Business commentary

2016-09-08 06:00

DEALING with risk is a requirement in any business. CEOs are tasked with identifying likely areas of risk and coming up with risk mitigation strategies to counter them. Normal business risk relates to things like new technology, competitor activities, changes in consumer behaviour and preferences, input cost increases and changes to legislation. A dynamic risk mitigation strategy is an indication of informed proactive leadership.

The question is how does one deal with significant levels of “abnormal” risk? In this context, abnormal risk relates to the current political, economic and socioeconomic situation in South Africa.

Individual businesses have very little control over political power struggles and vendettas, investment rating downgrades by external agencies and poor management of state owned enterprises.

Faced with the very real risk of economic meltdown on a national and by extension regional scale, there is nothing that individual businesses can do but there is a lot that organised business can do.

It is time that all business groupings form a united front and take on the politicians in the interests of saving the country. I am convinced that, given the potentially dire circumstances faced by their constituency, organised labour will, at least until the threat is averted, join forces with organised business and succeed in achieving a leadership change in the ruling party.

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