In Nepal, corporate leaders are evaluated in terms of their contribution to the creation of wealth and maximization of profit of the organization. They are hardly recognized for prudent leadership in terms of stakeholder’s satisfaction. In this age of globalization, business leaders are threatened by the complexities and challenges resulting from rapid changes in global environment.
Its forces tremendously affect business operation, resources mobilization, corporate planning and decision making process. Social objective and responsibility have become indispensable concerns for corporate mission and objective. [break]
Loupdargent.com
Expectations about corporations’ role in social issues, ethnical issues and transparency have risen sharply in Nepali corporate sector. The short term thinking used by businesspersons, along with matching business tactics and strategies have been threatened in the awake of knowledge economy, stakeholder’s consciousness, and their changing needs and expectations.
Banks and financial institutions are mushrooming with the monotonous slogan of ‘customer satisfaction’. But are they economically, ethically and socially viable and sustainable? Many times, the Board of Director (BOD) and CEOs of such organizations are found involved in unethical and illegal practices. They claim to be equal employment opportunity providers, but in practice, most banks and financial institutions procure staffs through the ‘relationship approach’, without consideration for merit.
Some new offices seem to be equipped with already set-up staff without public vacancy on newspapers or internet. The same tendency can be seen in staff promotion even in the organization declared to be free of nepotism and favoritism.
If the recruitment process is so flawed, how can we expect and promote efficiency and effectiveness in the long run?
Compared to other sectors, banks and financial institutions are somewhat more transparent, because according to the rules set by Nepal Rastra Bank, they are compelled to reveal their financial statements—quarterly to annually—through prominent print media. But other public companies are not so transparent.
Many share investors trust banks and financial institutions rather than other companies, due to the transparency factor. Although secondary market is not so professionally institutionalized, people are accustomed to invest massively on banking and finance sectors.
Truth and transparency in every course of action is a concern in Nepali corporate sector. Indeed companies cannot innovate, respond to the changing needs of stakeholders, or function efficiently in the long run unless they are honest and transparent. Truth in communication to organizational members and stakeholders is really important. However, such principles are easier to understand, but difficult to implement in real life. For example, it is said that if managers want to be good leaders, they should shoulder the failure committed by team members, and share the ownership of success with them. Who are the good managers in corporate sector? Good managers are leaders who find ways to gain candor from their employees because it gives them the best of their staff member’s thinking and creates candor through structured and unstructured methods.
But in public corporate sector, high-ranking officials are risk sensitive; they own the credit for the good, and blame others for failure. In many situations, employees in organization desire group cohesiveness and support, because they themselves are willing to think and speak honestly. But most leaders hardly favor group-think because of their own insecurity, culture of dominance, superiority complex, oversized ego, overconfidence in their own competencies, among other factors. This situation prevails in both public and private sectors.
The actions of leaders, including BOD and employees, are very important in ensuring truth and transparency towards stakeholders. However, developing the culture of candor is not given priority as yet. Team work and participation are cultivating factors of candor.
But most BOD and top managers make crucial decisions in their own favor or the corporations, without satisfaction to employees. Globally, manager-centered approach is out of vogue, and focus has shifted to teamwork, which obviously empowers transparency. Hence, candor is emerging as an interesting subject of discussion among academia and technocrats.
Climate of trust and confidence nurture candor, but Nepal is plagued with attitude crisis. The problem is the same in politics, bureaucracy, and in corporate sector. Uncommon trade union practices, lack of understanding between management and labor, lack of effective team building and mobilization are external barriers of candor. Cross functional communication and coordination can somewhat overcome the crisis of trust and confidence among the people in an organization.
Structural and psychological barriers are the major causes of communication interruption; managers are ‘reserved’ or ‘not open’ in many issues. Subordinates do not communicate openly upwards as they should, team members cannot challenge managers’ assumptions openly, and they are not able to communicate to BOD in many situations.
Good corporate culture is necessary to ensure candor. Managers should try to cultivate a favorable work climate, team spirit, and corporate governance, and set ethical standards. Most business managers are involved in short term business practices to gain profit, deviating from corporate norms and values. This is certain to affect corporate image and customer loyalty in the long run.
To cope with the situation, managers should be competent, skilled and experienced. Training to both corporate managers and employees in relation to the candor is found fruitful in this scenario.
We can’t have cent percent transparency in any organization, and nor is it desirable. Today, internet increases the risk of misinformation, and threatens the credibility of corporate leadership. We need to learn to be technology savvy, and to counter misinformation with facts and figures.
Similarly, focus should be made on procuring good managers, which is potentially the most powerful institutional lever to generate candor.
The author is a
management scholar
ashokghimire2007@yahoo.com
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