Theme 7: Partnership Approaches to Involving Business

(Peace Through Commerce) #1
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A discussion moderated by Dean Krehmeyer, Executive Director, Business Roundtable Institute for Corporate Ethics

Visit Biographies for more about presenters

How can partnerships help business in contributing to peace and stability?
One of the often recommended approaches for fostering peace through commerce is a partnership model. Because businesses may not have the expertise or capabilities to know how best to engage in a geographic area, they team with those who can provide them with such insights.

Presentations:
Partnership Approaches to Advancing Business' Contribution to Peace - with NGOs and Employees
Watch the four videos and join the discussion with presenters below.

Norman Bishara, Assistant Professor of Business Law & Business Ethics, and
Cindy Schipani, Professor of Business Law, Ross School of Business, University of Michigan

"Complementary Alternative Benefits to Promote Peace " (6:12)

Kimberly Eaason, Director of Strategic Relationships, TransFair USA


"Fair Trade Certification: Good Practice for Business and Increased Prosperity for Developing Communities"
(7:03)

Virginia Haufler, Associate Professor of Government and Politics, University of Maryland

"New Institutional Models: The Kimberly Process" (6:37)

Michelle Westermann-Behaylo, Doctoral Candidate, George Washington University

"Institutionalizing Peace Through Commerce: The Partnership Dimension" (3:06)

Resources

Discussion: How can partnerships help business in contributing to peace and stability?

1. For the business partnership models presented, what are the unique strengths? Are these models replicable, and what are the hurdles to replicating?
2. Where should the discussion of business partnership models be initiated – is this primarily a management-led issue or a board/governance-led issue? Who could most make positive action happen?
3. Does the partnerships described in the presentations reduce risk? Create value? How would a newly hired MBA-graduate who has participated throughout the “Business Fights Poverty” eConference make the pitch for their company to “get on board”?

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(Tim Fort) #2

I am delighted to welcome Dean Krehmeyer, who runs the Business Roundtable’s Corporate Ethics Institute. Dean is a long-time supporter of the business and peace connection, contributing intellectually, financially, and logistically. Dean’s work is critical - how to translate good research into workable, pragmatic applications: exactly what we are trying to do through this eConference. This particular week is a good example of scholars attempting to do this and that makes Dean an ideal person to moderate this week’s theme.

Tim

Timothy L. Fort, PhD, JD
Exec. Director, Institute for Corporate Responsibility
Lindner-Gambal Professor of Business Ethics
George Washington University School of Business
Professorial Lecturer, George Washington Law School

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(Dean Krehmeyer) #3

Welcome to this week’s discussion on Partnership Approaches to Involving Business. I am really looking forward to our on-line exchange and learning this week. As an initial kickoff, I would first encourage you to briefly browse through the preceding sessions; many of which are connected to this week’s issue.

A key question that you see for the week is, “How can partnerships help business in contributing to peace and stability?” You may notice the implied assumption in the question, namely, that partnerships indeed do help business in contributing to peace and stability. I believe this assumption to be true. The examples of both individual companies and initiatives on behalf of groups of corporations are evidence of this. I’ll be providing some examples that I believe bear this out during the week, and I invite you to do the same.

Peace and stability are of crucial importance for leading businesses to create value broadly across their stakeholder groups. The discussions we have this week and throughout conference provide important insights for academic research, student exploration, and corporate action. For myself as well as likely for many of you who also work at business schools, this issue takes on even greater importance. Business schools have come under renewed criticism in recent months about what we can teach today’s students – tomorrow’s leaders – about ethics, values, and the role of business in society, including promoting peaceful and stable societies. We need dialogues and conference exactly like this that truly connect business leadership with these values, principles, and objectives.

I invite you to review the video presentations and materials in this week’s session and share your thoughts on this important and timely issue. I look forward to your contributions and our exchange of ideas.

Best,

Dean

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(Devon Rose) #4

Bishara’s video and paper discussed how companies can inspire employees to positively impact their workplaces and consequently, society. This is new evidence which supports the efforts of companies such as Google and Microsoft, who go above and beyond to provide stress relief and other support to their employees. Benefits for the company go beyond motivating ethical standards and actions within employees and have long-term effects such as limiting absenteeism and premature turn-over. This is to say that companies can act as leaders in the private sector and hopefully establish new norms in society.

I think that shifts like this should be management-led, because implementing standards may be too difficult across industries. Companies that provide this support to employees will likely see the value add, as supported by Bishara’s paper. A shift in norms, in my opinion, should be driven by the private sector and not the government; once companies are convinced of the benefits of such actions, they will be more inclined to support their employees in innovative ways.

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(Lori Gera) #5

I did agree with Norman Bisharas statement that these added benefit programs will help to reduce stress in the work environment. Many companies that offer fringe benefits such as flexible schedules, babysitting centers, and even athletic facilities have demonstrated greater employee happiness which has translated into lower absenteeism and higher productivity and in effect reduced costs for the company. This being said, I definitely believe that this portion of Bisharas statement was true. I agree that this fosters a sense of community within their own business, but how does this in fact create a sense of community as a whole? Are there in fact concrete examples where this has in fact reduced discrimination and created more of a sense of a whole? I feel in our studies, we have seen that extra benefits are beneficial to a company but I would like to know if there is in fact research that indicates that this would be of benefit to the society as a whole. I think the idea of this extending into the broader society does support peace, however, I am curious as to what evidence has suggested that this will in fact develop into a societal trend.

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(Lori Gera) #6

In response to question two, I believe that the business partnernships must in fact be management-led. As Bishara stated and even Kimberly Eaason in their presentations, companies must set examples for the community to follow. Management are the individuals who are visible to the rest of the community. Their actions to establish partnerships, be it through offering company additional benefits as suggested by Norman Bishara or offering Fair Trade Products to help promote the growth of countries in need, if these actions are observed by others they are more likely to not only trickle down the individual company itself, but hopefully out into the broader community. Because employees look to management for guidance in actions, I believe that it is imperative that management take a strong position in leading the development of partnernships.

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(Joshua Birnbaum) #7

When public and private organizations agree on a partnership to ensure peace, I feel it is almost as if two corporations are merging to execute shared business goals. In this day and age, it’s almost impossible to successfully execute a merger of equals. My question is, what does that mean for business and government? Do you need one or the other to maintain dominance in order to be successful? My initial feeling is that you would need one to be more dominant, but that one would need to be government. But, that’s just my initial reaction.

Does anyone have any thoughts? Is my analogy even applicable?

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(Joshua Birnbaum) #8

I definitely agree that CABs should be provided by the management of each company. Government cannot make a law or demand these CABs because, by definition, if everyone had them and they were mandatory then they would be EXTRA benefits. After a while they would become the norm and the cycle would start over again. However, is this cycle inevitable anyway? If there is significant research that these CABs save companies millions then it will become more widespread. But will it become so common that we will eventually have to move above or beyond these benefits? Will we enter a situation where a potential employee might not sign on to be a part of a new company if it didn’t provide these benefits?

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(Joshua Birnbaum) #9

I think that it is important that management take the lead in the development of these partnerships but I don’t know how realistic it is. It would take an insightful and proactive company to seek out an opportunity like this. I would think that the community would have specific needs and seek out help from the private sector in order to fulfill those needs. I think it would be rare for a company to approach a community and seek out this opportunity. Although it may be rare, it is definitely possible and i’m sure this happens all the time. However, I wonder whether it works better to have the company initiate the partnership or management? Does it make a significant difference?

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(Dean Krehmeyer) #10

Joshua-
Thank you for your thoughts on the business and government partnerships. I think your mergers metaphor is appropriate and highlights key questions in the somewhat uncharted water we are seeing these days about business and government partnerships - whether they were originally intended to be “partnerships” or not. I’m thinking of the lessons that could be taken from the recent executives bonuses at AIG for one - as many folks noted in the media and elsewhere, the government was essentially an 80% “shareholder” in the entity. Yet, while most 80% owners or companies are represented in the boardroom for these type of compensation decisions, this lively discussion took place in the public forum of Congress and the very public pages of the media. Interesting lessons to be learned to avoid repeating the events, I believe.

I look forward to hearing the thoughts of others.

Dean

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(Dean Krehmeyer) #11

Lori-
Thanks for your thoughts on my question about management-led or board of director-led business partnerships. I agree with all ofthe reasons you state for management leadership on this issue. However, I continue to think that perhaps there is an opportunity for leading boards of directors to also contribute here…and I also believe that many actually already do lead on this issue. Maybe the question is not an “either/or” answer, but really it is a “How do management and the board collaborate together on identifying these type of partnerships as a stakeholder value-creation strategy?” They do this exercise regularly on business to business partnerships (e.g., with suppliers, major customers, etc.). I’ll continue to look for more comments on this issue.

Thanks-
Dean

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(Solomon Brayant Mpapale) #12

1.I think the unique streagths in the model lies in its embracing novel ideas like hiring the MBA Graduate who has participated in an e-conference.This is however not in itself insurance that success is guaranteed but simply boosts the chances of success to the extent that the business has demonstrated capacity and willingness to embrace flexibility which in my opinion is represented by the graduate.Is it replicable?Yes it is, but it needs not neccesarily be cast in stone or be tied down to the same ideas.It can be more dynamic if for example,managerial approaches from other different disciplines are adopted and tried.Hurdles that could be encountered could include time wasted trying out the new ideas or even the new people learning on the job.

2.This should be initiated at management level.Why?This is the technical arm of the business that does research, understands trends and can comprehend better the nature and extent of risks.Then the matter can be forwarded to the board for endorsement as the board excercises an oversight role of the business and is the last step of authority before the shareholders are reached.This is for purposes of "balance of power or separation of powers."Both can make positive action happen.

3.I think it is hard to say if the partnership model envisaged hightens or dimishes risks.That can be answered after some study backed up with hard data and empirical facts.What is clear is by demonstrating the propensity to take risks by hiring the graduate,the business is in fact paying the first down payment in taking out the insurance policy against risks.Remember, the greatest risk carries the greatest returns.If this strategy works, i bet it would be a momentous success.If it fails, it would be a crushing disaster.On the whole,the business is to be commnded for trying out new ideas rather than being too cautious,conservative and unambitious.But again, the extent of the risk remains a hypothetical matter.Maybe, if tried in carefully administered doses, this experiment could work and that is why i would support it.

Mpapale,

London.

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(Joshua Wohlgemuth) #13

After watching Kimberly Eaason’s presentation regarding TransFairUSA I had a bit of a paradigm shift in terms of how I view “peace”. Before this conference the notion of peace to me was just merely the reduction of any conflict. Furthermore, I believed that while certain global corporate actions do in fact provide a positive impact on the world, that they were not necessarily fostering “peace”. As previously mentioned, prior to this conference I believed an abscence of conflict to be the only criteria for peace; however, in hearing about inititatives like TransFairUSA I now believe “peace” to have a far different meaning. I recognize how difficult my previous understanding of peace is to obtain, which is probably why all of these concepts seemed so abstract to me. Now I understand that being able to provide producers in a third world country with a legitimate income is a form of peace, that putting a roof over a childs head is a form of peace, and now I understand how paramount it is for business to foster my new found understanding of peace. This paradigm shift is quite eye-opening for me; yet, I wonder how can business translate my new understanding of peace to obtain the abstract notion of peace represented by a complete abscence of conflict? This eye-opening concpet is still quite abstract in nature to me and I am curious as to what everyone elses thoughts are…

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(Steven Sciuto) #14

In response to question 3…

I wonder if there is a link to both Norman Bishara’s and Virginia Haufler’s video. What if a company provided additional incentives that were targeted directly at controversial issues in an attempt to create peace or improve the quality of life? For instance, what if a business were to give incentives to its employees that bought hybrid vehicles? Built homes out of non-"blood timber”? Were rewarded for another type of action that would be counter productive to an unethical company or industry? Does anyone know if this is happening at any companies? It may not be as effective as the Blood Diamond campaign but if enough companies joined in it may end up making a difference.

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(Alexis Sampson) #15

Steven,

You asked if there are links to Bishara’s and Haufler’s videos. Yes, all of the videos in this eConference have their own links so they can be easily shared.

There are two ways to get the specific video links:

  • If you click on the triangle on the far right lower corner of each video you’ll get a menu, including an option to ‘Share’ (the second option from the bottom). If you click this, and then “Share this video link” it will take you right to a page to send the link from.
  • Or, you can click in the middle of the video, to make a new window pop out with details for that video. You can copy the web address from that page, or use the “Share” option there.

For now, here are the links to the videos above:
Norman Bishara: Link http://businessfightspoverty.ning.com/video/video/show?id=2014886:V…
Kimberly Eaason: Link http://businessfightspoverty.ning.com/video/video/show?id=2014886:V…
Virginia Haufler: Link http://businessfightspoverty.ning.com/video/video/show?id=2014886:V…
Michelle Westermann-Behaylo: Link http://businessfightspoverty.ning.com/video/video/show?id=2014886:V…

Let me know if you need any help!

Alexis

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(Marilyn Ong Siew Ai) #16

Joshua
I note that prior to your statement, the discussion thread seems to be focussed on PARTNERSHIPS WITH EMPLOYEES i.e. internal corporate stakeholders. I had thought how unfortunate if our discussion is going to be confined to biz partnerships with NGOs and employees when in fact the overwhelming potential cause for conflict comes from the EXTERNAL STAKEHOLDERS i.e. COMMUNITIES in particular in under-developed and developing countries which are the more likely cause for conflict, and who are in fact located in conflict prone areas of the world.

Your observations about your new found paradigmic understanding of “peace” brings up for discussion PARTNERSHIPS WITH COMMUNITIES that must be the thrust of multinational (or transnational) CSR operating in many such countries. These multinationals benefit from the obvious comparative advantage of cheaper economic resources, in particular labour. But do the communities within which they operate gain in parity to these multinationals? Or are they an exploited mass who are paid low wages and work long hours that would be illegal in the multinational home country? The much lauded creation of employment per se is not a solution to poverty and its sister, conflict. It is SOCIAL INJUSTICE by businesses that can lead to the sowing of the seeds of conflict.

With the view to turning our focus to EXTERNAL STAKEHOLDERS ie. COMMUNITIES of developing and under-developing communities, I seek my fellow participants views on

  1. what is the unique strength of a biz partnership model with communities?
  2. does the partnership reduce risk? Create value?

In East Malaysia (N.W.Borneo), where I am located, I am doing social work through an ethnic heritage tourism project in my capacity as an academic with an indigenous community who is the custodian of the natural resources of a rich rainforest environment and who is an obvious external stakeholders and potential business partner, not only for their ownership of these resources but also due to their amazing indigenous knowledge of their natural habitat.

I see the unique strength of a business model with indigenous communities as being the sustainable development of a state’s resources that engages indigenous people and contributes to the rural human capital development.

To me, THE RISK lies in not engaging with indigenous communities!

THE VALUE lies in businesses’ sustainable development of natural resources and tapping into indigenous knowledge that predates scientific knowledge. For indigenous communities, THE VALUE lies in rural human capital development which prepares them to fit into a rapidly changing world.

Marilyn Ong Siew Ai
University Malaysia Sarawak
East Malaysia

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(Virginia Haufler) #17

I like the analogy with mergers, and the question about relative power within a public-private partnership. I haven’t seen any analyses that looks at this question, and there may be too few of them yet for us to to detect any patterns. My impression, based on the ones I have studied, is that they tend to assign the different actors different roles, and in some cases no one partner is dominant. In other cases, the partners are constantly negotiating/ adjusting their relative dominance.

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(Virginia Haufler) #18

You are right to focus on the community in which a business works as a key partner for peace. In fact many businesses are increasingly agreeing with you, although they may not label what they are doing a “partnership.” The problem is that corporate efforts at community engagement are often poorly done. In some instances, the company simply does it poorly. In some instances, it can exacerbate conflict if the local community is perceived to be gaining too much at the expense of other parts of the country, including the central government-- a particular problem in countries where secessionists are actively agitating against the authorities.

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(Virginia Haufler) #19

Steven,

On the one hand, I agree that if companies provided incentives to employees it could make a big difference. The example that comes to mind is the companies that provide employees with incentives to use public transportation, which can help cities that have overcrowded highways and high pollution. Some companies encourage all sorts of volunteerism by their employees, by supporting time off or other benefits. But, from a company’s standpoint, too many of these kinds of activities could end up being overwhelming to administer and monitor, not to mention increasingly expensive as we add more and more items to the list of behaviors to encourage. But I could imagine putting together a public-private partnership in which many companies together, along with NGOs and/ or governments, could put something like this together-- a public-private partnership for peace.

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(Joshua Wohlgemuth) #20

Marilyn,
I would like to first say how incredible I think it is to gain one’s persepctive from Malaysia. Being able to engage in discussion with someone across the globe is an unbelievable opportunity and quite frankly pretty cool!! With regards to question 1: I believe there is tremendous value and opportunity in biusiness partnerships with communities. These partnerships are so specific and yield tangible results that bring these communities to “peace”. However, I have a question to you which partly addresses your second question. I am curious as to how welcoming and open the indienous communities you have been working with have been to these aforementioned partnerships? It is my belief that this partnership must be mutual, for if this partnership is thrust upon these people it may do more harm than good.

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