One of the most notable shifts in the workplace has been the disappearance of the prototypical loyal employee who would work 30 or 40 years for the same corporation and then retire with a gold watch and a pension. Many workers today hold positions at multiple companies during their careers, and may feel no particular loyalty to remain at any one organization. By the same token, many companies feel no special loyalty to their workers.
Despite this sea change in corporate culture—and, in some instances, because of it—mentoring is just as important as it ever has been for younger workers looking to learn the ropes from more experienced employees, according to experts at Wharton and other business schools. Indeed, mentoring may also be more important than ever for organizations themselves, since linking up a mature mentor with a promising protégé is an excellent way to keep valued up-and-comers from jumping ship and taking jobs elsewhere.
Wharton management professor Katherine Klein says what mentees look for in a relationship with a mentor is “having a sounding board and a place where it’s safe to be vulnerable and get career advice. It’s a relationship where one can let one’s guard down, a place where one can get honest feedback, and a place, ideally, where one can get psychological and social support in handling stressful situations”.
For their part, effective mentors are people who possess knowledge of career paths inside, and even outside, the organization, Klein says. “Mentors should have an understanding of the organization’s values, culture and norms. The mentor should be sensitive to the mentee’s needs and wishes, and enhance the mentee’s career potential, while looking for ways the mentee’s potential can benefit the organization.”
West Asian businesswomen: Making big strides
This spring, Wharton and the University of Pennsylvania law school hosted 37 professional women from West Asia for a four-week legal and business fellowship programme. In partnership with America-Mideast Educational and Training Services (AMIDEAST) and the US State Department, the programme teaches business and legal skills, and encourages women to share information and network with each other as well as faculty. Depending on their experience, the women attended classes at Wharton executive education or the law school, and then began a five-month internship with large companies and law firms.
Knowledge@Wharton asked three women from the programme to talk about their experiences and their views on such topics as business opportunities for women and the role of Islam in society. Bothayna Alromaihi, 22, Amani Zaid, 26, and Doua Mansour, 25, noted that, in general, West Asian women are making strides in business and as entrepreneurs, that education is encouraged, and that their governments provide maternity leave and childcare allowances that allow women to maintain their careers as they build their families.
They also pointed out some obstacles, including cultural norms that dictate how females should interact with their male colleagues. For example, late-night work sessions including male and female workers are generally off limits in some cultures. “If it is a meeting during the day in the office, you can arrange it... You can have business relations with men as long as it is within a scope accepted by the community,” says Zaid, who is from Yemen.
That is not necessarily a problem, Zaid notes. Women and men can be business partners, she says, and in fact, it is a more optimal situation because men, in general, are better connected in the world of business.
When asked how Islam impacts their ability, all three women were careful to point out that Islam and cultural norms should not be confused. “The culture imposes things on you that Islam wouldn’t,” Zaid says. “Islam encourages education, for both females and males. Yemen has improved a lot in terms of women’s rights. Otherwise, I wouldn’t be here now, supported by my society, talking to you.”
A new take on corporate governance
A company that issues transparent financial reports and has a few outside directors, who do not take orders from management, is likely to serve its shareholders better, and achieve better stock returns. That’s the argument for sound corporate governance rules. But is it true?
That question was the subject of a paper presented at a global conference on India’s Financial System held in April at Wharton. The conference was organized by Wharton’s Financial Institutions Center with the Centre for Analytical Finance at the Indian School of Business in Hyderabad and the Stockholm-based Swedish Institute for Financial Research. “The big question is, does corporate governance affect firm values? Or, more importantly, does it matter, period?” Vikramaditya S. Khanna from the University of Michigan Law School asked at the conference.
To tease out the effect of specific rules, Khanna and Bernard S. Black of the University of Texas Law School, looked at Clause 49, a set of governance reforms proposed in India in 1999 and adopted in 2000. Their paper, Can Corporate Governance Reforms Increase Firms’ Market Values? Evidence from India, shows that stronger rules can indeed boost stock returns. Stock prices of large companies jumped 4% after the reforms were announced, Khanna and Black found. “We were quite surprised with how consistent the results were,” Khanna says. It showed that investors approved of the expected reforms, the study concluded. Investors apparently believed that it would strengthen other investors’ sense of trust, making them more likely to buy stocks. Anticipating this extra demand, investors pushed prices upward. Small-company stocks did not benefit as much because the reforms would not affect them for several years. The researchers also found that faster-growing companies benefited more, probably because the reforms would be especially valuable to firms with a heavy need to raise capital.
Could some other factor account for the outsized gains around the announcement? A search of new stories on the day of the announcement revealed nothing else out of the ordinary, Khanna says. “There really seemed to be nothing else going on, except monsoon announcements and heat waves.”
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