February 10, 2002	Sunday	Ziqa’ad 26, 1422

KARACHI, Feb 9: If the Corporate Excellence Award 2000 of the Management Association of Pakistan (MAP) is any indication, the business practices of domestic companies are being updated to match those of the multinationals.

Of the eight companies that received the MAP awards on Wednesday, five are local firms and three are corporates with majority foreign stakes. It is for the first time that domestic firms outperformed their foreign peers since 1982 when the awards were instituted, says a MAP official.

And MAP president Syed Masoud Ali Naqvi explains that the business practices of local companies have improved and the multinationals, mainly in pharmaceuticals, are not doing so well.

For the year 2000, the award in food and allied sector went to Lever Brothers Pakistan and to Khadim Ali Shah Bukhari (KASB) in the financial category.

Invited to address business executives at the award-giving ceremony, Musharaf Hai, Chairperson, Levers Brothers Pakistan, listed among other things, three factors responsible for the company’s outstanding performance: Focus on consumer, powerful brand and an outfit “fit for growth”. She is the first Pakistani woman to head a multinational.

KASB is the first brokerage house to become a corporate security house listed on the stock exchange. Its chairman Nasir Ali Shah Bokhari informed the audience that the company is being managed by young professionals with the stakeholders taking a back seat.

Local businessmen are looking for new ideas and vision that would make their enterprises successful. In a related event Hamid N. Jaffer, chairman, Jaffer Group of Companies, organized a presentation on “How to build a multi-billion dollar company — the Cyras Way.” It was largely attended and the keen interest of the business participants, was evident in the question and answer session.

In his presentation Rafat Pirzada, chief strategy officer and co-founder, Cyras Systems, USA, now on a visit to his home country, stressed that for business to succeed and to implement a vision, idea or strategy, a strong united team of employees, sharing same values as the company’s sponsors and endowed with a burning desire to win, was most important. If a professional has to be paid more than what the sponsors get, there should be no reluctance.

Recipient of the MAP corporate certificates 2000 are: Kohinoor Weaving Mills, Sitara Chemical Industries, Rafhan Maize Products, Millat Tractors, Thal Jute and Orix Leasing Pakistan.

For nearly a decade after the corporate awards were instituted in 1982, the recipients with one or two exceptions, were multinationals. The change in the local corporate culture becomes more evident in the 1990s, often described as the official spokesmen as the lost decade for the national economy, when domestic companies started getting a minority share in the awards and certificates. And they came from different fields of economic activity, insurance, tractor manufacture, packages, textiles, cement, tiles and ceramics, jute mills and chemicals.

That multinationals were outnumbered by domestic peers is particularly significant because the criteria for 2000 was updated, to quote Syed Mumtaz Saeed, Chairman, Corporate Excellence Awards Sub-Committee “in the light of best practices in corporate management.” This was done through adaptive look at the award processes and criteria of Baldridge Awards of US, the Corporate Excellence Award of Canada, the European Quality Awards as well as the award systems of Singapore, Malaysia and Japan, says Mumtaz Saeed, who is also an author of a number of articles and books on management. Managing for democracy is one of his pet themes.

The critical change in the awards designed for 2000 is that, the weightage to financial results has been reduced from 50 per cent to 30 per cent. The Karachi Stock Exchange gives awards on financial performance and the MAP does not want to duplicate what KSE does, as well as adopt the best international practices.

Business ethics and values constitute an important element in giving the awards. The objective is to ensure that final results are achieved through proper means. To quote Mumtaz Saeed “right means to right ends.” The MAP is conscious of the Enron episode, which is not the only one of its kind.

MAP sources said that a company with excellent performance belonging to an apparently well managed business house was once excluded because of its problems with the National Accountability Bureau.

The revised criteria, giving weightage to marks, are as follows: Corporate governance 15 per cent, strategic direction and leadership 25 per cent, customer and market focus 20 per cent, human resource focus 20 per cent, operations management 7.5 per cent, information management 7.5 per cent and risk management 5 per cent. ISO certification was also made obligatory for companies eligible for awards.

For the year 2000, MAP picked up about 75 companies listed on the stock exchange with the primary qualifying criterion: a dividend rate of at least 20 per cent (cash or bonus) in last two out of the three years or an aggregate payout of at least 60 per cent over the past three years. About 25 companies each in the industrial and financial sector were short-listed. Questionnaires were sent to the eligible companies and discussions are conducted on the basis of replies b22efore the final assessment.