Thursday, June 28, 2012

Why did Rajat Gupta do it?

Umm... I realise I am walking into something of a minefield here. And I really don't want to indulge in psychobabble- I never set much store by it anyway. However, since the question has been asked and answered in ways that I do not find persuasive, I thought it was worth a brief comment.

To say that Rajat Gupta was greedy is a non-statement- the rest of us are not angels anyway. If we accept that living is, for the most part, one big ego trip, then it's impossible to keep greed out of the equation.

Some would argue that the issue is not greed per se. It is greed that goes beyond reasonable bounds, whatever these are. This is the line that most critics of Gupta have taken. He was alright during his McKinsey days, his downfall began when, in the company of fund managers  and other Wall Street types, he began to entertain visions of moving from being a multi-millionaire to a billionaire. That is when things began to wrong. He would have been okay had he stuck to his multi-millionaire status, his mansion and three apartments. All of us need to survive, you know.

The inference, of course, is that people at the top who don't fall into this trap are people who have "managed" their greed- I teach at a b-school, so I guess I should be using the right expressions. That is how they end up as decent, law-abiding, tax-paying, non-insider trading citizens.

It was left to John Gapper of the FT to prick this delusion in an incisive article:

Like politicians, executives who reach the top are not saints – they must build alliances, defeat rivals and be highly ambitious. They may behave with nobility once in the job but that is not how they got there.

Studies have found that many executives share qualities with psychopaths. One study of British managers identified similar traits in both – superficial charm, grandiosity, lack of empathy, manipulativeness. These flaws, far from holding them back, had helped them rise.

There you have it. Being at the top in the corporate world is not about higher values or concern for mankind, much less about being a balanced guy with lots of inner harmony. It is the ruthless pursuit of self-interest, the indulgence of greed in every way, that takes people to the top. In the process, some transgress the law in obvious ways, some in not-so-obvious ways, and a great many are blind to any moral code but cannot be said to have violated laws. Again, some get caught, others don't.

Viewed thus, what happened in Gupta's case represents a continuum, not an abrupt discontinuity. His misfortune was that he happened to get caught. There must be many like him whom people still queue up to listen to, shake hands with, are eager to write about.

I will leave you to ponder Gapper's unsettling punchline:
The nastiest conclusion is that the “norms and expectations” of the corporate elite are corrupt – that at such heights, illegal information-sharing is no big deal.


Anonymous said...

Link to FT article is missing

Anonymous said...

Spot on...

He was already corrupt only got exposed because was caught doing so. I think the sensibility of right and word changes completely after you have attained a status. These guys think normal rules don't apply to them because they are beyond it.

Anonymous said...

So all those stories about how non-americans (read south asians here) were made a scapegoat for something which most people were guilty of, is really wrong? Sigh.. and here I was thinking we will save some face by racism allegations!

Anonymous said...

I think this article is quite off-base. I think in an exceptionally corrupt environment, he really did manage to be a fairly decent individual.

There was no hard evidence that he was part of Raj's ring.

I think Galleon and Goldman were much closer than people realize and that clients got to hear a lot of information.

Goldman confidentiality is not necessarily the same "inside information" for federal criminal trial purposes.

He was indeed targeted selectively, as there was much greater wrong-doing at Goldman.

The trial was most unfair, with the judge leaning over backwards for the prosecution.

When no whites of the same status who have done much worse things have even been charged, I think racism is a valid concern.
Studies have shown that all-white juries do discriminate against Indians in white-collar cases.

There are times when Indians are too sensitive about criticism. This is not one of them.

There is a serious problem with Bharara's crusade, which seems to be going after tangential issues, and not the core of the matter.

Anonymous said...

being at the top of your game or somewhere else on the corporate ladder isn't the question. being manipulative or playing politics at work or indulging in other forms of self progress is fair game. i was taught all along that these currencies exist in the corporate world and much as you have to watch your back, you have to watch how you go. but i can say that in my career, i did not indulge in illegal stuff of the kind that would get me to jail. i'm not surprised that rajat and you sing from the same hymn sheet because that's what you've been trained to do and that's how you think. your'e Indian and you will always think like one and your tolerance levels on issues like corruption will always be weighing in favour of ' the way it happens here' approach, rather tan the way it should happen.
one is governed by the environment that one lives and operates in and sadly rajat and raj and people like them never left their roots when they arrived in the us and carried on in the same way.
your simplistic justification of the issue is unacceptable - that everyone does it so it's ok - so long as you don't get caught. maybe it works in your view but it didn't in the case of the jury!

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punit unisense said...

I totally agree with you..very well said the even we are not Angels..nice one! stock market tips

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