The Three Forms of Dharma: A New Paradigm for Ethical Leadership in Current Times | Prasad Kaipa

IIW Web Team 26 September, 2023



Navigating the intricate world of 21st-century business, the role of ethical leadership is becoming increasingly vital. Western approaches offer considerable insights through frameworks grounded in positive psychology and empirical research. However, these models can benefit from a more expansive view. Enter the concept of “Dharma,” an age-old tenet from Indic wisdom, which brings a rich and nuanced approach to ethics and decision-making. In today’s business environment, fraught with ethical conundrums, the insights provided by Dharma could serve as a much-needed compass.

Dharma, etymologically derived from the Sanskrit word “Dhr,” meaning to hold or sustain, serves as a foundational pillar in Dharmic religions like Hinduism, Buddhism, and Jainism. Although these religions interpret Dharma slightly differently, their core principles align, offering universally applicable ethical guidance. While this article is geared toward business leaders, its insights also extend to leaders in politics, education, and the non-profit sector.

The term “Dharma” defies easy translation into Western terms like ethics or morality. It’s a more encompassing concept that includes duties, rights, laws, virtues, and the concept of a ‘right path.’ The Merriam-Webster Dictionary describes Dharma as “an individual’s duty fulfilled by observance of custom or law.”

I find that Dharma intersects with numerous areas—ethics, righteousness, and both natural and universal law. Therefore, I opt for the original Sanskrit term, “Dharma,” to capture its multifaceted nature.

Are your decision-making frameworks flexible enough to adapt to complex ethical dilemmas? How can the richer, more textured concept of Dharma expand your approach to leadership and ethical decision-making?

The Spectrum of Dharma

What is the range of Dharma if one cannot define in binary terms? A verse from the famous Indian epic Mahābhārata (taken from a section called “Udyoga Parvam”) succinctly encapsulates the essence of dharma:

“yatrādharmo dharmarüpani dhattê dharmah krtsno drsyate dharmarüpah | bibhradarmo dharmarupam tathã cha vidvâmsa stam samprapasyani buddva||”

The verse suggests that a wise person recognizes these different forms of Dharma after understanding their essence:

  1. Adharma disguised as Dharma
  2. Dharma that appears as Adharma
  3. Pure Dharma

This verse introduces three forms of Dharma that can serve as a roadmap for modern leaders in both work and personal context. It also encapsulates the essence of Dharma as a multi-faceted concept that takes various forms, often defying easy categorization.

Reflect on your recent leadership decisions. Can they be categorized under one of these three forms of Dharma? What could be the consequences of misidentifying one form of Dharma as another?

Having explored the intricate spectrum of Dharma, the natural question that arises is how to differentiate among its various forms. In the following section, we shall delve into telltale signs that can guide leaders in this nuanced discernment.

Applying Dharma to Modern Leadership: Case Studies

Adharma disguised as Dharma

Example: New articles confirm Google and Meta (Facebook) but also X (Twitter) are criticized for violating privacy measures

  • Inconsistency: While they all tout user privacy, many (like Meta) have had numerous data breaches.
  • Transparency: A lack of clarity about data usage is prevalent.
  • Short-term Gain: The focus often is on maximizing profits at the expense of user data.

Scrutinize the alignment between your organization’s professed values and actual behaviors. Are there instances where you’ve witnessed a disconnect between stated ethical principles and real-world actions within your organization? How about your personal life?

Dharma that appears as Adharma

Example: Angela Merkel and her immigration policies. Navi Radjou நவி ராஜூ and I have written about Merkel in an article before.

Angela Merkel’s approach to immigration policies exemplifies the form of Dharma that appears as Adharma. Merkel welcomed over one million refugees into Germany between 2015 and 2016, a decision that was both lauded and criticized. While this raised ethical and political debates, there is an economic rationale behind her policy. According to Germany’s Federal Statistical Office, the country has a rapidly aging population, with a median age of 47.1 years as of 2020. Germany’s workforce is projected to shrink by several million in the coming decades unless offset by immigration.

Furthermore, studies suggest that the influx of refugees could have a net positive impact on Germany’s economy. A 2016 report from the German Council of Economic Experts stated that the long-term economic benefits of the refugee influx could outweigh the costs, provided there’s successful integration into the labor market.

Facing an aging population and a potentially shrinking tax base, Merkel’s decision might be seen as visionary pragmatism. Her policies seek to ensure Germany’s economic stability in the long term, despite the short-term societal and political costs. Merkel’s decision to open Germany’s borders met with resistance and impacted her popularity; however, her leadership embodies Dharma that appears as Adharma—unpopular but ethically sound and economically rational choices.

  • Purpose-Driven: In a divisive global environment, Merkel aimed to foster an inclusive, united global community by welcoming over one million refugees.
  • Visionary Pragmatism: Germany’s aging population and shrinking workforce make immigrants indispensable.
  • Protests and Popularity: The migrant crisis influenced right-wing electoral preferences in Germany, affecting Merkel’s popularity.

Don’t shy away from decisions that are ethically correct but unpopular. Have you ever had to make a difficult decision that was ethically sound but met with resistance?

Pure Dharma

Example: Patagonia’s commitment to Environmental Stewardship.

Patagonia sets a standard for Pure Dharma through its unwavering commitment to environmental stewardship. The company has pioneered a range of initiatives to actualize this commitment. Their ‘1% for the Planet’ program earmarks 1% of total sales or 10% of pre-tax profits—whichever is higher—to environmental organizations. Since its inception in 1985, the program has contributed over $100 million to environmental causes.

Additionally, Patagonia’s ‘Worn Wear’ program encourages consumers to repair, rather than replace, their clothing. This initiative has saved over 100,000 garments from landfills as of 2021, thereby mitigating waste and encouraging a culture of sustainability.

On the transparency front, Patagonia goes beyond mere lip service. Their ‘Footprint Chronicles’ provides consumers with an unprecedented view into the company’s supply chain, enabling ethical consumption choices. Here, Patagonia doesn’t just pledge environmental responsibility; it quantifies and tracks it, creating a model for other organizations to emulate.”

Incorporating such specific and quantifiable metrics allows you to demonstrate how the abstract concept of Dharma translates into real-world business practices, thus strengthening your argument for its relevance in modern leadership.

  • Alignment: There’s a consistent adherence between the company’s environmental pledges and actions.
  • Transparency: The company is open about its supply chain sustainability.
  • Widespread Benefits: Aims for long-term positive impacts on both environment and stakeholders.

Aim for congruence between your organization’s ethical statements and actions. How can your organization consistently practice what it preaches? How about you?

Bridging Eastern and Western Thought

Western ethical paradigms often function within dualities like good versus evil, and right versus wrong. Rooted in Judeo-Christian traditions, these paradigms usually rely on an absolute moral law-giver, creating a rigid ethical framework. In contrast, the Indic concept of Dharma offers a fluid, situational approach that embraces complexity rather than reducing it to binary terms. This adaptability, in turn, makes Dharma a complementary ethical model to its Western counterparts.

Here, we find a fascinating convergence between Eastern and Western philosophies: Both aim for a harmonious, ethical, and efficient work environment, but they often diverge in methods and foundational beliefs. For instance, the Nyāya School of Hindu Philosophy offers a comprehensive reasoning framework, adding a layer of ethical nuance that Western models like positive psychology may lack, as they usually prioritize empirical, observable traits.

Questions for Consideration:

  • How can situational ethics, informed by Dharma, be implemented in your organizational decision-making?
  • What aspects of Indic wisdom might enrich Western ethical frameworks?

Potential for Integration

Can an understanding of Dharma enrich Western management theories, such as positive psychology? Unequivocally, yes. Dharma offers a lens that examines not just actions but also the intentions behind them. Scholars like Donna Ladkin, in her book “Rethinking Leadership: A New Look at Old Leadership Questions” (2010), echo this call for a holistic, nuanced ethical perspective in leadership studies.

The Confluence of Ancient Wisdom and Modern Leadership

As we enter an era increasingly riddled with ethical dilemmas, the demand for a flexible and multi-faceted ethical framework has never been more pressing. Dharma can be this framework. It transcends traditional Western binary ethics, providing a more nuanced ethical landscape.

The academic world must keep pace. Comparative studies should be developed to analyze decision-making patterns under Western and Dharmic ethical models, involving business schools, philosophy departments, and leadership development programs in this endeavor. Such a study could utilize real-life case studies, control groups, and longitudinal design for robust insights.

Questions for Consideration:

  • How can the concept of Dharma be integrated into your leadership style?
  • What limitations do Western models have in addressing the complexities of modern leadership?
  • How can academia facilitate the discourse between Eastern and Western ethical frameworks?

In summary, the multifaceted concept of Dharma offers groundbreaking insights for ethical decision-making, particularly when compared to Western models. Understanding Dharma can serve as a cornerstone for the ethical leaders of the future, as they navigate an interconnected, globalized world.


I am a cofounder of Institute of Indic Wisdom (other cofounders are Hari VadlamaniRaghu Ananthanarayanan and Sai Sambat) and our focus is bringing Indic wisdom to management and leadership arena. We are a research focused design studio, business think tank and a 501(c)3 non-profit located in both United States and India. We are interested in making (and helping others to make) Indian Knowledge Systems (IKS) from Sanatana Dharma to Nitya Nutana — making the ancient knowledge applicable and every fresh for today’s world.

In writing this article, I was inspired by questions raised by Somayaji Manikantan and assisted by Anant Kadiyala and Navi Radjou நவி ராஜூ. Considering that I have been deeply immersed in this article for past 16 hours, I could not have written 15 versions, researched different material and edited without the help of ChatGPT.

IIW Web Team