Clean Business Cuisine

Citation

Mainelli, M. and Harris, l. (2005), "Clean Business Cuisine", Journal of Business Strategy, Vol. 26 No. 2. https://doi.org/10.1108/jbs.2005.28826baf.001

Clean Business Cuisine

Clean Business Cuisine Michael Mainelli and Ian Harris, ISBN 1 84059 227 3, price £14.99.For further information, please e-mail: michael_mainelli@zyen.com or ian_harris@zyen.com or telephone: +44 (20) 7562-9562. Z/Yen helps organizations make better choices. The name combines Zen and Yen - "a philosophical desire to succeed" - in a ratio, recognizing that all decisions are trade-offs.

With this issue of Journal of Business Strategy we continue serializing one of the more amusing business books of recent times, even though it is about ancient times. Our thanks to authors Michael Mainelli and Ian Harris for providing this divertimento from their book, Clean Business Cuisine.

In an increasingly risk-averse and socially concerned environment, organizations must pay greater attention to governance. In addition, regulators, activists and lawyers also pay greater attention to how organizations conduct themselves, and the appearance of governance. Paradoxically, greater specification of how organizations must conduct themselves can frequently lead to situations where ethical conduct is against the law. The most corrupt regimes and bureaucracies are often the most ethical, on paper. One might muse that corruption and bureaucracy are positively correlated. Further, one might observe that the inability of organizations to make decisions without recourse to experts in various areas of regulation, for instance human resources or procurement or health and safety, leads to more likelihood that organizations will get things wrong. But do principles pay? Is it true that “the people you help on your way up are slightly less likely to knife you on your way down”?

Chapter eight

Kli Ning’s principle problem

An honourable reputation cannot be bought. Good reputation flows from good deeds of good character. Morals are for sheep. Do you have anything to remove these Mutton Chao stains from my shirt? (Overheard in a conversation between the ageing Confucius and the young Chao Kli Ning, circa 480 BC.)

[During which Kli Ning discovers the risks of professional advice, the rewards of loyalty, the thrills of Seasonally Adjusted Transitional Employment Subsidy and the agonies of state bureaucracy.]

The minute Chao Kli Ning walked into the joint you could tell he was a man of distinction. Chao Kli Ning owned the biggest business in the whole region: the 200 establishment strong Kwik Klining Duck Tea House And Laundry Franchise. Every village in the region either had a Kwik Klining or wanted one badly. Xianatu was the headquarters of the Kwik Klining empire. Kli Ning now employed so many people that the latest census decreed Xianatu officially a town; no longer the mere village of Chao Kli Ning’s birth.

The joint into which he walked was the newly built Town Hall. The joint from which Chao Kli Ning walked, in a truly foul mood, should have been called “Newly Built But Yet To Be Paid For Town Hall”. Kli Ning had just had a meeting with a number of men of consequence. The consequence was that these men of little distinction, namely local government officials, were going to cost Kli Ning a lot of money in extra taxes. These taxes would start to pay for, amongst other things, inspectorates, employment ministries, regulators and naturally the mortgages on buildings such as the Town Hall to house them all.

These bureaucrats were also going to cost Kli Ning’s human resources manager, Ai Char, even more time and effort in form filling and query chasing. The Regional Statistics Office had just reviewed Kli Ning’s last quarter’s forms and were demanding even more information.

That evening, Kli Ning dumped the new regulations on the desks of both Ai Char and his general manager, Lo Fan, with a message to meet him first thing the next morning. When the three met the following morning, Kli Ning was still in a foul mood. Lo Fan made it worse. “These new rules are preposterous. We’ll have to keep records of all staff activities to the nearest minute. We couldn’t do it accurately even if we tried. Those government officials couldn’t use the information even if they got it.”

Ai Char added to Kli Ning’s gloom by beginning to indulge in Ai Char’s favourite pastime, quoting local government regulations. “Regulation 580/451/Registered Character Number 4876 clearly requires us to submit complete, accurate and timely timesheets.”

As usual, Lo Fan began to argue with Ai Char. “The last time you quoted regulation numbers at us, Ai Char, you tried to make us give tea breaks to our staff as long as those of our customers.”

Ai Char interjected, “Lo Fan, you know as well as I that there are a lot of regulations to keep up with. That particular instance was an honest mistake confusing the interpretation of tea break contained in Regulation 1195/454 Tea Break (Amendment) with the definition of staff tea breaks contained in Regulation 37/455”.

Kli Ning motioned them to stop. “Ai Char, Lo Fan. Get a big picture grip on the details. Are you telling me that we need to implement timesheets for all staff just to satisfy a bunch of petty, local bureaucrats who don’t even have the wherewithal and taste to dine in my fine establishments?”

For once Lo Fan and Ai Char were in agreement and much against all their better wishes they bought a timesheet recording system from leading experts at the Temple of Temporal Discontinuity. Strangely, Kli Ning began to appreciate the purchase some months later when Lo Fan called an urgent meeting. Lo Fan began, “I have been reviewing these timesheets and, oddly, the bureaucrats may have inadvertently helped us to save some money. It would appear that our headquarters staff are slightly inefficient. We should be able to fire half of them without noticing the slightest difference in service.”

“Brilliant, Lo Fan,” said Kli Ning expectantly, “how is this possible?”

“Well”, began Lo Fan, looking from Kli Ning to Ai Char to his notes, “since we introduced timesheets we have had a few problems. Some staff complained that they had to spend more time filling in timesheets than they spent working. If you remember, you have already fired them. Our current problem is that most staff record most of their work time as non-productive. We have a code called ‘waiting for work’. Junior staff record most of their time to this code. Senior staff complain that junior staff are either too busy to help or haven’t prepared the senior staff work properly. Hence, the senior staff record almost all of their time to ‘preparing for work’. Yet, whenever I talk to the junior staff, they claim that they spend all their spare time preparing the senior staff for work by doing the ledger calculations, filling in the senior staff forms, preparing the management accounts and fetching tea for the senior staff while they are ‘waiting for work’. Thus the senior staff are doing the junior work, and the junior staff the senior work. We only need the senior staff work so we should fire them.”

“Lo Fan”, ventured Kli Ning, “as your brilliance often escapes me, perhaps you can explain how we can fire the junior staff and still have someone to fetch tea for the senior staff?”

“O esteemed master”, continued Lo Fan, “as you have so perceptively seen, we don’t fire the junior staff – we fire the senior ones! The timesheets prove that the junior staff are doing all the work.”

“Lo Fan, that is brilliant”, said Kli Ning. “Let us do this forthwith.”

Ai Char coughed slightly to gain attention and then began, “this is truly insightful, but it is important to analyse thoroughly before considering such drastic action as actually firing people. Further, some of the technical regulatory issues concerning the employment of breadwinners, compulsory notice and form-filling staff ratios need to be confirmed before a satisfactory course of action can be put into a category for pending deliberation. I am personally disturbed at being the human resources manager of a firm which is about to fire half of its key staff and force them and their families into the streets, starving and without a realistic hope of reemployment in the locality. If you will permit me an evening’s perusal of the regulations, I may be able to satisfy the regulations, halve the staff wages bill and yet keep all the staff on board.”

Ai Char returned a bit bleary the next morning and explained a somewhat convoluted scheme. Apparently, Kli Ning and Lo Fan had been unaware of Regulation 728/455 – Seasonally Adjusted Transitional Employment Subsidy. This regulation was meant to subsidise farmers so that they could employ their workers during the months between planting and harvest. The farmers simply registered their crop cycle periods and collected money from the government to pay their workers for the registered period between planting and harvest, known as “idle period”. If Kli Ning registered his business as monthly seasonal and designated the middle two weeks of each month as “idle period” he could collect half the money for his staff bill from the government and not need to fire a soul.

Ai Char had even prepared a brief memo on the subject, which ended with the following conclusive paragraph, “Regulation 728/455 would apparently be potentially appropriate in this instance so far as the particulars have been established. Nevertheless, certain other consequences may or may not be of adequate significance to result in further consideration or consultation through a proper feasibility study.”

After a few seconds of discussion, Kli Ning concluded with, “well, that settles it. Let’s do it.” Even so, Kli Ning felt a deep unease in the place where his conscience occasionally deigned to reside. It was as if his stomach was telling him that it seemed immoral to pay people a full wage for what was clearly partial work. But he soon got over this feeling. The money was coming from the government and they paid people for partial work all the time. Sometimes government even paid people for no work at all.

Some months later, not so far away, in the bowels of the town’s new statistical office, an earnest clerk, Min, made a great discovery. His discovery was of such magnitude that it might even finish paying for the sparkling new government building in which Min worked. Indeed, it might also provide enough seed money to lay the foundations of another new building for another new department which might justify an increased budget and naturally some additional taxes. Min had uncovered what appeared to be a breach of Regulation 728/455 – Seasonally Adjusted Transitional Employment Subsidy.

Min had verified the chop used on the Kwik Klining Duck Tea House And Laundry Franchise’s applications for Seasonally Adjusted Transitional Employment Subsidy. The applications were made by a certain Ai Char, a so-called human resources manger of the firm. Yet much to Min’s surprise, the chop was registered to a certain Lo Fan, who listed his employment as general manager of the same firm. In accordance with normal procedures, Min raised an Initiation Of Investigation For Criminal Fraud form against the aforementioned Lo Fan, published a Notice of Almost Certain Culpability and Criminal Activity against the Kwik Klining Duck Tea House and Laundry in the Journal of Obscure Government Public Announcements, passed the form to the most inappropriate department and promptly forgot all about it.

A total of 18 bureaucrats later, the investigating official, Chih, sighed, hastily grabbed his regulations, slowly finished his cup of tea and somewhat languidly set off in the direction of Kli Ning’s offices. On the way, Chih grabbed two police officers to help him with his enquiries in this informal investigation.

The three of them arrived at Kli Ning’s offices and were greeted by Ai Char. After pausing for a cup of tea with Ai Char, they demanded to see Lo Fan immediately. Within minutes, Kli Ning was embroiled in debate. When the voices got too loud, Ai Char managed to convince everyone to sit calmly around the boardroom table and discuss the matter.

Chih explained the gross violation of clause 328, the disparity between the submitter (Ai Char) and chopper (Lo Fan) of the applications. Kli Ning turned to Ai Char and asked him to explain. Chih raised his voice again. “You don’t seem to understand. We have come to seize Lo Fan.”

Kli Ning gasped in incredulity. Ai Char stepped in smoothly, “you see, Kli Ning, clause 328 clearly apportions blame in such circumstances. I confess that I have been guilty of a slight clerical oversight. Lo Fan faces almost certain criminal charges for not safeguarding the use of his personal chop, under Article 7 of the Chopping Standards. Possibly death. It’s difficult to say. I think the courts should determine this man’s guilt and then sentence him, although not necessarily in that order.”

Chih effused, “I am relieved that finally someone in this organization appears to have a basic understanding of elementary public and criminal procedures. Clearly we must hold Lo Fan in custody, pending trial to confirm his evident guilt.” With that, Chih motioned to the two police officers, who promptly seized Lo Fan. All four smartly marched from the room.

Kli Ning was furious and rounded on Ai Char. “Get a detailed grip on the big picture, Ai Char. You got us into this mess, you had better get Lo Fan out of it. And fast.”

Ai Char unctuously declined. “I am a humble human remains … I mean human resources manger,” he said, “handling legal proceedings is not in my job description. Handling legal proceedings is part of the general manager’s job description. Lo Fan had better get moving on this very quickly, although as he is in jail I can see that this will be difficult. Perhaps you ought to find a new general manager who is capable of dealing with it. If you advertise the post, I would be happy to apply. Further, I think it is my duty to point out to you that you face almost certain civil proceedings to recover the funds you have misappropriated from the Seasonally Adjusted Transitional Employment Subsidy Scheme. That is, unless it is proved that the fraud was perpetrated by an employee acting outside the law.”

Kli Ning was disgusted by Ai Char’s lack of principles. Ai Char didn’t even seem to be doing it for the money. Kli Ning was now totally confused between principles and money. Kli Ning therefore rushed off to see his lawyer, Mr Fat, known in the village as Fat Fee. After reviewing the documents and deliberating on Kli Ning’s statements, Fat Fee commented “surely, Kli Ning, you knew that the Seasonally Adjusted Transitional Employment Subsidy Scheme was not meant to be used by businesses such as yours. Further, you know that the monthly submissions were a technical loophole. Fortunately, you were lucky that Ai Char used Lo Fan’s chop. Because we can now prove that the fraud was perpetrated by an employee acting outside the law, you can be sure to keep the subsidy money, less a small penalty fine. And naturally my fees.”

Kli Ning seemed relieved, but enquired, “Yes, but what about Lo Fan?”

Fat Fee demurred, “you know how often I have had to advise you to get a detailed grip on the big picture. You are well aware that I am a commercial lawyer and not a criminal lawyer. Handling criminal proceedings is not in my job description. However, if you want my informal, unofficial, personal advice, if I were in your shoes I would dump the loser. I think Lo Fan will be unable to perform his duties for you for some years. Further, speaking as your friend, I would advise you to think twice before employing anyone with a criminal record.”

Kli Ning was troubled. “What do you think will happen if I do intervene on Lo Fan’s behalf? After all, this whole scheme was Ai Char’s idea and not Lo Fan’s. Unofficially, what do you advise?”

“For my friends, my unofficial fee rates are the same as my official ones, but never mind. If you do intervene on Lo Fan’s behalf, you will almost certainly have to repay all the subsidy monies, plus a large penalty fine, plus of course my fees. If you give me a moment to calculate this on my personal abacus, that’s, let’s see, approximately nine months of your staff wages. Further, if you look at the documentation, any court would conclude from Ai Char’s memo that Ai Char was clearly against this from the start and exercised considerable restraint on Lo Fan’s excesses.”

Kli Ning had a real problem. Two of his fundamental principles were in direct conflict: making money and looking after his people when they showed a good rate of return. He recalled the wise words of a man in whom, many years previously, Kli Ning had invested a great deal of money for a dreadful return; the late lamented knife sharpener who worked beside his first restaurant. “The people you help on your way up are slightly less likely to knife you on your way down.” The knife sharpener finally proved his worth that day. Z/Yen enlightenment sometimes came from unlikely sources. Kli Ning now knew what he had to do.

A week later, Lo Fan was profoundly grateful and out of jail. Kli Ning and Lo Fan promptly implemented Lo Fan’s original plan to make significant staff cuts by firing all senior staff. Over the next 18 months, the savings were likely to cover the anticipated subsidy repayments and government fines. When Lo Fan submitted his list for senior staff dismissal, Kli Ning was not surprised to see Ai Char’s name at the top of the list. Kli Ning happily signed the dismissal orders, pointedly using his own chop. Lo Fan settled back for a long, hard 18 months. Lo Fan felt greatly indebted for all Kli Ning had done on his behalf, and resolved to pay Kli Ning back through his increased endeavours and enduring loyalty.

Some months and 18 bureaucrats later, in the bowels of the town’s brand new statistical annex, the earnest clerk, Min, was troubled. He had just received a Seasonally Adjusted Transitional Employment Subsidy Rebate and Penalty Fine form of such magnitude that, once implemented, would require nine months of work on statistical revisions for the prior two year period. Inadvertently, Min mislaid all three copies of the Rebate and Penalty Fine Form. This mishap saved Kli Ning a lot of money. Kli Ning never bothered to mention the savings to Lo Fan. Lo Fan was far too busy with his diligent work to notice the savings. Lo Fan did notice that a statistical clerk, Min, was the only civil servant he knew who ate at Kwik Klining Duck Tea Houses. Indeed, Min ate there every day. Min was also the only civil servant Lo Fan knew with a Lifetime Pass, which entitled him to a substantial discount on all food and drink purchases at any outlet of the Kwik Klining Duck Tea House And Laundry Franchise. Lo Fan pondered long and hard on the vicissitudes of life, before getting back to working off his debt to the ever merciful Chao Kli Ning.

• •

  Most people are sheep. When other peoples’ ethics are the law, you may not have enough time to deal with your own (from the last will and testament of Chao Kli Ning, circa 400 BC).

[Questions for students: (1) Would you have bailed out Lo Fan or would you have let the loser stew? If your answer was to bail him out, determine the appropriate interest rate to charge, showing calculations where necessary. (2) Write an appropriate letter from Fat Fee, specifying the formal and informal advice to Kli Ning, referencing appropriate case law where needed, and appending detailed fee calculations and disbursement of expenses, both incurred and wholly fictitious.]

Conclusion

Modern societal constraints are increasingly complex. Organizations complain vociferously about the amount of “red tape” and governments repeatedly break promises to “reduce the burden of legislation”. Standards, ethical guidelines and certifications only add to the burden. In some ways the only sane response to the situation is to note that “if you can’t do anything right, then do the right thing”. It may be rational to rely more on basic human societal behaviors such as “tit-for-tat”, then to attempt to comply with a library of legislation. A strong set of principles can often provide guidance when the complexity of regulations leads to situations where “life is too short” to make a decision in line with the rules. So perhaps we turn full circle to the point where a strong set of organizational ethics, duly followed in preference to the law, is an appropriate response to over-regulation intended to reduce ethical violations.