Fortress or kindhearted Europe?

The Italian Island Lampedusa is again in the news around the world. Once again it is because of human tragedies that took place before its coast: several hundreds of African refugees died during the attempt to cross the Mediterranean Sea in vessels. As reported in the press, between 1992 and 2012 17’000 humans already died in such attempts.

In Europe in all sorts of media there are brisk discussions, comments and reports about the topic. Two basic view points and recommendations for the future dominate in discussions: one says that to prevent such tragedies in the future Europe needs to provide the refugees more support for their plans. An example is that potential refugees should have the possibility to make a request for asylum directly in Western embassies in African states. Proponents of this view moreover think that development aid is an important part to solve the issue. They denounce also exogenous reasons for poverty like the narrowly self-interested and exploitative activities of Western (natural resources) corporations in Africa. The second fraction wants to prevent such tragedies, but by taking measures that are aimed to stop influxes of refugees over the Mediterranean Sea. This shall be achieved, for example through strengthening boarder controls on the sea massively and through establishing refugee camps already in Northern Africa. Proponents of this view primarily condemn endogenous reasons for poverty like highly corrupt and kleptocratic elites in the African states.

Overall, proponents of both views present certain constructive suggestions for solving the issue. But one main problem is that it seems like the proponents of both sides do not listen to each other. If they would do so they probably would come to the conclusion that a combination of their suggestions would be the way to come to an effective solution. The suggestions are generally not mutually exclusive (e.g. stronger boarder controls and the possibility to make a request for asylum in embassies directly). In the existing consequent separation of the view-points we possibly also can recognize that one part of Europeans act consistent to one view while the other part does so with the other. The result of quasi two parallel policies are not only uncoordinated, often there are diametrically opposed actions (e.g. Western aid trying to provide access to clean water vs. a Western corporation nearby looting resources and thereby discharging polluted water in the river).

Coordinated and coherent actions among proponents of both views and thus of different stakeholders of the issue would arguably be expedient. It would also prevent from overturning in non-expedient actions from one fraction which the other is likely to see as too extreme. Without more coordination the status quo will be kept.

A second problem is that the root causes of the issue are not really discussed. But European stakeholders should focus more on these root causes. There are, for example potentials to connect activities of corporations looting natural resources and development aid organizations. Although it is at a first glance not easy to connect such different stakeholders it is a necessity: cooperation on root causes would tame both of them and thus lead to less non-reflected or only one-side-reflected activities. In this way real opportunities could be created in Africa.

In sum, cooperation between stakeholders concerning root causes is essential. In a presentation from early 2010 at the University of Zurich an invited Historian of the University of Oxford mentioned that the European activities in North Africa were not considering the full context there. Important realities were ignored and hence a forward-looking engagement was not possible. A year later the Arab spring took place. This brought hope in the beginning, but lastly not positive perspectives for the future of young people. Instead it brought new problems and new refugees.

 

Claude Meier

 

The Squander of a Reputation

The adage that it takes a lifetime to create a good reputation, but only a second to squander it is by now rather a platitude than a clever insight. And yet, it seems that we all too often forget this truism, especially if under the influence of short-term profitability.

At a recent conference of the Swiss Association for Quality there was much talk about the reputation of Switzerland – especially “Swissness” - as it relates to the quality of the products and services offered by Swiss companies and organizations. The problem Switzerland faces is that it’s “brand” – the Swiss Cross and the wording “Swiss” -  is increasingly misused by foreign companies for financial gain. It is estimated that customers are willing to pay an average premium of roughly 20% for goods with a “Swiss” brand, although the gamut ranges from 1-2% for the machine industry to 50% for luxury goods such as watches. As these percentages make evident, the favorable reputation of Switzerland translates into very concrete economic returns.

According to a world-wide assessment by the Nation Brand Index, however, the brand “Swiss” lost quite precipitously in value these past years, from being the number 2 in the world in 2005, to coming in only at number 9 in 2001. Part of the reason for the image damage has to do with the fact that a number of firms have taken advantage of the above elucidated value premium even though they have absolutely nothing to do with Switzerland, or then only in a limited fashion. The most egregious example of this is the BelSwissBank (http://www.bsb.by/en/) which features both the Swiss cross as part of its logo and its name, even though it is headquartered and operated entirely in Belarus!

 

Such examples of misuse of the Swiss brand are, however, only part of the reason for a steady erosion of the Swiss brand. It was interesting to note that several exponents of the Swiss industrial and added-value manufacturing sector, as well as the deputy head of the Swiss Federal Institute of Intellectual Property, clearly pointed to the continuous negative publicity that Switzerland receives abroad in conjunction with its taxation practices and banking sector. Instead of thinking about perfectionist watch-makers or hi-tech machine manufacturers, Switzerland is increasingly perceived abroad first and foremost through the prism of having long played a smooth zero-sum game of hiding the money of foreign tax evaders and creating tax havens for high net-worth individuals and multinational corporations. That, clearly, is not a particularly good way to cultivate your friendships with other nations, nor is it conducive to the “brand” of Switzerland.

 

Having lived and worked in a number of different countries, it is my experience that “Swiss quality” – although hardly perfect and de facto necessarily always the best – does nevertheless have some reality to it. The Swiss virtues of reliability, conscientiousness, attention to detail, perfectionism and superb organizational and planning skills, do translate into a merited good reputation in its products and services. This hard earned good reputation, however, stands to be squandered today, due both to free-loaders of the brand “Swiss” and the persistent negative media attention Switzerland gets abroad in conjunction to its banking and taxation schemes.

Manuel Dawson

History matters

Three months ago I took up a post as a research assistant in a business school. Nothing unusual—despite the fact of my uncommon academic background in this field of research. I am a historian who specialised in medieval times by writing my thesis about sociocultural dimensions of eating in and out in late medieval towns. As my new job was repeatedly subject to discussions among friends with academic or non-academic background, I carry out in this blog how a historian could contribute to the business research.

First of all, business is all but a main subject of today's historiography. The already ten year old lamentation of the German business historian Hartmut Berghoff who stated a de-economisation of the recent historiography was met with almost no responses. As an illustration you can look at the recent list of the 24 (!) introductory seminars at the history department of my home university: Neither attracts the freshmen with a catchphrase which is in any relation to "economy". Topics like the history of human bodies appear to be more in vogue—is it surprising that nobody apart of us historians is knowing what we are actually doing?

Instead of regretting the loss of any influence of a historian's voice on public debates, I demand that historiography should inquire the past with questions relevant to today's problems. From my point of view, I am convinced that no topic has such a demand of reflections as e.g. the apparently irresistible marketization of all spheres of our lives. But what could a historian contribute to such a discussion?

Ironically, straight the specific culture-based perspective which can be trained by studying such topics like the history of the transformation of the perception of human bodies. As long as the mainstream economics are regarding the economy as a separated "realm" in which rules and dynamics are considered like physical principles that tries to make our actions ex ante predictable like the falling of an apple from a tree due to the force of gravity; that long voices other than economists' are needed on the topic of economy.

In contrast to a purely economic approach, a historian's perspective embeds the economy in its sociocultural environment. Institutions as e.g. markets can be deciphered as social constructions and are persistently subject to change; their rules are characterised by mostly unrecognized norms and conventions. Regarding the behaviour of human beings on markets, you can go so far that a postulated rationality of human behaviour itself is a socially constructed concept which was invented by scholars during the times of Enlightenment.

That even mainstream economists turn away from the axiom of rational behaviour by reason of its limited empirical explanatory power is no surprise from a culturalistic point of view: The rational mode of thinking is only one empowering concept among others which all influence the behaviour of business men.

In this respect, however, I understand the work of scholars as contributors to the design of the concepts and institutions of our lives. The question in the middle for business researcher has to be: What is a “good” firm? As a historian I have not only some knowledge about the path dependencies of all conditions but also the consciousness about its alterability. I am happy to help working on it.

Contributions to society’s well-being

I recently spent some time in the US to attend a conference. I was reading the daily newspaper and an article caught my attention. It reported on a representative study by the Pew Research Center asking adults about which profession they thought was the one contributing the most to society’s well being and the least respectively.

 

On the top of the list were the military (78%), teachers (72%) and then medical doctors (66%). This makes sense due to the fact that since 9/11 the Americans have a higher need for security and hold the importance of the military very high. Also, the average citizen can experience the positive impact of education and health firsthand. As a lecturer on strategic management I found the low ranking of business executives (24%) who made it second to last on the list, just behind journalists (28%) and above lawyers (18%) quite worrisome. Therefore teachers were rated three times higher than managers. But they are not paid three times as much as managers, but rather 30 times less! Once again, this study shows that the reputation of business leaders has dropped to a very low level. The survey confirms the outcome of a plebiscite in Switzerland (a sample survey of a special kind). It was a proposal that translates into “the fat cat initiative” which was widely accepted, showing that many managers were in fact not.

 

Many causes for this negative sentiment toward managers can be discussed. For example the double reward for strategic misperformance of top managers: Before 2007 managers of major Swiss banks were rewarded with big bonuses for risky growth (investment banking) and acquisitions of financial institutions of all kinds. Today these bankers are rewarded even more for reversing the strategy of their predecessors, selling supposedly unprofitable and risky parts of business. Despite the fact that either the one or the other strategy must be wrong, high “performance” bonuses where paid in both cases. It could also be discussed that citizens increasingly tend to disapprove of valuating firms on the grounds of their short-term success. It doesn’t seem to impress them that speculators at the stock market think otherwise.

 

As a lecturer of strategic management I think about what I could do to improve the standing of leaders in business. I think that on the one hand educators should regularly draw attention to the issue (e.g. in case studies) that when decisions in business are made not to solely consider monetary results but to also assess the effects the decision has on society. Value creation for all stakeholders is the issue! Further, in my opinion educators in management studies should apply this socially responsible strategy to their research projects and particularly to the evaluation of research results.

 

It should be noted that the renowned Academy of Management aspires “to inspire and enable a better world” in their vision statement (and not a higher income for managers!). This undoubtedly means not to propagate the short-term shareholder value thinking in research and teaching but to rise to the challenge to “contribute to society’s well-being”. If business leaders perform convincingly in this aspect their reputation in society ought to improve in the future.

Edwin Rühli

Long-term care in Thailand: A Swiss Perspective

In Thailand, private investors from Switzerland are funding a resort for older people in need of long-term care. This pilot Project offers 50 places in a nursing home focused exclusively on Swiss patients and their spouses. According to the investors, the resort’s services include twenty-four-seven assistance, comparable to the standards applied in Switzerland. Due to an overwhelming public and private demand for the limited number of places, follow-on resorts are planned not only for persons in need of long-term care, but also for patients suffering from burnout or addiction.

In Switzerland, more than one hundred thousand older people are in need of permanent medical assistance and experts estimate that this number will triple until 2050. Research revealed that there would be an additional demand of one hundred thousand places in nursing homes in the next 15 years. The problem is that the average monthly costs related to long-term care is about CHF 11’000 (USD 10’000) per person, what cannot be funded sustainably neither by the current Swiss health-care system nor by private contributions. From this perspective, the resort in Thailand is both an attempt to approach the demographic problems of modern societies, but also a profitable business model. Because the monthly costs for long-term care in Thailand are less than half of those in Switzerland, the private investors are calculating with a financial return of more than five percent for their resort.

I have a somewhat uneasy feeling regarding long-term care resorts for Swiss older people in Thailand due to two reasons. First, I dislike the imagination of living in one of the richest countries in the world, which society is not able or willing to find sustainable approaches or solutions for its demographic issues. In my opinion, purely economic considerations fall short of taking into account the complex problem of increasing health-care costs in most of modern societies. In short, sending persons in need of long-term care to Thailand because of economic reasons is the failure of a whole society to take over responsibility and to show solidarity with its older people.

Second, sending older people to Thailand because of the financial costs related to long-term care is a striking example of the economic primacy in many of today’s social-political considerations. For example, a leading Swiss expert in the field of gerontology recently stated that if a dement person does not recognize the own apartment anymore, it would not make any difference if he or she lives in Switzerland or Thailand. This statement completely neglects an older person as being embedded in a family or a broader social context. To find sustainable and integrative solutions for the complex problem of the rising health-care costs, economic considerations have to serve the needs of a society and the people it is made of.

Tom Schneider

Mindsets

A few days ago I watched a news contribution on a manipulated scientific medical study about a pill. It turns out that several employees of a pharmaceutical company where involved in the construction and completion of this study without disclosing this fact. The manipulation of the data led to positive outcomes of the study, helping to make this pill very popular and thus very lucrative. In this particular study some criminal intention was clearly at play. But many of these medical studies are financed by pharmaceutical companies, says the expert on the news report. This got me thinking about the influence of conflict of interest on the outcome of studies.

In a documentary on fracking I recently watched, I found a similar pattern. The people involved in making money or allowing this technique of oil production, conducted studies showing that this way of flowing oil is harmless to humans and nature. The NGOs concerned with the destruction of the environment found converse results. How can this be? Both parties have a big motivation to prove their arguments. Both parties have a specific mindset when constructing their study. This leads to a frame of thinking and a way of perceiving the world. I think every scientist should have a look at their basic motivation of research and their underlying assumptions of how the world works or ought to work in their eyes. It is very hard to fight one’s own frame of thinking, but by making these implicit assumptions explicit and communicating them, others can better understand your where you are coming from. If obvious conflict of interest is given as is the case in the example of the manipulated study and in my opinion also in the case of financing, I think it will prevent a scientist from performing rigorous research and should be excluded from the carrying out the study.

This is my mind frame and my motivation for this article: I am a psychologist and stakeholder theory enthusiast and think that explicating and communicating thoughts and assumptions helps to find common grounds. Further, I think the world is not black or white but should be looked at nuanced. Further we are working on a paper on mindsets and basic assumptions of different theories, which got me to pay more attention on this issue. So in this sense: Q.E.D.
 

Vanessa McSorley

 

 

Purpose matters

This weekend I was visiting my father who is spending four weeks in a little village in the Swiss mountains for recovery. When I entered the hotel I was pleased with the warmth of the receptionist. She gave me the feeling that I was really welcome and that she cares for me. It was not the usual customer orientation we experience in many hotels from employees who are trained to be customer oriented. It was an encounter between human beings. During the entire stay in this hotel I met various people who love their work because they like caring for others.

The hotel belongs to a foundation, which aims at providing services to human beings in all phases of life. Besides hotels they are engaged in child and elderly care.

In doing business we often have a weak connection to why we are doing this work. Rendering a good service is much easier when we know why we are doing it and what we stand for when providing these services.

This hotel stands for doing good to people. Whether we base this on Christian values or on a humanistic commitment in a philosophical sense does not matter that much. What matters is that we know with which purpose we are serving whom. Customer orientation in this perspective is not a mere technical term but a humanistic commitment in the broader sense.

Sybille Sachs

Changing from economic to political primacy: Why this is necessary

Recently many publications of economists and philosophers were released which question and want to contain the dominant role of the economy and the market in our societies of today (e.g. R. and E. Skidelsky, T. Sedlacek, L. Herzog, M. Sandel). They demand that the role of the economy has to be debated publicly. This corresponds basically to the demand for a primacy of politics over economy. But why is it important to contrast the primacy of politics with the one of economy?

 

First of all it is decisive to see that among all political views of a society also such exist according to which the economy and its material fruits indeed are not seen as an end in itself. In a society living the primacy of real democratic politics institutional conditions are in place which enable to include all (non-radical) political views and matters of a society. Of course, and this is fully clear, also in such case economy will play an important role simply because people want sustenance and wealth.

 

In a society in which the primacy of economy rules economic issues are basically considered as the most important ones. Principles like the market, growth or profit maximization become to end purposes of all existence. All forces which potentially constrain the forces of the pure market as the only regulative force will be fought. Factually (and although democratic institutions may still exist) this model of society shows fundamental and even totalitarian traits: everybody has to subjugate herself to the primacy of economy and its principles, if she wants or not.

 

Once established, to depart from this model is difficult: each concept of economy other than the one of a neoliberal economy acknowledges also other matters than pure economic ones to have a meaning or value on their own (e.g. stakeholders, society, environment). This of course endangers the economic primacy. But a society with e.g. a primacy of religion has similar problems: all its members have to subordinate themselves to religious principles if they want or not.

 

Only the primacy of politics which is committed to a democratic order can provide remedy: only in this way the full colourfulness of views of a society can be integrated. Despite this also caution has to be exercised: material power asymmetries between political actors e.g. can influence the formation of majorities. Moreover, it has to be acknowledged that politicians like R. Reagan or M. Thatcher which have contributed significantly to the primacy of economy were democratically elected.

 

Because today we know to what such primacy is able to do critic at it has become good form even in economic circles. But the voyage has not ended yet: the actual requirement is the return to the primacy of politics and also to stay there. To stay there it is also necessary to debate in Aristotelian manner what is good and hence moral. To think about the good helps preserving before leaving the primacy of politics: nobody will then voluntarily leave this primacy for a fundamental-totalitarian system, be it of religious, economic or of other character.

 

Claude Meier