In this final part of this four part series of posts on TBI’s organizational structure- one which we have shown has been plagued by rent-seeking practices which have sapped the energy and competitiveness of the company from the start- we look at the real reasons for Mariam’s ouster in late 2015. Why was the TBI Director finally forced out of the company and what does it show about TBI’s fortunes? You will probably not be surprised to learn that we believe it is the clearest proof yet that TBI is a company with a serious inability to grow and compete.

Was She Removed Due to Bad Performance?

If TBI were a healthy company, you would probably assume that Mariam Kartikatresni had been forced out due to bad performance. After all, isn’t that the reason CEOs and COOs usually get shown the door? However, there is nothing about this hypothesis which seems likely to us. The main reason is that Mariam’s performance was always atrocious.

There is a saying in Latin America, “Tell me what someone boasts about and I will tell you what they lack.” In the case of Mariam, she always boasted constantly about her professionalism. Everything at TBI needed to be ‘professional’ and she constantly accused others of not living up to her standards of professionalism, firing one assistant after another. However, this was a woman who routinely turned up to meetings one or even two hours late, who rolled out marketing programs months or even years behind schedule, who failed to open new TBI schools several times because of an inability to raise the capital in time. This was a woman whose time as TBI Director was known as “The Reign of Error” by various wits at TBI. There was not a professional bone in his bumbling nincompoop’s body and her endless boasting about her professionalism was just an attempt to compensate for what she lacked.

Everyone knew she was bad. TBI franchise school owners refused to meet her with her during 2010-2011 due to her history of telling them lies and breaking promises. Everyone had seen the dozens and dozens of people resign rather than have to put up with her narcissistic abuse day after day. Everyone knew that when promised TBI would have 30 schools by 2013 and a head office in Singapore, none of these things would happen on time or probably at all. And here we are in 2016 and none of them have happened. So there was no secret at all about her bad performance. It had been a running joke for the past half decade or more. Everyone knew that she was bad and no one had been able to do anything about it. She just used her connections on the board at UniSadhuGuna and stayed in her plum position despite years of atrocious mismanagement.

But if years of incompetence were not the reason for her demise, then what was?

The Battle of the Rent-Seekers

TBI is a chronically inefficient organization which has not grown at all in years. Under-performance, even woeful under-performance, is completely normal. Some TBI schools such as TBI Serpong have new office supervisors or managers every few months. Others such as TBI Cengkareng and TBI Semarang have gone bankrupt due to chronically low student numbers. Being bad at your job is normal for TBI and even expected. So it simply can’t explain why Mariam’s clique have largely been forced out en masse. There is, however, a theory which explains the situation much better and it relates to the usual pattern of events in a rent-seeking fiefdom when income begins to dwindle.

In a classic study of rent-seeking behavior, Sobel and Hall suggested that while rent-seekers may find their activities complementary in the early stages, especially in a high growth environment when there is a sense of plenty, this situation is unlikely to last. As they observed, “At some point, however, this relationship switches from complementarity and cooperation to conflict, competition, and a war between the groups over funding.”

The Economist magazine has made the exact same point about the Middle East oil-rich states, which are the classic example of rent-seeking countries. During years of high oil prices, the Arab monarchies typically took on more and more public servants, trying to buy loyalty from their subjects. When oil was over $100 a barrel, there was a lot of money to go around and all the well-connected people seeking a piece of the action seemed easy to cut in. However, when the money stared to dry up, wars between the groups over funding started, with the more powerfully connected groups trying to drive out rival clans and cliques, so there is more for their own network. It has been argued that when corruption cases emerge in the Middle East, it is often really about a war over rents. If you can drive powerful people out and take over their turf, you can collect their rents yourself and distribute them throughout your own network.

To quote Sobel and Hall once again: “Some states have experienced spending growth to the point where economic and political constraints on that growth have led to a situation where rent seekers can gain only at the expense of other rent seekers. As that fact becomes recognized, peaceful, cooperative political action between rent seeking groups that prevailed when such action resulted in a larger expenditure (rent) pool might give way to outright war between the rent seekers.”

That’s what has happened between Mariam and NIng Anhar- all attempts at peaceful and cooperative action failed as student numbers dwindled and sources of income dried up. The uneasy detente turned to open warfare between the rent seekers, and Ibu Ning was victorious, driving out Mariam not because she was an incompetent nincompoop but because she was a competitor for increasingly scarce rents (resources). There just isn’t as much money as their used to be (as shown by recent staff downsizing and wage freezes). The reason Mariam, Lilies and Ashley have all gone is so Reza and Ning can lay claims to the money these rent-seekers formerly hoarded. It is ultimately the strongest proof yet that TBI is an organization in rapid decline.