By: Dr Paul Vorster
The Zondo Commission, an inquiry into state-capture, has revealed some very unsettling things. Our parastatals or state-owned enterprises are embroiled in so many unethical decisions and actions it staggers the mind. From patronage networks to shell companies, self-enrichment, defrauding the state, conflicts of interest, politicking, nepotism, and good old-fashioned corruption. If you can imagine it, it has probably happened.
The problem is not limited to our parastatals. The public sector has suffered these ills for a long time. Now the private sector has started to be embroiled in the untoward activities of public departments and state-owned enterprises. This should not come as a surprise to anyone. The biggest spender in the South African economy is the government and they often contract private organisations to do the work. Tenders fly aplenty. Money needs to be spent. Thus, we have several sharks smelling the blood in the water ready to claim their piece of the pie.
To the horror of South African citizens, even a state of emergency makes little difference with massive fraud and corruption being reported with PPE tenders, vaccines, and emergency funds set aside for the most hard-hit citizens of the pandemic. No pot of money is safe.
All of this alludes to something even more sinister. Could it be that so many South African citizens that partake in this morally reprehensible behaviour are so self-obsessed that they do not see the larger repercussions of their actions? Let me mention some of these repercussions: poor service delivery, rolling blackouts, potholes the size of small cars, water shortages, a lack of refuse removal and basic sanitation, a failing education and health care system, record unemployment, a lack of social services, explosive crime rates, and those pesky traffic lights that are always on the frits.
This brings me to a very interesting observation. Why do organisations exist in the first place? Well, let us unpack this. Organisations be they in the private, public, or SOE sectors, perform a mandate in our society. In other words, an organisation provides a service, expertise, or products to our society. If these ‘goods and services’ are useful, there is usually a demand for them. We need to look a little deeper, however. Some organisations primary mandates are to offer services to the public without making a profit per se. This is quite evident in the public sector where municipalities, metros, local governments, and provincial governments render the basic services needed for a society to function. Parastatals often do the same and sometimes have even more responsibility (for example Eskom). We are not even talking here about the Department of Health or the Department of Basic Education.
In other words, everything we have, our quality of life, our future, our welfare, is greatly dependent on whether organisations meet their mandates to our society in an ‘objective’ manner and keep an eye on their stakeholders’ wellbeing. I say objective, because as we have experienced, several organisations claim to be doing their work but are in fact deceiving us.
The fact that a negative perception exists about the public and SOE sectors is not disputed. The question we need to answer is whether this is factually correct. Recently, TEI evaluated the ethical culture of 70 organisations operating in the public, private, and SOE sectors. This database comprises medium to large organisations, includes listed companies, government departments, and large SOEs across various industries from telecoms to healthcare. This data was gathered between 2017 and 2021. Organisations were ranked on their relative culture maturity as measured through the validated Ethical Culture Maturity Indicator (ECMI) – an instrument that measures whether supportive elements of an ethical culture are present in the organisation by sampling employee perceptions in an anonymised format.
The top ten organisations in this sample (i.e., those organisations with the highest ethical culture maturity) were composed entirely by private sector organisations. Whereas the bottom ten were comprised of only one private sector organisation, six SOEs, and three public sector departments. It therefore appears that the perception of the SOE and public sector are backed up by organisational research data.
When we look a bit closer to the bottom ten organisations the most pertinent themes that emerge are unfair people practices (i.e., favouritism, inconsistent treatment, intimidation, inconsistent rewards, nepotism), a lack of senior and middle management commitment to ethics, and insufficient ethics accountability and responsibility (i.e., holding people accountable for their behaviour and decision-making in a fair, consistent, and transparent manner).
Interestingly, the same ills that befell these public departments and SOEs also emerged in the one private sector organisation in the bottom ten. This may indicate that the dimensions of ethical cultures may transcend organisations and sectors. In other words, there are a group of universal ethical culture dimensions that may be vitally important to all organisations despite the industries or sectors they operate within.
It is also interesting to note that the bottom five organisations often also indicated values-incongruity and deception as active aspects undermining the ethical culture. This deception extended to organisational governance and included internal and external stakeholders at all levels.
Brumley and their colleagues identified four main strategies of deception. We will list them below. But before you read this list, think of organisations in our society that have engaged in this deceptive behaviour. There are many examples.
- Strategy 1: Degradation of Information – whereby the organisation hides in the background noise, or produces noise, for the purpose of concealment or camouflaging exploitation of a stakeholder group.
- Strategy 2: Corruption of Information – whereby the organisation mimics what it is not, to misdirect or mislead a stakeholder group.
- Strategy 3: Denial of Information by Destruction – whereby the organisation impairs, disables, or destroys the sensory apparatus of the stakeholder to exploit them.
- Strategy 4: Denial of Information by Subversion – whereby the organisation subverts the victim’s mechanisms used to detect and defeat exploitation.
International organisations that come to mind here are ENRON, Arthur Andersen, Ford, Volkswagen, Welles Fargo, Cambridge Analytica, Facebook, Twitter, and Boeing, to name only a few. Locally organisations such as VBS Bank, Steinhoff, Bosasa, Eskom, Transnet, SAA, and the SABC are top of mind. However, this type of deceptive behaviour can also be seen in numerous government departments and public service organisations on both an organisational and individual level. The list is by no means complete.
Now let me elicit where this model of deception originates from. It is a parasitic model used in the biological sciences. This means that these four strategies are not organisational strategies, but rather strategies employed by parasites in the biological context. All I did was replace the word ‘parasite’ with ‘organisation’ and ‘host’ with ‘stakeholder’. A parasitic relationship occurs when one organism (the parasite) invades the body of another organism (the host) to take critical nutrients or resources from that organism without providing anything in return. The parasite uses deceptive strategies to evade the defences of the host or dupe them into believing it is harmless or beneficial. Parasites always take from their hosts in a manner that will always negatively affect the host’s health and may often lead to death or disability over the long-term. The parasite on the other hand benefits greatly from this relationship over the short-term.
This raises many possibilities. If we were to apply biological models to organisations, then we could argue that a good economy or free market would be one where organisations are mostly engaging in a form of mutual beneficence (also referred to as mutualism or reciprocal altruism) and not parasitism. But this does beg the question, how many organisations are engaging in mutualism and how many are deceptively parasitic? Is there a threshold at which the market of a particular country may eventually succumb to parasitic organisations over the long-term?
Indeed, South Africa could be said to be an organism that is suffering from a major parasitic infestation. The data confirms this. There is a cure however, and perhaps it lies in the heart of the deceptive strategies that parasitic organisations may use. If we were sensitized to these strategies, perhaps we would not be duped so easily. Perhaps we should start by asking whether our organisations have deployed these deceptive strategies on stakeholders in the South African economy and root them out.
The late Auditor General of South Africa, Kimi Makwetu, once said that:
“…the objective of an organisation is to grow its people and contribute to the economy without taking too much from it. If an organisation is not going to consider these objectives, it will not be able to manage the inherent contradictions that normally come with chasing a multitude of objectives. For me to live ethically, is to recognize as a business that you are part of an integrated whole. There is no other option but to live ethically because it gives you an opportunity to sustain the achievements of what the business wants to do. A business is not there purely to make money for those who own it today, but it is also one of the institutions and instruments in a society that is mobilized and organized to create a life for citizens to come.”
Dr Paul Vorster is a Senior Research Specialist at The Ethics Institute. He holds a Doctors Degree in Industrial and Organisational Psychology from the University of Johannesburg.