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| Sunday, 26 December 2004 |
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Business |  |
| News Business Features Editorial
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Activities of Core groups and Business Confidence by Lloyd F Yapa The very first article in this column described briefly the methodology of formulating a course of action or a business plan to achieve an identified goal for a nation, public or private organization or an individual with the minimum of delay or waste of resources. This process is referred to as Corporate Planning or Strategic Planning or just Strategic Management; (this is indicative planning as distinct from the complicated type of planning undertaken by centrally planned economies). The purpose of this article is to highlight certain aspects of such plans/strategies. Components of a strategic plan The main components of such a strategic plan are a set of goals, (vision, goals and objectives stated in quantitative terms for ease of measurement of performance), strategies to achieve the goals based on an analysis of impeding and impelling factors and an action plan to implement the strategies. Two sets of goals In any entity or organization there are at least two sets of goals, i.e. those of the organization as well as those (or the aspirations) of the people inhabiting the organization, entity or nation. The main responsibility of the leaders of any organization or entity is to reconcile the two sets of goals, so that the organizational goals obtain primacy and priority and lead to the realization of the aspirations of the people as well, when the organizational strategies are implemented. If the leaders succeed in this endeavour, mainly by developing a consensus on the strategies to be adopted, the organization (or country) achieves its goals with considerable ease. Otherwise a tug of war can develop between the people in an organization or of a nation and its leaders resulting in incessant turmoil, waste of resources and misery for the people. Core groups with differing agendas This organizational problem would not be so daunting, if there were only two sets of goals in an organization or a nation. Often the situation could be very complicated with the presence of what are referred to as 'core groups' with differing agendas. Such core groups could make or break an organization or a nation, depending on whether they support or oppose the goals that have been agreed upon. The leaders of such core groups can wield so much influence, that their followers would automatically magnify their pronouncements, expressions of irritation or even their body language. Psychologists refer to this phenomenon as 'amplification'. An analysis of the events leading to the tragic incident, which took place on 12/11, might reveal amplification of the pronouncements made by a certain group of religious zealots in the recent past. Unfortunately, there are too many such core groups in this country spreading misery and mayhem, than those supporting the aspiration of the people to lead a life devoid of want and insecurity. Tragedy The greater tragedy of such events is not only the loss of life and limb of a few individuals, but also the enormous harm caused to the economy resulting in perpetuating poverty. When such an incident takes place, business confidence invariably takes a nosedive. If they recur, one after another, investors may entertain serious doubts about the stability of the country as a favourable location to conduct business. They will therefore refrain from making regular investments, which are necessary to develop its infrastructure and its capacity to produce the goods and services needed by the people. Its cadres of skilled persons also may leave its shores in disgust. Without doubt, this is the main reason for the persistence of poverty in this country. This column has repeatedly pointed out, that social and political stability is the prerequisites for economic advancement. Stability is achieved and the decks are cleared for achievement of goals, when the leaders of a nation or an organization succeed in neutralizing the core groups with agendas, which are opposed to the aspirations of the people of the country or organization concerned. The leaders could also reach consensus on the key strategies to achieve the desired goals by communicating/negotiating, especially with the leaders of such core groups. The latter is certainly the better method, as it produces a 'win win' situation for all parties concerned. Business confidence can soar in the presence of stability and when it is combined, especially with good governance and pragmatic macro and micro economic policies aimed at maintaining stable and competitive prices, local and foreign investments could flow in. These are the techniques adopted by leaders such as Lee Quan Yew of Singapore and Mahathir Mohammed of Malaysia with spectacular success. Other methods of reconciliation Leaders can act in other ways as well to win over core groups with unfavourable as well as favourable agendas. One of these is obviously to keep on communicating the agreed strategies and the conduct desired to implement them, so that such action becomes second nature to the stakeholders concerned and the people; continuous incremental improvements can then take place. In addition, they should personally set an example and reinforce it time after time, while creating trust by fostering awareness of what actually is happening with implementation of agreed strategies and by delivering the results aspired by the people on time. They can also go on to create strong core groups, that portray the diversity of the people in the organization or the nation in terms of race, religion and gender, so that their pronouncements will not be out of line with the aspirations of the community at large. Last but not least is to educate the young (and the old, particularly the present lot of leaders) in right conduct, conflict resolution/strategic management and leadership methodologies in order to enable them develop the skills required to achieve organizational and national goals, without creating turmoil. |
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