How Change Happens in the Private Sector | Non Governmental Organization

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This paper summarises the main factors that brought about change in two private companies, and their implications for civil society actors aiming to generate more pro-poor change in the private sector.
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    How change happens in the private sector Kate Raworth and Liam Wren-Lewis Oxfam believes that private sector actors can change their strategies, policies and behaviour to have a more positive impact on poverty reduction, and to do less harm to poor people. There are clear cases where companies have changed in these ways. How and why did those changes happen? In order to answer this question, we chose two examples of major companies that changed for the better. We got as close as possible to the source of that change to understand the factors that led to it. At the end of each case study, we summarise the five main factors that we think brought about change, and consider the implications of these for civil society organisations that want to generate more pro-poor change of this kind in the private sector. 1 How the biggest supermarket in Africa (Shoprite) started buying locally grown vegetables in Zambia The following conversation is between Martin Kalungu-Banda (MK-B) (former Head of Oxfam GB Private Sector Team) in conversation with Kate Raworth (KR), October 2005, with additional interview transcript from Dr Yambayamba.  KR: Sumi 1  and I have been asked to write a paper on the private sector for the upcoming book From Poverty to Power  . From Poverty to Power   is going to be about how and why change happens: change in the way a company operates, such as how it starts protecting the environment, or switches to a strategy that is more beneficial to poor people. In our background paper on the private sector, we want to include several case examples of how change has happened. From a distance, we don't really know how it happened, and we either guess or make assumptions. But the closer we can come to the people who actually made the decision to change, the more we can understand about the real motivations, and the personal factors which helped to bring about the change. I love the story that you tell about Zambia because you were closely involved and instigating it. You weren't the person who changed; but you were absolutely instrumental in causing the person to change the way he thought and acted. I'd like to describe it as an example of how change happens in the corporate sector. Perhaps you would like to tell me the story in the same way that you’ve told it to me before? This case study was written as a contribution to the development of From Poverty to Power: How Active Citizens and Effective States Can Change the World , Oxfam International 2008. It is published in order to share widely the results of commissioned research and programme experience. The views it expresses are those of the author and do not necessarily reflect those of Oxfam International or its affiliate organisations.    How change happens in the private sector From Poverty to Power - www.fp2p.org 2 MK-B: I was doing research on good governance, for my work in the University. I travelled to the Eastern part of Zambia, also known as the Eastern Province. I went to some villages away from the provincial capital. With a group of students, we camped in the village called Luangeni. In that village, where we stayed for about ten days, I noticed that there were so many children. In the evening, children would gather round the centre of the village where the elders were sitting and telling stories, and the children would come there and when the elders were not speaking, they would sing, dance and play their own games. I asked the village headman who was sitting next to me - not because I was concerned but I just wanted to begin a conversation, 'How many of these children go to school?' He replied, 'Not more than three, four.' I decided to count the children, there were about eighty-six! Then I followed up with another question. 'Why don't people want to take their children to school?' He said, 'They used to take the children to school until something happened.' I asked, 'What happened?' And he said, 'The supermarket - Shoprite - came and camped here.' I said, 'I don't understand,' and then he answered, 'Before the supermarket came here, we used to grow vegetables of various types in that damp area over there,' - I could see where he was pointing to, even though it was dark - and he said, ‘That damp area has water throughout the year, and we used to grow vegetables and every weekend, we put those vegetables on our bicycles and went and sold them to the BOMA,’ as the provincial centre is called. And I asked, 'What is the way out of this, then? This supermarket just pushed you out like that.' And he said, 'We are just waiting for a time when a riot will come to the BOMA, and probably some people will set that thing alight, and then that will force them to leave.' 'We are waiting for a time when a riot might occur in town. And that would be a good excuse for setting the supermarket on fire. That would probably discourage them from coming back and then we can go on with our business of selling vegetables.' I asked, 'Have you ever been to the supermarket itself? You could have gone there to say, 'We have these vegetables. Why don't you buy them from us?' And he said, 'We were told, ‘Your vegetables are of inferior quality, and we don't want to deal with you.’ ‘ I was probably diverted to something else, but it kept lingering on in my mind. So one day, I decided to break away from the research we were doing and went to the BOMA and asked to see the local manager for Shoprite. I went to him (Mr Botha) and said, 'This is the issue. Is there any way you can work with the community?' And he replied, 'No, no, no, no. You are not speaking to the right person. I receive products that have already been signed-off in Lusaka, the capital city, because that's where the General Manager for Shoprite in the country (Mr. Fritz) sits.' KR: Was the local man Zambian or South African?    MK-B: He was Zambian. So, I went back to the capital city and I decided to sit with a group of friends. I said, 'Guys, this is what I've found.' One of them is an agronomist, teaching at the University of Zambia. I said, 'This is the problem we have seen. Our system is dying purely because Shoprite, which is the only supermarket in the country, imports most of its products directly from South Africa. And that has simply put local businessmen out of business. I said, 'Do you think we can go and talk to the Shoprite General Manager about this?' And they said, 'Yes,' and for some reason, I asked that we rehearse what we were going to talk about. Because my colleague was an agronomist, I asked him to put a very strong case on why vegetables must be grown in the Eastern provinces. KR: What angle were you arguing from - the point of view of Zambia's economy or the point of view of the consumer? MK-B: From the angle that local communities had become worse off because of Shoprite's importation of vegetables. KR: So in terms of Zambia's own development, this was an important crop? MK-B: I wasn't even thinking of Zambia, I was thinking of just the Eastern province. Because I couldn't believe a village like that. I had worked there two years previously, that's how I knew where to go when I was doing this research. I worked under Oxfam. I went there because I was working on economic justice, I had gone there to see some women who had transformed their own lives because Oxfam gave them seeds. And the whole of that had simply changed: I didn't go because I knew the change had happened in a negative way, I went because there was a success story, and I wanted to hear how villagers and their leadership can work to change their circumstances. KR: Just out of interest, what had happened to those women when you got to the village? MK-B: They had become worse off. Two years previously, they were the big story we were telling everywhere and saying, 'Look how transformation can happen. You do not need to do anything more important than making seeds available to them and then they will do the rest by themselves.' KR: The Oxfam project gave them vegetable seeds? MK-B: Oxfam gave maize and sorghum seeds and also vegetables. So we rehearsed, and then we went to the General Manager's office after making an appointment. KR: How many people went? MK-B: It was the two of us: the agronomist Dr. Yambayamba, and myself. And we entered this massive, massive, big, big office. Typical of what you hear about corporate offices. He was sitting behind this very long, wide brown table. He said, 'Yes, gentlemen, can I help you?' KR: What was the ethnicity, the background nationality, of the General Manager? MK-B: The General Manager was a white South African. He was the kind of person who would be classified in those days as Boer farmer, and all that. In his incredibly beautiful offices, he was the typical ‘casual,’ he wore a khaki shirt and jeans, and did his work in that way. KR: Were there other people there? MK-B: Just him. Then we introduced the issue. We said, 'Look, this is what I found out in Luangeni village...' How change happens in the private sector From Poverty to Power - www.fp2p.org 3    KR: When you had asked for an appointment, did they say, 'Who are you? What do you want?' Why did they give you the time? MK-B: That's interesting. At that point, although we had formed the Zambia Partnership Forum, which was an organisation trying to champion partnership between government, business and NGOs for development purposes, we didn't ask for an appointment as that, we asked for an appointment because both of us were teaching in the University. We thought that would gain us space, rather than going there as an NGO. KR: Do you remember what you said when you were talking to his secretary? 'We're both teachers at the University and we want to come and meet him because...?' MK-B: 'We want to come and meet the General Manager because of the issues we found when we were doing research on behalf of the University and this is an issue which affects your business - but also affects the community.' KR: You got your appointment. MK-B: I introduced the subject and I said, 'Your business has caused the following problem. People were better off and now they are worse off.' And he immediately interrupted and he said, 'Martin. See the wider picture. You might complain about a few households. See how many people's lives have improved for the better. People access quality foods, people access quality utensils and many other things. People used to line up for bread - now they can have bread at any time they feel like. People could not predict when they were going to have tomatoes or vegetables or celery and all these things. Now it's clear - they will find it there. Besides, the price is unbeatable. Isn't that what it means to serve a community?' I said, 'I understand, but isn't there a way in which that this can happen and yet the communities are not becoming worse off? We do not have to choose.' Then my colleague came in and said, 'Look, Eastern Province and the part you are talking about - these are traditional farmers. They have plenty of water. It will not cost them much, and over time, they can be trained to produce what you are looking for.' And at that point he leaned forward and he said, 'Guys, think, think! This is the beast I run. It is not like any other things you have known. It works on the basis that everything is predictable. There will be tomatoes, there will be onions - and not just that but there will be onion and tomatoes of a certain size, of a certain quality. And that has to be constant. When change occurs, people will know, and will be informed, and the results will be explained. And your people are incapable of understanding that.' KR: What do you mean, 'When change occurs, people will be informed...?' MK-B: What he meant was, 'When we have brought in change to the product - size, quality, colouring and all that - we will precede that change with information which will let them know and then again they will expect something - and your people are not capable of understanding that. We have asked them to supply us tomatoes - when they have managed to bring them, they have been of a completely different colour than we would like, the size will not be desirable and they will think that we are just troubling them, because we are asking for this size and not that size.' My colleague, Dr. Yambayamba, said, 'They can be trained. Most of the villagers you are talking about are extremely literate.' How change happens in the private sector From Poverty to Power - www.fp2p.org 4
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