The integration of economic, social and environmental goals in a leasing product for a financial

institution in an African country: a case of Business Ethics?

Roberto Patrus Mundim PenaPatrícia Bettencourt

Introduction

• Is it possible that a commercial bank offers a product that is simultaneously economically viable, socially fair and environmentally correct?

• How can a commercial bank contribute to the overall national development of a developing country with its products and services?

The object of study

• The object of this study is a specific program/product named “More Taxi for Me”.

• This product results from a partnership between Millenium bim and the Maputo (Mozambique) Taxi drivers Association.

• It is an offer of a leasing product in order to buy more recent vehicles with special terms to the taxi drivers and to the bank.

Background

• In Maputo, capital of Mozambique, the fleet of taxis was (and still is) old and careless.

• The cars were not safe. • There was not a single brand new taxi,

zero kms, on the streets of the capital. • None of them had any advertising (who

was up to advertise its brand in an old and ugly car?).

The Theoretical Referential

• The research was based on a Business Ethics (BE) model, proposed by Lozano (1999) and developed by Pena (2004) which intends to simultaneously integrate:– ethical values;– responsibility over corporate behaviour– and the establishment of those values in the

organisational culture.

The Model of Business Ethics (BE)(a) Affirmative Ethics of Humanity's Principle

(b) Ethics of Responsibility

(c) Ethics of Virtues

(d) Business Ethics Model

The Model of Business Ethics (BE)

• The ethical company sets up the limits of its economic profits search. Those limits are traced by the affirmative ethics of the humanity’s principle (a).

• Deontological approach: Kant

The Model of Business Ethics (BE)

• The ethics of responsibility (b) is in charge of taking into consideration the dimension of the responsibility with the future.

• Teleological perspective: Jonas (1995)

The Model of Business Ethics (BE)

• The managerial ethics demands that the organisational culture expresses the values assumed and affirmed by the company.

• Virtue is here understood as the value converted into act.

• Virtue’s perspective: Solomon (1993).

The Model of Business Ethics (BE)

• This triple ethical reference proposed by Lozano (1999) and developed by Pena (2004) tries to verify the congruence among: – an ethics of responsibility – an ethics of humanity – an ethics of virtues

The Model of Business Ethics (BE)

• The presented BE approach demands that:– the triple bottom line shall be integrated in

a single bottom;– which integrates simultaneously the

economic, social and environmental dimensions.

The Model of Business Ethics (BE)

• The focus of BE is the organisation.

• That approach refuses the business ethics compensatory dimension:– through which the company would try to

make up the impacts of its management action by means of social and environmental programmes detached from its core business.

Compensatory X IntegratedSustainability

Sustainability

Economical Social Environmental

Environmental

SocialEconomical

IS

Methodological procedures

• It is a case study,• performed at the Banco Millenium bim, a

financial institution from Mozambique, Africa– Millemium bim is a signatory of the Global

Compact

• It is detached the product Taxi Leasing, developed from the “More Taxi For Me” campaign.

Methodological procedures

• Research tool: 4 half-structured interviews with – the CEO – the Marketing Manager – the President of the Maputo Taxi Drivers

Association (Associação dos Taxeiros de Maputo - ATAXIMA)

– a taxi driver not beneficed by the leasing.

Methodological procedures

The questions of the research : – Would the program More Taxi for Me be

accomplishing the Business Ethics model, i.e., bringing together ethical values, responsibility towards the stakeholders and virtue?

– Is it about a sustainable product, which simultaneously associates economic, social and environmental purposes?

– If so, in which perspective: integrated sustainability, or compensatory sustainability?

Data analysis: the opportunity

• “There was a strong pressure to improve the fleet” – President of ATAXIMA

• The critical situation of Maputo city taxi fleet shaped a good business opportunity - Marketing Manager of the Bank

Data analysis: “business first”

• According to the Marketing Manager of the Bank, economic value guided the analysis of business feasibility, complemented by the social parameter.

Data analysis: “the conterpart”

• The product was created without any entrance money.

• In extenuation of the risk, the Bank would advertise on the cars, as counterpart to ease the credit

Data analysis: “the conterpart”

• The Bank lead the negotiation process with the supplier in order to use its better dealing power to get all cars from same brand, same year of manufacture, same white colour and a better price.

• It is not the bank’s role to purchase for its clients, but this was about a social service aggregated to the commercial product.

Data Analysis

• Ten leasing contracts were celebrated, without any initial down payment, with prices and terms current in the market.

• After a year from the first offer, other ten more operations were done.

• In November 2007, another operation, the third so far, raised the financed cars up to thirty.

Results – for the Bank

• For the Bank, a financial operation has been established which, for the time being, has turned out profitable.

• There was no operation with its credit in delay which points to a great chance of no money loss.

• The Bank has its advertising in the cars, associating its brand to an initiative of social character, assuring its reputation near the public.

• Taxi drivers whom had access the second and third phases of leasing opened new bank accounts.

Results – for the Taxi Drivers

• They have been celebrating more businesses, transporting more passengers

• For the Taxi drivers Association this, through the raising of its associates and by their contributions assiduity, which was a selection criteria required to join the operation.

Results – for the Taxi Users

• As the Taxi users concern, tourists and Maputo’s inhabitants, the profit is obvious: transport with greater comfort, security and wellbeing.

Results – for the authorities

• The programme “More Taxi For Me” has been contributing for the accomplishment of the legal obligation to have motor third party insurance.

Final considerations• Can "More Taxi For Me" be considered a programme

that integrates the economic, social and environmental objectives of a company?

• From the sustainability point of view, it is undeniable that Taxi Leasing integrates economic and social dimensions.

• Indirectly, the purchase of more recent vehicles decreases the carbon emissions into the atmosphere.

• Though it has an environmental value, which can improve, this value has been absent from the company’s speech.

• This is an initiative of integrated sustainability as the economic, social and environmental dimensions (this one in a lesser degree) are inherent to Taxi Leasing.

Final considerations

• For the Bank, the advertising in the cars was justified as an extenuation of the operation’s risk.

• In this way, under the business perspective, it was being paid by the Bank. In that sense we could ask if the social dimension was being paid by the advertising.

• it was not possible to calculate the cost of publicity and its relation with the Taxi Leasing return rate and to compare it to the return rate of a common Leasing operation. It remains there a restraint to the analysis of the collected data.

• As the operation does not register delays in payments, can we say that publicity has been free of charge?

Thank you!

p.bettencourt@doit.co.mz

robertopatrus@pucminas