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Finance and Banking

 

Three Pillars of Business Growth

The past week saw the East African Development Bank (EADB) avail a whooping UG Shs 215 million to Enterprise Uganda in support of small micro enterprise (SME) development in Uganda. This funding will mainly be used to train business owners on business and management skills.

I want to advance a three tier business growth and success strategy that I choose to brand as the ‘3 Cs strategy’ which are; Corporate Governance, Corporate Social Responsibility and Continuous Innovation. My take is that these three strategies applied in concert will revitalize business growth.

While it’s important that a business addresses the three areas simultaneously, it’s important to employ a working strategy that will attract the customer. Mr. Charles Ocici (Director, Enterprise Uganda) puts it well: “…there’s only one boss in business and that is the customer.” Any business practice impacts the customer base and influences customer loyalty.

Corporate governance addresses the internal governance system, process and structure of an organization. It is keen on general management and operations, financial management and risk management among other areas. A business can command a host of customers but without adequate, appropriate and effective internal systems and processes, it won’t succeed. In business things are not left to chance. Since the customer is complicated, delicate and has several options, the one who gives the best offer wins customer loyalty. Businesses must be keen upholding standards by maintaining proper books of accounts, undertaking periodic audits, upholding credible recruitment standards and procedures and efficient procurement. Successes in the procurement reforms will yield massive savings through transparent and regulated procurement processes.

 Risk management  will enable the business to identify and assess  risks and consequently devise counter measures to address such risks. All these constitute corporate governance and fundamentally allow for proper business management practices that will impact every aspect of the business entity resulting in a healthy business.

An online introductory course in corporate social responsibility (CSR) conducted by the World Bank Institute gave me a deep appreciation of the concept. The premise of CSR is that a business is in effect a Social enterprise whose operations don’t occur in isolation but rather in society/community and therefore businesses are responsible to the communities in which they operate. CSR doesn’t refer to efforts involving dishing out money to charities and aid agencies , hi-tech gadgets, houses and all that we often see only. It is a comprehensive concept addressing every aspect that relates to doing business responsibly notably environment protection, labor security, human rights, health protection and community involvement among others. In other words, a business’ venture to boost sale may not necessarily amount to much if back in the factories, working conditions are pathetic. This inevitably affects the work force in terms of motivation and productivity. CSR is described by some scholars as the humane face of the organization as if to imply co-existence with the inhumane face.

CSR should run in the veins of any business and be at core of the business strategy. It will have direct effects of a motivated highly engaged and productive work force, communities that are committed to the business’ products and a business that harmoniously co-exists with the environment.

It can not be better put than in the words of Kofi Anan former Secretary General of the UN (1999),” We have to choose between a global market, driven only by calculations of short-term profit, and one which has a human face. Between a world which condemns a quarter of the human race to starvation and squalor, and one which offers everyone at least a chance of prosperity, in a healthy environment. Between a selfish free-for-all society in which we ignore the fate of the losers, and a future in which the strong and successful accept their responsibilities, showing global vision and leadership.”

Continuous innovation means incessant re-inventing the wheel to meet the ever changing needs and demands of the market. The only constant in this world is change. A dynamic world calls for an equally dynamic business response. Businesses should develop systems to anticipate change with accuracy so that they can position themselves to respond appropriately. Product/service programmes and processes must all be flexible in order to accommodate changing demands. This requires open mindedness and incorporation of Information Communication Technology in business.

Ideally these three strategies are the benchmark for successful business. While business often concentrate on the third, the first two have in recent years taken centre stage and become key variables against which businesses are evaluated by the customers and government and standards bodies.



By Edgar Rutaagi
Financial Adviser
Uganda


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