Column - Habibullah N Karim
Business ethics an oxymoron?
The other day I was invited to give a guest lecture on 'business ethics' to a group of Bachelors of Business Administration (BBA) students at North South University. As I opened the talk I posed the question whether based on our day-to-day experience the phrase is a contradiction in terms. Of course with the Arthur Andersens, Enrons, Parmalats, and Bdfoods of the world fresh in our memory, it is hard to imagine that businesses can be anything but self-serving amoral institutions devoted to mindless profiteering.
I do not need to recount a lesson in economics to highlight the importance of businesses, large or small, as the primary mover of the economy, in any part of the world. In this country 85percent of the economy is under private sector management. More than one million jobs are created by this sector each year. The economy is revving along at or more than 6percent growth year-on-year despite all the perceived corruption in the public sector and the seemingly endless political dogfights. We have been able to do all of this primarily because the economy has become largely independent of public sector interventions over the years.
There are many other similar antecedents in the world. South Korea, Thailand, Philippines and Vietnam are known for their political upheavals and endemic corruption. But those problems have not kept their economies in check simply because lion's share of the economy in each of these countries is in the private sector as in Bangladesh and also because the politicians in those countries do not meddle in matters of the economy as much as ours do here. Face it, if the politicians kept their political in-fights and turf wars to themselves without letting these spill over into our private lives by imposing general strikes and other forms of near-anarchic political instruments, our economy would also keep on accelerating without any disruption. But that is not to be, at least not yet.
With the negative portrayal of prominent businessmen and business houses of the country forming a chorus in the media in recent times (especially since 1/11), anyone would be led to believe that the business world is devoid of any ethical sense or for that matter any sense of moral compunction or social responsibility.
James Collins, an independent management guru and Jerry Porras of Stanford University Graduate School of Business in their book 'Built to Last' argued that only those companies that adhere to time-tested moral values and ethical standards as a matter of policy and company culture thrive in the long run (in their case more than 50 years). They have tested their theory on empirical data from 100 most successful companies in the world and found this to be quite close to the reality. In this country too if we try to find companies that have thrived over several generations we can count them on our fingers such as the Ispahani Group, the A K Khan Group, or the Rahim-Afrooz Group, local conglomerates that have shunned conventional methods of expediency in favor of long-term business values.
In fact one of the few strengths that foreign investors and overseas buyers of our goods and services keep telling us about is the very enterprising nature of our people. Whether in industrial ventures, trading ventures or non-profits, Bangladesh has built an enviable reputation as a crucible of entrepreneurship that will surely mete out great dividends in the long haul.
Now how do we marry ethics with entrepreneurship? In the first instance, ethical values make for good business through creating goodwill, brand value and most importantly through attracting good talent. In the second instance, great companies have lost much more than a tarnished image by condoning or worse, encouraging, illicit practices.
Beximco and Basundhara are great conglomerates in their own right that have created thousands of jobs, built up billions in shareholder value and established brands that are household names in the country but still they have suffered great ignominy and concomitant loss of business due to practices that fall outside the accepted norms of ethics.
Great global corporations such as GE, Merck and Mckinsey (of USA) have shown over many decades how ethical business practices can propel corporations with vision to great heights that can withstand short term external shocks virtually without a scratch. The private sector entrepreneurs and executives must take that to heart. Let us practice and preach ethical business with a missionary zeal and as we control 85percent of the economy, even if we can not convert all the government functionaries and the politicians to follow suit, it will not affect the country much and sooner or later they will also come around.