Bal­anc­ing needs in an evolved so­ci­ety

CityPress - - Business - Muzi Kuzwayo busi­ness@city­

Pub­lic re­la­tions is dead. The com­mu­ni­ties in which busi­nesses op­er­ate have wis­ened to the pol­ished words of spin doc­tors.

They now scru­ti­nise the col­lec­tive ac­tions of the cor­po­ra­tion, its di­rec­tors and its em­ploy­ees, and so the re­la­tion­ship be­tween com­pa­nies and the world is no longer shaped by clever ad­ver­tis­ing and pub­lic re­la­tions strate­gies.

In a nut­shell, the world of busi­ness has evolved from the in­dus­trial rev­o­lu­tion, where share­hold­ers called the shots, past the ser­vice rev­o­lu­tion where the customer was king, to a new eco­nomic re­al­ity where peo­ple who nei­ther own nor buy from a com­pany can dras­ti­cally af­fect its busi­ness.

The prob­lem is that most busi­ness lead­ers are not equipped with the ne­c­es­sary skills to build and nur­ture these re­la­tion­ships. Their view of the cor­po­rate world fo­cuses on the stake­hold­ers who have the power to hire and fire them. This short-ter­mist view harms the busi­ness in the long run.

The King IV Re­port on Cor­po­rate Gov­er­nance seeks to change that by high­light­ing that the in­ter­ests of share­hold­ers and those of stake­hold­ers are in­ter­de­pen­dent.

In­deed, a com­pany is a provider of em­ploy­ment.

You just have to drive through towns such as Car­letonville and Welkom to see the dev­as­ta­tion that came with the clo­sure of gold mines. If the own­ers of those mines had had a long-term view, and imag­ined what would hap­pen to those com­mu­ni­ties when the com­pa­nies ceased to op­er­ate, they could have avoided the cur­rent suf­fer­ing.

The fail­ure of those com­pa­nies has had an im­pact on those com­mu­ni­ties.

When many mi­grant labour­ers were ter­mi­nated, they couldn’t bear the pain of go­ing back to their ru­ral homes with­out a job. So they stayed.

Where men have money and am­ple time, a she­been will al­ways pop up, sup­ply­ing the booze and the girls.

In no time the mi­grant labourer has gone through what­ever lit­tle money he had and has even less de­sire to re­turn to his fam­ily.

He drinks his life away, of­ten get­ting drunk on le­ftovers un­til he be­comes what is called isi­botho, a word that has its roots in ukubola – mean­ing to rot. That is how modern so­ci­eties rot — when there is no prof­itable em­ploy­ment for its young peo­ple.

Many com­pa­nies of­fer prod­ucts and ser­vices that may be cru­cial to so­ci­ety, such as medicines or den­tal ser­vices, but some of­fer us the full­ness of life. Can you imag­ine a child­hood with­out chew­ing gum — that mind­less chew­ing that gets you into trou­ble with par­ents?

Per­haps some day psy­chol­o­gists will dis­cover that step­ping on chew­ing gum on a hot day is good for a child’s prob­lem-solv­ing skills.

The busi­ness of bank­ing pro­vides fund­ing to en­trepreneurs when they want to cre­ate wealth. It also helps them pre­serve it.

In the modern eco­nomic world there is no progress with­out a ro­bust bank­ing sys­tem, and so bank­ing has be­come too im­por­tant to be left to the bankers and their share­hold­ers alone.

These or­gan­i­sa­tions are too big to fail. When they fal­ter, the gov­ern­ment has to step in to save them.

Like most well-mean­ing ini­tia­tives, many of the stake­holder mod­els that have been pre­sented are thin on what hap­pens when there is a clash of stake­holder in­ter­ests.

They also don’t take into con­sid­er­a­tion the un­rea­son­able­ness of hu­man be­ings, their glut­tony, greed, fear and all other vices that char­ac­terise our species.

A friend of mine who has worked in stake­holder man­age­ment for more than 20 years likes to sim­plify the con­cept.

Take a fam­ily set­ting, she says. Chil­dren are ma­jor stake­hold­ers. But par­ents don’t con­sult them when they want to make an­other baby. But when the chil­dren want to get mar­ried, they have to con­sult their par­ents.

Stake­holder man­age­ment is the art of un­der­stand­ing those power bal­ances. Kuzwayo is the founder of Ig­ni­tive,

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