Ever since the Harvard Professor, B. F. Skinner conducted those experiments among workers of General Electric at its plant in Hawthorne back in the 40s, Behavioural Science became all of the rage in management theory.
It was no surprise then that psychologists soon became hot property within the community of management consultants. But this also spawned a plethora of management jokes and I particularly liked this one.
The CEO of a company thought he should take the help of a psychologist in recruiting a personal secretary for his office. There were three short-listed candidates and to each one of them the psychologist posed the question: How much is two and two? The first one said, four. The second one replied as 22. The third one said, Well it could be 4 or 22.
With the interview thus over the psychologist summed up the interview as follows: Well, you have three types. One is the simple type. The other one is the devious type and then you have the comprehensive type. Now, which one would you prefer, he asked. The CEO thought for a while and said, I will take the tall blonde with the long legs.
The selection of a personal secretary, I daresay, is not a decision that has life and death implications for the financial prospects of the company.
If we assume just for the sake of argument that it is indeed so, then the CEO in the story has, without quite recognising it perhaps, been guilty of an act of unleashing an agency cost on the company. The selection of a wrong candidate chosen more for her shapely appearance than for any superior secretarial qualities, one should presume, has adverse consequences for the company. One could extend the analogy further.
Let us assume that the CEO in question could quite easily delay the appointment, preferring to wait for a candidate to come along who combines in her personality, admirable good looks and a flexible moral outlook on life. The consequences for the company are no less adverse in this situation as well.
Decisions on military procurement that Gen. V. K. Singh, has touched upon suffer from both types of agency costs. The military top brass, those in civilian bureaucracy and, of course, those representing the political decision-making authority have, like the CEO in the story, enough flexibility to change the specifications upon which a decision has to be taken.
I am aware that there are such things as General Staff Requirement and so on, which limit the choice to only those vendors who conform to such pre-determined requirements.
But there is only one flaw in the argument. The requirements are themselves based on threat perceptions. Such perceptions by their very nature cannot be seen as inflexible. As the environment changes around us — based on the real and perceived actions of the enemy — so would perceptions, and with it the specifications of what should be ordered. Now, who is to know whether perceptions change our requirement of military equipment, or the preferred choice of equipment changes our perceptions of threat?
Sounds far-fetched? Not necessarily. Remember the Kargil conflict? Units of the Pakistan’s Northern Light Infantry were perched on the icy peaks along the Line of Control in the Kargil area of Kashmir. The successful Indian infantry assault on those peaks was aided in no small measure by the artillery barrage on enemy positions by, you guessed it, the Bofors guns. Everybody was effusive in his/her praise of the efficacy of the gun. But what they failed to mention was that it didn’t have to excel in that one attribute for which it was chosen in preference to other competing guns fromFranceandAustria. Though more expensive, Bofors was preferred because it had the ability to ‘shoot and scoot’.
The reference was to its ability to fire from a location and quickly move to another location and escape weapon locating radars. I am no expert on warfare. But common sense tells me that when armies are massed on either side across a long battle formation, there isn’t really any place to scoot!
DEMARCATION OF ROLES
In any case, the Kargil battle was fought with the Bofors field guns relentlessly pounding hill peaks individually from static, but vantage locations, prior to an infantry assault on them. The Bofors Scam was really about this so-called ‘shoot and scoot’ ability.
Management theory tells us that agency costs can be controlled principally by aligning incentive structures in such a way that there is a congruence of goals between that of managers and the organisation. But designing the organisation structure suitably can be just as effective in minimising the agency costs in military decisions.
There is a clear absence of separation of policy and operational aspects in decision making. Whether the nation must trust the US in military aircraft purchases can be a policy decision.
Similarly, whether the country needs to procure 5,000 trucks or fewer to mount missiles can be a policy decision. The truck makers who conform to the technical specifications, or deciding who is cheaper over the life time of the truck, are decisions that should not be part of a file going all the way up to the Defence Minister!
The present system of Service Chiefs reporting to the Government through the Defence Secretary is another aspect of the structure that requires a review, too.
The country needs structure for the armed forces that is similar to what the atomic energy establishment enjoys with a chairman who is essentially a scientist drawn from the nuclear establishment, functioning also as the Secretary of the Department of Atomic Energy.
The argument that the civilian supremacy over the armed forces can be enforced only if they report to the Defence Secretary is a wholly bogus argument.
If the country’s nuclear scientists could be trusted not to turn into rogues and drop a bomb or two in some part of the country or, worse still, sell the secrets to Taliban, the Service Chiefs can be trusted upon to not turn their guns against the civil authority.
It would do well to remember that in a democracy the people of a nation represent the real civilian authority. Not the Defence Minister, nor indeed the Prime Minister.
Of course, till the present set of officials complete their terms, one can confer on them the privilege of a seat in the Republic Day parade ahead of the Army Chief. That should suffice as a transition arrangement.