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.
Wednesday, July 23, 2014
Wednesday, July 16, 2014
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.
Thursday, June 19, 2014
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.
Friday, June 13, 2014
Applied Shared Value Creation: What NestlĂ©’s Botox-Strategy tells us
“NestlĂ© rejuvenates itself with Botox”. The Sunday papers were downright euphoric about the strategic reorientation of NestlĂ©. With the Nespresso model in mind, NestlĂ© 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 NestlĂ© 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, NestlĂ© is strengthening its Health Science sector, which produces food for lifestyle disease prevention.
The
strategy follows the credo of “Shared Value Creation” that NestlĂ© 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,
NestlĂ©’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.
Thursday, May 29, 2014
We, the customers
We, the
customers, are giving us as employees a hard time. This thought crossed my mind
during the closing event of our Business & Society seminar at the
University of Zurich. This year, the students conducted qualitative
research projects on corporate health management. Besides discussing the
benefits a company can attain by keeping employees healthy (achieving a return on investment), the discussion also addressed the limits of
such measures. On the one hand, employees have to take responsibility for their
own health, thus the influence of the organization on their health is
limited. On the other hand, another issue was raised: The closer a department
is to the customers, the more pressure there is and the smaller the possibility
of reducing the workload (an often mentioned stressor). The customers, in a
competitive environment, determine their expectations towards a company. These
expectations can be quite high and are only rarely met with a normal volume of
work. As a consequence, corporate health management faces resistance as well.
Tuesday, April 29, 2014
Social standards for companies: an effective medicine or just a placebo?

The big question after more than ten years is, what are the benefits?
What is the impact and effectiveness of social standards with regard to their
own goals? I have examined these questions by conducting a study in the
clothing industry regarding labor rights.
More specifically, I have examined two social standards with a lot of
members also in Switzerland: The Fair Wear Foundation (FWF) and the Business
Social Compliance Initiative (BSCI). My data consisted of confidential audit
reports and interviews with representatives of companies and NGOs in
Switzerland and in the producing country China. I have developed a system
(including a comparison over time), which is able to analyze the data and
provide answers to the question of effectiveness.
My analysis shows that FWF and BSCI have indeed contributed to the
improved labor rights situation in China, at least in certain areas. Especially
in areas that are easily measurable (e.g. minimum wage, health and safety) as
well as in areas supplementary to the actual labor rights (e.g. awareness of
the existence of labor rights). The results are worse in areas that are not
that easily accessible by the means of factory audits (the main tool for evaluating
the success of implementation), e.g. the freedom of assembly, the right to
collective bargaining or the living wage, which should enable social and
cultural participation. There were some improvements in those areas as well,
but in absolute terms, the level has remained low.
The main problem with the living wage, which the FWF (but not BSCI) requires
is the lack of a clear definition. In principle, the legal equation should
probably be minimum wage = living wage.
With regard to the freedom of assembly and the right to collective
bargaining, the consequent call for these rights by the FWF had at least a
partially positive impact. An additional positive factor is probably the strong
involvement of the member companies during the implementation, as required by
the FWF.
This stronger involvement has led to more frequent interactions between factories
and members, which helped reducing the problem of the snapshot nature of
audits. In addition, it made the implementation seem less imposed from the
outside as purely external audits would.
In general, my study suggests that different forms of cooperation and
exchange between stakeholders are beneficial to an effective implementation. Thus,
member companies can exchange their views among each other and with NGOs at
arranged meetings. This not only increases the relevant skills for the
implementation, but also their mutual acceptance (especially companies – NGOs).
FWF and BSCI already have been active in this area but there still is a lot of potential.
Overall, the study has demonstrated that it is possible to create an
evaluation system for the effectiveness of social standards. However, its
significance strongly depends on the quality of the data, which usually wasn’t created
for the purpose of such an analysis.
These insights lead us to the following conclusion: The standards FWF
and BSCI are not a placebo but a medicine – an effective medicine, but still (and
by far) not for all ills.
Claude Meier
Thursday, April 24, 2014
Giving Voice to Values
It’s one thing to
intellectually comprehend various ethical models or to be conscious oft he diverse
ethical dilemmas that await one in one’s chosen profession, and quite another
to act in accordance with one’s personal values in specific situations. It is
here where Mary Gentile’s book “Giving Voice to Values” makes a very innovative
contribution: http://www.givingvoicetovaluesthebook.com/
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