"Business schools can set up entrepreneurship shelters"
Prof. Philip E. Juico, Dean of Ramon V. del Rosario Sr. Graduate School of Business, De La Salle Professional Schools, Philippines was in Nepal recently to sign a Memorandum of Understanding (MOU) with South Asian Institute of Management (SAIM) for jointly carrying out various activities. Nubiz talked with Juico (also a former Minister for Land Reforms of Philippines under President Corazon Aquino and the Chairman of Philippines Sports Commission during the presidentship of Fidel Ramos) regarding the management education worldwide and their experience in Philippines in running business schools. Excerpts:
What are the new challenges in management educational worldwide?
Always the challenge is of being relevant and responding to the social needs of the time. Right now there are too many poor people in the world and the job of the manager (and I don't only mean the managers in the corporate world but all the managers) is to respond to the poverty situation: how do we as managers help alleviate the poverty situation without diminishing the dignity and compromising the basic human rights of the people? It is easy to come up with a programme which can produce results but it can create other problems like social injustices. The number one responsibility in this connection is to create more jobs through entrepreneurship. You need some basic management tools to do that although being an entrepreneur is totally different from being a manager. Entrepreneurs are generally very adventurous and hardworking people who work twenty hours a day and they approach the whole things with passion. Now the manager, on the other hand, should have intrapreneurship within the company. You can still be an "entrepreneur" within the company by sparking the same opportunities the entrepreneurs are looking for. By doing so you are creating jobs and expanding. And these are the answers to the problem of poverty. There are just too many poor people like in my country where more than 30 percent people are poor. That is management challenge. The key really is in providing the jobs and empowering the people. The job of the manager is to create the condition where people become more efficient. You produce products cheaper, your marketing is well, people buy it and you provide job. Thus you will have the economic base for the people to be able to purchase your goods.
A lot is being talked about Asian values in the management. There is so much diversity in these Asian values. What are the common points identified so far?
I think the key Asian style is to resolve the issues outside of the formal set up. As Asians we like to talk about the issue first so that we don't get into a situation where we have to say 'we don't allow it'. This is because for us our face is very important. We don't want to lose our face and we don't want others to lose face. That is one Asian value that is very common. Another very important characteristic of ours is to respect the elders. So, when you are negotiating with the people who are much older than you, you are very deferential.
Now an emerging trend is that a lot of women are getting involved in management. Our women now are not just going to be house managers. They are now important resources. In house management, the work of a wife is very important because if she is an efficient house manager, she frees her husband to do more important work. In other words, they complement each other.
In certain countries, you can also have the system of I-scratch-your-back-and-you-scratch-mine. And we are very paternalistic. In Asia, if I am a head of a company or government official, it is my duty to help my relatives. It is a duty in our case, but in the west, it is nepotism. In Asia, we are very family oriented.
The experience in Nepal is such that the small and medium enterprises, which constitute about 90 percent of the total registered enterprises, are not able to benefit from the graduates of management schools. How is the experience in Philippines or elsewhere?
Some schools have designed courses exclusively for the people who run their own enterprises. What we do is, as part of the learning process, we discuss the problems of the company and we solve the problems, in class, together with others, and we assign one main paper to a student. That's how they can benefit. The others are going to non-degree programs, for example accountancy for non-accountants, marketing for non-marketing people and the like. I don't know much about the small and medium enterprises in Nepal. But still I think the graduates of management schools may be able to assist those enterprises through what we call 'on-the-job-training' in Philippines or 'service learning' in other part of the world. They can assist the small companies prepare a loan proposal to submit to the bank, assist them in their marketing. There can also be sharing of best practice of management to these small and medium enterprises through conference or through other means. I see a possibility for South Asian Institute of Management (SAIM) setting up a sort of entrepreneurship shelter especially for the small and medium enterprises. It has to be a special office, different from MBA programs. This is simply because the clients are different, the needs are different, even the psychological make-ups are different.
So, what models or best practices from Philippines or elsewhere do you suggest for Nepal to enable the SMEs to benefit from management schools?
There is a micro-finance program which assists small enterprises. That was started by former President Corazon Aquino. The money is raised through donations. The idea is to get as much donations as possible so as to lower the cost of capital whereby it becomes easy to lend to the borrower at the lower rate of interest. And then, there are many entrepreneurs now joining forces with others to do business process outsourcing (BPO). Now we have, what we call, legal knowledge outsourcing. And also things like laying out a newspaper or a magazine for some western countries are being done now in Philippines. We have plenty of small health care services, again run by entrepreneurs who have medical backgrounds.
These are the new businesses. But my question is whether there are any models to help the existing small and medium enterprises?
A lot of small and medium enterprises have now become big as a result of progress. There are many models of such growth like people who started from nothing and rose to Starbucks level. And what is Starbucks? Basically, what you are selling is experience. When you go to Starbucks outlet, you feel the friendliness of the people, like the barista, the person who brews the coffee. And that is not a put-on. That is something that is endemic to the company. If you go to corporate headquarters, the people are greeted with dignity. In fact, the basic philosophy is that a customer is a human being and you need to make him feel at home. And a number of small Filipino enterprises follow that. They create the ambience so that the people come back.
One challenge in Nepal is to create a link between industries and business schools. What can be done?
What we are doing is we invite a lot of businessmen, corporate people and even government officers. A lot of students are interested to listen to the anecdotes as to how one handled the finance problem, how he handled this labor problem and so on. That is apart from the knowledge that they can get from the graduate school. So, we have to bring these experiences to the campus by way of making the guests give speeches or by making the students do a project. Of course, another way is to bring them to the advisory board. In the Philippines that is what we are doing, bringing these people with plenty of contact, plenty of influence into the board of advisors. These people may send fifty or sixty people in your programs now and often. You have to have some people in your institution who maintains good relations with the business community. Apart from knowledge they are source of funds as well.
As we have understood, you are especially interested in studying sports. So, what learnings are derived from your study?
I had the privilege to be the Chairman of Philippines Sports Commission during the presidentship of Fidel Ramos. Learning in sports program is basically no different from learning in a company. You have your objectives, vision and mission, plans, strategies, practices, action plans and monitoring mechanism. Basically everything is the same. Problem is that a lot of people take sports just as playing and playing and that there is nothing cerebral about the sports. But even in the playing arena, the coach has to have brains, even the players have to have brains. If you have a poor brain and you are given three or four plays to master, then your brain is just going to explode. So you have to have some creativity. Sports play a role in total national development. The values you instill and foster through sports are the same values you need in society. In the sports you must have passion, discipline and commitment. If you are passionate, you will have discipline. Just imagine waking up at four in the morning every day for training and denying yourself certain pleasures. That is passion and discipline. Discipline also means behaving properly towards the opponents. An opponent is exactly an opponent not an enemy. Without the opponent, there is no game. So, to a certain extent, there is a partnership. When you play, you give validity to the rules of the game. You don't change the rules of the game in the middle of the game. Also in government, in business you don't do that. Then there is respect for authority. Another basic about sports is respect for the right of others. When there is violation of rule, there is instant retribution. For example, in soccer, when there is offside committed, there is immediate punishment, no hearing, no trials. Thus there is certainty of punishment for any wrong-doing. And these are exactly what are needed in business or government as well.
Increasing number of colleges from the more developed countries are increasing the students hunting trips to the less developed countries like Nepal. Is this simply a talent hunt or basic economic compulsion of getting economically sufficient number of students?
All schools are in competition to get the best faculty and the best students. For example, I am in competition for the best faculty. If I have the best faculty, I am able to contribute to the society and able to attract donors. So, schools behave like that all over the world. If you want a school to have a global outlook, you must populate your school with people who come from diverse backgrounds. Also the society today is pluralistic, except for some totalitarian states. Therefore, you can find diversity in companies and everywhere. So, your students have to learn how to adjust in the diversity.
Are there learnings for the least developed countries from such student hunting efforts of colleges from more developed countries?
One of the learnings is that, especially the richer people of the developing countries are very brand conscious. They only recognize Harvard, Wharton or up to certain categories. The lower level people go for the lower brand items. So, it is like a marketing game.
You have the experience of heading the land bank of Philippines. Do you think such bank has relevance in countries like Nepal?
The land bank of Philippines was established in the 1964 precisely to finance the land reform program. The idea was that the government set up the bank which would have enough money to buy the land of the huge landowners for redistribution to the tenants. That was the main function of land bank, i.e. to support the land reform program. It is the way of redistributing the assets, the economic power, for redistributing the political power. It is the way of empowering. I was in the board of the land bank of the Philippines by virtue of being the Secretary or the minister of the Department of Agrarian Reforms. It was an ex-officio position.
How was your experience with that bank?
It is social justice program. As a bank, it is buying land from the big owners and selling them to small farmers, many of whom may default. So, the bank has to remain viable and for that purpose, it must find ways to do some commercial transactions which will help it support its primary objectives. But in such case, there is the tendency to be overcommercialised and that was exactly what happened also in Philippines. Since it is a social service, the government must be willing to subsidize it. Land Bank of the Philippines still remains to be viable.
The Philippines is rich in natural and human resources, still it is lagging behind most of the neighbours in economic performance. Why?
The people and the government have not come together as a team. The team work is lacking. A team is a group of people who have a common objective. Second, all of the people in the team accept the objective. Third, each player has a role to play. It is like in soccer where you have a mid fielder, you have a goal keeper and you have somebody in the wings. The problem with the Philippines is that there does not seem to be a common agreement on the objective. People are mixing up their roles. Six years ago, the GDP of Thailand was one half of The Philippines. Now it's just the opposite. At the end of the Korean War, Philippines was more developed than Korea. Our basic tragedy came when Marcos declared Martial Law and he and his family ruled the country without any accountability, transparency. Since then, the Filipino government started failing to deliver goods. Marcos corrupted the system. Absolute power corrupts absolutely. And the wrong values that were promoted during those times took toll upon our country. Now, I think, we have to have a leader who can inflame the hearts and minds of the Filipino people, somebody who can inspire us to get behind him or her to help achieve those goals. We still don't have that.
Now your university is having a tie-up with SAIM. What is it?
A school as an institution has three functions. The number one is to teach, number two is to do research. It so happens that the best researchers are the best teachers. And the third function of a school or university is to serve the society. We need to help the society. We are talking at the first level, the first function of a school or university, i.e. teaching. So, we are looking at exchange of faculty. Eventually we will be moving into joint researches. We will be promoting best practices and also copying. Copying is not bad in itself. The Japanese, Taiwanese and the Koreans have done that. Doing that, you don't have to pay for the mistakes. You learn from the mistakes of others and your learning curve will be shorter. That's what we are trying to do.
Philippines receives a lot of remittance from overseas. How has that helped in nation building process?
We earn 10 billion dollars in remittance every year. It certainly helps a lot. Ten billion dollars a year is no joke. For example, people send money to their family and then they build a house and you see the multiplier effect. Happiness is not measured merely by GDP, happiness should be measured by the relation that the person has with his neighbours. This income from overseas helps to improve that happiness. And it helps to improve the social peace.
People say that The Philippines serves an example that in the long term, the remittance also has bad effect on the society. What is your take on that?
Yes, it promotes a very consumer oriented society. But even that creates jobs and people get employed. Of course, there are negative effects of the remittance. Famillies are breaking off. Husband is running away with another woman and woman is running away with another man so the children getting into the problems because there is no father, no mother. It has tremendous social repercussions. So, we are also trying to bring the Filipinos back and encourage to work within the country though I don't think it may happen very soon.
