BBA 1st Year Business Ethics Gandhian Philosophy of Wealth Management Short Question Answer : BBA Most Important Topic Gandhian Philosophy of Wealth Management : Philosophy of Truesteeship, Gandhiji’s Seven Greatest Social Sins Study Material Notes Questions With Answer.
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Section-B (Short Answer Questions (BBA Notes)
Q.1. Write a brief note on “the Gandhian philosophy of wealth management”.
Or What is Gandhian philosophy of wealth management? (2012)
Ans. The Gandhian Philosophy of Wealth Management: The most important and yet the most controversial point in the economic philosophy of Gandhi is the theory of trusteeship. He was against capitalism and yet he was not against capitalists. He wanted to use their genius as managers of industries. The Gandhian philosophy of wealth management is based on the principle that a wealthy man does not truly have the right to hoard wealth solely for the self; the only right he has is that to an honourable livelihood. The concept of “bk sangraha” is oriented towards the common good. This is distinct from capitalistic economies, with its attehdant social, ecological and psychological woes.
Trusteeship Management: Trusteeship, as applicable to the corporate world, refers to the act of holding and managing resources on behalf of the stakeholders of the firm. “What’s new about that”, one may enquire. Given that the traditional take on wealth has almost always been tilted towards owners of corporations, this concept brings in an element of equity, by placing other stakeholders such as employees, customers and society on the same ground as large and small shareholders.
The idea is that all wealth, including human, financial and technological resources, belongs to society and the rewards accruing from their use must revert to society at large. The principles of trusteeship can be traced to the concept of collective endeavour and community living. Briefly, these are: Resources must be held and utilized for the benefit of society. Managers are the trustees of the stakeholders and must work towards optimizing stakeholder value, not merely maximizing shareholder value. The small investor has as much a say in decisions as the large investor. Thus, the overall approach is towards the macro and the long-term perspective, rather than the short-term, micro perspective which is often geared exclusively to suit the intersts of shareholders and top management. At first sight, this seemingly idealistic concept invariably raises a few protests. “The owner/s must be rewarded for bearing risks and supplying expertise”: Definitely. But the reward must be in proportion to the skills and expertise supplied. The increasing instances of ethical transgressions on the part of leaders and CEOs indicate the need for better balance in the risk-reward rclationship. The Enron fiasco and the sale of shares worth over $70m by erstwhile chief Rebecca Mark, a few months before its bankruptcy, is a case in point. “Corporations exist for profits”: They exist to fulfil the needs of society and in the process, generate profits. Moreover, even if profits were to be the only determinant of policies, trusteeship would still score over inequitable sharing of wealth, since better wealth management automatically leads to more lasting and stable equations with stakeholders. This, in turn, leads to higher profits, goodwill and trust. “Trusteeship might lead to a disincentive for efficiency and efforts”: When individual and group efforts are correctly aligned with social needs, the possibility of de-motivation or deliberate inefficiency does not arise. Conviction in the utility of the concept, coupled with the commitment of top leadership, would ensure efficiency as well as effectiveness.
Indian Perspective: The wisdom of the Vedas and Upanishads point towards holistic progress rather than a fragmented movement in which one section gains at the cost of other section. Moreover, the cycle of give-and-take is explained at great length. The Arthashastra of Kautilya and the Kural of Tiruvalluvar both describe the role of the king as trustee, with respect to the citizens and the wealth of the land. In the last century, Swami Vivekananda taught that sustainable progress calls for progress of all the members and components of society. Fragmented progress is temporary and often illusory.
It is only when all elements of the environment are taken care of that an individual or an organization can hope to consistently succeed in its venture.
Q.2. “Most corporates and competing institutions often issue their mission statements in which they declare their philosophy and also apply Gandhiji’s philosophy of management.” Explain the statement with examples.
Ans. The bedrock of Gandhian management is the Gandhian philosophy, which is a monolithic structure of truth, love and non-violence. Gandhi applied his philosophy as a litmus test to confirm his principles, and as a fire-test to warrant his practices. It is the integration of this philosophy with, his principles and practices that adds a new dimension to the field of management. It defines a new set of management values and hence a new school of management thought.
Most corporates and competing institutions often issue their mission statements in which they declare their philosophy by defining their identity and stating in broad terms their intent or goal, competitive edge or strength,
target groups and markets.
(1) IBM aims at supplying intelligent information, hence their innovations give foremost consideration to accuracy, quickness, compactness and security which are crucially important in making decisions in a competitive environment. Microsoft overcomes the barrier of language by stressing on research and development in many such softwares that are user-friendly and which use symbols and icons to convey similar meanings in different languages. It has, therefore, gained worldwide acceptability and popularity.