Abuse of a system-going back to basics

1. ABUSE OF A
SYSTEMIT IS TIME TO GO BACK TO BASICS
By The4Oxen

2. ABUSE OF A SYSTEM
IT IS TIME TO GO BACK TO BASICS
We keep South Africans in Business and in Employment
ABUSE OF A SYSTEM
IT IS TIME TO GO BACK TO BASICS
Balanced
Capitalist System
Unbalanced
Capitalist System
Capitalism Abuse
Purpose Driven
Capitalism
RESTLESSNESS AND INEFFICIENCY
No steadiness
No sustainability
No stability
No succession
BUSINESS BASICS
A Corporate exists to ensure OUR survival
• Adam Smith
• Average Lifespan of a Company is 60 years
• Milton Friedman
• Layoffs began in the pursuit of arbitary projections
• Now we leave or are asked to leave
• Average lifespan of a Company is 20 years
• Larry Fink (CEO of BlackRock Inc)
• The 4 Oxen
18th
Century
1950s
1970s
1980s
1990s
2000s
2018
2020

3. CAPITALISM
BENEFITS THE
RICH OVER
THE POOR?
We keep South Africans in Business and in Employment
Balance Capitalist System
Adam Smith
Unbalanced Capitalist
System
Milton Friedman
According to Adam, it is human
nature to advance personal
interest. Thus corporations were the
most effective, powerful and
beneficial organisations in the
world. The average American would
invest in Companies and enjoy
good returns. Back then, executives
and directors saw themselves as
stewards of the public interest and
served not just the shareholders,
but employees and communities.
Smith, however, was not blind to a
Businesses Owner’s propensity to
rely on short-term goals or a finite
mindset. We all have a selfish
motivation to build durable
companies. Thus it is in our human
nature to advance our interest,
which Smith called the “invisible
hand”. Amid the 20th Century,
production was the ultimate
objective for all industry and
commerce.
Thus, a Company’s interest came
second to the
importance of the consumer,
whose needs furthermore bear
sacrifices to the needs of the
producer. In the end, the invisible
hand ultimately benefited the
consumer and as a result, an
average business lifespan of 60
years.
The selfishness of outside investors
alance. The introduction of this
unbalance system is after the
influence of a Nobel Prize Winner in
Economics and the most
significant theorist of today’s
Capitalism, Friedman. Friedman is
responsible for what is now known
as the heart of finite-minded
business practices, the theory of
Shareholder Primacy.
According to Friedman,
Shareholders are the rightful
employers of the Company’s
executives and directors, whose
responsibility it is to conduct
Business following the
Shareholder’s desires. This desire,
generally, is to make as much
money as possible, while
conforming to the basic rules of
society, as embodied by the law and
ethical customs.
Based on the Shareholder Primacy
Theory, there is but one social
responsibility of businesses, which
is to use its resources and engage in
activities designed to increase its
profits so long as it stays within the
rule of the game. In other words,
the sole purpose of Business is to
make money, which rightfully
belongs to the Shareholders.
As a result, the general stance is
that the Owner of a Company sits at
the top of the benefits food chain
and that Business exists solely to
create wealth. Thus, it is often
assumed, up until today, that
putting pressure on a Company to
cut the cost to maximise the return
on investment is the only way that
the game of Business is successful.
In reality, Friedman’s view on
Business is very one-dimensional.
However, recent history has shown
that Business is much more
dynamic and complicated.
In an attempt to please sharehold-
ers and the desired short-term
gains, layoffs began to destroy
lifelong commitments to a Compa-
ny, and pride, trust and loyalty
diminished in both directions.
By now, the new normal is that we
either leave or are asked to leave.
In short, due to Friedman’s
unbalanced capitalist teachings, we
have been building businesses for
the past 40 odd years, with a
self-destructive definition of the
business game. The result of the
“after me the flood” mindset, we
forgot that Capitalism exists to
advance the quality of life by easing
or enhancing our lives. Unlike
Friedman’s selfish mindset,
Capitalism is not only about
prosperity, but also progress.
Employees and the Human Species
in general, want to feel part of a
bigger picture than just ourselves,
or stated differently, part of an
infinite cause.
According to Adam,
it is human nature to
advance personal
interest.
“invisible hand”
CAPITALISM
BENEFITS THE
RICH OVER
THE POOR?

4. We keep South Africans in Business and in Employment
Abuse of Capitalism
No Purpose
Back to Basics
The Problem
The Solution
Many leaders practice in Business
today is more of an abuse of Capi-
talism, which is organised to
advance the interest of a few people
who abuse the system for personal
gain.
Today, the average lifespan of Busi-
ness has decreased drastically to 20
years. Many blame the develop-
ment of the destructive effects on
technology. In contrast, others
argue the decline in lifespan for a
business is a symptom of a more
insidious root cause.
This insidious root cause might be
found in the futurist trend when the
concept of forecasting was consid-
ered critical across multiple institu-
tions between the 1950s and 1980s.
Teams of futurists examined the
technological, political and cultural
trends to predict their future
impact on Business and prepare for
it. As a result, Companies felt pres-
sure to grow incredibly fast to
ensure maximum return on invest-
ment for shareholders and a com-
pulsion to go public.
Executives and directors yielded to
the pressure of playing with the
finite mindset and began making
decisions based on the short-term
gains, despite the infinite,
long-term benefits.
By now, the average lifespan of a
Company reduced drastically since
the 1970s. Still, the South African
Labour Market and
Competitiveness have dwindled
frighteningly low because of strict
reliance on Friedman’s Shareholder
Primacy.
The Global Competitiveness Report
and independent Rating Agencies
continue to downgrade South
Africa into hopeless and dismal
economic rankings. Ultimately, we
are heading towards a repeat of the
2008 Global Recession. The reasons
for these dismal rankings are
plentiful and amongst others are
due to unethical and corrupt
business activities. Corruption,
whether in the private or public
sector, has resulted in many citizens
and employees simply refusing to
trust businesses and institutions.
Start-ups and small businesses
cannot continue to prosper in these
conditions. Our finite mindsets
approach to employee relations has
to change to ensure that the
threats to our success and survival
can be eradicated. In other words,
Capitalism abuse, due to the
development of an unbalanced
system, brought us instability and
no promise of sustainability or
succession. The drive for speedy
growth destroyed the value of
steadiness. Business Owners have
mostly lost their sense of purpose
and in their journey to achieve
short-term successes, neglected to
stay true to their purpose and cause
in Business.
What we have as a result is
short-term minded Human
Resources Management strategies,
which only ensure success and
sustainability to those consultants
who hire and fire on demand.
Stakeholder Primacy will result in
the loss of the privilege to operate
and own a Business. Businesses will
eventually succumb to short-term
pressure to distribute earnings and,
in the process, sacrifice invest-
ments in employee development,
innovation and capital expenditure
that are necessary for long-term
WE NEED TO GO
BACK TO BASICS.
growth. By feeding those who
survive on your misery, no business
will ever operate to their fullest
potential and will not stand a
chance to fight threats.
In 2018, Larry Fink, the founder,
chairperson and CEO of BlackRock,
Inc. caused a bit of a stir in the
financial industry when he wrote an
open letter to CEOs titled “A sense
of Purpose”. The call to act on
purpose is not a recent discussion.
Still, when someone in the position
of Larry Fink encourages the finan-
cial world to avoid playing the finite
game, it moves conversations in the
right direction.
The Four Oxen believe in assisting
the most vulnerable in our society.
We do this by trying to keep as
many South Africans employed as
possible. Start-ups and growing
businesses, most often referred to
as SMMEs, employ approximately
75% of South Africans and therefore
deserve to be supported in their
employee relations.
SMMEs are the most vulnerable to
inefficient and hostile employee
relations. They, therefore, should be
offered the assistance to approach
their employee relations in such a
way that makes business sense and
that ensures sustainability, stability,
steadiness and succession.
The Four Oxen base their services
on these four principles and there-
by ensure that SMMEs create
psychological safety, fair compensa-
tion and a sense of being part of a
just cause for their employees. Busi-
ness Executives are reminded of
their purpose in Business and learn
to become stewards to the greater
community. Ultimately, Businesses
will learn to employ their invisible
hand once more and develop Capi-
talism with a purpose.

5. By The4Oxen
We keep South Africans in Business and in Employment
Article by
Maike Zirzow
ABUSE OF
A SYSTEM
IT IS TIME TO GO BACK TO BASICS

6. Contact Us today on
T: +27 (0) 72 285 1964
E: why@the4oxen.co.za
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