Prof tells TT: Don’t rush to privatise

The Government of Trinidad and Tobago must not rush to transform State-controlled companies into private entities because “privatisation alone does not guarantee success.” This was the observation yesterday from Associate Professor of Management Practice (Strategic and International Management) of the London Business School, Donald Sull. Speaking to Newsday during a break in a UWI Institute of Business Conference entitled “Revival of the Fittest” at the Hilton Trinidad, Prof Sull said: “The potential for improvement after privatisation can be up to an order of magnitude higher.”

He drew reference to privatised Brazilian  railway company American Latino Logistica and privatised Chinese appliance maker Hire, to prove his point. However, Sull explained that while State-controlled companies are “generally not a good thing” in today’s changing global, economic environment, “ the alternative is not necessarily better unless it is well handled.” During his earlier discourse to a gathering of at least 800 members of the local business community, Prof Sull outlined all the reasons “why good companies go bad.”  Chief among the reasons identified by Sull, was the hardening of commitments made by business people at the genesis of their respective enterprises.

He said this often results in a “creeping bureaucracy” within companies, causing their resources to become millstones and this makes their performance in a changing global economy difficult. He observed that despite its early successes, one-time computer giant Apple could have become “the Microsoft of today” had it noted changing market conditions and taken steps to address them. Sull said all companies must develop the ability to continually revisit the formulas responsible for their initial success and make the necessary changes if they are to survive in an ever-changing global economy. He added that this school of thought was universal and local businesses must do all they can to afford falling prey to “active inertia.”