Management versus politics

Politics is the 'death knell' of good management. Good corporate management is about following defined procedures in all realms - finance, accounting, human resource, marketing, etc. Politics is about 'populism' at the cost of all good procedures. Good management practitioners can never be good politicians. Good politicians (if there is such an animal) cannot be good managers.
If a corporate entity falls prey to excessive politics, it eventually goes bankrupt - like PIA. The decline of PIA started 40 years ago when the top brass of PIA started accepting and implementing political decisions made by the "political governments of the day". I was once watching some PIA event on television where Asif Zardari was the chief guest. After the usual politically loaded address, Zardari announced the induction of 1000 new entrants into PIA. Not only that, he also announced some entries into the Civil Aviation Authority. Today PIA is a management basket case. It is bankrupt. The hapless taxpayers of Pakistan have to bail out PIA every year. While the employees of PIA live a life of luxury. Even the pensioners of PIA avail benefits that are unheard off. From the management standpoint, PIA is dead and buried. From the political standpoint, PIA is alive and kicking.
The public sector organizations (also called SOEs) around the world are in a bad shape. In the SOEs, political decisions take precedence over management decisions. Since 2007 Greece has been through massive economic decline. The EU has bailed it out to the tune of 350 billion euros (and counting). As part of the austerity drive, the Greek Foreign Ministry sold 10 cars (Limousines) that were deemed useless. However, the 10 drivers of the cars could not be laid off, as they were part of the union. Today, 6 years on, the drivers sit in the ministry cafeteria and sip coffee, play cards and contemplate the virtues of the state sector.
At end 2012, France had 800,000 employees at state-owned enterprises (SOE's). United States had 500,000, Italy 450,000, Britain 300,000. But Japan only 25,000. In India, there are approx 30 million employees at SOEs. They are a very powerful 'vote bank'. No government can afford to mess with them. Emmanual Macron, the recently elected President of France is trying to reengineer the labour code of France. This code is more than a 100 years old. It is part and parcel of the French society. Objections are already being raised. Soon Macron will have to back off, or lose the next election.
The worst economic decision in the history of Pakistan was the nationalization announced by ZA Bhutto in 1972-74. Within this was the nationalization of banks. As time evolved the big five (National, Habib, UBL, MCB and Allied) became the epicenter of corruption. All governments of Pakistan, whether political or otherwise, used these Banks to further their Agenda. There was a total disconnect between Good management and the Bank operations. Any Bank President who insisted on following good management practices was shown the Door, or worse. The National Bank of Pakistan, the 'Nation's Bank', was the bank of choice for political loans. Known and certified corrupt people were appointed presidents of NBP. A recently retired president of NBP, who was jettisoned on court orders, lives in a virtual palace with a private lake and a private zoo. PIDC is a prime example of politics taking precedence over management (and economics). PIDC was created in the early 1950's to industrialize Pakistan. Many Eminent people, including Ghulam Farooq, were its chairman. Only one project of PIDC ever delivered financial returns. This is the PIDC building located on Ziauddin Road. All other projects were politically inspired and failed. The greatest failure of PIDC was the PAK - Iran textile mills. Its two factories were located at Utthal and Quetta. This is not a cotton growing area, there is no hinterland market, skilled labour is not available. Yet the governments of the two countries, at the apex level, approved the two projects. Again, politics trumped management.
In 1973, I had a narrow escape! At that time I worked for a prestigious British company. ZAB was on his misconceived Nationalization spree. He had formed a Board of Industrial Management (BOI) with many senior executives. BOI was looking to fill the vacancy of secretary. I was asked by the Minister in-charge if I was interested. I delivered saying "Sir, this is a political job. I only carry out management orders. If I accept, my dead body will be found in some swamp in Chhanga Manga". The minister smiled enigmatically and responded "you are probably right".
(The writer is the former Executive Director of the Management Association of Pakistan)