Sustainable and Responsible Business in Africa

The book comprises 15 chapters, including the introductory and concluding aspects:

This chapter examines the opportunities, challenges, and risks in the post-pandemic African business environment. The top ten risks faced by businesses in Africa and practical measures to manage the risks and challenges were examined. Case studies were used to illustrate risk management and opportunity maximisation in the African business environment, focusing on the Rwandan tourism industry, Nigeria’s Dadin Hausa Dam/Olam Rice Farmland, and Libya and Nigeria’s Crude Oil Underproduction. The chapter provides insights into what can be done to mitigate the risks and challenges so that the opportunities can be better harnessed for more sustainable growth and development in Africa.

This chapter analyses salient opportunities and challenges associated with running Small and Medium-sized Entrepreneurial Ventures (SMEV) in the Vhembe district of the Limpopo province of South Africa. Drawing from the experience of eight Vhembe-based Small and Medium-sized entrepreneurs, the chapter identifies and discusses what is entailed in engaging in and sustaining an SMEV in such a context. While some of the identified opportunities include an SMEV-friendly environment for start-ups, access to business networking and clientele base, a less complex market and cheap running cost, some prominent challenges include limited access to finance, lack of basic infrastructure to harness managerial and technical or entrepreneurial skills required for running SMEs, the non-existence of specific entrepreneurial-government policies, and insecurity emanating from violent attacks and theft within South Africa’s rural setting. Based on the review, the chapter inter alia recommends accelerated efforts in improving rural infrastructures and amenities and providing more SMEV-friendly policies to foster rural development and entrepreneurial engagement. Such efforts not only encourage SMEV start-ups, they also provide opportunities for SMEV developments.

Sustainability is a serious issue that any business that wants to succeed with assured continuity must consider. Internal and external issues can contribute to a company’s ability to continue or cease to exist. Making strategic plans and taking critical steps to protect a business’s future within its operation’s industry and environment is what sustainability in business means. Although this may not be an immediate effect, an unhealthy environment results from unsustainable business practices, which will eventually affect the availability and supply of natural materials and the economy. Experts explained that unsustainable practices could reduce employees’ well-being and productivity, affecting a company’s competitiveness. Therefore, this chapter discusses the sustainability challenge, identifies sustainability practices, and makes valuable recommendations for strategic advantages in Africa. Consequently, the chapter concludes that sustainability is crucial to the continuity and growth of every organisation. Organisations need to gain a competitive advantage by achieving sustainability in their workforce through sustainable work conditions. Also, organisations must achieve financial stability by making a profit from which their shareholders can earn profit for their investments and workers would be paid for their work.

African companies should consider consumers as key business stakeholders and protect and develop them. Often African consumers need more resources or the knowledge and education to choose the best products for themselves and their families. Local public institutions lack funds to invest in their populations’ education and protect them from dangerous activities, products, and services forbidden outside the continent.

To protect consumers and reach customer satisfaction, African companies shall build customer-centric organisations that empower clients and employees. By doing so, marketing teams can guarantee an adequate quality standard for their products and services while developing fully transparent Marketing Mix strategies. We can only protect the consumer if he is aware of the product ingredients, materials, or side effects of its usage.

Finally, a responsible marketer should participate in its customers’ education to ensure complete customer awareness and understanding. When local African institutions struggle to give their people the required information and to protect them from unethical marketing behaviours, companies can assist and reinforce this learning through the appropriate Marketing Mix tools and activities. An educated consumer will soon become an engaged consumer.

There is a growing concern about the impact of advertising on African societies. Though advertising has the potential to bring economic growth and development to the region, it can also have negative consequences if not conducted responsibly. This includes promoting unhealthy or harmful products, exploiting cultural values, and perpetuating negative stereotypes. An integral concern about responsible advertising in African businesses is the need to consider the cultural and social context of the region by being mindful of the values and beliefs of different communities and avoiding using offensive or inappropriate content. This is to make sure that advertising does not exploit or mislead consumers. Using various theories, this chapter discusses concepts of advertising, types of advertising, functions of advertising, ethical issues in advertising, and various ways businesses can avoid irresponsible and unethical advertising and focus on using responsible advertising to sell their products and services and promote their brands. The chapter recommends that all advertisements fulfil all ethical obligations to gain approval from regulatory bodies before dissemination. By working to promote responsible practices, the advertising industry can play a positive and constructive role in shaping future businesses in Africa.

This chapter discussed the concept of responsible pricing and how a responsible pricing strategy creates opportunities for businesses in Sub-Saharan Africa to remain profitable in every sales situation and ensure sustainability. Responsible pricing entails setting appropriate value-based prices for an organisation’s product or service offering in such a way that it is affordable to customers and promotes sustainability for the organisation. By setting the prices in a socially responsible manner, a business enterprise would be able to achieve its core objective of sustainability and customer satisfaction. Responsible pricing is mostly achieved by setting prices based on the perceived value of the product/service from a stakeholders’ point of view, particularly the consumers. By dynamically modifying pricing in line with customers’ perceived value, a business may take efforts to decrease the effect of price sensitivity of consumers, which can positively affect the purchase behaviour of consumers. Businesses that utilise responsible pricing won’t set prices lower than necessary because it gives them information on the customers’ willingness to pay. On the other hand, the setting of prices that result in excessive profits or exploit a customer’s needs is considered to be unethical behaviour and against responsible pricing practices.

This chapter aims to increase awareness of the importance of responsible financial accounting in Africa and contribute to the broader discourse on sustainability in the region. It begins by examining the economic landscape of Africa and the history and development of social and environmental accounting (SEA) in the region. The introduction of Western accounting practices during colonial times greatly impacted the way economic activities were conducted and reported on the continent, often leading to neglect of social and environmental considerations. Despite facing challenges such as high levels of inequality, unemployment, and debt, Africa has many economic growth and development opportunities, such as a growing middle class, a youthful population, and abundant natural resources. As a result, SEA is becoming increasingly prevalent as governments, consumers, investors, and other stakeholders demand more transparency and accountability from organisations is a crucial tool for organisations in Africa to navigate the challenges and opportunities of the twenty-first century and contribute to the well-being of people and the planet. To further drive the development of environmental accounting in the region, and influence international standard setting, there is a need for a comprehensive accounting research infrastructure in Africa.

Successful business in Africa requires not only the traditional tools of strategy, structure and operational processes but a holistic understanding of the environment, the continent’s diversity and its intra-continental differences and an effective means of navigating it. The geography, economic, socio-economic factors, culture and values of Africa are tightly interwoven, and all impact workplace behaviours. However, unlike in the UK and the USA, there is a need for more published behavioural research in Africa, so mainstreamed western-based behavioural frameworks are applied with varying degrees of success. The author, who has worked, consulted, taught and coached executives in African workplaces for over 30 years, draws on her experience and research to highlight crucial issues and challenges affecting and influencing employee behaviour in Africa. She suggests adopting cultural humility when relying on western frameworks, setting aside preconceptions and seeking practical ways of working that may differ from perceived norms. She posits that employees must be regarded as key stakeholders in organisational success and suggests building cultural awareness, aligning employee and corporate organisational values and treating employees sensitively and inclusively. She shares a practitioner’s viewpoint, several African examples and useful insights that should enhance employers’ abilities to proffer culturally sensitive strategies for business success.

Leadership has always been at the heart of management discourse. Still, ethical leadership has gained more prominence following the collapse and scandals that engulfed the corporate world (Enron, WorldCom—Corporate scandals) not too long ago. The performance and culture of an organisation are closely related to the quality, effectiveness, ethical attitude, and approach of its leader. This is because leaders do not only inspire but drive the performance and culture of the organisation. Recent studies have also established that ethical leaders are perceived as very effective leaders as they recognise the uniqueness of their people and thus motivate them to more excellent performance. Many unethical behaviours by leaders have had catastrophic effects on the different stakeholders, while leaders who have built an ethical culture have formed a culture of excellence in their organisations. Ethical leadership is therefore concerned with treating employees and other stakeholders with dignity and building a culture of excellence where all the stakeholders can flourish. This chapter would therefore focus on what constitutes ethical leadership and how organisations can build a culture where employees and all stakeholders can thrive and build a sustainable business.

Successful businesses create products that transform their customers and society for the better in tandem with the drive to preserve the environment for future generations; this attribute resonates with any business mandate to integrate waste management solutions in its value chain. Responsible African business leaders must be prepared to control and manage their ecosystems regarding the impact of the issues that concern the ethos of the circular economy; the onus rests on African business leaders to navigate responsibly waste management issues and solutions as their businesses evolve and adapt to the future. This chapter will focus on the concept of waste management in Africa, evolving waste management issues; challenges and opportunities of implementing the circularity principle in both industrial and service-based sectors in emerging economies; adoption of innovative measures regarding how emerging economies can transit from the traditional linear approach of production and consumption to a circular path. The scope of the chapter will also entail a discussion of how African leadership in both private and public sectors can sustainably imbibe and integrate the principles and practices of circularity in their value chains amidst the challenges of insecurity and inept business practices abound in Sub-Saharan Africa.

Corporate Social Responsibility (CSR) is a tool that can be applied to reduce risks, build brand equity, elevate market performance and drive business sustainability. In developed countries, CSR is becoming a crucial determinant of organisations’ ability to deliver expected outcomes to stakeholders and attract future investments. However, in Africa and other emerging markets, the practice of CSR is still evolving, inspired more by the philosophy of charity, philanthropy and stewardship than business strategy. Against that background, this chapter interrogates the approach to CSR in Africa from ideation to execution/impact and argues for integrating CSR initiatives with business operating strategies to entrench responsible business practices and unlock profit-making opportunities. From a conceptual perspective and the prism of the stakeholder management theory, the chapter draws attention to the shortcomings in the practice of CSR in Africa. It offers suggestions for improvement across the design and implementation protocols. Specifically, the study recommends broadening the corporate social performance spectrum in Africa to incentivise and energise more participation from Micro, Small and Medium Enterprises (MSMEs) as a pathway to scaling CSR impact in the continent, especially in the post-COVID-19 era.

Logistics and supply chains as critical functional areas of operations have evolved regarding effectiveness. This evolution has implications regarding the dependability of the organisational ability to adapt and adopt relevant metrics to responsibly deliver value to organisational customers and stakeholders. Initiating and sustaining this balance pose a challenge to most organisations regarding enhancing responsible logistics and supply chain effectiveness amidst navigating emerging operational challenges. Organisations operating in emerging economies, like those operating in developed climes, need to leverage internal and external operational capabilities to resolve evolving challenges in tandem with the need to provide value to their customers responsibly.

Thus, this chapter will focus on responsible logistics and supply chain framework, critical challenges in driving efficient and effective logistics, and supply chain operations in emerging economies relating to dimensions of green operations. It will also provide a framework for creating a sustainable cum responsible logistics and supply chain architecture to adapt to eco-friendly logistics practices; sustainable supply chain architecture is geared towards the responsible, innovative drive for technology, people, and the environment.

Globally, businesses and corporate organisations are experiencing unprecedented volatility, uncertainty, complexities, and ambiguity (VUCA), which have made succeeding a herculean task. Therefore, how an organisation is managed, directed, and controlled—corporate governance has become a leading topic among stakeholders in the business world. This is because corporate governance effectiveness has been recognised as an indispensable factor in achieving sustainable long-term organisational success, irrespective of the sector, business model, and size. The board is the focal point of corporate governance, and it is responsible for its effectiveness through the board’s oversight, leadership, strategic, and other functions.

Overall, the state of many African Boards is not prosaic, and most African organisations struggle with running an effective board due to some cultural, economic, political, and legal factors on the continent. This chapter submits that corporate governance in Africa can be strengthened through legal and regulatory reforms; education and training; stakeholder engagement; auditing and monitoring; and meeting international standards and practising global best practices. However, African organisations seeking to run an effective board must focus on strategy, reinvention and innovation, technological adoption, and board assessment, amongst others.

During the fifteen years of teaching Business Ethics and Leadership at the Lagos Business school, I realised how important it is to write this book on responsible business practices in Africa. A book focused on helping managers see how important it is to make responsible business decisions and achieve sustainability in their businesses. From my interactions with hundreds of top corporate executives of various organisations, I have discovered that many believe that making responsible business decisions and taking responsible actions is crucial for businesses to remain sustainable. However, many find it challenging to give enough voice to their values due to the structural, economic, and ethical challenges of doing business in Africa.