Top 10 Corporate Responsibility Stories of 2012

This year may have lacked the huge catastrophes that have dominated the corporate responsibility headlines of the last couple of years (such as BP's oil spill in 2010 or TEPCO's nuclear disaster at Fukushima in 2011), but 2012 has probably been more packed with serious incidents than any of the previous years. We had real trouble putting these in any kind of order and even getting down to just a top 10 of big stories was tough  - and meant we had to jettison a few favoured good news stories about corporate responsibility just to be able to capture all of the bad news. So it nearly became the Top 15 Corporate Irresponsibility Stories of 2012. But in keeping with tradition, here's our view of the top 10 of the highlights and lowlights of a jam-packed year of corporate responsibility stories. And if you think we've got it wrong, or want to change up the order a bit, do add your comments below.

1. Apple's supply chain odyssey
If there is one thing that seems to be guaranteed now, it's that the tech giants will be at the forefront of the corporate responsibility agenda for the forseeable future. If nothing else, it's simply a function of their size, power and ubiquity. In 2010 we had Google facing human rights issues in China; last year was Facebook's privacy battles. And this year, Apple's ongoing supply chain issues really exploded into the public consciousness, thanks in part to the New York Times stories that kicked off the year. Worker suicides, factory fires, poor labour conditions - none of this was exactly new, but one way or another 2012 saw Apple take over from Nike (and tech take over apparel) as the poster child of inhumane supply chains. Apple reacted fast once the tide had turned, but for many it was too little, too late. Even their own internal audits provided evidence of widespread breaches of their policy. As the bad news rolled in, the company that so-often seemed immune to criticism started to show signs of serious reform. Instead of secrecy, it started moving towards greater transparency, joined the Fair Labor Association and initiated third party inspections, and now reports monthly on the working hours of over a million workers. In what may turn out to be the most significant move yet, the company has begun manufacturing some of its Macs not in China, but in the US.

2. The LIBOR scandal
2012 was a bad year for a finance sector that seems increasingly incapable of holding onto whatever public trust is left after the financial crisis and its aftermath. Whilst the US regulators' continued clampdown on insider trading gained yet more scalps, most prominently former McKinsey head Rajat Gupta, it was the arcane field of inter-bank lending rates that dominated the financial front pages. Most of us probably didn't even know what a LIBOR was until this year, but revelations of deliberate fixing of interest rates among major banks in Europe during the late 2000s means that we all now know more than we want to. First, the CEO of Barclays was forced to resign in the wake of investigations by UK regulators. Now, the Swiss bank UBS has agreed to pay $1.5bn in fines to the Swiss, UK, and US regulators for manipulation of interest rates that according to Britain’s Financial Service Authority, was so “routine and widespread” that “every LIBOR and EURIBOR submission, in currencies and tenors in which UBS traded during the relevant period, was at risk of having been improperly influenced to benefit derivatives trading positions.” Investigations continue, and it is clear that other banks and possibly brokerages will be drawn into the fray. Perhaps the major legacy of the scandal though will be the startling picture it has provided us of the "horribly rotten, comically stupid" alternate moral universe that traders inhabit.

3. HSBC's money laundering fine
If the LIBOR scandal wasn't enough, HSBC's record breaking $1.9bn settlement with US regulators for money laundering in Mexico really capped a year that demonstrated how readily financial services companies could deliberately flout the rule of law, and bypass their own control systems with impunity. The HSBC settlement followed similar (though smaller) money laundering settlements against foreign banks including ING and Credit Suisse. What was particularly remarkable with HSBC was the fact that despite having strong evidence the authorities elected not to indict the bank out of fears of possible financial collapse.  The message? Four years on from the financial meltdown, some financial institutions are still too big to fail ... but their licence to operate looks increasingly at risk.

4. Bangladesh factory fire
The death of 112 workers in the Tazreen fashions factory fire of November marked probably the saddest moment for corporate responsibility in 2012. It also provided a powerful reminder that the global apparel industry still had not got its house in order regarding working conditions in the product supply chain, despite two decades  of codes of conduct and factory audits. Tazreen was making clothes for global brands such as Wal-Mart and Sears, who remarkably did not even know that their products were being manufactured there. All in all, a devastating wake-up call for the world of supply chain monitoring.

5. Lonmin mine shootings
Described by the BBC as the bleakest moment faced by South Africa since the end of Apartheid, the shooting of 34 striking miners by police at the Lonmin Marikana platinum mine demonstrated the escalating difficulties of doing business in the global mining industry and in an increasingly fractious South Africa in particular. Lonmin tried to remain above the security crisis, which in total claimed some 44 lives, but a company that not so long ago had the highest CEO:average worker pay gap on the FT 100, operating in one of the most unequal countries on the planet was bound to breed resentment.  Unfortunately the more fundamental reform required to significantly ease the tensions at Marikana looks unlikely.

6. Wal-Mart's Mexican corruption scandal
Wal-Mart wasn't the only company put under the corruption microscope in 2012. Canadian engineering firm SNC Lavalin, among others, was another high profile casualty of increased vigilance among national prosecutors. But the Wal-Mart de Mexico story makes it into our top ten a) because it marked such a sudden reversal of fortune for the company after its much vaunted CSR makeover of the past few years; b) because retail, unlike construction, is rarely a site for major bribery.  Many of the facts are still to come out, but a devastating investigation by the New York Times points to Wal-Mart's Mexican business being a "an aggressive and creative corrupter", systematically using bribery to obtain store permits for its rapid expansion and subverting democratic processes and regulatory safeguards in the process. Critically, the company was also found to have deliberately hushed-up the problem to protect its burgeoning reputation, closing down an internal investigation in 2006, and failing to report any of the illicit payments to the authorities. Suddenly all those nice sustainability initiatives don't look quite so pretty.

7. The BBC's Newsnight sex abuse fiasco
With the fallout of the News International phone hacking scandal still very much a part of the UK media landscape, the last thing the sector needed was a scandal at the most trusted media organization of them all, the BBC. But when the 2011 decision to terminate a Newsnight investigation into sex abuse claims against the recently deceased, former BBC presenter Jimmy Saville came to light this year, it because clear that something was wrong at the redoubtable British media organization. It was left to a rival broadcaster to finally break a story that has since become probably the largest serial sex abuse case in UK history. The BBC then spiraled further into disaster when Newsnight broadcast sex abuse claims against an unnamed senior establishment figure that were very quickly discovered to be untrue. The Director General of the BBC resigned amid the panic and confusion whilst a subsequent report into the BBCs handling of the Saville investigation labelled the organization "incapable and chaotic" with a culture of distrust. It's better than "immoral and deceitful", but hardly a ringing endorsement of responsible management.

8. Starbucks' "voluntary" tax payment.
After bubbling away for a few years, 2012 was really the year that tax justice broke into the mainstream consciousness. Campaigners have targeted various companies over the years, but when the spotlight fell on Starbucks, along with Amazon and Google, for their failure to pay tax on millions of dollars of profits in the UK, activists, politicians and consumers called for change. Not that any one suggested that any of the companies had broken the law, merely that such aggressive tax avoidance didn't align with many people's conceptions of fair play. Starbucks' offer to make a "voluntary" payment of $30m to make up for the shortfall suggested that they could read the message in the coffee grinds about where the debate was headed - towards greater expectations placed on companies to be "good citizens". But clearly the onus is also on politicians to beef up the rules ... rather than just criticize companies who are able to take advantage of their shortcomings.

9.  The Super PAC election
The US election was one of the big news stories of the year, and one of the main corporate responsibility issues swirling around the election was about the role of corporate money in politics. This was the first US national election since the 2010 Citizens United legislation which effectively removed any cap on political donations by companies. No surprise then that the election was the most expensive in history with corporate money aggressively channelled to candidates through super PACs (political action committees). Even though this was expected to benefit former hedge fund boss Mitt Romney, Obama came out ahead, perhaps demonstrating that money can't always buy elections. But when even the Harvard Business Review blog starts carping on about getting corporate money out of politics, you know that a tipping point could be fast approaching.

10. BP oil spill aftershocks
Just because it was our no.1 story two years ago, that doesn't mean the BP oil spill isn't still telling us something new about corporate responsibility. This year, we saw the company slapped with a record $4.5bn fine from the US Justice Department after it admitted to criminal responsibility for the explosion that led to 11 deaths on the Deepwater Horizon well. The company could still face a bigger fine following a civil suit for the damages caused by environmental pollution. But maybe the most significant aftershock of the spill was the decision by the US Environmental Protection Agency to suspend BP from bidding for federal contracts over their "lack of business integrity". Although it's still unclear how long the suspension will last, this suggests a potentially significant shift in the government's strategy for dealing with irresponsible companies. Or maybe it just means that BP didn't get its lobbying strategy right!


Photo copyright meteo. Reproduced under Creative Commons Licence

Four reasons why we're so hard on our leaders' ethical lapses

The list of prominent leaders being turfed out of office for ethics violations seems to be growing at an exponential rate. Here in Canada, Toronto mayor Rob Ford's ouster this week for breaking conflict of interest rules is no less than the third Canadian city major to bite the dust this month due to questions of integrity (the others, Gerald Tremblay of Montreal and Gilles Vaillancourt of Laval both resigned without admitting any guilt in face of corruption investigations).

 In the last month we've also seen the Director of the CIA in the US, David Patreus resign due to an admission of "extremely poor judgement" in conducting an extramarital affair. The same week, the incoming CEO of the multinational defense company Lockheed Martin resigned over "a close personal relationship" with a subordinate. Even Hurricane Sandy took its toll with the resignation of the CEO of the Long Island Power Authority after thousands of its customers were left without electricity. And over in the UK, the Director General of the BBC resigned this month due to the organization's botched child abuse investigations.

But its not just a sudden blip. Earlier in the year, Bob Diamond, the CEO of Barclays Bank, resigned in the wake of the Libor scandal, adding to a CEO head count that already included the CEO of Yahoo (falsified CV), Best Buy (inappropriate relationship with a subordinate), Nomura (insider trading), Restoration Hardware (relationship with a subordinate), Stryker (extramarital affair with subordinate), and Lotus cars (expenses irregularities). And just to stoke the fires even more, the former CEO of SNC Lavalin who resigned in March (corruption scandal), has just been arrested on fraud charges.

Depending on how you look at it, these various resignations, firings, and now arrests could be seen as a sign that leaders' ethical standards are tumbling fast .... or that our standards are tightening and that tolerance for any kind of ethical violations is shrinking. Regardless, it is always a big decision to terminate the boss, especially given the huge costs involved in terms of severance packages, the loss of valued experience, skills, and continuity - and in the context of public officials, the costs of going through another expensive election. To give a sense of what we're talking about here: Mayor Ford's removal may force a new by-election which will cost the city, and therefore Toronto taxpayers, some $7m. The termination of HP CEO Mark Hurd in 2010 for minor financial irregularities cost the firm a huge $37m pay-off, saw the share price tumble by 9%, and led to a period of significant decline for the firm after Hurd's successors failed to match his winning formula.

So why do we do it, especially when the "crimes" don't always seem to be that big: a fabricated qualification here, a few thousand in dodgy expenses there, a little bit of infidelity with a colleague when you should be home with the family. Are these really worth the trouble and expense of ousting the most important person in the organization? Here's four reasons why they might be.

1. Leaders are the chief ethics officers.
Leaders are ultimately responsible for the success or otherwise of their organizations. And that goes for ethics too. Leaders need to be the guardians of the organization's ethics. So if things go wrong, the logic goes, it is the leader that should be held accountable, regardless even of whether they knew what was going on further down their organization. And if its the leader who's actually breaking the rules, then they are putting their organization at risk ... of scandal, of fines, or of ethical culture problems further down the line.

2. Leaders set the tone.
You can't build an ethical culture if the boss breaks the rules with impunity. Many will argue that termination is too strong for relatively minor indiscretions, but they often overlook the knock-on effect of being seen to be too lenient. Employees throughout the organization can get the message that ethics isn't really taken too seriously and that although you may get your wrist slapped, the rewards in terms of bending the rules may outweigh the costs. Termination makes that risk-reward calculation crystal clear.

3. Leaders personify problems
Many ethics problems, especially when they break into the public domain, get associated with the organization's leader who becomes the public face of the scandal - and often the target of approbation. So any strategy for dealing with the problem has to tackle the issue of the leader. That's why organizations sometimes fire their leaders in the face of ethics scandals - its an attempt to demonstrate that the problem has been dealt with. The reality is rarely so simple, but the optics matter.

4. Leaders already have disproportionate power
Even minor indiscretions can gain a greater significance when its the boss who is involved. We all make mistakes from time to time, but when the leader crosses the ethical line, the stakes are immediately raised because he or she is already in a position of such power. Fiddling the expenses or having an affair with a subordinate are not just breaking the rules; when its the boss whose doing it, its an abuse of power - or even worse, its sending a message that leaders are above the rules that govern everyone else.

Of course, individual cases will also bring up unique reasons specific to that case, but the message here is simple. Terminating the leader may not make sense economically, and it may not even solve the problem ... but it still can make sense if you're looking to build a truly ethical organization.

Image by cali.org. Reproduced under Creative Commons Licence.

Film Review 'The City Below'

Among the spate of movies inspired by the ongoing financial crisis, ‘The City Below’ (German: ‘Unter dir die Stadt’) is definitely one exceptional voice. While many of those – think ‘Too big to fail’ or ‘Margin Call’ - provide us with a tension filled account of the inner workings of events that led to the crash of banks and markets in 2008 this movie is anything but a thriller. Technically it is a romance, but it is essentially a portrait of the ‘sociotop’ which is the world of the ‘one percent’, the top echelons of a global bank in Germany’s banking capital Frankfurt.

As such the movie – rather than adding to feelings of anger, rage and disgust about greedy bankers – provides us, as it were, with a clinical diagnosis of the de-humanized, de-emotionalized and fake rational world which steers our contemporary version of capitalism. We enter a world actually devoid of glamour or anything to aspire to – and the film leaves us wondering whether the working life of the ‘one percent’ after all is, if anything, worth our pity rather than our envy. The synopsis of the plot runs like this:

A man and a woman at an art exhibition share a fleeting moment of attraction, which neither can act upon. Days later, a chance second meeting leads to an innocent coffee and the two strangers - both married - toy with their unexplainable fascination for each other. Svenja is curious and finds herself in a hotel room with Roland, but she does not consummate an affair. A powerful executive at the large bank where Svenja's husband works, Roland is used to getting what he wants. He manipulates the transfer of her husband to Indonesia to replace a recently murdered bank manager. Unaware of Roland's actions, Svenja now ceases to resist...

Watching the movie I could not help being reminded of Marx’s point in ‘Das Kapital’ where he differentiates between ‘dead labor’ (as in machines and assets) and ‘living labor’ (as in human workers). Marx made the point that capitalism ultimately results in the subjugation of living labor under dead labor, the ultimate de-humanization and alienation of 'human resources' (as we are called in today's business world)  through a rationale of maximal value extraction. In his fascinating book ‘Dead Men Working’, our colleague Peter Fleming argues based on studies of call centre workers and other low skilled labor jobs, that we increasingly witness an army of all but physically dead men and women roped into the relentless pursuit of productivity and efficiency. Mind you, in today’s movie, death is quite physically part of the business: Svenja’s husband Oliver only finds out after being transferred to run the bank’s operations in Indonesia that his predecessor there had actually been brutally butchered while doing his job. ‘Necrocapitalism’ – as as onother of our colleagues, Bobby Banerjee, has coined the current system of global capitalism – though is not just hitting the disenfranchised, under skilled and exploited working masses (such as those killed South African miners in their attempt to resist exploitation and abuse this summer). ‘The city below’ shows us the life of those at the top – the ‘dead men working’ in the power houses of capitalism - and how their capacity for true human interaction, emotion, and passion has been extinguished, channeled and crowed out.

What better backdrop for exposing this than the realm of romantic endeavors? When Svenja’s husband, as she puts it, is ‘annoyingly’ friendly to her she immediately knows there must be an agenda: she smells that he ‘invests’ some niceties into their relations for a ‘return’: her putting up with him relocating for two years to Indonesia. The grammar of their relationship is the one of business relations: they had some sort of contract, ‘a deal’ that they would stay for some time in Frankfurt and we witness Oliver’s skills - brilliant but utterly dismal for a lover – to re-negotiate.

Svenja’s affair with Roland (a board member at the bank where Oliver works) takes this even further. For Roland, who is used to being obeyed and not questioned, the ‘execution’ of his desire follows a strictly transactional pattern, hoping that his status and clout will open him the doors. Even after their first sexual encounters he occasionally lapses back into addressing Svenja in the third person – the polite German level of addressing business partners. Roland has lost any sense of a human, emotional touch: when they make love the first time Svenja has to remind him that she is not ‘made of glass’ – unlike the soulless, deceivingly transparent furniture of ‘dead capital’, which surrounds most of his living days. One time she asks him to extinguish their ritual post-coital cigarette on her arm. But this movie is not ‘Fight Club’, where at least the sensation of pain allows the heroes to feel human again in an otherwise commoditized and instrumentalized word. In 'The City Below' Roland just manages a hapless Freudian ‘Übersprungshandlung’ (Displacement Activity), he can all but inflict this pain on her purse. The movie is modeled on the biblical story of King David who sends the husband of his lover out to be killed in battle. But unlike the ancient romance, Roland and Svenja’s relationship goes nowhere – and even that is part of their negotiated arrangements.

Smoking, by the way, has an unmissably symbolic presence in this movie. Currently in most Western countries banned from all spaces of capitalist work, travel and relaxation as a pleasure ultimately leading to death, in the movie it becomes the great one thing where rules can be broken and intimacy is still possible. The affair between Roland and Svenja starts over the inadvertently shared cigarette in a museum. His first line ever to her is in fact ‘Smoking is forbidden here’, and arguably it is this moment when his passion is ignited. There is not a single of the love scenes in the film which is not – I am not sure what – clouded or mystified by cigarette smoke. In a world of those dead alive the forbidden is the sensual; and an arguably dangerous pleasure is the niche in where whatever is left of human passion and emotion can be fleetingly enjoyed.

Roland and Svenja’s affair shows that humans, of course, cannot totally survive in a world where every decision, every relation is governed by an instrumental, self-interest driven rationale for maximizing one’s own or the company’s returns and economic success. Roland carves out spaces where he tries to escape. Once a day his driver takes him to some dump where he watches Junkies injecting their drugs. In essence the affair with Svenja is a similar attempt, and towards her he tries to reconstruct himself as a human being by taking her to what he pretends to be his modest working class childhood home (which in fact is the home of the murdered employee). These are not just kinky distractions in the movie, these are common patterns among top executives. We should not be surprised, for instance,  that Ex-Goldman Sachs Boss and US Treasury Secretary Hank Paulson for all his life has been an avid environmentalist and nature conservancy wonk in his free time – a contrast to his day job which could not be more gasping and irrational.

Having worked as a consultant for three month at Germany’s largest Bank in Frankfurt 13 years ago the entire movie struck a strange déjà vu for me. It's silent pace, the sterile, nearly theatrical acting of the main protagonists, the architecture and interior design, the language ridden with Anglicisms - all this resonates very well with my memories from that time. Despite unearthing a rather dire reality the movie is a very watchable, even humerous experience leading us into an otherwise hard to be experienced space – the world of global finance taking place far above ‘the city below’...

DM

The movie 'The City Below' plays at the GOETHE FILMS@TIFF Bell Lightbox in Toronto, October 30, 6.30pm

Looking for positive outcomes from plagiarism in the Margaret Wente affair

Following on from the earlier guest post from our York colleague Dawn Bazely regarding the Globe and Mail plagiarism case, we asked Dawn to tie up the loose ends by identifying some of the positives that have emerged from the whole affair. This is what she has to say....

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There was a lot of learning to be had from following the Margaret Wente story last week. All in all, last week was important if you have ever written an assignment (e.g. essay or laboratory report), or have taught any form of writing or have read a newspapers or magazine. This covers pretty much most of the Canadian population!

Questions were raised by mainstream journalists, bloggers and hundreds of the readers of online stories, about whether Wente was guilty of plagiarism, and the behaviour of a number of Globe and Mail staff in responding to this allegation. These stories came out in publications that included Macleans, the Toronto Star, the National Post, and Toronto Life, and even the Guardian. Those asking questions included John Miller, a former dean of journalism at Ryerson, Elizabeth James with Vancouver’s North Shore News and the blogger at the Sixth Estate who wrote about How media should handle a plagiarism scandal

Why were the Globe and Mail’s ethics and standards being called into question? In a nutshell, several columns by Globe and Mail columnist Margaret Wente had been scrutinized by an Ottawa artist and professor, Carol Wainio in her Media Culpa blog. Over several years, Media Culpa posted comparisons of older text by other authors to the text in some of Wente’s columns. Wainio made several of these comparisons. Wente’s columns made no attributions or reference to this other work, and strings of words were identical.

What made it possible for everyone to weigh in with an opinion, was that the Media Culpa’s blogs provided similar comparisons if text to those produced by plagiarism software, such as Turnitin.com. With Turnitin output reports, side-by-side text comparisons are made. Every course director and teaching assistant must make a judgment about these Turnitin text reports, and decide what to tolerate in terms of the cutting and pasting of text. There will be a process for taking this up with students whose work is identified in this way.

The response that unfolded to Media Culpa’s posts, which Wainio had conveyed on several occasions to the Globe and Mail, was that various editors and columnists (including Wente herself) defended a position on plagiarism in which a certain amount cutting and pasting of text written by someone else is to be expected and accepted. Reasons for downplaying Wainio’s text comparisons included the pressures of meeting deadlines. A number of well known writers in “old media”, aka the mainstream press defended Wente. Some of them expressed the opinion that upholding the standards and principles of “academic” plagiarism, or the standards taught in university and high school, was just too difficult. The Wente apologists included Terence Corcoran and Dan Delmar at the National Post. Back at the Globe and Mail, the editor, John Stackhouse and the public editor, Sylvia Stead provided very muted and restrained responses, only after torrents of internet chatter ensured that the story did not die down.

Is cutting and pasting so unavoidable, so that we are we all guilty of using other peoples’ phrases and sentences?

Some members of the reading public seem to think so. Jack, commented at the crux of the matter blog: “So she quoted without naming sources. I rarely do. Does that make me a plagiarist? “Sloppy journalism”? Disagree. If that were true we would all be guilty but we aren’t are we?”

The title of Dan Delmar’s column at the National Post was: Are we all “self-righteous” sinners cast(ing) the first stone at Margaret Wente? My answer to this is a definite “no”. Biology laboratory reports provide a good case study for evaluating just how prevalent cutting and pasting actually is. Hundreds of student do the same experiments every year, and write up their results. Up to to now, thousands of these reports have been run through plagiarism software such as Turnitin. This software checks for patterns in words, and compares one person’s text against that from other sources: the internet, other student papers, journals, and whatever other text is available and accessible.

The Turnitin reports shows that it IS possible for thousands of students to write up the same experiment with relatively little overlap in sentence structure. The one exception is the methods section, in which students often quote directly from the laboratory manual, and it has been easy to put guidelines into place for quoting them.

Nevertheless, IS the academic integrity project in jeopardy?

There may be a very real case for arguing that different kinds of writers should be held to different standards, but there is no doubt in my mind that if Margaret Wente had submitted the columns in which Wainio detected unattributed text as undergraduate assignments, that she would have been called in for a chat with the teaching assistant and course director. Not surprisingly, a US Gallup poll found that journalists aren’t high on the public’s honesty list.

While the entire affair raised serious questions about the ethical behavior of powerful members of “old media”, in general, I tend to agree with the Back of the Book blog, that there has been an upside to the Wente case.

Good pedagogy includes raising awareness about the rules of academic integrity and plagiarism. Academic integrity is not primarily about punishment but about learning how not to plagiarize, and give credit appropriately. Many of the frontline workers, such as grad student blogger, gradstudentdrone, in the war on cut and paste have stepped forward during l’affaire Wente, to acknowledge the challenges, and the grey areas of confronting plagiarism.

The reader responses have shown that these principles and ethical codes relating to academic integrity are taken very seriously by many outside of academia and the media. Being able to view the text comparisons directly, was no doubt a contributing factor to the outrage at the behavior of senior editors, and the picture that their actions paint of the corporate culture. Carol Wainio wrote several responses on her blog and in the mainstream media that were calm, measured and logical. This all served to reinforce the impression that a section of the media establishment has been making judgment calls that put them out of line with teachers, readers and members of the mainstream media who are more apt to look at the evidence without blinking. Kathy English, the Toronto Star’s public editor described the Wente case as a test of accountability.

Perhaps the most positive outcome is the broad discussion that the Wente story generated. A very cool example is the discussion thread about this on the Vancouver Canucks Hockey team forum. Thank goodness the fans have something to distract them. This incident also gave many people cause for reflection and rememberance, such as David Climenhaga’s raising the tragic case of Toronto Star journalist Ken Adachi, who committed suicide after being found plagiarizing. 

Dawn Bazeley

Image by Jobadge. 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