Profit, Corruption, and Red Tape in Doing Business in the Philippines

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Hiring and Profit in the Philippines

Textbooks and courses on business administration, management, and entrepreneurship with their emphasis on attaining business forecast and maximizing profit always imply that productive capital in doing business (such money, stocks, land, equipment, machinery, etc.) is a priority over labor (or workers’ welfare).

The common practice of some businesses is to sacrifice the wage and benefits of workers to lower production cost and thus attain their forecast and earn higher profit levels. This indicates capitalist thinking which gives more importance to productive capital rather than labor. One unfair labor practice that shows this priority of the growth of capital rather than labor is the “casualization” of labor in developing countries like the Philippines.

To lower labor cost in order to increase profit is the hiring of casual workers from agencies with work contracts with less than six months to prevent employees to become regular or permanent under the Philippine Labor Code and thus save money by not spending for their social benefits. This practice indicates that businessmen/women are not really more concerned with the welfare of the workers by providing them permanent jobs and sufficient social benefits in the name of Christian charity and social justice but with the increase of profit or capital for their business.

The hiring of students as casual crew in fast-food chains rather than permanent employees is another example of this “casualization” and prioritization of capital over labor. The hiring of employees in security agencies, janitorial services, and call centers in the Philippines follows this trend of contractualization of labor.

Corruption and Doing Business in the Philippines

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Entrepreneurs who want to earn the profit for their business could be totally faulted if they fail to provide a moral wage which is sufficient to raise a family. From the point of view of business owners and managers, one important reason why they tend to lower the wage of workers in the Philippines is the high cost of doing business in the country. To maintain, expand or to stay profitable in business, entrepreneurs are sometimes pressured to lower the labor cost.

Bureaucracy Files Tax Consultant Figure Fu

Corruption is another expense in business. In Transparency International surveys, the Philippines has consistently been listed as among the most corrupt countries in Asia and in the world. Business owners and managers want to recovery the bribes they gave to corrupt government regulators and law enforcers often find ways to reduce production cost. And most often they resort to minimizing the wage and benefits of their employees. The capacity of employers to provide a decent wage to their workers is sometimes conditioned by the overall environment of doing business in a particular country.

Analysis, Magnifying Glass

A World Bank report on the cost of doing business in 2018 revealed that the Philippines is one of the most unattractive destinations of foreign investment in the world because of the delay and high cost of starting and doing business in the country. In general, doing business in the country is tedious, time-consuming, and expensive, making it difficult for employers to be generous to their workers in wage and social benefits.

Red Tape

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Red tape is one major reason why employers incur higher expenses in doing business resulting which can sometimes reduce their capacity to give a higher wage and social benefits to their workers. Research and theory have been inconsistent and ambiguous on the nature of “red tape”. But there is  an understanding that red tape has something to do with excessive or meaningless paperwork  (Bennett & Johnson, 1979); a high degree of formalization and constraint (Hall, 1968); unnecessary rules, procedures and regulations; inefficiency; unjustifiable delays; and as a result from all this, frustration and vexation (Bozeman 1993, p. 273).

Bureaucracy Aktenordner Paperwork Office W

Rosenfeld (1984) defines red tape as the sum of government guidelines, procedures, and forms that are perceived as excessive, unwieldy, or pointless in relation to official decisions and policy (as cited in Bozeman, 1993, p. 276). Theories abound why red tape exists in government regulation. But one popular theory sees the concern of the government to create a system of checks and balances in the regulatory process in order to avoid corruption and deviation from the official law as causing red tape.

Taxes, Tax Evasion, Police, Handcuffs

Red tape is one of the more serious bureaucratic obstacles in addition to legal obstacles in the full legalization of business in the local economy.  With numerous unnecessary paper works, bureaucratic requirements and procedures, and  unexplained delays in securing business registration, licenses and permits as well as  compliance with the yearly requirements and inspections to maintain legality in business,  traders or entrepreneurs increase their cost of maintaining their business which, in turn, can discourage them to improve the wage of their employees. Thus, the Philippines is one most difficult countries to do business in Southeast Asia as well as in the world according to the  World Bank Report on the ease of doing business in the world.

Photo Credit: Pixabay.com

3 Types of Leadership: What Kind of a Leader are You?

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The German sociologist Max Weber identified three ideal types of leadership in which authority may rest: (1) charismatic, (2) traditional, and (3) rational-legal. In any society or institution, the power of the leader may be exercised on the basis of a mixture of these 3 types of leadership.

  1. Charismatic Leadership

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Charismatic Leadership is founded on the personal traits and gifts of the leader. The more  authentic these personal traits are as perceived by the people, the higher is the legitimacy of the leader. People obey the leader, not primarily because of certain laws or traditions, but because of his/her personal talents. Because it is a personalized form of authority, charismatic leadership tends to be unstable. It does not normally survive after the death of the original leader, and it often abandons the leader while he or she is alive. Charismatic leaders in history include  Jesus Christ, Mahatma Gandhi, Martin Luther King, St. Francis of Asisi, Mother Teresa of Calcutta, etc.

In  corporate settings, charismatic leaders like Steve Jobs, Jack Ma, Bill Gates, Mark Zuckerberg, to name a few, are creative, innovative, and visionary people. They have extraordinary talents that ordinary managers do not possess. They usually introduce innovation, creativity, or unique management style in their business environments.

         2. Traditional authority

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Traditional leadership is one that is based on some sort of tradition that is handed down from the past. The leader is obeyed by the people as a legitimate leader because of a formal or informal norm handed down by great leaders or managers from the past. This kind of leadership is based on customs and traditions of the business firms.  The leader is not usually innovative but conservative. He or she is just continuing what is being practiced by the company based on tradition.

      The ordination of a priest by a bishop is an example of traditional authority. The new priest received his power and authority by way of tradition, and people obey him as a legitimate spiritual pastor of the Church. Succession in monarchy is also done through traditional authority. Tradition dictates that only persons with royal blood can ascend to the throne.

           3. Rational-Legal Leadership

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         The last type of leadership proposed by Max Weber is the most common type of authority in modern and contemporary society. This leadership is based on a set of rules, and the belief in the legitimacy of the process of rule creation and enforcement. This form of domination is routinized through bureaucracy. The leader assumes the right to exercise power over the people because the law says so.

        The leader’s authority is held by legally established impersonal orders and extends to people only by virtue of the offices they hold. The power of government officials, for instance, is determined by the offices to which they are appointed or elected because of their individual qualifications. As long as individuals hold these offices, they have a certain amount of power. But once they leave office, their rational-legal authority is also lost.  Though personal traits also count in the selection process, a fixed law becomes the primary legitimizer of the leader’s capacity to exercise leadership. His authority expires when he retires or becomes incapacitated as stipulated by law.

Photo Credit: Pixabay.com

What kind of a leader are you? Which type of leadership do you aim to achieve?

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Culture Matters in Job Hiring

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Introduction

Culture matters in job recruitment. Hiring people to fill up vacant positions in the company requires that the new recruit does not only possess the necessary skill and talent for the job but also a “perfect fit” in the company’s organizational culture. Assuming that the applicant has all the qualifications, the primary question a recruiter should ask himself/herself before hiring an applicant must be this: “Can this person, if hired, persist in his/her job despite the negative traits of the company’s culture? Can his/her personality and value system tolerate if s/he discovers the most toxic trait or aspect of the company’s way of life? For instance, if s/he discovers that the company has strong power cliques or lacks a career plan, can this new recruit capable of and willing to adjust and stay in the company? Will s/he be loyal in spite of….?

2 Dimensions of Hiring People

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There are basically two major dimensions of hiring new applicants into the company: the technical and the cultural. The technical dimension includes the educational background, talent, experience and expertise of the applicant for the job. The cultural includes the applicants’ personality, value system, beliefs, attitudes to rules, power, and authority or work ethic. The technical aspect is easier to handle than the cultural one. The resume or CV can be an important guide with regard to the technical aspect of the job. But there seems to be no comprehensive guide or tool for the recruiter or interviewer to understand the applicant’s cultural orientation. A well-planned interview guide can probably handle this, revealing the applicant’s basic cultural attitude and value system vis-a-vis the hiring company’ core values. The psychological exams may reveal some aspects of the person’s cultural life but not enough to cover all about the person’s character, value system, disposition, interpersonal skills and attitude towards work: all these are important characteristics which can determine the recruit’s longevity in the company.

The Recruiter Must Have a Sufficient Knowledge of Company’s Culture

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It is difficult for a recruiter to know whether the applicant fits into the company’s culture if s/he is not part of the company or lacks an emic (insider’s knowledge) perspective of the organizational culture of the hiring company. Well, if the position is basically a technical one which doesn’t require much social networking or managing people, this internal knowledge of the corporate culture may not be that necessary. But people are not robots. They react to situations based on their cultural values and beliefs. Most failures in hiring–in a sense that recruits do not stay long in the company–is probably due to lack of sufficient knowledge of the recruiter about the organizational culture of the hiring company. In this sense, the hiring company is accepting people who are technically capable but incompatible to its overall cultural mold. The result: fast turnovers due to cultural incompatibility between the new recruits’ cultural orientation and the cultural expectations of the hiring company.

Fast turnovers in the company’s hiring can, therefore, be an indicator of a mismatch between the recruit’s cultural values and the company’s organizational culture. And ultimately, the recruiting team can take the blame for hiring people whose cultural and mental frames, as well as corporate values, are in conflict with those of the company. The technical aspect of the job may be a perfect match but not the value system of the new employee and that of the hiring company.

Final Reminder

Remember: Hiring is like finding a missing spare part of a particular brand of car. The recruiter may find a spare part similar to the original one but not in design and brand; thus, it will never fit into the car system. It will only damage the car. Thus, if the cultural orientation and value system of the newly-hired employee do not jibe with that of the company’s culture, s/he never fit into the firm’s cultural system. S/he can only cause harm rather improve the brand and productivity of the company. It is therefore important that the recruiter knows the brand and make of the car in order that s/he can spot and buy the correct spare part for the car. The ideal recruiter is one who knows the “basic parts and their interdependence in the entire system” of the hiring company.

Photo credit: Pexels.com

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Should a Leader be a Follower First?

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Introduction

To be a leader requires that one must be a good follower. But this requirement would depend on the circumstances on how the person becomes a leader in business. A person can become an instant leader of a business empire by succession.

There is basically two types of becoming a leader. One is by ascription or by birth and the other is by achievement. An ascribed leadership is acquired through inheritance or succession. Usually the heir is a child or spouse of a recognized leader in a particular business enterprise. After the business leader died or retired, the spouse or child becomes the heir of the established business and assumes the leadership of the business.

the seventh seal GIF

For instance, the Norwegian heiress Alexandra and Katharina Andresen, who are 21 and 22 years respectively, became the youngest billionaires in the world for the third year in a row, after their father, Johan H. Andersen, transferred ownership of their family’s investment company, Ferd, to them in 2007. In such a young age, they instantly become the established leader in the investment business  of their country.

Fern sisters

Photo: Alexandra (21 years old) and Katharina (22 years old), world’s youngest billionaires (courtesy of businessinsider.com)

The other way of being a business leader is by achievement. This type of leadership is common in our current global and technological age. The candidate usually achieves success and leadership in a particular field of business by hard work, dedication,and achievement. This person usually does not come from a rich or landed class. Some come from humble beginnings. Others are even college dropouts such as Bill Gates or Mark Zuckerburg. Some studies have shown that there is no direct correlation between academic excellence in school and success in doing business. Not all billionaires  graduated with summa cum laude or with high honors in college, but they are usually creative people, smart and have a strong passion in actualizing their niches and goals in business. These people are usually  self-made billionaires.

pexels-photo-618613.jpeg

“The youngest self-made billionaire is John Collison of Stripe, age 27. He cofounded the payments startup with older brother Patrick Collison, who at 29 is also one of the youngest billionaires. Stripe’s most recent fundraising round in November 2016 valued the company at $9.2 billion; the brothers are each worth $1 billion. John Collison is just a few months younger than Snap cofounder and CEO Evan Spiegel.”

Leadership by ascription or succession does not necessarily requires to be a good follower before becoming a leader in  his/her business empire or firm. Without fully knowing the “rules of the game” or actual operations of the firm in the lower echelon of the company, s/he leads the business by succession.

Enrique Razon

Photo: Enrique Razon, leader in port-handling business (courtesy of Forbes.com)

Leadership by achievement requires the aspirant to be a good follower become s/he becomes the recognized leader of his/her chosen niche in business. One of the top 10 riches Filipino in the Philippines, Enrique Razon (Networth: $4.3 billion), started as a crane operator as a young man in his father’s port-handling business. He allegedly dropped out of school to study his father’s business operations. In a television interview, he attributed the expansion of the business to this experience of being an ordinary worker of the firm. He was literally a follower and servant and worked his way up in his father’s firm. He obeyed his managers and the rules of his own business. As a result, he learned the various aspects of the business. When his father died, Enrique Razon took over the business and went beyond. And because he was a faithful follower, he learned the “rules of the game” and became a new leader by achievement in port-handling business. His business has even become a multinational and engaged other forms of trade, such casino and resort business.

henry sy

Photo: Henry Sy, the richest Filipino businessman, leader in retail and mall business (courtesy of Forbes.com)

Another great Filipino who became the leader in retail business in the Philippines by being a good follower is Henry Sy, the richest Filipino according to Forbes Magazine. he started his business by selling shoes as an ambulant vendor. Before becoming the leader in retail and mall business, he was a true disciple of retailing. Because of his dedication and persistence, he became the leader of his chosen business niche by achievement.

What type of business leader you want to be?

leader leadership GIF by Dr. Donna Thomas Rodgers

Photo credit: Pexels.com free photos, Forbes.com, and businessinsider.com

Thank you for reading this post. Feel free to like, comment, and share this post! Cheers and best wishes! AMDG.

 

References

Au-Yeung, A. (6 March 2018). “The World’s Youngest Billionaires In 2018: Meet The 63 Under Age 40”. Forbes. Retrieved from https://www.forbes.com/sites/angelauyeung/2018/03/06/youngest-billionaires-under-40-2018/#60d61c86729a.

Top 5 Biblical Passages for Christian Business Leaders

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1. Mark 10:43-45

“But whoever would be great among you must be your servant, and whoever would be first among you must be the slave of all. For even the Son of Man came not to be served but to serve, and to give his life as a ransom for many.”

This passage from the Gospel of Mark is considered the central image of a Christian leader– a suffering servant. A leader who serves his/her constituents rather than being served by them. Leadership in the Christian sense is service for the sake of the Kingdom and self-emptying to empower others.

Under this model, the leader does not seek glory and power for his/her self but to promote and protect the common good even if this entails dying to one’s self and disregarding his/her self-interest.

In Catholic Church’s teaching, doing business is a form of service to God and people–the customers. Its ultimate goal is not really profiteering but serving the public by providing consumers with high-quality goods and services in order that they can enjoy the fruits of God’s creation.

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A good and Christian leader must then strive to become a servant of God in the business organization, providing the public with quality goods and services.

As managers, they must not abuse their discretionary powers in the workplace but instead empower others to become servants and leaders too in their respective duties and areas of responsibilities.

2. Philippians 2:3

Do nothing out of selfish ambition or vain conceit. Rather, in humility value others above yourselves..”

This passage from the Letter of Paul to the Philippians can remind business leaders not to seek selfish ambitions or vain conceit. They must be humble, always conscious that positions of power in the business organization is temporary and meant for service.

Selfish ambition or conceit in the business organization can lead to unhealthy competition, politics, and sidelining of the corporate values just to get ahead of others in the promotion system.

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3. 1 Timothy 3:2

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Now the overseer is to be above reproach, faithful to his wife, temperate, self-controlled, respectable, hospitable, able to teach…”

This passage reminds business leaders to walk the talk, to witness what they preach in the workplace. A good and Christian leader is one who always provides a good example for others to follow.

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4. Proverbs 27:23-24

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“Be sure you know the condition of your flocks, give careful attention to your herds;  for riches do not endure forever, and a crown is not secure for all generations.”
Business leaders must not be only conscious about their position of power and authority, of the benefits and rewards they could get if they perform well in the company.
They must, first of all, know the real conditions of their employees in the workplace. They should check whether they are properly remunerated with a just wage by the company.
Corporate productivity is often tied up with the level of satisfaction of the workers with their wage and social benefits.
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5. Isaiah 41:10

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“Fear not, for I am with you; be not dismayed, for I am your God; I will strengthen you, I will help you, I will uphold you with my righteous right hand.”

In Church’s teachings, work is connected with one’s spirituality: A leader’s duty and role in the company must be part of his/her spiritual life.

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A Christian leader is one who is always conscious that the work of managing others in the workplace is part of his/her quest for salvation. Sanctification is not only expressed inside the Church but anywhere since God’s presence is everywhere. Thus, if business leaders are always aware of God’s presence in the workplace, he/she would never be fearful in his decisions and actions.

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GIF Credits: Giphy.com

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Why is Red Attractive to Business?

Photo Credit: freedigitalphotos.net
Photo Credit: freedigitalphotos.net
First of all, the meaning of colors in society is cultural. Color goes beyond appearance but generates a cultural experience. It reminds one of his/her experience and social upbringing in society. It offers an instantaneous visual way to associate meaning to a particular individual, company or industry. People from various cultures give different meaning and interpretation to colors. And the color red is one of the primary colors which can have different meanings to individuals in society. In urban societies, red is a dominant and attention-grabbing color. Just look around and you will see red in people’s clothes, billboards, cars, buildings, logos, etc. Red is an energetic and vivid influence within the business and romantic world. In general, people associate many positive things to the color. Let us cite some few things in business where red is highly valuable and desirable.
Color Red in Business
Red is generally a “warm” color. “Red” holidays like Christmas and Valentine’s Day are often associated with warmth, love, and giving. Some entrepreneurs capitalize on the popularity of red to improve their sales and business. Coca-Cola is the most popular and biggest-selling soft drink in history, as well as one of the most recognizable brands in the world and the color of its name and logo is red. Created in 1886 in Atlanta, Georgia, by Dr. John S. Pemberton, Coca-Cola was first offered as a fountain beverage at Jacob’s Pharmacy by mixing Coca-Cola syrup with carbonated water. Coca-Cola was patented in 1887, registered as a trademark in 1893. In 1899, Coca-Cola began franchised bottling operations in the United States and in 1906 bottling operations for Coca-Cola began to expand internationally.
There is a popular theory about color in China. China’s emperor has a theory of the five elements to select a color. The color green stands for wood, red stands for fire, yellow for earth, white for metal and black for water. And the color red symbolizes luck and happiness. Chinese people believe that red can be a sign of joy and fortune. That is why the Chinese New Year and other official or traditional holidays are full of red. Also, any older people or people that have been married usually give red envelope as red is a sign of good luck.The choice of color in business logos can speak a lot about the company’s brand.
Close your eyes and think about the color of the name Coca-Cola or Coke is black, would you think that the company will reach its prestige today had it not been red in color? Or if McDonald’s famous golden arches were had been gray? Would the burger chain be the international success it is today? Color is a key part of any brand. “Whether your logo is red and intense, yellow and joyful or black and mysterious, its colors are announcing something to the customer. Take note that red, maroon, yellow, and orange are hot colors. Thus, McDonald’s use of yellow-gold for its arches since they are selling hot burgers and meals.
Products that need heat or suggesting something sexy or romantic must use hot colors; thus, red for Valentine’s day products such as cards and ribbons. Blue, purple, and green are cool colors. Therefore, cool products such as drinks and refreshers or deodorant and related products must use cool colors to convey the nature of the firm’s goods. As a company creates the perfect logo, it must sure to pay attention to the color messages they’re sending.” Take a look at the following highly popular logos and you will notice that they mostly are in red:
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Reference:
https://www.fatrabbitcreative.com/blog/psychology-of-the-color-red-and-what-it-means-for-your-business2. Entrepreneur, https://www.entrepreneur.com/article/232401.
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Is the Church Against the Capitalist System?

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When the social encyclical Centesimus Annus by Pope John Paul II was published in 1989 on the occasion of the fall of communism in Eastern Europe, some people in the press and the media have reported that the Pope has finally become a capitalist. By endorsing some positive as aspects of capitalism, the neo-liberalists and advocates of free trade thought that capitalism is a better economic system than socialism, the system adopted by many communist countries.

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These reports are misleading if one reads the texts of the encyclical. In Centesimus Annus, the Pope praises some positive traits of capitalism but he also condemns its excesses. He never endorses capitalism as the victorious economic model over socialism that developing countries ought to follow to achieve true economic and civil progress. The Pope’s answer to the query whether capitalism is the indeed the preferred system or not is with qualification. He says:

The answer is complex. If by capitalism is meant an economic system which recognizes the fundamental and positive role of business, the market, private property, as well as free human creativity in the economic sector, the answer is certainly in the affirmative…But, if by ‘capitalism,’ is meant a system in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom in its totality and sees it as a particular aspect of that freedom, the core of which is ethical and religious, then the reply is certainly negative (Centesimus Annus, n. 42).

What the Pope is praising in capitalism is its recognition of the positive role of business, the market, private ownership and free human creativity in the economy. These traits are obviously lacking in a socialist system where the state largely controls the business sector and private ownership and impedes freedom of its citizens to engage in business. However, the Pope qualifies his endorsement in the text. These traits are only praiseworthy if they are circumscribed within a strong juridical framework. In other words, the Pope is recommending that brand of capitalism that provides an effective and strong state intervention which is sufficient to regulate unbridled and unscrupulous capital accumulation in order to protect the common good from the excesses of free enterprise.

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A type of capitalism such as liberal or neo-liberal capitalism that lacks state intervention in protecting the common good from abuses of free trade, big business, and the free market is what the Pope rejected.  Pope John Paul II calls the latter as “idolatry of the market” that jeopardizes the common good. To him, “[e]conomic activity, especially the activity of a market economy, cannot be conducted in an institutional, juridical or political vacuum. On the contrary, it presupposes sure guarantees of individual freedom and private property, as well as a stable currency and efficient public service. Hence the principal task of the State is to guarantee this security so that those who work and produce can enjoy the fruits of their labors and thus feel encouraged to work efficiently and honestly” (Centesimus Annus, n. 48).

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The Pope, however, clarified that this state intervention must not be absolute and encompassing–such in the case of communist countries–so as not to curtain people’s freedom to engage in business. The primary responsibility in overseeing and directing the exercise of human rights in the economic sector belongs not to the State but to individuals and to various groups and associations that make up society (CA 48).

Employment contract

The State’s duty in this sphere is only to sustain business activities by creating conditions which will ensure job opportunities where they are lacking or by supporting them in moments of crises (Ibid). It has also a duty to dismantle monopolies that create delays or obstacles to development. It can also exercise a substitute function when social sectors or business systems are too weak or are just getting underway, and are not equal to the task at hand. However, this supplementary intervention that protects the common good must be brief as possible “so as not to remove from society and business systems the functions which are properly theirs, and so as to avoid enlarging excessively the spheres of State intervention to the detriment of both economic and civil freedom” (Ibid).

 

Should a Leader be a Follower First?

once upon a time lost girl GIF

Introduction

To be a leader requires that one must be a good follower. But this requirement would depend on the circumstances on how the person becomes a leader in business. A person can become an instant leader of a business empire by succession.

There is basically two types of becoming a leader. One is by ascription or by birth and the other is by achievement. An ascribed leadership is acquired through inheritance or succession. Usually the heir is a child or spouse of a recognized leader in a particular business enterprise. After the business leader died or retired, the spouse or child becomes the heir of the established business and assumes the leadership of the business.

the seventh seal GIF

For instance, the Norwegian heiress Alexandra and Katharina Andresen, who are 21 and 22 years respectively, became the youngest billionaires in the world for the third year in a row, after their father, Johan H. Andersen, transferred ownership of their family’s investment company, Ferd, to them in 2007. In such a young age, they instantly become the established leader in the investment business  of their country.

Fern sisters

Photo: Alexandra (21 years old) and Katharina (22 years old), world’s youngest billionaires (courtesy of businessinsider.com)

The other way of being a business leader is by achievement. This type of leadership is common in our current global and technological age. The candidate usually achieves success and leadership in a particular field of business by hard work, dedication,and achievement. This person usually does not come from a rich or landed class. Some come from humble beginnings. Others are even college dropouts such as Bill Gates or Mark Zuckerburg. Some studies have shown that there is no direct correlation between academic excellence in school and success in doing business. Not all billionaires  graduated with summa cum laude or with high honors in college, but they are usually creative people, smart and have a strong passion in actualizing their niches and goals in business. These people are usually  self-made billionaires.

pexels-photo-618613.jpeg

“The youngest self-made billionaire is John Collison of Stripe, age 27. He cofounded the payments startup with older brother Patrick Collison, who at 29 is also one of the youngest billionaires. Stripe’s most recent fundraising round in November 2016 valued the company at $9.2 billion; the brothers are each worth $1 billion. John Collison is just a few months younger than Snap cofounder and CEO Evan Spiegel.”

Leadership by ascription or succession does not necessarily requires to be a good follower before becoming a leader in  his/her business empire or firm. Without fully knowing the “rules of the game” or actual operations of the firm in the lower echelon of the company, s/he leads the business by succession.

Enrique Razon

Photo: Enrique Razon, leader in port-handling business (courtesy of Forbes.com)

Leadership by achievement requires the aspirant to be a good follower become s/he becomes the recognized leader of his/her chosen niche in business. One of the top 10 riches Filipino in the Philippines, Enrique Razon (Networth: $4.3 billion), started as a crane operator as a young man in his father’s port-handling business. He allegedly dropped out of school to study his father’s business operations. In a television interview, he attributed the expansion of the business to this experience of being an ordinary worker of the firm. He was literally a follower and servant and worked his way up in his father’s firm. He obeyed his managers and the rules of his own business. As a result, he learned the various aspects of the business. When his father died, Enrique Razon took over the business and went beyond. And because he was a faithful follower, he learned the “rules of the game” and became a new leader by achievement in port-handling business. His business has even become a multinational and engaged other forms of trade, such casino and resort business.

henry sy

Photo: Henry Sy, the richest Filipino businessman, leader in retail and mall business (courtesy of Forbes.com)

Another great Filipino who became the leader in retail business in the Philippines by being a good follower is Henry Sy, the richest Filipino according to Forbes Magazine. he started his business by selling shoes as an ambulant vendor. Before becoming the leader in retail and mall business, he was a true disciple of retailing. Because of his dedication and persistence, he became the leader of his chosen business niche by achievement.

What type of business leader you want to be?

leader leadership GIF by Dr. Donna Thomas Rodgers

Photo credit: Pexels.com free photos, Forbes.com, and businessinsider.com

Thank you for reading this post. Feel free to like, comment, and share this post! Cheers and best wishes! AMDG.

 

References

Au-Yeung, A. (6 March 2018). “The World’s Youngest Billionaires In 2018: Meet The 63 Under Age 40”. Forbes. Retrieved from https://www.forbes.com/sites/angelauyeung/2018/03/06/youngest-billionaires-under-40-2018/#60d61c86729a.

3 Types of Leadership: What Kind of a Leader are You?

accomplishment-achievement-adult-1059120

The German sociologist Max Weber identified three ideal types of leadership in which authority may rest: (1) charismatic, (2) traditional, and (3) rational-legal. In any society or institution, the power of the leader may be exercised on the basis of a mixture of these 3 types of leadership.

  1. Charismatic Leadership

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Charismatic Leadership is founded on the personal traits and gifts of the leader. The more  authentic these personal traits are as perceived by the people, the higher is the legitimacy of the leader. People obey the leader, not primarily because of certain laws or traditions, but because of his/her personal talents. Because it is a personalized form of authority, charismatic leadership tends to be unstable. It does not normally survive after the death of the original leader, and it often abandons the leader while he or she is alive. Charismatic leaders in history include  Jesus Christ, Mahatma Gandhi, Martin Luther King, St. Francis of Asisi, Mother Teresa of Calcutta, etc.

In  corporate settings, charismatic leaders like Steve Jobs, Jack Ma, Bill Gates, Mark Zuckerberg, to name a few, are creative, innovative, and visionary people. They have extraordinary talents that ordinary managers do not possess. They usually introduce innovation, creativity, or unique management style in their business environments.

         2. Traditional authority

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Traditional leadership is one that is based on some sort of tradition that is handed down from the past. The leader is obeyed by the people as a legitimate leader because of a formal or informal norm handed down by great leaders or managers from the past. This kind of leadership is based on customs and traditions of the business firms.  The leader is not usually innovative but conservative. He or she is just continuing what is being practiced by the company based on tradition.

      The ordination of a priest by a bishop is an example of traditional authority. The new priest received his power and authority by way of tradition, and people obey him as a legitimate spiritual pastor of the Church. Succession in monarchy is also done through traditional authority. Tradition dictates that only persons with royal blood can ascend to the throne.

           3. Rational-Legal Leadership

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         The last type of leadership proposed by Max Weber is the most common type of authority in modern and contemporary society. This leadership is based on a set of rules, and the belief in the legitimacy of the process of rule creation and enforcement. This form of domination is routinized through bureaucracy. The leader assumes the right to exercise power over the people because the law says so.

        The leader’s authority is held by legally established impersonal orders and extends to people only by virtue of the offices they hold. The power of government officials, for instance, is determined by the offices to which they are appointed or elected because of their individual qualifications. As long as individuals hold these offices, they have a certain amount of power. But once they leave office, their rational-legal authority is also lost.  Though personal traits also count in the selection process, a fixed law becomes the primary legitimizer of the leader’s capacity to exercise leadership. His authority expires when he retires or becomes incapacitated as stipulated by law.

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What kind of a leader are you? Which type of leadership do you aim to achieve?

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All Great Leaders Begin with a Dream!

“Leaders are rarely accidental. Most of them aspire something to improve society according to their personal values and cultural orientation. “

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All great leaders begin with a dream. They aspire to become authorities in some particular fields. They also think and believe that they can achieve their dreams. They are actually visionaries. They begin with an idea that they would someday become leaders according to the likings their hearts and end up industry leaders. Social scientists believe that we are what we think. Action is guided by thinking. We can only achieve what strongly think and dream. If we do not aspire to become  leaders, then we can never be one. Aspiring leaders think outside the box to explore new horizons to serve humanity.

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Leaders are rarely accidental. Most of them aspire something to improve society according to their personal values and cultural orientation. It’s true that leaders are made, not born. No one is born a leader, unless he or she inherited it because of the social status of their parents. Thus, if one is born a member of a political clan or family, he or she can assume the political leadership of their parents as a form of what sociologists call as ascribed status or a form of social status acquired from birth. But most business leaders who are innovative and who opened new fields in today’s technological world are made through their own efforts and through the conducive social and business environments that provided them a “break” or opportunity to lead a group or industry. Steve Jobs, for example, could not become a leader in technology innovation if the digital technology did not flourish during his time. The latest technologies provided him with new tools and opportunities to actualize his dreams! Bill Gates would not also become the founder of the Microsoft and a leader of the software technology if technology did not shift from analog to digital and without the invention of the Internet and personal computers. Achieving leadership is not only a matter of personal effort. The social milieu must also be “friendly” or conducive to the dreamer or aspiring leader! And if the dreamer is really serious  in achieving something to improve society in some particular fields, then the content of his or her dream must be based on real life situations; otherwise, the dream is only a wishful or idle thinking without a serious effort on the part of the dreamer to actualize it. This is not the kind of dream that great leaders think! What they think is achieving breakthroughs of humankind’s current perennial problems that make life difficult for people. Great leaders in business, for instance, think and invent products and services that improve the current market or open up a new market altogether or niche.

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Contemporary Leadership as Achieved Social Status

Most leadership that happen in contemporary society is achieved status, i.e, acquired by the person through personal achievement and effort. That is why in urban society, most leaders are guided by personal aspirations that one day they would become industry leaders. They just don’t sit around and wait for the opportunities to come. Instead they explore real human needs, study how they can address them, and work tirelessly to achieve them. They never give up when they encounter obstacles and frustrations along the way. Most great leaders in today’s business world did not achieve their leadership status by wishful thinking or leading a comfortable life. They live a very difficult life before they achieve their dream and become leaders of their chosen fields. Jack Ma, for instance, did not become the leader of the Alibaba Group in China and become one of the richest men of his country without undergoing humiliation of being rejected by Harvard Business School twelve times and experiencing some seemingly insurmountable obstacles in achieving his dream. Bill Gates and Mark Zuckerberg had to drop from Harvard University to focus on their dreams. The road to success and leadership is painful but inwardly rewarding for aspirants in achieved leadership status.  Most of these business leaders did not acquire their leadership by ascription or comfort, but by extreme personal sacrifice and determination, seeing achievement of their dreams and glory beyond the horizon not seen by ordinary mortals.

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