Ziqitza Health Care Limited: Responding To Corruption

Ziqitza Health Care Limited: Responding to Corruption

After a monthly staff meeting, a young employee approached Sweta Mangal, CEO of Ziqitza Health Care Limited (ZHL). Sanjay Rafati had been hired as a financial officer the previous month, in November 2011. In view of the company’s strict ethical code, he was nervous about expressing his point of view, which was why he wanted to see Ms. Mangal in private: The situation in one of the states where ZHL operates is getting critical. Unless the government pays what it owes us immediately, we will not be able to make payroll. We won’t be able to service our new ambulances, which will open us up to more accusations of negligence. Lives may be lost. This will devastate our morale and ruin our reputation. That bureaucrat will never stop.

Although Rafati had refrained from stating it directly, she understood that he wanted her to bribe a recalcitrant official. This particular state had been a thorn in her side for 2 years. While the timeliness of payment varied from state to state, a delay of this length from a state government was extremely rare. The predecessor of “that bureaucrat” had asked her to fly there, only to cancel the meeting after she had arrived – a scenario that had played out no fewer than seven times. “He wanted us to bribe him,” she explained, “and we refused. He also didn’t like the fact that I, a woman, lost my temper and told him off.” Under the terms of the public-private partnership finally established with this state under a new official in July 2010, ZHL planned to have a total of 464 ambulances, essentially doubling its ambulance fleet. This represented a major investment. Now, the new state official was using the financial commitment ZHL had already made to the state to up the pressure for a bribe, as she explained: “Whenever we submitted invoices, they would send us a series of queries. We would answer them and then they would raise a new set of queries. This followed a couple of times and the concerned person used to ask for a bribe in a roundabout manner, but we ignored the same. Then finally in Fall 2010, he asked directly: ‘If you arrange to pay me 5 % of the invoice value, things will work out.’” When we raised the issue with his superiors, they asked us to put the claim in writing. We did, but nothing changed, rather things worsened. The cycle, she feared, was never-ending. The financial calculation, she knew, was compelling: for a bribe of 5% of the total due to ZHL, the entire payment would be made on time. Hundreds of thousands of rupees were in play. While legal adjudication of such issues was theoretically becoming available through a civil court, it could take years to reach a decision; even the way of functioning of the new court was yet to be established. ZHL needed the money now. It couldn’t run a business where one of its largest customers was not paying its bills. The only alternative was a loan at 15% interest – triple the cost of the bribe.

But how sustainable would this be in the long term? Ms. Mangal spoke quietly, looking into Rafati’s anxious eyes: “You know that we cannot – ever – offer a bribe. That would violate our most fundamental commitment to ethics and transparency.” Yes, she acknowledged, most Indian companies would have paid the bribe, but ZHL was changing Indian society, and it was part of a movement that was gaining momentum. “This is who we are,” she insisted. “Be patient and contact the bank.” With that, she returned to her office, now worried that Rafati might resign.

Paper For Above instruction

Introduction

The case of Ziqitza Health Care Limited (ZHL) illustrates the profound challenges and ethical dilemmas faced by social enterprises operating in environments marked by pervasive corruption. Rooted in the Indian context, where corruption is deeply embedded within bureaucratic and political processes, ZHL’s steadfast commitment to ethical standards provides rich insights into organizational responses to corruption pressures. This paper explores ZHL’s strategies for maintaining integrity, the broader societal and institutional factors influencing such decision-making, and the implications for social entrepreneurship and ethical leadership in developing countries.

Understanding Corruption in India’s Socioeconomic Context

India’s ranking on Transparency International’s Corruption Perceptions Index (CPI) reflects widespread issues of bribery and corrupt practices that impede economic and social development. With over $19 billion transferred illicitly each year and a significant portion of households reportedly expected to pay bribes, corruption permeates both petty bureaucracy and high-level political processes (Transparency International, 2011). The slow pace of legal enforcement and the widespread expectation of unofficial payments create an environment where bribery is often viewed as a necessary cost of doing business (Kaufmann & Wei, 2010). This societal context challenges organizations like ZHL to uphold integrity amid systemic pressures.

Role of Social Entrepreneurship and Ethical Leadership

Founded in 2002, ZHL’s mission to provide affordable and reliable ambulance services in India exemplifies social entrepreneurship aligned with high ethical standards. Its founders, coming from privileged backgrounds and inspired by Mahatma Gandhi’s teachings on life-saving, aimed to create a model that combined profit with social impact. Their refusal to engage in bribery set a leadership tone emphasizing transparency, which became a core organizational value (Mair & Marti, 2006). This ethical stance reinforces the importance of ethical leadership in fostering a corporate culture resistant to corruption.

Organizational Strategies for Responding to Corruption

ZHL’s approach to corruption challenges includes establishing an in-house legal team, engaging in transparency initiatives, and advocating for open tender processes in public-private partnerships. The company’s refusal to pay bribes, even when facing delays payments from government agencies, underscores its commitment to ethical principles (Kolstad & Wiig, 2009). Furthermore, its efforts to educate employees and publicize its anti-corruption stance serve to build a reputation that attracts socially conscious investors, such as the Acumen Fund, which values long-term social impact over short-term gains (World Bank, 2012).

Challenges and Risks of Ethical Persistence

Despite its ethical commitment, ZHL faces ongoing challenges, including delayed payments, legal disputes, and pressure from corrupt officials. A key dilemma arises when the economic costs of refusing a bribe—such as operational delays and financial strain—are weighed against the moral imperative to uphold integrity. The case highlights the tension between immediate business needs and long-term ethical standards, especially when risking legal or physical harm (Johnston, 2014). The decision of Sweta Mangal to refuse bribes illustrates leadership resilience, but also underscores the personal and organizational risks involved.

Broader Implications for Social Entrepreneurship

ZHL’s experience demonstrates that aligning organizational values with operational practices is critical for sustainable social entrepreneurship. Ethical standards can serve as a competitive advantage in markets where corruption is normalized (Dees, 2001). Moreover, advocacy for transparency can contribute to societal change, reinforcing anti-corruption movements and inspiring other organizations to follow suit (Banerjee, 2017). The case emphasizes that effective leadership, social mission alignment, and strategic resilience are essential to navigate corruption’s pervasive influence.

Conclusion

ZHL’s story exemplifies how social enterprises committed to ethical standards confront systemic corruption in complex environments. Its strategies of legal resistance, advocacy for transparency, and cultural leadership provide valuable lessons for similar organizations worldwide. While challenges remain, ZHL’s experience affirms that integrity and social responsibility can be maintained even under systemic pressures, contributing to broader societal transformation and setting a precedent for ethical practice in developing countries.

References

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