Saturday, December 17, 2011

Building Sustainable Organisation: Lessons from Indian Caste System

Can we learn from negatives? Recently an article was published on HBR describing what business can learn from Organized Crime?

In similar context, Can we learn from Indian Caste System?

Indian caste system despite its draw backs is surviving from more than 3000 years. One may well ask why such a system has remained intact for so long? What were the qualities which made it sustainable? Can we look at it and draw lessons how to build a large, successful and sustainable organisation? This article looks at features of caste system and obtains eight management insights for building large, successful and sustainable organisations.

Caste System

In India, Hindu society is divided in four castes ("varna" from the Sanskrit word for "colour") and the outcastes. In order from highest to lowest are: (1) the Brahmin (priestly and intellectual caste); (2) the Kshatriya (warrior and administrative caste); (3) the Vaisiya (merchant and skilled artisan caste); (4) the Sudra (common labour, farming caste).

These Varnas were broad classifications only; within each classification would exist hundreds, if not thousands, of subtle caste and sub caste variations (jatis). These "jatis" are sub-divisions which indicate specific professions or occupations as well as geographical, physical and genealogical differences between jatis. Although a person born into a particular jati is supposed to perform a certain occupation, economic realities might force an individual to choose some other profession. He will still refer himself as being his traditional jati. In this system, the jati member is required to marry someone from the same jati through a pre-arranged system. Women are supposed to provide people (children) for the jati and to train these people in correct jati traditions. It is primarily a Hindu-based system, but aspects of this system have infiltrated other religions (e.g. Christianity and Islam) as well.

Eight Management Insights from Indian Caste System

1. Core Belief

Majority of Indians believe in caste system. They believe that caste hierarchy is based on the basis of their action in their previous life. The quality of their work and actions in this life will determine their caste in their next life. If in one's past life one had performed the functions of one's caste and jati correctly, one can hope to be promoted to a higher status in next life. If the opposite were true, one can expect to be demoted too. In order to advance in the next life, one must perform all that is required by one's jati. They also believe that it is their religious duty to respect and follow the caste system. Even the people who don’t have belief in caste system don’t do anything to denounce it and prefer the status quo instead of questioning it.

This gives us the management insight of having the core belief of the organisation. Why the organization is in business? What are the organization’s core believes? If the majority of the employees understand core belief of the organization then organisation can withstand any changes and crisis. The core value remains same which does not change with external environment.

In the last 3000 years Indians still hold this belief. Even if some people do not have that strong belief they prefer the status quo and go with the majority. The concept of the core value is found in most successful companies around the world and is documented in book “Built to last”.

2. Hierarchy but mobility

There were four layer clear hierarchies in the caste system. The hierarchy was role based and it provided clear stability to this system for last 3000 years.

The people can however improve their hierarchy by adopting ways and means of upper hierarchies. Involved in this concept of Sankritization is the adherence to certain forms of traditional behaviour epitomized in the Sanskrit language, its hieratic literature, and the centuries old practices associated with it. Like sanskritization etc person can adopt ways and means of upper caste and in coming generations can improve their hierarchy.

This gives us management insight that if a large organisation is to be built which could withstand test of times, there should be clear cut hierarchy. But at the same time, there should be some mobility and the individual who works hard towards it can improve his hierarchy. It should be skill based. The individual with capabilities could rise.

This comes in contrast with new fad of flat based, non hierarchical organisation. These might work for relatively smaller organisation but if organisation is big and has to survive long it should be hierarchical, but having scope for mobility.

3. Culture

The culture played a significant role in sustainability of caste system. It consists of a set of values, guiding beliefs, understandings, and ways of thinking that is shared by the members of an organisation and are taught to new members as standards. The artefacts like rites, ceremonies, stories, symbols, language, dress, behaviours reinforced the spirit of caste system.

This gives us the management insight about the importance of the culture and artefacts in the organisation. Even if the organisation is bureaucratic, the culture ensures commitment of the individuals towards the goals and values of the organisations. The organization culture is one of the hygiene factors which makes the employees feel part of the big organization and control employee attrition.

4. Employee Security & Welfare

The caste system ensured the welfare of its members as joint responsibility of its jati members. This made ties stronger and enabled caste system to thrive on sustaining basis.

This gives us management insight about giving employee security and taking care of its welfare will improve bonding and ties. So employees will become more productive and responsible.

These examples are found in Asian management context like companies in Japan, Korea where organization show paternalist approach towards their employees and that enables them to increase their productivity.

5. Knowledge given higher status

The knowledge was given higher status then work in caste hierarchy. The upper castes Brahmins were supposed to be learned and knowledgeable person and perform all sacred functions. The other castes had different work responsibilities like Ksatriyas in military, Vaishyas in trade and Shudras in manual labour. Brahmins command respect for having knowledge and access to knowledge was taken as step to move up in caste hierarchy.

This gives us management insight about importance of knowledge in the company. It is not surprising that every good company is talking about knowledge management today. But the success of knowledge management will depend upon the status given to knowledge vis-à-vis actual work. One of the world’s leading consulting company, when started implementing knowledge management practices, it made one of their star directors as its head to give knowledge management credibility and status vis-à-vis actual client consulting work. This made the knowledge management initiative at the consulting company successful.

6. Scope for entrepreneurship

Few leaders who were not satisfied by caste system and believed things should be done in different way tried to break away from these and formed new religions/sects with out caste hierarchy. These were joined by many followers. But over the time they also got themselves placed in broad caste hierarchy. The examples include Jainism, Buddhism, and Sikhism.

This gives us management insight about giving space and building systems to encourage and accommodate the entrepreneurship in the organisation. If somebody comes with any idea with conviction, organisation could encourage him to start on his own and become investor in that venture. In this way the star employee will be part of the extended family.

Many companies encourage employees to spend some of their time in projects on their choice and if any new idea comes up, then company funds it. Also few big companies have venture capital funds and invest in companies started by their ex employees if they find their venture a viable business proposition. These are good strategies for encouraging employees to try out new things, accommodating dissent and creating win-win situation for all.

7. Silent leadership

There were no great visible leaders championing caste system. However there might be many leaders who must be working silently for strengthening this system but no where we come across any charismatic leaders leading caste system.

This gives us management insight that charismatic leaders are not a necessity for building sustainable organisations. The silent leaders who work to strengthen the system without coming in the lime light can contribute more in building the organisations. This analogy is some what similar to Level 5 leadership advocated by Jim Collins in Good to Great.

8. Small Ecosystems

The four castes were broad but every caste had thousands of small subcastes called jatis and for all practical purposes that was the identity of the group. The marriages were usually within the jatis and each jati has some difference in culture and rituals. The jati acts as a corporation and the members are its "agents." Thus, the jati member is a fiduciary member who is required to do whatever is in the best interest of his jati, not exclusively his or her own interest.

This gives management insight to bring small ecosystems in big companies. The company should be divided into small units eg. 300 to 1000 people and for all practical purposes day to day interaction should be within this small group. This helps in fostering better ties and increase productivity. Interestingly some of India’s leading software companies follow this practice of building small units of few hundred people each within the big software centre.


The caste system has survived for long and has worked very well for the past 3000 years, primarily because it served the needs of the society. Everyone knew his place, occupation, societal expectations and marriage bounds and choices in society. One knew what one had to do to advance. Jati was the best protection one had in the society. People knew that by being disowned by a jati, they would lose their status in the society. One also expected that whatever one's status in life, it was deserved.

If we can understand these eight principles of core belief, culture, hierarchy with mobility, employee security and welfare, higher status of knowledge, entrepreneurship scope, silent leadership and small ecosystems, we can increase the chances of sustainability of the large organisations.