This is a re-posted opinion piece.
MANILA, Philippines — Almost everyone expects business to be an instrument for development. By being more productive and increasingly efficient, socio-economic enterprises contribute to speeding up the pace of economic and social development. Development, therefore, to a very large extent, has to be by business, mainly through the productivity increases it brings about and delivers.
There is, however, another, equally important facet of development in relation to the business sector. Development also has to be for business; by the many new possibilities that development opens up, business should also benefit; and it is partly for this reason that business should be pro-active in promoting development. Development, after all, should be good for business.
This looks like an obvious point that needs no further elaboration. With development, there should be growth, and such growth has to be at a certain high level; moreover, it should be sustained over at least a few decades. It is under such a sustained growth environment that business should flourish.
Business flourishes because it becomes ever-more competitive. Under a sustained growth scenario, there are a number of dynamic changes in the market that force business to be on its toes. It has to innovate; it has to respond to changing market needs; it has to adopt newer, more efficient technology; and it has to bring to market those products and services attuned to the evolving demands in the market place, while providing them at high quality and competitive (oftentimes much lower) rates. All these require effort and present ever-new challenges. But the socio-economic enterprises that prove themselves equal to the required effort and the new challenges end up flourishing.
Business flourishes because it adheres to governance standards and the requirements and discipline of the regulatory regime. It respects the rules and stays within the clear boundaries that regulators put up to secure the safety and sustainability of the business system as well as the proper functioning of the market mechanism. It views regulations as safeguards; therefore, compliance with them – not only according to the letter of those rules, but also according to their spirit – is the responsible attitude that keeps business within the right and safe path towards its continued flourishing.
Business flourishes because of its competence and acumen as well as because of its social responsibility. It never forgets that it is part of a whole system. It operates with an eye trained on the bottom line, while recognizing that the top line is heavily dependent on the broader social and economic environment. It therefore does whatever it can to contribute pro-actively and positively to the health and continued strength of that broader environment; it views its responsibility as not limited to maximizing long-term shareholder value; it broadens its responsibility to include the welfare and long-term progress of all its major constituencies, and in particular its most important other stakeholders.
There should be no doubt that only through the blessings of development can business flourish: only in the context of sustained growth at a certain high level over a long period can business better respond to the demands of greater competitiveness, the re-quirements of corporate governance and the regulations of the regulatory regime, and the responsibility owed to all stakeholders and the other key players in the broader social and economic environment. It is in this regard that this obvious point should become even clearer to all socio-economic enterprises: development should be good for business.
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By: Dr. Jesus P. Estanislao
Source: Manila Bulletin, December 13, 2011
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