Millions of job cuts, mad rush for bail outs and sad declaration of bust outs are common today in the corporate world. In the last one year, United States corporate companies have slashed 24 lakh jobs. Chinese companies are packing off their workers and sending them back to their home villages. Sensing the trouble from laid workers, Chinese government is sending army to the rural hinterlands to closely watch the job lost youth. More than 6 lakh jobs were lost in the textile sector alone in India. Jet Airways came close to sending thousands of its crew members home without giving advance notice. Thanks to the arm-twisting of political parties, the pink slips were withdrawn overnight. Reliance Industries is planning to layoff its 6000 senior executives countrywide.
In the first sign of economic crisis, jobs are taken away. The young, hardworking and aspiring people are first thrown out. They are in the company for few months and proving their worth. Before they gain the total confidence of the top management, recession plays the killer role. Without any concern and consideration, new entrants are sacked. First, they are not exposed enough to seek legal remedy. Second, they have extra patience and no knowledge to revolt against the management. Three, the freshers may not have enough collectivity and resources to refuse the termination orders.
An impassionate analysis into the current crisis reveals that there are multiple contradictions in the corporate governance. On the one hand, the corporate companies are running panic to government to bailout from the financial crisis. From American International Group Inc (the insurance giant) to Lehman Brothers to Fraddie Mac to General Motors to India’s King Fisher all the companies still live in lavish lifestyles. The corporate honchos in these companies have not scaled down their living standards. They still saty in the same billion dollar paid villas, fly in the personal jets and throw company money in millions for pure personal pleasure.
$150 billion bailed out American International Group Inc has seven planes in its kitty. Citigroup Inc, Wells Fargo & Co, Bank of America Corp JPMorgan Chase & Co and Morgan Stanley received $120 billion as bailout package from the United States government. Yet their executives fly in their corporate jets which suck $20,000 for fuel per month.
According to the Associate Press analysis, US banks which were bailed out by the government last year awarded $1.6 billion as salaries, bonuses and perks in the recession affected period.
Mukesh Ambani gifted his wife Rs.250 crores worth private jet for her birthday. To outsmart his brother, Anil Ambani gave Rs.450 Italitan made yacht to his wife Tina on her birthday. If these corporate heroes were concerned about their employees welfare the first step they should have taken is prune their expenditure and perks to the top executives rather than showing door to the hardworking young people.
There is a silver-lining in this dark corporate cloud. Tatas are different. Keeping up their tradition of employees care, Ratan Tata steps forward and takes care of his employees first. Even he burns his finger and pocket but safeguards his employees. May be that is the reason behind the heavy attachment of Tata employees to their companies. Karamvir Kang, the manager of Hotel Taj Mahal in Mumbai performed his hotel duty despite his wife and children were charred to death. The mental wherewithal of Taj Hotel employees shown during and after the 26/11 firing demonstrates the extraordinary Tata spirit. He had shown the same spirit during the Singur crisis. One of the first demands he put to the Government of West Bengal was employees safety.
We need more Tatas for India and the world. The corporate governance should have ethics as the baseline. Any effort to forego business ethics and social responsibility will boomerang on them sooner or later. The much touted CSR – Corporate Social Responsibility should not be a mere publicity stunt. Without delivering employer responsibility they cannot be socially responsible.
Dr. A. Prabaharan's 
pasifik said,
+04302008-12-24T05:23:03+04:30312008b+04:30Wed, 24 Dec 2008 05:23:03 +0430 2, 2008 at 7.27 +04:3012
Financial crisis, It’s a sad story for us now. And we have to live with it…sh…..
Happy blogging,
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euandus said,
+04302009-10-23T05:30:00+04:30312009b+04:30Fri, 23 Oct 2009 05:30:00 +0430 2, 2008 at 7.27 +04:3010
I think the failure of Lehman’s corporate governance was evinced in back in the summer of 2008 when the top execs viewed the market rather than the stockholders as “demanding that we hold ourselves accountable,” according to Skip McGee. I’ve just finished a blog post arging that while self-accountability is a laudable goal, we can’t (or shouldn’t) rely on it. In fact, “holding ourselves accountable” suggests the absence of accountability through corporate governance.