Is there really a business case for being good in corporate Kenya?

PHOTO | FILE 

By CANUTE WASWA

In Summary

• In a rather imperfect business world that is characterised by corruption, counterfeiting, complacency and complicity of regulators, non-enforcement of laws, indifferent consumers and non-compliance by competitors, what good does it pay to be good in Kenya?
• Instead, with the need to pay facilitation fees so as to make certain important processes efficient we end up playing ball with politically connected individuals whose deals are eased by the infamous phone call directives and underhand dealings.

Today’s article was prompted by Charles Onyango Obbo. He began his article in a sister publication by saying that in our business, you spend a lot of time talking to people who have some fascinating insights on public affairs to give you, and also those who are checking out the truth of rumours and conspiracy theories.

He went ahead to say that sometimes they pay for the coffee and sometimes you pay. Well last week I had coffee with Mumo, a good friend of mine. He is sustainable business expert based in Kenya.

Our conversation began innocently with what happened to Apple. The world’s largest company was presented with the huge bill after the European Commission ruled that a sweetheart tax deal between Apple and the Irish tax authorities amounted to illegal state aid.

The commission said the deal allowed Apple to pay a maximum tax rate of just one per cent. In 2014, the tech firm paid tax at just 0.005 per cent. The usual rate of corporation tax in Ireland is 12.5 per cent.

Then came the big question. What would it have been in apple was a Kenyan company?

Mumo started by asking a rhetorical question. What happened to the simple art of making money? It used to be so simple or perhaps simpler. Today, fancy terms such as responsible business, social responsibility and ethical business are bundled in business meetings with common ease.

Corporate language, brand materials and websites are increasingly using terms that were only recently restricted to the civil society sector. Firms are no longer making money, that is just too 20th century. Now, they are creating shared value, stakeholder value or prosperity or if the by-line of a prestigious bank is to be believed, they are creating “good”.

Gone are the days when individuals, mostly men, converged in dimly lit restaurant corners to discuss business ideas.

Invariably, these individuals would put down some money in form of start-up equity, earning themselves the prestigious name of investors or shareholders. Or perhaps, they would take up a loan or some other form of capital to embark on their business adventure.

But Mumo went on to ask me an even harder question. What is the business case of being good in Kenya? He was not interested in the moral imperative which is rather clear or even the more debatable idea of legal compliance.

What good does it pay to be good

In a rather imperfect business world that is characterised by corruption, counterfeiting, complacency and complicity of regulators, non-enforcement of laws, indifferent consumers and non-compliance by competitors, what good does it pay to be good in Kenya?

Being bad seems to be much more profitable than ever. Perhaps, in other places, where laws are well and fully enforced and companies often accrue severe punitive responses including mind boggling fines, a good case could be presented for being good.

The traditional push back to such questions is often that being good enhances reputation, reinforces brand, build employee loyalty and retention, reduces expenses, improves community rapport and buttresses customer relations. Excellent reasons for being good — but are these really relevant in the Kenyan business reality.

To that mix, let us add consumers who are unconcerned, employees whose net goal was to get a job and not necessarily work, governments that use “under staffing” as an excuse not to enforce laws that could enhance “being good” and MPs seeking to capitalise on their legislative role to create “anti-business” rules.

Given this worldwide excitement with the good corporation, a business case ought to be easily contrived for the private sector in Kenya. But that does not seem to be the case.

Instead, with the need to pay facilitation fees so as to make certain important processes efficient we end up playing ball with politically connected individuals whose deals are eased by the infamous phone call directives and underhand dealings.

With such a variety of challenges to being a good business person, how does one play by the book of good and make money. Companies cannot be expected to make themselves commercially unviable in the quest of “doing the right thing”. Surely context also matters. So why be good as a business if you can thrive and excel by being bad? What is the business case?

I did not have answers for Mumo. Do you?

Mr Waswa is a management and HR specialist and managing director of Outdoors Africa. E-mail: waswa@outdoorsafrica.co.ke.