WANTED: A New Breed of Corporate Owner

corporate executive A

Corporate Executive A

Reader’s lead me to a lot of good discussion topics. In this case, David Webb did the favor. In response to my suggestion that the Philippines could start its own military ship-building industry, he wondered if new manufacturing enterprises in the Philippines would fall into the hands of the trapos.  I whipped out this top-of-mind reply:

  • Gadzooks, it [new manufacturing] should cut the trapos out of it.  I’m personally sick of those guys. It should be techies in charge, young and mechanical and paid well. Hired by the government and funded as a major start-up with government money. Private interests can eventually take over, rather like the U.S. bail-out of GM and Chrysler. We need a new breed of owner in the Philippines. 

So let’s explore that  a little. Trapos are politicians and their rich backers who tend to reach a hand into every lucrative pot to make sure they take control of matters and enrich themselves and their friends.

  • Trapos (noun, plural) “Traditional politicians” who think about themselves first, exercise power and sometimes become drunk on it, love being admired and are surrounded by swarms of sycophants, and are likely to break promises, manipulate and cut corners. (adapted from definition by Conrado Sanchez, Jr.

Trapos and the entire trapos-industrial complex of the Philippines deal in two major currencies: (1) the peso, and (2) the favor. Or the inside-out favor, which is threat and blackmail and imposed deals. Money is the math, the way they tally their gains. Favors are the power, the way they gain advantage over the less well connected.

Corporate Executive B

Corporate Executive B

There is a reason wealth is so highly concentrated in a few hands within the Philippines. These top businessmen and their favorite politicians set the rules by which all other businesses play. So farmers and laborers suffer whilst these characters fly high. They control markets and prices and costs. And laws. By way of example, media ownership is unregulated because the business owners and their traditional politician friends like it like that. That’s why you get 40 minutes of commercials during an hour of Voice of the Philippines. Farms barely squeak by because the buyers and packagers of goods set the terms of purchase. There are few alternatives, and won’t be until the Philippines has enforceable anti-trust regulations.

The playing field is atilt, with the politicians and industrialists playing cozy in the smokey backroom, and the hard-working laboring class being S.O.L.  (Refer to the Urban Dictionary if this term is new to you.)

Well, let’s work with our imaginations here. It invigorates the soul.

I imagine a set of industrial leaders who are different. Who are more interested in product and productivity than favors and cheating. Who have pride in their technical know-how and managerial skill. Who gain thrills by defeating ordinary obstacles through ingenuity and productivity rather than buying their way past them, at the price of a sloppy, go nowhere economy. They want to be players in a dynamic Philippines rising. Not favor-bound slugs sliming on the laboring classes.

They know that “managing” means skillful motivation and application of people, and think a lot about how to get the most from their investment in human resources.

I imagine young. I imagine a skilled OFW metalworking engineer in Canada, brought home by a decent salary and the opportunity to do big things, to be in charge of big things. Given a charter to run a boat manufacturing company. Paid a relocation bonus and large salary. Offered incentives to meet certain goals, in production and profit.

Corporate Executive C

Corporate Executive C

I imagine:

  • A boat-building plant that can fabricate parts with laser-cutting precision, speed and efficiency.
  • OFW computer wizards brought back from the United States to design missile guidance systems.
  • A missile construction plant punching out rocket-powered tubes and packing them with dynamite.
  • A drone manufacturing plant stuffing remote controlled flying machines with cameras and missiles.
  • A group of law-abiding business owners who need no favors to succeed; they do it with skill. With product, price and service. With thoughtful training, motivation and use of people.
  • A government that takes pride in its military-industrial complex and broad base of successful entrepreneurial managers.

Ha! I imagine a broad industrial culture where people EARN their wealth in wide-open markets rather than use power and control over the disadvantaged to connive for it.

Really, the oligarchs and trapos are rather like a stealth Napoles. I’d write the plural of Napoles, because there are so many of them, but I don’t know how to do that. The oligarchs and trapos don’t blatantly rob and steal, but they tread the edge of ethics and well being of the Philippines to leverage their power and advantage and make bazillions.

corporate executive O

Corporate Executive O

If you talk to them, you are likely to get the same spiel you would get from Mitt Romney or fat-cat Republicans in the United States. “Corporations are people” and they fairly earn every dime they have.

Yes, and left unregulated, to their own devices, you get the Philippines.

The main difference between here and America is that in the United States, there is opportunity. Fair employment laws ensure it. Good business teaching assures it. Motivation of workers is so very very important in the U.S., and good firms do not tolerate slothful, passive slugs just putting in a day.

Big business is run fair and square and generally ethically. In the Philippines, big business . . . well, any business for that matter . . . too often only offers opportunities to the favored. Not the competent.

It’s time to open the doors to opportunity.

I imagine a Philippines that is managed by people who want to give competent employees a ladder to climb based on the simple principle that the best workers, the most productive employees, will be given training and the opportunity to excel.

The Philippines would do well with a large number of “middle class” corporations to match the social and economic benefits of a much larger middle class population. Two laws would help immensely:

  • Anti-trust, to break up the huge companies that are blocking competition, and blocking the innovation and productivity that come with wide-open competition.
  • Fair Employment to require that capability be the only basis for hiring and promoting employees at companies with 25 employees or more.

Remove the restraints on wealth creation.

Put opportunity and ambition into the job stream.

26 Responses to “WANTED: A New Breed of Corporate Owner”
  1. manuel buencamino says:

    I was imagining a skilled OFW who picked up science, technology, and the work ethics of Japan, Singapore, and South Korea brought home by a decent salary and the opportunity to do big things, to be in charge of big things. Given a charter to run a boat manufacturing company. Paid a relocation bonus and large salary. Offered incentives to meet certain goals, in production and profit.

  2. edgar lores says:

    1. I was a fisher boy between the ages of 8 and 12, and the sea was my second home. The sea was a stone’s throw away from our house. At night I was lulled to sleep by the gentle lapping of the waves on the shore. On early mornings, even on schooldays, I would go spear hunting for red rockfish. Those were the days.

    2. Filipinos have an affinity for the sea, which is not all that surprising as the Philippines is surrounded by water. But this is the land of irony.

    2.1. We are a country of many islands and we have no shipbuilding industry.
    2.2. Filipino seamen sail the 5 oceans and the 7 seas and we have no shipbuilding industry.
    2.3. Filipino semen populate the islands – and how! – and our sons and daughters go “overseas” to staff luxury cruise ships.
    2.4. Filipino politicians steal the country blind and buy property “overseas”.

    3. Eliot again on “living in a pretentious, superficial society” and men being lured by the Sirens – which in the Philippines is the call of wealth — only to drown after waking up from their fantasies:

    “We have lingered in the chambers of the sea
    By sea-girls wreathed with seaweed red and brown
    Till human voices wake us, and we drown.”

    3.1. The Filipino human voices are those on social media and the drowning is in progress.

  3. hmm. this issue of rent-seeking and unproductive elites is a neglected one. why would the mainstream media report it anyway? anti-trust laws to stymie monopolies. That would be possible if there’s enough public pressure. Even Escudero, who seems an active lawmaker, is close to the Ayalas.

    Establish a culture of pride for one’s work in business. I think that would take a long time. Money grubbers only care about–guess what– money. For now, we need the abolition of 60-40 rule. But that’s a constitutional provision. Experts say a constitutional assembly is needed to do that. arghhhhh.

    Fair employment, not when they ask applicants to put photos on resumes; i read that’s frowned on in the US. And yes, more tax-incentives for small and medium scale enterprises. Especially when large companies can find loopholes in the tax codes to reduce their tax bill. (cough) they apply for the tax identification number in the employees’ stead (cough)

    P.S. why a young Filipino engineer abroad? Get a middle-aged, senior engineer OFW who has technical knowledge and managerial experience.

    • Joe America says:

      Gadzooks, another pessimistic view. So I guess maybe I’m naive, impractical, a dreamer, or spitting into the wind for distance.

      Could be. But I’ll keep trying to talk a good game. Because it is the best one for the Philippines.

      Yes, your P.S. is probably better than my idea. Someone with more experience.

      • hahaha. I wasn’t trying to be a pessimist. I tried my best at an objective analysis. anyway, i would enjoy tax-breaks for small and medium scale enterprises, not just large companies (wink) vested interest (wink).

        But who knows? No political analyst has predicted this pork barrel fiasco. I can only hope that corporate governance reforms will come about swiftly. I think the Philippines is improving and maturing, but not as fast as other emerging countries (e.g., Malaysia, Thailand, Indonesia, Vietnam, Brazil, Chile, South Africa etc.) .

        • Joe America says:

          Agree, because there the leadership recognizes the importance of rules that promote competitive business enterprises, whereas here that enlightenment has not quite rung loud and clear.

  4. ricelander says:

    Henry Sy, the richest man of the Philippines. Who are the rest? Lucio Tan, Danding Cojuangco, Manny Pangilinan, the Lopezes, the Ayalas….

    How do they compare to Henry Ford, Bill Gates, Richard Branson, Yataro Iwasaki, Byung-Chull Lee and the other great industrialists? Not to belittle our own industrialists, but why don’t we have a shipbuilding industry indeed? Or a car manufacturing? Or a steel industry? We are not making anything at all. We rarely see anything that say Made in the Philippines anymore. We are big on malls, fastfood, beer, call centers, of course…

    But hey, if we look beyond corruption, you see a clearer picture.

    • Joe America says:

      Yes, America, too, went through her period of near-oligarchy. Sometimes the super-rich were downright unkind, as were, say, the Huntington’s is California who employed Chinese laborers under brutal, slave-like conditions, to build the railroads. The influence of the super-rich is diminished somewhat today, but still exists in the form of investment bankers who buy and sell companies, or influence whole industries. Bill Gates was one, for his time, but turned out just fine.

      Their power to control the economy was .broken down by the development of a broad middle class and the influence of that middle class on laws. Anti-trust laws. Lobbying laws. The great industrialization of America started with the genius of people like Henry Ford, but was exploded into a great economic power by the need of World War II. We’ve been riding that horse ever since.

      So in the Philippines, we have an overly strong infuence of the rich and politically connected. A larger middle class and outspoken social media is likely to grind that power down. FOI is actually a part of that, from the Government side of things. So this blog is an agitation in that direction. What I have added is a recognition that the Philippines is now in a situation of NEED – for military equipment – and ought to leverage that, as did America, into economic might.

  5. ricelander says:

    On fair employment. You make that a law, who will decide what is fair? A judge? hahaha

    Competition will force what is fair, when the owner is compelled to look for the best because it is his only assurance to survive.

    • Joe America says:

      Yes, that is the big flaw, is it not, that the Philippine Judicial process – which includes both judges and attorneys – does not really provide an avenue for an employee who is wronged to get compensation from the employer for damages. If there is a law, there must be enforcement. And I agree that is a weakness of the idea, in the Philippines, today. No avenues for enforcement.

      But at some point the judiciary will get cleaned up, and the Philippines will see class action suits, too, of the type that led to employment laws in the U.S. Attorneys just have to recognize that there are ways to get rich by compiling small cases into one large one. . . if they can avoid getting shot . . .

      I agree, competition is a great motivator toward good, smart, fair practices.

    • Mariano Renato Pacifico says:

      I was thinking of NGO but they are tainted. Anything Filipino touches turns not into gold but money to bring home to by hook or by crook.

    • Fair employment laws can be consistent to free market principles when the laws are based on sound econ theories and not on personal biases of legislators and judges. No resume photos on pictures (lookist); no age; sex; ethnicity (aeta) discrimination.

  6. Mariano Renato Pacifico says:

    CONGRATULATIONS TO JOE AMERICA !!!!! He is going big time !!!!


    Dear Joe America,

    Greetings from GMA News Online, sir!

    We are the go-to news site for Filiipinos everywhere. Our site averages about 1 million hits per day.

    We found this blog post titled most interesting and we would very much like to re-post the entry in its entirety in our Opinion Section (http://www.gmanetwork.com/news/opinion) to give your post a wider forum, and foster discussion about this subject, especially in light of recent events.

    We hope this article hasn’t been previously published in any major local paper or media outlet?

    We will provide a link back to its URL and indicate that the post originally appeared here. You may also contact me at karl.demesa@gmail.com and 0916-5935308 / 0919-6927048.

    Here’s hoping for your swift and positive response.

    Thank you very much!

    Contributing Editor
    GMA News Online
    Opinion Section

    • Joe America says:

      Hey, we’ve been “big time” ever since Kris Aquino stopped by to let us know she had read a blog to her brother over the dinner table. He laughed at the right spots and sent his appreciation for the blog via Kris. I think it is the one where I compared him to a beat-up old car. I deduced that Mr. Aquino has a sense of humor (whew).

      ABS-CBN Online makes us “broad time”. Where broad is defined to mean wide-ranging. Not a woman of considerable self-authority.

  7. ella says:

    Joe yes, the country is wanting in everything most especially new breed of corporate owners, but as you have already pointed out and it is very clear in everything that is happening and in all aspects of the country, the playing field for such is not level.

  8. Mariano Renato Pacifico says:

    First and foremost what the Philippines need is new breed of news media owner.
    Here is the current breed of news reporting in the Philippines:
    1. 133% increase in net worth + recipient of pork barrel + hanging out with Napoles = Corruption + Guilt
    2. Justices partying with Napoles + Pork Barrel = Justices protected Napoles
    3. Malacanang Escort Service for Napoles = Benigno not Guilty. Why not guilty? Because he is a protected species.
    4. Benigno Aquino partying with Napoles = Benigno not guilty because there is no picture of him partying with Napoles only the justices are guilty and the congressmen and the senators because they have pictures of them. What a wonderful news reporting.

    Maturity of Philippine Media is measure of maturity of Filipinos. If Filipinos are not mature there cannot be new breed of corporate owners. It would take a miracle for Philippine Media to be mature because mature news reporting is not saleable. Mature reporting is bad business. Because the immature Filipino readers cannot understand it.

    • Mariano Renato Pacifico says:

      I just cannot stand Philippine Media.

      • Joe America says:

        Well, Philippine media do run fast and shallow and are overburdened with advertising, that’s true. Both Television and Newspapers are that way, and Radio seems to me to be mostly music. But certain opinion columnists in the newspapers are first class, and of course FHM magazine is always a good read.

        I like Rappler because I think they are innovative and trying to do a different kind of reporting for a different kind of medium, and it has great potential. They run thin and young, but timely and earnest. Plus they have all kinds of topics, from cooking to corruption, so one can certainly broaden one’s knowledge by trying to keep up with them. I think the discussion threads are getting a little better. I would not put them into the shallow class, actually, for range of topics, and some that are quite good. Deep even. They provide better thinking material than the print rags or inane TV offer up.

  9. The Mouse says:

    Not sure about SM. Sure they are fast expanding now but they do indeed have questionable labor practices….and not to mention, they prefer paying to their office in Makati than in the locality where they operate. Basically, they are not playing in the fair ground, not only in terms of labor but in competition with local businesses. Seriously, pay taxes locally, SM. Not the ideal corporation. And SM does not really innovate like Bill Gate or Steve Job does.

    • Joe America says:

      Very important observation. Large corporations should be taking a serious civic interest in local communities, not the puffy PR that ends up in their annual reports. Like mining companies that say they are respecting the environment as they spew poisons across Mindanao.

      I need to study tax distributions to understand how localities are funded. Do they get a share of VAT? I know property taxes generally don’t get levied well or reflect the true economic value of properties. The richer the people are, the more they get away with cheating. It is one big arena for skimming and scamming. Favoring the favored.

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