Finance Small Business Unconscionable behaviour demonstrates need for cultural change

Unconscionable behaviour demonstrates need for cultural change

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Coles has finally been found out and fined over the way it has dealt with its suppliers with the company agreeing  to pay $11 million in penalties and  review contracts with hundreds of suppliers after admitting to 15 instances of unconscionable conduct.

The decision should prove a watershed and I suspect managment in the big supermarket groups have been re-examining business practices as  complaints from suppliers have grown into a crescendo over the past year.

• Coles fined $11.25 million
• Company fined for dumping CSG fracking water in Newcastle sewer

Coles now faces a massive cultural shift in moving supplier relationships from  “just do as you are told” to one of “how do we do this together?”

That is a difficult task that must begin at the top and involves changing behaviour right through the organisation to avoid future fines.

The field operators, the business negotiators, the buyers and all those who deal with suppliers need to be called back to head office and given unambiguous instructions to deal fairly with other businesses.

The impact of unconscionable behaviour has been felt widely throughout the economy as manufacturing suppliers have been told to stop thinking and just do as they are told.

That in turn reduces the productivity of the nation as companies stop looking for better ways to do things, damages our standard of living  and dampens optimism.

It also reduces consumer choice by restricting the development of new products.

This unconscionable behaviour has meant  too many honest, hard working and clever individuals are going home to their families stressed out and worried about their futures, damaging their health and family life.

The victory that today’s decision represents is a result of some significant action  by a number of parties.

Bruce Billson, the Minister for Small Business, is to be congratulated for creating an environment where those who have suffered from the effects of  such unconscionable conduct  have been empowered to come forward, explain what is going on and demand action.

ACCC chief Rod Sims and his team have shown professionalism, courage of conviction and nerve in facing off some of the biggest companies in Australia and their  well-resourced supporters.

Mr Sims has won a battle from which some of his predecessors have retreated or surrendered, ignoring the protests and plight of small business.

Representatives of both sides of politics for too long have also lacked the courage or conviction to take on powerful interests in the retail sector, holding on to the threadbare argument that “competition” would sort out the problems.

These politicians failed in their portfolios and failed the business community; they know who they are and they should hang their heads in policy shame.

We in the small business community are happy to work with big businesses in honest fair partnerships where there are rewards for hard work and good management.

In most cases that is exactly what happens and it needs to happen with the supermarket duopoly.

We will probably never remove the dominant power of a few big companies but we are surely justified in expecting that power will be exercised with responsibility; a responsibility we have too often not seen demonstrated in any real way.

Until that happens we will continue to see economic, personal and social damage with our small business sector and society in general not flourishing as it should.

Peter Strong is CEO of small business advocacy group COSBOA


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