- Safe Democracy Foundation - http://english.safe-democracy.org -

More Corporate Responsibility

According to a recent report by the McKinsey Company published in The McKinsey Quarterly [1], there is a breach of trust between consumers and global corporations, which creates a lack of understanding between business leaders and consumers. The solution: more social responsibility. Where all will win: business, governments, and the civil society.

THE PUBLIC OPINION DEMANDS, on a global level, exemplary ethics from leaders and government figures. But today adding to this request is the demand for social responsibility from business leaders. The manifestations of this pressure are increasing rapidly. If there have been significant advances in this field, societies hope for much more.

The New York Times [2] writes about an in-depth report by Bonini, McKillop and Mendonca (consultants for the McKinsey Company) published in The McKinsey Quarterly [1]. A group of 4,238 multinational business executives and 4,063 consumers of the products of these companies were interviewed.

“The authors of the study concluded that executives have a limited understanding of the concerns of consumers” The report discovered a breach of trust between the consumers and the global corporations, leading to a lack of understanding between business leaders about the real desires of the consumers.

When asked, 68 per cent of the executives answered that the large corporations have made positive contributions to the general well being the majority of the time. However, only 48 per cent of the consumers agreed with them. This percentage is lower in the United States at 40 per cent.

When consumers where asked about what level certain institutions acted in the best interest of society, Europeans and Americans placed global corporations at the end of the list. Those higher up on the list were non-governmental organizations, small regional businesses, the United Nations, labor unions, and the mass media.

THE ENVIRONMENT, IN FIRST PLACE

The report showed the large difference between what executives perceived to be the most important concerns for consumers and the true concerns of consumers in reality. When asked what will be the most important problems for consumers in the next three years executives replied: job loss, outsourcing, and the privacy and security of information, and the environment. However, the consumers stated that the environment was their primary concern, followed by pensions and other retirement benefits and healthcare.

The authors of the study concluded that executives have a limited understanding of the concerns of consumers. The title of The New York Times article, written by Paul B. Brown, is conclusive: they do not trust the corporations.

“Activist organizations of all kinds have grown and returned more aggressive and effective to put more public pressure on these organizations Similarly, a recent report, by two competitive experts, Michael Porter and Stanley Kramer (Harvard Business Review [3], December 2006) shows the strong pressure that exists for more social responsibility from businesses. They said that many businesses discovered the importance of corporate responsibility by the public’s reactions to concerns that were not previously considered as a part of a business´ responsibility. A well known producer of athletic apparel (as told by the authors) experienced an extensive boycott by consumers after the New York Times and other media groups reported the abuse of labourers in Indonesia, in the early 90s. The decision of the big petroleum producer to sink an obsolete platform in the North Sea brought with it Greenpeace protestors and headlines in the international media in 1995. There are also intense demands for more medical research to be done to find cures for diseases such as AIDS and malaria.

Porter and Kramer summarize the situation by stating: Activist organizations of all kinds have grown and returned more aggressive and effective to put more public pressure on these organizations. Consequently, the social responsibility of businesses is not an option: It is a priority that one cannot avoid.

PUTTING FORTH ETHICS

What do societies hope for from the businesses? The spectrum is wide; from politics to personal ethics, the inner workings of the business, to honest relations with consumers, transparency, a good corporate government, political energies in favour of the environment, the active implications of business in the great causes of public interest and the development of strategic alliances between business and the civil society.

64 per cent of the 250 major global corporations published reports about this theme in 2005, but these only satisfied aspects of reduced expectations.

“Latin America is making visible improvements in its macro-economy in addition to opening up more possibilities for businesses. But, at the same time following in the footsteps of the large social gap” One concept of standards to which extremely advanced societies aspire to meet is given to us by the adopted policies of one of the largest investment funds in the world, which receives petroleum utilities from the Norwegian government, costing 300,000 million dollars and having fixed demand criterion. The decision was announced that this corporation would relinquish its business investments if any of the following rules of conduct were broken, which include: serious violations of human rights, serious violations of the rights of individuals in war, serious environmental harm, as well as corruption and other violations of ethical norms. After the decision to take back the investments funds of 21 international businesses, some very well known, a list has been published.

The New York Times praised the action; it stands out, as it is the first time that a government sanctioned businesses for ethical criterion, putting ethics ahead of taxes for customs. Norway backs its ethics with its money, said.

THE GROWTH OF LATIN AMERICA

Latin America is making visible improvements in its macro-economy in addition to opening up more possibilities for businesses. But, at the same time following in the footsteps of the large social gap, with high levels of poverty, juvenile unemployment, educational desertion, teenage pregnancy, and death during childbirth. Consulting public opinion both direct and indirect, indicates that the community hopes that the compromise of the businesses, which have been increasing thanks to the efforts of the pioneering directors, and many others will increase and intensify.

In a region with civil societies, whose degrees of articulation and participation is continually growing, this will be with each passing time, like in a developing world, a priority and not an option.

How many before have assumed this fact, more than to invigorate the capacity of the entire society to face the real difficult challenges, improving the ethical yields and products of their own business will improve the quality of society for all. Every one will win.