Saving the bottom line at the expense of reputation

Managing a big business comes with a deep understanding of trade-offs.

Contacts with suppliers are critical, but equally so are relationships with those suppliers.

When disagreements emerge and a breakdown of a relationship happens, a choice needs to be made under conditions of uncertainty.

Choosing to enforce contacts and play hardball with lawyers that might save your bottom line, but this approach also runs the real risk of being viewed as resorting to bullying in the public eye if the story goes mainstream in the press.

Yes, a big business has every legal right to enforce the working frameworks that have been put in place, but the cost for doing so could end up being far higher than whatever was saved financially by doing so.

Trust and reputation

These days, maintaining trust and a good reputation for ethical business practices is an outcome worth far more in the long-term than any choice that could potentially put that hard-won perception in jeopardy.

You don't want the public to start thinking your brand abuses its power in the market; or the rest of your supplier base to start questioning the integrity of their contracts.

In South Africa (in particular), the country is very sensitive to any corporate behaviour that seemingly puts entrepreneurs or jobs at risk. The consequential futures of a poorly managed breakdown of these relationships carry lots of reputational risk that needs to be carefully understood before decisions are made.

Bottom line: The bottom line is worth less than a good reputation. Guard the latter at all costs.