Leadership Magazine: Charity starts at home, but is that where it should stay?

My August 2019 Leadership Magazine Column is on page 92 and 93 

I recently caught up with Neeltje du Plessis, lecturer in communication management at the University of Pretoria. She is busy working on a new textbook with a chapter about the impact of isolationism on the corporate social responsibility (CSR) of a country. The whole concept of isolationism intrigued me, as it speaks to four of the ten elements that we take into consideration when measuring an organisation’s reputation (strategic intent, strategic alliances, value offering and corporate social investment).

For starters, I must admit, I had to do a quick Google search to get to grips what exactly isolationism means. Broadly speaking, it has to do with foreign policies institutionalised by leaders who are of the opinion that their nations’ interest are best served by keeping the affairs of other countries at a distance. The most relevant example of this is United States of America (USA) president, Donald Trump’s ‘Keep America Great’ initiative, where the core focus is on investing in American companies and levying high taxes on imports.

Many, if not all, African countries are dependent on foreign investment and especially social investment grants and many would not survive without them. How will we be impacted in our own country if we were to adopt an isolationist view? What would happen if we implemented isolationist policies?  Would we be shooting ourselves in the foot, or would we share even bigger returns and foster greater opportunities for ourselves? Why are we not investing more in our own talent and industries? Travel to any European city and you might be astounded by the beautiful fruit and vegetables on display at their supermarkets, take a closer look and you will see that it comes from South Africa. We have so much to give in terms of magnificent produce, natural resources, and talent, and yet we often relinquish it without our own people seeing it.

In the same vein, not having clear governance and policy structures in place to protect what we have can also ruin our own industries. For example, a few years ago South African chicken farmers were crippled by the import of chickens and chicken products from Zimbabwe. There was absolutely nothing wrong with our chickens; the imported chickens were just cheaper.  If there was a lack of chickens in South Africa, then importing and supporting the neighbouring country’s economy makes sense. But we first need to get our own economy on its feet. If you are importing and not supporting the local market you are not furthering the country’s own economy. Isolationism touches not just on overseas markets, but also our African neighbours that we all want to see grow while maintaining our own strengths. 

It all boils down to balance.  When we measure reputations, all the different elements that we consider (ten of them) need to be in balance. Similarly, in an era of isolationism, we need to be very mindful of this balance. If we focus too much on isolating ourselves from the rest of the world, we may be cutting ourselves off from the global trade opportunities and learning new skills and trades.

With that said, we must keep true to our own identify and first look for local opportunities and businesses to invest in before importing products.  If we take another example, cheap clothing from the East has ruined the fabric industry in Africa: it is a lot more affordable to buy imports than to invest in locally made fabric and tailors, and now we are losing those skills which has been very much a part of the African cultural fabric (pun intended).

We should be looking after own people first; it does not help creating wealth for other countries and our own people are starving. We need much tighter regulation and policies regarding importing goods.

What is the reality of isolationism on South Africa and Africa?

Africa is expressing a definite desire to find and communicate a strong African identity: independent of colonial influence, yet relevant in the modern world. African leaders want to take Africa into a significant place in the world economy and culture within the next 30 to 50 years, but on its own terms. This process includes finding an alternative to the Western/US business capitalist business model through an Africapitalism* model that can combine economic and social wealth equally; again, finding balance.

In the United Kingdom (UK) and USA the desire for isolationism started as social movements with anti-globalisation protests and protest votes against ‘giving it all away’. This has been actioned with Trump enforcing isolationist policies and the Brexit vote that took place. In Africa we are currently in the social movement stage. However, while the social movement media is focused on decolonisation as Africa deals with its colonial past, it is very concerning that governments seem to be selling vast tracts of land to Chinese interests.

Why is this important to know about?

Consultants, business leaders, academics and new entrants in the world of work need to take note that the worldview that governs relationships are changing.  The rules are changing. Success is measured differently. We are already in an era where the integrated report emphasises social and environmental value that the corporation added during the financial year, apart from merely financial performance. Corporations are taking a lot of care in the kinds of programmes they are involved in and the partners they choose in creating social and environmental value.

Delving deeper: How does this relate to CSR and why is this important?

One aspect of business that is affected by isolationism is CSR, a key reputational element. Isolationism may affect the amount of resources committed to CSR programmes, the scope of these programmes and the type of programmes that will be supported through CSR programmes. These questions are important for non-profit organisations, community-based organisations and vulnerable communities, as they must understand how corporates make decisions about who to support with their CSR initiatives. For example: if a company follows a more globalised approach in its business model, its CSR decisions might include projects with a more global focus, while a more inward focus could bring more benefit to local community-based organisations. This is a simplified version of possibilities, but it illustrates on a basic level the influence that a more isolationist worldview could have on CSR decisions.

The good news is that in many instances, government isolationist policy such as the USA policies, do not influence USA corporate policies. Therefore, American companies active in South Africa will still make their CSR decisions based on business principles, led by investor pressure and stakeholder relations in their immediate environment.

What does isolationism mean for Africa?

This is not the end of the story. We are on the brink of developing new ways of doing business and communicating, to manage the expectations and report on the impact of business success. The new way of doing business will be CSR and Communication led and it will come from Africa to teach the world the balance.

So, are we in favour if isolationism or not?

Isolationism by USA, Europe and UK can hurt African countries in terms of government funded programmes as government policies change to focus more on internal spending and development.

Multinational corporations are still motivated by shareholder, stakeholder and reputational risk factors and will continue to invest in CSR programmes in the local communities, but their success will determine the amount, scope and focus of the programmes.

Africa’s desire to take control of its own narrative and its own development might include measures to encourage local business interests over multinationals, however the African governments will define local businesses in their quest to de-colonise, which might mean that the scope of some international companies’ activities might be reduced where local companies are given preferential treatment in terms of tariffs and taxes.

A new Africapitalism business model might indicate that CSR becomes a major strategic determinant of decisions in African businesses, which means that African isolationism is eventually a good thing for CSR, but that it may take a long time.

*Elumelu, T. O. 2011. Africapitalism: The path to economic prosperity and social wealth.