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The Restorer
Tuesday, 24 August 2010
MORAL CRISIS IN CAPITALISM OVER GREED AND IRRESPONSIBILITY
Mood:  energetic
FIFA World Cup South Africa 2010™ has been touted the best in the history of this number one sporting world event. South Africa, let alone Africa as a continent, received unprecedented praises on hosting this event successfully amidst the prophets of doom and disparagers. They also felt it that it was here. South Africa prides herself. Many, if not all South Africans have a strong believe that the event unfolded the hidden golden thread that meant to tie us into a cohesive society since 1994. The tournament has come and gone but one positive thing it has left behind is that it has helped to foster racial tolerance, at least according to my observation. Business, government, labour and all societal forces in the country breed positive attitudes that the post-world cup will generate positive socio-economic development spin-offs and benefits for all including but not limited to job creation, international trade ties, investors, foreign direct investments (FDI) and increment of tourists on to the Mzansi shores. As a nation we are all positive about these potential developments of our beautiful country. The challenge is for all societal forces to keep the momentum on track. That the world cup has left such soft issues that strengthen external relations and perceptions, what about our own core hard issues? Here I am specifically referring to the discontentment of our society with the high rate of unemployment (over 25%), lack of or slow paced service delivery by government, crime, corruption and other social ills that bedevil our beautiful country. While there are many issues to debate and converse about, my focus is specifically on the greed and irresponsibility to the detriment and at the expense of socio-economic development. Firstly, income disparity between senior executives and lower grade employees is atrocious. Perhaps labour legislation should reconsider minimum wage levels based on the size and profitability of companies. It begs the question why is there a minimum wage and not a maximum. Pardon my ignorance possibly I am reading too much of the literature challenging conventional wisdom. My argument here is that while empowerment seeks to redress socio-economic imbalances of the past through legislation with emphasis on intellectual capital, consideration should be given to a reasonable standard of leaving that sustains the economy through savings that the employees would set aside provided their monthly earnings allow such a characteristic of a saving culture contributing to economic growth with less debt and credit spending.   Is this unfair to the corporates as such interventions could curtail investor interest and capital inflows? Could this be interpreted as killing entrepreneurial spirit when government interferes with the capitalist practices and behavior? Capitalists will surely disagree with me, but the majority of those residing in the second economy will most definitely agree with me. Therefore this warrants a dialogue among all those concern and have interest in the socio-economic development of this country and not be left to business alone. Secondly, it is argued globally, and supported by facts that small businesses (SMMEs) generates 80% of employment in all the countries that have had policies developed to support entrepreneurship and encourage entrepreneurial fortitude.  It saddened me and sometimes get perturbed that while the government, through BBBEE legislation, attempts to redress historical socio-economic imbalances, big businesses hide behind their massive revenues running into billions by contributing to the tax base and behave as if South Africa is a developed nation with 60% of its economic active population (EAP) in the upper income brackets and that there are no small businesses that need to be developed to become effective in the mainstream economy so that they in turn benefit through incentives devised by regulations for that purpose. It is dreadful to learn how corporate South Africa, especially big business employ greed capitalistic tactics in their procurement processes to benefit a selected few companies mainly those that the powers that be have a relationship with directly and indirectly. How many stories have you had that the big boss has instructed a subordinate to grant or award a business to a company that did not even appear on the bid list. And I am not talking about corruption that has permeated the business-political milieu; I am referring to cases of supreme unscrupulous behavior and fraud by senior executives at the expense of small business development. Contracts get extended for no certain reasons to extend a hand of “broerskap” while procurement processes are being deliberately delayed. I have had many cases where big companies get awarded tender contracts (both public and private tenders) with the proviso or a conditional clause that sub-contracting will be given to the small and emerging enterprises. But when the implementation and execution of those contracts take effect, none of the companies listed as subcontractors appear on the site where the work is done. This is tantamount to daylight robbery of the socio-economic development policies and regulations by perpetrating greed and irresponsibility in the name of capitalistic appetite. There’s plenty of such irresponsible venomous practice by both private and public sector that would, in the long run, cease the developmental path of our nation and halt us back as a developmental state and discourage entrepreneurship to the detriment of economic growth. The time is opportune for South African leaders to elevate business principles and practices for the benefit of the nation and its development capitalizing on the momentum that the world cup has catapulted. I derive lessons from leadership practices (good and bad) of European and American successful multinationals. When they develop organizational value system, they follow and practice that to the core. There are dedicated publications that celebrate the success of companies with high level of value system that contribute to their sustainable success. One system is the fundamental value of decency and transparency. Like Dov Seidman, the hottest advisor on the corporate virtue circuit globally, I am obsessed with the classic philosopher’s challenge: Live your principles. Seidman maintains that globalization has made it increasingly difficult for companies to differentiate themselves based on their products alone. Whatever your product or service might be, chances are that someone on the other side of the world can copy and sell it for less money. And if money is the only bond between a company and employees, the latter will quit the moment another company offers them more cash. All the more important, then, is for companies to compete at the level of behavior. He says this will be the soft currency of the 21st century. The world has changed, argues Seidman that the winner takes-all strategies are obsolete. I could not agree with Seidman more. Reputation is one of the fundamental values that would drive companies’ competency and contribute to profitability. The rise of information technology has made good behaviour more important because it has become increasingly hard to hide bad behavior and it’s also becoming more difficult and much harder to manage reputation the old-fashion way, by hiding behind lawyers and crisis-management consultant. Seidman contends that ultimately, the only way to enjoy good reputation is to earn it by living with integrity.  

Posted by vusmuz at 10:33 AM EDT
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