Citizens' Issues
Preventing Enron-like scams in the Armed Forces

Army officers need to stand up and be counted at any cost or else, they will stay down for good and dent the image of the Armed Forces

Even as we get continuously desensitized to news of violence, immorality and corruption in all sections of society, news of such deviations by members of the Armed Forces draws special attention due to the severe contrast that such news has with the image of the Armed Forces as a disciplined and ethical organization. In recent years, there have been numerous cases of unbecoming conduct and misuse of the position held by senior Armed Forces officers. Having been a member of the Armed Forces and knowing that it is still one the finest institutions of our country, such news of alleged corrupt practices by officers make me cringe, just as it would appear shameful and painful for all serving and retired members of the Armed Forces. I reject the argument that it is difficult to maintain the traditional values of selflessness, integrity and morality in the Armed Forces and lay the blame on the value system of other institutions and society at large. We need to introspect and understand how and why unethical practices creep into an organized, disciplined and structured force and how it can be insulated from a decaying environment.

Even as the Indian Army, an internationally renowned fighting force, should not be really compared with the Enron case, I see some distinct similarities between the Enron culture and a sub-culture within the Indian Army. These significant and interesting parallels might explain the deeper systemic causes of the now rather frequent image fraying incidents of unethical practices involving senior Army officers that come to light through the media. What becomes known may be just a tip of the malaise. My focus is on two comparable aspects that could reveal systemic weaknesses.

Culture and Leadership

A nation’s survival depends on the quality of its armed forces and that inevitably depends on the quality of the leadership. The quality of the armed forces and its leadership has a decisive influence on national power. Today, several behavioural and ethical tendencies borrowed from the business world threaten the displacement of the military ethos.

In 1986, General Sundarji as Chief of the Armed Staff had expressed his concern to all officers (this term is used to include the wider meaning of leaders) of the Indian Army about how the Army “is becoming increasingly careerist, opportunist, and sycophantic; standards of integrity have fallen and honour and patriotism are becoming unfashionable.” Even the current chief of Army Staff, Gen VK Singh had resolved to address this issue seriously. The crucial question to examine is that in the present climate of values and imperatives of the system are the officers who are successful the best or are they those best fitted to cope with the circumstances?  Survival of the fittest need not mean survival of the best. In particular cases, survival may be achieved through degeneration or the compromise of ethical values.
 
While the spectacular failure of Enron is primarily attributed to its accountancy practices, its internal culture and leadership practices also contributed to its collapse. At Enron, the culture was characterized by promotion of conformity and a parallel suppression of dissent. Just as in cults, employees were so over-aligned with the company that they never asked uncomfortable questions of their leaders. The leaders at Enron displayed narcissism. The leaders had a strong need for power, were over-confident and held strong convictions. They tended to be very sensitive to criticism, were poor listeners, lacked empathy, hated advice and had an intense desire to compete. Such a silencing culture created and promoted an insular homogenous group mentality that could never challenge the mis-judgments of their superiors. Subordinates were thus made vulnerable to manipulation by leaders of the organization through a corrosive value system.

At Enron, communication was primarily one way, from the top to bottom and used only to reinforce the demanding goals set by Enron’s leaders. Corrective feedback was not sought, but stifled. Dissent was considered as resistance to be overcome rather than as useful feedback. An unwritten rule demanded “no bad news”. The messenger would invariably get shot, as was evident in the case of Sherron Watkins, a senior employee in the finance department of Enron, who broke the hierarchical chain of command and voiced her concerns about the financial position of the company directly to Ken Lay, the CEO. Soon after that meeting, Ken Lay contacted his lawyers to find ways of firing her.

In the Army too, cultism can exist in some quarters, as military ranks bestow enormous authority over their subordinates.  Conformity to rules and customs is critical and backed by an Army Act. Newcomers are ingrained with the ethos of discipline, loyalty, integrity and team work. They are always referred to as ‘the cream of the nation’. Compliance with professional norms earns them rewards and recognition. The profession also monopolizes their time. “You are always on duty round the clock” is the norm. All these rituals of integration and socializing are necessary to inculcate the desired values for a fighting force. What goes wrong is the extent to which the norms of loyalty and obedience can get stretched by some errant leaders to suit their own personal ends.

Many failings arrest worldly success but in the Army non availability of sufficient high grade assignments to mathematically match the large availability of officers with a high grade profile was a systemic problem which in recent restructuring has been corrected to some extent. Thus, many good officers become victim of comparative merit.

The lifestyle of military leaders improves with rank as more and more organizational resources come to be placed at their disposal. Some of the military leadership is prone to opulence within its own domain. At higher ranks, some may justify to themselves that they have earned their position through relentless efforts and they must enjoy all the possible ‘perks’ in their tenured appointments.

Also, for some military leaders, debate may be unnecessary and the only thing that they consistently seek is enthusiastic expressions of agreement from their subordinates on their ideas and proposals. As negative information or feedback is generally seen as subordinates’ inability to cope and is deemed by the superior to reflect poorly on the subordinate, much of upward communication can get distorted through filters at different levels of hierarchy in order to please or pacify the final recipient. Only the inescapable negative information may get fed upwards by subordinates to give leaders the illusion of control.

Some military leaders in their appointments may seek to be surrounded by subordinate staff with proven and tested loyalties to themselves and who will facilitate the achievement of their personal and professional interests. Subordinates are also far too willing to be affiliated with senior ranks and may proactively seek to be posted under them. Like within cults, if the message is that the subordinate is valued and very much wanted- it increases the person’s tendency to affiliate and conform and engage in yet further behaviours pleasing to the leader. “Always try and serve under someone you know” was the advice given publicly by a serving Lt. General to a colonel during the latter’s farewell function at the Staff College some years ago. This not only revealed how the general might have risen in his career but also reflected some of the current values in the organizational culture of the Army.

A sub-culture of submissiveness, servility and appeasement combined with rigid controls ensuring conformity may result in a lack of genuine upward communication. The absence of debate and insulation of the top leadership by a selected coterie of staff officers can generate a feeling of omnipotence and omniscience in the leader. Such a mistaken assumption on the part of a leader prepares the ground for incorrect decisions and unethical practices.

When careerism is held as the highest value, there is increased willingness to acquiesce in policies and orders that are detrimental to the good of the service. Officers then may then have to make a choice between pleasing one’s superior and staying ‘loyal’ or staying loyal to oneself and one’s values. The individual then assesses whether to object or obey purely in terms of his ascending career interests.

Subordination of self interest to organizational interest is essential for the excellence of Armed Forces. A proven example of selflessness is that of the German military which was one of the most efficient military of the twentieth century. To become a member of the German General Staff, what was required was the absence of the quality of ambition. If an officer of the General Staff was regarded as a climber, they had no further use of him. In our case, it is possible that senior commanders may fail to stand up to the establishment in matters of conscience if the bait of ambassadorship, governorship or some cushy job after retirement looms large.

Even though the Defence Service Regulations make it incumbent upon subordinates to report any type of irregularity in which their superiors are involved, this provision of whistle blowing is rarely invoked or at best may be used by the officer in retaliation to an injustice done to him.

The Rank and Yank Appraisal Policy of Enron

Enron had a punitive internal culture in which all that has been so painstakingly gained in a career could be withdrawn at the whim of senior managers. Enron’s appraisal system was known as “rank and yank”. An internal performance review committee rated employees twice a year. They were graded on a scale of one to five on 10 separate criteria, and then categorized into three groups. Group A were to be challenged and given large rewards; ‘B’s were to be encouraged and affirmed and ‘C’s were told to shape up or ship out. Those in ‘C’ category were given time to improve until their next review. Whatever they did, 15% of all employees would find themselves in the bottom category twice a year. So sufficient improvement was almost impossible and they tended to leave quickly. The A and B categories were also at risk to be downgraded every six months. A cut-throat culture was created which pitted employees against each other. It was clearly in every individual’s interest that someone other than themselves received a poor rating.

Through this appraisal system, Enron created an environment where employees were afraid to express their opinions or to question unethical and potentially illegal business practices. Because the rank and yank system was both arbitrary and subjective, it was easily used by managers to reward blind loyalty and invalidate brewing dissent.

The Army’s Appraisal System

Officers in the Army are graded each year on about a score of parameters on a scale of zero to nine. A niner is considered outstanding and gradings of seven and eight are both considered above average. The 20 parameters are graded by two levels up in the hierarchy and reviewed at the third level. The hierarchical pyramid is steep, getting very narrow at the top. Till recently, so drastic was the differentiation with the civil services that while in 18 years of service, one could rise to the level of a joint secretary; a similar status of major general could only be attained after 30 years of service or more.

Promotions are vacancy based and relative merit with an exaggerated emphasis on quantitative assessment plays a major role in selection procedures. So, no matter how good the overall standards of a batch of officers, a certain percentage has to be yanked. So intense is the competition that a single grade of seven in any of the 20 qualities over the entire length of the career could become the cause of elimination from the promotion process.

While getting superseded is an inevitable reality due to lower performance than peers and must be accepted with stoic indifference, it is also an accepted fact that human judgments across the board are not equitable and much can depend on the nature of superiors that one is placed under. A superior’s frame of reference is much influenced by his own ethical standards and his own model of success. Quite often, a careerist superior would expect attitudes and behaviour of his subordinates to conform to ways and means he adopted to achieve success. If such values extend across the organization on a wide scale, only individuals deemed appropriate by the dominant group will rise in their career.

Moreover, the system of appraisal is partially transparent. Only the portion of demonstrated performance rated by immediate superior is shown and not the assessment of the officer’s potential. Officially, these can be contrasting. The designing of the partially closed system has its merits but it allows revengeful assessing officers to commend subordinates in their visible reports and yet administer a “poison pill” in form of a grade of seven in abstract qualities of potential, without his knowledge. The assessee is not apprised of his potential and even if he knew he cannot protest much as seven is considered above average and yet turns out to be a career stopper.

The structural defect in design of the appraisal system can give rise to an ethos of appeasement particularly when value systems of the appraiser and assessee differ. If an assessee fails to act upon instructions that are clearly unethical and/or illegal, the errant superior may nurse a grudge against him and while being unable to wrongly assess him in the open portion of the appraisal because of his visible competence and which could lead to a justified protest, he may damage his promotion prospects by under rating him in the hidden portion of the appraisal report.

Cases of good officers being treated shabbily may arise because of their disagreeing with the proposed unethical action rather than their lack of objectivity or competence. The appraisal system thus reinforces the demand for conformist behaviour and is a disincentive to the articulation of voices even when things are going wrong.

 The appraisal system is misused as a form of unobtrusive control and as an instrument of coercion by cultish organizations. By making their subordinates helpless and fearful, through a mix of approval and abuse, they suppress voices of dissent. Subordinates too, tend to find security in doing what they are told to do rather than think and make decisions for themselves.

Conclusion

The picture of certain sections of the Army practicing the ethics of the marketplace does not suggest a particularly inspired work performance. The optimistic view is that such sections are minimal and do not reflect on the integrity of the Army as a whole. But unless this malignant tumour is contained and excised, it poses the danger of weakening the body and finally overtaking it.

The following measures could help reduce the possibilities of ethical deviations without compromising on discipline:

A.    The unintended birth of some sub cultures that work counter to the primary goals and identity of organizations need to be identified and kept in check by a continuous tracking of practices and the nature of sense-making by the members of the organization. This is only possible if feedback loops within the organization are effective and leaders at all levels have a propensity to listen, understand and act. Often times, an eerie bonhomie among top rungs of leadership, based on ‘quid pro quo’ relationships, prevent the curbing of the rise of destructive sub cultures within an organization. A formal system of ethical audits for both individuals and organizations needs to be instituted. At the individual level, a 360 degree evaluative process, at least on the critical qualities of leaders should be taken as another input for promotions. Such a process would reinforce values and measures aimed at ensuring correct conduct. At the organizational level, a stricter process of external audits with focus on ethically vulnerable points in the system needs to be put in place.

B.    Military structures should have functional doctrines of protest that encourage the use of the instrument of moral protest through personal courage and a sense of morality. An officer must not betray his personal integrity or his position and such a doctrine would help individuals balance moral and career considerations. Valid whistle-blowing must be encouraged and rewarded.

C.    Improve career management by reducing proportionate emphasis on a quantitative based selection system and increase value judgment on qualitative criteria. Reduce possibilities of senior officers choosing their subordinates and carrying them in service. The appraisal system needs to be made more transparent by disclosing judgments of potential and turning it into a developmental tool.

For any lasting change, efforts have to be both bottom-up and top-down. Systemic changes to encourage the growth of the right culture need to permeate from the top.
For those below, the advice is that you don’t have to go along to get along. Loyalty to one’s superior ought to be seen as a conditional relationship based upon the condition that the superior is acting honourably in his position of command. On issues that seem important to them, officers need to stand up and be counted at any cost or else, in any case, they will stay down for good and dent the image of the Armed Forces.

The preceding generations have brought into being our mighty Army with its strong traditions, values and a unique culture despite some imperfections. It is incumbent upon the present and future generations to endeavour to remove the imperfections, and build a greater Army that the nation can continue to be unquestionably proud of.

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COMMENTS

Dilip

4 years ago

That was a very nice article Rajeev.Very clear and articulate.The malaise of Civil society have crept into the Armed forces and are threatening to engulf the system.Unless the senior Leadership recognizes the threat and decided to take immediate corrective action,things may slide out of control. The Army should also not lower their standard during intake of Officers at the SSB level otherwise the so called"Bad apples" will spoil the entire basket.!!!

Rajiv Tyagi

4 years ago

Excellent article and analysis! In every hierarchical system, it should be compulsory to have an appraisal of the senior by his juniors. The appraisal should be kept secret from the senior appraisee but should have a substantial impact on he appraisee's future prospects. The appraisal should be on qualities like ethical standards, potential as a leader of men and professional ability... The grading of the senior thus appraised may be filtered statistically, like taking a median score from all the scores obtained from the appraisee's juniors...

TDSAT hauls up Star, MSM, Zee for aiding ‘illegal’ MSO in HP

The TDSAT direction came over the complaints filed by three MSOs who have sought that the broadcasting houses stay the unauthorised re-transmission of their signals in the state

 

New Delhi: The Telecom Dispute Settlement and Appellate Tribunal (TDSAT) has hauled up channel distributing firms—Star Den, MSM Discovery and Zee Turner—for letting their signals be distributed illegally by a Punjab-based leading multi system operator (MSO) in Himachal Pradesh (HP) without getting necessary approvals, reports PTI.

It has said the three “shall also pay a sum of Rs25,000 each to the petitioner” MSOs of Himachal, which had brought the case before it.

Besides, TDSAT has asked the Telecom Regulatory Authority of India (TRAI) to probe, if possible, the three firms’ role apprehending that without their ‘connivance’ the MSO, Fastway, could not have become a dominant player with 65% market share in HP.

“We are sending a copy of this order to the regulator (TRAI) only for the purpose of considering as to whether it is possible for them to enquire as to how the Respondent No 4 (Fastway), which is said to be dominating the field of broadcasting and cable services in the state of Punjab, had been permitted with the connivance of the broadcasters to sneak in the state of Himachal Pradesh to start its services without entering into any proper subscription agreement with the broadcaster and by the process acquired 65% of the market,” said the tribunal.

It also asked to send copies of its findings to the post master of Shimla and Solan which are statutorily authorised to issue license to cable operator and district magistrate of Shimla and Solan “for appropriate action on their part” against Fastway Transmissions.

“To us, it appears that (Fastway) had been able to acquire the market by reason of adopting a wrongful method for the purpose of frustrating any competition amongst the service providers...” the tribunal observed.

Star Den is a 50:50 JV between broadcasting houses Star India and DEN Networks for distribution of their TV channels.

Zee-Turner is a 76:24 JV between Zee Entertainment and Turner India Pvt Ltd, while MSM Discovery is a 74:26 JV between Multi Screen Media (Sony group) and Discovery Communications for distributing their channels.

The TDSAT direction came over the complaints filed by three MSOs—Solan Sat TV, Bridge View Broadband Network and Solan Communication. They have sought that the broadcasting houses stay the unauthorised re-transmission of their signals in the state.

They had also requested the tribunal to direct Fastway not to illegally encroach upon their authorised areas. As evidence they submitted CDs and its brochure.

The three broadcasters in their written replies had submitted before the tribunal that Fastway has not committed any act of piracy.

Moreover, they submitted that the complainant MSOs indirectly had sought for down-gradation in the amount of subscription fee payable to them, which could not be done directly.

Zee Turner had even termed them as defaulters.

TDSAT said it will not go into these issues right now.

However, its said, “Sufficient materials have been brought on record to show that Fastway, having regard to the fact that it has been paying a huge amount of subscription fee to them, and/or for other reasons which it had not disclosed, the Respondent No 1 and 2 (Star Den & MSM Discovery) must be held to have acted wrongfully”.

Besides, the three companies, TDSAT also imposed a cost of Rs1 lakh on Fastway.

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India, China agree to enhance defence and security dialogue

The two leaders have reiterated their intention to promote regular ministerial-level exchanges and make full use of the strategic dialogue and other bilateral dialogue mechanisms

 

Rio de Janeiro: India and China have agreed to enhance their defence and security dialogue and take steps to achieve a bilateral trade target of $100 billion by 2015, reports PTI.

Prime minister Manmohan Singh and his Chinese counterpart Wen Jiabao spoke of the need to continue with this dialogue at their 40-minute meeting on the sidelines of the Rio+20 Environment Summit here.

Briefing reporters after the meeting, foreign secretary Ranjan Mathai said that during the discussion on trade and economic cooperation prime minister Singh invited Chinese investment in infrastructure in India.

Mr Mathai also said that Indian rice exports to China will commence soon.

Reflecting the good chemistry shared between them, Mr Wen told Mr Singh that their meeting in Brazil was the 13th.

Mr Mathai said the two leaders discussed the issue of trans-border rivers flowing in India and China during which Beijing agreed to transfer of data in this regard to New Delhi.

Official sources said this move sent a strong signal from China on sharing of information with India on the rivers issue. This was also important since India was a lower riparian country.

“Defence and strategic dialogue (between India and China) should continue and be stepped up,” Mr Mathai said.

The two countries have already agreed to establish a “strategic and cooperative partnership for peace and prosperity". They have also reiterated their intention to promote regular ministerial-level exchanges and make full use of the strategic dialogue and other bilateral dialogue mechanisms. Prime minister Singh also spoke of Indian naval ships recently visiting China.

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