The human resources manager at a textile company in Pakistan’s central city of Lahore points towards a pile of résumés on his table. They have been sent in by freshly graduated MBAs but he laments their “shortage of skills” when it comes to the “tough realities” they need to face.
At that moment, in a powerful reminder of the frequent challenges faced by businesses in Pakistan, the lights suddenly go out. These daily power cuts have been crippling many businesses across the south Asian country, which has a population of 200m.
“This (power cut) is the sort of challenge they don’t necessarily prepare you for in a business school,” says the HR manager, adding: “We want our managers to have their feet on the ground.” This message appears to chime with the thinking across many of the country’s corporate board rooms.
More than a decade has passed since the September 11 2001 attacks on the US forced Pakistan into an American-led global “war on terror”. The period of political and economic uncertainty that this war unleashed has visibly changed the business environment in the country.
While there used to be a large number of expatriates running a network of multinational companies, there are now far fewer and these have hung on only because of Pakistan’s large market size. Concerns have mounted over the safety of western nationals in the country, who are likely to be in greater danger of physical attacks or kidnappings than their local counterparts.
The security risk has forced an increasing number of companies to hold meetings in safer regions such as Dubai.
Perhaps in response to the scarcity of experienced managers from abroad, local banks and companies are seeking well-rounded Pakistani executives armed with MBA degrees. But they also want them to be able to cope with challenges such as the heightened security risks. Although there are a number of successful US-trained Pakistani managers, some with MBAs from top-ranked US business schools, domestically trained MBAs are in demand because overseas-educated MBAs of Pakistani origin often do not want to leave the west to take up a position.
First, many of them prefer to build their careers outside the country in North America, Europe or Asia, because they are attracted by more generous financial packages. Second, by staying abroad, many such graduates can evade the risks that accompany daily operations in Pakistan, such as the running of elaborate supply chains involving road transportation to potentially high-risk areas.
Pakistan’s business schools are seeking to fill the gap created by this trend and an increasing number of graduates from the country’s top two MBA programmes – offered by the Lahore University of Management Science (Lums) and the Institute of Business Administration (IBA) at Karachi university – are looking for opportunities within the country.
“Our MBAs are hands-down a better choice for any employer in Pakistan,” says Arif Butt, dean of the Suleman Dawood School of Business at Lums. Its MBA programme is based on a case-study approach adopted by the world’s leading business schools. Prof Butt says Lums graduates “can very easily and very quickly assume positions of responsibility and become corporate leaders. They know the [Pakistani] environment very well.”
Lums also offers specialist programmes such as a certificate in agribusiness to train individuals in modern management techniques for establishing businesses linked to Pakistan’s large agricultural sector.
Ishrat Hussain, dean of IBA and a former governor of Pakistan’s central bank, says the post 9/11 environment has allowed local business graduates to rise faster.
“Across businesses based in Pakistan, whether foreign-owned or local, the position of CEO is increasingly occupied by our own graduates,” he says. “For many employers, there is no difference [between hiring a Pakistani graduate from the top two schools or a graduate from a foreign MBA programme]”.
As Pakistan’s business schools are increasingly preparing their graduates for the local environment, attention needs to paid to the particular problems the country faces.
Aside from security risks, challenges include operating in an environment tainted by corruption and widespread tax evasion. Such issues raise important questions in a country where the top business schools also seek to train their students to meet internationally acceptable ethical standards.
Pakistan is facing an overall economic slowdown – not helped by the fact that a recently signed loan agreement between it and the IMF requires restrictions on government spending. The slowdown makes it even more unlikely that the country will become a compelling destination for expatriate business leaders in the near future.
The pay-off, according to many Pakistan-based companies and stakeholders in local business schools, is the boost this has given the schools. The increased demand for trained managers is creating what they hope will be a steady supply of homegrown candidates for top corporate positions in the future.
For many employers there is a preference for hiring local managers on significantly lower salaries and with fewer perks than those offered to western expatriates.
Against this backdrop, many of Pakistan’s MBA graduates believe the increased demand for their skills will also create long-lasting recognition of their value.
“I don’t think it’s necessarily [the case of] wanting to go to Pakistan if security was to improve,” says Shafaq Omar, director of human resources at Unilever Pakistan, in her assessment of the future. “There is no reason that expatriates will regain the CEO positions. There is enough local talent.”
Pakistan poses particular challenges for women, who face restricted opportunities, especially in conservative areas of the Islamic country.
However, some more progressive employers are trying to address these difficulties.
Shafaq Omar, director of human resources at Unilever Pakistan, the local subsidiary of the European consumer products group, says women employed by the company are provided with a car and driver on field visits as part of a regular practice to promote equal employment opportunities. “This is one of the examples of the practical environment that we have created,” adds Ms Omar, who has an MBA from Suleman Dawood School of Business at the Lahore University of Management Sciences.
A young woman graduate from an MBA programme at the Karachi university’s Institute of Business Administration, who asked not to be named, shared her personal ordeal. At an interview with a prospective employer she was asked questions about her personal life and whether she planned to get married. “I could instantly sense what was going through his [prospective employer’s] mind when he asked if I was already engaged or interested in someone,” she says. “Women struggle even if they have top grades. Employers often take the view, they will be wasting their time and money on grooming someone who will eventually become a housewife, stay at home and raise children”.