Monday, January 12, 2009

Corporate Socialism for better corporate Governance

Amidst the maddening ruckus of Satyam episode, Indians got their fair share of growling-as if they are all but modern avatar of Gandhi while Raju is the only black sheep in IT fairyland of shining India. Even today we learned World Bank barred Wipro for offering bribes to their employees--which, although legalized in USA in the name of friendly share option, nevertheless a variant to influence contractual decision in favor. While thousands of words and blogs taking on ailment of corporate Governance in India, what we are missing here is a big picture of corporate Governance embalming traditional Indian culture of business-compromised ethics and reduced human values for employees. However there may be a better scoring point over their American counterparts-better job security.

While discussion on ethics is useless in business- as at the end of the day, ethics is also an integral part of the product offering. Falling short of good business practice purports to suicide by slow poison, I would rather reflect upon the second part-profit over people. Infosys, Wipro, TCS and Satyam-they all did one great thing-perfected art of exploiting their employees with gross disregard to US labor regulation. Recently Infosys paid a whopping fine of millions of dollars to its employees for unpaid overtime in US soil-I feel pity for their Indian counterparts who probably slogged even harder while law of the land could not ensure them any protection from exhausting work. Infosys human resource was even callous to the extent of not maintaining a proper guidance of sexual discrimination- as a result of which, their highest paid employee of 2000-2001 & VP of sales in USA,Phaneesh Murthy, was accused of sexual advance to female employees- a case Infosys was forced to settle out of the court losing a few millions while tightening their discrimination guidelines. All the employees of Infosys, Wipro, Satyam and TCS are treated like cattle in the matter of relocating them from one part of the world to another-company barely gives them a flight ticket and that's all. Rest of the relocation, coping up with adverse and alien environment-is all left to the employees. Even a week's hotel cost is not paid as relocation. Typically any standard US company would agree to pay $10,000 minimum for relocating from coast to coast in USA where as for any worker employed with any of these crown jewels of IT-India gets only a flying ticket to their client's office! One may argue, well, they are in the game of outsourcing-where the mantra is always about an operational model of cutting the cost. But I do not buy that argument when I see they declare quarterly result with billions of dollars of profit while their workers do not get any relocation and picks up TV /sofa either from dustbin leftover or thrift store for bare minimum survival. Still they do not complain because they are earning better than their parents and Indian counterparts. Also they are more loyal to their company as well since Indian companies guarantee a better job security. While visa frauds are highly common and under senate scanner now, as an Indian, I am more concerned about an Indian IT worker walking on snow in upstate New York's freezing zero because his company didn't give him proper accommodation while declaring millions of dollar profit for its shareholders and fat bonus to CEOs. I call that profit over people and that is the disease that has plunged Indian IT industry where as in Auto or conventional industry, profit is made and shared with employees -both in Japan and in USA.

The vulgarity associated with driving profit margins for inflating share price must be stopped and penalized or else we will see more of Satyam kind of scandal hitting our reputation and savings to rock bottom. I strongly demand a law to distribute any profit over 5% equally among all the employees to stop the management making profit over people. IT employees must organize themselves in unions to raise this demand in Indian parliament for a better India and better corporate Governance. Greed of corporate management can not be checked without laws that enforce equal distribution of profit among all of its employees irrespective of rank an hierarchy. Corporate socialism is the only way for better Corporate Governance.