Striving for ideal in business practice
Syed Fattahul Alim | Wednesday, 9 July 2008
CORPORATISM in business and industry is not a new idea. It has been in practice in the West for over a century. However, in our own context of business culture, it is being talked about as if as part of the Zeitgeist under the dispensation of the globalised world order, especially in the Third World countries. Small wonder the international donor agencies like the World Bank and the International Monetary Fund (IMF) are putting pressure on the government to corporatise, especially, the state-run enterprises while the various intellectual forums and watchdog bodies are growingly laying stress on the importance of corporate culture in its most advanced form, the corporate social responsibility or CSR-the corporate business ethics applied to the wider social context where a business operates.
The seminars, workshops and the various discussions as a result are awash with the new ideology in business. The main focus of the CSR is the non-economic roles of business in society. So the thrust of most of the narratives on CSR is more on the normative aspects of the new business ideology than on its academic and explanatory sides. But who are going to practise CSR in a country where the business is yet to grow out of its feudal trappings? Here most of the businesses are still in their first generation. They are still engaged in what the economists term as primitive accumulation. The phenomenon has been unfolding just before our eyes.
The behaviour of those well within as well as close to power speak volumes for what primitive accumulation means. The money thus appropriated through grabbing and looting public properties is being invested in business. This is the general trend. However, there are exceptions. There are genuine businesses, which are in operation since the pre-independence days. But they after all do not represent the dominant culture (!) of the time, which is rooted in outright plundering of pubic resources. Now what would be the behaviour of this capital accumulated in such a fashion through political connections? It will take a long time before the operators of such capital may evince any kind of business ethics. Amid this demonic roar all around, the voice of the genuine ones, who have earned their reputation through hard work, is naturally suppressed. But then their capital, too, is yet to reach the scale whereby they might seriously think of practising the latest ideal in business called CSR.
In the Western world, many businesses have built their reputation over the decades. The multinational corporate giants that straddle the continents are now engaged in building their allegiance among their client communities through various types of social work. They are helping communities in various kinds of development projects. They are active mostly in Africa and other Third World settings. The Shell Foundation, for example, is active in the Flower Valley in South Africa where they have established Early Learning Centres to educate children in the community as well as developing new skills for the adults. The Mark and Spencer is also engaged there and building fair trade and guaranteeing and promoting the culture of fair trade purchase. In a different way, they are also helping communities to educate themselves so that they might fight HIV/AIDS. Meanwhile, to develop good business citizenship, they have also developed some guidelines for reporting on business transactions and set standards for them. These are all the instances of CSR practices, the standards of which have been set by the multinational companies. In short, the big businesses of the West has grown to such heights that they are now treading the areas that have traditionally been the preserves of the governments. But in their own social context, the government and the business have no clash of interests. On the contrary, the governments are there to look after the interests of businesses and provide the latter the necessary protection so that they might carry out their operation in the rest part of the world.
In a sense, the newly defined roles of business are defined within the wider social milieu, which in the main, is a product of the highly advanced business culture developed in Europe and North America. Though not entirely altruistic at the core, these slogans, at least, require of the businesses to demonstrate higher standard of performance if they are to survive in the marketplace But so far as our own business history and culture is concerned, these are under any circumstances tall order to pursue. It is not surprising then that the Chairman of the local chapter of the Transparency International TI) and economist, Professor Muzaffer Ahmed, the other day put the blame for the failure of the corporate culture, or CSR to be more to the point, to take root in the local business culture squarely on the drive for wholesale privatization of the public sector enterprises in the country. It would not be out of place to recall here that the prescription for privatizing the public sector enterprises in a wholesale fashion came from the self-same multinational donor agencies, who are no less a promoter of the ideals of best business practices that the big multinationals of the West often preach.
However, if professor Muzaffer Ahmed is right, then the insistent demands for disinvesting the pubic sector enterprises made by the multilateral donor agencies were wrong or vice versa. Leaving the debate to the academicians or the real stakeholders (it is worthwhile to note here that the term 'stakeholder,' that has gained universal currency and is used in every kind of writing, is also of recent origin and basically a word meaning 'corporate owners' beyond the 'shareholders'), let us look more closely at Professor Muzaffer Ahmed's argument about why privatization of the state-owned enterprises, or the private sector itself failed to live up to their expectations so far as the high ideals of business culture like CSR is concerned. However, Professor Ahmed traced the problem to the feudal root of our private sector operators. It cannot be denied that our social culture has its umbilical chord attached to its feudal womb, for the socio-economic revolution that precedes a fully-fledged capitalistic culture, or the long historical trail from the pre-capitalistic order to the capitalistic one that a society has to traverse in absence of any kind of revolution, Bangladesh cannot claim to have experienced any thus far. Naturally, the businesses remained dominated by families and their cultures dictated by feudal values.
But what is the remedy? Short of a revolution, there is perhaps no formula to magically transform society into a highly advanced capitalistic one where the businesses would behave ideally. But then how could be the public sector behemoths, which were controlled by the bureaucracy and home to all kinds of social ills including corruption, sloth and procrastination, which are all anathema to all that CSR stand for, can be the substitute? The whole culture of the government bureaucracy has to be transformed before the business enterprises managed by it might show any semblance of CSR. So, there was no question of the state-owned enterprises (SoEs), demonstrating the core values of CSR, either in the past or even at present.
However, there are other reasons, rather than the CSR-related ones, for which the wholesale privatization of the public sector corporations should be taken with a grain of salt. The early drive for privatization was taken too hastily and without much thought. The private companies that took over the SoEs had no experience in the particular kind of trades either. The outcome has been mostly counter-productive and in some cases disastrous. But that is a different issue altogether.
Under the circumstances, the issue of corporate culture, which in its latest form is Corporate Social Responsibility or CSR, will take a long time before it might be practised in its undiluted form in our existing business culture. So, one would have to wait and help things develop to their dreamt-of heights before asking them to put their best performance on display.
The seminars, workshops and the various discussions as a result are awash with the new ideology in business. The main focus of the CSR is the non-economic roles of business in society. So the thrust of most of the narratives on CSR is more on the normative aspects of the new business ideology than on its academic and explanatory sides. But who are going to practise CSR in a country where the business is yet to grow out of its feudal trappings? Here most of the businesses are still in their first generation. They are still engaged in what the economists term as primitive accumulation. The phenomenon has been unfolding just before our eyes.
The behaviour of those well within as well as close to power speak volumes for what primitive accumulation means. The money thus appropriated through grabbing and looting public properties is being invested in business. This is the general trend. However, there are exceptions. There are genuine businesses, which are in operation since the pre-independence days. But they after all do not represent the dominant culture (!) of the time, which is rooted in outright plundering of pubic resources. Now what would be the behaviour of this capital accumulated in such a fashion through political connections? It will take a long time before the operators of such capital may evince any kind of business ethics. Amid this demonic roar all around, the voice of the genuine ones, who have earned their reputation through hard work, is naturally suppressed. But then their capital, too, is yet to reach the scale whereby they might seriously think of practising the latest ideal in business called CSR.
In the Western world, many businesses have built their reputation over the decades. The multinational corporate giants that straddle the continents are now engaged in building their allegiance among their client communities through various types of social work. They are helping communities in various kinds of development projects. They are active mostly in Africa and other Third World settings. The Shell Foundation, for example, is active in the Flower Valley in South Africa where they have established Early Learning Centres to educate children in the community as well as developing new skills for the adults. The Mark and Spencer is also engaged there and building fair trade and guaranteeing and promoting the culture of fair trade purchase. In a different way, they are also helping communities to educate themselves so that they might fight HIV/AIDS. Meanwhile, to develop good business citizenship, they have also developed some guidelines for reporting on business transactions and set standards for them. These are all the instances of CSR practices, the standards of which have been set by the multinational companies. In short, the big businesses of the West has grown to such heights that they are now treading the areas that have traditionally been the preserves of the governments. But in their own social context, the government and the business have no clash of interests. On the contrary, the governments are there to look after the interests of businesses and provide the latter the necessary protection so that they might carry out their operation in the rest part of the world.
In a sense, the newly defined roles of business are defined within the wider social milieu, which in the main, is a product of the highly advanced business culture developed in Europe and North America. Though not entirely altruistic at the core, these slogans, at least, require of the businesses to demonstrate higher standard of performance if they are to survive in the marketplace But so far as our own business history and culture is concerned, these are under any circumstances tall order to pursue. It is not surprising then that the Chairman of the local chapter of the Transparency International TI) and economist, Professor Muzaffer Ahmed, the other day put the blame for the failure of the corporate culture, or CSR to be more to the point, to take root in the local business culture squarely on the drive for wholesale privatization of the public sector enterprises in the country. It would not be out of place to recall here that the prescription for privatizing the public sector enterprises in a wholesale fashion came from the self-same multinational donor agencies, who are no less a promoter of the ideals of best business practices that the big multinationals of the West often preach.
However, if professor Muzaffer Ahmed is right, then the insistent demands for disinvesting the pubic sector enterprises made by the multilateral donor agencies were wrong or vice versa. Leaving the debate to the academicians or the real stakeholders (it is worthwhile to note here that the term 'stakeholder,' that has gained universal currency and is used in every kind of writing, is also of recent origin and basically a word meaning 'corporate owners' beyond the 'shareholders'), let us look more closely at Professor Muzaffer Ahmed's argument about why privatization of the state-owned enterprises, or the private sector itself failed to live up to their expectations so far as the high ideals of business culture like CSR is concerned. However, Professor Ahmed traced the problem to the feudal root of our private sector operators. It cannot be denied that our social culture has its umbilical chord attached to its feudal womb, for the socio-economic revolution that precedes a fully-fledged capitalistic culture, or the long historical trail from the pre-capitalistic order to the capitalistic one that a society has to traverse in absence of any kind of revolution, Bangladesh cannot claim to have experienced any thus far. Naturally, the businesses remained dominated by families and their cultures dictated by feudal values.
But what is the remedy? Short of a revolution, there is perhaps no formula to magically transform society into a highly advanced capitalistic one where the businesses would behave ideally. But then how could be the public sector behemoths, which were controlled by the bureaucracy and home to all kinds of social ills including corruption, sloth and procrastination, which are all anathema to all that CSR stand for, can be the substitute? The whole culture of the government bureaucracy has to be transformed before the business enterprises managed by it might show any semblance of CSR. So, there was no question of the state-owned enterprises (SoEs), demonstrating the core values of CSR, either in the past or even at present.
However, there are other reasons, rather than the CSR-related ones, for which the wholesale privatization of the public sector corporations should be taken with a grain of salt. The early drive for privatization was taken too hastily and without much thought. The private companies that took over the SoEs had no experience in the particular kind of trades either. The outcome has been mostly counter-productive and in some cases disastrous. But that is a different issue altogether.
Under the circumstances, the issue of corporate culture, which in its latest form is Corporate Social Responsibility or CSR, will take a long time before it might be practised in its undiluted form in our existing business culture. So, one would have to wait and help things develop to their dreamt-of heights before asking them to put their best performance on display.