Whakatipu rawa ma ngā uri whakatipu: optimising the “Māori” in Māori economic development

Introduction

One of the great challenges for indigenous and nonindigenous entrepreneurs in the twenty-first century is to move beyond profit maximisation as an acceptable modality for doing business and gravitate towards the concept of socially optimal outcomes, where maximising community well-being and minimising externalities to the natural environment and social justice are paramount (M. Kawharu, 2000; Marsden, Henare, & Royal, 2003; Minhinnick, 1989; Ostrom, 1990; Ostrom & Walker, 2005). The concept of socially optimal outcomes (Kapp, 1950/1971, 1970) is particularly important for iwi (tribal) and hapū (sub-tribal) entrepreneurs, given the complex challenges and multiple resource pressures they face, such as climate change, declining biodiversity and water quality (Central Government Co-ordinating Group for Biodiversity, 2000; King, Penny, & Severne, 2010; Land and Water Forum, 2010). These issues are serious threats to iwi and hapū well-being, given that indigenous well-being is intrinsically linked to ecosystem health (G. Harmsworth & Awatere, 2013). We argue that optimising Māori enterprise performance ought to be addressed within a paradigm of mitigating negative externalities (such as resource depletion, pollution and diminished social justice) rather than a belief in self-correcting market forces or continuous economic growth.

What is a Māori enterprise?

Defining Māori enterprise for research, public policy and statistical purposes has been an enduring challenge (see, for example, French, 1998; Henry, 1997; Love & Love, 2005; Msirikale, 1990). Common features among these attempts to define Māori enterprise are the following: (a) Māori people and groups are majority owners in the business (which are, therefore, inclusive of mixed – Māori and non-Māori – ownership arrangements), (b) Māori management and staff may be employed, (c) distinctly Māori products and services may be produced, and (d) Māori consumers may be a primary customer segment. Additional features of a Māori enterprise may include (a) use of a distinctly Māori legal entity such as a Māori land trust or incorporation, (b) use of kaupapa Māori (Māori ideology) in the organisational culture of the enterprise, and (c) distinctly Māori assets and resources, such as land administered under Te Ture Whenua Māori (the Māori Land Act 1993; Mika & Sullivan, 2014).

This article is primarily concerned with Māori enterprises that are owned by Māori people and groups, and operate per kaupapa Māori values. We examine Māori Asset Holding Institution (MAHI), enterprises that manage collective assets on behalf of tribes. These assets may have been part of compensation packages through the Treaty of Waitangi Settlement process or were acquired as part of the strategic operations of the MAHI. The strategic operations of MAHI are generally guided by policies and strategies that refer to a kaupapa Māori perspective.

What is Māori entrepreneurship?

Māori entrepreneurship represents a differentiated form of entrepreneurship shaped by kaupapa Māori. While the degree to which kaupapa Māori is applied may vary, they are associated with the phenomenon of Māori entrepreneurship. This entrepreneurship is initially defined as the process by which a Māori person (or people) operating within a Māori world view generates value by identifying and exploiting new products, processes or markets for economic, social and cultural purposes of benefit to themselves, their whānau (family), hapū, iwi and wider community.

Durie (2003) proposes the idea of a Māori-centred entrepreneurship which promotes Māori self-determination in several ways: (a) relative autonomy and self-sufficiency, (b) the revitalisation of the Māori language and culture, (c) secure access for Māori to Māori society and (d) addressing social inequalities. Harmsworth (2005, p. 21) notes that Durie’s approach challenges the standard business ethic of profit maximisation and presents an ethic (“Māori advancement”) that “appears, developmentally speaking, clearly superior to current ‘policies-in-use’ in New Zealand” (see, for example, Cash & Taurima, 2002).

Durie (2003) concludes that a distinctly Māori approach to business is not apparent despite increased participation by Māori in business and initiatives that have assisted Māori businesses. Despite the absence of Māori-centred entrepreneurship, Harmsworth (2005) and Davies (2011) suggest that there is a Māori way of doing business that incorporates kaupapa Māori values. Davies (2011) argues that a Māori approach to entrepreneurship includes considerations of conduct, long time horizons, and broader objectives and aspirations. In Aotearoa, models have been developed that successfully integrate kaupapa Māori with entrepreneurship (M Kawharu, 2004, 2014), models that draw on Māori ideological values such as kin accountabilities and honour or respect for others (M Kawharu, Tapsell, & Woods, 2012). Furthermore, Henry (2007) coins the phrase kaupapa Māori entrepreneurship, which she equates with social entrepreneurship. Kaupapa Māori entrepreneurs pursue social aims to improve the wealth and well-being of Māori communities and the restoration of their lands, language and culture (McLeod, 2009). We argue that kaupapa Māori entrepreneurship is based on a set of principles grounded in Māori ideology.

Principles of kaupapa Māori entrepreneurship

According to Mika (2014a, 2014b), Māori entrepreneurship is located within the context of Māori development by virtue of the entrepreneur being Māori, degrees of socialisation as Māori and conducting business within a Māori enterprise according to Māori values, customs and norms (kaupapa Māori). The second principle of Māori entrepreneurship is that Māori entrepreneurs interact within wider society as a source of inputs, transformative capabilities and an outlet for what is produced by Māori entrepreneurial activity. The third principle is, therefore, that Māori entrepreneurship is adaptive, integrative and intercultural, whose natural tendency is to balance responsibilities within Māori society and wider society. The Māori concept of utu (reciprocity) is posited as a cultural device for regulating cultural and commercial imperatives inherent within Māori entrepreneurship. The fourth principle is that Māori entrepreneurship is imbued with a spiritual ethos or mauri (life force). The strength of mauri varies depending on one’s participation in and knowledge of Māori ideology. The fifth principle is that mana (power, authority and honour) seems to be a determinant of Māori entrepreneurship.

Kaupapa Māori entrepreneurship in practice

The entrenched and conservative nature of some Māori enterprises and the near dominance of neo-liberal economic dogma among iwi and hapū entrepreneurs pose significant challenges for movements towards kaupapa Māori entrepreneurship. Implementation of kaupapa Māori entrepreneurship within MAHI is always limited in outcome because the corporate-beneficiary structure is inherently distancing by design, effectively isolating the corporation from the culture (Barr & Reid, 2014). As a consequence, kaupapa Māori cannot be easily or comprehensively incorporated (Barr & Reid, 2014; Reid & Rout, 2016). These outcomes are by design based in part on the theory that corporates are more efficient at profit maximisation than other types of institutes. In the terminology of Cornell and Kalt (2000), these structures have difficulty incorporating Māori cultural values (and achieving a cultural match) because they are based on a very different set of assumptions about organisational purpose, organisational technology and organisational business culture. Our article explores some of the reasons why there is a mismatch in outcomes. The aim of this article is to present an approach for implementing kaupapa Māori entrepreneurship within the context of MAHI. We primarily explore how governance and management of institutions that own collective assets on behalf of tribes, like trust boards and corporates, balance economic growth with kaupapa Māori values and principles like utu (reciprocity), manaakitanga (an ethic of generosity) and kaitiakitanga (sustainable resource management). Although unorthodox and untested, kaupapa Māori entrepreneurship may be more effective, long term, for MAHI and the tribes that own it.

Methodology and methods

For indigenous peoples, “academic research” or “outsider research” has been an experience of “unrelenting research of a profoundly exploitative nature” (L. Smith, 1999). Research is seen by indigenous peoples as an assimilationist tool to Europeanise all knowledge and heritage (Statistics New Zealand, 2012). The validity of kaupapa Māori ideology depends on the positioning within which it is evaluated. For political, moral and ethical reasons, it could be argued that kaupapa Māori should be assessed within a Māori epistemological context (for an example of a kaupapa Māori framework, see Durie, 2003, 1998; Harmsworth & Awatere, 2013; Smith, 1997). However, the current research recognises that the worth of indigenous knowledge is not considered of itself but from the outside, from within the dominant framework of entrepreneurship, for example, Jackson (1992). Having made this normative judgement, we carried out our research using the guidance of methodologies that recognise the subjective meaning of social action. We concur with other Indigenous scholars that research is based on culture and it is bound to society’s diverse organisations (L. Smith, 1999; Walker, 1997).

Our approach recognises that kaupapa Māori values are derived from Māori world views, philosophies and epistemologies. The challenge for Māori entrepreneurs is about carrying out investments that are consistent with core kaupapa Māori values, such as kaitiakitanga (sustainable resource management), manaakitanga (reciprocity) and whanaungatanga (community connectedness; see Figure 1).

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Figure 1.

Kaupapa Māori informed investment decisions.

Kaupapa Māori values influence policy and planning documents, including Statement of Investment Policy and Objectives (SIPOs), strategic plans, decision support and evaluation tools. Culturally consistent policy ought to lead to tangible and intangible benefits for iwi and hapū that help support aspirations for Māori development and shift enterprises towards a more Māori-centred form of entrepreneurship. The conceptual framework in Figure 1, with its focus on ensuring that investment decisions are consistent with kaupapa Māori values, provided the basis for how we approached this project.

Indigenous academics advocate research should have positive outcomes for the people being studied, and that the “participants” are entitled to active roles in formulating the research goals, managing the research programme and interpreting the outcomes of the research (Harrison, 2001). As indigenous researchers and researchers experienced in working with kaupapa Māori, we are compelled to approach this research topic using a mix of methodological approaches: Kaupapa Māori research (KMR) and case-study approach.

KMR is a development framework and suite of methods rather than one method. This approach does not exclude other methodological approaches from being used if the stated methodology is consistent with KMR principles. KMR uses key working principles such as whakapapa (interconnectedness), Te reo (Māori language), tikanga Māori (Māori processes), rangatiratanga (authority principle) and whānau (family; L. Smith, 1999). These working principles help inform the way we worked with iwi and hapū entrepreneurs (L. Smith, 1999; L. Smith & Reid, 2000). Our research approach engenders confidence among knowledge holders that we as researchers are not there to exploit but to assist, instead, their progress towards improving well-being of the collective. A basic level of respect for each research participant and the information they shared was acknowledged. At the same time a generalisation process was carried out during the analysis of findings to ensure that the information we utilised was engaged in a respectful manner, adequately reflected the intentions of the participants, mitigated any potential commercial sensitivity and produced an outcome that was of benefit for participants.

Case studies were used to demonstrate how kaupapa Māori is implemented in a “real-life and practical context” by Māori entrepreneurs (Yin, 2003). In using the multiple-case design approach, we followed a series of steps. The initial step of the design was to develop a grounding of underpinning conceptual theory, which led to the development of our main research question: “How do Māori Asset Holdings Institutions balance economic decisions and kaupapa Māori-based aspirations?” Case studies were then selected to gather a convergent body of evidence rather than as a representative sample of MAHI. Within case studies, a series of semi-structured interviews were the primary method of collecting detailed data. Interviews were carried out with governance group members, management and consultants for each of the four case studies. The key themes emerging from the interviews are presented in the findings section of this article. Each case study was supported by key documentation including, for example, relevant strategic plans, SIPOs, investment strategies, business plans, charters, group investment frameworks, statements of corporate intent and letters of expectation. We successfully completed four case studies, showing how kaupapa Māori influences decisions by Māori enterprises. These case studies represent a range of MAHI from pre- and post-settlement entities, derived from different geographic locations, and respond to different needs and issues in each location.

Results

Case-study findings

For iwi and hapū throughout the country, the starting points for economic development are usually uneven. Relationships between asset-holding companies and whānau are varied, and skill sets and knowledge bases are diverse. The case studies described in this report provide examples of MAHI managers using kaupapa Māori values in investment decisions. From these examples, key themes have emerged that provide insights into more effective incorporation of kaupapa Māori entrepreneurship. This study has identified six constant themes for successful incorporation and integration.

Discussion and conclusion

The absence of kaupapa Māori-attuned policy and strategy runs the risk of marginalising Māori aspirations. We support the proposition that kaupapa Māori values have a significant role to play in Māori enterprises (Harmsworth, 2005). Māori values help define Māori enterprises, maintain cultural and ethical standards, give direction, provide a point of difference in the market place (Knox, 2005; Mika & Sullivan, 2014) and help address inequalities (Durie, (2003). The absence of kaupapa Māori-attuned policy within Māori enterprises and entrepreneurs could also lead to adverse outcomes for whānau of collectively owned assets managed by MAHI such as increased environmental pollution, loss of jobs and a lack of connection with tribally owned assets. Consequently, kaupapa Māori is not easily or comprehensively implemented by Māori enterprises like MAHI.

Our case studies demonstrate that there is significant willingness on the part of MAHI to be Māori-centred (Durie, 2003), yet there are several challenges that MAHI face for the successful incorporation of kaupapa Māori. As Barr and Reid (2014) have identified, the corporate-beneficiary structure is inherently distancing by design, effectively isolating enterprises from kaupapa Māori. Thus, there are gaps on the part of some entrepreneurs regarding understanding and applying kaupapa Māori values. We reject the notion that that some business units within MAHI ought to “subsidise” others. In some cases, devolvement of managerial responsibilities to corporate entities with little understanding of kaupapa Māori values further supports Barr and Reid’s assertion of the disconnection between governance groups and MAHI. Evidence from our study raises the startling realisation that some MAHI outsource expertise to derive short-term profit that adversely impacts the capability of whānau to participate in managing collective assets. The handing over of management responsibilities to non-tribal members seems to be a matter of prudence and pragmatism because the current capacity for self-management is absent or nascent. In contrast, implementation of kaupapa Māori entrepreneurship includes considerations of conduct, long time horizons and broader objectives and aspirations (Davies, 2011).

To move towards a more Māori-centred entrepreneurship (Durie, 2003) or a more kaupapa Māori-attuned entrepreneurship (Henry, 2007) requires an adherence to the kaupapa Māori principles of entrepreneurship developed by Mika (2014a, 2014b). The efficacy of a Māori value set in entrepreneurship is predicated on Māori being able to make decisions that directly affect the way their assets are managed. This necessitates active kaupapa Māori management of Māori enterprises. Concomitant with active management is a kaupapa Māori capacity building effort to produce skilled and willing candidates to take on managerial and operational roles of MAHI. Capability programmes utilised alongside MAGs are essential for kaupapa Māori entrepreneurship. However, Māori enterprises need to dedicate adequate resources and time for effective implementation of these programmes.

To achieve a kaupapa Māori-attuned entrepreneurship, we advocate the following strategy for Māori enterprises like MAHI: development of clear and unifying kaupapa Māori-based policies like statements of core intent and letters of expectation, development of processes to apply these policies in practice, utilisation and development of kaupapa Māori advocates (MAGs and entrepreneurs with kaupapa Māori capability), recruitment of visionary leaders that recognise the opportunities afforded through socially optimal outcomes and utilisation of assessment tools informed by kaupapa Māori.

A key finding from this study is the lack of capability of some staff within Māori enterprises regarding kaupapa Māori. Further research ought to explore the processes required to help develop the capability of Māori entrepreneurs to be more kaupapa Māori attuned. Further work is also required to promote the validity of kaupapa Māori policy. Further evidence is required to demonstrate that socially optimal outcomes are just as valid as financially profitable outcomes. The current study focused on MAHI, and hence, additional research is required to examining a typology of Māori enterprises building upon earlier work by Durie (2003). This work could explore the degree to which Māori enterprises are Māori-centred or kaupapa Māori attuned.

Although most case studies have been context specific, generic themes and methods have been drawn from them. The case studies have provided a wealth of information and knowledge about local contexts, enabling documentation of local issues, values and perspectives to achieve practical outcomes and effective incorporation and expression of kaupapa Māori values into strategy and policy, along with kaupapa Māori tools for evaluating investments. A substantial amount of well-meaning policy and strategy has been generated by Māori enterprises that successfully reflect kaupapa Māori positions, but there are numerous challenges to implementing kaupapa Māori values in the management of collective assets.

A key finding from the case studies is that the articulation of kaupapa Māori values in policy and strategy is one part of developing organisational culture that has been successfully carried out by the MAHI examined in this article. Equally important is the application of kaupapa Māori values to the systems, structures, processes and behaviours of an enterprise engaged in entrepreneurship. There are, however, gaps in implementing kaupapa Māori values in entrepreneurship among Māori enterprises. If Māori enterprises are to become more kaupapa Māori attuned by matching core values in economic decisions by staff, management and governors, then kaupapa Māori values must become part of the fabric of the enterprise.