Strategic CSR - Facebook

The article in the url below is an interesting commentary on the extent to which social media are encroaching upon our lives (or enabling our lives, I guess, depending on your perspective):

 

“Some companies and industries do especially well in tough times: Discounters, health-care providers, fast-food chains, Facebook. That’s right, Facebook. The unemployment rate is more correlated with Google searches for ‘facebook’ than with any other search term.”

 

The data for the article were generated by Google Correlate (http://www.google.com/trends/correlate/), a service that allows you to enter search terms and see what other search terms are correlated. It also, apparently, allows you to upload your own dataset and see what Google search terms are correlated with it:

 

“We uploaded actual unemployment rate data to see what search patterns correlate most closely, and Facebook searches dominate. Higher unemployment translates to more Facebook searches, and lower unemployment means fewer Facebook searches. They are so closely tied to unemployment, they outnumber searches involving actual unemployment-related topics.”

 

I think the title of the article has its causal relationship backwards (I am pretty sure unemployment results in more Facebook searches, not the other way around!), but the relationship is strong. See the graphic that accompanies the article to see just how strong:

 

http://images.bwbx.io/cms/2014-01-08/facebook03.png

 

While it may not be very surprising to learn that unemployed people spend more time surfing the Internet; as the article notes, it is surprising that Facebook is the most immediate beneficiary—unless, of course, people are using Facebook to help themselves find jobs:

 

“It seems reasonable that more unemployed people suggests more time spent surfing the Web, whether to kill time or to connect with anyone and everyone who might help them find a job, but it’s still surprising that Facebook is far and away the most correlated search—far more than ‘unemployment,’ ‘résumé,’ or ‘work.’”

 

Take care

David

 

David Chandler & Bill Werther

Strategic Corporate Social Responsibility: Stakeholders, Globalization, and Sustainable Value Creation (3e)

© Sage Publications, 2014

 

Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/

 

 

When Searches for Facebook Spike, So Does Unemployment

By Eric Chemi

January 9, 2014

Bloomberg Businessweek

http://www.businessweek.com/articles/2014-01-09/google-searches-for-facebook-spike-with-the-unemployment-rate

 

Strategic CSR - Oceans

The article in the url below details the damage we are doing to the world's oceans. It is really too depressing to recount here—the sub-title tells you all you need to know about the tone:

 

“Humans are damaging the high seas. Now the oceans are doing harm back.”

 

The article is worth reading, however, if you remain in any way unconvinced at the speed at which humans are destroying the environment. This graphic, which accompanies the article, details the proportion of the oceans that are collapsed, fully-exploited, over-exploited, recovering, and undeveloped. The first three categories make up over 90% of the total:

 

http://cdn.static-economist.com/sites/default/files/imagecache/original-size/images/print-edition/20140222_IRC381_0.png

 

The article as a whole makes a compelling case that we are awful stewards of that which is most important—the source of our future existence.

 

Have a good weekend

David

 

David Chandler & Bill Werther

Strategic Corporate Social Responsibility: Stakeholders, Globalization, and Sustainable Value Creation (3e)

© Sage Publications, 2014

 

Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


In deep water

February 22, 2014

The Economist

Late Edition – Final

51

http://www.economist.com/news/international/21596990-humans-are-damaging-high-seas-now-oceans-are-doing-harm-back-deep-water

 

Strategic CSR - Forgetting

The article in the url below is fascinating. It discusses the increasing role of automation in our lives and the effect machines (computers, in particular) are having on some of our innate skills. In essence, an over-reliance on computers is causing us to forget how to perform basic functions. Think of the GPS navigator that is built into your car as an example. How many stories have you heard about people following the directions to dead-ends or roads that no longer exist? Think also of the spell-checker on your computer or the effect a calculator has had on our ability to perform simple math calculations. The article suggests that when we rely on such machines, we forget how to perform the core function ourselves (such as navigation), but we also tend to ignore data points that would otherwise alert us to problems. In other words, we are forgetting how to do things and we are not paying attention—we have become disengaged from the activity at hand. This is having devastating effects in all walks of life, such as the role of pilots in flying planes:

 

“Pilots today work inside what they call ‘glass cockpits.’ The old analog dials and gauges are mostly gone. They’ve been replaced by banks of digital displays. Automation has become so sophisticated that on a typical passenger flight, a human pilot holds the controls for a grand total of just three minutes. What pilots spend a lot of time doing is monitoring screens and keying in data. … And that, many aviation and automation experts have concluded, is a problem. … No one doubts that autopilot has contributed to improvements in flight safety over the years. It reduces pilot fatigue and provides advance warnings of problems, and it can keep a plane airborne should the crew become disabled. … [But] When an autopilot system fails, too many pilots, thrust abruptly into what has become a rare role, make mistakes. … The Federal Aviation Administration has become so concerned that in January it issued a ‘safety alert’ to airlines, urging them to get their pilots to do more manual flying. An overreliance on automation, the agency warned, could put planes and passengers at risk.”

 

The phenomenon is also affecting things such as the navigational abilities of Inuit hunters:

 

“The hunters’ ability to navigate vast stretches of the barren Arctic terrain, where landmarks are few, snow formations are in constant flux, and trails disappear overnight, has amazed explorers and scientists for centuries. … Inuit culture is changing now. The Igloolik hunters have begun to rely on computer-generated maps to get around. … But as GPS devices have proliferated on Igloolik, reports of serious accidents during hunts have spread. A hunter who hasn’t developed way-finding skills can easily become lost, particularly if his GPS receiver fails. The routes so meticulously plotted on satellite maps can also give hunters tunnel vision, leading them onto thin ice or into other hazards a skilled navigator would avoid. … A unique talent that has distinguished a people for centuries may evaporate in a generation.”

 

The result, the author argues, is a fundamental choice that defines us as humans:

 

“Whether it’s a pilot on a flight deck, a doctor in an examination room, or an Inuit hunter on an ice floe, knowing demands doing. One of the most remarkable things about us is also one of the easiest to overlook: each time we collide with the real, we deepen our understanding of the world and become more fully a part of it. While we’re wrestling with a difficult task, we may be motivated by an anticipation of the ends of our labor, but it’s the work itself—the means—that makes us who we are. Computer automation severs the ends from the means. It makes getting what we want easier, but it distances us from the work of knowing. As we transform ourselves into creatures of the screen, we face an existential question: Does our essence still lie in what we know, or are we now content to be defined by what we want? If we don’t grapple with that question ourselves, our gadgets will be happy to answer it for us.”

 

Take care

David

 

David Chandler & Bill Werther

Strategic Corporate Social Responsibility: Stakeholders, Globalization, and Sustainable Value Creation (3e)

© Sage Publications, 2014

 

Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/

 

 

The Great Forgetting

By Nicholas Carr

November, 2013

The Atlantic Magazine

http://www.theatlantic.com/magazine/archive/2013/11/the-great-forgetting/309516/

 

Strategic CSR - Zappos

The article in the url below shows how Zappos is pushing the boundaries of corporate culture even further:

 

“Online retailer Zappos has long been known to do things its own way. The customer-service obsessed company calls its executives ‘monkeys,’ has staffers ring cowbells to greet guests, and offers new employees cash to quit as a way to test their loyalty. The Las Vegas-based retailer is now going even more radical, introducing a new approach to organizing the company. It will eliminate traditional managers, do away with the typical corporate hierarchy and get rid of job titles, at least internally.”

 

Although this decision has great symbolic meaning (it sends a strong message that all employees are valued), there also seems to be significant substance attached to the move:

 

“The unusual approach is called a ‘holacracy.’ Developed by a former software entrepreneur, the idea is to replace the traditional corporate chain of command with a series of overlapping, self-governing ‘circles.’ In theory, this gives employees more of a voice in the way the company is run.”

 

The move also represents a strong statement against the stultifying effects of bureaucracy, while retaining ideas of accountability and transparency:

 

“At its core, a holacracy aims to organize a company around the work that needs to be done instead of around the people who do it. As a result, employees do not have job titles. They are typically assigned to several roles that have explicit expectations. Rather than working on a single team, employees are usually part of multiple circles that each perform certain functions. In addition, there are no managers in the classically defined sense. Instead, there are people known as ‘lead links’ who have the ability to assign employees to roles or remove them from them, but who are not in a position to actually tell people what to do. Decisions about what each role entails and how various teams should function are instead made by a governing process of people from each circle.”

 

In making these changes, however idealistic and well-intentioned, Zappos is running-up against thousands of years of human evolution:

 

“Bob Sutton, a professor at Stanford’s Graduate School of Business … says ‘show me any group of five human beings or five apes or five dogs, and I want to see the one where a status difference does not emerge. It’s who we are as creatures.’”

 

Recognizing this, Zappos has so far moved only 10% of its employees over to the new system and hope to have everyone transitioned by the end of this year. Still, they fully expect the process to take a further six months before everyone has got used to the new rules (or absence of rules).

 

BTW: There is an interesting note at the bottom of the article:

 

“Note: Amazon founder and CEO Jeff Bezos also owns the Washington Post.”

 

Zappos, of course, was bought by Amazon in July, 2009, although it reportedly operates as an independent unit within the Amazon umbrella. This letter from Zappos’ CEO, Tony Hsieh, explains the reasons for the takeover.

 

Take care

David

 

David Chandler & Bill Werther

Strategic Corporate Social Responsibility: Stakeholders, Globalization, and Sustainable Value Creation (3e)

© Sage Publications, 2014

 

Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/

 

 

Zappos says goodbye to bosses

By Jena McGregor

January 3, 2014

The Washington Post

http://www.washingtonpost.com/blogs/on-leadership/wp/2014/01/03/zappos-gets-rid-of-all-managers/

 

Strategic CSR - Meat

If you are looking for some reasons to become a vegetarian, the article from The Economist in the url below provides plenty:

 

“Livestock matters because it is the biggest land user in the world. More land is given over to grazing animals than for any other single purpose. About a third of the world’s crops are fed to animals, and they use a third of all available fresh water. … But meat is an inefficient source of calories. It accounts for 17% of global calorific intake, but uses twice that amount of land, water and feed.”

 

“Livestock also damages the environment. It accounts for between 8% and 18% of greenhouse-gas emissions. … Roughly a fifth of all the world’s pasture has been degraded by overgrazing. Livestock uses water inefficiently: you need about 15,000 litres of water to produce a kilo of beef but only 1,250 litres for a kilo of maize or wheat. And animals form a significant reservoir of diseases that affect humans … three quarters of new infectious diseases of people were first found in animals.”

 

“The logical conclusion was drawn by Rajendra Pachauri, the chairman of the Intergovernmental Panel on Climate Change, who said ‘eat less meat; you’ll be healthier and so will the planet.’”

 

The problem, of course, is that not many of us are listening:

 

“Urbanisation and rising incomes mean that more of the world is converging on European and American levels of meat consumption, which is roughly 100kg a year (80kg in Britain, 120kg in America). At the moment, most of Africa and South Asia eats less than 20kg of meat a year. Even if parts of India remain vegetarian, shifting patterns of demand imply worldwide meat consumption will double by 2050.”

 

Have a good weekend

David

 

David Chandler & Bill Werther

Strategic Corporate Social Responsibility: Stakeholders, Globalization, and Sustainable Value Creation (3e)

© Sage Publications, 2014

 

Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/

 

 

Meat and greens

January 18, 2014

The Economist

60-62

http://www.economist.com/blogs/feastandfamine/2013/12/livestock

 

Strategic CSR - Individual Rights

I am thinking a lot about stakeholder theory at the moment.

 

It is interesting to debate whether the natural environment, as a non-independent actor, should be included as an identifiable stakeholder of the firm. Many argue that it should and that, in fact, the environment has rights that should be protected by law. Others, however, argue that it should not be included because it is not the environment itself that speaks or feels or acts; rather, it is how the degradation of the environment affects other stakeholder groups (e.g., NGOs or the government) who then advocate on its behalf. One argument for including the environment as one of the firm’s societal stakeholders is to reinforce the importance of sustainability within the CSR debate, while recognizing that the environment requires actors to speak and act on its behalf in order to be protected.

 

The article in the url below extends this argument further, exploring the extent to which animals should have legally-defined rights:

 

“‘Beings who recognize themselves as ‘I’s.’ Those are persons.’ That was the view of Immanuel Kant, said Lori Gruen, a philosophy professor at Wesleyan University who thinks and writes often about nonhuman animals and the moral and philosophical issues involved in how we treat them. She was responding to questions in an interview last week after advocates used a new legal strategy to have chimpanzees recognized as legal persons, with a right to liberty, albeit a liberty with considerable limits.”

 

The argument, as an intellectual exercise, seems perfectly reasonable to me:

 

“Mr. Wise [founder of the Nonhuman Rights Project advocacy group] argues that chimps are enough like humans that they should have some legal rights; not the right to vote or freedom of religion — he is not aiming for a full-blown planet of the apes — but a limited right to bodily liberty.”

 

Whether the Courts can be persuaded of the practical viability of this argument, however, is another thing. Nevertheless, it does seem that, if we rationalize the idea that corporations are special legal entities with some of the rights (and, it seems, fewer of the responsibilities) of people, it shouldn’t be such a stretch to extend those legal rights to animals that are very close to actually being people!

 

“The science of behavior is only part of the legal argument, though it is crucial to the central idea — that chimps are in some sense autonomous. … Dr. Gruen sees it as a term that is fraught with problems in philosophy, but Dr. Marino [of Emory University] said that for the purposes of the legal effort, autonomy means ‘a very basic capacity to be aware of yourself, your circumstances and your future.’”

 

The danger (or opportunity), of course, is that such a ruling would open a very large door to many other complicated issues:

 

“The kind of science that supports the idea of chimpanzees as autonomous could also support the idea that many other animals fit the bill. … The issues of self-awareness and of awareness of past and future strike to the heart of a common-sense view of what personhood might be. Chimps, elephants and some cetaceans have shown that they can recognize themselves in a mirror. … There is plenty of evidence that chimpanzees and other animals act for the future. Some birds hide seeds to recover in leaner times, for example.”

 

An argument against this points out that “personhood does not mean being human.” While true, this has not stopped us extending significant rights to corporations. The difference, of course, is that it suits our purposes to do so for corporations, while it may not suit our purposes (or the purposes of some of us) to extend similar rights to animals.

 

Take care

David

 

David Chandler & Bill Werther

Strategic Corporate Social Responsibility: Stakeholders, Globalization, and Sustainable Value Creation (3e)

© Sage Publications, 2014

 

Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


The Humanity of Nonhumans

By James Gorman

December 10, 2013

The New York Times

Late Edition – Final

D1

http://www.nytimes.com/2013/12/10/science/considering-the-humanity-of-nonhumans.html

 

Strategic CSR - The End of CSR

Over the break, I read a book by Peter Fleming (University of London) and Marc T. Jones (Maastricht School of Management) titled, The End of Corporate Social Responsibility. The book is well-written and worth a read by anyone interested in CSR. Certainly, I found their logic to be more stimulating and innovative than most of the work that I read that claims to support the idea of CSR. A couple of example quotes from the Introduction:

 

“Why the end of corporate social responsibility? Why would we entitle a book with such a bold statement when today companies are spending more on their corporate responsibility budget than ever, when it is one of the most prominent aspects of their websites, frequently mandatory in business school curriculums and the daily topic of conversation in the business press? Why would we claim that corporate social responsibility has ended, moreover, at a time when it is needed in business now more than ever (just think of the 2010 oil spill in the Gulf of Mexico and the ecological catastrophe that ensued). … Could it not be for these reasons that some might argue the opposite – corporate social responsibility is really only beginning? No; if the title of our book is misleading, it is because we feel that corporate social responsibility never really began.”

 

“For us, however, the key starting point for making sense of CSR is the context (i.e. capitalism) in which the discourse and practice is set. The institutional forces propelling business, the corporate form and the ideological matrix of economic rationality forward (some would say into oblivion) immediately transposes most gestures of responsibility – including sustainability and stakeholder dialogue – into something of a farce. Indeed, the idea that the logic of the neo-corporate enterprise might be reformed to consider social issues beyond economic rationality misunderstands how capitalism functions. There is a deep tension between what we might expect to be ethical organizational citizenship and the general sense that businesses follow (increasing profits, control, reducing costs, increasing consumer dependence, widening commodification, privatization, etc.). And it is this code of business that will always take precedence over all other considerations (Heilbroner, 1985), not because the people who manage corporations are ‘bad’, but because that is how corporations were designed to operate. In this context, much of what CSR proclaims begins to look like either wishful thinking … or simply propaganda … designed to pull the wool over the eyes of consumers, environmental protection groups and society more generally.”

 

While I arrive at a different conclusion to the authors, I was sympathetic to a lot of the premises underlying their thesis and feel a similar logic driving the concept that we refer to as strategic CSR. I have also been thinking a lot more about these foundational ideas because I am working on a new book as part of the United Nations Principles for Responsible Management Education (http://www.unprme.org/) book collection. The working title for this new book is Corporate Social Responsibility: A Strategic Perspective and should be published by the beginning of next year.

 

This book project started with an attempt to challenge the largest myths about business and economics that I see propagated in business schools and the media (e.g., that shareholders own the firm; the idea that profits can be maximized; or that economic value and social value are independent constructs). Out of the arguments I use to break down these myths, I gradually build what I think is a more robust intellectual framework underpinning strategic CSR.

 

As a result, I am OK with The End of Corporate Social Responsibility, as long as strategic CSR rises in its place!

 

Take care

David

 

David Chandler & Bill Werther

Strategic Corporate Social Responsibility: Stakeholders, Globalization, and Sustainable Value Creation (3e)

© Sage Publications, 2014

 

Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/

 

Strategic CSR - Exxon

In a wonderful example of irony, the article in the url below reports that Rex Tillerson (CEO of Exxon Mobil) has joined a lawsuit in his local community complaining about the inconveniences of fracking:

 

“One evening last November, a tall, white-haired man turned up at a Town Council meeting to protest construction of a water tower near his home in this wealthy community outside Dallas. The man was Rex Tillerson, chairman and chief executive of Exxon Mobil Corp. He and his neighbors had filed suit to block the tower, saying it is illegal and would create ‘a noise nuisance and traffic hazards,’ in part because it would provide water for use in hydraulic fracturing.”

 

As the article notes:

 

“Fracking, which requires heavy trucks to haul and pump massive amounts of water, unlocks oil and gas from dense rock and has helped touch off a surge in U.S. energy output. It also is a core part of Exxon’s business.”

 

Tillerson’s lawyer stresses that, while the Exxon CEO has joined the case, he is not concerned about the noise or traffic problems that are associated with increased drilling activity:

 

“Mr. Tillerson's primary concern is that his property value would be harmed.”

 

Of course, why would his property value potentially be harmed? Well, one reason, no doubt, is the increased noice and traffic that accompany fracking activity. Apparently, Mr. Tillerson is quite keen to win the case:

 

“The tower would be almost 15 stories tall, adjacent to the 83-acre horse ranch Mr. Tillerson and his wife own and a short distance from their 18-acre homestead. Mr. Tillerson sat for a three-hour deposition in the lawsuit last May, attended an all-day mediation session in September and has spoken out against the tower during at least two Town Council meetings, according to public records and people involved with the case.”

 

While we all might think that Tillerson should have better things to do with this time (like run a multinational energy company), I am sure we can feel confident that his experience with this case will ensure he has greater sympathy for residents elsewhere who might raise similar issues in complaint against Exxon’s fracking activity. After all, as he noted in one of his appearances before the Council:

 

“Allowing the tower in defiance of town ordinances could open the door to runaway development and might prompt him to leave town, Mr. Tillerson told the council. ‘I cannot stay in a place,’ he said, ‘where I do not know who to count on and who not to count on.’”

 

Have a good weekend

David

 

David Chandler & Bill Werther

Strategic Corporate Social Responsibility: Stakeholders, Globalization, and Sustainable Value Creation (3e)

© Sage Publications, 2014

 

Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


Exxon Chief Joins Lawsuit Raising Ruckus Over Fracking

By Daniel Gilbert

February 21, 2014

The Wall Street Journal

Late Edition – Final

B1

http://online.wsj.com/news/articles/SB20001424052702304899704579391181466603804

 

Strategic CSR - Market morality

Two quotes from a recent David Brooks column in The New York Times (the article in the url below) got me thinking about the morality of the market. The first quote highlights the percentage of the global population who have emerged from poverty as a result of economic advancement:

 

“… the percentage of people in the world living on $1 a day has declined by 80 percent since 1970s, adjusting for inflation. That’s the greatest increase in human possibility in human history. The primary cause is globalized capitalism.”

 

The second quote, in contrast, reflects on the recent Facebook acquisition of WhatsApp for $19 billion:

 

“When Facebook entered a deal to buy WhatsApp this week, it agreed to pay a price equal to $345 million per WhatsApp employee. Meanwhile, the share of the economic pie for the middle 60 percent of earners nationally has fallen from 53 percent to 45 percent since 1970.”

 

Brooks’ takeaway from these two statistics is that, while the market in abstract terms has enormous potential to deliver societal advancement, the market as currently structured is failing to deliver on that potential:

 

“The real moral health of an economic system … can be measured by how well it helps all people make an enterprise of their life. Whether they work at odd jobs or at a nongovernmental organization or at a big company, do they get to experience the joy of achievement? Do they know that their work amounts to something?”

 

The reasons for this disparity are largely structural and the Facebook deal is a perfect example—lots of wealth that is increasingly concentrated and, as a result, excludes a large percentage of people who it would be in society’s better interests to keep more engaged:

 

“This economy produces very valuable companies with very few employees. Meanwhile, the majority of workers are not seeing income gains commensurate with their productivity levels. This puts a strain on the essential compact that you can earn your success. … the middle class is being proletarianized, and the uneducated class is being left behind.”

 

The article also argues that the policy solutions that are being advocated, from both the right and the left, are failing to address the core problem:

 

“Republicans need to declare a truce on the social safety net. They need to assure the country that the net will always be there for the truly needy. Then they need to point out that it is the web of middle-class entitlements, even the home mortgage deduction, that really threaten benefits to the poor. … Democrats embrace a raise in the minimum wage that could drive another half-million workers out of the labor market. Much better … would be to expand the earned-income tax credit or maybe use direct payments or loans to help people move to opportunity.”

 

Take care

David

 

David Chandler & Bill Werther

Strategic Corporate Social Responsibility: Stakeholders, Globalization, and Sustainable Value Creation (3e)

© Sage Publications, 2014

 

Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


Capitalism For the Masses

By David Brooks

February 21, 2014

The New York Times

Late Edition – Final

A23

http://www.nytimes.com/2014/02/21/opinion/brooks-capitalism-for-the-masses.html

 

Strategic CSR - Corporate Stakeholder Responsibility

The article in the url below provides a good example of what firms can get away with if there are no negative consequences for bad behavior—in this case, poor customer service:

 

“For all the usual complaints—such as ‘I hate dealing with this company’ or ‘These guys are the worst at customer service’—about the usual suspects from the ranks of cable and Internet providers, airlines, and banks, it turns out they just don’t have much incentive to care. The companies you hate are making plenty of money.”

 

The situation becomes worse if, in fact, there is a positive consequence for bad behavior:

 

“… the trend is actually downward, suggesting that the most-hated companies perform better than their beloved peers. … Your contempt really, truly doesn’t matter to these companies, with no influence on the bottom line. If anything, it might hurt company profits to spend money making customers happy.”

 

The interesting thing about this challenge, however, is ‘Who is the stakeholder at fault?’ for this situation:

 

“For cable-TV providers, an industry whose customers famously have few options, happy users could be a waste of money and bad for shareholders. And so many of us angry subscribers are also the shareholders through, say, our retirement accounts.”

 

The article focuses on consumers, but what can a consumer do if all the firms in an industry are equally bad or if there is essentially no competition? If this is the case, then it is likely another stakeholder (other than the consumer) that is failing in its responsibility to hold the firm(s) to account—perhaps the government failing to regulate, or a supplier failing to uphold best practice, or the stockmarket failing to invest in companies that will focus on delivering long-term value. Somewhat worryingly from the consumer perspective:

 

“Basically, the customer-service scores have no relevance to stock market returns. … the most-hated companies, no matter how narrow or broad you define them, always beat the most-loved companies.”

 

But, education is at the heart of mass-action. As such, the first step lies with educators (broadly defined) to understand the scale of the change needed and convey that challenge honestly to the wider public:

 

“This means that public engagement still lies at the heart of the challenge of climate change, but it is a form of public engagement that goes way beyond plastic bags. And any public campaign that treats minor behavioural change as a valid goal in itself is also taking a radical stance: complicity in a dangerously warmer world.”

 

Take care

David

 

David Chandler & Bill Werther

Strategic Corporate Social Responsibility: Stakeholders, Globalization, and Sustainable Value Creation (3e)

© Sage Publications, 2014

 

Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/

 

 

Proof that it pays to be America’s Most-hated Companies

By Eric Chemi

December 17, 2013

Bloomberg Businessweek

http://www.businessweek.com/articles/2013-12-17/proof-that-it-pays-to-be-americas-most-hated-companies

 

Strategic CSR - Financial Crisis

Some quotes from the article in the url below that should be of concern to anyone hoping that we had learned from the Financial Crisis:

 

“Five years after the system was held at gunpoint by a massively interconnected and over-risked Wall Street, the country’s six biggest banks—JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley—are now 37 percent larger than they were in the depths of the financial crisis. These institutions make more than four out of every 10 loans and tote two-thirds of the banking system’s $14.4 trillion in assets.”

 

“The total roster of U.S. banks is at all-time record low. In 1985, there were more than 18,000, compared with 6,891 now. … ‘The federal government has been keeping track of the number of banks since 1934 and this year is the very first time that the number has fallen below 7,000.’ [writes economics author and blogger Michael Snyder].”

 

“JPMorgan Chase is about the size of the entire British economy and holds 12 percent of all cash in the U.S.”

 

“Four U.S. banks now lug total derivatives exposure well north of $40 trillion, or more than the combined value of U.S. gross domestic product and the national debt.”

 

Too big to fail is not only alive and well, it is the global financial system! The graphic that accompanies the article demonstrates clearly how the banking industry has consolidated over the last two decades:

 

http://images.bwbx.io/cms/2013-12-09/1209-bank-popup-6301.jpg

 

Have a good weekend.
David

 

David Chandler & Bill Werther

Strategic Corporate Social Responsibility: Stakeholders, Globalization, and Sustainable Value Creation (3e)

© Sage Publications, 2014

 

Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/

 

 

Is Wall Street Now Too Big to Care?

By Roben Farzad

December 10, 2013

Bloomberg Businessweek

http://www.businessweek.com/articles/2013-12-10/is-todays-wall-street-now-too-big-to-care

 

Strategic CSR - Relative morality

The article in the url below raises an interesting question about the relative nature of the morals that guide day-to-day behavior. It does so in a particular context – the finance industry:

 

“Picture yourself in the late 1700s. You're the manager of an ‘ethical fund’ specialising in investing in Caribbean plantations that don't use slave labour. You're debating with a group of financiers. They see your fund as a marginal offering for those who want to be nice, but not fit for rational, prudent investors.”

 

The author makes the obvious point that, today, such issues are moot:

 

“Nowadays nobody gets a badge for not using slave labour. It's considered to be normal rather than explicitly ethical.”

 

While issues like the use of slave labor are behind us (for the most part), the author equates the historical scenario above with the contemporary one of investments in carbon-intensive industries. Perhaps in future decades/centuries, he suggests, we will look back with similar incomprehension that this was ever an issue for debate, let alone resistance:

 

“Likewise, many current fund managers perceive investment in high carbon projects as entirely normal, rational or inevitable. If you want to be overtly ‘ethical’, you have the option of green funds. But it should be taken for granted that sustainability is a standard feature of investment, not a nice exception.”

 

Rather than an issue of individual morality, however, the author argues that the finance industry is beset with “institutional amorality”—structures embedded within the day-to-day operations that allow individual investors to distance themselves from the consequences of their actions/decisions:

 

“The major problem of the financial sector is not individual immorality. It's institutional amorality, the sense that there is nothing abnormal occurring whilst delivering a slow-motion punch to the face of society. They use technology which help to abstract real life situations – like mountain-top coal removal – into spreadsheets. The dynamics of stockmarkets increasingly encourage investors to think of investments in terms of prices, not real world assets.”

 

Although such structures are damaging, history teaches us that they are also temporary:

 

“Not using slave labour is currently characterised as normal rational investment, whereas not destroying ecosystems is considered ‘ethical’,’emotional’ or ‘irrational’. Perhaps most insidious though, is the pervasive denial of creative agency found in certain parts of the financial sector. The investment management industry refuses to accept that they actively define the future through their investment choices, disingenuously casting themselves as mere servants of others.”

 

This time and these standards will pass, just as those before have come and gone. The issue is whether they will pass sufficiently quickly before lasting damage is done.

 

Take care

David

 

David Chandler & Bill Werther

Strategic Corporate Social Responsibility: Stakeholders, Globalization, and Sustainable Value Creation (3e)

© Sage Publications, 2014

 

Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/

The problem of the financial sector is institutional amorality

By Brett Scott

December 5, 2013

The Guardian

http://www.theguardian.com/sustainable-business/problem-financial-sector-amorality

 

Strategic CSR - Apple

The article in the url below reports on an effort by the U.S. Federal government to improve the lives of low-paid workers overseas (Chapter 7; Issue: Supply Chain, p428):

 

“[The end of the year] is the deadline for corporate suppliers of the world’s biggest consumer—the U.S. government—to have a say in new regulations aimed at ending indentured servitude overseas. The rules stem from an executive order Obama signed last year, called ‘Strengthening Protections Against Trafficking In Persons In Federal Contracts.’ The President’s dictate is unequivocal on one key point: If a company wants to keep the government as a customer, it must stop hiring overseas workers who had to buy their jobs. You read that right: Workers actually buy jobs. … Obama’s administration now appears ready to change the conversation. The debate is no longer, How much is too much? It’s, Why should foreign migrants have to buy these jobs at all?”

 

The regulation is  aimed at curbing the practice by which some prospective employees overseas use brokers to secure the opportunity for a job. Although widespread in a number of countries, the article focuses in particular on the implications of this change for Apple:

 

“Washington is a huge and growing business for Apple. The company has a dedicated online store tailored for government buyers, including simplified ways for federal contractors to purchase Apple gear with government-issued SmartPay credit cards. According to IDC Government Insights, which tracks government spending, iPads and iPhones have become commonplace equipment at NASA, the National Oceanic and Atmospheric Administration, the Fish and Wildlife Service, the U.S. Geological Survey, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives.”

 

What I find most interesting about the article, however, is its reach:

 

“Procurement lawyers in Washington say the ban applies all the way down the supply chain. It even applies to contractors selling what are known in government-speak as COTS items—commercial off-the-shelf goods.”

 

This is important because it advances a debate that has not made much progress recently—how far does a company’s responsibility for its supply chain extend? In other words, while we may be able to agree that a firm is responsible for its immediate suppliers, there is little agreement on the suppliers of a firm’s suppliers; or those suppliers’ suppliers and sub-contractors, who can often be several steps removed from the retail brand that draws all the attention. Issues like this are particularly important for firms like Walmart, which has around 60,000 suppliers. If we assume, conservatively, that each of those suppliers has ten suppliers, and if we hold Walmart accountable for only two steps in the supply chain (i.e., the suppliers of their suppliers), then Walmart is responsible for the operating conditions of 600,000 firms. And, what about three steps in the supply chain? Again, with a conservative estimate of 10 suppliers, Walmart would be responsible for the actions of 6 million firms.

 

Holding a firm accountable for its supply chain is easy to say in theory, but incredibly difficult (and possibly ‘unfair’) to implement in practice. More importantly, it is not clear that such oversight and accountability generates more value than the associated costs.

 

Take care

David

 

David Chandler & Bill Werther

Strategic Corporate Social Responsibility: Stakeholders, Globalization, and Sustainable Value Creation (3e)

© Sage Publications, 2014

 

Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/

 

 

What Obama’s Anti-human Trafficking Order Means for Apple

By Cam Simpson & Adam Satariano

December 18, 2013

Bloomberg Businessweek

http://www.businessweek.com/printer/articles/173681-what-obamas-anti-human-trafficking-order-means-for-apple