Among Friends and Fraudsters: Building an Honest Business in a High-risk Market

What do leaders actually do when confronted with ethical dilemmas? Swedish entrepreneur Marie Englesson takes us behind the scenes of this pressing question, providing insight into her experiences of establishing a successful cosmetics business in Tanzania, Atsoko, which formed the basis of her new book.

About one-third of corporate managers globally have either been asked to pay a bribe or lost business to a competitor that has paid a bribe, according to the bi-annual global economic crime survey from PricewaterhouseCoopers. Their reports show similar trends year after year. Corporate managers across the world continue to engage in corruption and fraud. Why?

What I saw and what I learned during my six years as an entrepreneur building a business in Tanzania gave me a much more nuanced understanding of why people engage in fraud and corruption.

I had to make hundreds of those sticky decisions myself. Most times, the best rational and easy short-term decision would have been to fast-track a delayed government permit with a small facilitation fee; to accept the offer from a supplier to avoid import taxes; or to pay some “soda money” to the traffic police stopping my employee yet again. Some days it took all the resilience — and sometimes all the courage I had — to say no and stick to my values.

I noticed it was much harder for me to say no to a solicitation for a bribe on a Friday afternoon when I was tired and just wanted to go home, than it was on a Tuesday morning, when I was fit for a fight. I noticed it was very tempting to avoid paying taxes when everyone, including revenue authority officials, expected you to.

Some years into my startup, I started speaking with more senior members of the business community in Tanzania about how to deal with fraud and corruption both within and outside of my company. I spoke with fellow entrepreneurs, corporate employees, business leaders, auditors, lawyers, and investors in the East African region. How could I stop both myself and my employees from engaging in fraud and corruption? How could I make it clear to my employees, government officials, suppliers and clients that we would not engage in corrupt practices, no matter the temptations or threats they extended to us? My research led me to re-think the way I was managing my company.

During 2016 and 2017, I grew my company, Atsoko, from a small retail startup to a beauty chain with seven stores and thousands of customers. Our revenue grew 100 percent over those two years with a half-million-dollar turnover, ranking Atsoko as one of the top one-hundred mid-sized companies in Tanzania. My brand and company became a household name among middle-class women in Dar es Salaam. Behind the scenes of the successful brand, my personal triumph was my success in fighting back the fraud and corruption, supported by employees and advisors I had come to trust.

After a year of putting in dedicated work and resources against fraud and corruption, Atsoko had almost zero incidents of internal fraud, and government agencies stopped approaching us as frequently for bribes. We had succeeded in building a stronger moral culture within the company which we also communicated to external parties, and we had learned to preventively detect and deal with the risks of fraud and petty corruption before they became a problem.

Seeing what a big challenge fraud and corruption are to many businesses and leaders, especially in high risk markets, I decided to share a collection of my own lessons and experiences, as well as those of other senior leaders and employees, in a book, Among Friends and Fraudsters, which was published in December 2020.

With the understanding that we can all become corrupt if tempted enough, I argue that business leaders need to identify and assess the different types of temptations they and their company might face, and to understand the psychological processes that may influence them to violate their own values. Then they have to make a plan and allocate dedicated resources that help them stick to their values.

Through my book, I hope to inspire leaders and organisations to stay true and honest, especially when it is hard. Protect yourself and your company by understanding how fraud and corruption work before you get trapped. Ignorance is not a valid excuse under the law, and a company and a leader may lose money as well as reputation .

Marie Englesson will share more insights about the ethical dilemmas she encountered while setting up and managing her business in Tanzania on 18th March, as Brook Horowitz’s guest in The Room Masterclass Series on Leading with Integrity. Register here for the introductory session on Thursday 18th February. For the full series, which starts on 4th March, find out more here.

Marie’s book is available at all major booksellers.

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