A stakeholder view on secession movements

One of the key assumptions of a stakeholder approach to the world – be it individual, social, economic or political – is that power should be both decentralized and inclusive. Implicit in this is that all stakeholders have a right to – also unilaterally - withdraw from participation in such a common enterprise. Often, such a withdrawal is however difficult, be it divorce from a marriage or a firm laying people off. At times, as for example with a small mom-and-pop store being subject to its country’s taxation policies, it is virtually impossible.

A critique of traditional economy

In an article in the NZZ of April 26, 2014, the editor Andreas Uhlig reported that Andrew Haldane, executive director of the Bank of England, has criticized the foundations of contemporary economy fundamentally. Haldane stated that “the unrestrained self-interest of individuals and companies, greed and unrestricted competition… have harmed society and made it poorer”. He made a case for “rethinking some of the central components of contemporary economy”. This would lead to a redefinition of the basic assumptions and insights of economic theory, and it would also have far-reaching consequences on the level of individual companies and for the Theory of the Firm.  

This critique, formulated by such a renowned figure, is of great interest for our institute, since we have aligned our own research of over ten years towards such a critique of the basic assumptions of the Theory of the Firm and of corporate strategy.

Guest blog: Match.Me.Up! brings together young entrepreneurs and experienced professionals in Switzerland

With Match.Me.Up! Impact Hub Zurich designed an unusual program to bring together people looking for a meaningful job with fast growing and impact driven start-ups. One thing is for sure: a fulfilling job will become more important than money and status in the long
run.

According to a study by Ashoka and McKinsey over a third of people are looking for purpose-driven work activities in which they can experience the social effects directly. Not a majority. Not a movement yet. But an important trend. For more than every other over 50 yearold a meaningful job is more important than the wage (54%) (Source: Xing). But careers in the social sector are considered unattractive, especially because they are often equated with volunteer work. This is exactly where the program Match.Me.Up! is different: it brings together experienced professionals - not with well-known charity organizations - but with fast-growing start-ups in the area of sustainability. Carsten Rübsaamen, who himself undertook a change of career and moved from being a banker to a social entrepreneurs, was part of the Match.Me.Up! program in 2013 with his start-up "Book Bridge” in search of an Executive Committee member. "Many people want more - more in the sense of that they realize that every decision that you make not only affects yourself but also others. And a job with a start-up gives you more!”, says Carsten. Because in addition to the monetary variables such as salary, status and power there is always also a social and environmental dimension of a job. A large number of people have already realized this today and donate money to various charity organizations. "But Match.Me.Up! shows that one can combine his job with doing good: simply by having a job, "says Niels Rot, co-founder of Impact Hub Zurich and responsible for the Match.Me.Up! program. The whole program is designed as a personal learning journey and includes a "try-out" phase in which the start-up and the candidates can get to know each other during a project-based cooperation, before making the game changing decision. There are over 15 job openings ranking from COO to Head of Business Development and Marketing Manager and Java Software Engineer at various start-ups. The application deadline is October 3, 2014.

Céline Müller
PR and Communication Manager


Impact Hub Zürich
We at Impact Hub Zürich foster innovation through collaboration. Located in buzzing Zürich-West, we provide a space where entrepreneurs and all kinds of innovators come together to prototype new models for a world that works for all - connecting all sectors, industries and cultural backgrounds. We offer access to inspiring work spaces, a vibrant learning community, startup incubation programs, corporate innovation workshops and entrepreneurial leadership trainings. With 7’000+ members in 50+ Impact Hubs across the world, the Impact Hub Network has become the center of gravity for people innovating a new kind of economy. Locally rooted and globally connected.

E pluribus unum

In our interconnected society, the behavior of public, private and non-profit organizations affects an increasing number of actors. Especially when it comes to complex socio-economic issues, organizational decision-makers face a large number of stakeholders with different norms, values and interests. The vision of consumer goods manufacturer Unilever is a good example for the efforts organizations make to reconcile these stakeholder interests: “[...] to double the size of the business while reducing our environmental footprint and increasing our positive social impact“ (Unilever, Annual Report 2013), which takes into account the impact of business on different actors.

The Soccer world cup is behind us, the aftertaste remains. Take a look at the article in the Economist, „Beautiful game, ugly business”: http://www.economist.com/node/18744271

The human as a high performance product

Just in time (or precisely not, depending on your perspective) for the soccer world cup, the Franco-German television channel ARTE broadcasted a documentary with the title “Pressure, doping, depressions – top athletes come clean” about top-class sport. Although I thought I already knew quite a bit, this nevertheless opened my eyes for the absolute shocking reality of professional sport today. Athletes are deliberately and strategically trimmed and manipulated since childhood. In order to advance the profitability of the clubs, sponsors and multinationals , tricks such as dubious engagement contracts, performance enhancing drugs, doctors who purposely tell only half the truth and lawyers adept at eschewing lawsuits are commonly made use of. This has increasingly little to do with honest performance and sportsmanship. One wins – and earns in real – only if one is number one, and this necessitates that one is ready to cheat as also ruin one’s body in the long-run. When mere milliseconds decide between the first and second place and only the first place counts for the sponsors, than one can readily comprehend that athletes are willing to turn to any means so as to become and remain number one. The tragic part of all this is that athletes often don’t even have a choice but to serve this relentless pursuit of profit, lest they quit, which for a number of reasons is decidedly difficult.

The multi-generational company

The impending demographic changes in society and economy have raised our awareness of the importance of intergenerational structural changes. In 2000, only 15,1% of the population of Switzerland were over 64 years old, in 2012 it was already 17,4%, and in the year 2030 it will be 24,2%, according to the Federal Statistical Office.


These demographic developments presumably also exacerbate the current shortage of skilled workforce. The Federal Council has approved financial support measures to mitigate this development for 2013-2016, which primarily focus on education, research and the promotion of Switzerland’s innovative power. In addition to the financial measures, the Federal Council has also addressed crosscutting issues such as equal opportunities and sustainable development as important aspects.

Applied Shared Value Creation: What Nestlé’s Botox-Strategy tells us

“Nestlé rejuvenates itself with Botox”. The Sunday papers were downright euphoric about the strategic reorientation of Nestlé. With the Nespresso model in mind, Nestlé is moving away from mass-produced consumer goods such as Maggi soup cubes and going towards more exclusive products. With targeted acquisitions, the gigantic enterprise, which many regard as cumbersome, is establishing a lucrative new foothold with its newly founded division Nestlé Skin Health. The journal also took away my suspicion that the nerve poison Botox might just get a euphemistic covering by calling the division Skin Health – at least half of the Botox applications are reportedly being used for medical reasons. The strategic move is thus convincing at first glance: Together with Skin Health, Nestlé is strengthening its Health Science sector, which produces food for lifestyle disease prevention.

The strategy follows the credo of “Shared Value Creation” that Nestlé has developed and internalized in collaboration with the strategy guru Michael Porter. The concept aims at no less than reorienting capitalism: Companies should search and find solutions to pressing social issues. The panacea Botox might indeed relief some of our everyday problems and thus create social value. It is supposed to not only flatten wrinkles temporarily, but also to be effective in the treatment of e.g. urinary incontinence, arthritis or premature ejaculation.

Nevertheless, Nestlé’s reorientation also reveals the pronounced symptoms of the strategic concept of “Shared Value Creation”: It is cherry picking the problems. On the strategic level, attention is only paid to the problems whose solution can be transformed into high-margin products. In addition, as one commentator in the same paper argued, Nestlé is fostering its connection to a specific stakeholder group: the baby boomers. When they were born, Nestlé was fighting for supremacy in the baby food market. As they now got wrinkles and lines, Nestlé is again caring about the worries of the strongest financial force in society. Nestlé is not rejuvenating but aging together with its preferred stakeholder group.