Business schools as change agents in an era of corruption

If African business schools are to serve as change agents and play an effective role in combating systemic corruption in Africa, they need to equip future business leaders with pragmatic political skills rather than rely solely on developing an individual’s ethical outlook, according to new research from the University of Bath in the United Kingdom.

“Pockets of ethical behaviour do not go far enough in Africa, Dr Tahiru Azaaviele Liedong, assistant professor of strategy in the School of Management at the University of Bath, told University World News. “The [private] sector has a huge potential to bring about change, but only if it is politically capable,” he said.

Raised in the poorest part of Ghana – the Upper West Region – Liedong said he had experienced abject poverty first hand. “Knowledgeable of the relationship between poverty and corruption, I have always strived to combat it, whether through research or practice. Prior to joining academia, I worked at the World Bank where my passion for development and my zeal to fight corruption was firmed,” he said in an email interview.

The limitations of ethical individuals

In his paper published recently in Africa Journal of Management titled “Combating Corruption in Africa through Institutional Entrepreneurship: Peering in from business-government relations”, in which he argues for good governance and well-functioning institutions, Liedong proposes that “institutional entrepreneurs” pushing for changes to Africa’s political and governance institutions are likely to be more effective than ethical business leaders in reversing the trajectory of systemic corruption.

He also argues that “corporate political activity” – the efforts exerted by firms to influence government regulations policy in ways favourable to them – is an important subject to teach in business schools, which at present tend to be focused heavily on profit-maximising activities and exploiting economic markets for organisational success.

The paper is in part a response to recent research by P Mishra and S Maiko, published in the same journal, which proposes that business schools should incorporate student-elder partnerships in their curricula to teach African values regarding care, compassion and tolerance, among others, thereby developing ethical business leaders to fight corruption.

Liedong argues that such an approach is limited, firstly because it assumes that the private sector, as opposed to the public sector, is a sufficiently significant source of corruption, and secondly, because corruption has become “normal” in parts of the world, including Africa. In 2016, the United Nations estimated that corrupt practices were costing developing countries about US$1.26 trillion a year.

“Though ethical behaviour is important in the fight against corruption, I believe that it is difficult to uphold ethical behaviour in contexts where corruption is systemic, such as in Africa,” he told University World News.

“In other words, when everyone has to pay a bribe to get things done, it will be difficult to succeed without paying up. In this sense, business people find themselves in very tight situations – they cannot refuse to indulge in bribery mainly because corruption is the norm, an institution of its own.

“Research has demonstrated that ethical companies lose business to their competitors who are willing to meet the “demands” of public officials. In my view, fighting systemic corruption in Africa requires a change to the nation-level institutions which allow the canker to thrive. Pockets of ethical behaviour won’t go far enough,” he said.

What can universities do?

Rather than developing ethical business leaders, business schools should be developing institutional entrepreneurs, argues Liedong. He defines such entrepreneurs as actors who have interest in particular institutional arrangements and who leverage resources and capabilities to create new institutions or to transform existing ones.

“Simply put, institutional entrepreneurs are people or organisations who buffer or push for institutional changes. The changes mainly occur through a political process which reflects inter-relationships between different interests. Hence, political skills are required for institutional entrepreneurship,” he said.

These political skills include the being able to engage with the polity, organise coalitions (within industry or even beyond), and push for changes to institutions.

“More specifically, these skills entail the ability to scan the political environment to identify policy issues worth addressing, the ability to sell issues to other stakeholders and develop a strong political constituency, and the ability to employ the appropriate political strategy to change or influence issues,” he said.

According to Liedong, research shows that businesses are affected by political issues and institutional weaknesses, but managers lack the interest or the skills to address institutional problems.

“The curricula in most business schools are tailored towards identifying and exploiting economic markets for organisational success, which I think makes these managers good at jumping onto profit-maximising activities, but weak at effecting systemic changes in their institutional environments.

A worrying quietness

He described the quietness of the private sector in the fight against corruption in Africa as “very worrying” because the sector has huge potential to bring about change – but only if it is “politically capable”.

“Political skills can be taught by changing the curricula in business schools and including courses on business-government relations or corporate political activity. These courses will teach managers about developing effective political strategies. Besides the content, managers should be exposed to some practical sessions on how to execute political initiatives.”

Liedong argues that students could be given the opportunity to observe parliamentary sessions, and interact with legislators to provide first-hand experience regarding how government (and parliamentary) business is conducted.

“They could also be assigned to the public or government affairs departments of selected African firms and tasked with helping those firms address specific issues or influence government policies that have political, social or economic consequences for business and society.

“Further, they could be tasked with politically influencing the resolution of specific problems at the local government level. This will require them to form coalitions with community leaders and non-governmental organisations, sharpen their issue-selling skills and draw upon political tactics such as bargaining, negotiation and compromise. The above are just examples of how business schools could make the development of political skills effective,” he said.

Liedong said only a few business schools around the world currently teach business-government relations but if firms, and more broadly the private sector, are to join the fight against systemic corruption in Africa, they have to be politically active.

“The general perception of this subject, even among academics who sum it all up as lobbying, is that it is not ethical. Indeed, corporate political activity could be unethical, but it is not always unethical.

"In Africa where the need to combat corruption is relatively greater, novel ways are necessary. In this respect, business schools can serve as agents of institutional change. I know ethics is integrated into the curricula of African business schools, but the same cannot be said about corporate political activity.”

He said while some business schools in Africa have implemented the UN-sanctioned 'Principles for Responsible Management Education', the main emphasis was on sustainability and ethics.

“Ethics, as I mentioned previously, do not go far to address systemic corruption … I do not think that teaching political skills is within the radar of African business schools; hence managers are mainly trained to exploit the opportunities in their business and institutional environments, but rarely to change those environments.”