Never sign anything you have not read!

An article called “Mayor comes clean on white ban” caught my attention today.

Not only does the article depict some compliance issues , it also shows up how easy it is for managers to damage reputation, when they do not understand how it manifests.

African Eye news reports that the manager of Mpumalanga’s Ehlanzeni district municipality in Nelspruit, Hugh Mbatha, claims he had been unaware he was sanctioning a ban on the appointment of white service providers when he signed a memorandum issued to senior staff.

Mbatha publicly admitted at a “setting the record straight” press conference on Tuesday that the instruction to officials who manage service delivery in six major towns and five large rural regions was unconstitutional and would have illegally discriminated against white businesses on the basis of their owners’ race.

Mbatha admitted he had signed the memorandum that was circulated to staff on the matter, but said he had not read the full document and therefore had not realised that it included an explicit ban on white businesses.

How can you call yourself a manager, when you sign documents without reading them? Is part of being a manager, not about leading and controlling?This seems to me rather a case of a decision that has backfired and now people are scurrying around trying to repair the damage to the reputation of the municipality.

“There were 30 resolutions in the [memorandum]. In this one resolution, somebody with a hidden agenda is deliberately playing the race card with the obvious intention to create unnecessary hatred between whites and blacks in our district,” said Mbatha.

“The matter was so serious that it could easily have been taken up by the SA Human Rights Commission,” he said.

Last week, however, Mbatha vigorously defended the ban on whites, saying: “We are capacitating blacks [through this new policy] so they too can get big business and become millionaires.”

This statement clearly reflects a misunderstanding of the concept of *** stakeholder management. Stakeholder management principles state that you should be inclusive and not exclusive and that you should care for all relevant stakeholders. Instead of trying to balance the rights of one stakeholder group against those of another, or make decisions based on power relations, managers should care for all stakeholders and use a rule such as, “Care enough for the least advantaged stakeholders that they not be harmed; insofar as they are not harmed, privilege those stakeholders with whom you have a close relationship” (Burton and Dunn, 1996).

A rule such as this one places relationships at the heart of the decision process and emphasizes the firm’s responsibilities to all stakeholders, those who are least advantaged as well as those with whom the relationship is particularly close.

Given that relationships are inherent in our existence, we have relationships to particular individuals and groups. It is on these particular individuals and groups that we focus our attention, not on some abstract idea of an individual or group that might exist such as “suppliers” or “customers.” We have relationships with real, concrete suppliers and customers, suppliers and customers that can be separated from one another and identified.

It is obvious that this decision was nothing other than one of those political decisions that did not take all factors and issues into account.

When challenged about his about-turn on Tuesday, he said: “All I can say is that it is impossible that we would have allowed black business to be given contracts at the exclusion of whites.”

The contentious policy was formulated at a two-day management lekgotla two weeks ago, when municipal officials tried to review Ehlanzeni’s broad-based black economic empowerment (BBBEE) policies.

The resulting resolution was circulated to council staff as part of an urgent memorandum signed by Mbatha, that read “stop appointments of white consultants, contractors and any other service providers, and empower black consultants and any other service providers”.

So obviously he was not the only one who did not read the document. I guess it is like the law of commission and omission. It is not what you saw, it was you deliberately did not see or omitted to notice. 

Mbatha initially dismissed critics as being “out of touch with the reality of South African business”, but on Tuesday conceded he had been wrong.

Mbatha and Ehlanzeni executive mayor Khosi Mkhonto also lashed out at the whistleblowers who had alerted the media, accusing them of bringing the municipality’s reputation into disrepute by creating a “media frenzy”.

Did they honestly believe that they can control the flow of messages, just because they are managers?

“This policy was formulated at our lekgotla. A lekgotla is a gathering, where all present are given a platform. We are therefore surprised that somebody decided to voice their unhappiness in the media instead of at the lekgotla itself,” said Mkhonto.

I bet that if any one person objected at this lekgotla, they would have been ridiculed. After all, group think would certainly have been enforced. It is a known fact that patterns of decisionmaking causes reputation risk and that often there are psychological issues in group settings like that.

Mkhonto then stressed that the municipality faces “imbalances” in the demographics of its suppliers and contractors that went beyond race.

Supply Chain risk management is more than just demographics. It is about ensuring professional standards irrespective of race, colour or creed. Do we still wonder why there is lack of service delivery, when the wrong criteria is used to evaluate performance?

“I would estimate that 99% of our managers are males, while a majority of business is given to whites. Now we are not ashamed to say we need more of a gender balance and also need to create space for people with disabilities,” she said.

*** The term ‘stakeholder management’ refers to the development and implementation of organisational policies and practices that take into account the goals and concerns of all relevant stakeholders.