GHANDIAN TRUSTEESHIP PHILOSPHY BACKGROUND

The international corporate environment has been rocked by several scandals beginning in the late 1990s. The well-publicized cases of Enron. WorldCom, Tyco, and Global Crossing in the United States and of Parmalat in Europe exposed instances of accounting irregularities and financial mismanagement, and also revealed the enormous financial assets appropriated by the leaders of these enterprises. The issues involved both individual and corporate behavior. All the level of the individual, the scandals brought forth concerns about unethical behavior and misuse of power since individuals had secured for themselves a larger share of corporate rewards while denying the same to others. The collective question raised was how organizations could make decisions that harmed their senior executives Is the unethical behavior that we witness a price we pay for our form of capitalism and free market policies, or are businesses basically amoral? the concept of trusteeship proposed by Gandhi can serve as a moral foundation for the organization.

WHO IS A TRUSTEE A trustee is one who holds property in trust for another/others. For Gandhi, trusteeship is the application of the law of God to human society and human institutions. Legal frameworks
view trusts as organizations that are formed to achieve a stated purpose (for profit or not), where the management is in the hands of individuals who do not run it for personal gain. trusteeship as a system wherein the individual considers that part of his wealth in excess of his needs as being held in trust for the larger good of society and acts accordingly. GHANDIAN BELIEF BEHIND THE PHILOSPHY OF TRUSTEESHIP Trusteeship was derived from Gandhis spiritually. In the no dualistic tradition of Hindu philosophy, the individual self (Atman) and the ultimate reality (Brahman) are considered one. Following this tradition, Gandhi saw God not as a personal but an unseen power, which was represented for him as truth, and which became a central tenet for him. He even named his autobiography as The story of my experiments with truth. His belief that truth is God led him to the idea of oneness of mankind and the essential unity of all existence. The practice of ahimsa or nonviolence was the means to attain this truth. Gandhis moral philosophy of Sarvodaya, meaning universal uplift or welfare, also flowed from his belief in the oneness of mankind. Sarvodaya was a step beyond utilitarianism, which looked for the welfare of the greatest number. When you seek

the welfare of all, you cannot be satisfied with the welfare of the greatest number, and universal welfare flowed from his belief of isomorphism of truth, Atman. And Brahman. It did not matter to him that it may be a goal that is beyond reach. Those who own money now, are asked to behave like trustee holding their riches on behalf of the poor. GHANDIAN PHILOSPHY OF TRUSTEESHIP Gandhi was not uncomfortable among the capitalists. G.D. Birla, founder of the Birla Group of companies in India, provided much of the money for the maintenance of Gandhis ashrams and his various organizations. Gandhi also distinguished between capitalists and capitalism. Thus, Should the wealthy be dispossessed of their possessions? Society will be the poorer, for it will lose the gifts of a man who knows how to accumulate wealth. The rich man will be left in possession of his wealth, of which he will use what he reasonably needs and act as a trustee for the remainder to be used for society. Similarly, neither did unequal distribution of wealth greatly perturb him, since from a practical point of view it was preferable to violent enforcement of egalitarianism. Again, Economic equality did not mean that everyone would literally have the same amount. It simply meant that everybody should have enough for his or her needs. , an elephant needs a thousand times more food than an ant. For Gandhi, wealthy people should not just be encouraged to act as trustees, they are morally required t o do so. Gandhis justification primarily arose from his Hindu spiritual beliefs, which enjoined the follower not to be attached to material possessions that detract one from a path to salvation. This injunction served him quite well. For his desire was to alleviate the poverty he saw around him, and a nonviolent approach to equitable distribution was preferable to either state intervention or the violent means of the communists. MORAL JUSTIFICATION OF WHY TO ACT AS TRUSTEE Even though an individual may claim that he did not cause the poverty, continuing to live in and share the fruits of society requires bearing common responsibility. Under trusteeship, the individual is not giving away excess wealth, but retaining what is needed (a flexible standard) and using the rest for societys benefit. This approach has a practical appeal to it. The argument that only a few individuals following such a scheme will not make an impact on society can also be challenged. The needs of society are so great that every bit helps. Peter Singer, a utilitarian ethicist, Gandhis trusteeship when he states, In the world as it is now, I can see no escape from the conclusion that each of us with wealth surplus to his or her essential needs should be giving most of it to people suffering

from poverty so dire as to be life threatening. Thats right, I am saying that you shouldnt buy that new car, take that cruise, redecorate the house, or get that pricey new suit. After all, a $1,000 suit could save five childrens lives. Singer extends the principle to the level of the nation when it comes to giving aid to the poor nations. He argues that if we can prevent something bad without sacrificing anything of comparable significance, we ought to do it. Much like Gandhis standard of in excess of ones need, Singer uses a criterion of comparable moral significance to determine how much to give. For one person, giving up a second car to donate aid to a poor nation may be worth it, but it may not be for another. However, stopping short of Gandhis universalist position. Singer argues that the standard of donating must be a doable 10% of ones income. Gandhis trusteeship differs from the utilitarian position in another area also. The utilitarian may justify the methods employed as long as it secures the desired goal. But for Gandhi, the same moral standards that apply to the ends also apply to the means.

The need for the moral foundation for business arises from three areas (1) The state creates and protects corporations, and the purpose of the state is to further societys interests. (2) The corporation itself is composed of a collective people. If individuals have moral standards and the corporation is a person in the eyes of society, shouldnt it also have moral standards? (3) Corporations have wide ranging activities that impact the lives of people through the goods and services they buy and sell. Thus, they have to behave in a manner that society would consider appropriate which may be greater than an existence to maximize private gain.

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A COMPANY AS TRUSTEESHIP
extend the trusteeship idea from the level of an individual to the whole organization. It requires running the organization in such a way that , in addition to its basic economic purpose, the organization considers for itself a larger role in society aimed at improving the welfare of those within the community.

It becomes trusteeship when a company accepts its total responsibility and when management's role becomes that of balancing all the claims upon the company on the basis of seeking justice as the aim of business.... A company is not a human person, therefore, it cannot have a human soul. What it can and should have is a corporate personality which

enables its managers and employees to realize that they are serving the community through the company. The principle of Trusteeship expresses the inherent responsibility of a business enterprise to its consumers, workers, shareholders, and the community and the mutual responsibilities of these to one another (Goyder 1980). The concept of trusteeship implies stewardship without ownership. Such stewardship is not for private profit, but for the greatest good of all. Gandhi believed that people should keep the minimum of wealth for themselves to be able to lead a life that millions lead and give up the rest to be held in trust for the greatest good of all. In Gandhi's concept of trusteeship these are not supposed to be any possible abuses of private and public property, capitalism, or socialism. But it is an idea, and an ideal, that is still evolving and is not sufficiently crystallized for implementation in letter and spirit.
Gandhis formulation also does not prevent an organization from pursuing a goal maximizing wealth. By Donaldsons criteria, using trusteeship in decision making would require the organization to believe that a taken is for the betterment of society. Thus, the principles trusteeship need to be reflected in the policies, systems, and procedures of the procedures of the organization that guides its functioning. 1.embody trusteeship in the statement of the mission of the organization. When the organization demonstrates use of its mission in its critical decisions that would assure us that the organization has followed a principle of trusteeship. Birla, the industrialist referred to earlier who was also a close associate of Gandhi, once said, It has been the policy of the House of Birla not to build up business with a view to the accumulation of capital but to develop unexplored lines, harness the underdeveloped resources of the country, promote know-how, create skilled labor and managerial talents, spread education, and above all, add to the efforts of the leaders of the country who have been struggling to build a new, independent India, free from want, the curse of unemployment, ignorance, and disease. This is an example of how one business group incorporated trusteeship ideas in to its purpose. It would be difficult to find clear evidence of trusteeship (intent followed by behavior) by relying on published information that usually presents an incomplete picture of organizational behavior and decision making practices. Working under limitation, some cases illustrate organizations attempting to work on similar values. For example, the first sentences in the mission statement of Medtronics, the medical equipment manufacturer, is To contribute to human welfare by application of biomedical engineering in the research, manufacture, and sale of instruments or appliances that alleviate pain, restore health, and extend life The fourth sentence states, To make a fair profit on current operations to meet our obligations, sustain our growth, and reach our goals. William George, the former CEO of the company, explains, It is my belief the corporations are created for a purpose beyond making money. Sustained growth in shareholder value may be the end result, but it cannot be the sole purpose. The purpose of any company boils down to one thing: serving your customers.

A second example concerns Ben7 Jerrys Homemade, Inc., a medium sized ice cream manufacturing company. This company was started by two avant grade entrepreneurs in 1978 (since acquired by the Unilever Group in 2000). At the start, the company decided that apart from making good ice cream and making a profit, they would strive to improve the quality of life in the broader community through a social mission. One of their policies included limiting limiting the salary of the top manager to a multiple (seven) of the lowest paid employee. After a few successful years, this rule was perceived to be a stumbling block when the organization started looking for an experienced CEO to sustain their growth in the face of serve competition. Ultimately, this principle was given up. Both Medtronics and Ben and Jerry suggest that there are organizations that see a larger purpose in their existence beyond Friedmans narrow view that profit maximization should be the sole responsibility of corporations as long as they stay within the limits of the law. While these two cases may not be complete examples of trusteeship, they suggest the possibilities for organizations that want to move in that direction. For example in recommending an organization formulate an enterprise strategy to deal with the question of what do we stand for? Freeman and Gilbert caution that it is not just a slogan but hard work in trying to understand the values of the people within the company while trying to connect ethics and morality as part of an organizations purpose. 2.to be the duty of the man of wealth; To set an example of modest, unostentatious living, shunning display of extravagance; to provide moderately for the legitimate wants of those dependent upon him; and, after doing so, to consider all which he is called upon to administer in the manner in which, in his judgment, is best calculated to produce the most beneficial results for the community the man of wealth becoming the mere trustee and agent for his proper brethren, bringing to their service his superior wisdom, experience, and ability to administer, doing for them better than they would or could do for themselves.

HOW TO CARRYOUT PHILOSPHY OF TRUSTEESHIP Leveling Up, Down Economic equality is the master key to nonviolent independence. Working for economic equality means abolishing the eternal conflict between capital and labour. It means the leveling down of the few rich in whose hands is concentrated the bulk of the nations wealth on the one hand, and the leveling up of the semi-starved naked millions on the other. A nonviolent system of government is clearly an impossibility, so long as the wide gulf between the rich and the hungry millions persists. The contrast between the palaces of New Delhi and the miserable hovels of the poor, labouring class nearby cannot last one day in a free India in which the poor will enjoy the same power as the richest in the land. A violent and bloody revolution is a certainty one day unless there is a voluntary abdication of riches and the power that riches give and sharing them for the common good.

I adhere to my doctrine of trusteeship in spite of the ridicule that has been poured upon it. It is true that it is difficult to reach. So is non-violence. But we made up our minds in 1920 to negotiate that steep ascent. We have found it worth the effort Non-violent Way By the non-violent method, we seek not to destroy the capitalist, we seek to destroy capitalism. We invite the capitalist to regard himself as a trustee for those on whom he depends for the making, the retention and the increase of his capital. Nor need the worker wait for his conversion. If capital is power, so is work. Either is dependent on the other. Immediately the worker realizes his strength, he is din a position to become a co-sharer with the capitalist instead of remaining his slave. If he aims at becoming the sole owner, he will most likely be killing the goose that lays the golden eggs. Not need I be afraid of some one else taking my place when I have non-co-operated. For I expect to influence my co-workers so as not to help the wrong-doing of my employer. This kind of education of the mass of workers is no doubt a slow process, but as it is also the surest, it is necessarily the quickest. It can be easily demonstrated in the end of the worker and as no human being is so bad as to be beyond redemption, no human being is so perfect as to warrant his destroying him whom he wrongly considers to be wholly evil. Community Welfare I am inviting those people who consider themselves as owners today to act as trustees, i.e., owners, not in their own right, but owners in the right of those whom they have exploited.

It has become the fashion these days to say that society cannot be organized or run on non-violent lines. I join issue on that point. In a family, when the father slaps his delinquent child, the latter does not think of retaliating. He obeys his father not because of the deterrent effect of the slap but because of the offended love which he senses behind it. That, in my opinion, is an epitome of the way in which society is or should be governed. What is true of the family must be true of society which is but a larger family.

Supposing I have come by a fair amount of wealtheither by way of legacy, or by means of trade and industryI must know that all that wealth does not belong to me; what belongs to me is the right to an honourable livelihood, no better than that enjoyed by millions of others. The rest of my wealth belongs to the community and must be used for the welfare of the community. I enunciated this theory when the socialist theory was placed before the country in respect to the possessions held by zamindars and ruling chiefs. They would do away with these privileged classes. I want them to outgrow their greed and sense of possession, and to come down in spite of their wealth to the level of those who earn their bread by labour. The labourer has to realize that the wealthy man is less owner of his wealth than the labourer is owner of his own, viz., the power to work. No Make-shift My theory of trusteeship is no make-shift, certainly no camouflage. I am confident that it will survive all other theories. It has the sanction of philosophy and religion behind it. That possessors of wealth have not acted up to the theory does not prove its falsity; it proves the weakness of the wealthy. No other theory is compatible with non-violence. In the non-violent method wrong-doer compasses his

own end, if he does not undo the wrong. For, either through non-violent non-co-operation he is made to see the error, or he finds himself completely isolated.

Acquisition of Health Those who own money now, are asked to behave like trustees holding their riches on behalf of the poor. You may say that trusteeship is a legal fiction. But if people meditate over it constantly and try to act up to it, then life on earth would be governed far more by love than it is at present. Absolute trusteeship is an abstraction like Euclids definition of a point, and is equally unattainable. But if we strive for it, we shall be able to go further in realizing state of equality on earth than by any other method.

It is my conviction that it is possible to acquire riches without consciously doing wrong. For example I may light on a gold mine in my one acre of land. But I accept the proposition that it is better not to desire wealth than to acquire it, and become its trustee. I gave up my own long ago, which should be proof enough of what I would like others to do. But what am I to advise those who are already wealthy or who would not shed the desire for wealth? I can only say to them that they should use their wealth for service. It is true that generally the rich spend more on themselves than they need. But this can be avoided. Jamnalalji spent far less on himself than men of his own economic status and even than many middle-class men. I have come across innumerable rich persons who are stingy on themselves. For some it is a part of their nature to spend next to nothing on themselves, and they do not think that they acquire merit in so doing. The same applies to the sons of the wealthy. Personally, I do not believe in inherited riches. The wellto-do should educate and bring up their children so that they may learn how to be independent. The tragedy is that they do not do so. Their children do get some education, they even recite verses in praise of poverty, but they have no compunction about helping themselves to parental wealth. That being so, I exercise my common sense and advise what is practicable. Those of us, however, who consider it a duty to adopt poverty and believe in and desire economic equality may not be jealous of the rich, but should exhibit real happiness in our poverty which others may emulate. The sad fact is that those who are thus happy are few and far between.

A trustee has no heir but the public. In a State built on the basis of non-violence, the commission of trustees will be regulated. Princes and zamindars will be on a par with the other men of wealth. The Choice As for the present owners of wealth, they will have to make their choice between class war and voluntarily converting themselves into trustees of their wealth. They will be allowed to retain the stewardship of their possessions and to use their talent, to increase the wealth, not for their own sakes, but for the sake of the nation and, therefore, without exploitation. The State will regulate the rate of commission, which they will get commensurate with the service rendered, and its value to society. Their children will inherit the stewardship only if they prove their fitness for it. Supposing India becomes a free country tomorrow, all the capitalists will have an opportunity of becoming statutory trustees. But such a statute will not be imposed from above. It will have to come from below. When the people understand the implications of trusteeship and the atmosphere is ripe for it, the people themselves, beginning with gram panchayats, will begin to introduce such statutes. Such a thing coming from below is easy to swallow. Coming from above it is liable to prove a dead weight. APPLICATION OF IDEA OF TRUTEESHIP

How do we recognize that an organization is behaving like a trustee? When a pharmaceutical company limits its dividend to past averages allowing it to hold the price (and forego excess profits) of its essential drugs that serve the needs of large sections of the poor, then it would have displayed trusteeship behavior. A drug that Merck and Co. was previously championing as a special kind of pain killer was withdrawn by the company recently after evidence that it could cause cardiovascular problems. A recent report suggests that here was suspicion within the ranks of the company of the problem even earlier and the need s of marketing and science were in conflict as decisions were made about its launch and promotion. This suggests a lack of clarity of the moral purpose of an organization and decisions being driven by only economic considerations. The trusteeship idea can be applied in a limited was in several areas of decision making. What should be the location of the unit? Will it benefit the community without affecting the environment? What should be the technology used? If it is launching a new product, has it taken all precautions to ensure safety in the manufacture and use of the product? What manner of advertising is used to attract new customers? If the company has to down size, is it done in a manner that causes the least harm?

The Gandhian Approach TO INDUSTRIAL RELATIONS Gandhiji can be called one of the greatest labour leaders of modern India. His approach to labour problems was completely new and refreshingly human. He held definite views regarding fixation and regulation of wages, organisation and functions of trade unions, necessity and desirability of collective bargaining, use and abuse of strikes, labour indiscipline, workers participation in management, conditions of work and living, and duties of workers. The Ahmedabad Textile Labour Association, a unique and successful experiment in Gandhian trade unionism, implemented many of his ideas. Gandhiji had immense faith in the goodness of man and he believed that many of the evils of the modern world have been brought about by wrong systems and not by wrong individuals. He insisted on recognising each individual worker as a human being. He believed in non-violent communism, going so far as to say that if communism comes without any violence, it would be welcome. Gandhiji laid down certain conditions for a successful strike. These are: (a) the cause of the strike must be just and there should be no strike without a grievance; (b) there should be no violence; and (c) non-strikers or blacklegs should never be molested. He was not against strikes but pleaded that they should be the last weapon in the armory of industrial workers and hence should not be resorted to unless all peaceful and constitutional methods of negotiations, conciliation and arbitration are exhausted. His concept of trusteeship is a significant contribution in the sphere of industrial relations. According to him, employers should not regard themselves as sole owners of mills and factories of which they may be the legal owners. They should regard themselves only as trustees, or co-owners. He also appealed to the workers to behave as trustees, not to regard the mill and machinery as belonging to the exploiting agents but to regard them as their own, protect them and put to the best use they can. In short, the theory of trusteeship is based on the view that all forms of property and human accomplishments are gifts of nature and as such, they belong not to any one individual

but to society. Thus, the trusteeship system is totally different from other contemporary labour relations systems. It aimed at achieving economic equality and the material advancement of the have-nots in a capitalist society by non-violent means. Gandhiji realised that relations between labour and management can either be a powerful stimulus to economic and social progress or an important factor in economic and social stagnation. According to him, industrial peace was an essential condition not only for the growth and development of the industry itself, but also in a great measure, for the improvement in the conditions of work and wages. At the same time, he not only endorsed the workers right to adopt the method of collective bargaining but also actively supported it. He advocated voluntary arbitration and mutual settlement of disputes. He also pleaded for perfect understanding between capital and labour, mutual respect, recognition of equality, and strong labour organisation as the essential factors for happy and constructive industrial relations. For him, means and ends are equally important.
Practical Trusteeship Formula Trusteeship provides a means of transforming the present capitalist order of society into an egalitarian one. It gives no quarter to capitalism, but gives the present owning class a chance of reforming itself. It is based on the faith that human nature is never beyond redemption. It does not recognize any right of private ownership of property except so far as it may be permitted by society for its own welfare. It does not exclude legislative regulation of the ownership and use of wealth. Thus under State-regulated trusteeship, an individual will not be free to hold or use his wealth for selfish satisfaction or in disregard of the interests of society. Just as it is proposed to fix a decent minimum living wage, even so a limit should be fixed for the maximum income that would be allowed to any person in society. The difference between such minimum and maximum incomes should be reasonable and equitable and variable from time to time so much so that the tendency would be towards obliteration of the difference. Under the Gandhian economic order the character of production will be determined by social necessity and not by personal whim or greed.

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Whatever the perspective, conflict is inherent in industrial relations due to tensions of command and subordination, competitiveness, exploitation, physical deprivation at work, and economic security. Conflict may arise due to: I. Wage-work bargain, II. Managerial system of work governance, or III. Fundamental divisions and differing values in society. The interests of groups can be negotiated through collective bargaining. But rights and values are often not amenable or appropriate to bargaining. Conflict manifests itself in one or more of the following forms:

I. Relatively hidden and unorganized individual ways, such as, low employee morale, high labour turnover, absenteeism, accidents, etc. II. Grievances, indiscipline, etc. III. Strikes or other forms of industrial action, overt (strike/lockout) or covert (work-to-rule, go-slow, gherao, etc.)