Molly Melin: Associate Professor, Loyola University Chicago
Tim Fort: Eveleigh Professor of Business Ethics, Kelley School of Business, Indiana University
Paul-André Wilton: Senior Policy Advisor (Conflict and Humanitarian), Care International
Karen Newman: Senior Advisor, SDG Fund, UNDP
Jimena Leiva Roesch: Senior Policy Analyst, International Peace Institute
Michelle Breslauer: Director of Americas Programme, Institute for Economics and Peace
This written discussion is part a new month-long Challenge with Indiana University around the question: “What role can business play in pursuit of peace?” The Challenge consists an online programme of written articles and online discussions, available on the Challenge homepage.
Despite the fact that broad macroeconomic connections between business and peace have long been acknowledged more needs to be done. This Challenge aims to deepen understanding around the role that business can play in peacekeeping, peace making, and peace building.
This discussion focuses on why business might contribute to peace. A one-hour live panel will take place Wednesday 12 October from 10am ET / 3pm UK.
The discussion will focus on three questions:
What motivates business to contribute to peace? Of these motivations, which one(s) might be the most important in the future?
If businesses aim to contribute to peace, what can they learn from best practice, including from other businesses and from the political and diplomatic worlds?
As businesses move from a pure focus on shareholder value to “shared” value for all stakeholders, what implications does this have for why and how they can contribute to peace?
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A business might contribute to peace because, in general, it's the right thing to do. In my opinion, the way to a more peaceful world is a more peaceful business world. So if businesses start acting on what is in the best interest for peace (and not just revenues), then we could progress toward a more peaceful business world and business world. Another reason for a business to push peace relates to the bottom line. An economic environment with a lot of fear and hate isn't very efficient. When businesses try to force peace instead of hate, the affected economy could grow, and a growing economy is more beneficial to business.
I agree with your two ideas about why a business might contribute to peace. With that being said, most organizations are primarily only focused on the bottom line and being a successful company. I think it would be hard to convince businesses to start making huge efforts towards peace. A company cares the most about its success so I believe, that is the most important motivator for continuing peace in the future. As Tim Fort noted, respecting employees and treating them fairly contributes to peace. If companies can end the old practices of discrimination based on age, gender, race, and other factors than it can help businesses. By creating an inclusive workforce and hiring people based on qualifications rather than physical differences improves peace as well as the bottom line. The incremental approach also plays a role in this because taking small steps towards overall peace will change the environment and hopefully become common practice. If this is the case peace will eventually be reached and businesses might not even notice they are doing it.
I agree that steps toward overall peace in the business world will be very incremental. I believe peace within the business world is going to start within each individual company and from there going to happen naturally. Like Camden said, by doing things like creating an inclusive workforce and promoting a healthy work environment, employees are going to be much happier. Happy employees are going to be more likely to devote their time to their work and be passionate about a company in which they enjoy working at. With hardworking employees comes improvements in business practices and ideally growth and success for the business overall. At this point in time when companies think about creating peace I believe they should think less about external factors and what they can do to directly impact the community, and more about internal factors and make sure they have happy employees that are devoted to their work and always act with integrity. From there, I think everything else will happen naturally because others will start to look to these companies as role models and motivate other companies to take the same actions and act in the same manner.
Businesses can contribute to peace in many ways. A business can take an active role in the pursuit of peace by creating platforms in which people can directly affect peace and make a stance to promote peace in areas of unrest. Motivations for this kind of action could include it being the right thing to do, or it may help them in the long-run. The fact that it will help the business in the long-run seems like the most obvious motivation. Businesses are in business to make a profit, and it is hard to do that in areas of unrest. Also, a firm viewed positively by consumers for its efforts to create peace might become a consumers choice for a product or service for that reason. When a company uses its resources to benefit society, society tends to reward them with praise and attention. This attention can then create loyal customers or new customers from word-of-mouth marketing. I think this motivation to be viewed positively by society will be the most important in the future because it aligns with the companies' strategy, but also creates peace as a result.
As businesses move from a focus on shareholder value to shared value for all stakeholders this shows that they are contributing to peace not only for the immediate payout for their shareholders, but for the good of everyone associated with the business. This indicates that they are doing this because they see a greater benefit to helping promote peace than a quick payout. This doesn't necessarily mean that profits are not a reason. When a company focuses on the stakeholders they may look at their employees, the people in the communities they serve and work in, and anyone affected by the business they practice. They can therefore contribute to peace for the stakeholders by practicing more environmentally friendly actions within the communities they operate. They can also promote peace in areas of unrest to help protect employees and customers. These actions will allow them to create a company that is viewed positively and has integrity. This could ultimately help the company's bottom line because it will make them a socially responsible company that people will want to do business with. A business acting unselfishly attracts more business than a company that disregards the effects its business has on the people it serves.
I don't necessarily believe that businesses contribute to peace because they feel it's the morally right choice. I think decisions in business come from a desire to increase profits and build relationships with customers. When businesses make decisions to better the world by contributing to peace, they are also creating a positive reputation for themselves to appear socially responsible and invite a larger pool of investors. As the business world evolves, customers are expecting more from business owners and through social media they are always aware of the state of the business. Now more than ever it's necessary for business owners to consider how each decision they make to increase profits will be perceived in the media by the public. Regardless of motivation, I think the important thing to consider is if each particular business is contributing or detracting from peace.
How an organization contributes depends on their business model in regards to how they see the importance of doing so in their business model. As Professor Fort said in his intro, there are three types of orientations a business could take: peace entrepreneur, peace keeping is seen as good business, and one where businesses incrementally conduct themselves in an ethical manner. But it does not matter what type of orientation a business takes as they foster peace for the same reason a business does anything; that is for economic, legal, identity, and moral reasons. Social entrepreneurs are largely driven to foster peace for both identity and moral reasons. The second orientation of business is largely driven by economic and legal reasons as both the customers and the lawful directives of the shareholders expect peace keeping activities to occur. Finally, the third orientation fosters peace for a combination of why a business does anything. It could be for legal reasons as before the Sarbanes-Oxley Act was enacted, many corporations failed because of lax moral standards within their organization and many people were sent to prison. It could also be a part of their identity as with Johnson & Johnson. The reasons are much ambiguous for such businesses as they are just trying to succeed, however the business defines success.
I also think one implication in balancing shareholder theory and shared stakeholder theory is that the timeline is important. Due to pressures from Wall Street to produce sales increases and improved bottom lines every quarter, many companies are forced to think about the short term in order to survive. Effective peace initiatives, however, are strategic and might not take a fiscal quarter to complete. It’s important for companies to balance between the short term and long term in accordance with these implications. Short-term monetary success might prove to be enough for the shareholder, but the stakeholder who expects peace initiatives might be looking out for the long-term brand reputation. Companies that do wish to create peace can learn several things from political and diplomatic leaders. By learning about the culture and values of foreign countries that company’s want to make peace in, they can target those specific values and ensure that stakeholders are positively affected in a way that goes beyond just making the firm’s reputation look good. Firms can also learn about regulations and policies that can help or hinder their initiatives.
Why would it be the right thing for a business to contribute to business? As I noted earlier the reasons a business fosters peace are the same reasons a business does anything, for economic, legal, identity, and moral reasons. But who would decide the "right" reasons? Would it be the shareholders or the stakeholders (according to shareholder and stakeholder theory, respectably)? If a business pushes for peace (keeping in mind this would also compete with economic goals), how hard should a business push for peace? Should a business keep peace, not just foster?
Grant West said:
A business might contribute to peace because, in general, it's the right thing to do. In my opinion, the way to a more peaceful world is a more peaceful business world. So if businesses start acting on what is in the best interest for peace (and not just revenues), then we could progress toward a more peaceful business world and business world. Another reason for a business to push peace relates to the bottom line. An economic environment with a lot of fear and hate isn't very efficient. When businesses try to force peace instead of hate, the affected economy could grow, and a growing economy is more beneficial to business.
One aspect I didn't think about was the different time commitments. During a short term setting it may be easier for a company to commit to providing capital and efforts toward peace. A longer commitment is more like a marriage which will take a lot of time effort and money. The long term commitment is what I think will truly be the most advantageous toward a better and more peaceful world. A short term commitment to peace and peace building can look or portray a lacking dedication to peace, while a long term commitment to peace can make the company look like a leader and innovator in peace building in the business world.
Caroline Bleser said:
I also think one implication in balancing shareholder theory and shared stakeholder theory is that the timeline is important. Due to pressures from Wall Street to produce sales increases and improved bottom lines every quarter, many companies are forced to think about the short term in order to survive. Effective peace initiatives, however, are strategic and might not take a fiscal quarter to complete. It’s important for companies to balance between the short term and long term in accordance with these implications. Short-term monetary success might prove to be enough for the shareholder, but the stakeholder who expects peace initiatives might be looking out for the long-term brand reputation. Companies that do wish to create peace can learn several things from political and diplomatic leaders. By learning about the culture and values of foreign countries that company’s want to make peace in, they can target those specific values and ensure that stakeholders are positively affected in a way that goes beyond just making the firm’s reputation look good. Firms can also learn about regulations and policies that can help or hinder their initiatives.
In General, I think the industry a company operates in is going to have a large impact on its peace keeping initiatives. Like Sophia said for a company like Johnson and Johnson who operates in the healthcare industry it is crucial they act in a way that promotes peace for society. If they did not, it would negate their business model and strongly weaken their company image. On the flip side of this, companies in other industries probably feel very little obligation to contribute peace to society. Especially if peace keeping initiatives are not going to coincide with what their brand believes in and stands for. If promoting peace is going to compliment a company's business model and help promote their brand in a positive light and attract more customers and sales then of course it makes sense to implement external peace keeping initiatives. On the other hand, if investing a large amount into peace keeping initiatives is going to do nothing for your brand and business then it doesn't make sense for these companies to invest and therefore they do not feel obligated to contribute to the peace.
Sophia Brewer said:
How an organization contributes depends on their business model in regards to how they see the importance of doing so in their business model. As Professor Fort said in his intro, there are three types of orientations a business could take: peace entrepreneur, peace keeping is seen as good business, and one where businesses incrementally conduct themselves in an ethical manner. But it does not matter what type of orientation a business takes as they foster peace for the same reason a business does anything; that is for economic, legal, identity, and moral reasons. Social entrepreneurs are largely driven to foster peace for both identity and moral reasons. The second orientation of business is largely driven by economic and legal reasons as both the customers and the lawful directives of the shareholders expect peace keeping activities to occur. Finally, the third orientation fosters peace for a combination of why a business does anything. It could be for legal reasons as before the Sarbanes-Oxley Act was enacted, many corporations failed because of lax moral standards within their organization and many people were sent to prison. It could also be a part of their identity as with Johnson & Johnson. The reasons are much ambiguous for such businesses as they are just trying to succeed, however the business defines success.
Although it may not be covered as the main driver of the bottom line and shareholder theory, a business that contributes to peace will often outperform those who do not. Not simply because creating peace is the right thing to do, but rather, it is a cause people internally and externally can rally behind. We live in a much different world nowadays with social media and television; thus, it is now expected companies do more than simply make profit, they are expected to give back to the community. One way of doing this, is promoting peace through community involvement, job creation, or charity work. By creating peace, a business helps create value for all stakeholders. A business that creates peace, inspires inclusion for the community and employees at the firm. Employees who are creating change and creating opportunities for others, will be highly motivated and likely to outperform their competitors. On the other hand, a company that creates value for its community is a company that investors and customers can get behind; a customer is likely to feel good by being a part of a company that encompasses values he/she deems as ethical. All in all, businesses that practice peace creation will lead to a larger customer and profit base, which will in turn help the economy grow and prosper.
Businesses are made up of people, first and foremost. These people naturally want peace in their lives, for the benefit them as individuals. Individuals want peace for themselves and their communities. These individuals, once part of a business, would hopefully use the power being part of a firm can provide and come together to do good.
Businesses should also be motivated to contribute to peace to better society as a whole. Once again, businesses are made up of people. Most people ideally want to create a better world for their children to live in. Employees and executives of companies should be motivated to contribute to peace and a better quality of life for future generations.
Finally, businesses who use their resources to better the lives of their employees and that of society will also reap the benefits of positive public relations. More and more people are becoming concerned with the moral behavior of companies. I think this will only become more important in the future. Many of us don't want to support business that may be treating their employees poorly or contributing to pollution. A company that works toward benefitting groups outside the firm will prove that they are worth investing in.
I think that there are many underlying factors that contribute to why businesses that add to peace often outperform those who choose not to. I think that many companies credited with positively impacting the world are those with powerful brand names, and an image to maintain. The public holds high expectations for those companies, such as Starbucks and Google, and that's the reason they are often the target of activist groups. They have the name that people recognize, and bad press can negatively impact their bottom line. I think those companies realize they need to be proactive in responding to social issues, including peace, which is why they have the reputation of being socially responsible. I don't think that contributing to peace is the reason they outperform, I just believe that the companies in the news for contributing are those that are already very successful because they have the resources to be proactive to continue building that strong brand.
Daniel Schwartz said:
Although it may not be covered as the main driver of the bottom line and shareholder theory, a business that contributes to peace will often outperform those who do not. Not simply because creating peace is the right thing to do, but rather, it is a cause people internally and externally can rally behind. We live in a much different world nowadays with social media and television; thus, it is now expected companies do more than simply make profit, they are expected to give back to the community. One way of doing this, is promoting peace through community involvement, job creation, or charity work. By creating peace, a business helps create value for all stakeholders. A business that creates peace, inspires inclusion for the community and employees at the firm. Employees who are creating change and creating opportunities for others, will be highly motivated and likely to outperform their competitors. On the other hand, a company that creates value for its community is a company that investors and customers can get behind; a customer is likely to feel good by being a part of a company that encompasses values he/she deems as ethical. All in all, businesses that practice peace creation will lead to a larger customer and profit base, which will in turn help the economy grow and prosper.
While I think many of these comments are capturing what we might consider “supply” factors of peace (the willingness of a business to act to promote peace), it’s also important to consider the “demand” side (when is business engagement needed). These second factors offer dynamics that can require businesses to be more proactive. For example, if a businesses faces losses if it doesn’t proactively engage the community. While different companies may react differently to the same circumstances, the circumstances also serve as an important motivator.
Hi everyone - welcome to the live segment of this discussion! We're joined by a great panel to discuss the question of why business might contribute to peace.
Can I ask all of our panellists to introduce themselves.