Because companies too are made up of people jostling for power and craving recognition and a share of the goodies, they have much in common with political entities and politicians. The incidences of turf battles, schemes for job retention, credit-grabbing, back-stabbing of rivals, glorification of the boss, and the climbing skills for getting to the top and staying there are all part of the game of survival that follows the Darwinian rule not of the survival of the fittest, or the least scrupulous.
The corporate rules of engagement, though following some principles of politics, also differ in some ways from the larger and more public spectacle of public life.
Business executives address a narrower base of interested parties (employees, stockholders, and investors) than politicians (the party and the struggling masses). Thus, media attention on the former is narrower since the goings-on in a corporation seldom affect issues that people march in the street for like rising prices, violation of human rights, taxi surcharge for travel time, and relocation of informal settlers.
Business stories interest only a few that are familiar with financial terms like market value, stock swap, and EBITDA. Due to their complexity even for general reporters, business stories are simplified into soap opera with heroes and villains. Seldom do business stories make it to the front page, unless they involve scandals and possible imprisonment for fraud and theft, or deals with politicians.
While regular politicians also buy votes, they make sanctimonious declarations to the contrary. It’s acceptable for business groups however to increase its number of shares by buying them in the open market or from other parties wanting to sell at a premium. Not only do corporate types admit to buying votes, they even disclose at what prices these had been bought and how much they now control. They are even obliged to buy more shares at a tender price from minority stockholders.
While politicians can rest easy once elected, needing to think about the polls maybe three years later, corporate officers need to go through voting every year at the stockholders’ meeting. While corporate elections to the board are often a foregone conclusion, they can be exciting when there are blocks of shares vying for supremacy. Anyway, exits at the very top, do not always need to wait for the yearly elections — he needs to attend to his family at this time.
Constituents can easily bail out. If stockholders are unhappy with the way the CEO is running the company, they can simply dump their shares. There is no need for a privilege speech or a congressional investigation, just an order to the broker or the computer to “sell at market” and then move on to cash out or invest in another company, not necessarily the competition. Corporate politics sometimes needs to touch base with its big brother. There’s no need to seek political connections if one is just selling carrot cakes or sandals. It is the customers that determine the fate of these companies. But natural monopolies that require franchises or government contracts for vaccinations need friends in high places. They are also likely to be invited to shed light on business practices in aid of legislation.
Given the political dimension of large corporations, it is puzzling that there has not been a successful business candidate for the highest national position. Given the risk-reward ratio that businessmen are constantly evaluating, it is deemed more appropriate to support (beyond just kind words and prayers) specific candidates rather than become one of them. Polls are so important for businessmen in allocating funds for the political exercise. But these sometimes change as businessmen get lessons on the meaning of sunk cost.
And here’s one last difference between politics and business. Corporate politicians do not employ surveys and popularity polls to determine their support. It is the earnings per share and dividends declared that serve to keep them in their jobs. It is not necessary for a CEO to smile or even be nice to media. It is the annual report that determines their worthiness to serve for another year.
And when the numbers go sour, there is no need for rallies or media bashing to see the end of a corporate career. The jump from a plane in flight is quick… and not always accompanied by a golden parachute.
A. R. Samson is Chairman and CEO, TOUCH xda.
ar.samson@yahoo.com
