Businesses are sometimes tempted to focus on short term financial gains by turning a blind eye on ethical practices.
In Zimbabwe, routinely rubbishing ethical standards and in some cases going to the extent of institutionalising unethical business practices continues to be the preferred means of doing business ostensibly to “mitigate” the negative effects of the operating environment.
The economy today continues to face daunting macroeconomic challenges that include a tight liquidity crunch, undercapitalisation, rundown infrastructure, a non-performing manufacturing sector and unemployment, among others.
However, to reason that violating the rules of good business conduct is in itself a solution to existing challenges is wrong and myopic.
When businesses turn their back on ethical practices because “it’s the way things are done these days” or “everyone is doing it”, means they have chosen to be part of the problem making transition to responsible business conduct even more difficult.
Unethical business practices have one known end-result, which is the eventual downfall of the business.
The collapse of Enron and Worldcom in the United States in 2001 provides the most telling example of what happens when businesses choose to be unethical.
And the fall of once promising banks in the country such as Trust and Barbican, the abuse of depositors’ funds at Renaissance Merchant Bank and Interfin, the apparent cases of rent-seeking and state capture in government, and the “salarygate” scandals in parastatals and local authorities, are all telling examples.
Focusing on short term gains undermines the sustainability of businesses and hurts the wider economy.
The predatory business practices that continue to define the business terrain in the country must be rooted out.
Banking institutions must be stopped from continuing to levy the slave bank charges they are forcing down the throats of the banking public since the expiry of the MoU they signed with the RBZ to curb such increases. The economy has been hurt for too long, and businesses must strive to rise above current challenges to become part of the solution by thirsting for responsible business practices.
Companies must introduce formal ethics management processes in their operations.
Experience shows that ethical business practices enhance company reputation, help to attract investors, and improve business profitability.
They protect supply chains and help companies to become business partners of choice. With effective ethical processes in place, businesses will reap more in terms of market dominance, securing community good will, and increasing shareholder value.
A research carried out by the UK Institute of Business Ethics from 2003 to 2007 proved that ethical business practices are positively correlated to business financial performance, and periodical surveys carried out at Wall Street show that business ethics positively influence success factors such as stock prices and customer purchasing patterns.
Corporate leaders in the country should stop exposing their businesses to needless risks by engaging in unethical business practices that seek to achieve short term financial gains whose purpose in most cases is to satisfy the voracious greed of those in positions of power and authority.
Instead, businesses must start adopting formal ethics management processes to anchor their corporate governance and operational processes.
A formal ethics thrust is visionary and transformational in nature, providing clear behavioural sign posts to employees and everyone else in the organisation. It is a behaviour management intervention that helps businesses to migrate towards responsible business conduct.
Of course, running businesses ethically cannot be viewed as a new phenomenon in the country because corporates have always been run ethically, but up to the late 90s. Serious ethical challenges in business came with the socio-economic and political upheavals experienced at the turn of the millenium.
So what should be recognised as new is the adoption of formal ethics management processes and allowing ethical leadership and ethical decision-making to become core elements of strategic planning and management processes.
Businesses should understand that introducing corporate ethics will help to tame the minds of those prone to taking the slightest opportunity to milk their companies.
The business sector today demands sober and committed leaders who have a clear understanding of the transformational challenges facing the economy. The economy is bleeding and cannot continue to be held to ransom by self-serving leaders who perpetuate business practices for personal gain.
The business sector can no longer afford leaders who are insensitive and wish to continue to needlessly drag their businesses into shadowy places in order to strip them of their assets.
The business sector is yearning for dynamic leaders who have an insightful understanding of the existing challenges in the economy.
The corporate sector wants leaders who will anchor their business operations on sustainability, as well as using their knowledge and positions to set the right tone across the business, including embedding responsible business practices at all staff levels and across business operations.
The country is craving for transformational leaders who are ready to effect change through ethics-rooted strategies. The sector wants ethical leaders who will rekindle employee commitment towards achieving company goals and objectives.
It wants leaders whose business conduct reflects a spirit of diligence, care, reason, fiduciary caution, and the desire to take care of all stakeholders’ interests. Yes, the tone at the top is paramount because once the leader shifts into the ethics gear, the whole organisation follows suit.
Mhonderwa is an ethics consultant with the Business Ethics Centre. Sent feedback to firstname.lastname@example.org or call 0772 913 875