The Role of Business in a Global Society: Progress or Protect?
The Article originally appeared on Huffington Post
The concept of ‘The Butterfly Effect’ explains that even small actions can have far reaching and unintended consequences. This presents a unique problem for businesses operating in a global context because any business working across cultures must face the fact that — no matter how they conduct their business — they are going to have some impacts that will cause some stakeholder to question their actions.
To be sure, global standards such as GRI, the Global Sullivan Principles, and others define a minimum set of standards for global business. But for a business seeking to obtain competitive advantage in a global context, conforming to global standards is not a leadership position. In fact, any business hoping that adherence to minimum, agreed-upon standards will give them a competitive advantage is in fact relying on the assumption that its competitors engage in malfeasance or suffer from incompetence.
In light of Matt Browne’s piece ‘Can Global Brands Become a Force for Good,‘ I suggest that it is much harder to please some of the people all of the time, you can satisfy all of the people some of the time but will never satisfy everyone all of the time.
Fundamentally the question comes down to two extremes; whether people see businesses as having a responsibility to follow the ‘highest’ (often equated by one’s own) standards and to serve as a driver for changes (seen as improvements) or whether they believe that the businesses have a responsibility to be respectful and protective of the local indigenous cultures wherever they do business.
While these two extremes exaggerate the point, the question is fundamental for a business that must consider which most closely reflects the attitudes and opinions of their stakeholders (including shareholder and customers) back home.
The issues is lessened in cases when (and where) the local culture is one that does not conflict severely with that of stakeholders in the organization’s home country. A business operating in a culture with different perspectives on what constitutes appropriate wages, benefits, working conditions, hours and age of employment, may find itself struggling to explain its practices back home.
Today we look back at the age of colonization with the perspective of history and are critical of efforts to ‘convert’ people from their traditional religious beliefs. We see those civilizations and societies as being worthy of protection rather than extermination. But at the time, the Spanish conquistadors saw themselves as rescuers rather than as oppressors. Their ‘modern’ sensibilities were appalled by human sacrifices and other tenants of the Maya religion and sought to help by bringing local populations the benefits of their more ‘advanced’ thinking.
In his book Moral Capitalism Steven Young, global executive director of the Caux Round Table, stresses the critical importance of being mindful and respectful of the local indigenous cultures that may be ill equipped to “fight back” against a more technologically advanced one.
“The culture that follows upon successful economic growth is a global one, rooted in American consumerism … that subverts traditional elites and values. Global business is the carrier of this culture, responding to consumer demands. It is legitimate for business to deliver what people want, but at the same time business should take care that local cultures are not permanently asphyxiated.”
Today we expect businesses to bring their benefits (goods, services, jobs) while working within the local culture. In fact, being respectful of those cultural differences is sometimes a requirement placed upon the company prior to being allowed to do business.
Because capitalism reflects the culture of the home country, the culture of the home country is often a secondary, unexpected impact on a new community. Movies like Gung Ho make light of the cultural impacts that transporting a business can have, but in fact, the impacts range include the dramatic (such as providing salaries — and the empowerment having one’s own money brings – to individuals who have previously been excluded from the economic mainstream) to the mundane, such as when as a teenager living in Germany in the 1970s, I was exposed to a number of different cultural norms simply by turning on the radio or television. Three decades later, I unintentionally challenged the local culture (in Morocco) by asking a woman for her opinion in a business meeting.
Young recognizes that however well intended, the very existence of a business from overseas threatens the local social, political, religious and political orders and challenges the status quo. Therefore, he writes “business has a responsibility to moderate its impact on those communities, which can hardly protect themselves against the intrusions.”
Indeed that may be the hardest lesson of all.
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