Prof Ted Malloch is an international economist and a fellow in management practice at the University of Oxford’s Said Business School. Prof Malloch, who has authored several books on business practices, recently published his new book, Practical Wisdom in Management: Business Across Spiritual Traditions, which stresses on the need for reconnecting businesses with spiritual and philosophical traditions.

During a recent visit to Oman, Prof Malloch spoke to Muscat Daily about how spiritual traditions play an important role in business and also shared his views on the world economy and Oman.

How do spiritual traditions inspire corporate leadership and cultures?

Many global companies have developed a short-term focussed mentality rather than long-term perspectives. I argue for long-term thinking and planning for companies, which is an important factor in the success of businesses.

Some of the companies I have studied have been in existence for hundreds of years, most of them are large companies but some are also medium sized firms. These are responsible organisations and have a long-term perspective with an embedded idea of sustainability. Their business plans are not for the next quarter or next year but for hundred years.

We found such companies in every culture, be it the US, Europe, Japan and even in the Middle East. They are very careful about their relationship with the environment and employees. They do not see themselves in a narrow short-term profit maximisation mentality but have a very long-term perspective.

In our study we call them virtue businesses: Companies that take virtues very seriously. These are excellent companies with focus on different directions, they are not just one dimensional. They are very much involved in the spiritual and philosophical traditions of their culture and take them very seriously.

The first thing we found in companies linked to traditions is that they tend to be long-term oriented. And second thing we looked that they have a different idea of leadership, which is responsible leadership. The leaders – CEOs and managers – of these firms are not of the view that the company exists just for them and that they can profit from it. They have an opposite view and build their companies over a long period of time. All the businesses that are connected to their traditions have a sense of purpose and succeed over a long period.

Has it become more important for companies to connect to traditions after the global financial crisis?

Focusing on virtues has become more important than ever in business after the global financial crisis. Without rediscovering our virtues we cannot understand or resolve the deepest roots of our present situation.

According to estimates, the world lost US$35tn as a result of the crisis and the bad behaviour of companies; and we are yet to tide over it. These numbers total up to nearly ten years of economic development for the world.

Why did we lose that much value and what lessons can we learn from it? The companies were badly managed with short-term orientations and a profit-maximisation mentality. They were over-leveraged, especially banks, and they purchased wrong types of securities and instruments. It was the CEOs and the whole managerial class that fell victim to the temptations of excessive risk-taking and greed with disastrous effects. So there is a lot to learn from that period.

The practical wisdom can be gained by connecting with the virtues found in all the world’s spiritual and philosophical traditions, in every culture and religion. In each of the spiritual traditions around the world there are similar virtues. Because people are interested in honesty, humility, generosity and care for environment, which are found in every tradition.

There has been a lot more focus on ethics after the crisis. What new thinking and skills do you think leaders need to acquire to meet challenges in times of economic uncertainties?

We carried out a survey at Oxford in which we spoke to nearly 200 leading CEOs all over the world on a one-on-one basis.

It was suggested that corporate leaders must possess a more strategic leadership mentality, which focuses on the long-term. There is so much uncertainty and bigger changes are taking place and the scope, speed and significance of those changes are far greater than ever before. So leaders have to be more flexible and willing to learn from circumstances. I think this type of mentality is essential in leadership.

Another finding of the survey was that business leaders must be able to deal with doubts. There is so much uncertainty around and you have to deal with doubts and be adaptive.

There is also the notion of purpose that should be adopted. Most young people are interested in joining companies that are good, do right things and treat employees and the environment well. A responsible leader should be able to bring the environment, people, profit and society into a common framework. We also found that companies with spiritual and philosophical traditions get more acceptability because they have a high ethical framework.

What is your outlook for global economy in 2015?

How do you see the situation in the eurozone? The IMF recently lowered its forecast for global economic growth. The US is recovering slowly. China and India are growing, but not as fast as they were expected to. But the situation is Europe is quite pathetic. There seems to be two different Europes at this time, one Northern and the other Southern. It is particularly bad for Greece where the crisis has resurfaced again. I personally think that it is very likely that Greece will exit the eurozone. If it does then the question will be whether it will be a slow and moderate withdrawal or a quick one.

The European problems are slowing down the engines of global growth.

The countries in Southern Europe such as in Scandinavia, the Netherlands, Belgium and Germany are growing and could grow further. But Southern Europe is facing problems with countries like Spain, Italy and Portugal facing difficulties and high unemployment rates. Some of the banks in Europe have large exposures to Greek debt, mostly French and German banks.

What is your view on the Oman economy?

It is quite interesting to see how Oman is diversifying its economy. It is a good strategy to reduce the future dependence on oil. The development of light manufacturing industries, tourism, logistics, and petrochemicals sector is creating a stronger economy. Oman has stability and with the development of strong logistics and ports it will become a place where people would want to do business. The country is very well-positioned and moving in the right direction. It should keep doing what it is doing and do more of it.

The sultanate should also focus on higher education to develop the next level of managers and professionals. It would be wise for the country to build a strong base of knowledge workers and processionals in order to create a world-class workforce.