Great companies are about more than making money

The recent arrest of the Kwok brothers, members of one of Hong Kong’s highest profile business families, reminds us that doing business with friends and relatives can sometimes end in tears. But that doesn’t mean that Asia’s traditional family-based companies do not have something to teach the wider business world.

 Western-style capitalism so often emphasizes adversarial competition as being intrinsically valuable that this can sometimes become the nature of the internal company culture. Dog eat dog at the water cooler. This view sees humans as resources from which to extract maximum economic value.

But many great and enduring Hong Kong and Asian companies think differently. They see companies as a part of society, as a social institution, in the same way that the family is.

As such, they have a coherent history that employees can identify with and a culture that nurtures rather than simply exploits. They want to leave a legacy of people as well as profit. They have an authentic story of emotional relationships to tell rather than a solely manufactured brand identity. Employees need to be steeped in this corporate story so that they can draw on it as a source of strength when the going gets tough.

Do you have to be a family business to operate as a social institution? Clearly not; it is about building an enduring institution with social values and a common purpose that works to make profit. And according to Rosabeth Moss Kanter, Professor of Business Administration at the Harvard Business School, that means incorporating six aspects of institutional logic into the corporate value structure: a common purpose; a long-term-view; emotional engagement; community building; innovation; and self-organization, in other words trusting people to do their job. This is not about paying lip service to corporate social responsibility but actually internalizing these values into the ethos of the company.

On a recent trip to the Mandarin Oriental Bangkok, General Manager Jan Goessing, told me an inspirational story about how family-oriented the management of the hotel staff is, so that generations of Thai families see working there as a matter of pride. During the recent floods of 2010 and 2011, and the subsequent downturn, the staff rallied to help each other and help weather the challenging business environment together with rather than in opposition to the management.

A sense of family and identification might seem like a luxury in the good times, but can mean the difference between good staff leaving or staying when times are tough. Companies as social institutions are an advantage that Asian companies can leverage in an increasingly austerity-driven corporate world.