Should the UN Global Compact have sharper teeth?

Do those teeth need sharpening? Georg Kell, Executive Director of the UN Global Compact. 

The emergence of multi-stakeholder initiatives and voluntary corporate accountability programs for business have become some of the most interesting aspects of the CSR debate over the past decade or so. The largest of these in terms of company participation is the UN Global Compact, which now has some 10,000 participants, including over 7,000 businesses in 145 countries. By any account, that's a huge number. It's also a huge experiment given that there's never been anything quite like it before or since.

A few years ago we were the official bloggers of the Global Compact's 10 year anniversary, "Leaders Summit" which took place in New York in 2010. At that time we made various comments on the successes, failures and future challenges of the compact. As geeky academics, we are now eagerly awaiting the publication of the special issue of the journal Business & Society (which we are on the board of), entitled "The UN Global Compact: Retrospect and Prospect", edited by our friends and colleagues Andreas Rasche, Sandra Waddock and Malcolm McIntosh. They've put together a nice collection of academic papers on the subject, including a terrific introduction from the editors, and the special issue really demonstrates how seriously the academic community is taking the Global Compact.

Some of the big questions for researchers interested in the Compact - and indeed for many in the practitioner community - are about its governance and effectiveness. Does membership have an effect of corporate social performance? What governance system would be most effective to ensure corporate accountability? And perhaps the biggest question of them all - should the compact, as its critics maintain, have more regulatory power to discipline companies that don't live up to its principles, or is it more important to have a low bar for participation so as to engage the maximum amount of companies?

Answers to these questions are slowly beginning to emerge from the research community. Over at the aptly named Global Compact Critics website, a colleague of ours at the University of Zurich, Patrick Haack, has written a guest blog based on his research that reaches a conclusion which the compact critics love to hate. Yes, you guessed it, Haack recommends that rather than kicking out any "bad apples" in the compact, the UN should keep them in. Paradoxically, this is the way to build legitimacy according to Haack: “a “soft” and consensual approach is in the best interest of the Global Compact and transnational governance more generally... "keeping bad apples” and providing them with time and resources to overcome organizational barriers may prove more fruitful than unconditional punishment."

Provocative stuff. Unsurprisingly, the critics have hit back - in the form of a post from Mariëtte van Huijstee from SOMO, the organization behind the Global Compact Critics website. "By keeping bad apples in at all times," she argues, "the initiative loses its legitimacy and appeal for other companies in the long run." This is no arcane academic argument; it goes to the heart of how to build an effective mechanism for corporate accountability and ensure that companies act in the best interests of society.  But the answers are not obvious and the need for good research is critical.Some of what has emerged so far has shown that the diffusion of the Compact has been dampened by the effect of critical NGOs who have voiced concerned over its "weak" inclusive approach - meaning that companies from countries with strong networks of international NGOs have been less likely to sign up than those from countries outside of these networks. This helps to explain why the Compact has been particularly successful at getting traction in developing countries, even whilst developed country NGO criticize its lack of teeth.

So the debate will no doubt rage on. But soon, we hope, we'll have the research to show what the real advantages and disadvantages are of the Compact - and whether its weakness is, as Haack contests, one of its main strengths.

Photo by djevents. Reproduced under Creative Commons Licence

IKEAs flatpack approach to diversity

After our recent discussion of IKEA's role as a public institution  it was interesting to see this week that the company has been in hot water over the last few days after revelations that it removed images of women in its Saudi Arabia catalogue. The evidence, on the face of it, is pretty damning. As you can see in the pictures here, it really is a case of disappearing women. No doubt about it.

There is a feel of something ethically troubling here, with critics arguing that   IKEA should be upholding its values of equality. The Swedish trade ministerhas kicked in by criticising the company while IKEA itself has offered an apology, saying that the practice is "in conflict with company values".

The question we have to ask though is whether IKEA really is doing anything much wrong here? After all, isn't it up to them what pictures they want to put in their own catalogues? And don't they have a responsibility to meet local cultural norms as long as no ones fundamental rights are being infringed? Its not like any women were directly disadvantaged by their actions, we're they?

As far as we can see, though, IKEA hasn't been very smart or subtle in appearing to airbrush its women from Saudi. As far as cultural sensitivity goes, its a pretty basic effort to fit in with cultural norms in the country. But first, let's remember that IKEAs catalogues are increasingly just computer generated anyway, so maybe the women were never actually "there" in the first place. And second, let's not pretend that IKEA catalogues are a glowing example of diversity to begin with. Show us the rich ethnic mix in the catalogue. Or for that matter, the representations of women in hijab that constitute a large part of the female population in many parts of the world where the firm operates.

A global company it may be, but a globally diverse catalogue it is not. IKEA markets a homogenous global product for a global audience with less tailoring to local tastes even than other global giants such as McDonald's or Wall-Mart attempt.  So what are we complaining about here? That IKEA hasn't been 100% homogenous after all and we don't like it? Is homogeneity really the best solution to equality and diversity problems?

That's not to say it doesn't matter what pictures companies use in their marketing campaigns, because in our view, it certainly does. This is especially so for big companies like IKEA because they have such a major impact on the visual world around us. But demanding that they present a unified image across the globe just seems to be missing the point.  Shouldn't we be demanding that they present a genuinely diverse representation of their customers, maybe even one tailored to the societies in which they operate? Disappearing white women from your catalogues in Saudi Arabia certainly doesn't look good, but it's hardly the biggest problem here.

Regular readers of our academic research will know that we have a long standing interest in the role of companies in shaping people's citizenship opportunitiesand experience. IKEA here is clearly failing to promote the cause of women's equality in Saudi, insofar as equality is measured in terms of representation. This is one part of the picture (in the same way that failing to represent ethnic minorities or those with different sexual orientations in advertising presents and reinforces a skewed image of society). But it's not the only important one.

A critical role is also played by the company in its hiring and promotion policies, and in its other efforts to promote (or not) equality in Saudi. If the company isn't doing a good job on these fronts (and this is a question that demands further investigation) then presenting a pretty diversity picture in its catalogues would be little more than window dressing anyway. Let's hope the latest scandal presages some deeper consideration of how to deal with diversity at the company given its increasing global spread. Saudi women, if not the curiously disappearing catalogue models, deserve no less. 

Photo: IKEA
Thanks to Jeremy Sandler for alerting us to the story

Lunch at IKEA

Copyright Kai Hendry

Shopping on an empty stomach is not fun. Especially if its shopping for something a little more sophisticated, such as furniture. No wonder than IKEA, the Swedish budget furniture chain, runs restaurants in all its locations. I had a chance to check one out last Saturday. Well, that is, in the end I didn’t.

Copyright Kai Hendry

I have never eaten at IKEA but as my 11-month old baby daughter needed her food anyway, and we were just about to enter the store, we thought we might as well check it out. Nothing had prepared us though for what was going on there. There were two massive lines the size of a check in line for a intercontinental flight and I would estimate that there were at least 500 people in the restaurant. Families with kids, grandmother and dog were queuing up next to young couples or groups of teenagers, old single men as well as people in wheelchairs. It was an amazing mix.

Copyright rayb777

Given the size of the lines and the prospective waiting time we quickly folded the idea of lunch and just fed the baby with what we had with us. The IKEA lunch line though was an exciting spectacle to watch for a few minutes. The food looked actually quite good, though it was rather simple. Meat-and-two-veg seemed to be the general structure. And generous portions. It was cheap: none of the items is more than $7.99 with the legendary Meatball staple at $5.99. It also looked relatively healthy. Only two of the seven main dishes on offer contained fries or deep fried stuff; most had vegetables or salad as sides; and the pasta and crepes were even organic! No junk food this.

It is kind of funny when sitting in the restaurant of a multinational chain you suddenly get the feeling of being more in a public institution – the place looked like the hospital or school canteens of my youth or the university ‘mensa’ of my student days. The entire place had more something of an institutional air around it rather than a ‘restaurant’. Underlined by the demographics of the dining public this appeared more like a social institution than a privately run for-profit restaurant. It even reminded me a little bit of a public soup kitchen or red cross food outlets which I saw when visiting refugee camps in the aftermath of the Yugoslavian wars in the mid 1990s.

Now the peculiar thing here is that all this was not only provided by an otherwise known as a ruthless, efficient and profit driven multinational corporation. Even more, it was just because IKEA has this ultimate modern perfection of a Fordist business model with globally standardized sourcing, products, and processes that the company is able to offer this affordable food supply. I was reminded of investigations in the mid 2000s in Germany which found that IKEA had become the food supplier of choice for people on welfare and low incomes. At the time, the company already made 10% of its revenue in Germany just by food!

Matten jr. enjoyed herself at IKEA

It leaves one wondering about the status and nature of global capitalism. In some ways, IKEA represents this approach like few others. Some scholars have argued that IKEA though, shaped by the social-democratic climate of his home country Sweden represents a somewhat softer or human form of a global corporation. But just skimming the IKEA page on Wikipedia shows that the company is anything but a saint. I well remember that, when the wall came down in 1989 in Germany, some former dissidents had a funny déjà-vu when visiting their relatives in the West for the first time: they could recognize some of their friends’ IKEA furniture as items they had to assemble while being imprisoned by the regime in Eastern Germany which supplied IKEA with some of their phenomenally cheap products...

For me, the company just represents, first of all, the ascent and the degree to which private corporations shape the public and private sphere of ordinary people these days. After all, one out of ten Europeans these days is said to having been conceived in an IKEA bed. It also shows, secondly, that at least from a consumer perspective in the Global North a multinational such as IKEA contributes significantly to enhancing the standard of living and providing affordable access to basic necessities of life. But most of all, it raises some growing and unresolved questions about the status of the social sphere in a world where markets and capitalism seem to colonize every last corner of our lives. No student at my current university has access to cheap food at IKEA prices; and many of the ‘common’ folks I saw last Saturday at IKEA certainly know that taking the family out for a meal anywhere else would probably be beyond their budget. The last time I saw a meal service in a Toronto hospital it was just outright revolting junk served in a public institution. But why is it only a ruthless, self-interested multinational which provides a better alternative at that level today?

I have not doubts about the motivations of IKEA in running such a restaurant operation. I am just puzzled by the fact that the result resembles so much what traditionally looked like the public provision of these goods. This said, I am not even sure if I want to add: this should still be available for common folks, be it in schools, universities, hospitals or even worker’s canteens in companies. But I also know why IKEA can and these other players cannot provide this any more...

DM

Top three fotos reproduced under the Creative Commons License