Performance Management - National HRD Network
Performance Management - National HRD Network
Performance Management - National HRD Network
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Today, I propose to tell you a story of a<br />
business unit which can be described<br />
as symbol of Honesty. YES, I am talking<br />
about the company : Polyhydron located at<br />
Hubli near Belgaum in Karnatak State, India.<br />
Mr.Suresh Hundre, CMD, established this<br />
unit in 1987 and with two decades of<br />
experience of observing ethical practices<br />
developed into "Business Ashrama" on 4th<br />
July 2002. (Samadhi day of Swami<br />
Vivekanand). According to Mr.Suresh<br />
Hundre : "It is a place for grooming<br />
karmayogies based on an experiment of<br />
integrating spirituality with business which<br />
produces excellent results".<br />
If you read the vision statement of<br />
Polyhydron it says: "We will create an island<br />
of excellence through focus on customer,<br />
employee-empowerment and continuous<br />
improvement." Let me explain to you that<br />
Mr.Hundre and his colleagues follow not only<br />
in words but also in spirit their mission<br />
statement which reads as "Polyhydron will<br />
nurture an ethically managed organisation.<br />
We will not exploit our customers, suppliers,<br />
government, society and nature." Frankly,<br />
as a teacher of management, I have yet to<br />
find a more comprehensive mission<br />
statement than this one.<br />
If you visit the Ashrama, you will experience<br />
the spiritual ambience - Dhyan Mandir for<br />
meditation, water ponds, fish, royal swans<br />
and a lot of greenery.<br />
Polyhydron is in the manufacturing of mobile<br />
hydraulic press, way back form 1987-88. Till<br />
then the equipment was imported from USA.<br />
Obviously from India's point of view,<br />
precious foreign exchange has been saved<br />
by the Unit.<br />
It conducts usual business activities like<br />
manufacturing, marketing, finance, HR etc.<br />
but in a unique way. For example ; in<br />
manufacturing, there is such an open-ness<br />
that a worker on the shop-floor can reject<br />
the material and believe me - he is the final<br />
authority. As regards marketing, no attractive<br />
concessions or discounts are offered to the<br />
customers. At this stage, some figures will<br />
make my point clear. For example; in 1995-<br />
96, the company turnover touched Rs.5.75<br />
Polyhydron : Business Ashrama<br />
A Unique Experiment in<br />
Business Ethics<br />
crores without offering any discounts and<br />
company proudly paid corporate tax to the<br />
tune of Rs.1.5 crores. Incidentally, Mr.<br />
Hundre does not welcome any consultant<br />
in his office who may like to offer advice on<br />
how to reduce the tax burden! You will be<br />
surprised that the company's starting point<br />
of planning is : How can we pay more tax to<br />
the Government in the current year as<br />
compared to previous year! To Mr.Suresh<br />
Hundre, this is "continuous improvement".<br />
I remember having read an article in the<br />
Harvard Business Review entitled : "If<br />
honesty does not pay, why be honest in<br />
business" ( It is a well-intentioned survey<br />
based article). However in the words of<br />
Mr.Hundre, "Honesty is not the best policy.<br />
It is the only policy. "We are honest, we are<br />
transparent and we do not pay any bribe!"<br />
<strong>Management</strong> of the unit is simple. It is based<br />
on "trust". Mr.Suresh Hundre's Polyhydron<br />
is a temple of ethics in an engineering<br />
industry. Ms.Sushma Nirgundkar who wrote<br />
an article in the Times of India, mentions<br />
"Mr.Hundre's role models are Mahatma<br />
Gandhi, Kiran Bedi, Ratan Tata and Narayan<br />
Murthy".<br />
It is admirable that in this unit, there are only<br />
two layers( in other words there are no<br />
supervisory staff). The atmosphere is of<br />
mutual trust. Everybody in the organisation<br />
knows the figures of net profit, material cost,<br />
labour cost, tax paid to the government,<br />
excise paid, payments made to the suppliers<br />
etc. Even outsiders like government officials<br />
and customers have access to this<br />
information. Anybody in the organisation can<br />
challenge any voucher! There are no<br />
"debtors" no "creditors". Obviously there are<br />
no bad or doubtful debts. Suppliers are paid<br />
the moment the material is accepted and<br />
customers pay immediately on delivery.<br />
Employee Empowerment:<br />
All the employees are expected to be<br />
honest. They will follow ethical practices. I<br />
can give one example here. A few years<br />
back, the company was to buy a few<br />
computers. The company paid heavily for<br />
software and hardware for the computer<br />
network, buying from the original<br />
Dr. S G Bapat is President, Dr S G Bapat & Assocites, Pune. E-Mail: sg_bapat@hotmail.com;sg_bapat@indiainfo.com<br />
Dr. S.G.Bapat<br />
manufacturers, when pirated versions were<br />
cheaply available in the open market. The<br />
price paid was working out to be double.<br />
The company decided to buy half the<br />
number of computers and employees<br />
agreed to work in turns and by rotation -<br />
even night shift for some might be thought<br />
to be OK. A small incident but noteworthy.<br />
Mr.Suresh Hundre believes in setting a<br />
personal example. He does participate in<br />
social activities but it will be after 5 p.m. If<br />
he is taking Off, his casual leave application<br />
will be on the notice-board. I was surprised<br />
that in our seminar in Pune on "Value based<br />
<strong>Management</strong>", he was a faculty, but he was<br />
on "leave" and was not on duty. Forget about<br />
charging TA DA for the company!<br />
Anybody would like that all the world over<br />
such units be multiplied. There are quite a<br />
few people in the world who still believe that<br />
"Good Ethics is Good Business". I talked to<br />
Mr. Suresh Hundre, CMD. Here is a brief of<br />
the interview:<br />
Do you feel that most of the employees have<br />
understood the concept of employee<br />
empowerment?<br />
Suresh : Yes. Most of the employees have<br />
understood the concept of Business<br />
Ashrama and they are fully empowered. In<br />
fact, a senior faculty member from Karnatak<br />
University's <strong>Management</strong> Institute is writing<br />
Ph.D. thesis on Empowerment at<br />
Polyhydron.<br />
Mr.Hundre, you may be knowing that<br />
Mahatma Gandhi suggested "trusteeship<br />
formula" for distributing the gains as 25%<br />
to owners and shareholders, 25% for<br />
additional repayment of loan and interest,<br />
25% to be divided equally amongst the<br />
employees and 25% is to be used for<br />
"expansion of the business in future". Do<br />
you agree with this formula or you have<br />
developed your own one?<br />
Suresh : Dr.Bapat, we have our own formula.<br />
We first calculate the wealth created and<br />
then we share 30% with employees, 5% with<br />
shareholders, 1% with society and balance<br />
64% remains in the for growth. (Of course,<br />
this is all after the payment of corporate tax<br />
as per existing rules).<br />
u H<br />
| <strong>HRD</strong> News Letter | March 2007, Vol.22, Issue:12 33|