that the present tight and difficult economic situation can put a break to some of our
negative habits and awaken positive motives, rethinking and innovations which are beneficial not only to the
economy and the corporate bottom line but also to our higher evolution. This article is a compilation of
perceptions, attitudes, comments, trends and actions which indicate that a spark of light can still emerge out of
the present darkness. The comments expressed in this article are optimistic possibilities, some may say fancies.
But we must keep in mind that our thoughts and inner attitudes are not mere abstractions but creative forces.
We become what we think. So it is always better to be a cheerful and voluntary optimist than a gloomy and
inveterate pessimist.
Everything is closely knit together. And a vibration somewhere has terrestrial consequences, which means there
isn't one effort that isn't useful from the terrestrial point of view... there isn't one effort towards the Better, not
one aspiration towards the True that doesn't have terrestrial consequences.
If we could always keep in our consciousness, in a clear and living way, the vision of what should be-despite all
that denies it-to keep deliberately, ignoring these denials in order to keep actively in our consciousness what
should be-that, I feel, is true creative power.
In just the seven months since the stock market began to plummet, the recession has aimed its death ray not just
at the credit market, the Dow and Detroit, but at the very ethos of conspicuous consumption. Even those with a
regular income are reassessing their spending habits, perhaps for the long term. They are shopping their closets,
downscaling their vacations and holding off on trading in their cars. If the race to have the latest fashions and
gadgets was like an endless, ever-faster video game, then someone has pushed the reset button.
To many, the adjustment feels less like a temporary, emergency response than a permanent recalibration, one
they view in terms of ethics rather than expediency.
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I think this economy was a good way to cure my compulsive shopping habit, Maxine Frankel, 59, a high school
teacher from Skokie, Illinois, US, said as she longingly stroked a diaphanous black shawl at a shop in the nearbyChicago suburb of Glenview. Its kind of funny, but I feel much more satisfied with the things money cant buy,
like the well-being of my family. Im just not seeking happiness from material things anymore.
Carol Morgan, who teaches law at the University of Georgia and whose husband has a private law practice, said
she felt a responsibility to cut needless spending. That is probably something that is a prudent thing to do in any
event, but particularly now I see it as the right thing, as the moral thing to do, she said, adding that she also
hoped to increase her charitable giving. Before, extravagance and opulence was the aspiration, and if we can
replace that with a desire to live more simply - replace that with time with family, or time for spirituality - what a
positive outcome to a very negative situation.
As the economy collapsed last fall, so did the job prospects of thousands of college seniors; especially those who
had set their sights on Wall Street. But after the initial panic, some students said they felt an odd relief. Instead of
going straight into a 100 hour-a-week job at an investment bank, they are pursuing less lucrative but potentially
more satisfying opportunities in public service, enrolling in record numbers in the Peace Corps, AmeriCorps, and
Teach for America.
At elite universities such as Harvard, where about half the graduating class would enter finance and consulting in
years past, many students say they feel liberated to consider alternative career paths, crediting not only the
tanking economy but also President Barack Obamas call for public service.
Theres always that push to make money and be comfortable, but the financial crisis made me think that theres
a lot more in life than going to get that corporate job, said Matthew Clair, a Harvard government major who will
spend the next two years teaching at an Atlanta primary school. It gave me a good excuse to take some more
time off to do what Im really passionate about.
Recessions and financial crises are the mechanisms by which the market system punishes the inefficient and
rewards the efficient, punishes the imprudent and rewards the prudent, punishes innovations that are
unsustainable and rewards those that are. True, recessions also punish bystanders, who gain undeservedly in
booms and suffer undeservedly in busts. For them government should provide safety nets. Fiscal and monetary
policies should be tweaked to reduce the pain of a downturn and facilitate recoveries. But that does not mean booms should go on forever, and that recessions should be viewed as crises. On the contrary, recessions are
solutions, they are correctives. They may be painful, but so are many medical procedures, and the pain is both
unavoidable and actually beneficial to install a warning against perverse behaviour in the future.
The crash of the stock markets coupled with the liquidity crisis may have put paid to the plans of many
entrepreneurs. But venture capitalist believe that the present times of adversity will lead to opportunities as also
a brutal Darwinian selection of the most robust new businesses.
Warren Buffet said that in a rising tide you dont know how many people are naked under the water. And today as
the tide is going down the men and the boys are going to get separated.
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In a weird sort of way itll be good for technology. I feel during the boom years a lot of bad technology got funded.
Now only the best, the most viable ideas and those that can really change lives might get money.
Stagnant urban demand, collapse of export markets and relative rural prosperity are drawing companies to the
countryside.... There are companies reaching out to the rural consumers because urban demand has stagnated
and export demand has all but disappeared. They are being helped by raising agricultural produce and rural
largesse like loan waivers, employment guarantees and generous hikes in support prices of food-grains. Ironically
it took a downturn to turn companies towards rural consumers in a big way.
The author is a Research Associate at Sri Aurobindo Society and on the editorial board of Fourth Dimension
Inc. His major areas of interest are Management and Indian Culture.
References and Acknowledgements
1. Shaila Dawan, Conspicuousness is out as belt-tightening trickles up, Guardian, Reproduced in The Hindu, March 11, 2009.
2. Tracy Jan, Graduates get a Breather The NewYork Times, reproduced in The Hindu, March 15, 2009.
3. Swaminathan S. Anklesaria Aiyar, Booms are not forever, Down to Earth, Feb 1-15, 2009.
4. Kushan Mitra and Shalini S. Dagar, Opportunity in Adversity, Business Today, December 2008.
5. Jason Ponting, Financial Meltdown will be good for Technology, Business Today, February 2009.
6. The Mother, Collected Works, Agenda.
7. Editorial, Business Today April 5, 2005
8. Raman Ray, Chairman & Managing Director, Quatro
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Theory of RelativityBijoya Sengupta
No, Eienstein has nothing to do with this one... instead it was fathered and popularised by a couple of statist,
theorists and a Hollywood flick. But is there more to this somewhat simplistically optimistic theory than meets
the eye? Do we as human beings have more in common with each other than we realise? And are our
differences just diverse instead of being divisive? So what is the clash of civilisations all about?
Have you ever met a rank stranger only to find that they are somehow connected to you? That they are friends offriends or family of family? Its happened to me.
Four years ago, I was part of a large delegation of journalists from across Asia which was visiting Sweden as part
of a research project on its automobile industry.
Our trip coincided with the mid-summer festival in the capital city of Stockholm... 48 hours when the entire
country shuts down for some serious fun and merry-making. Our group was forced to take a break too and we
decided to do some sightseeing. Since ten out of 18 members in the group were Chinese, we hired a bilingual
guide... a local Chinese girl who could also speak English...
Imagine my surprise then, when the guide walked up me during our lunch break and asked me, in perfect
Bengali, if I was from Kolkata. Shed heard me phone-chat with my Mum and couldnt resist. Turns out, she was
from Cal herself and from my school too. Her family emigrated to Canada thereafter and she met and married her
husband, a Swede, in Toronto. That's how she's in Stockholm, a polyglot fluent in Chinese, Swedish, English and
Bengali...
Theres a reason why I decided to narrate this quaint travel tale. Its my favourite example of what the famous
1993 Hollywood hit called Six Degrees Of Separation. The Will Smith, Donald Sutherland drama or the 1990 play
by American playwright John Guare on which it is based, turned the connectivity theme into a popular pastime...
a kind of adult, non-board game. Later, social networking sites like Orkut and Facebook used the same conceptwith dizzying success.
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But first, what exactly is six degrees of separation? According to the Wikipedia, it refers to the idea that, if a
person is one step away from each person they know and two steps away from each person who is known by oneof the people they know, then everyone is at most six steps away from any other person on Earth.
Although, the concept, also called the human web, is for the most part an intellectual theory that became popular
after the World War I - it was first propounded by Hungarian author Frigyes Karinthy and later developed by
MITs Michael Gurevich and Austrian mathematician Manfred Kochen -recent discoveries can be used to put an
entirely different spin on this essentially statist theory.
In an article in the latest local edition of the Geo magazine, Partha Mazumdar and D. Balasubramanian argue
that recent data generated by the human genome sequencing project indicate any two randomly drawn humans
are genetically about 99.9% identical. Thats solid scientific evidence and with a little bit of imagination it can bestretched to prove a tiny chromosome of fact in the six degrees fiction. This is really the cherry on the cake.
Historians and gene-scientists have already proved that modern humans or homo sapiens evolved in Africa and
actually migrated to the rest of the world 100,000 years ago. This model of evolution is called the out of Africa
model and it probably proves what pop culture has always known - we may look and sound different but we are,
and always have been, what John Lennon called a brotherhood of man.
For seers this indistinction is also the reason for hope. Countries, communities, cultures try their best to give man
an identity separate from others - a concept of us and them, of inclusivity and exclusivity - thats essentially alien
to the human DNA. To be fair though, the diversity is as crucial to humans as the homogeneity... it simply makes
us and the world we inhabit a more lively and interesting place. Imagine how dull things would be if we all lookedand thought and behaved exactly the same way... this world would be a giant assembly line.
But diversity is not the same thing as divisiveness. And if, as Sri Aurobindo prophesied, we are a transient species
on the evolutionary scale, then superficial societal distinctions are both specious and self-debilitating. If we are
all related and are pilgrims on the path to progress, then what is all the divisive decibel about? Sri Aurobindos
words in Savitri aptly describe this wait for the advent of the truth...
Forerunners of a divine multitude
Out of the paths of the morning star they came
Into the little room of mortal lifeI saw them cross the twilight of an age
The sun-eyed children of a marvelous dawn...
The author, a Kolkata-based freelance writer is on the editorial board of Fourth Dimension Inc
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The Money-Force: It's Nature and Right UseThe Mother, Sri Aurobindo Ashram
Money, your notes, your coins, that is your money. But that is not money. This is a force which does not belong to
anybody. It belongs to everyone. It is something which is alive only if it circulates. If you want to heap it up, it
decays. It is as though you wanted to enclose water in a vase and keep it always; after some time your water
would be absolutely putrefied. With money it is the same thing. And people have not yet understood that.
Wealth is force... a force of Nature; and it should be a means of circulation, a power in movement, as flowing
water is a power in movement. It is something which can serve to produce, to organize. It is a convenient means,
because in fact it is only a means of making things circulate fully and freely.
And truly Money has no value unless it circulates. For each and every one, money is valuable only when one has
spent it.... But the most generous man in the world could give nothing if he had nothing to begin with.... One
must have the power to accumulate in order to have the power of spreading. If you have only one of the two, that
causes an imbalance. One must have both in a balanced, rhythmic movement-the equilibrium we just spoke
about.
...the first thing to do when one has money is to give it. But as it is said that it should not be given without
discernment, don't go and give it like those who practice philanthropy, because that fills them with a sense of
their own goodness, their generosity and their own importance. You must act in a sattwic way, that is, make the
best possible use of it. And so, each one must find in his highest consciousness what the best possible use of the
money he has can be.
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The true attitude is this: money is a force intended for the work on earth, the work required to prepare the earth
to receive and manifest the divine forces, and it-that is, the power of utilising it-must come into the hands ofthose who have the clearest, most comprehensive and truest vision.
But if people understood that one should be like a receiving and transmitting station and that the wider the range
(just the opposite of personal), the more impersonal, comprehensive and wide it is, the most force it can hold
(force that is translated materially: notes and coins). This power to hold is proportional to the capacity to use
the money in the best way - best in terms of the general progress: the widest vision, the greatest understanding
and the most enlightened, exact and true usage, not according to the warped needs of the ego but according to the
general need of the earth for its evolution and development. That is to say, the widest vision will have the largestcapacity.
Behind all wrong movements, there is a true movement; there is a joy in being able to direct, utilise, organise in
such a way that there is a minimum of waste and the maximum of result. It is a very interesting vision to have.
And this must be the true side in people who want to accumulate money: it is the capacity to use it on a very large
scale. Then, there are those who very much like to have it and spend it; that is something else-they are generous
natures, neither regulated nor organised. But the joy of being able to satisfy all true needs, all necessities, is good.
It is like the joy of changing a sickness into health, a falsehood into truth, a suffering into joy; it is the same thing:to change an artificial and foolish need-which does not correspond to anything natural-into a possibility which
becomes something quite natural. So much money is needed to do this or that or the other, so much is needed to
arrange this, to repair that, to build this, to organise that-that is good. And I understand that people like to be the
channels through which the money goes exactly where it is needed. That must be the true movement in people
who like to... translated into foolish egoism, who need to appropriate.
Money does not belong to anybody. Money is a collective possession which should be used only by those who
have an integral, comprehensive and universal vision. I would add something to that: not only integral andcomprehensive, but essentially true as well; a vision which can tell the difference between a use which is in accord
with the universal progress, and a use which could be termed fanciful. But these are details, for even the
mistakes, even, from a certain standpoint, the waste, help the general progress: these are lessons learned the hard
way.
The true method of being in the stream of this money-power is precisely what is written here: a sense of absolute
impersonality, the feeling that it is not something you possess or which belongs to you, but that it is a force you
can handle and direct where it ought to go in order to do the most useful work. And by these movements, by thisconstant action, the power increases -the power of attraction, a certain power of organisation also. That is to say,
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even somebody who has no physical means, who is not in those material circumstances where he could materially
handle money, if he is in possession of this force, he can make it act, make it circulate, and if ever he finds itnecessary, receives from it as much power as he needs without there being externally any sign or any reason why
the money should come to him. He may be in conditions which are absolutely the very opposite of those of usual
wealth, and yet can handle this force and always have at his disposal all the wealth that's necessary to carry on his
work.
This force should be in the hands of those who know how to make the best possible use of it, that is, as I said at
the beginning, people who have abolished in themselves or in someway or other got rid of every personal desire
and every attachment. To this should be added a vision vast enough to understand the needs of the earth, aknowledge complete enough to know how to organise all these needs and use this force by these means.
If, besides this, these beings have a higher spiritual knowledge, then they can utilise this force to construct
gradually upon the earth what will be capable of manifesting the divine Power, Force and Grace. And then this
power of money, wealth, this financial force, of which I just said that it was like a curse, would become a supreme
blessing for the good of all.
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Dishing out More than TheoryAn interview of E. Sarathbabu, Founder, Foodking, conducted by Shobha Warrier
Just two years since he launched his start-up Foodking, E Sarathbabu is already an icon and an inspiration.
From a humble hut in Chennai to some of the best colleges in India, his has been a ride that folklores are made
of. He could have taken the easy way out of his poverty by accepting a million rupee job offer but he decided to
follow a more noble calling. In this interview with Shobha Warrier, Sarathbabu retraces his incredible journey.
His story is an inspiration for millions. A self-made entrepreneur, his mission is to help the poor through job
creation. E Sarathbabu hit the headlines after he rejected several high profile job offers from various MNCs after
he passed out of IIM, Ahmedabad two years ago.
He instead started a catering business of his own, inspired by his mother who once sold idlis on the pavements of
Chennai, worked as an ayah in an Anganvadi to educate him and his siblings. As a child, he also sold idlis in the
slum where he lived. We talk about India shining and India growing, but we should ensure that people do not
die of hunger. We can be a developed country but we should not leave the poor people behind. I am worried for
them because I know what hunger is and I still remember the days I was hungry, says Sarathbabu.
In August 2006, Sarathbabus entrepreneurial dream came true with Foodking. He had no personal ambition but
wanted to buy a house and a car for his mother. He has bought a car but is yet to buy a house for his mother. The
foodking still lives in the same hut in Madipakkam in Chennai. Today, Foodking has six units and 200
employees, and the turnover of the company is Rs.32 lakh a month. But it has not been a bed of roses for
Sarathbabu. After struggling and making losses in the first year, he managed a turnaround in 2007.
How has his experience as a Foodking been in the last two years? Sarathbabu shares the trial and tribulations of
an exciting and challenging job in an interview with Shobha Warrier.
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A Tough Beginning
As I am a first generation entrepreneur, the first year was very challenging. I had a loan of Rs 20 lakh by the end
of first year. I had no experience in handling people in business, and it was difficult to identify the right people.
Though I made losses in the first year, not even once did I regret my decision of not accepting the offers from
MNCs and starting an enterprise of my own. I looked at my losses as a learning experience. I was confident that I
would be successful one day.
Sleeping on the Railway Platform
My first unit was at IIM, Ahmedabad. When we started our second unit in October 2006, I thought now I would
start making money. But I made losses of around Rs 2000 a day. A first generation entrepreneur cannot affordsuch a loss. But I worked really hard, working till 3 a.m. in the morning. What reduced my losses were the
birthday party offers.
I started the third unit again in Ahmedabad but it also made losses. All my units were cafeteria and I understood
then that the small cafeterias do not work; I needed huge volumes to work. My friends who were extremely
supportive in the first year when things were difficult for me. I had taken loans from my IIM-A friends. They were
earning very well.
In December 2006, an IIM Ahmedabad alumni event took place in Mumbai and I decided to go there mainly to
get a contract. I was hopeful of getting it. I also knew that if I got the huge contract, I would come out of all thelosses I had been incurring.
I booked my train ticket from Ahmedabad to Mumbai for Rs 300 and I had Rs 200 in my hand. As the meet went
on till late at night, I could reach the station only at midnight. I missed the train. I decided to sit on the platform
till the morning and travel by the next train in the morning. I didn't have the money to check into a hotel. I didn't
want to disturb any of my friends so late at night.
It was an unforgettable night as I was even shoved off by policemen from the platform. It was quite insulting and
embarrassing. After two hours, people started moving in, I also went in.
A man who sat next to me on the platform gave me a newspaper so that I could sleep. I spread the newspaper and
slept on the platform! I sleep well. I got my ticket refund in the morning and went back to Ahmedabad. And, luck
did not favour me, I didn't get the contract.
In March 2007, I got an offer to start a unit at BITS, Pilani (Sarathbabu was an alumnus of BITS, Pilani). That
was the first medium break for me. For the first time, I started making profits there though the other units
continued to make losses. The reason for our success at BITS, Pilani was the volume; there were more students
and there was a need for a unit like ours while in Ahmedabad, they have at least a hundred options.
If I made Rs 5000 a day at Ahmedabad in two shifts, here I made Rs 15,000 a day. BITS, Pilani unit gave me the
confidence to move on. Unless you make money, you can't be confident in business.
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What changed my Fortune
When all my friends who worked for various MNCs made good money every month and I made losses with my
venture. But I kept telling myself, I am moving in the right direction to reach my ambition and vision. My dream
was to provide employment and I was doing just that. I continued to work till 3 a.m. but I never felt tired.
Through BITS, Pilani, I got the BITS, Goa contract and that was the biggest break for me. It was not a cafeteria
like the earlier ones but the dining hall that we got. We had to feed 1300 students. We started our operations in
July 2007. At Rs 50, for 1300 students, our sales was Rs 65,000 per day. We soon started making a profit of Rs
10 to 15,000 a day. Around 60 to 70 people work there. I gave the charge of the Ahmedabad operations to one of
my managers and moved to Goa.
I was still in debt by Rs 15-20 lakhs but I knew BITS, Goa would keep my dream alive. Within six months of
starting our operations in Goa, I repaid all my debt.
I was called to give a speech at the SRM Deemed University. After the speech, I asked the Chancellor, can you
give me an opportunity to serve in your campus? He said, "If not you, to whom will I give such an opportunity?"
It's a food court but a big one, similar to the one at BITS, Pilani. There are around 17,000 students there.
Now, I have the BITS, Hyderabad contract, ready to start in July 2008. Other than the six units, I have
approached a few more universities and corporate houses too. In the first year, I had made a loss of Rs 25 lakh.
Right now, we have a turnover of Rs 32 lakh every month, which works out to 3.5 crore (Rs 35 million) a year.
I have hired about 200 people. Indirectly, we touch the lives of around 1000 people. By this year end, we will
have 500 people working for us. Only 10% of my workers are educated, the rest are uneducated. I want to make a
change in their lives. If they have any problem, I will take care of it. We support the marriages and education of
poor families. We are paying more to the employees as the company is doing well. Now that the foundation is
strong, I plan to have ten units and a turnover of Rs 20 crore (Rs 200 million) turnover by next year.
His advice: Never give up!
In the last two years, I have given more than 120 lectures in various institutions in India. When I got the first
opportunity to speak, I thought God had given me an opportunity to encourage or inspire entrepreneurs. When
youngsters tell me they are inspired, I feel good.
When you just dish out the theory, nobody believes you. But when you do it, they believe you. What I tell them is
based on my own experiences.
When I thought of starting a company, I felt India needed 100 people like Narayana Murthy and Ambani. If 100
such people support 2 lakh people each, imagine how many Indians get supported.
Entrepreneurship is needed to uplift the poor. It is not easy to be an entrepreneur, especially a first generation
entrepreneur.
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There will be lots of challenges in the beginning but you should learn to look for the light at the end of the tunnel.
Never give up even if there are hurdles. There are many who give up within a week. You need determination anda tough mind to cross the initial hurdles. If you are starting without much money, you should not have any
overhead expenses.
He still lives in the same Hut
As I am in the food business, I know how much the price of every food item has gone up. Many people will
languish in poverty because of inflation. Had my mother been working as an Anganvadi ayah today and earning
Rs 1500, she would not have been able to feed us and educate us.
On the one side, we talk about India shining and India growing, but we should ensure that people do not die ofhunger. We can be a developed country but we should not leave the poor people behind. I am worried for them
because I know what hunger is and I still remember the days I was hungry. That is why I feel it is our
responsibility to take care of them.
I wanted to buy a car and a house for my mother. I bought a car first, not a house. I still live in the same house,
the same hut. I can build a house right now but I want my business to grow a little more. I feel good in the hut;
thats where I get my energy, that's where I lived 25 years of my life. I want to remind myself that the money and
fame should not take me away from what I want to achieve. But within six months, I will build a good house for
my mother. Her only advice to me is, don't waste money.
Till I was in the 10th, there was no electricity in my house. I had to sit near the kerosene lamp and concentrate
hard. That's how I learnt to concentrate.
The two year journey has been very enriching. It seems like a 20-year journey for me. I was living every moment
of the two years, from sleeping on the Mumbai railway station platform to this level.
Reproduced from:
http://specials.rediff.com/money/2008/apr/29sarath1.htm
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Weve Got MailThank you for your encouragement, feedback and suggestions. Keep writing in.
I love every article published in FDI. Technically the web layout is clean and pleasant.
Usage of soothing graphics and colors that blends with the page makes more readable and also creates the mood
to stay with the website forever. Choice of theme colour for every issue is excellent.
I appreciate the whole team behind this outstanding work.
- Deiva Mohanavelu
I enjoy getting this (and other) e-magazine and generally forward it to other people who are interested.
- Abhinav Dwivedi
Read the articles... its a new approach and unique information I have which has added new mental
programming, continue this new and innovating ideas which will allow the new thought process.
- Dr Vasant Mehta.
I have read some of the articles in this issue, and I find them of very high order with refershing thoughts. The e-
journal has added a completely bold and beautiful dimension to serving the needs of the selective and choosy
reader with highly intellectual material of superior quality. I wish the efforts of all those behind the venture,
fructify with further enlargement of adding more readers and benefit the society at large and my sincere thanks to
all, particularly the Editors team.
- R.K.Chandra
We share few happy and inspiring experiences of our readers on the article published in June issue, to view the
article please see the link given below:
Incorporating_Spirituality:_A_Blue-Print_for_Practice
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I am a regular reader of the Fourth Dimension Inc and this is indeed an eye opener. There are some references in
Incorporating Spirituality and I have come across similar experiences which I am portraying in short:
1. I was on a business trip to Belgium with my superior. One evening while returning, unfortunately his
ticket was not confirmed and we decided to travel together the next morning. We took a train to come to
Brussels and somehow I took off my coat and put on a hanger near a window. This was a busy train and
we left the train leaving the coat behind. We went straight to the hotel for a check-in and the gentle man
asked to see my passport. It was in a sudden shock, where is my coat; I left in the train. I rushed to the
station and train had already left. I just prayed to LORD KRISHNA. It is none but he can save me from
this disaster. My passport, travel tickets and valets were together. I did go to the police station and
reported of my problem and they did relay a message to other stations and cautioned me that consider it
lost. Yet to every one's surprise I got my coat back in two hours with all the contents.2. In an another incidence, I was in Geneva with my very senior. We met at the airport and left for the hotel.
We were carrying our luggage on our own. We took a taxi and arrived at the hotel. Suddenly my senior
realised that his hand bag is missing and he said to have given to me. I had no collection and I was not in
a position to oppose him either. We looked around and felt that we seem to have lost at the airport. I
rushed back to the airport and yet again it was LORD KRISHNA in my head. I just prayed to him. OH
DIVINE, HELP ME. I did go to all the possible places and went to lost property section but no success
and eventually I went to the police and to my utter surprise police had captured a man and indeed he was
caught with the hand bag of my senior.
- Girish K. Agarwal
While going through the article Incorporating Spirituality: A Blue-print for Practice... I was reminded of an
experience I had when I was In-charge of the Technical Training Centre in a Cigarette Factory in Hyderabad.
One of Foreign Directors was expected to visit us in the factory. The programme for his visit around the factory
was circulated to all the departments. The time of his arrival in the Training Centre was 11.20am. He was to
spend 30 minutes in my department. The high speed machine in the training centre was not working properly
that day. I had asked a few technicians to attend to it. I myself had a go at it but the machine failed to respond.
Since I had other work to do, I left it to the boys to do their best. But till 11 a.m. there was no success. I went into
my cabin and started praying. I had inadvertently shed a tear while praying. There was slight improvement in theperformance of the machine, but we faced frequent interruptions (every minute or two). I told the boys to keep
the machine running. The Director walked in sharp at 11.20 a.m. and to my amazement, the machine kept on
running continuously for the next 20 minutes!!! The Director went away complimenting me that even a machine
in London did not run so continuously.
To crown it all, as soon as the Director left, the machine was back to its condition before he had come in!!! It
failed to run!!! Till today I had no answer as to how it had happened. But today, after reading the article I think I
know the answer.
- Viswanath Venkat