ZIMBABWEAN businesses are facing challenges in a volatile economic environment, so it is important to re-evaluate the basic assumptions that guide strategic decision-making.
For many years, companies have focused solely on maximising shareholder value without considering other factors (Louw and Venter, 2013). However, it is becoming clear that this approach has limitations, so it is time to adopt a more human-centered business strategy (Pirson and Lawrence, 2010)
Constraints of economistic approach
The traditional economistic perspective views businesses primarily as profit-generating machines. It emphasises enhancing shareholder value and reduces individuals within organisations to mere agents of economic efficiency, driven by self-interest.
This approach prioritises short-term financial gains over long-term sustainability and ethical considerations (Pirson, 2016).
In Zimbabwe's unpredictable and challenging economic environment, this perspective has led to strategies that prioritise cost-cutting measures, workforce reductions, and aggressive market expansion at the expense of ethical practices and social responsibility ((Louw and Venter, 2013).
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As a result, trust in businesses has eroded, contributing to socio-economic disparities and environmental degradation (International Labour Organisation (ILO), 2017).
Humanistic business strategy
The humanistic perspective offers a holistic approach to business strategy. It sees businesses as communities of individuals whose well-being and development are as important as financial outcomes.
Balancing stakeholder interests
A humanistic approach to business strategy begins with redefining success. Instead of focusing solely on profit, businesses are encouraged to consider the impact of their operations on all stakeholders.
This includes ensuring fair wages and working conditions for employees, providing high-quality and ethically produced goods and services to customers, and making positive contributions to the communities in which they operate (Pirson, 2016).
One practical way to implement this approach is through stakeholder engagement. By actively involving stakeholders in the decision-making process, businesses can gain a better understanding of their needs and concerns.
This participatory approach not only leads to more informed and effective strategies but also helps build trust and strengthen relationships with stakeholders, which are crucial for long-term success.
Long-term value creation
The humanistic business strategy emphasises the importance of creating long-term value instead of focusing on short-term profits. This involves investing in the development of employees, fostering innovation, and building resilient business models that can adapt to changing market conditions. By focusing on long-term goals, businesses can establish sustainable competitive advantages that drive growth and profitability over time (Dupre, 2021).
For instance, a humanistic business strategy might prioritise investments in employee training and development, understanding that a skilled and motivated workforce is crucial for innovation and productivity. It could also involve adopting sustainable business practices to reduce environmental impact and contribute to the well-being of future generations.
Innovation and ethical leadership
Innovation is a key element of a human-centered business strategy. By nurturing a culture of creativity and ongoing improvement, businesses can create new products, services, and business models that address the changing needs of society.
However, innovation within a human-centred framework is not just about technological progress; it also involves discovering new ways to address social and environmental challenges (Zhang, Zhou and McKenzie, 2013).
Ethical leadership is another crucial aspect of a human-centered business strategy. Leaders, who adopt this approach, are guided by moral principles and a commitment to the common good (Teehankee and Sevilla, 2020).
They prioritise transparency, fairness, and accountability in all aspects of their business operations, setting a positive example for their employees and the wider business community.
Resilience in the face of adversity
In a volatile and uncertain environment like Zimbabwe, resilience is crucial for business success. A humanistic business strategy provides companies with the tools they need to navigate challenges and emerge stronger.
By building strong relationships with stakeholders, investing in the well-being of employees, and adopting sustainable practices, businesses can create a foundation of trust and stability that helps them withstand economic shocks and other disruptions. Furthermore, a humanistic approach encourages businesses to proactively address potential risks and challenges. This may involve scenario planning, diversifying revenue streams, or developing contingency plans to ensure business continuity.
By taking a long-term view and considering the wider impact of their decisions, businesses can enhance their resilience and reduce their vulnerability to external shocks (Pirson, 2016).
Conclusion
As Zimbabwean businesses face the challenges of a rapidly changing economic landscape, it is evident that the traditional economistic approach to business strategy is no longer sufficient.
The limitations of this perspective, with its narrow focus on short-term profits and shareholder value, are becoming increasingly clear. To build a sustainable and resilient business ecosystem in Zimbabwe, it is time to embrace a more humanistic approach to strategy.
In the final article of this series, I will explore the humanistic perspective on sustainability, focusing on how Zimbabwean companies can integrate sustainability into their core strategies to create lasting value for both business and society.
The journey towards a more equitable, resilient, and prosperous future begins with a strategic shift — one that places human dignity and the common good at the heart of business decision-making.
- Jongwe is an experienced business consultant with extensive expertise across various industries in Southern Africa, including higher education. — WhatsApp at +27 82 408 3661/ +263 788 016 938 or by e-mail at consultgws@gmail.com