Relationships are of vital importance in business, whether they be with customers, banks or involve "man management", writes Caroline Madden

IN THIS week's visual case study available on www.eoy.tv, we hear the fascinating story of how chartered accountant Aidan Heavey managed to break into - and succeed in - the world of exploration with Tullow Oil, the company he founded in 1985.

One of the many interesting observations Heavey makes is the importance of establishing very good relationships with the governments of the African countries in which Tullow operates. If you dig a little deeper and have a look around Tullow's website, www.tullowoil.com, you'll discover that fostering strong relationships is one of the company's core values.

For example, Tullow goes to great lengths to build positive relations with the local communities in which it operates, supporting and empowering them through health and education programmes and so on.

Heavey understands that relationships are of vital importance in business.

And according to Loman O'Byrne, chief executive of the South Dublin County Enterprise Board, business is all about relationships. "It's important in every aspect of a business."

The most obvious aspect is the business's relationship with its customers and, in this area, O'Byrne believes the Irish excel.

"I think our cultural style of dealing with other people - a basic respect for and interest in other people - stands to us all over the world."

Another area where relationships are hugely important is "man management".

"The key roles of a manager are motivation and decision-making, and motivation really comes down to relationships with people," he explains.

"There are very few successful business people who are not good at handling their employees.

"It's so hard to succeed in business unless you have some sort of people skills," he adds. "If you don't you've really got to team up with people, or employ people who do."

What about fostering strong relationships with the local community by "giving back", for example by funding local projects?

"It does help as a form of PR - they're looked upon very much better by their communities," O'Byrne observes.

However, the difficulty is that these sort of corporate social responsibility (CSR) programmes must be funded from profits, and in the current environment companies are keeping a very tight lid on non-essential outgoings.

"In my view you can't sacrifice the concentration on the bottom line," he says, "because a company that's going into losses and not succeeding in its marketplace is not going to be much use to its community in the long run or even in the medium term. So in order to be of use to your community you have to survive. In order to survive you have to be profitable."

Relationships are also important in areas that you might not necessarily expect, for example in a business's dealings with its bank. In fact this is of such importance that the Enterprise Board runs courses to teach businesses how to build a good relationship with their bank.

But surely banks are just interested in hard facts and figures? Can a strong relationship with your bank manager really influence their willingness to facilitate you?

"Very much so," O'Byrne says. "I think the customers who do best out of the banks are the ones who keep closely in touch."

Given the current financial climate, the relationship a business has built up with its bank has become more critical than ever.

"Lending practices are getting stricter, so everything you can have in your favour when you're looking for money, such as a good relationship, is definitely worthwhile," explained a relationship manager at a major Irish bank.

Banking is a very personal business, he says, so, for example, it might be worth inviting your contact in the bank out for a site visit so they can gain a better understanding of the nature of your business. Trust is also key, so the business must build up a track record of delivering on any financial projections provided to the bank.

It's also important to be honest and upfront. Banks don't like surprises. So if something goes wrong, for example the business loses a major contract or a supplier goes bust, they should pick up the phone to their bank straight away rather than letting it find out by reading it in the papers.

Tullow Oil - business relationships

This week's case study ties in with the following areas of the Leaving Cert business studies curriculum:

Unit 1: People in business - looking at relationships with all stakeholders, such as African governments

Unit 2: Enterprise - Aidan Heavey demonstrates some of the key skills and characteristics of an entrepreneur,

eg ambition and confidence

Unit 6: Domestic environment - Heavey's reference to care for the environment links well to the section on the ethical and social responsibility of a business

The Irish Times Business  Education Series

The Business Education Series provides second-level students with an insight into key business issues, and is published every Friday in the Business This Week supplement.

It is intended to complement a series of 12 visual case studies available on the Ernst Young Entrepreneur of the Year programme's new online business education channel www.eoy.tv. Teacher support notes are also available here. Students can watch the clips at home in their own time or in the classroom with their teacher.

The case studies have been developed in collaboration with the Business Studies Teachers Association. Each case study is directly related to the Leaving Cert business course, and links to the curriculum are outlined here each week.