adminclose shop on the basis of exogenous factors.
While businesses are unique in terms of their size, complexity, resource base, product line and management, one critical factor that has tended to define the success or failure of a business is whether it is able to act responsibly and meet the reasonable expectations of its stakeholders.
Acting responsibly and meeting stakeholder expectations is premised on the propagation of an ethical culture in the business.
Every business has stakeholders that include customers, employees, suppliers, investors, the environment, shareholders and managers.
From the business, customers want quality products, and employees want their welfare to be taken care of, including having an outlay of good working conditions.
Investors want a return on their investment, the environment needs preservation for posterity, and shareholders want value for their money.
A responsible enterprise should therefore generate revenue by satisfying customers, it should attract capital by meeting investor expectations, and it must increase effectiveness by attracting highly skilled and competent staff.
A responsible business should exhibit transparency in financial matters, and workplace health and safety issues must be prioritised.
The responsible enterprise should ensure it is compliant with the laws of the land including industry rules and regulations. Improved business performance, productivity and increased profits come to those who effectively and efficiently foster and meet the reasonable expectations of their stakeholders.
While success in business is ultimately measured in terms of profits and losses, the ethically responsible enterprise knows that taking care of stakeholders’ expectations results in long-term growth and profitability.
Businesses whether small or large, should act responsibly all the time.
It is indisputable that the major goal of an enterprise is to make profit and increase shareholder value, and when business operations are anchored on sustainability, more profits and shareholder value is realised in the long term.
Profits made using unethical means are gratifying in the short term, but they clearly don’t guarantee that more profits will be made tomorrow, and worse still, they expose the firm to sudden and painful loss of business in the long run.
Companies can only sustain profitability in the long term when they adopt ethical means of making those profits.
Responsible businesses should therefore see the value of going beyond short-term profiteering to consider the people, and the planet as key elements of sustained profitability.
The triple bottom line or the three Ps (profit, people and planet) has in recent times become an unmistakable cornerstone for sustainable business success whether the business is for-profit, or not.
A responsible business should be inspired to contribute towards national economic development.
It should take initiatives and inspire change by contributing to efforts that promote evolution to responsible business conduct in the economy.
This is achievable when firms take the initiative to fund genuine efforts to bring about behaviour change in the economy, and when they engage in broader corporate social responsibility programmes that targets not just the community in which they do business, but the society at large.
Traditionally, people have tended to speak of business in terms of products, jobs, and profits without talking much about its obligations to the community in which it does business.
Corporate social responsibility is a company-initiated activity where entities invest time and resources in improving the welfare of the communities in which they do business.
It means engaging in the construction of schools, roads and hospitals, providing clean water, and it may also include caring for the poor and disadvantaged in those communities. Corporate social responsibility has over the years become a powerful tool in building brands and securing community goodwill.
A good corporate social responsibility policy can actually give a company a competitive edge and encourage people to purchase products based on a solid belief that the company operates with the interests of customers and the community at heart.
So, it really matters how profits are made, how wealth is distributed, and whether businesses are operating in a sustainable way. Economic growth and development and the improvement of the people’s living standards in communities are spin-offs from sustainable business growth.
Former company executives at Lobels (Pvt) Ltd are reported to have formed numerous fictitious firms which they used to milk Lobels (Pvt) Limited through fabricated invoicing, and as a result of this, the company is reported to have lost millions of dollars.
For sometime now, Lobels has teetered on the brink of total collapse putting in danger the livelihood of a number of people who are dependent on it for employment.
This scenario is typical of what happens to a business when its leaders choose to be reckless and irresponsible.
A responsible enterprise strives to place the right people in the right positions, and understands that it is an integral part of the community in which it does its business.
Company leaders should never concentrate their attention and efforts on dealing with everyday challenges.
Instead, they should strive to rise above these challenges and focus on the future of their firms.
A responsible business enterprise holds some enduring purpose that goes beyond profit to define the enterprise and inspire and guide its employees.
And such a purpose will help employees have a deeper understanding of the intent of the organisation stirring them to achieve organisational goals.
Above all, a responsible business should implement a formal business ethics programme.
An effective ethics programme is the cornerstone for building a responsible business enterprise, which will result in enhanced stakeholder trust and goodwill.
It will result in a responsible business that will enjoy increased productivity, competitiveness, access to credit, and sustained long-term growth.
l Bradwell Mhonderwa is the Managing Consultant of Business Ethics Centre, a Corporate Governance and Business Ethics Management firm. Phone 04-293 2948, 0712 420 090, 0772 913 875, or email [email protected]
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