The Birthday Party Begins

Ten year olds are in a funny age. Not quite children anymore, they are not grown ups either. They have learned the basics, reading and writing and calculus - but there is still a lot ahead of them.

I like the metaphor for the UN Global Compact ten year anniversary Summit. In the opening ceremony it became quite clear that indeed much has been achieved. To talk about business responsiblities is now widely legitmate and the guest list shows, that many companies have grown with it. This is also visible in who - next to Ban-Ki Moon (UN Secretary General) - was invited to give the major talk in this afternoon's opening ceremony: Wang Zhongyu, President, China Enterprise Confederation - China of all countries. Its nice that ten year olds still don't care too much about what the world around them thinks. And in fact one has to give Chinese businesses in the UNGC a lot of credit, certainly for their commitment and also for successes.

CSR is a world full of ambiguities, but today China's and Chinese businesses' record on the achievement of the ten principles was not on the agenda. Fair enough, this can come at another time.

Equally ambiguous I felt about a 5mins videoclip which was shown in the opening ceremony. I forgot the details, but it was incredibly cheesy, happy-clappy and goosepimply-emotional. Showing this at, say, the Christian Womens Knitting Association of South Arkansas' annual charity dinner - fine. But in a room with over a 1000 people from business (300 of which CEOs or the like)? I don't know. But hey, where shall a ten year old have already got a sense of style?

By the way, who started that fashion of showing a video clip with people talking in the clip while they are sitting in the flesh on the podium? This happened twice today. Why not just talk to each other?

Which happened finally, when we were told by Lord Hastings, the master of ceremonies for the Summit, to say hello to the person right of us and the person left of us. I was so relieved we did not have to kiss them. My neighbor on the left was from Uruguay, btw. He contgratulated me on Germany's win today in the Soccer World Cup. So it was nice after all...

Ambiguity also came up with the terminology in the world of CSR. CSR for most people who spoke today is still seen largely as philantropy while 'Sustainability' - the title of the Summit - in their view looks more at making operations and core business processes socially responsible. It all goes to show that language and concepts are, at the end of the day, all ephemeral and relative. Like ten year olds and their slang today. Would I understand a text message from them? Probably not, but if it means something good, I don't care.

'Business Education has Become an Industry'

So here we are. As hot as the weather is in New York, as hotly contested is the role which business education has played recently in making for more responsible companies. At the PRME 'side event' of the UNGC Summit some rather soulsearching questions were raised. Rakesh Kurana from Harvard made it quite clear that one of the dilemmas of b-schools in fact is that they have come to see their students rather as ‘customers’ then people who need education and at times been served a diet that needs some acquired taste. Just to blame the business world for lack of demand for issues of CSR and ethics is not enough in a world where the public increasingly worries about the status of wider societal impacts of business.

While the Accenture Study (in cooperation with the UNGC) of the opinion of more than 800 CEOs suggest a slightly different picture, it leaves us with one general problem: Since business education, certainly at postgraduate/MBA level is in fact privatised and ‘purchased’ by students or their companies, this inherent tension cannot be denied. One of the reasons I personally have started to dislike teaching on MBA – or worse – executive MBA – programs is exactly that it is a tough challenge to make students think, reflect about things unknown or strange to them and, most notably, to read. And the issues the UNGC is concerned about fall exactly in this category.

Interesting comments came from India, delivered by Jamshed Irani, Director, Tata Sons Limited. In his view, since business schools don’t do a good job (in general) at talking about climate change, ethics etc. corporations should have their own universities and b-schools. Yes, you havn’t misheard. I guess this reflects a tradition of a great company with a long tradition of philanthropy and ethics, such as Tata. But what about a b-school run by AIG, BP or Lehman Brothers? Just imagine the type of ‘leaders’ we would get from there...

So far the UNGC summit (i.e. this fringe event) put the finger on one important thing: with delegating responsibility for public goods (and education used to be one) in the hand of private actors, we have opened a pandora’s box. Its irreversible, I think (as the Hewlett Packard Chair in CSR, no less). But we need new criteria for private responsibility for public goods in order to change this focus within b-schools. How this will be achieved – no real answers so far from New York.

UN Global Compact Leaders Summit 2010

What do you bring to the birthday party of a ten year old? Especially if it has pretty posh parents and throws the party nowhere less than at Times Square in New York?

Crane and Matten have been invited to be the official Summit Bloggers for the 10 year anniversary Conference of the United Nations Global Compact this week Thursday and Friday in New York City. Over the next three days Dirk will keep you posted with news and updates on what is going on here.

I have never done such a thing, so expect a colourful medley of comments, lifeblogs from the sessions or just thoughts. Let me know what you think, too, so that we can learn as we go. I have no real idea where this will be going. In the spirit of the party, I am not in the mood of only talking about how naughty the boy has been over the last 10 years. This job is done by others already in the bloggosphere.

And besides, its not how I feel about the compact. In a world with serious governance deficits on the global level I think we can do with all we can. And here the UN Global Compact has changed the game remarkably, I feel. Thursday and Friday this week, around 1200 senior executives from member companies, some of them top brass, will talk about ethics in business, CSR, sustainability etc.. I still have vivid recollections how things were 10 years ago. The laughter and raised eyebrows of my colleagues in the German bank I was working at the time, when I told them I would take a job teaching and writing about business ethics: 'Business ethics: hahahah. What will you do in the afternoons?'. That was '99, so things have changed.

This being more a meeting of members of an organization rather than a normal conference I expect this to be quite exciting. I have also scheduled some interviews with senior managers, so lets see where that takes us.

Today I will first go to the meeting of the Principles of Responsible Management Education (PRME). The PRMEs are an offshoot of the UNGC which have been signed by many institutions of business education worldwide and which aim at implementing business responsibility firmly into the curriculum of business education.

So I have not yet decided on the birthday present. I have to see how the party goes and how the birthday boy looks from close. I will share my impressions with you.

Argentina, or: Neoliberalism with Benefits

Argentina, according to activists such as Naomi Klein and others, can be seen as a textbook case for what often is vilified to as ‘neo-liberalism’. In Argentina, this alludes mostly to the presidency of Carlos Menem and its aftermath, which ended 2001 in the bankruptcy of the Argentinean state. It was a period of rampant privatization, radical free market policies, most notoriously boosted by the conditions which the IMF and the Word Bank dictated to the country for its loans. Unforgotten are the decrees allowing every citizen to withdraw from their bank not more than $250 per week. Many lost their pensions and savings and the devaluation of the currency has led to an economic downturn from which the country is only slowly and partly recovering.

Looking at Argentina now (Dirk has just spent 6 weeks there) provides a rather fascinating picture. Yes, it cannot be overlooked that the country shows signs of deterioration: In Buenos Aires, the stunning architecture, the layout of the wide streets and parks clearly indicate that the country has seen better days. But the crumbling sidewalks, the empty high street buildings (at the former Harrods they couldn’t even bother to remove the signs) and the state of public buildings are only some examples of what makes the recent decline palpable.

But in the main, the recent years have brought to the surface some phenomena which make the country very different from other places in the world. If one goes out or does shopping it is stunning that apart from a two, three fast food chains one has a hard time to find any of the global brands which makes high streets anywhere else look all more and more the same. Instead, the absolutely cool shops of BsAs’ Palermo or Cordoba’s San Telmo barrios boast a richness of home-grown brands, designers and artists which offer a truly unique experience. In some ways this can be seen as a consequence of the crisis: since the decline of the currency foreign products have become unaffordable, stimulating domestic talent.

Another interesting phenomenon is the sheer number of bookshops. Argentineans seem to be not only fairly well educated and intellectually vibrant, but they certainly display that their hearts beat on their left sides. The number of demonstrations, often using symbols one remembers from university cafeterias in the 1970s in Europe, is sheer staggering, often including public debates and talks. It looks that recent events have politicized a whole generation of mostly younger people.
While the Argentinean state has still maintained some core elements of what used to be European-style welfare state, it is interesting to see though that many social tasks are now increasingly addressed by private corporations and NGOs. In a similar vein it is the private sector now which has taken first steps and initiatives to address corruption, which is fairly rampant and endemic as part of a colonial heritage under Spanish rule. Argentina has a history of military dictatorship, human rights violations by governments and, more recently corruption and rent-seeking of government officials. No wonder then we see that corporations are increasingly stepping into a quasi governmental role, which we have written about extensively. It is interesting that many business schools have become leading hubs in addressing these social issues, be it corruption or broader social responsibilities.

One can’t escape the impression that the rough economic legacy and palpable discontent with governments has not only led to a generation of younger Argentineans which are highly reflective, ready to speak up and march out for their views; it has also led to remarkable forms of social activism and entrepreneurship. One of the most interesting examples is the ‘El Castillo’ Hotel in the beautiful hills west of Cordoba. It’s Argentina’s first and so far only eco hotel and caters to corporate and private customers with longer, custom designed holiday programs with a host of activities, including all sorts of sports, art, music, acting, games or cooking. The owner-managers, the three Fabrega siblings Adriana, Edgardo and Fabian, set the place up in a derelict old mansion when they were in their mid 20s and have turned it into a viable business. From exclusively employing locals, skilling indigenous workers (discrimination is otherwise rather common), pursuing environmental goals up to diligently delivered events – the owners brim of pride not only about economic success, but most notably about contributing to social change. After all, its the home country of Che Guevara...

McDonald's comes back out of le closet

The fast food chain McDonald's has recently released an interesting TV ad in France featuring a young gay character talking with his father. It's notable not just because it features a gay character in a big multinational company's commercial, but also because the character is actually hiding his sexuality.  You can see the spot with English subtitles here:



The ad has gained a lot of online attention. The spot itself has been seen by nearly 2m people on YouTube and there are countless sites (including repostings on YouTube) where commentators have made their views known about the ad. These views range from a positive appreciation of McDonald's for acknowledging the gay community to some pretty nasty homophobic vitriol. Somewhere in between there are those who are asking why a fast food company should even be mentioning someone's sexuality, and those that are questioning whether McDonald's is trying to reach out to a new, and potentially prosperous targt market. As we have explored in a recent paper (downloadable at SSRN), corporations have increasingly been involved in identity politcs, and this raises a number of critical debates about the intermingling of business and politics.

To understand the significance of McDonald's 'gay ad' though, we need to put it in context. The ad is one part of a larger campaign launched by the company last year featuring the strapline 'Venez Comme Vous Etre' (Come as You Are). The campaign includes film and print ads, viral videos and other stuff. The basic message of the campaign is everyone's welcome at McDonald's, however you're dressed, whatever your age or race. And whatever your sexual orientation. The official company line is that series "recognizes the diversity of McDonald's customers in France."

It's all part of the cosmopolitan identity that multinationals like McDonald's are increasingly seeking to create. Remember that not that long ago, anti-globalization campaigners in France saw McDonald's as a symbol of American big business and global injustice - and were wrecking their restaurants from time to time to prove the point. So in that context a campaign that presents the company as a broad church that welcomes one and all makes a lot of sense. So much so that in food-loving France, the chain enjoys growing popularity and has become, according to The Times newspaper, the country’s ‘worst-kept dirty secret’. Everyone loves McDonald's (at least that's what the company is telling us). Even gay people. Even closeted gay people. And even clueless Dads.

It might seem odd that the company has chosen to portray a young man who is cute and confident, but at home at least, firmly in the closet. Why not present an out and proud gay character? One answer could be that the company is looking to represent a realistic picture of gay identity, not just a handy stereotype of sugar-coated camp beloved of Hollywood. It's also worth remembering though that back in 2008, McDonald's got itself in a bit of hot water back home in the US over its purported support of the gay community. Following a $20,000 sponsorship donation and the appointment of a McDonald's VP to the board of the National Gay & Lesbian Chamber of Commerce (NGLCC), the American Family Association (AFA) and other groups from the christian right called a boycott. The company had refused "to stay neutral in the cultural war over homosexuality" the AFA claimed, and was "promoting the homosexual agenda, including homosexual marriage."Eventually McDonald's duly pulled out of its support of the NGLCC.

 McDonald's American experience shows just how problematic it can be for companies to get involved in representing different minorities. It can place them in a world of identity politics that they are unprepared and ill suited to deal with. Promoting diversity or targeting the lucrative gay market may make good economic sense, but its also a political act with political implications. Pro- and anti- groups may both use corporations to help them achieve their political goals, just like the NGLCC and the AFA have. McDonald's may claim it is simply about diversity and inclusiveness but others see it as the frontline of identity politics.

So this may help to explain the somewhat ambiguous messaging of McDonald's"gay ad" in France. The company is putting out a welcome whether you're in or out of the closet, or even if, like the father in the ad, you don't recognise or support gay identity. Come as you are, as they put it in the campaign.

That said though, running the ad is quite a risk for a company still smarting from a controversial boycott that riled up a significant chunk of their core customer base in conservative middle America. As several commentators have suggested, the ad is unlikely to run in the US, but even so it's starting to cause waves, as this clip of Bill O'Relly shows. The company can hardly be pro gay in France and neutral in the US. At some stage, like it or not, the embracing of diversity means you just have to take some kind of political position. As much as companies like McDonald's may be more comfortable talking economics, they simply can't afford to ignore the politics.


Photo by Márcio Cabral de Moura. Reproduced under Creative Commons Licence