Sunday, December 19, 2010

Business ethics more culturally significant than CSR ... but not everywhere

'Business ethics' and "corporate social responsibility" are two terms that are often used interchangeably, but at the same time represent somewhat different lenses on business practice. Ethics, of course, is always concerned with norms and values, and is basically about what is right and wrong. CSR on the other hand may be about these things, but doesn't have to be - lots of people take a purely economic or strategic approach to CSR without any real consideration of the normative dimensions. CSR is also, as might be expected, a lot more business-friendly than business ethics. In fact, people often tend to use CSR when they're talking about the good things companies are doing, and business ethics (or a lack of them) when talking about the bad things they do. There are other differences too, but we'll save the definitional niceties for another day.

The point is that the term you use is not always just arbitrary. And the two have a very different heritage even if they have broadly similar concerns. As a professor of business ethics (Crane) and a professor of corporate social responsibility (Matten), and co-authors of textbooks on both subjects, we often get asked which is the most important, which is the most popular subject at university, and why we do we need more than one term to describe the same thing? So we were pleased to discover the new gizmo from Google that lets you easily and quickly do a simple analysis of the cultural significance of different words and phrases. The Ngram viewer from Google Labs plots the incidence of specific terms over the last 200 years in more than 5 million digitally scanned fiction and non-fiction books. It may not let you do anything very sophisticated from a research point of view, but it is incredibly easy and fun to use.

So we plugged "business ethics", "corporate social responsibility" in, and for good measure added "corporate responsibility" and "sustainable business". The results, shown above, relate to books published in English from 1900 to 2008 (the last year provided by the data). As you can see, CSR only really emerged post 1960, whilst business ethics has enjoyed more than a century of cultural dominance, with particular peaks around the crash and depression of 1929-1930, and the financial scandals of 2000. And CR was actually a preferred term to CSR in books until around 2001.

By the looks of things, the dominance of business ethics could be coming to an end though. CSR and corporate responsibility have become increasingly more used - especially in the last decade which has seen an exponential growth in their incidence. Saying that, we'll see if the most recent financial scandals see another resurgence of business ethics post 2008 as the last data points on the graphs might seem to suggest.

An interesting feature of the tool is that you can distinguish between books published in English in the US and books published in English in the UK (as well as books published in non-English languages). And here, we were intrigued to see that in UK publications, CSR has already overtaken business ethics as you can see in the graph below.

In fact, in UK books, business ethics in general has not achieved anything like the cultural significance it appeared to in the first graph. Until the early1980s corporate responsibility was actually the dominant term.

Looking then to US books (see below), we can see that it is here that business ethics particularly stands out - albeit with a mid 1970s blip when corporate responsibility overtook it. Even as late as 2008, business ethics still dominates by quite a gap, although this is clearly narrowing over time.

The US emphasis on individual ethics versus the European focus on system-level responsibilities is something we've discussed at some length in our Business Ethics textbook. Plus the UK has been very much at the vanguard of the CSR movement. So these graphs don't come as a complete surprise. Still, it's interesting to see the data set out so starkly. That said, there are clearly some limitations to the Ngram methodology, as has been widely discussed. Still, there is clearly food for thought in here. And, of course, we're sure there are a whole lot of other corporate responsibility analyses that can be conducted with the tool. Do let us know of any interesting ones you come across.

Monday, December 13, 2010

Top 10 Corporate Responsibility Stories of 2010

Mermaids protesting the BP oil spill. Photo by Johnathaneric.

 It's been a big year for corporate responsiblity. A huge oil spill, continued ructions in the financial sector, landmark decisions in the courts, and a new dawn for online companies around human rights issues. It is never easy to pick the most important stories of the year. Some get huge coverage simply because they feature big brand companies. Some hardly even scratch the public consciousness despite having major implications. In other cases, it can be difficult to determine accurately what their long-run significance will be.

But here in the Crane and Matten control room, we've put our heads together to come up with what we regards as the top 10 corporate responsibility stories of the year. These are the events that we think will have the most lasting impact on the field. But it was a hard choice - narrowly missing the cut were the 10 year anniversary of the Global Compact, the FIFA World Cup corruption scandal, Unilever's "Sustainable Living" plan, Apple's labour violations, Wal-Mart's latest announcements on sustainable agriculture, Jerome Kerviel's massive fine, and American Apparel's rollercoaster ride through 2010, among others.

But, hey, not everyone can be a "winner". So if you think we're worng, or if we've missed off your biggest story of the year, do let us know. And while you're at it, take a moment to complete our poll on the right to help us find the top stories according to our readers.Here, though, is our top 10.

1. BP's oil spill in the Gulf of Mexico
Deepwater Horizon was one of the world's largest ever oil spills, and understandably this story absolutely dominated 2010. Not only did it put a final nail in the coffin for BP's once vaunted sustainability reputation, but it heralded a major rethink about the viability of deep sea drilling. BP didn't cover itself in glory by failing to come up with a realistic remedy until far too late - and ended up picking up most of the tab, thereby putting paid to the usual assumption that pollution is simply an 'externality' of business. Really, this was the mother of all corporate responsibility crises in 2010.  

2. Google's battle for free speech
Google's withdrawal from China at the beginning of the year was a landmark decision in the battle for free speech on the web. A real clash of titans, no other story this year illustrated better the clash between government and big business around human rights issues. But Google's subsequent legal problems in Italy, where senior executives were convicted of privacy violations, demonstrated just how complicated this battle is going to be. 

3. WikiLeaks publication of the embassy cables
Who knows where this one will end up, or just what its long term significance will be for corporate responsibility? But it's hard to deny its significance as a major turning point in the fight for greater government transparency, and the contested role of the media and NGOs in bringing confidential information into the public realm. Heralded by some as the first great cyber war, the WikiLeaks maelstrom inevitably catapaulted online companies into the fray with predictably unpredictable results.   

4. Citizens United decision
The only court case to make it into the Top 10,  but according to President Obama the 5-4 decision by the US Supreme Court in Citizen's United vs Federal Election Committee "reversed a century of law" and "opened the floodgates" for corporations to play an ever greater role in US politics. According to the ruling, companies and other special interests can now spend as much as they like on influencing the outcome of elections. And why? Because despite their vast resources, companies should have rights to free speech on political matters the same as any other citizen. An historic ruling.

5. Toyota’s product safety recall
This case grabbed a lot of headlines in 2010, mostly because of the very scale of the recall and Toyota's previously unblemished safety reputation. This was a huge embarrasment for the Japanese car maker and showed up serious problems in the firm's management culture.

6. Bank bonuses 
Bank bonuses stayed in the headlines during 2010. Despite continued economic problems, huge public bailouts in Greece and Ireland, persistent unemployment, and widespread austerity measures, some banks managed to award bigger bonuses in 2010 than ever before.  No surprise that the public stayed angry with a bonus culture apparently so far removed from their day-to-day problems. But European regulators finally seemed to get the message with new guidelines released at the end of the year that looked set to dramatically change the bonus landscape across the entire continent.

Butcher in Haiti with food vouchers used to stimulate trade. Photo by DFID
7. Corporate response to the Haiti earthquake 
Few stories better illustrated the precarious role of business in international development than the corporate response to the Haiti earthquake back in January. The arrival of cruise ships full of vacationers represented for many the unacceptable face of corporate insensitivity and amoral consumerism. Yet, few denied that business had to be an essential ingredient in getting the stricken country back on its feet again. 

8. Greenpeace campaign against Sinar Mas palm oil 
Greenpeace won Ethical Corporation's campaigner of the year in 2010 for its work in combating deforestation. This was exemplified in the NGO's campaign against Indonesian palm oil producer Sinar Mas which saw them force Unilever, Nestle and others to cease buying from the company during the year. Greenpeace's spoof ad on YouTube for the Nestle chocolate bar Kit Kat went viral demonstrating how campaigners were effectively harnessing social media for anti-corporate protest. 

9. HP's termination of CEO Mark Hurd
Hewlett Packard has had its ethical ups and downs over the years, but few expected the company to follow through quite so severely when CEO Mark Hurd was found to have made fraudulent expense claims to cover up a relationship with a female contractor. Rejecting Hurd's offer to pay back the $20,000 he'd received for the claims, the highly regarded leader was ousted by the board for failing to live up to the company's code of conduct. This was an impressive commitment to ethical rules by anyone's standards. However, it angered many who thought the company was shooting itself in the foot. A tumbling stock price and Hurd's instatement at competitior Oracle showed how much pain there could be in doing the right thing.

10. India's 2G licence scandal
OK, so actually this happened in 2008, but it was only in the closing months of 2010 that the full extent of the 2G telecom spectrum licences scandal began to be revealed. In what some have called India's biggest scandal since independence, Telecommunications Minister Andimuthu Raja was forced to resign over allegations that he lost the Indian Government some $38 billion in revenues using an opaque permit system that was riven with corruption. Leaked tapes of secret phone calls with corporate lobbyists have poured oil on the fire. This could yet become India's Enron moment.

So that's our Top 10 for 2010. Doesn't make for particularly edifying reading, but it hasn't been all bad. In amongst the scandals and corruption there have been some genuine cases of ethical leadership in 2010, where companies like Google and HP have had to make some hard ethical choices that have cost them dear. No ne said corporate responsibility was easy.

Friday, December 10, 2010

‘Freedom of Speech is Priceless - For Everything Else, there is MasterCard.’

This is a quote from the German blogosphere today, commenting on the decision of MasterCard, Amazon, PayPal and other companies to withdraw their services from the controversial Wikileaks site.

In the last two days the attention on Wikileaks has taken a really funny turn. While most of the brouhaha in the media over the last days has been about the stirs in the political world ensued by the disclosure of the diplomatic cables, the debate has taken a conspicuous turn in the last two days.

First, there is the decision of these companies to withdraw their services from Wikileaks. While this points, once more, at the blurring boundaries between business (making profits) and politics (acting as agents of their democratic electorates) it also highlights the increasing relevance of ethical reasoning for corporate decision making. How we would love to have been a fly on the wall in the boardroom of these companies when they were deliberating on how to deal with Wikileaks these days!

Now, the controversy here is rather simple – and has been discussed by us on the blog before: what should a corporation do in the face of censorship by a government? In the case of Google et al. in China the answer still seems reasonable easy: of course they should not allow it, in particular as they would bow to demands of a totalitarian, undemocratic regime. But what about the US government? And its perils in the face of a fairly low key website such as Wikileaks, disclosing some rather embarrassing realities about the war in Iraq, Afghanistan, and latest, their real thoughts about friends, foes and allies?

Alas, the reaction of these companies and their declared intents are anything but convincing. And do not reveal a very informed and mature expertise in addressing ethical issues. How can MasterCard still offer services to organisations close to the Ku Klux Klan, but turn down Wikileaks on the grounds of violation of the rule of law in democratic countries? It does not make sense. Similarly, Twitter’s half-baked explanation about why to go easy on Wikileaks Tweats was anything but convincing. It all points to a second insight the recent disclosures have made more than obvious.

A minute ago, The Guardian (on its website) revealed how Pfizer attempted at tweaking the political system in Nigeria to avoid legal action because of dubious practices in drug trials (‘The Constant Gardener’ is kind of greeting…). Similarly, the cables reveal how deeply MasterCard and other credit card companies were using American political/diplomatic clout to further their business goals in Russia, for instance. Most notably we learned about the fact that oil giant Shell ‘had seconded employees to every relevant department and so knew "everything that was being done in those ministries".’ Not only that this slightly clashes with Shell’s business principles – or maybe provides us with a proper interpretation of those: ‘Shell companies do not take part in party politics.’ Fair enough. But the Wikileak cables provide us with the proper interpretation of what Shell really means when it makes a sweeping statement like this:
‘However, when dealing with governments, Shell companies have the right and the responsibility to make our position known on any matters which affect us, our employees, our customers, our shareholders or local communities in a manner which is in accordance with our values and the Business Principles.’ (Principle 3)
The merit of Wikileaks is not that we suddenly discover what companies say publicly is not the same as they do in private. We are all guilty of this at times. As Lizzie Widdicombe puts it in the New Yorker this week, the problem is not a certain discrepancy in facts, but the ‘abrupt shift in tone’. Not that companies feel exposed by revelations of some sort of truth, but in fact by a disclosure of intent. All that smooth talk about CSR in Nigeria on Shell’s website – at the end of the day the intent of their most senior executive in the country reveals the true attitude: an instrumental approach to the countries Shell is operating in.

So there is much merit in following the websites of those news organisations, Wikileaks has entrusted with the documents. Democracy is only possible with some basic transparency of the institutions that govern us. Wikileaks, again, highlights the fact that those are not just governments. But more and more also corporations. In that sense, it is somewhat sad that the two previous waves of Wikileaks’ disclosures have only met rather limited uproar: the Iraq war (incl. the video on American soldiers killing civilians) and the Afghan War Logs. The real fury in Washington and elsewhere came with the latest disclosure of the diplomatic cables. Chances are, that the latter will give us a much more precise idea of how much the collusion between business and governments has really developed.

Photo taken from

Tuesday, December 7, 2010

Is too much transparency a bad thing?

It’s been quite a week or so for transparency. The incendiary WikiLeaks release of almost a quarter of a million classified cables from the US diplomatic service has set news media across the world alight with daily revelations that have acutely embarrassed politicians everywhere. Last week also saw the FIFA bribery scandal reach new heights with the screening of the BBC Panorama program alleging corruption, followed by last Thursday’s selection of Russia and Qatar as the hosts of the 2018 and 2022 World Cups respectively. Yes, that’s Russia, the country labeled a “virtual mafia state” in one of the WikiLeaks cables. Both cases involve a whole host of ethical issues, but perhaps more than anything they pose critical questions about the appropriate limits of transparency. How much should we know about what goes on behind the scenes in organizations such as the US diplomatic service or a global sporting body such as FIFA? And can too much transparency really be a bad thing?

WikiLeaks is clearly the most significant case of the two, and it looks set to be something of a landmark on the ethics of transparency in the digital age. On the one side, high profile rightwingers in the US, including Presidential hopeful Mike Huckerbee, have responded by suggesting the source of the leaks should be tried for treason. “Anything less than execution is too kind a penalty,” he commented. WikiLeaks founder Julian Assange is under investigation in the US and Australia, wanted for questioning in Sweden (for an unrelated charge), and on Interpol’s red list – not to mention being cast by Sarah Palin as an “anti-American operative” who should be pursued with “the same urgency [as] al Qaeda and Taliban leaders”. Bradley Manning the army private who is supposedly the original source of the material is sitting in a military jail awaiting court marshal and a possible 52 years in jail. US internet companies Amazon, Paypal and EveryDNS, meanwhile, have responded to pressure by US authorities and ceased supporting WikiLeaks by allow it to use their servers, domains, and payment services respectively. As a result, the organization has been forced offline several times in the last week.

On the other side of the debate, five respected news organizations – the New York Times, The Guardian, Le Monde, El País, and Der Spiegel – received prior access to the cables and have shown little hesitation in splashing front page stories over the past 10 days. Various commentators, hackers, and net activists have heralded the leaks as a new phase in the radical transparency of digital information. Columbia, meanwhile, has offered Assange immunity, whilst Amazon has been touted as a boycott target for caving to “censorship” and political restrictions on “free speech”. Clearly, things are complicated, to say the least.

The publishing of the embassy cables by WikiLeaks is in many ways a more ethically ambiguous act than many of their previous leaks, most notably the well known Iraq and Afghanistan war logs which detailed the hidden impacts of US military action. Other WikiLeaks though have also won acclaim focusing on documents alleging political and corporate corruption, public interest media reports suppressed by injunction, and secret Congressional research reports. The embassy cables, just by their sheer volume, represent a less focused campaign.

Yes, there are clearly some important public interest revelations in the material that has come to light. These include: the exposure of a US spying campaign targeted at UN leaders; the naming by US diplomats of China’s propaganda chief Li Changchun as the orchestrator of the Google hacking late last year; and disclosures that the Brazilian government deliberately covered up the existence of terrorist suspects within its borders to protect the country’s image, to name just a few. Oh and of course claims that the media organization al-Jazeera is heavily influenced by state foreign policy in Quatar, where the 2022 World Cup is going to be held. But it has to be said that many of the big news stories are no more than allegations by diplomats in what they thought were confidential dispatches rather than necessarily well-founded or verified facts. There is also a whole lot more material that is just plain gossip and rumor-mongering rather than what you might genuinely call ‘intelligence’.

All this makes the WikiLeaks cables less clear cut in terms of making the hidden “truth” public. They provide us with a unique insight into how international diplomacy works, and what emerges is hardly pretty or a paragon of honesty and integrity. But it is hardly the case of a whistleblower bringing a miscarriage of justice to light or an exposé of corporate malfeasance or political corruption, except in the very broadest of terms. Sure the material in the leaks is incredibly interesting, but how we have to ask how much of it is genuinely in the public interest. If it doesn’t pass this test, then why should supposedly classified information become public?

On the other hand, the arguments emanating from the US that the release of the cables has injured the national interest and put lives at risk is also rather flimsy. Yes it has embarrassed the government, but then who hasn’t it embarrassed? Putin, Burlosconi, and others have been just as much the target as those in the US. And no one yet has managed to unearth anything that has genuinely put lives at risk even if it has probably hampered US diplomatic efforts in general. This of course begs the question of why so much information should be classified in the first place if it’s not actually protecting anything.

It is this – the transparency versus confidentiality issue – that is at stake here. Some would clearly like to see all but the most critical security information made public so that the state can be held to account. Others believe that a communication made under the presumption of confidentiality should remain that way unless there is a clear public interest reason for disclosing it. In the FIFA case, there seems little doubt that the BBC was right to go public with its allegations of corruption, even if some commentators were unhappy that it potentially hampered England’s bid to host the 2018 tournament. And even if FIFA President Sepp Blatter complained of “the evils of the media"

The WikiLeaks cables though are so indiscriminate as to fail the public interest test, at least when considered as a whole. However, with appropriate sorting and contextualizing (which the newspapers appear to be doing a pretty good job of), this changes the complexion somewhat. Newspapers like the New York Times and The Guardian have given a good account of their motives and methods. As the New York Times editor says:

"The more important reason to publish these articles is that the cables tell the unvarnished story of how the government makes its biggest decisions, the decisions that cost the country most heavily in lives and money. They shed light on the motivations — and, in some cases, duplicity — of allies on the receiving end of American courtship and foreign aid. They illuminate the diplomacy surrounding two current wars and several countries, like Pakistan and Yemen, where American military involvement is growing. As daunting as it is to publish such material over official objections, it would be presumptuous to conclude that Americans have no right to know what is being done in their name."

With appropriate journalistic selecting and framing, there is little doubt that there is an important if rather delicate media task at work here. This doesn’t condone the release of the cables en masse, though, which in our opinion is harder to defend from an ethical point of view, unless one’s view is that all government should be 100% transparent.

Regardless of the rights and wrongs of WikiLeaks in this particular case, though, the broader lesson seems to be fairly clear. In business ethics, one of the standard rules of thumb is the New York Times test – if you wouldn’t want your actions to be reported on the front page of the newspaper then maybe you shouldn’t be doing it. No doubt US diplomats didn’t expect this to so literally come true, but in a digital world, the prospects for doing so are increasing exponentially. And if you don’t want to be a news star, then you’ll need to work a lot harder than the US government in making sure what is said in confidence stays that way.

WikiLeaks graphic by Anna Lena Schiller reproduced under Creative Commons Licence
America Shhh image reproduced from Boycott Amazon for Dumping Wikileaks  

Thursday, December 2, 2010

What’s wrong with Canada?

For a long time Canada – certainly in the rest of the world – had this image of a very progressive, liberal and forward looking country in terms of social and environmental responsibilities of business. This not only applies to business leaders which from an early time on championed these ideas. To mind comes Maurice Strong and his engagement for various UN led environmental initiatives in the 1970s. Or Chuck Hantho who, while CEO of what is now ICI Canada, initiated the ‘Responsible Care’ program in Canada which subsequently was adopted by the global association of the chemical industry and is now a standard for the industry in 53 countries globally. Not to forget David McTaggart, the Canadian businessman who became one of the founders and early leaders of Greenpeace. Also notable are wider initiatives such as the Montreal Protocol or, more generally, the courageous stance for human rights and integrity in the world, symbolized by ‘the last man standing in Ruanda’, Canadian General Romeo Dallaire on the UN mission when the Genocide began to unfold in the Central African country.

This all sounds like long ago now. The month of November was not a good month for Canadians with an interest in social responsibility of business. First, we saw Bill C-300 voted down by the Canadian parliament – a bill which attempted at raising the standards of environmental and social responsibilities of Canadian mining companies abroad. We might quibble about details of the bill. But it is pretty undisputable that the Canadian mining industry as a whole has a pretty dismal reputation around the world. What is conspicuous is that Canadian politicians do not even see some attempts at ‘symbolic politics’ – which the bill would have been by and large – as necessary. It makes you wonder.

Then, later in November, it was a – by all standards rather modest – attempt at addressing Canada’s more than wanting approach to climate change, which was voted down in the Senate (Canada’s second chamber of parliament). Bill C-311 was a modest attempt to close the gap between the Kyoto targets and the current performance of the country, ahead of a next round of negotiations in Cancun this month.

Of course it does not help to be governed by a party whose power base and current Prime Minster is from the province of Alberta which thrives on one of the most questionable mining operations in the world: the oil sands. But it cannot be all just old-style business interest driven political manoeuvring. This blog is triggered by reports about the work of Vancouver based consultant Patrick Moore for Asian Pulp and Paper (APP) basically legitimating the environmental record of a company that is allegedly responsible for the most rampant deforestation in Indonesia. The delicate detail – which seems to look symbolic for the country: Moore once was a director and spokesperson for Greenpeace.

All this is even more interesting as Canadians generally pride themselves on being so much more sophisticated, civilized and socially literate than their relatives ‘South of the border’. Looking, however, at the track record on the ground, the mood of the country has largely assimilated to that of their Southern neighbours. And were it not for the last bastion of Canadian’s pride in their social edge – the public health system - the Country’s practices make it look in many ways like the 51st state...

Photo by 416style reproduced under the Creative Commons Licence.

Friday, November 26, 2010

Price of tap water x 2000 + plastic bottles + manufactured demand = The Story of Bottled Water

We've been meaning to write something on Annie Leonard's "Story of Stuff" online phenomenon for some time. But then we thought: why not give some real "digital natives" the opportunity to express what they think about it? So we set a challenge for a class of undergraduates at Copenhagen Business School who we knew were using our book and were about to watch some of the Story of Stuff content as part of their CSR course. Write us a review, we said, and we'll feature the best one on the Crane and Matten blog.

And so here it is - a terrific guest blog from the winner of our challenge, Camilla Marie Thiele, a bachelor’s student at CBS.

The Story of Bottled Water” presents a narrative of how the bottled water industry came into being by “manufacturing demand” for an unnecessary product through misleading advertisements, and how this product is effectively trashing the planet. This narrative, which is cleverly presented in animated video form with smartly drawn cartoon characters that attract the attention of adults and children alike, attempts to expose the bottled water industry and its deceptive selling practices in an effort to help us consumers see through the deception. That said, the video also points the finger at us – the consumers – who purchase these millions of litres of bottled water every year and toss them out with little regard to where those chunks of plastic pile up.

Annie Leonard, the writer and narrator, offers a compelling argument of how the bottled water industry has worked to deceive us, where that industry has strategically called into question the quality of regular old tap water and manipulated all of us into thinking that water from the tap is inferior to water from the bottle. This is part of the bottled water industry’s plot to manufacture demand with an ultimate goal of relegating tap water to just showers and washing dishes!

And, as Leonard argues, it is obvious why the bottled water industry must work to manufacture demand because it costs 2000 times more for bottled water than tap water - not to mention that tap water has been shown over and over again to be just as high quality (if not better) than bottled water. Leonard goes on to argue that this has led to the current situation where because of this manufactured demand, people around the world are spending their money on bottles of water whereas the real demand issue of access to clean tap water is grossly underfunded. And this happens while the bottled water industry is laughing all the way to the bank!

Leonard is right - that does not sound sustainable. It is time that we took back the tap.

The seven minute animated video that is “The Story of Bottled Water” is part of a wider collection of videos known as The Story of Stuff Project. Since the first The Story of Stuff video was put out in 2007, this project has become an online phenomenon clocking up over 10 million views. This figure now includes my fellow classmates and I since we viewed both the Story of Stuff and the Story of Bottled Water as part of our bachelors course in Corporate Social Responsibility at the Copenhagen Business School.

The Story of Bottled Water critically examines the environmental and social consequences of an unchallenged allegiance to consumerism by using the bottled water industry as a compelling example of the harms that can result. And it is effective because even though The Story of Bottled Water is part of an activist campaign taking on a suite of very serious issues, Leonard frames the points in a satirical and highly entertaining way. Despite - or maybe because of - the simple videos and their easy-to-understand-manner, it is a message that provides substantial food for thought for every kind of audience. And perhaps most importantly for my fellow business school students and me, The Story of Stuff provides the opportunity to really dive into the questions about the responsibilities of business, in particular the responsibility of companies that manufacture demand for products that are not even needed.

Making a product that is not needed, and then spending all of your time and energy to manufacture demand for it? Hmmmm, that sounds like a huge waste. Why don’t we call for companies to focus their time and innovative energy on meeting real demands? The world is full of a lot of really big challenges and thus there are a lot of very real demands out there that could use creative people and companies addressing them, and ultimately turn these problems into more sustainable solutions. This calls for a re-calculation of the first equation:

Real needs + innovative products + sustainable solutions = Responsible and sustainable profits.

And who knows – you might even smile on your way to the bank. So be smart and think outside of the bottle.

Camilla Marie Thiele is a bachelor’s student at the Copenhagen Business School studying Business Administration and Organizational Communication. She can be reached at

The blog challenge was facilitated by Robert Strand, a PhD fellow at CBS and one of our occasional guest contributors. Thanks Robert!

Saturday, November 20, 2010

Client 9: the Rise and Fall of Eliot Spitzer

"All I ask for is an unfair advantage.” Reputedly a favourite line of Hank Greenberg, the former Chair and CEO of AIG, it makes for an apposite tagline for a leader forced to resign by his own board as a result of investigations into financial impropiety. The Greenberg investigations were instigated by then New York Attorney General, Eliot Spitzer, who made a habit of making enemies amongst the city's most powerful  corporate leaders during his uncompromising campaign to prosecute corporate misconduct. And as writer and director Alex Gibney argues in Client 9: the Rise and Fall of Eliot Spitzer it was the foes he created in his day job as much as the night time friends he sought among the high class escort world that ultimately brought him down.

Gibney, the oscar winning documentary maker of Taxi to the Dark Side, Casino Jack, and Enron: the Smartest Guys in the Room, is no stranger to the twilight morality of big business, and the powerplays of American politics. In Client 9 he weaves the two together in a fascinating and surprisingly gripping account of Spitzer's downfall. It's played out like a battle of giants, Spitzer the so-called "Sheriff of Wall Street" fiercely defending the moral purpose of his achievements, and a cast of highly entertaining, and visibly bristling combatants like Greenberg who can hardly contain their pleasure at tough-guy Spitzer's remarkable demise ... and their own part in contributing to it.

There's no shortage of insight here about the ethics of business and politics, and especially in Spitzer's spectacular rise and fall, about the intersection of public virtue and private vice.  He gives a frank and compelling interview to camera, insightful and erudite on his public achievements and then stilted and seemingly at a loss to explain his private problems. The question at the heart of this is how could someone so vigorous in policing the law so knowingly engage in illegality. Spitzer himself doesn't offer too many answers. But one of his aides makes the case in terms of a balance sheet - on the one side cracking down on the financial misdemeanours that led to a worldwide financial crisis that cost billions and billions of dollars - and on the other side having sex a few times with a prostitute. In those terms, Spitzer is on the side of moral good. The good he did far outweighed the bad - at least that is how Gibney couches it in a balanced but ultimately sympathetic portrayal of someone that tends to divide opinions. But Spitzer also admits to hubris, albeit in rather ironically self-important terms. “The only metaphor I can think of" he says at the outset of the movie, "is Icarus. Those whom the gods would destroy, they make all powerful.”

It's not just Spitzer's brittle character though that gives Gibney's movie it's edge. It also features some wonderfully revealing portraits of his enemies and other players in the story. These include: Kenneth Langone, a billionaire American businessman and an outspoken critic of Spitzer; Roger Stone, the infamous lobbyist with a Richard Nixon tatoo on his back; Joseph Bruno, Spitzer’s chief political rival when he became governor of New York; “Angelina” his preferred escort; and audience favourite Cecil Suwal, the disarmingly ditzy CEO of Emperors Club VIP, the escort agency at the heart of the scandal. It's a feast of moral messiness, perhaps best summed up  by the giggling Suwal who admits to getting "confused" about the illegality of high end prostitition given the huge sums of money involved. Gibney doesn't give us any reason to believe that she was the only one.

Monday, November 15, 2010

Baby shopping: ethics, fiction and the marketization of human reproduction

We are big fans of the power of film to illuminate business ethics issues, but we don't often discuss the role of fiction.  But that doesn't mean we're not interested in it. And to prove the point, we thought we'd point out that a short story written by Andy has been short-listed for a writing prize, the AnyBook Award, organized by the American Book Centre in Amsterdam.

The theme of the competition is Redesign Your World, and Andy's entry "Baby Shopping" is all about the marketization of human reproduction. It doesn't offer any ethical answers or certainties, but uses fiction to explore what happens when the emancipatory forces of choice get the better of ethical considerations ... and the very human problems that ensue. It's all focused around personal relationships rather than abstract ethics, which is where fiction has some obvious obvious advantages over our more usual academic writing. It's not to be taken too seriously, but if you've ever cringed about stories of celebrity adoptions, or wondered whether you really could get just anything on the interenet, you might want to take a read. The competition limited entries to 1000 words so it won't take long! 

For the next week, until 22nd Nov 2010, the top 10 shortlist are the subject of a public vote, so if you like Andy's entry, do give it your vote. The other shortlisted pieces (which include art and poetry as well as short stories) are certainly worth a read too, and in keeping with the Redesign Your World theme, some include strong sustainability themes. So stop reading this and step into the creative world with us for a minute.

Photo by ^^TILSIM^^. Reproduced under Creative Commons License

Monday, November 1, 2010

The art of finance

Money. Cash, moolah, dough, readies, greenbacks, dosh. Whatever you call it, you can't get away from it. Most of us like to have it, of course, but we also know that it's a dangerous drug. "Money," as the saying goes, "is the root of all evil."

With the financial crisis and executive greed currently giving money a particularly bad name, we were interested to hear of a recent experiment in Amsterdam in the Netherlands which is seeking to provide a new and more positive way of thinking about the value of money. It's called the Bijlmer Euro, named after a much maligned quarter of the city called de Bijlmer which is home to many of Amsterdam's many immigrant communities and a good proportion of its less successful examles of high rise urban planning.

The Bijlmer Euro is a local currency, which for those of you that have not come across them before, are specially designed notes or other form of exchange certificate that are used within a specific locality to enhance local social and economic systems.

Local currencies like the Bijlmer Euro operate as exchange tools giving people the opportunity to buy and sell goods and services among a particular community without resorting to the usual pounds, euros or dollars. Why would communities want to do this? Well there are a whole lot of reasons, which vary depending on the local currency concerned. But some of the more common reasons are that they are help stimulate the local economy (because they can only be used locally), they can encourage people to ‘buy local’ and get to know local providers, or they can be part of an attempt to reduce reliance on existing financial systems and actors such as banks and credit card providers.

There are thousands of local currencies out there, including in our own home town of Toronto, where the Toronto Dollar operates around the St Laurence Market community. But what makes the Bijlmer Euro so interesting is that the whole project was designed by an artist, namely Christian Nold, who is mainly known for his 'emotional cartographies' project which saw him using lie detector technology and Google Earth to create user-generated emotion-based maps of neighbourhoods and towns. Interesting stuff. So while in Amsterdam recently, we spoke to Nold about the Bijlmer Euro and what he's hoping to achieve.

Probably the most interesting aspect of the whole project is that Nold has designed it so that you can actually see how the money is circulating in the local economy. The Bijlmer Euro notes are regular Euros with a special chip (recycled from used public transport tickets) overlaid on them which means that everytime a note is used, the transaction is tracked. In this way it is possible to trace the networks of exchange that are taking place among the participants. You can see a live visualization on the project website. This, Nold says, is especially important for an area like de Bijlmer which is most commonly presented as a 'problem area'. So his central objective was to help people see the Bijlmer also as a thriving economic network. "People described it to me as the Dutch Bronx" he says, "but with this you can replace that with a vision that gets you a little bit closer to the NASDAQ."

Of course, to get people involved in the whole project, it needed more tangible aspects that this. So users of the notes get discounts at local stores,and shop keepers get to make new connections with residents and hopefully stop leakage of economic value from the local economy. There are also some fun touches included such as the ability to put electronic messages on the notes for people to read, and a bright yellow, bicycle-powered 'mobile bank' (as shown above) where you can get the notes and input your messages. Even these though have a deeper purpose, as Nold explains:
"Money is an economic tool, but I think it is also very much a social tool. Banknotes are this weird thing that doesn’t really belong to us, but is really a social medium that moves between people. I think that having messages on them is a funny way of reclaiming the money in some way and making it personal."
Looking at it this way, you can see how there's more to money than meets the eye. Talking to Nold - whose personal explanation for the project takes in everything from the financial meltdown, baffled economists, the Falun Gong, transition towns, the end of capitalism, and the Iranian 'Green Revolution' - makes you look at the spare change in your pocket in ways that you really haven't considered before. However, whether the residents in de Bijlmer have seen this as anything more than a fun way to save a few cents remains to be seen. But Nold certainly thinks that a number of people have gotten sufficiently excited about the initiative that it may now go into a new phase now that the initial experiment is over. As he says:

"At the start of the project lots of people were telling us this is impossible, this is totally illegal, you can’t do it. But it’s possible, it’s doable and we’ve just done it. We have almost 2000 notes in circulation... I’m not sure it’s having huge mass appeal – we’re not getting tens of thousands of people using it – but we’re certainly getting a committed group of people who are seeing the value of it. The next really big step is the continuity of it."
And that really is where we'll see if this turns out to be anything more than an interesting experiment. Having now discovered who's spending what and where, Nold has been turning his thoughts to the large employers in the neighbourhood, especially the major banks, many of whom have their headquarters nearby, and whose staff have been using the Bijlmer Euros. Perhaps they can be persuaded to have a rethink about the social and economic value of money in the communities that border their offices.

We think it would be a fascinating development to have a major financial player involved in supporting a alternative currency like this in Amsterdam. And if they don't get involved, it looks like Nold will be taking things in new directions. He's already planning a book about the project to serve as a model for others, and is even plotting to set up an alternative financial organization to support low cost overseas remittances."We want to become a bank," he says boldly, "to see if we can get rid of Western Union." Finance, it seems, is the new art.

Tuesday, October 26, 2010

Living proof of the power of capital?

This post comes from one of our occasional guest bloggers, Dr Laura Spence,from Royal Holloway, University of London. She's also the unofficial Crane and Matten photographer having been responsible for our latest profile pic to the right, (as well the one it replaced). Thanks Laura!


While Crane & Matten have been enjoying a well earned break, I had an intriguing and thought-provoking week here in the UK. On Monday I was invited to a talk by Bill and Melinda Gates, the entrepreneur behind Microsoft and his wife. The purpose of their talk was to spread the word on an initiative called the ‘Living Proof project’. They asked the audience to tell the story further, which I am happy to do here.

Akthough focusing only on US investments, Living Proof reminds us of the progress that investment in sustainable development has resulted in over recent decades. The Bill and Melinda Gates Foundation have played a substantial role in these improvements alongside government aid and the work of charities and other institutions globally (though interestingly not much mention was made of the contribution, such as it might be, of business).

Some of the incredibly encouraging facts that Bill and Melinda presented are worth registering: 5.4 million child deaths were averted through immunisation between 2000 and 2009; we are nearing the eradication of polio; 98 million fewer people are going hungry in 2010compared to 2009; in Africa measles deaths dropped by 92% between 2000 and 2008.

No-one is suggesting that poverty and public health are not still critical problems globally, but progress has been made. Aid is a large part of the reason for these wonderful improvements in the lives of the poorest. Highlights of their talk can be seen at: , or for the full blown version, go to .

Meantime, I have been pondering what it is that makes people like Bill and Melinda Gates, who have dedicated a large part of their lives to generating vast wealth, switch focus and seek to give it all (indeed, 95% in their case) away. They are not the only ones to take this route (think of James Carnegie, William Hesketh Lever, George Cadbury, Thomas Holloway). And I should say I don’t mean to have a dig at Bill and Melinda. I wish others would take a leaf out of their book. But what is it that motivates such a shift?

It would be easy to assume that in some cases it is to assuage guilt for spectacular financial success by means not always bathed in moral glory. Well, maybe. But there appears to be something more going on. Accepting moral responsibility for the power that wealth delivers must also play a role. Being released from the shackles of complex, large organizations with multiple priorities may be another reason. Or is it a question of the enormous gratification – better surely than any number of diamonds or private jets – that must come with saving lives? Perhaps ensuring a positive social legacy is also a driver. There again, thy may just be in a position to do good, and willing and able so to do. This phenomenon of refocusing on public good post-career is not just a privilege of the private sector. Pop stars, and politicians, all represented ably at the Bill and Melinda Gates talk, have also been known to do this.

You do have to wonder though, if some of the people we deem the most successful in our society have ideas of philanthropy in later life, why don’t they get thinking about what they can do NOW, with the tools at their disposal. Why do many of us fail to adequately ‘do good’ during our day jobs? This was part of the discussion at a workshop I was involved in last Wednesday on Social Enterprise. This enigmatic concept broadly encompasses the idea of an organization that has social or environmental drivers as the PRIMARY goal. It is a huge phenomenon and is an area to watch in terms of research and, more importantly, its actual impact on pressing global problems.

Last Wednesday also saw the UK government announce the details of a strategic spending review intended to reduce the UK debt, which will cause a great deal of pain over the next few years. While the axe has been taken to nearly every aspect of public spending and the benefits and welfare system in our country, miraculously the investment in foreign aid has been pretty much spared. Though I didn’t spot him there, maybe the Chancellor was listening to the message from Bill and Melinda Gates. I sincerely hope a few business leaders will too.

Laura Spence

Photo by Johnny Vulcan. Reproduced under Creative Commons Licence

Crane and Matten get married (... but not to each other!)

We don't usually post personal blogs here but given our lack of activity over the past couple of months we figured we had some explaining to do. The fact is we've been neglecting the Crane and Matten blog because, well .... we've been concentrating rather more than usual on Crane and Matten's personal lives.

The last two months have seen not just one of us, but both of us getting married.... and not, we should clarify, to each other, nor, in case you were wondering, to the same woman. Hey, we're friends but we're not that friendly. So first Andy got hitched in September (to Daniela) and then Dirk in October (to Deniz). Of course we also had to go to each other's weddings ... and of course neither of us could get married here in Canada because, well, that would have just been too easy.

So it has been a hectic time of travelling, planning, celebrating, honeymooning, with a bit of best man speech-writing thrown in for both us. Naturally we mused from time to time on the nature of ethical event planning, but no one took much notice of us.

Anyway, the Crane and Matten blog is now back in business, so we will be blogging as usual from now on, although our first post is actually going to be from one of our occasional guest bloggers. So stay tuned for more of our  insights on the world of corporate responsibility. And if you don't agree with what we have to say, then you'll probably find that you have something in common with our wives....

Wednesday, September 1, 2010

Why the Wall Street Journal is wrong about CSR

Our friend, colleague, and fellow blogger over at the University of Western Ontario, Mike Valente, has just posted a very informed and thought-provoking response to last week's rather incendiary article in the Wall Street Journal about why CSR is misguided. As you'll see from the 200 or so comments on the WSJ comments page, the original piece did not pose a particularly convincing argument, and as far as we're concerned, nor was it a very insightful one either. Over on his Business and Sustainability blog, Mike helpfully provides some good clear analysis of why the author is wrong, some of which we've re-posted  below. Mike also says where he agrees with the article too, but you'll have to go to Mike's original post to read that. We just like the argumentative bits.

It's great that Mike took the time to write this reply. When we first read the WSJ piece, Andy's deeply thought through response was, "this is suspiciously crtpyo-Friedmanite - he seems to think the world hasn't changed in the last 40 years". Dirk's was: "this guy is in cloud cuckoo land regarding the role of government". We didn't get much further than that.

So here's a extract from Mike's post:

Where I Disagree

1) Business as Passive Recipient: My greatest concern with this article is the author’s presumption that business merely represents a passive recipient to market and regulatory trends as reflected in his examples of the auto sector and health food sector. We’ve known for quite some time though that companies have played a proactive role in shaping the market and regulation for food, vehicles, and many other products and services. General Motors played a very influential role in curbing government imposition of taxes on gasoline so that larger gas-guzzling vehicles would still be attractive to the market. The private sector’s role in ‘killing’ the electric car was, according to many, not a result of any lack of market demand but the preservation of corporate interests, suggesting that business exercises the power to build and dismantle markets. So while I agree that companies will respond when the market demands change, I disagree that companies sit by idly in response with no influence on this market through political lobbying or strong marketing.

While it is true that companies have adapted to the changing demands of consumers in, for example, healthier food, this was not without strong corporate interest in preventing such trends through strong lobbying for regulation that supports practices that undermine the health of consumers. Examples here include the subsidization of corn and soy to support the processed food industry and the strong lobbying for the allowance of trans fat in food. And as an aside, the author’s argument that social activists have had little impact on changing company ways is unfounded. Many would argue that civil society organizations, non-governmental organizations, and activists play an important role in shaping market demand and consumer behaviour in spite of corporate efforts to preserve the status quo. Consider Greenpeace’s ability to catalyze a massive boycott of Shell in 1995 or the Asian-American Free Labor Association’s ability to boycott Nike products in early 1990s. More recently, the New York Times reported that banks are becoming more wary about lending to mining companies in light of growing criticism by environmental advocates such as the Rainforest Action Network and Sierra Club.

2) Business as a Political Actor: I would argue that there are indeed situations when firms are best positioned to respond to social and ecological issues regardless of the relevance to business operations. This is especially the case in the global south where substantial public service gaps exist and companies have stepped in to fill governmental roles like, for example, the efforts of several multinational corporations in Kenya to address public service gaps after the post-election conflict in 2008. While I agree that in an ideal world, government or other public bodies may be best positioned, in reality these actors are not always available and it is instead business that finds itself better positioned (see Private, but Public WSJ, 2009). Regardless of the reality of the situation, the article implies that companies should stand by and do the responsible thing which is to continue with daily operations that maximizes profitability when its surrounding communities don’t, for example, have access to food and water.

But governmental gaps exist as a consequence of an increasingly complex socio-economic environment rather than because government has lost its capacity. Similar to the economic models that are built upon a ‘theoretical’ assumption of perfect competition, the ideal scenario of which the author speaks may not exist, however logical his argument might be. So while it is true that, in theory, “governments are a far more effective protector of the public good”, the reality is that their ability to do this is waning when we consider the rather pervasive loss of power of government to regulate and provide public services, the ability of corporations to transcend state level regulation, and the growing privatization of public services. We can either keep beating a dead horse and try to revert back to a simplistic design that relies on the separation of the public and private sectors or we can begin to adapt to the reality that these lines are blurred and business might have to be involved in the solution to these problems. This is a frightening thought of course because it suggests that a profit-making entity is influencing public discourse. The truth is that this has been happening for quite some time. Perhaps our efforts should be directed to understanding this growing phenomenon, building theories to guide it, and advising managers and policy makers how to use it to align corporate and public interests.

3) Managerial Choice to be Part of the Solution: Even when activists, NGOs, and civil society groups do exist to address some of these issues, we find that business is typically brought in as part of the solution. Many unique business models of the global south represent innovative responses, suggesting that business is not merely a passive recipient to market trends but an active player in the solution to these issues. The point is that firms represent architects in finding ways to align profit with social goals. This gets to an important presumption that the author makes regarding the view that managers do not have control over the alignment of profit with public goals and that factors beyond its control determine this alignment.

Exemplary scholars like Ed Freeman argue that it is the responsibility of business to migrate to areas that ultimately maximize value for multiple stakeholders, including shareholders, concurrently. Put another way, managerial options may not be limited to being responsible on the one hand and sacrificing profits on the other OR vice versa. A manager’s job is to think outside of the box to understand how profit maximization can take place in conjunction with the maximization of value for different stakeholders; stakeholders who represent social interests. So, for example, let’s say an automotive manufacturer is pondering their next line of vehicles to be designed and manufactured. The author’s view is that the firm can do one of two things – either ‘responsibly’ make a green car at the expense of profits because no market yet exists or maximize profitability and make an SUV where the market currently resides. As already mentioned, companies have a very strong ability to create new markets and influence public policy in a way that shapes society’s behaviours. To Freeman and others, the challenge of business is to find a way to make responsibility (or ethical behaviour) and profitability commensurable. So being responsible here may involve pushing for regulation that supports sustainable vehicles and building marketing campaigns that educate the market about such products and thus make such strategies profitable.

In sum, the views put forward in the WSJ article, while relevant at a time when public and private roles were distinct and clearly defined, are quite outdated. It may be time to let go of the theoretical niceties associated with pigeonholing roles and responsibilities to different actors and recognize that the blurring lines between them may represent a future reality that requires the attention of managers, business scholars, and policy makers.
Enough said.

Photo by Adran MB. Reproduced under Creative Commons Licence

Monday, August 30, 2010

What is CSR? Free download of introduction to CSR now available

[This post has now been updated with the new edition of our textbook and a new free download. Go to the post "Corporate social responsibility in a global context - a new free download"]

We've just posted online our introduction to CSR from our 2008 text co-written with Laura Spence, Corporate Social Responsibility: Readings and Cases in a Global Context. It's available for free download here at  the Social Science Research Network, albeit only in the pre-typeset version.  In the paper we examine the nature and definition of CSR, and its emergence in different national and organizational contexts. It should be a good basic CSR 101 for anyone trying to get their head's around the subject.

Of course, the question of what corporate social responsibility (CSR) is should be pretty straighforward. It is obvious that CSR is about the stuff that companies do to improve society, right? Or at least what they do to make it less worse. Or perhaps its what they tell us they're doing to make things better, but in reality they're not really doing much of because its expensive, uncompetitive, and difficult. Or maybe its what they should be doing, or doing more of, if only they were a little more, well.... responsible.

So 'what is CSR' is a deceptively difficult question to answer. It almost immediately brings up questions of whether firms have particular types of responsibilities, what those repsonsibilities are, how much firms should be doing, for who, and why. In fact it is easier to come up with a list of questions rather than a simple short definition that pleases everyone.

Still, that's no excuse for ducking the question. Our approach in the CSR introduction paper is not to get too caught up in definitions, but to explore what unites the different definitions that are out there and use that to identify the core characteristics of CSR. In all, we identify six of these components, as shown in the figure below. To find out more, just take a read of the paper....

This figure is not actually in the chapter, but feel free to use and reproduce under a non-commercial creative commons licence, giving appropriate citation to the original source of the idea.

Monday, August 23, 2010

Shooting straight at Target?

Target, the American discount retail giant that has for years been trying to claw market share from its mammoth rival Wal-Mart, was generally regarded as a more socially responsible alterntive to its big box competitor. That started to change with Wal-Mart's sustainability u-turn a few years ago, prompting Fast Company magazine to recently proclaim Walmart the winner in the "sustainability face-off" between the two companies.

One area of social responsibility where Target has continued to outpunch its rival though has been in diversity and human rights. For example, Target scored a maximum 100 points in the most recent Corporate Equality Index published by Human Rights Campaign, the largest national lesbian, gay, bisexual and transgender (LGBT) civil rights organization in the US. Among other things, Target extends its employee's health care coverage to same-sex partners. Wal-Mart, by comparison, until recently provided coverage to less than half of its own employees never mind their partners. It scored just 40 on the Index.

However, in the last two months, Target's carefully nurtured diversity reputation has begun to unravel. It is now in the midst of a boycott from LGBT customers, appears to have seriously angered many of its once loyal employees, and has even had the social media campaign for the launch of its fall clothing line derailed.

The cause? A relatively innoculous looking $150,000 campaign donation in the upcoming 2010 Minnesota Governor's Race. Target made the donation to MN Forward, a political action commitee which describes itself as "established to ensure that private-sector job creation and economic growth are at the top of the agenda during the 2010 campaign" . The group works to solicit campaign donations from  "Minnesota job creators to elect candidates from both parties who support policies that enhance job growth".

So far, so uncontroversial. Target is among a number of Minnesota-based companies contributing to MN Forward, with a view to backing candidates making job creation and support for business a priority. The group is putting its corporate money behind the Republican candidate Tom Emmer in the Governor's race. And they make no bones about why: "As a legislator, Tom Emmer voted against job-killing taxes and for reduced government spending. Emmer voted with the Minnesota Chamber of Commerce 91% of the time". You can't get much more pro-business than that. So it's hardly very surprising that Target is willing to cough up a few readies to get their man in poll position. So where's the rub?

The problem is Emmer isn't just about supporting business. He's also about supporting marriage. Traditional marriage. As in, not gay marriage. All of the other candidates are in support of legalizing same-sex marriage in the state, but Emmer has been a staunch opponent of LGBT marriage rights. As he says on his campaign website: "I believe marriage is the union between one man and one woman. As a legislator, I have consistently supported the constitutional marriage amendment that protects traditional marriage.”

There's more, as the Minnesota Independent newspaper documents well:
"In 2007, Emmer authored a constitutional amendment to prohibit same-sex marriage and civil unions. In many instances, Emmer has tried to change language in bills to that same-sex couples cannot benefit. In a bill to create standards around surrogate motherhood, Emmer attempted to replace the word “parents” with the words “mother and father.” In a wrongful death bill this session, Emmer questioned the use of the term “domestic partner” just as he has in bills aimed at providing benefits for same-sex partners. Emmer has also been criticized for his association with Christian hard rock ministry, You Can Run But You Cannot Hide Intl., Inc., which has made incendiary statements about the morality of imprisoning and executing homosexuals. Emmer’s campaign had purchased table space at the group’s fundraiser and visited with the group on the radio and in person."
Ah. So, not exactly a poster boy for Target's diversity policies then. The company, a regular supporter of the local gay pride festival, is more used to being recognized for its leadership on LGBT issues. So given this kind of backstory it is perhaps no surprise that the company's campaign donation has ignited a bit of a storm. Gay rights organizations have been up in arms, various facebook campaigns have been started, and protests have been held outside of the firm's stores. Boycott plans and employee unrest have followed.

Initially, Target was unrepentant. The CEO's response to staff was an email largely dismissing the problem. In the mail, he wrote: "We rarely endorse all advocated positions of the organizations or candidates we support, and we do not have a political or social agenda. As you know, Target has a history of supporting organizations and candidates, on both sides of the aisle, who seek to advance policies aligned with our business objectives, such as job creation and economic growth...Let me be very clear, Target's support of the GLBT community is unwavering, and inclusiveness remains a core value of our company."

However, fearing an escalation of the storm, earlier this month Target's CEO issued an apology letter to employees, remarking that "while I firmly believe that a business climate conducive to growth is critical to our future, I realize our decision affected many of you in a way I did not anticipate, and for that I am genuinely sorry." This seemed to stem the tide of protest, but the story has yet to go away for the troubled retailer. Last week, the Human Rights Campaign (yes, the group that gave Target the 100/100 score for their equality policies) announced that the company has refused to "make it right" to the LGBT community by retracting the donation or making a matching $150,000 donation to a gay rights organizaton. HRC said it would be making a $150,000 donation itself to elect a pro-equality governor.

We doubt ths will be the end of the story. But what can we learn from events so far? One clear conclusion is that the recent Citizens United ruling in the US that gives private corporations the right to fund political broadcasts during elections is not going to be a field of roses for companies. Whilst it may guarantee them free political speech, the question is will they necessarily want to use it given the dangers of upsetting their many and varied stakeholders? Big brand companies especially will probably want to be proceed with politics very carefully and not without due dilligence - as Target have found to their cost.

Secondly, companies will need to get smarter about how to engage in identity politics. It is no use saying "we don't have a political agenda" when you've invested in supporting minority or under-represented groups such as LGBTs, racial minoroties,or the handicapped. The decisions may be driven by business concerns but that doesn't mean that they don't have political ramifcations. And identity-based organizations know this and are ready to exploit companies' naivety. McDonald's have already been burnt on a simialr issue, as we reported a couple of months ago. And if you want to read more, we've recently written a couple of downloadable academic papers focusing on corporations and identity politics and how to bring identity afiliations into stakeholder identification.

The point is that companies are not yet very skilled at joined-up thinking across their span of operations when it comes to issues like gay rights - or any number of other issues that reflect people's complex and multi-faceted identities. Target is learning to thnk about LGBT issues not just in relation to human resources, but also in marketing, investor relations and government relations. Next it could be Muslims, Mexican immigrants or Mothers Against Drink Driving pointing out their inconsistencies. Or perhaps the American Family Association will start boycotting them now that they've heard about all that pro-gay stuff Target were doing. Then we'll really see if the company has a political agenda.

Tuesday, August 3, 2010

Culture clash in business-NGO partnerships

Ten years ago last month, Jem Bendell published what turned out to be one of the most influential books yet on business-NGO partnerships called Terms for Endearment: Business, NGOs and Sustainable Development. To mark the anniversary, the publisher Greenleaf is offering a big discount on the book (50% off) and making a number of the chapters free to download. Included in the free chapters is Andy's chapter, "Culture clash and mediation: exploring the cultural dynamics of business-NGO collaboration". We're really pleased to see this and some of the other chapters made freely available. The book itself was a great collection of articles and it really helped kick start a critical perspective on partnerships and an engagement from the academic community with the political ramifications of corporate responsibility practice - a theme that regular readers will notice that we've become ever more interested in.

So in support of the anniversary Andy has written a blog post reflecting on writing the chapter all those years ago. The post will go up on Jem's website sometime later this month, but he's agreed for us to publish it here first. So here it is - and don't forget head over to Greenleaf and download some classic chapters for free

"If truth be told, I discovered business-NGO partnerships pretty much by accident. I was trying to complete my PhD, which was about the “amoralization” of corporate greening. That is, how business involvement in sustainability was accompanied by some form of removal of moral framing and content. I’m not just talking the business case, though that was certainly a major part of it. But also how even social mission companies sometimes failed to morally engage their employees in green business. Or how middle managers in companies would try to make environmental issues as normal and unthreatening to their colleagues as possible. “The environment” my respondents basically seemed to be telling me, was “not ethics”.

I ran into the WWF Plus Group, which is the partnership that I examine in the chapter that is included in Terms for Endearment, because one of the companies I was writing a case study on was involved in the initiative. The Plus Group (a working group seeking to implement the Forest Stewardship Council accreditation scheme in the UK) seemed to me to be an especially interesting context to explore the kinds of questions that I was interested in. Here, I sensed, the moral complexion of the different partners might come into sharp relief. Not exactly a “good” NGO facing up to a whole bunch of “bad” companies like some latter day cowboy story. But certainly plenty of potential for a collision of moral worldviews – or more broadly culture clash as the chapter title puts it.

So I got deeper and deeper into the initiative, and became invigorated by exploring the cultural dimensions of business-NGO partnerships. A number of researchers had alluded to the potential for culture problems to arise, but no one had investigated them in any real depth. In the end, I got so into it that, like a badly behaved guest, I probably wound up staying longer than I was supposed to. But I also think that the kind of work I was doing was necessary to move our knowledge up a level.

Looking back now, I think that the chapter still holds up well. It shows that there are different ways of thinking about culture with respect to partnerships, which is a point still missed by many people who study the phenomenon. In that respect, I think it’s great that Greenleaf is making the pdf of the chapter freely available. It will help to disseminate the more critical approach to culture that the piece showcases.

And then there are the insights I provide about the role played by ‘cultural mediators’ in managing cultural translations across and within organizations. At the time that I was writing the chapter, more than a decade ago, this seemed fresh and new. It captured a very real and, I think, important dynamic at play in partnerships. In fact, I’ve had a number of practitioners over the years that have the read the piece saying, ‘yes, that’s exactly what I do!”

So the identification of cultural mediators, and my analysis of the role they play in this complex cultural milieu of partnerships, still rings true. Actually today, it’s much more commonplace for partnering organizations to go so far as to formally identify such a role: NGOs have partnership managers; companies have stakeholder relationship managers and other similar posts. But if we peer beneath the surface, we’ve still got a long way to go before we really understand what’s going on here.

That said, I’ve been heartened in the last few years to see some interesting studies emerging which really help us to see these deeper cultural dynamics more clearly. May Seitanidi, for instance, explores in her recently published book, The Politics of Partnerships, the dangers posed by seeking partners with too great a cultural fit, and the limits to meaningful change imposed by managing away conflict. Bahar Ali Kazmi, who is completing his PhD at the University of Nottingham, has been looking at how cultural mediators operate among different moral logics in the realization of human rights in developing countries. So there’s a lot of great work going on. And I expect that in another 10 years time, we’ll be looking back at how the research of these emerging scholars has helped shape the evolving field of business-NGO partnerships."

Sunday, July 11, 2010

The Human Factor

After two weeks a final reflective moments on the Summit are in place. You might have got it by now that, yes, I am by and large optimistic about the Global Compact and in particular the Summit. On reflection, much of it comes from the one to one interactions I had during the event.

I already mentioned Peter Solmssen, Executive VP and General Counsel at Siemens. My first question in meeting those guys always was why on earth they cut out two days of their busy schedule to hang out at this conference. For him it was about giving the corporate world a 'face'. Having an 'intelligent conversation' between parts of society which normally don't talk to each other – business, government, civil society, academia – for him was one of the benefits of this meeting. And I could so see it – not only in the very open, relaxed and engaging way we chatted about these issues, but also in the way he took part in the conference.

While Peter represents a big multinational, most of the UNCG members – and in fact most of businesses globally – are SMEs. One of the impressions I took away that the cliché we sometimes have of business people can be totally wrong. We often see them as profit hungry machines. But many of them are in fact passionate about creating something, passionate about their contribution to society, their communities and their employees. On that note, the CEO of one of the Argentinean members of the Compact impressed me a lot. Gustavo Grobocopatel is the co-founder of a large Agrobusiness in Argentina and most of all, he stroke me more as an intellectual, and as he admitted somewhat tongue-in-cheek, an accidental entrepreneur. His rationale for supporting the Compact and being at the Summit was that he thinks the world 'needs new governance'. A system of governance where business is ready to live up to its responsibilities.

Of course, not all attendees were of this calibre. As Lord Hastings, the 'Master of Ceremonies' ironically intimated in his introduction to Thursday afternoon's half-empty auditorium of roundtables, some participants had succumbed to the temptations of 'supporting the local economy' – i.e. going shopping in New York. Fair enough, these guys would just turn up once, make sure they had signed in, and otherwise take the Summit as what I saw it in my earlier blog: a ceremonial exercise which boosts their PR. In this category I would put someone like Ali Koç, third generation of the Koç family and in charge of some of their vast business empire in Turkey, which boasts a remarkable record in philanthropy. That's why I was keen on talking to him. When I approached him, the terror of speaking to a 'journalist/blogger' was galvanizing his eyes. After haplessly communicating to his PR-girl, he mumbled something of 'having a flight to catch' and walked off, making some rude comments about journalists these days. He told me to send him my questions by email. Of course he never replied.

So leaning back, the Global Compact in my book counts as what I have referred to as 'mimetic processes' in the proliferation of CSR: it becomes a legitimate 'business' by virtue of many players in the organizational field engaging in a specific management practice. By providing a platform of visible exchange and commitment the UNGC has made it just 'cool', to put it bluntly, for companies to practice CSR.

The 'cool' factor, finally, also explains another remarkable feature of the UNGC: the Summit would not be possible without a veritable little army of volunteers, interns and alumnis of the GC, who invested much of their time for free to make the Summit happen. I hung out with them at the after party in a bar on 58th at the end of the Summit. Certainly in this generation of future business leaders, government officials or NGO activists the legitimacy of responsible business practices need no further discussion. Even to the extent, as one of them told me tongue-in-cheek after a few pints, that the UN Global Compact would struggle itself to live up to one or two of its principles on labour, in particular the 'fair wages' bit. But looking at the happy crowd dancing away to the remarkable one man band that evening, I can solemnly swear to bear witness to the fact that it definitely was not into the 'forced labour' category...