Nepali Times
Strictly Business
Lower the hurdles


When Himalmedia and the Pokhara chapter of the Nepal Young Entrepreneurs Forum (NYEF) joined forces to organise an interaction recently, the issues that came up were one that will probably not be addressed in the Finance Minister's budget speech next week. In Pokhara, as in Kathmandu and Biratnagar, most owners of businesses are the entrepreneurs and the managers who have to wear different hats on any given day inside their companies.

Trade unions: Most participants said that they were not against trade unions. Some even said that trade unions are here to stay in Nepali businesses for the foreseeable future, and smart businesses learn how to work with them. But entrepreneurs are worried about the rising militancy of trade unions that act in the interest of neither the owners nor the employees.

In fact, the people who benefit from militancy are often elsewhere. They are in party-politics. Their mandate is to infiltrate as many companies as possible for extortion and employment for party cadres. The Pokhara entrepreneurs said that to ward off problems, they have done their best to fulfill all the requirements demanded by labour laws. Still, reasoning and pleading with militant employees, who are backed by political motivations, and who insist on viewing the world as a divided between masters and slaves is unproductive and frustrating.

Growth: Most Pokhara entrepreneurs admitted that growing their companies during the boom times was easy. But that easiness had one downside. It made most of them unprepared to think about growth during down times, when they felt themselves getting sucked into arranging and re-arranging their companies' innards. When tense political situations, bandas, labour unrest and the migration of high-income residents out of Pokhara to other countries affected the companies' growth rates, the owners were at a loss as to how to deal with these problems.

One solution the meeting threw up was to think of a business in terms of getting systems, structure and stability right so that the management's time is not spent on fighting internal fires all the time but open to chase opportunities, even during bad times. It's important in a company to lay down routine systems of who reports to whom with what numbers and ideas, and how the decision-making processes work so that stability is likely to result. With organizational stability in place, the owners can then look for new products to offer in old and new markets. But putting in systems, structure and stability is boring work that may not suit the temperament of owner-managers who are good at externally-focused work.

Human resources: One issue that came up with regard to human resources was how to make the trade-off between seniority and competence. In the old Nepal, seniority counted without a question for promotions and rewards. In the new competitive Nepal, anyone can see that senior employees are not necessarily the most competent or high-performing ones. Still, in most companies, owner-managers have no choice but to promote senior employees: not because they are performers, but because they've been around for a long time, and are often most resistant to learning about change. Compounding the problem is that most such senior employees are often the family members and relatives of the owner-managers. The Pokhara entrepreneurs' take was that as the working-age population gets smaller and smaller in Nepal, as is already happening, this problem is likely to sort itself out in the next few years.

These three issues that are in the minds of the Pokhara entrepreneurs provide action items for business-promoting bodies such as FNCCI, NYEF and others to come up with training and interaction programs in the future with an aim to further lower the hurdles faced by Nepali businesses.

(11 JAN 2013 - 17 JAN 2013)