By Mariano Leandro Tolentino IV
(The author is the grandson of Bro. Dr. Mariano Defante Tolentino Jr., ΤΜΣΦ 1954, who recently passed away on January 3, 2016. The article was titled “Strategic Management Term Paper: An Interview of Dr. Mariano Defante Tolentino Jr., which the author submitted as his paper on 11/3/2014 while at the University of the Philippines)
During the start of this class, the professor discussed that the midterm paper is about an interview of a CEO. At first, I did not expect that I would one day interview my grandfather. I thought that at 87 years old, he might not have the strength to do an interview with me. However, due to the initial invitation rejections I received, I felt that I did not have a choice but to interview my grandfather. Fortunately, I was able to interview my grandfather and learned a lot about running a company. It was here that I learn about running a company. It was here that I learn that the head of the company represents that company and that every action he does will affect the company and that the values he holds true in his life will also be the values that the company will value. So, after a trip to Iloilo here is my interview with Dr. Mariano Defante Tolentino Jr.
About Mariano Defante Tolentino Jr
Mariano Defante Tolentino Jr. was born on August 21, 1927 at Dumangas , Iloilo. He is the son of Mariano V. Tolentino Sr. and Estrella D. Tolentino. He has four brothers and a sister, all deceased- Virgina Tolentino Braga, a housewife, Paulino Tolentino Sr., a doctor, Pedro Tolentino, an engineer and George Tolentino, a doctor. He first married Dr. Joy Lillian Sonido Tolentino and with her has two children, Marianne Joy Tolentino-Padiernos and Atty. Mariano Pablo S. Tolentino. After his first wife passed away last March 1984, he married Rosita Naya Tolentino with whom he has a son named Russel Mark Tolentino.
Dr. Tolentino had a simple life when he was growing up in Dumangas, a coastal town in the province of Iloilo. According to him, there were no cellphones or computers then so they had to play in the plaza or climb trees or run in the fields to have fun. There were very few roads back then so going to the city was practically impossible because of the long ride. Thus, the people of Dumangas only had the plaza as its social center. In his teenage years, World War II happened and the Japanese occupied the Philippines. During this occupation, he was made a “kargador” or porter by the Japanese. Therefore, he would carry big pots of food and follow the Japanese soldiers wherever they would go. When the Japanese Soldiers stopped, he would also stop to prepare the food for the Japanese Soldiers. According to him, it was his perseverance and Faith in God that made him survive the ordeal.
Being a doctor
According to Dr Tolentino, right after World War 2 ended, his father, Mariano V. Tolentino Sr. received a medal of honor for being part of the resistance to the Japanese. Aside from the medal of honor, he also received monthly compensation from the Philippine government which he used for his children’s education. Dr. Mariano Tolentino then took up his Associates of Arts Degree in Siliman University in 1949.
He later took up Medicine at the University of Santo Tomas and earned his Doctor of Medicine degree in 1954. As a student he was a member of the Tau Mu Sigma Phi Fraternity at UST. As a doctor, he took Surgery as his specialty and he went to the United States where he became a resident doctor at the Philadelphia General Hospital. It was here where he met his first wife, Dr. Joy Lillian Sonido Tolentino and where his daughter Marianne Joy Tolentino-Padiernos was born. It is in this place also where he and his brother Paulino Tolentino Sr. performed the first successful heart transplant of a pig. However, after two years of working in Philadelphia, the young family decided to go back to the Philippines where they started a new chapter in their lives.
Vice President of RCPI
Captain Mariano V. Tolentino Sr. was a captain of the Philippine forces in World War 2. When the Philippines was occupied by the Japanese, Capt. Tolentino went into hiding. It was in this hiding that he used his knowledge in engineering and radio to contact Gen. Douglas McArthur in Australia. He then used this knowledge in founding the Radio Communication of the Philippines which was a telegraph company in the Philippines. When the young family of Dr. Tolentino Jr. came home from the United States of America, he discontinued with his medicine practice and concentrated on the family business of the Radio Communication of the Philippines. He along with his three brothers and 1 brother in law, formed the Board of Directors and Dr. Tolentino Jr. became the Vice President of Administration.
At first the Board of Directors was working fluidly as a team. However, infighting between the group soon started. Mr. Agapito Braga, Dr. Tolentino’s brother-in-law and RCPI’s Chief Executive Officer at that time, was rumored to have been stealing money from the corporation. The four brothers wanted to file a case against their brother in law but their mother persuaded them not to do so as he is still considered family. It was this time that Dr. Tolentino Jr. did not want to do anything anymore with the company and thus decided to sell his shares. He then invested the proceeds of the sale in a small corporation called Joy Agro Industrial Corporation.
President of Joy Agro Industrial Development Corporation
After selling his RCPI shares, Dr. Tolentino bought a lot of agricultural properties in Panay Island. He bought fishponds in the Passi, Dumangas and Guimaras part of Panay. He then bought a 96 hectare sugar cane plantation in Anilao , Iloilo. At the death of f his father, he acquired all of his father’s properties due to him being the namesake of his Dad. He then transferred all ownership to the Joy Agro Industrial Development Corporation where he was the majority stock holder and president of the corporation. His children then became stockholders of the corporation. He said transferring these ownerships to the corporation will limit the liability of the owners towards their creditors. This means that in case of liquidation of the company, if the company’s assets are insufficient to meet the liability, nothing is required to be contributed by the owners. Only the owners’ contribution is at stake rather than their personal assets.
However, Dr. Tolentino realized that in the agriculture business, it is very seasonal. During the rainy season, there is absolutely no harvest on sugar canes and harvest is expected only during the dry or summer season. Therefore, there is no money to be earned in the sugar industry during the wet season. Furthermore, crops also get destroyed due to strong winds and storms which will lessen the farm’s productivity. Another disadvantage of being in the sugar industry is that it is dependent on the Office of the President for its survival. He mentioned that in the Cory Administration, the sugar industry business was booming. This was because Cory Aquino had to help the Sugar Industry due to it being the family business of her own family in Tarlac. However, during the Ramos administration, former President Ramos was apathetic to the sugar industry and thus the sugar industry business did not do as well. Therefore, Dr. Tolentino decided to invest in non-agricultural businesses in order to augment the sales his corporation earned through the sugar plantation. In 1996, an arsonist burned down a building in Jalandoni St, Iloilo City right in front of the University of San Agustin. Dr. Tolentino took advantage of the situation and bought the burned down lot. From there, he built his own 4 storey building which is currently serving as a female dormitory to students of the University of San Agustin.
The structure of the organization is that Dr. Tolentino as president is the head of the company. He is the one making the decisions of the company. He is assisted by his executive assistant who supervises the business operations of the building. She does the clerical work of the building and also does the representations when meeting the building’s tenants. She also acts as the supervisor of the building’s staff workers like the dormitory’s guardian, electrician, janitor, runners and other employees. On the sugar cane plantation side, he has a foreman who acts as the sugar planter’s supervisor. He is Dr. Tolentino’s first point of contact when he deals with the concerns of the sugar cane plantation. Since Dr. Tolentino juggles his time between the building and the sugar cane plantation, the foreman must make sure that the operations in the sugar cane plantation are going well.
According to Dr. Tolentino, with this small organizational structure, he was able to micromanage the business. With this micromanagement, he was able to talk to the employees personally and get to know them on a personal level. He was also able to see first hand how the businesses are running which he would not have done if this company had a big organizational structure.
When asked what his motivations are in running this company, his first answer is his family. Through this business, he wants to bring honor to his parents who made him the person he is today. He also intends to construct a building in honor of his parents later on. Through this corporation, he wants to immortalize his first wife (Dr. Joy Lillian Sonido Tolentino) who passed away at a very young age of 57. Lastly, it is also through this business that he is able to provide for the needs of his children and grandchildren.
His second motivation is God. As mentioned earlier, during World War 2, he was forced to become a “kargador” of the Japanese soldiers and the Japanese gave him a very difficult time. According to him, it was through his Faith in God that he persevered the tough times with the Japanese and it is through this business where he wants to glorify God who has constantly given him strength even in his old age.
His last motivation is his employees. He believes that the success of the corporation will largely depend on the employees of the company. He said that the employees play a huge part in the company’s success. If you do not take care of them, they might do something that is detrimental to the company.Therefore, he wants them taken cared of. He makes sure that his employees will continue their education so he pays for their education. He wants to make sure that his employees are healthy so he makes sure that his employees eat during lunch. Lastly, he is able to show concern for his employees through his “management by walking.”
We then talked about what values he wants the corporation to have. Since he values his family so much, he wants the corporation to value the family. He does not stay up late in the office and makes sure that he reaches home before 6:00 pm. As such, he also expects each employees to do the same in not staying up late at work and instead to go home on time so they can spend time with their loved ones. Secondly, since he values the family, he wants the corporation to have a family atmosphere. Meaning, each employee should treat each other like family. This makes him able to talk to each employee personally. This also will allow him to “manage by walking around” where he juggles his time traveling from the farms to the building in order to see what is happening in his corporation. Having a family atmosphere also eliminates corporate “red tape” as employees do not have to go through a bureaucratic process in their requests or suggestions and instead they can go straight to the President for quick decision making. This saves the corporation time and money. However, he said that this family atmosphere also made their employees less professional and this has led to some employees being complacent at their work and resulted to “magmakaawa kay boss” so that they can get away with their complacency.
Another value we talked about is simplicity. He said that his father, Mariano V. Tolentino Sr. is an Ilocano, and the Ilocano stereotype of being “frugal” is quite accurate to describe him. According to Dr. Tolentino, he did not receive a single gift from his father during Christmas. Because of the frugality of his father, he was brought up to have a simple lifestyle. As such, he wants the corporation to value simplicity. This will discourage the corporation to make lavish transactions. This has led to the company minimizing its expenses by avoiding lavish things owned by the corporation. This simplicity also gave the corporation an opportunity to send some of its employees to school so that they can finish or continue their education which can improve their employees productivity and give them opportunities for career growth.
He then mentioned to me that health is important. He said as a doctor, he knew that people should take care of their health. In business, a person can not work if he is not well and if he does not work, he will not have a livelihood. So he makes sure that his employees are healthy. If they are sick, he will not hesitate in giving them medical consultation and he makes sure that they have enough rest before they work. That is why he does not give overtime work so that his employees will not just have time for their families but also time for rest.
The last value he talked about is education. He said that education is important in that it gives you an opportunity to improve your life. It was through education that he was able to become a doctor, make him travel to the United States of America. This is why he made it his mission that his children graduated from college and it is his pride and joy that one of his sons became a lawyer, Atty. Mariano Pablo S. Tolentino (my father). He would also want his employees in the corporation to value their education. That is why he did not hesitate in sending his employees to school for educational opportunities so that they can have more opportunities to improve their life. It is also through this simple act of sending his employees to school where he wants to show that he cares for the well being of his employees.
Challenges Faced as President of Joy Agro Industrial Development Corporation
The challenges faced was the next topic we discussed. As president of the company, Dr. Tolentino faced a lot of challenges. The first challenge he faced was the Comprehensive Agrarian Reform Program. The Comprehensive Agrarian Reform Program is the program started by President Corazon Aquino which aims to redistribute agricultural land to the landless farms. Under this program, all lands exceeding seven hectares were to be bought by the government and sold to the landless farmers. According to him, the premium paid by the government is not enough compensation. Because of this program, he contemplated on the possibility of converting the agricultural land to non-agricultural.
Another challenge he has experienced is the climate. Since the sugar industry only makes money during the dry season, Dr. Tolentino had to really manage the costs during the rainy seasons so that sales during dry season are enough to cover costs all year round. Another challenge brought about by the Philippines’ climate are storms that destroy agricultural lands yearly and according to him, there is nothing he can do about it and is part of the risk in being in the sugar or agricultural business. However, this risk can be lessened. He even received a proposal from a real estate company of converting his 96 hectare farm to a residential subdivision. However, he declined this proposal. He then decided to enter into a non-agricultural businesses and opened a female dormitory right in front of University of San Agustin in order lessen the risk of relying solely on agriculture as the main source of income for the business.
Another challenge he has faced is the non-payment of his tenants in his building. The building is a four story one where the third and fourth floors serve as a dormitory for female University of San Agustin students, the first floor of the building is rented out to companies for commercial use and the second floor is rented out to businesses as office space. However, a lot of these companies renting out these spaces where not paying their rents on time. As president of the corporation, he aggressively went after these companies to pay their rents and did not hesitate not renewing the contracts of these delinquent companies. This act of going after the delinquent payers showed that he was a serious man in his business and because of this, companies who rent out the office spaces have been regularly been paying their dues on time.
The last challenge he faced was theft by his own employees. As the company president, he delegated the paying of the company expenses to one of his employees. One of his employees usually just reminds him of the company expenses and would usually just give cash to the employee and the employee will be the one to pay the expenses. However, under this scheme, the employee will just pocket the money and not pay the expenses. This scheme went on for months until the Iloilo Electric Company sent them a disconnection notice and notifying them of the non-payment of their electric bill. Because of that, he conducted an investigation of the matter and found out that this certain employee has not been paying the expenses and that he has gone into hiding ever since. He then made changes in the corporation by only allowing certain people to touch the corporation’s money. He assigned a finance officer who will be the one responsible for the cash transactions of the corporation. Although he has not recovered the money stolen from the company, this incident has taught him to introduce control measures and to make sure that the company’s resources will not be stolen again.
Goals of the Corporation
Unfortunately, the corporation has no mission-vision statements as of the moment. However, the goals of Dr. Tolentino for the corporation are:
1. To be a self sustaining business- As of the moment, the corporation has not had a healthy cash flow due to the non-collection of receivables and theft by an employee. Therefore, the corporation had to rely on loans from banks for the business to continue. Dr. Tolentino has recognized this. So, he improved the collections of the company and he made a system that will monitor the flow of money in the corporation. Although, he realized that these steps are not enough to improve the sustainability of the corporation in the long run, he is open to new suggestions on how to achieve this goal.
2. To venture into other non-agricultural businesses- As mentioned a while ago, entering the agricultural or sugar business can be disadvantageous to the businessmen because of the Agrarian Reform Law and its seasonal business nature. Therefore, he saw a need to enter into non-agricultural businesses and divest some of its agricultural holdings. He has given up some of the corporation’s agricultural land and some of its fish ponds. Then, he was able to venture into the real estate business by offering office and commercial spaces to businesses. Plus, he was also able to offer bed spaces to female University of San Agustin students. He was also about to embark on another non-agricultural business, buying and selling of houses, however, he had to lose these properties to banks due to the default of certain loans. It is in his wishes that a 2nd building of the corporation be built, this time in his hometown of Dumangas, Iloilo.
3. A succession plan-Dr. Tolentino is planning a succession plan for this corporation. He is already 87 years old and he still runs the family businesses. He currently feels that mortality is catching up on him and that he can not continue running this business in the coming years. So far, he is thinking of whether to give the reigns of the business to one of his three children or to an outsider. However, none of the three children seem interested as they have there own endeavors. On the other hand, he does not know if he trusts an outsider in running the business. He will be using these next few months charting the direction of his corporation through naming his successor in the business. Since this is a very important choice, he will be taking his time in making it.
After doing the interview, I have become fully aware of the problems the company/corporation has been facing. I have become aware of the disadvantages of being in an agricultural business and I was able to see the importance of collecting the receivables of the company. I also saw the importance of having a management control system in and the importance of having a professional relationship with employees. I still do not know what the succession plan of the company will be. However, if chosen to be the next leader of the corporation, I will institute the following changes:
1. To 100 % divest in the agricultural business- Living in Iloilo, I have seen how important agriculture is in our country. However, this business has too many risks and these risks are uncontrollable. As such, I will divest the agricultural products and concentrate on non-agricultural businesses most especially real estate.
2. To put a professional atmosphere in the workplace-I respect my grandfather in his decision of having a “family atmosphere” in the workplace. However, as his experience has shown, this has led to his employees having a complacent attitude and it has led to employees abusing the trust given to them. Therefore, I will totally go for a professional atmosphere in the workplace. This will lead to people removing their complacency at work.
3. To improve collections effort- Since I decided to divest in the agricultural businesses, a huge part of the company’s revenues will come from the rent paid by the tenants. Therefore, the collections effort needs to be improved. In order to improve collections, I will give incentives to tenants who will pay their rent on time. I will give a discount to those tenants who will pay early and another discount to those tenants who will pay their rent months in advance. I will also organize a team whose sole purpose is to collect rent from the tenants.
4. To put a control system in the cash flows of the company-Dr. Tolentino has started doing this to the company by employing one person who will be personally responsible for the money. However, I will reinforce the control system by paying through checks. This will ensure that the person responsible will not be able to pocket the money. Another reinforcement to the control system is that the person assigned to handle cash will be different from the person who does the accounting books. This will eliminate the possibility of the accounting books being cooked by anyone.
5. To change the organizational structure- Since majority of the work is done by the President, I will change the organizational structure of the company. I will divide the staff into small teams which will be responsible for certain operations of the company and put a head in charge of a team. For example, I will put sales team which will be responsible for getting businesses to rent the office or commercial space, and I will form a collections team which will be responsible for collecting the rent or payment from the tenant businesses. In this way, it is better for me to monitor the businesses and through the heads of this team, I can pinpoint who is the person responsible for the success or failure of the operations. I will also create my own human resources department which will be responsible in taking care of the employees by providing them their benefits, assigning them proper job matching and training them for their career growth. The reason for doing so is that for one I am not that experienced in handling human resources and I believe that at this moment it would be better for me to outsource the Human Resources to a more competent individual.
Tau Mu Sigma Phi thanks Mariano Leandro Tolentino IV for sharing with us the life of his grandfather, our dearly departed brother, thru this term paper. The fraternity likewise extends our condolences to Dr. Tolerntino’s family. We are eternally grateful. Hail Tau Mu! – Bro. Dr. Ferdinand Magno, 13 Men and a Baby