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This case was prepared by James Hoopes, Professor of Ethics in Businessat Babson College, Dr. Leilani Mohd Nor,
Associate Professor at School of Marketing, SRI, Taylor’s University, and Mohar Yusof, Universiti Tun Abdul Razak. It
was developed as a basis for class discussion rather than to illustrate either effective or ineffective handling of an
administrative situation. It is not intended to serve as an endorsement, source of primary data or illustration of
effective or ineffective management.
Copyright © 2018 Babson College and licensed for publication to Harvard Business School. All rights reserved. No
part of this publication can be reproduced, stored or transmitted in any form or by any means without prior
written permission of Babson College.
BAB447 / NOVEMBER 2018
How to Use Virtue in Business: Part A
1981—Petaling Jaya, a Midsized Malaysian City
Hussamuddin was frustrated. It had seemed like a good idea two years earlier when Omar, a
printer, offered to partner with him in his publishing business. What could be more natural than
an alliance between a printer and a publisher?
They had met three years earlier, during Hussamuddin’s start-up phase. While still a university
student, he had published a children’s magazine and then a few books. He took one of his early
printing orders to Omar.
“My business is small. I am just trying to earn my living. Please give a good price, at least for the
start,” Hussamuddin had said to Omar. Sweetening the request with a larger order than he could
usually afford, Hussamuddin cemented the relationship by paying on time. After that, he placed
smaller printing orders with Omar but got the same good price.
Hussamuddin’s business acumen impressed Omar and rightly so. After finishing his university
studies in 1978, Hussamuddin devoted himself full time to his publishing business, which grew
rapidly. But Hussamuddin believed he could grow even more quickly if he had more capital. In
1979, Hussamuddin joined Omar in establishing a new publishing company, Karya Bestari
(“Works of Knowledge”). Hussamuddin invested his publishing expertise in return for his 50%
stake. Omar put in 500,000 ringgit or US$165,000. It was “big money,” as Hussamuddin said, at
a time when per capita income in Malaysia was less than 5,000 ringgit or $US1,600.
Two years later, Hussamuddin saw that the deal not only involved big money but was also a big
mistake. Instead of the fast growth he and Omar had expected by joining forces, Karya Bestari
was losing money. The market had no appetite for many of the books the company had published
since the two men went into partnership.
From Hussamuddin’s perspective, the origin of the losses was obvious. As a condition of his
investment, Omar had brought in his friend, Amin, to help run the business. Hussamuddin had
welcomed the help with management and finance. Unfortunately, Amin also insisted on deciding
publishing questions. He had no experience with the book market.
Hussamuddin understood the marketing side of the business very well. Building a publishing
company from scratch had taught him what would sell. Watching Amin lose money by publishing
the wrong books had been hugely frustrating for Hussamuddin. And once Karya Bestari had spent
For the exclusive use of P. Chang, 2021.
This document is authorized for use only by Polun Chang in BA 512 Spring 2021 taught by John Morris, Oregon State University from Mar 2021 to Jun 2021.
How To Use Virtue in Business: Part A
BAB447 – NOVEMBER 2018
2
the money Omar invested, it had begun piling up debt to, of all people, Omar! As was only fair,
Omar charged Karya Bestari for printing its books. So now Omar was not only half owner of Karya
Bestari but also its biggest creditor.
It was not just the lost money that bothered Hussamuddin. He had come to interpret Omar’s
insistence on having his own man at Karya Bestari as a sign of lack of confidence. And it was hard
on Hussamuddin not to have Omar’s confidence. He had worked all his life to develop personal
virtues such as competence and integrity.
Hussamuddin was certain that Omar was also unhappy with the present arrangement. Omar was
not only losing money on his investment. He would also never be able to collect on the printing
bill Karya Bestari owed him if the company ran ever more deeply into the red.
As he pondered all this, Hussamuddin thought of his parents. They would say that he should not
be discouraged. After all, they had taught him to see obstacles as opportunities.
He had been a diminutive boy destined to grow into a short man, barely five feet tall. In school,
he had been a natural target for bullies. So his parents helped him develop virtues that offset his
small physique.
His mother constantly told him, “Physically you are small, but what makes you a better person is
your character.” She was not trying to console him with the view that the inside of a person is all
that matters. She knew that outward things are important too. She meant that while
Hussamuddin’s size was not under his control, his actions were. The important thing was for him
to act in a way that developed a strong character.
Hussamuddin’s short legs sometimes left him behind his friends, so his mother urged him to walk
fast, a character trait he would keep all his life. It was not just a matter of keeping up. It was a
matter, she said, of getting “one step ahead.” She also taught him that a small person should speak
loudly in order to be noticed and heard. But both of his parents warned him against arrogance.
Fast walking and loud talking would be winning qualities only if balanced by humility.
And humility had to be about more than winning friends and influencing people. That would not
be genuine humility but only a stratagem. Hussamuddin’s humility became genuine because his
parents taught him that it was required by his religion. A Muslim is “one who submits to God.” It
would have been irreligious for Hussamuddin to hold himself above other people who were God’s
creatures no less than himself.
So Hussamuddin tried to practice humility for its own sake. For example, he went to his suppliers’
offices to place his orders, even though he was the buyer and they the sellers. The paradox was
that when humility was cultivated for its own sake rather than as a stratagem, it became even
more strategic. Suppliers, sensing that Hussamuddin’s humility was genuine, were all the happier
to do business with him: “I think that humility helped my bargaining skill.”
Hussamuddin’s father had emphasized that “ethics is a matter of working backwards.” His father
taught that in Islam, all beings are imperfect except the Almighty. People should make goodness
a future goal and then think backwards to understand what to do in the present. Later,
Hussamuddin would sum up the family philosophy by saying, “In our religion, if you want to go
to heaven in your future life, you must perform well in your present life.”
For the exclusive use of P. Chang, 2021.
This document is authorized for use only by Polun Chang in BA 512 Spring 2021 taught by John Morris, Oregon State University from Mar 2021 to Jun 2021.
How To Use Virtue in Business: Part A
BAB447 – NOVEMBER 2018
3
Developing good habits, Hussamuddin’s father had taught, was the key to heaven. Fast walking
and loud talking, softened by humility, were just the beginning. One should practice good actions
of all kinds, always with the goal of making those actions habitual.
His father had started a school for Muslim girls in Kota Bahru, the capital of the poor and
underdeveloped state of Kelantan in northern Malaysia where Hussamuddin grew up. When the
school failed to yield enough money to support the family, his father had started a bookshop on
the side. Helping his father in the shop had taught Hussamuddin the rudiments of the book
business. And the ready availability of books enabled him, again at his father’s urging, to acquire
the virtue of iqra or “the reading habit.”
Above all, Hussamuddin cultivated a habit of generosity. Alms-giving or zakat is one of the five
pillars of Islam, along with testifying to the faith, daily prayers, fasting during Ramadan, and
pilgrimage to Mecca. Zakat helps to purify the soul and prepare it for redemption. Although
Hussamuddin’s parents were poor, they were also open handed. For example, they shared their
food and their home with friends and relatives who came from the countryside to study in Kota
Bahru. As a child, Hussamuddin often saw his mother fry “two pieces of fish,” which “twelve of us
could still share.”
Hussamuddin pondered all this as he tried to decide the right course of action with regard to
Omar. For Hussamuddin, it was not just a question of money. It was a matter of having a chance
to become the kind of person he wanted to be. “Thinking backward” from a future goal, as his
father taught him to do, he knew that he wanted to be a good person who managed his company
well, not just in the sense of making money but operating with a generous spirit. He had to get out
of his present situation, not just because it was profitless, but also because it offered him none of
the spiritual growth he wanted. As long as Amin was at Karya Bestari, it would be difficult for
Hussamuddin to develop the virtue of generosity.
Somehow the management conflicts had to end. Either Hussamuddin or Omar had to have
managerial control and run the company without interference from the other. Hussamuddin was
certain that as long as Omar was part owner, he would insist on having Amin help to manage
Karya Bestari. That seemed to mean that there were only two options for ending the management
conflicts. And both options had great difficulties.
Option 1 was for Hussamuddin to give up his management role at Karya Bestari and let Omar
have full control. Hussamuddin would remain half owner and would share in the profits. But
would there be profits? To offer Omar full control when his agent was causing losses did not seem
like a path to profit.
Option 2 was for Hussamuddin to buy back Omar’s share of the company. Unfortunately,
Hussamuddin did not have the money. His family and friends could not possibly lend him such a
sum. No banker, seeing the losses on Karya Bestari’s books, would make the loan. How could
Hussamuddin possibly finance such a deal?
The path ahead for Hussamuddin seemed filled with obstacles. But all his life he had followed his
parent’s idea that obstacles should be seen as opportunities. There had to be an opportunity in
these obstacles, but what was it?
For the exclusive use of P. Chang, 2021.
This document is authorized for use only by Polun Chang in BA 512 Spring 2021 taught by John Morris, Oregon State University from Mar 2021 to Jun 2021.
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