1. Introduction
Since independence in 1980, Zimbabwe has gone through various economic improvement programmes
and policies which have in one way or the other contributed into shaping the current economic climate.
On the political environment, there have been key events which are key in understanding the prevailing
business environment. The land reform program, Political polarisation and disputed elections and the
2017 coup stem out as being the major causes of business ethics being faced in the country. Business
ethics refers to contemporary organizational standards, principles, sets of values and norms that govern
the actions and behaviour of an individual in the business organization. Whilst organisational standards
and principles remain firm, it is the values and norms that have suffer the brunt of the economic
downturn experienced since around year 2000. Generally, there are about 12 ethical principles: honesty,
fairness, leadership, integrity, compassion, respect, responsibility, loyalty, law-abiding, transparency,
and environmental concerns and this report seeks to highlight how Zimbabwean business are facing
challenges in upholding them and to make suggestions on how businesses can enforce them.
2. Contemporary Ethics and challenges
2.1. Leadership:
conscious effort to adopt, integrate, and emulate the other 11 principles to guide decisions and
behaviour in all aspects of professional and personal life. In Zimbabwe, organisations mainly
parastatals collapsed due to poor leadership. Leadership appointments have been made weighing
heavier on political affiliation rather than competency. Examples that could be talked about are
the collapse of NRZ, ZISCO, AA Mines and ZESA.
Among other examples of leadership failures at ZISCO, in the late 90s, Zisco was seating on heavy
debts around year 2000, Zisco was heavily indebted and was capitalising blast furnace 4 and the
sinter plant. Whilst
these projects were meant to steer ZISCo to higher and more efficient
production levels. Poor integration resulted in mass value loss as downstream processes were
mismatched to the new production levels from furnace 4. In turn the furnace life of furnace 4 was
reduced by about 50% to only 4years. Zisco was thus unable to service its debts would permanently
shut production in 2008. In 2000, ZISCO was also running without BOD which was highly
unethical. Whilst power cuts in the early 2000 also aided in the downfall of Zisco, the risk was
within the control of the leadership to predict and to manage. an article in the Newsday in 2008
summarised the collapse of Isostere, as one due to gross mismanagement and a failure by the stateowned firm to upgrade its equipment.
Despite the global campaign against asbestos, AA mines had different type of asbestos
characterised by longer fibre strands and considered safer than types found for example in South
Africa. The leadership of Mutumwa Mawere, backed by the government was unable to capitalise
on this advantage but would run down the mine through wrong investment decisions. After
takeover by the government, the current leadership has been satisfied by surviving on non-core
activities despite going through a period of record high prices around 2017.
2.2. Accountability:
Holding yourself and others responsible for their actions. Commitment to following ethical
practices and ensuring others follow ethics guidelines. After the land reform in 2000. Zimbabwe
experienced unprecedent economic turmoil peaking around 2007-8. This coupled with poor
government fiscal policies, and sanctions has made Zimbabwe business environment
uncompetitive. In the political arena, the downturns have been controversially attributed to
economic sanctions. Meanwhile in in the above leadership failures in parastatals, there has been
no accountability as blame is passed to fellow parastatals and in most cases the sanctions. Despite
huge demand for coal in Zimbabwe, parastatals such as Hwange colliery have shrunk in size as
management is accountable to the Minister who appoints them rather than the parliament. Long
term plans have not been implemented as every 5years each new minister of Mines sets up a team
of his own to run for 5years, Parastatal have been unable to run profitably and to grow since they
save the ruling party whose interests are deviant to business goals. In the private sector as well, In
the mining and all other export industries, government retains up to 25% of export earnings which
it remits in local currency to the exporter. With up to 50% difference between the official and
parallel market exchange rate, businesses are effectively losing 12,5% of their earnings as all local
services are charged at the parallel market rates. This situation makes it difficult to hold mangers
accountable when businesses perform badly as they attribute poor performance to government
policies.
2.3. Integrity:
Incorporates other principles—honesty, trustworthiness, and reliability. Someone with integrity
consistently does the right thing and strives to hold themselves to a higher standard. Due to
political polarisation, the influence of the ruling party in business decisions is also felt in the
private sector where they expect leadership to support party activities and influence who the
companies do business with. In the end organisations lose integrity as they go against internal
policies not to be involved in political support activities and sometimes even go against their tender
and procurement policies to accommodate politically backed suppliers and service providers.
Whilst in the private sector the impact has been mostly on quality of services supplied, in the
public sector this scenario also in fluences the prices at which services are offered as these are
almost always inflated. In a global market, this has made Zimbabwean businesses uncompetitive
and is one of the causes of the demise of the manufacturing sector, imported goods are always
cheaper. Even in the agriculture sector where there is huge support from government to farmers, a
tonne of imported maize from Zambia or South Africa is cheaper than from GMB. Outside the
political influence, the low economic activity in the country means that there is stiff competition
for both employment and business opportunities. This has paved way for rampant nepotism and
corruption in organisations.
2.4. Respect for others:
To foster ethical behaviour and environments in the workplace, respecting others is a critical
component. Everyone deserves dignity, privacy, equality, opportunity, compassion, and empathy.
The involvement of party politics in shaping the general direction of organisations in both the
public and private sectors has fuelled internal politics in organisations. The groups aligned to the
ruling party naturally derive their arbitrary power from their position and their goals tend to differ
from organisational goals. Due to their self-serving nature, their decisions tend to be irrational
when from the organisational perspective. This tends to create cliques/camps within the
organisation fuelling conflicts which generally manifest as groups where people disrespect each
other, lose compassion and empathy amongst themselves.
2.5. Honesty:
Truth in all matters is key to fostering an ethical climate. Partial truths, omissions, and under or
overstating don't help a business improve its performance. Bad news should be communicated and
received in the same manner as good news so that solutions can be developed. In an environment
where corruption, nepotism, political interference are rife, it is inevitable that organisations are
negatively affected in terms of performance and because decisions were made unethically,
managers tend to protect themselves telling partial truths, deliberately omitting certain information
during communications, overstating facts as acts of dishonesty. The power situation in Zimbabwe
is one characterised by dishonesty. Towards elections, the government through ZESA overstated
the power situation by telling the electorate that power problems were now history in the country.
The government deliberately overused its water allocation to generate more than 800MW against
a budget of just below 400MW, the impact of that move is that less than 3months after the
elections, ZESA is unable to generate enough power from Kariba as it has exhausted bits water
allocations, in the meantime the power plants 7 and 8 at Hwange are not yet fully operational. The
result is the current massive loadshedding in the country and ZESA was dishonesty when they said
power challenges were over. When you read newspaper reports around the time ZISCO and AA
mines were closing, management will do press statements around positive issues that were
happening within the organisation as propaganda that the organisation were still running and
would not talk about the challenges, they were facing which eventually led them to closure.
2.6. Respect for laws:
Ethical leadership should include enforcing all local, state, and federal laws. If there is a legal grey
area, leaders should err on the side of legality rather than exploiting a gap. the current economic
environment in Zimbabwe is characterised by massive corruption, high inflation, distorted
exchange rates and high business taxations. This coupled with perceive ed selected application of
the laws has fuelled criminal activities in business, most small-scale enterprises evade tax
payments in order to spur profitability. Most politically aligned organisations are known for not
paying taxes and this has sort of encouraged other businesses to do the same either by bribing
Zimra officials or under declaring business activities.
2.7. Responsibility:
Promote ownership within an organization, allow employees to be responsible for their work, and
be accountable for yours. As managers fail to be accountable, to be honesty and as they fail
integrity heuristics as highlighted earlier, they in turn stifle autonomy within teams. Autonomous
teams take responsibility for their actions and in turn would expect managers to be accountable
for their actions, The massive strikes some of them fatal, as in the case of ZISCO and Shibani are
testimony to this where employees believe that managers could have done better , or that managers
were living large at a time the companies were collapsing. These are epic cases of employees
taking responsibility while trying to make mangers accountable. This was the same case at Hwange
colliery in 2017 and at Zimasco in 2009 where workers forced the reassignment of the General
Manger at the Kwekwe smelter.
2.8. Transparency:
Stakeholders are people with an interest in a business, such as shareholders, employees, the
community a firm operates in, and the family members of the employees. Without divulging trade
secrets, companies should ensure information about their financials, price changes, hiring and
firing practices, wages and salaries, and promotions are available to those interested in the
business's success. When there is political interference and toxicity in organisations, they become
amoral. Organisations engage in immoral things not because they are immoral but because it may
be the things to do for survival. In order to make sure that politically connected organisations get
awarded tenders for example, tenders and job opportunities will not be openly advertised so that
preferred organisations and candidates emerge as deserving the opportunities. Again, this deprives
the organisations of best service providers or best employees. In such organisations it will not be
made clear how for example do employees get promoted or how they get salary increases.
2.9. Compassion:
Employees, the community surrounding a business, business partners, and customers should all be
treated with concern for their well-being. In highly politicised organisations as in Zimbabwe,
political groups and individuals are self-serving, they support decision which do not necessary
support business objectives but which support them as cliques or individual, due to the varying
values, goals and interests of such individuals /groups, one has to lose compassion in order to
advance their interests ahead of others. This explains why in the case of parastatals, every new
minister comes with their own BOD and management teams. In the current environment where
perception is that Chinese firms are getting their way into business through corruption and political
assistance. They have shown less compassion to the surrounding communities where they have
demonstrated very little or any Corporate Social responsibility. Their disregard for communities,
environmental protection and surrounding business communities is unprecedented. Under such
circumstances, other organisations start feeling less compelled to do acts of compassion and
government loses moral power to enforce them.
2.10.
Fairness:
Everyone should have the same opportunities and be treated the same. If a practice or behaviour
would make you feel uncomfortable or place personal or corporate benefit in front of equality,
common courtesy, and respect, it is likely not fair. As highlighted above due to limited
opportunities, corruption and nepotism. Employees in both the private and public sector are unable
to treat each other fairly and to enforce policy thereof.
2.11.
Loyalty:
Leadership should demonstrate confidentially and commitment to their employees and the
company. Inspiring loyalty in employees and management ensures that they are committed to best
practices. Due to the conflicting political and business interests, management has had to divide its
loyalty between politics, organisation and employees. Currently politics is prevailing aver business
and people interests as shown by the continued stay in power of the ruling party in an environment
where companies are performing poorly, in some cases closing and where employees are
continually protesting low salaries and poor service conditions. That no convictions even as
organisations such as NSSA where abuse of office was unearthed speaks to why rampant amorality
and split loyalty has been detrimental key parastatals.
2.12.
Environmental concern:
In a world where resources are limited, ecosystems have been damaged by past practices, and the
climate is changing, the coming in of the Chinese to do business in Zimbabwe has changed the
environmental concern perspective amongst organisations. Their disregard for environmental
protection concerns is evident along the great dyke where chrome pits are not rehabilitated after
mining, emissions from smelters are not monitored and recently in Boterekwa where there is
rampant destruction of flora. In Boterekwa, they are also processing the gold using leaching
method which in other countries is banned because of its effects on ground water bodies. Whilst
corruption is partly to blame, the government is unable to move with time to legislate and enforce
environmental protection instruments. In its bid to get to $12b mining economy by 2030, the
government has turned a blind eye to the environmental degradation and use of heavy chemicals
in processing being done by small scale miners, this in turn has discouraged good corporate
citizens from protecting the environment and in a way disempowered the EMA to enforce
Environmental Management policies.
Local authorities have not been spared either, as they struggle to maintain civil infrastructure under
the current economic environment, every town is now synonymous uncontrolled sewer discharges
into the environment. It is now impossible for them to enforce safe industrial discharges and
deviant factories are taking advantage of that.
it is of utmost importance to be aware of and concerned about the environmental impacts a business
has. All employees should be reencouraged to discover and report solutions for practices that can
add to damages already done.
3. Conclusion
Due to the above business ethics challenges, Zimbabwean companies have also failed to reap benefits
associated with good ethical practices. In the cases of ZISCO and AA Mines, not only have they folded
but they also have been unable to attract investors despite having very attractive business cases on
their tables.
As for parastatals, as they got more and more involved in scandals, reputations nose-dived, and they
have been unable to attract talent to run their organisations.
As environmental issues take centre stage on global markets, it is likely that Zimbabwean firms which
disregard environmental issues will lose customers in future.
4. Recommendations
REFERENCES:
1. https://www.investopedia.com/terms/b/bBusiness ethics - Wikipedia
2. en.wikipedia.org/wiki/Business ethicsusiness-ethics.asp