Microsoft Word 6-057 a gentler Capitalism Final version June 2006. doc

 

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groups, through targeted hiring, training and promotion.  Employment Equity was 

designed to ameliorate systemic discrimination, such as the adverse or disproportionate 

effect of staffing policies, including credentials and experiences requirements unrelated 

to successful job performance.  Managing diversity was an organizational developmental 

strategy primarily concerned with improving interpersonal and inter-group 

communications and relationships in the workplace.   

To Charnley, the empowerment situation at MTN required swift and decisive 

action for both business and social reasons; “BEE was simply the right thing to do to 

address inequities of the past in addition to being a clear strategic and business 

imperative,” she explained.  When Charnley became involved in MTN, the entire 

executive team, with the exception of one colored man, was white and more than eighty 

percent of all senior managers were white.  Because the company was growing, there 

were opportunities to bring in black employees without removing incumbents, a 

circumstance that was not true at many South African companies faced with downsizing 

to meet the competitive pressures of an open economy and globalization.

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    However, 

skilled telecommunications professionals and managers were scarce, and turnover was 

costly.  

With the endorsement of her fellow board members, Charnley insisted that black 

candidates be considered in the candidate pool whenever openings in professional and 

managerial positions arose.  These moves were often met with resistance.  There were 

various concerns expressed.  Some contended that previously disadvantaged job 

candidates did not have as much experience as white candidates.  In response, Charnley 

reminded the staff that 95% of them had not previously worked in the 

telecommunications industry.  Another concern was that amongst the relatively small 

pool of skilled black professionals in South Africa, there were simply too few candidates 

to fuel the revolutionary change in staffing at the company that Charnley seemed to 

desire.  Many proposed that MTN bring in black hires at lower levels and develop them.  

As they rose in the ranks, the racial profile of the company would be transformed.  

Charnley was skeptical of the efficacy of this suggestion.  Before Johnnic had become 

MTN’s majority shareholder, she knew black management had been hired and rarely 

promoted.  Most left because they saw no opportunity for advancement.   

As one black executive explained, it was difficult to win support from some 

managers for even evolutionary change: 

 

The employment equity act was an issue Irene had to push on.  You don’t 

find senior black people.  There are very few of us, and those of us that exist 

are circulated amongst companies.  That’s a big problem for MTN.  But Irene 

said, “Look, all of you started somewhere too.  Bring them in and train them.”  

But, it was difficult for some in management to understand why they needed to 

waste time and money to train people when there were plenty of qualified 

people out there.  But, you needed to convince them that if they didn't deal 

with the equity issue, there would be no future for the company. 

                                                 

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 Due to a United Nations embargo to protest apartheid, the South African economy had been virtually closed.  Now 

that it was open, many companies were struggling to restructure themselves to become competitive in a global 

marketplace.  Many at MTN commented on the fact that they were in a “better position” to address affirmative action 

needs because they were growing and not retrenching like many other South African companies. 

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The limited supply of skilled empowerment professionals in South Africa, in the 

minds of some in the company, also put a strain on the company's resources.  General 

Manager of New Business Development Johann Bezuidenhoudt, a white man, 

commented: 

 

Irene has been pushing black economic empowerment very strongly in the 

organization, which she has got to do.  But, it is difficult because there are not 

enough skilled resources.  To replace my direct reports, I would need to pay 

them R400,000 to R600,000 a year.  To get a previously disadvantaged 

replacement, I would be paying over R1,000,000 because the guys who 

develop business, if they want to do it, they will go and start their own 

businesses.  That is one of the most complex dilemmas Irene has to manage.  If 

she pushes it too hard, she is going to handicap the company.  If she doesn’t 

push hard enough, she’s going to be under a great deal of pressure from her 

shareholders. 

Charnley soon concluded she could not wait for everyone’s buy-in to move ahead 

with the BEE agenda.  She instructed executives to begin hiring the previously 

disadvantaged into senior positions.  She believed that the only way to win over the MTN 

staff was to put the hires in place.  Once they performed, they would build credibility 

with their peers.  Charnley knew that it would not be enough to simply hire black 

employees into MTN.  During the months she had been at the company, she had heard of 

too many examples of racism, both overt and subtle.  For example, Felleng Molusi, an 

African woman, lawyer, and former chair of the Independent Broadcasting Authority was 

hired to replace the group executive in charge of International Business Development 

who had chosen to head up a new venture within the company. Despite her experience in 

the telecommunications field, Molusi had difficulties when she first arrived at MTN in 

June 1999.  She recalled, “I felt unwelcome when I first joined MTN. Thinking I was a 

political appointment, some of my colleagues questioned me explicitly and subtly.  I went 

to a team building session where people wrote their views about each other on paper, and 

a lot of people wrote very negative things about me."  Few of Molusi's co-workers had 

been informed of her qualifications and assumed she had been appointed based solely on 

her race.  As that misperception was rectified, she began to gain acceptance from her 

colleagues.   

Charnley resolved that she would do all she could to ensure that new black 

executives would not be isolated.  To that end, she began meeting with them each week 

to learn how she could best support them.  Molusi reflected: 

 

It’s one thing to recruit people, put them in a position and then sit 

at Johnnic.  But, Irene was here every day and you knew you could rely on 

her support when things got tough.  With all the political games, that was 

important. In a lot of South African organizations, black people were put 

in key positions and then not given the requisite support.  With Irene’s 

backing, at least one was able to operate effectively in an often hostile 

environment.  There were many white people who were willing to support 

change, but there were an equal number who were resistant, and you never 

knew who was who. 

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