In South Africa the rate of success for Small to Medium Enterprises (SMEs) remains relatively low. For SMEs remaining in business past the 5 year mark is in itself a challenge. As the company grows the inclusion of corporate culture becomes essential and companies playing within this space are often called to task in creating their own unique corporate culture. Once this has been established, the questions is then asked, how valuable is one’s corporate culture and as a CFO, can one establish a tangible value for ones company’s corporate culture?
ACCA SA recently hosted a round table discussion on the 2015/2016 National Budget. The key element discussed was the difficulty in doing business in South Africa. From red tape analogies to mission impossible scenarios, all in all business is tough! Remaining compliant in business is as challenging. One of the panellists, Manenzhe Manenzhe, ACCA Member and CFO in Parliament, encourages SMEs to focus on compliancy and move away from corporate wrong doing in order to benefit in the long term.
A point to highlight, and raised by ACCA’s Policy Manager Nomsa Nkomo at the Budget Brief, is that governments inducement of the SME sector has an umbrella effect and one cannot count on these measures alone. One would need to create a competitive edge, a sense of difference, uniqueness and fresh approach to business. Tax relief and government incentives alone will not drive success
A report by ACCA; Culture and Channelling Corporate Behaviour, found that many companies have reduced corporate wrong doing by focussing on building suitable and sustainable corporate culture. The value of reducing corporate wrong doing and increasing productively can then be directly related to a company’s focus on sustainable corporate values and culture.
The report suggests that in designing corporate culture seven points need to be considered. These serve as a starting point for assessment and possible change:
- Align and embed core values at the very top
- Watch out for dynamics in groups
- Track how decisions are being made
- Be honest about the value of regulation and codes
- Beware of unintended consequences attached to any incentives structure
- Find out what motivates people
- Anticipate trends
SMEs should not only align success with sales figures, corporate culture can add rand value. One is encouraged to see actual value in maintaining a strong sense of corporate culture. As encouraged by Manenzhe, one need focus on compliancy and ethical practise to truly benefit from government assistance. To remain competitive, one would have to create a culture that is dynamic and in line with successful practise.