Godfrey Wasara
Readers, welcome to 2015. I would like to convey to you my compliments of the season and wish you a blessed year full of abundances. As the year begins I would like to bring in a very controversial topic: Your social responsibility as an entrepreneur. The topic is controversial because it hits on your primary objective of maximising you profits/wealth. Executing your social responsibilities will eat into your bottom line. The more you think of your social responsibilities the deeper you dig into your profits so there is conflict between your primary objective of making money and your obligation to the society.
Entrepreneur’s social responsibility
For you to understand what I mean by the entrepreneur’s social responsibility, it is important to be aware of all the stakeholders that make up your environment as a business person. These comprise the following: You the business owner; your managers and employees (if any) the Government, customers, suppliers; debt-holders (banks and all those who can afford to lend you money); lastly the community in which you conduct your business. The communities within which you conduct your business comprise the local community, the environment and environmental bodies and the public at large. Amongst all your stakeholders, this remains the most passive yet equally strategic and sensitive. I will now define the entrepreneur social responsibility.
The entrepreneur’s social responsibility is the process of taking into consideration the community within which you operate – as defined above – by factoring that community in your business plans, implementing that part of your business plan and getting positive feed-back and lasting legacy from that community. (My own definition)
In an economy where challenges are plenty, the prospects of aligning your primary objective of maximising your wealth to taking care of your social obligation are compromised and in the long run such prospects diminish. You tend to capitalise on the passiveness of this particular stakeholder and, as you are forced to drag implementing your social obligation budget, you tend neglect that community. In the long run, the community may retaliate by boycotting your products or services.
Conflict of interests
The conflicts are two pronged: (1) those emanating between the community stakeholder and other stakeholders in your environment and (2) those emanating between the community stakeholder and you the entrepreneur. The different stakeholder groups have very varied and possibly conflicting areas of interest in your business and will try at all costs to take their fair share of the “flesh”.
The first conflict arises from the way scarce resources are allocated or deployed. Logic dictates that, you meet your legal obligations first: customers would want quality goods and services, employees want their wages as they fall due, suppliers want their accounts settled in time, the government wants taxes paid as the fall due and providers of debt capital want these loans serviced promptly. By the time you finish servicing these, there is very little or no resources left to meet your social obligation to the community. Until very recently there was no legal framework binding you to service the community in which you operate.
The second one is even more complex in that you are bound to weigh you primary objective of maximising your profit against ploughing back part of such profits to the community. A few examples will suffice to hammer the point home.
In the area I live, there is a hive of activity involving heavy trucks. As they carry on their business they destroy roads. Very few if any ever look back to the damage they cause and do the necessary repairs. The reason they do not do so is because doing so goes against their profit motive.
Let me give a more visible example. Mining projects provide examples of such conflicts. Mining projects provide profitable opportunities but will result in land degradation as evidenced by pits full of poisonous water which may last for the next 50 years. This also reveals a significant conflict between the interests of the entrepreneur and the public particularly those living within degraded land. While it is often possible to reduce adverse environmental effects, these remedies will involve costs that tend to dig in the entrepreneur’s profits which profits are supposed to increase his wealth.
Remedies
As an entrepreneur, it is important to be aware right from the beginning how your operation will impact on the community in which you operate. A budget should always be set aside to mitigate any negative impact to that community.
Remedy can also be sought by identifying a strategic partner who can make good use of your waste. If you go to Mt Hampden you notice a lot of pits that were left behind as companies moulded bricks. I am sure they never looked back to see the amount of damage they have caused to the environment otherwise they would have done something. A cheaper way would probably have been to approach the City of Harare who would use these pits as rubbish dumping sites. I am sure the city fathers would be glad and at the same time remedy being made to degraded environment
Of late, a number of environmental pressure groups have come into being and the Government has also come in with legislation to deal with those seen to be degrading the environment. The Government has also taken a step further to ensure that entities should give something back to the communities in which they operate. The community share ownership scheme is a noble idea. It will go a long way in ensuring that communities get a fair share of benefits accruing from resources exploited from their areas.
As an entrepreneur it is vital to be proactive and assess the impact of your investment on the community and factor in negativities that your investment may cause. As you progress into business, look back at the community in which you are doing business. Remember this is the passive stakeholder, hardily coercing you to give anything back. Blessings increase as you give. In the communities you operate, somehow you are contributing in creating a desert, somewhere a dust road is in need of repairs, a dip-tank has run out of chemicals, a football/netball team is in need of uniforms, a child-headed home has run out of food, plenty of orphans have dropped out school due to lack of school fees, there are elderly couples out there who go through winter sleeping under tattered blankets, a polio victim is in need of a wheel chair, and the blind need your help to become self reliant never to remain beggars in the streets. There are plenty needs out there and I have just mentioned a few. Stand up and rise to the occasion and be counted. Spiritually, giving is investing. The Lord Almighty will reward you 10-fold.
The more you think of yourself at the expense of other stakeholders the greedier you become. It is because of greed that we hear cases of customers getting shoddy goods and services, employees going for months without pay, Government taxes being evaded, suppliers’ accounts not being settled as they fall due, loans not being serviced and innocent people being murdered for magic rituals. By so doing you are destroying communities instead of building them. As Zimbabweans we are part of the global village and the evil things we oft-commit as entrepreneurs are, through modern technology, spreading like wild fires. The way we conduct business determines the number and quality of investors interested in doing business with us. Thus, some of these business malpractices will forever leave our country thirsty of foreign direct investment,
Continue following your passion with determination.
- Godfrey Wasara is a registered public accountant, author and founder of Godane Business Conventions – a business solutions think-tank seeking to promote world class business best practices. You may contact him on wasaraman@gmail.com