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Māori business: Characteristics

Multiple bottom lines

As was the case in pre-European times and in the early contact period, Māori businesses, particularly those (such as land- and fisheries-based trusts and incorporations) that are often based on collectively owned assets, work to a triple or quadruple bottom line, measuring performance against multiple goals, not just financial or economic (although these are important.)

Triple bottom line

Operating to a triple bottom line, a business or organisation is judged by its performance on economic, social, and environmental outcomes. It has goals in all three categories and reports against these in its annual report. Businesses may place more or less weight, or equal weight, on how they perform against their social, financial, and ecological goals.

Quadruple bottom line

Operating to a quadruple bottom line, a business is judged by its performance on economic, social, environmental, and cultural or spiritual outcomes. It reports against all four categories in its annual report. Businesses may place more or less weight, or equal weight, on these different goals.

Cultural or spiritual outcomes can be difficult to measure. Performance indicators may relate to cultural integrity and support for cultural initiatives, education, and development, attention to spiritually significant sites and to people and events, as well as adherence to particular values and principles.

Joint ventures

Māori organisations and businesses are increasingly entering into joint ventures. These take a variety of forms; for example, joint activities and initiatives with local or central Government and housing or commercial property developments with public or private agencies (for example, a Māori land holding entity provides the land and a partner provides the building capital, and both partners co-operate in the operation and management of the development).

Typically, a separate legal entity is established to govern a joint venture, with representatives from both partners (or all partners if the venture involves three or more parties). Case study examples include Metlife Care Retirement Village (Palmerston North) Ltd, established by the Palmerston North Māori Reserves; and Taranaki 217, Village at the Park, Village Healthcare Ltd and Tenths Hospital Ltd established by Wellington Tenths Trust).

See also:

Risk minimisation strategies

In order to safeguard core assets such as land, Māori entities often use strategies to separate the assets from the development or initiative. This is because developments can carry a higher level of risk than is acceptable to the entity, given its kaitiakitanga role. By establishing separate legal entities to carry the risk, organisations can limit their liability to that separate entity should anything go wrong, thereby protecting the core assets.

Māori and general business: Some comparisons

Business ownership

Māori: Twice as many Māori as non-Māori plan to start their own business in the future. However Māori businesses have twice the failure rate of New Zealand businesses generally over first three years.

General: There are relatively low rates of business start-up plans compared to Māori start-up plans. However these have twice the rate of business survival compared with Māori business start-ups over first three years.

Rates of entrepreneurship* - defined as self-employed and employers

(*TPK, 2010)

Māori: The number of Māori entrepreneurs grew by 23.3% between 2001 and 2006.

General: The rates of entrepreneurship are growing more slowly.

Growth in contribution to GDP*

(*NZIER & Dept. of Statistics; cited in TPK, 2007)

Māori: The contribution to GDP from Māori owned businesses increased by 123% between 1996 and 2003.

General: The contribution to GDP increased by 40% between 1996 and 2003.

Management of collectively owned assets

Māori businesses managing collectively owned assets tend to have particular characteristics that distinguish their operations from general businesses and from Māori businesses that do not have responsibility for collectively owned assets. Some of these characteristics relate to the kaitiakitanga focus of businesses that manage intergenerational assets, and some relate to legislative requirements.

Typical characteristics: Some comparisons

Debt-equity ratio*

(*TPK, 2007)

Asset-holding trusts/incorporations: Low debt-equity ratio.

General business: Higher debt-equity ratio.

Future planning

Asset-holding trusts/incorporations: Planning is long-term; there is a vision for intergenerational growth (protecting and growing assets sustainably for future generations).

General business: Planning is in relatively short cycles (typically 5–10 years).

Sale of business

Asset-holding trusts/incorporations: The sale of foundational assets is unusual. The sale of land may require the agreement of 75 percent of owners or shareholders and the approval of the Māori Land Court. Profits from land sales may have to be reinvested in land.

General business: Many businesses grow profits as rapidly as possible, with a view to selling the business at peak profitability.

Risk tolerance*

(*TPK, 2007)

Asset-holding trusts/incorporations: Governance tends to be conservative and risk averse.

General business: More inclined to take risks and engage in offshore investment.

International trading*

(*NZIER, 2006; cited in TPK, 2007)

Asset-holding trusts/incorporations: High levels of engagement with world markets (60 percent of Māori assets have exposure to international trade).

General business: Moderate to low levels of engagement with world markets (31 percent exposure of the total New Zealand economy has exposure to international trade).

Business focus*

(*TPK, 2007)

Asset-holding trusts/incorporations: 75 percent of Māori business production comes from from agriculture, fishing, and home ownership.

General business: Manufacturing is the largest employer. Rental, hiring, and real estate, agriculture, forestry and fishing, construction and professional, scientific and technical services occupy the bulk of business.

See also:

Last updated August 9, 2013



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