How might one empirically assess the contribution of business actions to peace?


(Sophie Mervoyer) #61

Ranking is good but the purpose and who it is aimed to is necessary.

Ranking on it's own is a kind of marketing, which is good to attract like minded people and companies, but it is for me not enough.

I think the power of ranking is highly increased when their is an objective/need that goes beyond the ranking itself and be useful for the companies/public/civil sector to increase the impact of their actions: build a sustainable value chain, innovation, best practice sharing, collaboration etc.


(Phil) #62

Ranking of companies would not be a good idea. There is not a level playing field to measure unless it was country specific but within country different industries will have different levels of impact potential. Those of us dealing with smallholder agriculture face significantly higher challenges than those working with plantations for example.

A wider issue is whether business should do more to encourage better local governance which in itself can significantly impact upon peace if communities are receiving the kind of support in improving quality of life - often the lack of a vision of a positive future leads to other situations including urban drift and flight of capital. It may be that business has to convince other governments and institutions to engage with the government of the country in question to see how gaps in SDGs can be addressed between private and public sectors. Too often the difficulties are presented just to the private sector to address. This is not correct as a worse position will arise if that business decides to move away from wrongly assignable reputation risk and hence the economy of the country in question suffers


(Zahid Torres-Rahman) #63

That brings us to the end of the live segment of this discussion. We'll leave the discussion open, so please do continue to post your comments. Thank you so much to all of you who joined us!

This discussion is part of a Challenge on Business and Peace that we are running with Indiana University. For the duration of the Challenge, you can have free access to articles from a new publication from Indiana University, via the article links above.


(Philomena Blees) #64

What I like about your thoughts Begona is the measures are about businesses and their impact on peaceful outcomes like the SDGs as a place to start rather than rating businesses between themselves. Like Tim, I go back and forth on this. Competition is healthy but I would want to be sure that the rating kept it's eye on the goal of peace rather than having companies act only to out-compete another company. And I do see companies and business leaders openly recommending and commending their peers and competitors when merited, fostering healthy relationships. So, a rating system that rewards merit frankly while not putting others down in the doing of it..that would be an ideal setting. Something like the way we feel when people get the Nobel Peace Prize...for the most part, everyone shares in their achievement in good spirit.


(Smita Trivedi) #65

Hi all,

One of the things I mentioned earlier were the problems with measuring peace including endogeneity and causality. The basic issues here are that we can't claim to know that it was our responsible management action that lead to peace or was it actually something else? Or was it a combination? So when we empirically meausure one variable on one side of the equation and then measure the other we can't claim that it directly leads to the other. There are ways to minimize this in empirical research and I try to explain that in my article.

Another limitation to consider is intention ... aren't there many actions historically that businesses have taken (United Fruit company, British East India Company, etc.) that have in fact incited violence but yet can we be sure that the company didn't think they were doing what was best for society? So even if a company's actions may be directed at peace, how can we determine if it actually resulted in a reduction of violence or conflict?

Zahid Torres-Rahman said:

Thanks for sharing all comments and insights so far - let's move onto the next question!

Q2: What are some of the issues involved in measuring the contribution of businesses to peace?


(Begoña Casas Sierra) #66

Q3:

In my opinion some aspects are public and compulsory as they are based on legal standards (i.e. Human Rights), but most aspects are voluntary commitments for businesses.

It could be useful to take the most advanced companies (i.e. by UN or any international body) and present their initiatives as cases for inspiration for other companies. I believe companies mainly work on emulating each other as it happened before with CSR policies.

Business Fights Poverty could present successful business cases (i.e. in a publication)


(Smita Trivedi) #67

Yes, I completely agree with Professor Fort - the benefits may be good to motivate businesses. On the other hand, businesses can use this to their advantage, and we are certainly not ready to evaluate businesses to give them a ranking quite yet. Perhaps a certification of sorts would be interesting, but again, how would we measure this? I believe that at times when we do certification, it is only the companies that are aware/in need of something like this apply for it. We need to be careful that the goal is always peace and that we don't get muddled along the way with recognition as the goal instead. Thanks!


Zahid Torres-Rahman said:

Let's move to our final set of questions:

Q3: Some argue that we should rank companies on their contribution to peace, or alternatively certify them against some standard. Which might be better and should they be made public or used to inform internal management decisions? What role should business play in developing these approaches?


(Molly M. Melin) #68

This is all so useful for my research- thank you for your insights!


(Selina Ng) #69

In response to the third question, the best approach seems to be a combination of both ranking the companies on their contributions as well as, certify them against some standard. As mentioned in The PACO Index, “business people are inherently competitive”, therefore, creating a ranking system incentives the companies to promote peace through their activities. However, rankings alone do not do much besides comparing companies against each other. Should all companies decide to adopt the minimal standard, even the topped ranked companies wouldn’t be contributing much towards peace. Therefore, rankings should be complemented with some standards, to specify which areas companies can make more efforts. While creating standards, a one size fits all approach would not work. Every company is inherently different; it is difficult to create a universal criterion for all companies to follow. The PACO index does seem like a good starting point.


(Zijian Wang) #70

When it comes to question 3, there are indeed some advantages of ranking companies on their contribution to peace. Ethics have been more and more essential to a company's social image. Apart from profitability, innovation, or business strategies, how much ethical is the firm is another measure for assessing a company. A firm contributing more to peace will bring more reputation to its brand images, which can definitely boost its performance. However, I deem there is no need for certifying companies against some standard because ,as we discussed in class, if the company does not violate the law, we should not force it to contribute to peace. For some newly-started companies, they need more retained earnings for growth and temporarily have no excess resources to contribute to peace. If we force them to be contributive, first it would be inadequate humanitarian, second it will strangle some new little companies. As for whether making public, I think they should because it can make them more under monitor of public, which incentive them not to be unethical.


(Sophia Brewer) #71

Ranking companies may certainly have the effect of making companies contribute to peace more but others might do so in a less obvious way than can be measured. As Tim Fort mentioned in his introduction to this event, there are some businesses who contribute to peace in overt ways but there are others that contribute to peace in small and incremental ways. By ranking them, these businesses would either devote more capital to such practices and thus fundamentally change the purpose and structure of that specific business, whether that is a negative or positive will be up to the customer.


(Zijian Wang) #72

For question 2:

First of all, I concern that measuring the contribution to peace is very costly no matter in monetary aspect or in implementation aspect. The first question is what kind of criteria should we use for measuring contribution. It is clear that only measuring contribution by how much money a company contributes is not appropriate because a big company can have excess cash to do it, instead, a small company probably cannot contribute so much money like that. Additioanlly, if assessing contribution by many immaterial perspectives, it would involve much ambiguity. Collecting data from many different companies from different industries would be very costly and time-consuming. To be honest, for most companies, they would not take into as much consideration to profitability ranking as ethics ranking. Therefore, there still remains much to ameliorate in measuring contribution to peace.


(Sophia Brewer) #73

I agree with Zijian Wang about how this could strangle new businesses as there is a lot of capital needed to contribute to peace, but either the business does not have access to or could be better used elsewhere in the growing business. This could also deter people from forming small businesses ( a vital part of the US economy). While contributing to peace is beneficiary to society as a whole, it lead to wider economic effects by placing a burden on businesses.

Zijian Wang said:

When it comes to question 3, there are indeed some advantages of ranking companies on their contribution to peace. Ethics have been more and more essential to a company's social image. Apart from profitability, innovation, or business strategies, how much ethical is the firm is another measure for assessing a company. A firm contributing more to peace will bring more reputation to its brand images, which can definitely boost its performance. However, I deem there is no need for certifying companies against some standard because ,as we discussed in class, if the company does not violate the law, we should not force it to contribute to peace. For some newly-started companies, they need more retained earnings for growth and temporarily have no excess resources to contribute to peace. If we force them to be contributive, first it would be inadequate humanitarian, second it will strangle some new little companies. As for whether making public, I think they should because it can make them more under monitor of public, which incentive them not to be unethical.


(Jaron Kaufman) #74

I like your ideas Selina. I think that it makes sense to combine both rankings and a standard for companies to adhere to. I also agree that just because all companies meet a minimum standard, that doesn't mean any of the companies are actually doing that much unless these standards are very rigorous. I think there are some dangers in ranking companies however. One of the largest issues I foresee would be comparing large corporations with smaller businesses. One way to get around this would be to have different size categories where businesses within each size category would be ranked only against each other. I also think each of these size categories should have a different basis for judgement, as smaller businesses won't necessarily be able to commit at the same level as larger companies. The other danger I see with ranking companies is that businesses will partake in peace-keeping practices purely for the rankings, and could potentially abuse the system pretty easily. There would have to be a strong governance program to confirm that companies are really doing what they're saying. No matter how the businesses are ranked or certified, there needs to be a lot of consideration into how these standards will be created and what can truly be compared between companies.

Selina Ng said:

In response to the third question, the best approach seems to be a combination of both ranking the companies on their contributions as well as, certify them against some standard. As mentioned in The PACO Index, “business people are inherently competitive”, therefore, creating a ranking system incentives the companies to promote peace through their activities. However, rankings alone do not do much besides comparing companies against each other. Should all companies decide to adopt the minimal standard, even the topped ranked companies wouldn’t be contributing much towards peace. Therefore, rankings should be complemented with some standards, to specify which areas companies can make more efforts. While creating standards, a one size fits all approach would not work. Every company is inherently different; it is difficult to create a universal criterion for all companies to follow. The PACO index does seem like a good starting point.


(Mingyu Ye) #75

For the first question: By definition, "Empirically" means relying on or derived from observation or experiment, verifiable or provable by means of observation or experiment. I believe that one method of measuring contributions of companies to peace is to compare their actions among different scenarios. For example, different countries are a good measurement to tell what a company is doing the right thing for. Nike has been paying a premium wage to its labors in Unite States, not to mention other benefits. Its working conditions in other countries, especially those developing countries, are hard to be considered beneficial to peace. The rationale behind this is that the purpose of actions. Is a company doing something good because it is right thing to do, or just because it gains more profit? It needs more discussion.


(Qi Kang) #76

To answer the first question, I did some digging and drew to a conclusion that there are three major attributes of a company that people could use to empirically measuring the contribution of companies to peace in terms of cultural communication: marketing force that contribute to the welfare of the society, intercultural operation, and workforce diversity. A company can make contributions to peace by using it marketing force to bring people who have different faith and from different countries together. Intercultural operation as the daily operation of a multinational company works the same way. Workforce diversity can provides a neutral ground for religious differences and address difficult social needs. By measuring these three attributes, one can know how much effort a company has put into cultural communication to make people understand more of each other. With more understanding of each other, people will be able to communicate more peacefully.


(Mingyu Ye) #77

Regard the second/third question, I am afraid that good actions are much less attractive than scandals. How many people are willing to keep following a good action and to see how it ends up with? Scandals like Enron has been mentioned over and over. Leakage of BP, emission scandal of VW, accounts scandal of Wells fargo have proving the passion of people toward scandals as well as the conspiracy behind these. With that being said, the issue of getting constant public attention needs to be addressed.

To build a ranking system, it is necessary to motivate corporations to public their actions and to accept a external review. Just like the process of IPO. Perhaps an investment system can also be duplicated from stock market. Based on contributions to peace, corporations gain virtual assets in the market which can be translated to forecasted growth.


(Qi Kang) #78

In responding to the third question, I think alternatively certify companies against some standard will be a better idea rather than comparing them to one another, and I think make the result public will be a good idea. The idea of ranking companies on their contribution itself does not sound peace-contributing to me. Ranking means competition, because there is going to be someone ranks at the bottom and someone ranks at the top. Certifying the companies with against some standard, on the other hand, does not introduce a competition. It is more a rewarding than a certification, and making the result public will be one way to incentive the companies to reach certain standards.


(Vijay Kamath) #79

Ying, I had originally thought of ranking companies based on their contributions to peace. However, your viewpoint makes sense that there may be unnecessary competition. The problem that I have with a certification against some standard is what will businesses do after they meet the standard and are certified? If the business maintains their contributions, they will still be certified, but there is really no motivation that is pushing them to go above and beyond. If there is a ranking system, businesses will continually keep on contributing as the sky’s the limit.

Ying Qian said:

I'd like to share some opinions about the third question. I would say it is better to certify companies against some standard rather than rank them regarding to contributions to peace.

Ranking is a good thing but sometimes it raises unnecessary competition and distorts the purpose of the behavior. If we rank companies, it is not doubt that company will try to win the best place in raking when making decisions. While putting a lot of efforts on this, they will also consider to earn back what they give from some other sources. Gradually, company will only focused what they are ranked and what they can earn form it rather than the purpose behind the ranking, which is encourage contributions to peace.

And in my opinion, there is no difference between being made public and being used to inform internal management decisions. Because the final result of internal use is making it public when companies advertise themselves.


(Hongyu Zhao) #80

I agree with Yunqian, marketing to make company better place, so dose society. Yunqian said "Marketing is a very good way to promote peace to people",there is an another example from P&G, the thanks mom campaign, the advertisement not only brand P&G name out also is a way to pay back to community, educated people whenever you will be, how powerful you are don't forget to thank you mom. This campaign had big impact in society. It is a very good way to promote peace to people.

yunqian gong said:

Thinking of the first question, I would say there are many different ways for companies to contribute to peace. For example, Marketing is a very good way to promote peace to people. Businesses can use social media to share peaceful advertising campaigns. For example, BMW has a Blessing Basket Project, which helps people live in Africa to sell their handmade baskets. BMW makes a lot of advertisements not only on their website but also on TV. Moreover, it is also a good way for companies to contribute to peace by increasing the diversity.