Since the outbreak of the Covid-19 pandemic, we have witnessed an unprecedented and devastating slowdown on business activity worldwide.
Of course, nobody could have predicted that in 2020 we would have a pandemic with such devastating death rates and business impact as Covid-19.
In Malawi, the effects of the pandemic have been felt more on business activity than human mortality.
Generally, disease outbreaks are managed by health workers using vaccines and treatment.
However, on the business front, there is a general rule that one has to save and invest for a rainy day. This means that one has to always anticipate unfavourable times in the future and make certain investments to act as a shield against such setbacks.
With this rule in mind, one would be baffled by the fragility businesses have shown in light of the pandemic discovered in China last December.
The big question is: Why have businesses collapsed so easily in the face of coronavirus transmission?
For starters, the primary purpose of business is to maximise profits for its owners or shareholders. However, business practices nowadays show that there is a thin line between profit-making and greed.
What is common is the strong obsession by business owners and shareholders with profit maximisation, a tendency mostly driven by greed.
This greed, masquerading as maximising profits, is manifested in different forms. These include exploitation of employees, engaging unqualified workforce, use of substandard materials, and adoption of outdated technology (or none at all).
Unfortunately, such practices have been designed by shareholders to serve one purpose only—making more money for themselves through cost-saving activities that mostly threaten the survival of the very businesses they depend on.
In the end, greed deprives businesses of innovation and cash reserves, which are paramount to the survival of any business in tough and unprecedented times.
So, if you want to understand why businesses have shown less resilience to the coronavirus pandemic, the answer is simple—corporate greed!
It is no secret that in recent years, business owners have taken out more cash from their businesses at the expense of corporate savings or investments.
For the sake of perspective, how many times have we seen or heard of companies paying out massive dividends while the business is stuck with archaic technologies?
How many times have companies paid out massive bonuses to a few executives while the rest of the workforce complains of poor conditions of service?
In simple terms, business owners have been busy maximising their returns instead of reinvesting in their businesses to strengthen resilience.
The Covid-19 pandemic has exposed this gap.
To survive, companies in recent months have either been taking job cuts or effecting pay cuts for their staff.
Sadly, at the end of the day, the major loser paying for corporate greed is the mere employee.
Workers are either kicked out of employment or forced to earn less in their current jobs.
However, it is worth noting that as the pandemic rages, some few companies have stood firm and others have even registered growth.
A closer look at such companies unravels two things: resources and innovation.
One can argue that had business owners and shareholders reinvested more in their businesses, most companies struggling due to the global coronavirus outbreak would have had enough resources, including cash reserves, well-trained and innovative workforce and modern technologies that would minimise the adverse knocks caused by the pandemic on their business operations.
Of course, the next setback to be suffered by businesses might be another pandemic.
The Covid-19 outbreak ought to be a learning experience for business owners.
It is high time business owners started striking a balance between the appetite for profit maximisation and the need to invest in their businesses.
Corporate greed has no place in the creation of resilient business models.