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.

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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).

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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.

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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.

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

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Christian Leadership as Service

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Christian Leadership as Service

In the early 1970s, Robert Greenleaf proposed the servant leader model in secular business schools. But this concept is not new because the idea of leadership as service is already introduced in the Gospels by our Lord Jesus Christ.

“Jesus submitted his own life to sacrificial service under the will of God (Luke 22:42), and he sacrificed his life freely out of service for others (John 10:30). He came to serve (Matthew 20:28) although he was God’s son and was thus more powerful than any other leader in the world. He healed the sick (Mark 7:31-37), drove out demons (Mark 5:1-20), was recognized as Teacher and Lord (John 13:13), and had power over the wind and the sea and even over death (Mark 4:35-41; Matthew 9:18-26)…In John 13:1-17 Jesus gives a very practical example of what it means to serve others…he washes the feet of his followers, which was properly the responsibility of the house-servant” (christianleadership.org).

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Leadership in the Christian community is different from the corporate community. In business, success in leadership is often measured in terms of achieving targets, goals, profit forecasts, etc. But in Christian standards, success in leadership implies growing intimacy with God,  depth in spirituality and the degree of dying one’s self for others, especially the less fortunate and the poor in the Christian community.

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Exercising Christian leadership in the corporate world may be difficult but attainable as long as managers and employees have strong Christian spirituality and the business organization provides structures to develop the company’s Christian spirituality, especially on work and leadership. This implies establishing common activities in the company which can nurture prayer life in the workplace for workers and managers.

The Christian Servant Leader

Like Christ, a Christian leader does not aim to be served but to serve. In business, it means that Christian managers and business leaders must serve their subordinates–their workers, especially the rank-and-file workers as they are the most vulnerable group in the corporate community. The Church teaches the moral principle of giving preference to the poor or “the preferential option for the poor.”

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In business leadership, being a servant leader implies he or she must prioritize the welfare of the poor or the lowest-ranked employees in the company. They must provide extra care to the workers’ needs such as the giving of a just wage, social benefits, and humane working conditions. This is the Christian servant leader’s higher purpose in the workplace. The leader must not only be concerned with increasing the company’s profit but also improving the workers’ social welfare. A Christian servant leader is a “servant first” in relationship to people and not a “king” to be served by workers and slaves.

  • “There is a big difference between serving the needs of others and being a servant of others’ needs.
    • Serving the needs of others is liberating. It implies recognizing their needs (without judging them) and then doing what can be done, in line with the higher purpose of serving God first, to help satisfy that need. Whereas;
    • Being a servant of the needs of others requires that one must do anything and everything possible to satisfy those needs, whether it is in line with one’s service to God or not.
  • The servant leader himself/herself is a growing leader, led and grown by the Holy Spirit.
  • Jesus was the only human being who never abused his power.
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Applying these considerations of Jesus as a role model for Christian leaders we can see that, from a Biblical perspective, a servant leader is a person, who is:

  • Christ-centered in all aspects of life (a voluntary servant of Christ)
  • Committed to serve the needs of others before their own,
  • Courageous to lead with power and love as an expression of serving,
  • Consistently developing others into servant leaders, and
  • Continually inviting feedback from those that they want to serve in order to grow towards the ultimate servant leader, Jesus Christ” (christianleadership.org).
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Reference:
_________. (n.d.) “Jesus: The Role Model of Christian Leadership”. Retrieved from http://christian-leadership.org/jesus-the-role-model-for-christian-leaders/.
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Corporate Leadership is Cultural

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The ideal leader and leadership would depend a lot on the type of culture or corporate culture in business. Culture is a way of life of a society or business organization. The best leader is one who can mirror the corporate ideals or mission-vision of a business organization. Thus, if the business organization is selling cars of a particular country, then the ideal leader is one who knows best about the car industry and the mission-vision and corporate goals of his/her own company on how to promote and sell its cars to its chosen niche. The ideal leader of Ford, for instance, is one who knows by heart the American car tradition and corporate values of his/her company.

Discretionary Powers of Business Leaders

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All managers and business leaders have discretionary powers. What separates them from ordinary clerks or rank-and-file employees are their capacities to decide what to do for the good or bad of the company. Some leaders made bad decisions and inflict damage to the company not so much because they are evil or immoral people who were not screened properly by the management but because there is loose law enforcement system in the corporate culture. The brightest and efficient leader can commit illegal and illegitimate decisions if the checks and balances system of the company is loose and “toxic”. This reflects the type of leadership structure and culture of the organization. A rational and efficient corporate culture encourage transparent and charismatic leadership and provides a strong monitoring system. A company cannot expect its managers to be efficient and good leaders if the leadership structure, particularly the law enforcement system is weak. Business leaders have vast discretionary power and authority. And if these powers are not reined efficiently, the leadership style would be prone to abuse.

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There are basically two ways of strengthening the law enforcement system of the company. The first one is the strengthening of the internal control of the various levels and types of personnel in the company. This can be achieved by strengthening the social bonds of the various social groups in the company through community building activities and programs. A strong social bonding can inhibit corporate deviance, making each employee a brother’s keeper. Spiritual programs too can strengthen corporate bonding of employees and managers.

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The second form is empowering the monitoring and surveillance system of the company. If the social bonding is weak, external control is necessary to monitor abuses of corporate leaders. Putting up monitoring devices can be a great help to policy and law enforcement in the company. Regular evaluations by employees on the performance of their managers can also be of great help to monitor the performance of corporate leaders.

But law enforcement in the company can be of two types. It can be positive by providing incentives to people who perform well in the company and exceed corporate expectations. People respond to incentives. Thus, it is necessary for leaders to achieve higher goals rather mere obedience to the company rules and targets.

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The second and the most common type of law enforcement is, of course, strengthening the rules, sanctions, and punishments to those who commit corporate deviance. This is the negative approach which causes a lot of conflict and distrust in the company and makes managers and leaders despotic. It is often desirable to use the positive approach by providing attractive incentives to those who follow rules and exceed corporate goals and targets.

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Today’s Emerging Breed of Leaders: Billionaires in Jeans!

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In this post, we are going to examine why today’s business leaders and billionaires are becoming younger and unorthodox in their ways as shown in the type of clothes they wear in public such as t-shirts and jeans or denim!

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The traditional dress code for business leaders is the corporate attire and not t-shirts and denim pants! So, what’s wrong with our current age that the new breed of CEOs just wears ordinary clothes reserved for the young or teenagers?

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Take note that with the advent of digital technology and the cyberspace, the locus of doing business has shifted from the ordinary physical space to the wired or electronic space of the Internet and the hyperreal! From the physical store to the online store! From face-to-face interaction to online interaction mediated by the computer or smartphone screen!

Those who lead and use the latest technologies and the emerging global trade based on intellectual property are now the emerging breed of business leaders—billionaires who wear t-shirts, jeans or denim. Yes! They literally wear denim and t-shirts because they are relatively young people who earn their money by creatively exploring the business opportunities offered by the current technological and intellectual property age!

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Wearing shirts and denim instead of the typical coat and tie for business leaders also indicates a new image and social status for today’s new breed of entrepreneurs. Research studies showed that deliberate deviations from convention had a powerful effect on others. It implies that people who deliberately break the norms are saying that they cannot be ruled by the current social rules because they are creators of a new set of laws!

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The breaking of the traditional dress code for business leaders symbolically  conveys the message that the billionaires in jeans are not the traditional business heroes who just sit comfortably in their CEO offices and neatly dressed in their suits, but new type of leaders who can be present anywhere as long as they have the latest gadgets and technologies to create and manage their businesses. They are not afraid to get dirty to raise their next billion online! The jeans and t-shirts symbolize mobility and flexibility which is the spirit of global business characterized by fluidity and liquidity. The territory of their business is not primarily the temporal space of the physical store or office but the cyberspace where their online markets can be found.

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Younger people are generally curious and creative compared to older persons which would make them the suitable drivers of today’s digital technology, online interaction, and social media. They are technology savvy who love to tinker with the computer, create new apps or networks in the social media,  full of energy to surf and explore the electronic world using their latest gadgets for long hours. Older people are generally less tech-savvy and lack impatient in exploring the complex language and network of the computer world and cyberspace. And yet the new opportunities that create massive and instant wealth are available in the cyberspace and digital technology. They are now in one’s fingertips, in the high-tech and high-speed laptop and smartphones.

Doing business nowadays is now predominantly online. All one has to do is to connect to the cyberspace and be creative in exploring and using the different apps, sites, platforms,  social media, software, etc., to create wealth!

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The new breed of leaders do business in the cyberspace where corporate attire is unnecessary as long as they are comfortable with the clothes they wear while using their latest high-tech smartphones and gadgets for their online business, totally different from the traditional leaders who primarily do business in the physical world where physical looks and attire matter!

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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.

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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.

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“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?

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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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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?

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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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How to Be a Good and Effective Manager-Leader

Introduction

A good manager must not only possess superior technical skills but also social managerial skills. After all, the primary role of the manager is to guide and supervise people under his/her care, not machines and robots. The word “good” here implies a value judgment and a set of standards of what constitutes a good or bad trait. And since business has diverse standards of what constitutes a “good” or “bad” manager, it is expected that what is good in one company may be not good in another company. What is common, however, is that all managers, regardless of the type and size of business, deal with people and employees with different personality, attitude, ability, talent, and experience in the company. Like a conductor in an orchestra, a good manager is one who knows how to blend and unify the various social circumstances of his/her employees in the workplace to achieve the company’s short and long-term goals. What makes a manager different from a rank-and-file employee is his/her discretionary power. S/he has the power when and how a company policy or goal can be actualized in the workplace through his/her intervention. Thus, a manager who has 4 of the traits below can be considered “good” and effective in today’s global age.

1. Familiar with the company’s organizational Culture.

First of all, a good manager must be familiar with the organizational culture of the company. This trait requires that the manager must be observant, analytical, broad-minded and with longer exposure in the company. S/he should have a firm grasp of “how things work” inside the organization: the goals, rules and sanctions of the company, internal politics and the degree of influence of power cliques inside the firm, as well as the overall social networking process inside and outside the company. The more the manager is familiar with the overall system of the company, the more s/he can be effective to fit his/her own office or area of responsibility in the overall scheme and direction of the business firm.With his/her superior knowledge of the culture or “way of life” of people inside his/her company, s/he can “make things done” despite bureaucratic limitations and obstacles.

In particular, s/he must know whether his/her company is generally personalistic, that is, social interaction and transaction are basically based on social ties rather than on qualification and merit. In sole proprietorship or smaller enterprises, the employees are usually affiliated with owners as relative, friend or co-ethic. Thus, the manager must be careful in dealing with employees who are close to the owners. But in highly complex and rational system of big companies, merit, rather social ties, usually predominats the overall cultural system of the business firm. In this case, the manager can be more efficient and professional in dealing with employees and situations in his/her office or area of responsibility.

2. Prudent in his/her exercise of managerial power and authority.

A manager must be prudent in the exercise of his/her power and authority in the company. Authority is a legitimate form of power delegated by the company to the manager in administering the firm as specified in the company’s manual. In theory, the manager must only act within the scope of his/her authority. But in some cases, s/he goes beyond this boundary such as dominating or bullying his/her employees–and thus act using his/her personal power and status rather than his/her authority. S/he must remember the saying: “If there is power, there is resistance”! If the manager wants to avoid nasty rumors and gossip from his/her subordinate, s/he must exercise moderation and prudence with regard to power and authority. This does not mean that s/he should not show anger especially if the situation requires it to achieve targets. What is important is that the employee must feel that the coercion was done by the manager in good faith and for the good of the company and not as a response to a grudge.

Active Resistance

If employees sense that their manager goes beyond his/her authority and thus abuse his/her power, active and passive social resistance would more likely occur. Active resistance is an overt or open form of opposition to the manager’s management style. Unreasonable impositions by the manager on the employees usually invite social resistance such as gossiping and rumor mongering. If the maltreatment or bullying of the manager becomes harsh, employees may manifest their active resistance by answering back to the manager’s rants or other forms of defiance. They can write petition letters or complaints to a higher authority or openly disobeying the manager’s command. Active resistance is easy for the manager to identify and control since it is usually done openly. What is difficult is passive or covert resistance. This often done at his/her back. This needs some sociological sense to discover that the employees resist

Passive Resistance

Passive resistance is an indirect or covert form of resistance. If employees do not want the personality and management style of the manager, they don’t usually show it openly to avoid sanctions. Instead, they would usually do it indirectly such as spreading rumors and gossip against the manager. They can also intentional miss their targets, underperform their tasks and invent all sorts of excuses for their sloppy job. In this case, the manager cannot achieve his/her assigned goals and targets in the firm, making him/her an ineffective leader in the eyes of the top management or owners of the company. These resistant acts may appear insignificant to many people but they can create a ripple effect which can result in an organized opposition against the manager. A good manager therefore is a person who is prudent in the exercise of his/her power and authority, avoiding active and passive resistance, for the good of the company. A good manager is must also be open to dialogue with disgruntled employees to understand and address the root cause of their problems..

3. Familiar with the latest technology for business.

With growing digitalisation of business, a good manager must be familiar with the latest Internet and computer skills and applications for business, particularly with the use of the social media such as LinkedIn, Facebook, Twitter and other growing networking sites for business. With the advent of the digital, cyber and electronic spaces, physical presence is no longer necessary with the latest Information Communication Technologies (ICTs). Multitasking would be made easy because of the digital technology. A manager maybe away from his office, attending a conference and yet s/he can still attend to the day-to-day activities of his/her office with the use of his/her smart phones and wireless broadband or other high-tech devices and applications. The ICTs are also indispensable for a good manager in marketing formally or informally the company’s products and services.

4. Sensitive to his/her employees’ needs.

Finally, one of the most important traits a good manager must possess is sensitivity to his/her employees’ needs. The role of the manager is not only to achieve the company’s business goals and forecasts but also to protect and nurture the company’s most important asset—the employees. If employees feel happy, contented, and supported by the manager in what they do, their productivity and loyalty to the company would intensify and the company’s goals would then be easier to achieve. If this happens, the top management, will take notice of the manager’s capacity and and would be persuaded to promote him to higher post and responsibility.The employees’ feeling of being respected and valued by their company through their manager would surely result in increased productivity, efficiency and profit for the company. The famous Pope John Paul II in his papal encyclical or letter entitled Centisimus Annus (One Hundred Years), said that employees’ welfare in the company is more important than just earning more profit in a sesne that a business enterprise is a community of persons aimed at serving the public through products and services.

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