The Hindu Business Line : Doing business in a modern milieu

Commercial rectitude, once an afterthought in the managerial mind, has now become the pivotal preoccupation in corporate boardrooms. Managers are required to live with more external constraints on their behaviour imposed by regulators on behalf of a society that insists on more integrity and less commercial adventurism.

Sustainability is now the mantra for business organisations. But there is still some confusion and difference of opinion about what is meant by sustainability and how a business can accomplish this goal. Thus, governments as well as business houses are struggling with the key aspects relating to survival and renewal — for themselves, for society, and for the ecosphere.

Some critical issues pressure business houses into behaving as more responsible corporate citizens. The first issue is poverty. There are millions of people below the poverty line in the developing world.

Second, major business houses in the developed world own much of the material wealth. Third, the negative effects of globalisation and the international syndicate of industrialisation are taking a heavy toll on the cultural and community life in developing countries.

Addressing the core issues

The failure of the international comity of nations and confederations of business houses to address the above concerns has raised a subject of vital interest to the increasingly conscious and communicative societies, the world over.

The people are less willing to accept the oft-touted lack of scientific support as reason for inaction concerning environmental and social well-being. The empirical evidence proferred to them is enough for them to demand immediate corporate involvement in solving this problem.

Proactive approach

An increasingly proactive approach is expected from business-houses by a spectrum of stakeholders, including social activists and a committed judiciary. More and more people are collaborating and presenting a collective voice, wanting a lasting solution to this problem. They are coming together under the umbrella of sustainability. Governments are being urged — sometimes even persecuted — to explore ways to activate the market and legislative machineries to bring about changes geared towards better corporate accountability and innovation for sustainability.

The health of the natural environment must not be traded for economic advancement. Only when business houses integrate human and ecological sustainability into their planning process, will it be possible to address all these concerns in a holistic fashion.

Corporate life has always been rife with the unexpected and the unforeseen. This is especially true for managers in these commercial scenario. They have to coexist with two kinds of changes.

First, they must run their companies through an extraordinary technological revolution. Second, they must survive the buffets of an economy that keeps altering its course rapidly.

Living with disruptive technologies and surviving a volatile economy — each one per se is a challenge to the managers. But they are now required to do both, under conditions of extreme uncertainty and insecurity.

Need for change in mindset

Managing a corporate in the 21st century — through turbulence and disruption — calls for skills not employed before. Many top executives who had come of age in their profession during an era of relentless inflation and lived through the boom years of the 1990s, now find themselves in a totally different commercial environment.

Their managerial mindset based on their earlier experience is either irrelevant or misleading. Many of the lessons they have learnt in the embryonic stage of their career no longer apply in the contemporary context. Prices for many goods and services are as likely to fall as to rise in the marketplace today. Deflation is the order of the day in the industrial economy, which is confronted by rapid and rabid technological changes. Recovery from the recession with which the century commenced has been rather slow and slippery.

Commercial rectitude pivotal

Further, the infamous scandals that engulfed some top global conglomerates have created a climate of caution and accountability.

Commercial rectitude, once an afterthought in the managerial mind, has now become the preoccupation of corporate boardrooms. Managers are required to live with more external constraints on their behaviour imposed by regulators on behalf of a society that insists on more integrity and less commercial adventurism.

The trauma of terrorism has also had its impact on the social front of company management. They are more deeply involved in ensuring the personal security of their staff as well as safeguarding their supply chain from the dangers of disruption.

Managing a company requires not only business acumen, but also strong nerves and the element of luck. Not so long ago it was, at least, clear what the job entailed. But not anymore.

Almost every aspect of running a business is now in a state of flux. A major reason is the advent of the Internet and concomitant cluster of technologies for handling and transmitting information.

The Internet could turn out to be just as potent a force for reshaping companies and redefining their priorities in the 21st century as electricity and assembly line were in the previous century.

(The author is a Chennai-based freelance writer.)