The Sunday Mail
Politicians are the policy makers and they wield the power to make decisions that can shape the business environment. The shape can either be good or bad.
Using the PEST (Political, Economic, Social and Technology) analysis – an examination of the external macro-environment that affects all firms – it is evident that politics does affect the external environment of business.
Yet it seems the main focus of some politics is to achieve as many votes as possible while the focus of business is to achieve as much profit as possible.
Critics argue that the mind of a politician is designed to win elections while that of a businessman is designed to make a lot of money. However, there are people who possess both qualities.
Businesses that have been the most successful are those that have been able to learn the nuances between these two critical constituencies. That said, it must be noted that business decisions may become clouded if too much politics is involved.
According to American historian Mr Burt Folsom, “We always need to keep in mind the key differences between a business career and a political career. And there are some similarities, too.
“ln business you try to make money by identifying a need, making a product to satisfy that need, and then selling it to people at a profit. In politics you try to win elections by identifying a need, campaigning to meet that need, and then selling it to people for their votes.
“In business, success is measured by money in the cash register, and in politics success is measured by votes at the ballot box. The businessman, in a sense, is greedy for capital and the politician is greedy for votes. Capital and votes are the life blood of business and politics, and both are needed to perpetuate careers in those fields.”
In Zimbabwe particularly, there is a perverted perception that one needs to be aligned to politicians in order to be successful in business. Increasingly, there are many local businessmen that are aligning themselves to politicians in order to make short-cuts or get favours. Such opportunists give local businesses and politics a bad name. Even though some politicians may have the power and authority to make a certain deal happen, one does not need be a politician to be successful.
Politics is politics and business is business.
People should simply do what they are supposed to do rather than abuse political leaders’ names. In business, leverage can only be achieved through offering competitive products and satisfying the need of the market.
Good corporate governance, honesty and integrity is all that is needed to have sustainable success.
Trying to bulldoze one’s way through business by name-dropping powerful politicians can only take one’s success in business so far. The unfortunate economic circumstances that the country has had to endure for the past 16 years – ironically caused by the political onslaught from the United States of America and the European Union bloc – have bred a dangerous way of doing business. Some companies survive through bribes. The success and growth of such companies is not based on the value that they offer to consumers.
The chickens will definitely come home to roost.
A business that survives through generations is the one that has a sound ethical footing.
It therefore follows that managers should always be on the lookout of how Government policy can affect their business. Political stability has a telling effect on business. Also, the risk that politics imposes on business has to be constantly assessed.
Experts say political risk is one of the least predictable elements in the business environment.
Many companies in countries that are experiencing civil strife have borne the brunt of an environment that is inimical for the growth of business.
This is the reason why there is political risk insurance in some jurisdictions. The country has to learn to tread this fine line in order to be competitive in the face of growing global competition.
Taurai Changwa is an Articled Accountant and has vast experience on tax, accounting, audit and corporate governance issues. He is the managing director of SAFIC Consultancy. He writes in his personal capacity and can be contacted at [email protected] whatsapp on 0772374784.
