Dilmah Teas blend of paternalistic leadership

Approach builds commitment, good communications and teamwork

hen the head of a Sri Lankan tea company was gravely ill, his employees carried out a Buddhist ceremony to help to bring about his recovery.

Employees of Dilmah Tea gathered under a bodhi tree sacred to Buddhists as the tree under which Gotama Buddha attained enlightenment to perform a bodhi puja, just as they do on important religious days. They offered alms as if to the Buddha himself. The depth of feeling the employees showed during the illness of Merrill Fernando, can be at least in part explained by the paternal way in which Dilmahs chairman has led the company he founded 23 years ago. He has always placed strong emphasis on staff welfare. He provides free in-house staff medical facilities and nancial help for the education of employees children. For 30 years he provided the children of his clerical staff with all the necessary school textbooks at the beginning of the academic year, plus three suits and a pair of shoes. He started this practice when he had around 50 employees and continued the tradition with 1,000. He commented:
I feel I should give, you know, help them. Every one of the employees has helped me. Because of them I have got this business empire and therefore, while I can, I want to give back, share with them . . . I am very proud of that. I was also in the habit of treating and feeling that the employees are like my family. It inspired me to look after the staff, whom I look after in a very big way.

Management by walking around

Merrill Fernando adopts the management by walking around style which makes it easy for employees to communicate directly with him. As a result, they are highly motivated and team spirit is strong. He deals promptly and constructively with political conict in the organization. Charity is a signicant part of Merrill Fernandos life and permeates his business. For example, Dilmah Tea supports the Ronald McDonald Houses, the Childrens Leukemia and Cancer Research Foundation in Australia and the hospice movement in New Zealand. About a third of Merrill Fernandos wealth is set aside for his foundation, the Merrill J. Fernando Charitable Foundation. The foundation began by helping with a major project to provide breast-cancer screening facilities in the Sri Lankan capital, Colombo. The foundation has since built hospitals, orphanages, homes for the elderly and schools in rural areas where such facilities were not provided by government.

DOI 10.1108/09670731111140676

VOL. 19 NO. 4 2011, pp. 13-15, Q Emerald Group Publishing Limited, ISSN 0967-0734

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I have wealth acquired through the co-operation and assistance of many other people who worked with me, he commented. I realize and I strongly believe that we come into this world with nothing and go with nothing. I have added to this philosophy that the wealth should return to those who helped us to acquire it while we are still around . . . I am giving it back before I go in tribute and thanks to consumers, workers, and others who helped me along the way. The Dilmah Tea chairman believes that, for any charity to be meaningful, it should extend beyond a mere donation of resources. He personally visits places around the globe to ensure that his charitable resources actually help people. One should ensure that those resources are put to good use and are received by the parties that the resources were originally intended for, he explained. Today, to give a million rupees to a charity is nothing. That is not charity. You must take the trouble and time to spend those million rupees for the actual welfare of some people.

The role of religion

He also maintained that charity must come from the heart and should not inuence people about me or my business. He argued that the charity ethos would be undermined if people knew that he was engaged in so much philanthropic work and therefore felt obliged to buy his products. Merrill Fernando is a Catholic, while around 80 percent of his workforce is Buddhist. He holds an annual mass in his ofce complex, and also a pirith Buddhist chanting ceremony. He does not seek to convert colleagues to his religion. All religion teaches the same; we are taught in a different style, he commented. While religious practice has a major inuence in his life, he believes strongly that his success is due to hard work. Dilmah is the rst producer-owned tea brand in the world. The company concentrates on ensuring that tea that is grown and harvested by people in Sri Lanka is packed and shipped directly to consumers around the world. This contrasts with the practice of the large multinational corporations, which treat tea as a raw material that is shipped at nominal value to Europe where value-adding blending, branding and packing take place. Under the latter model, the producer receives only a fraction of the prots from the sale of the tea, while middlemen benet disproportionately.

Comment
This review is based on The spiritual dimension in leadership at Dilmah Tea, by Mario Fernando, of the School of Management and Marketing, Faculty of Commerce, University of Wollongong, Wollongong, Australia, Frederick Beale, of the acute-care policy section, Department of Health and Ageing, Canberra, Australia, and Gary D. Geroy, of Colorado State University, Fort Collins, Colorado, USA. The article examines the meaning of spirituality in a leader and illustrates the concept through the case of Merrill J. Fernando, founder of

For 30 years he provided the children of his clerical staff with all the necessary school textbooks at the beginning of the academic year, plus three suits and a pair of shoes. He started this practice when he had around 50 employees and continued the tradition with 1,000.

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 To give a million rupees to a charity is nothing. That is not charity. You must take the trouble and time to spend those million rupees for the actual welfare of some people.

Keywords: Leadership, Organizational culture, Employee relations

Dilmah Tea and chairman of the MJF Group. The authors suggest that a spiritually driven leaders high internal locus and strong passion for giving and caring for his or her followers epitomize the concept of transcendental leadership. The article provides an alternative way of characterizing spiritually orientated leaders, as they strive to integrate spirituality into all aspects of their life. An earlier version of the paper was presented at the 2007 Annual Academy of Management Conference, held in Philadelphia.

Reference
Fernando, M., Beale, F. and Geroy, G.D. (2009), The spiritual dimension in leadership at Dilmah Tea, Leadership & Organization Development Journal, Vol. 30 No. 6, pp. 522-39.

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