Ethics alien to property investors

09 Apr, 2017 - 00:04 0 Views
Ethics alien to property investors

The Sunday Mail

Taurai Changwa Business Forum
ETHICS are an integral part of any business as they are the founding principles of trust, itself a commodity that is valuable in growing businesses and sustaining them.

Experts usually describe ethical behaviour as conduct that is consistent with what society and individuals think are good values.

Well, in essence, it involves demonstrating respect for key moral principles that include honestly, fairness, equality, dignity, diversity and individual rights.

In economics, property and land development is considered a key stimulus to growth as it naturally feeds both upstream and downstream industries.

A lot of subsidiary industries, including informal businesses such as vending, normally feed off the boom cycle of the property sector.

However, what has become worrying over the years is the seeming unethical conduct of investors in the sector and the complete disregard for the underlying values that define the industry.

While old suburbs such as Hatfield, Avondale, Borrowdale and new suburbs like Goodhope, Sandton and Crowhill, just to mention a few, were developed following rules and regulations from central and, most particularly, local Government, new suburbs are generally unstructured and look like informal settlements.

Unsurprisingly, there is a growing trend where potential homeowners are increasingly being swindled by land developers.

This is all money that is hemorraging from the formal system.

Monetary dividends that are ordinarily supposed to accrue to local authorities – especially where land within local precincts is concerned – are currently benefiting a few irresponsible individuals.

Although Government came up with a convenient system of parallel development, where aspiring home owners could erect temporary structures for a stipulated period of time while the property was being serviced, it is now being abused to the detriment of supposed beneficiaries and the economy.

Servicing land always has a multiplier effect on the economy as the development of roads, drainage systems and street lighting directly impact on aggregate demand.

Sadly, this is not the case.

Before any solution can be suggested to correct this anomaly, there is need to debate whether the current situation is still tenable.

What are supposed to be national projects channelled through Government are now in the hands of profit-making concerns that care little about the economy or the well-being of home buyers.

There is need to ensure that there are strict rules that govern the conduct of private sector players in key sectors of the economy. This will definitely ensure honesty, for honesty implies a refusal to lie, steal, or deceive in any way.

Honour suggests an active or anxious regard for the standards of one’s profession, calling, or position.

Integrity implies trustworthiness and incorruptibility to a degree that one is incapable of being false to a trust, responsibility, or pledge. Probity implies tried and proven honesty or integrity.

All these are values that the private sector needs to relearn if they are to compete in the global marketplace. Current circumstances wont last forever.

It might seem profits and maximising returns is now taking precedence over good service.

Government, therefore, has to intervene to rein in excesses. Land as a “finite” resource has to be developed to acceptable standards.

This is the time for local businesses to develop their workmanship and expertise. Where such skills and capacity do not exist, companies have to shape up.

Performing and trading ethically in the long-term is definitely good for business. It creates loyalty and lures clients.

While shortcuts can guarantee returns in the short-term, they do not constitute a sound business model. Also, they might be illegal.

There are countless examples of big companies that went bust because of unsound models and practices. Some models are clearly ruinous to business reputations and brands.

Government needs to blacklist companies that are found guilty of unethical practices. With ever-growing competition, companies are under pressure to find low-cost developers, including foreign firms.

Professionalism is a cornerstone to any business, and it has been proven to work magic for businesses.

One outcome of poor ethical and moral practices in business is a general loss of confidence and trust in businesses.

 Taurai Changwa, a member of the Institute of Chartered Accountants of Zimbabwe, is an estate administrator with vast experience in tax, accounting, audit and corporate governance issues. He is MD of SAFIC Consultants and writes in his personal capacity. Feedback: [email protected], Facebook page SAFIC Consultancy, and WhatsApp +263772374784

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