The Hindu Business Line : Corporate bums, noble paupers and mints

Not all companies are great. There are the lesser mortals along the way. The non-great ones can be `corporate bums', `noble paupers', or `corporate mints', says Pradip Khandwalla, an Ahmedabad-based management consultant.

But, first, does `great' mean large size or dominance? "No," he says. Great humans are not just outstanding performers, but also outstanding contributors to the quality of life, Pradip explains.

"Similarly, great corporations, to me, are corporations that are outstanding performers on business dimensions like profitability and growth and also outstanding contributors to the quality of life of their stakeholders through ethics, corporate social responsibility, domain development, spiritual pursuits or democratic functioning."

Pradip is a former Director of IIM-Ahmedabad, where he served for more than a quarter century, till retiring in 2002, to become an independent consultant and trainer.

He has authored more than 20 books and a 100 papers. It is in a forthcoming book titled Management of Corporate Greatness: Blending Goodness with Greed (Pearson Education) that Pradip talks about four types of companies.

At the bottom of the heap are `corporate bums', the companies that are poor at both financial performance and goodness.

The opposite, that is, companies excelling at both, are the `great' ones.

`Corporate mints' produce a strong financial performance but are weak in terms of goodness. And `noble paupers' are good at goodness, but weak at generating profits.

"The majority of companies are corporate bums, with much fewer numbers that are noble paupers and corporate mints," rues Pradip.

The management challenge, according to him, is to transform a corporate bum or a noble pauper or a corporate mint into a `great' company. Based on a study of corporate performance in both First and Third World settings, he lays out a strategy that can help a company become stronger at generating a strong financial performance, and then put in place those mechanisms that strengthen its goodness.

The mechanisms that he lists are many. Begin with restructuring the board to include in it persons committed to `goodness', exhorts Pradip. To sub-`great' corporations that wish to move towards greatness, his counsel is: Adopt a code of conduct and institutionalise it, recast corporate strategy and include in it a `goodness' strategy.

Also in Pradip's prescription list are these suggestions: Change the style of management to ensure greater participation of all the major stakeholders in decision making, incorporate a long-term perspective through long-term planning, and sensitise your human resource management to provide rewards for `goodness'.

Does all this sound too `good' to believe? No, says Pradip, with a cheerful sparkle in his eyes. The veteran professor in him is decisively optimistic.

Perhaps, he sees corporate bums, mints and paupers as students whose scores can improve with a bit of guidance.

SayCheek@TheHindu.co.in

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