The Way Forward, lessons from the East
The week of unrest in South Africa in July 2021 elicited many opinions about its cause/s. This article highlights some triggers for this week of unrest, and, more importantly, what could be done to prevent a recurrence of this type of national disaster. The author’s background is in Operations, which can be described as the study of ‘what has to be done to reach a particular goal’; not the ‘where’ but rather the ‘how’. The final goal is also known as ‘the business strategy’, or the Grand Strategy. Operations strategy can be summarised as: ‘what must be done to get to the place identified in the Grand Strategy?’, not ‘where do we want to go?’.
He met a senior Chinese official while working in Tanzania who had come there to review the Chinese contracts that were being undertaken in the country. This official was a trusted member of the ruling party and gave the impression that he was well-versed in high-level economics, politics, and management.
In response to a question about why the Chinese mostly bought raw materials and not any products that have had value added to them, the official offered an emphatic answer: “We have determined that the biggest threat to any regime is internal unrest, not external factors. War we can handle... the biggest cause of internal unrest is unemployment. That is why we try to get raw materials and not products that have had value added to them. The more value that has been added to the products means less employment for our people”.
Prior to this, the author worked with a Fortune 500 company with manufacturing as its core focus, that was looking for expansion. The ideal candidate was China, which had a huge population but was at that time way behind all its competition. The company approached the Chinese government to get access to the market, which was accepted on condition that products must be made in China.
China's operational strategy emerges from this scenario: the desired outcome or the ‘Grand Strategy’ was to get China up and running so that it could become a force to be reckoned with on the world stage; in fact, to become a world power. And the success of this strategy is now part of world history!
South Africa is at the same point where China was in the 1970s and 1980s:
• We need Foreign Direct Investment.
• We need skills.
• We need a balance of payment surplus.
About the author:
Mike Mundy lectures on the Operations Management short course at Wits Plus.