Month: December 2017

About Meta-MSIs and Private Governance

By Luisa Murphy.

  • What are Meta-Multi-Stakeholder Initiatives (MSIs)?
  • What is their role and contribution to private governance?
  • How do Meta-MSIs enable the translation of responsible business policies and practices in unique octopus like ways?

Approximate reading time: 4-5 minutes.

Meta-MSIs, octopus arms and brains
What do Meta-multi-stakeholder initiatives (MSI) and octopuses have in common? Through my own PhD research of what I call a ‘Meta-MSI’ (the ASEAN CSR network), a phenomenon similar to the MSI (definition below), I have been investigating the dynamics and interactions between national networks which I liken to an octopus’ eight arms and corresponding eight mini- brains and the headquarters or “global network”. In this blog, I will define the Meta-MSI and briefly discuss how its constitution of networks provides important new insights into national level practices which may enable it to translate responsible business in intelligent, efficient and indeed, octopus like ways.

Towards a definition of the ‘Meta-MSI’
A Meta-MSI is a new type of MSI whose members comprise distinct organizational forms such as foundations, listed companies’ associations, chambers of commerce and industry and MSIs not individual members which usually constitute MSIs. In this regard, it also appears to have some key similarities to the ‘Meta-organization’ (e.g. Ahrne & Brunsson, 2005 & 2008) although I am still exploring the link (blog for another day).

Similar to MSIs, Meta-MSIs promote responsible business policies and practices through collective action, capacity building and shared vision. It includes MNCs, intergovernmental organizations and sometimes government agencies as partners. The members but also the partners are key to its legitimacy and vice versa. Hence, like an octopus, a Meta-MSI has a central brain (headquarters) but also eight mini-brains (national networks) which carry out autonomous activities. Moreover, like an octopus which coordinates with other sea creatures when necessary to achieve its ends, Meta-MSIs collaborate with partners on specific issues at the headquarter and national network level.

One example of a Meta-MSI is the ASEAN CSR network which is comprised of eight networks, including seven national networks and one regional network in Southeast Asia. It includes listed companies associations: CSR Club of Thai Listed Companies Association, MSIs: Global Compact Network Singapore, foundations: Indonesia Business Links; League of Corporate Foundations; ASEAN Foundation and national and international chamber of commerce and industries: Vietnam Chamber of Commerce and Industry; Union of Myanmar Federation of Chambers and Commerce and Industry and International Chamber of Commerce – Malaysia. Moreover, it engages corporate partners such as Hitachi and intergovernmental partners such as United Nations Office on Drugs and Crime (UNODC). These four types of member organizations are similar to the three hearts of the octopus which ensure circulation through its organs.

Meta-MSI contributions to private governance
Due to their structure, Meta-MSIs appear to be uniquely tailored to national level contexts and dynamics which provides for efficient functioning of the whole. Below, I briefly highlight three areas which I think enable the translation of responsible business policies and practices in unique and flexible octopus like ways.

First, as mentioned Meta-MSIs incorporation of heterogeneous member organizations provides insights into diverse ‘national business systems’ (Whitley, 1999) and how responsible business is approached in different contexts. In turn, Meta-MSIs operate by allowing policies and practices to be contextualized to these settings. Hence, like an octopus, the Meta-MSI is able to camouflage or adapt its policies and practices to its environment. This may lead the organization to be more efficient in the long-run, given that organizations do not need to defend the implementation of policies and practices which are different from other member organizations. Instead, all organizations are working towards the same goal of responsible business but may achieve them via different means.

Second, important studies (e.g. Rasche, 2012) have shown that the co-existence of loose and tight couplings within global networks provide MSIs with the ability to manage issues related to stability, flexibility and legitimacy, Meta-MSIs appear to navigate these challenges solely through an underlying loose organizational structure. This facilitates the translation of responsible business because it enables national networks to work even more autonomously (similar to an octopus with its eight arms) yet contribute to the whole through best practice sharing etc. The Meta-MSI is hence like the brain of the octopus, it coordinates with its eight mini-brains (it does not command), which allows (national) ownership of the relevant policies and practices. This may be important for promoting effective outcomes in the long-run as national organizations will develop institutions for responsible business which do not require micro-management by the “global” organization.

Finally, Meta-MSIs appear to be more exclusive than MSIs given their small number of member organizations at the “global” level and their corresponding memberships which range from being more exclusive to inclusive at the national levels. How this exclusivity impacts efficiency is another question. For instance, it might be worth considering whether it is more efficient to engage with one set of organizations e.g. SMEs through a national network (e.g. chamber of commerce) rather than SMEs and MNCs in the same network. Meta-MSIs are hence similar to an octopus which has a fixed number of arms and is wily about the other creatures it forms collaborations with.

In conclusion, while Meta-MSIs appear to be similar to octopuses in that they do not like the spotlight, I think it is worthwhile to cast a light on them and their national networks by considering how these global-national network (eight mini-brain- octopus) dynamics influence the governance for responsible business. I look forward to continuing the dialogue with you on octopuses, Meta-MSIs and other creatures in the private governance sea.

Luisa Murphy is a PhD Fellow at Copenhagen Business School and supported by the VELUX Endowed Chair in Corporate Sustainability. Her research examines governance for anti-corruption. She brings a human rights and business background from the University of Oxford and legal experience from the Antitrust Division of the United States Department of Justice.

Pic by Taylor Ann Wright, Unsplash.

Is CSR Effectively Altruistic?

By Lot Elshuis.

CSR is the part of a company that focusses on doing good. Interestingly enough, business is all about impact and effectiveness when it comes to the core of the business, but when strategies of doing good are developed and implemented there is often more concern for what sounds good than for the effectiveness and impact of their actions on recipients. Why is the rigor applied to core business activities often not applied to CSR-strategies as well?

Effective Altruism: Maximize impact, not feel-good moments
Effective Altruism takes exactly this approach. Kick-started by philosopher Peter Singer, Effective Altruism is a community that wants to change how ‘doing-good’ is often approached. First of all, Effective Altruism emphasizes that most people in developed countries, and especially those belonging to the richest 10% of the world population, have an outstanding opportunity to do good. We have won the lottery! Therefore we have the beautiful chance to add value to the lives of others.

Second of all, if we indeed want to take the opportunity to do good, we can do the most good by focusing on maximizing positive impact through applying scientific evidence and reason, instead of only looking at what sounds and feels good. Without thinking carefully about how exactly to do good, there is a risk of wasting important resources on things that do not work. Even worse is having the idea of doing good, while actually causing harm.

The Case of Play-Pumps International
Let me give an often-used example. Many developing-world communities are provided with water through hand-pumps. The social enterprise Play-Pumps International had the idea to replace these hand-pumps by merry-go-rounds, which would pump up water while children played on them. It seemed to be the ideal win-win situation. The enterprise received a grant from the US Government, a World Bank Development Marketplace award, and (it can’t get much better) a visit and sponsorship from rapper Jay-Z. However, sadly enough, the Play-Pumps didn’t have the positive impact that everyone assumed it had. One of the main problems was that the pumps needed constant force to obtain the water, which, obviously, made the kids tired. This often compelled the women of the communities to struggle to push the pumps. Moreover, the Play-Pumps were several times the cost of a hand-pump, which were able to pump more water an hour as well. (see Doing Good Better by William MacAskill for a more elaborate description of the case)

Rule of Thumb: Importance, Neglectedness, Tractability
Although Effective Altruism is focused on the individual who is willing to do good, we could apply the same to corporations who pursue CSR or social entrepreneurial strategies. Especially because effective altruists often focus on the cost-effectiveness of a cause or approach. This line of thought shouldn’t be unworldly to corporations, since cost-effective rationalizations are applied on a regular basis. An often-used rule of thumb by Effective Altruism for evaluating causes or approaches is assessing the following criteria:

  • Importance: What is the scale of the problem; how many people are affected and how deeply?
  • Neglectedness: Is there still enough opportunity to do good, or are a lot of other people already working on improvement in this field?
  • Tractability: Is there something practical you can do, with the possibility of succeeding?

By applying these criteria and looking for evidence through research, companies are likely to have a more profound impact on the area in which they want to do good.

Responsibility – but where?
As the name says, CSR is about responsibilities. Therefore, we might wonder whether companies who apply CSR actually have the responsibility to do the most good they can (with the same amount of time and money). Can we argue for saving lives in the poorest countries instead of improving the labor conditions of the workers in one’s own supply chain? While the former has a bigger impact, the latter might, to a greater extend, be in line with the more obvious responsibilities of the particular company. This is an interesting discussion, but unfortunately outside the scope of this post to deal with.

However, a lot of multinational organizations are already involved in causes that do not directly relate to their own supply chain. Google is for example awarding $1 billion in grants and contributes 1 million employee volunteer hours ‘to create more opportunity for everyone’. More specifically, H&M announced in a press release in September that they are donating $200,000 to Save the Children for “South Asia’s worst flooding in years”. From an effective altruist perspective, it would be rational to figure out, what the scale of this cause is at the moment, if there aren’t already a lot of other donors involved in this particular disaster relief in South Asia, and whether Save the Children can actually do something successfully about the situation of those affected by the floods. Accordingly, this could be compared to the measured impact of other causes to conclude where H&M’s, or Google’s, resources would be most valuable.

Impact before Marketing!
We all know that CSR is more often than not linked to marketing strategies. There is a high chance that H&M chose to donate to South Asia’s flooding because more potential consumers will be affected since they probably have heard about the flooding recently and were emotionally moved. However, this doesn’t have to pose a problem, because Effective Altruism is not per se about ‘selflessness’, although often used as definition for altruism. It is totally fine to feel good about doing good. In fact, it would be wonderful if everyone felt better by doing good, because then it is likely that more people will actually do good. Therefore, it would be all the more impactful if organizations started to market the impact of their causes, rather than doing and marketing what feels good. With that, consumers could support companies that do good effectively, instead of companies that scream the loudest without having a real positive impact on important cause areas.

Lot Elshuis is a MSc Candidate in Business Administration and Philosophy at Copenhagen Business School. With a background in philosophy, her research interest is focused on discussions about the role and responsibility of business in society and the ethical dilemmas that these discussions entails. You can contact her on LinkedIn.

Pic by Diego PH, unsplash.

 

A Story of Poison, Pork and Consumer Protection

By Jan Bauer.

  • Renewal of controversial weed killer supported by Germany despite internal dissent
  • Corporate support seems the only consistency in many decisions
  • What evidence should determine the public opinion of a minister?

Glyphosate and a German Minister under Fire
The German Minister of Food and Agriculture, Christian Schmidt (CSU), came under fire in the end of November. He voted in favor of renewing the license for the controversial weed killer Glyphosate in Europe – against the will of the Minister of the Environment, Barbara Hendricks (SPD), and without consulting chancellor Merkel. Mr. Schmidt said he “made the decision on [his] own and within the responsibility [his] department”. While the potential health and environmental risks of Glyphosate, better known under Monsanto’s commercial name Roundup, are still subject to debate, the unilateral approach by the minister has at least poisoned the political climate between the two parties before the upcoming exploratory negotiations to renew their “grand coalition”.

Many Question Marks behind a Political Free Solo
One can only speculate why Mr. Schmidt considered it necessary to purposefully violate the joint rules of procedure between the federal ministries that would have required him to abstain from voting as long as there is a disagreement between the federal ministries. Mr. Schmidt defended his actions by claiming that his vote will lead to a more restrictive use of the herbicide in some areas. Glyphosate producer Monsanto, currently in the process of being taken over by the German chemical company Bayer, seems not satisfied with the renewal either and would have expected an extension of the license by more than five years.

Eat more Meat, but don’t sell a “Vegan” Schnitzel
This decision is by no means the first controversy surrounding the German Minister of Food and Agriculture and his duty to balance cooperate and consumer interests. Mr. Schmidt openly promoted the consumption of pork in public institutions, which has been abandoned by some canteens to avoid complications with religious customers. Additionally, he encouraged to ban the use of common marketing practices to sell meat replacements as “vegetarian sausages” or a “vegan schnitzel”. This effort was advocated to prevent the confusion of consumers, as they might be overburdened by linking the words “vegan” or “vegetarian” with the meatlessness of the product in questions – what should happen to German meat dishes that falsely claim to be vegetarian, such as “Leberkäse” (literally translated to “liver cheese”) remains unclear. Despite the minister’s concern, there is little evidence for an actual confusion among consumers and the fact that the growing popularity of vegetarian and vegan products negatively affects the meat industry created some skepticism about the motives for such a proposal.

The ambivalent Role of Scientific Evidence in the Process of Policy Making
This issue relates to larger questions about the importance of scientific evidence to guide regulatory action. Despite increasing efforts to foster evidence-based policy, the scientific evidence rarely provides perfect guidance on what will be the outcome of a certain policy (the discussion about the impact of the planned U.S. tax reform is another famous example). So in the absence of clear evidence; what determines a minister to go one way or the other: personal beliefs, the opinion of his constituency, the influence of lobbyists?

The Traffic Light System for Food Labels – as Case in Point
For the specific case, we might shed some light on this by looking at remarks from Mr. Schmidt on issues with clearer evidence. In the area of nutritional food labels, research shows that the mere provision of nutritional facts on the back of products does insufficiently guide consumer choices and recent studies highlight that salient and simplified front-of-package labels, such as the traffic light system, can help consumer making healthier choices. Additionally, there is a broad public support for better food labelling that guide consumers and make healthy choices easier. Despite this evidence, the minister considers such labels as an “impermissible simplification” and rejects further regulation in this direction as too paternalistic.

A view shared by several other EU countries that tried to go against the voluntary traffic light food label in the UK, as it “aimed at classifying food as more or less “healthy””, which would violate trade legislation. Traditional product manufactures have little leeway to reformulate their products and claim to be disadvantaged. For instance, the majority of meat products would receive a red label which might negatively affect sales – in other words, the fear is that such labelling actually works from a consumer’s point of view. Hence, there seems to be an inherent tension between consumers’ needs for guidance and industry claims of discrimination. The European Commission apparently announced “a thorough review” by the end of 2017.

People before Profits
It is hard to understand on what basis Mr. Schmidt himself determines the needs for regulatory action and why he made each of these individual decisions. While the Glyphosate incident appears to be a procedural failure in the absence of clear evidence, his stances on food labelling fails to acknowledge a general consumer science and public consensus. All decisions, however, seem to be in line with the interests of the industry. Mr. Schmidt himself stated that “we should not restrict the choice for the majority of society for reasons of ease or cost” when it comes to leaving pork off the menu. Hence, I propose to consistently follow this logic and not restrict consumer protection supported by the majority of scientists and the public for reasons of ease or costs for some special interest groups.

Jan Bauer is Assistant Professor at Copenhagen Business School and part of CBS’ Governing Responsible Business Research Environment. His research interests are in the fields of health economics and consumer behaviour. As part of the Nudge-it Project, he focused on fostering healthy food choices of children and adults.

Pic by GLOBAL 2000 / Christoph Liebentritt, flickr.

Role Reversal: When Business Safeguards the Public Good

By Erin Leitheiser.

Earlier this week Patagonia launched what may be corporate America’s most forceful action yet against the government’s assaults on the environment and vulnerable communities: announcing that it would sue the Trump administration.  Such action signals a new era for business leadership on social and sustainability issues.

No Government-as-usual and no Business-as-usual
More than a year ago – and before the 2017 U.S. election – I wrote about Trump, anti-intellectualism and the new role for business.  While the takeaway then was that business was increasingly expected to step up contributions to solving social and sustainability issues, the new reality of a Trump administration necessitates yet another re-evaluation of business’s role in society.  No longer is it simply enough for companies to contribute to the broader public good via philanthropy or (more) sustainable business practices; such approaches assume a stable and accepted regulatory environment facilitated by the government.  We now live in a time when Americans are facing a hostile government that is pushing through major changes to the tax code which would benefit the wealthiest at the expense of the poorest, rolling back protections for women to access reproductive healthcare, and reneging on the country’s commitments and obligations to do its fair share to stymy carbon emissions, among countless others.  This is not government-as-usual, so it can no longer be business-as-usual either.

A new Role of Business in Trump Times
We have seen encouraging moves by state and local governments to do what they can to work around Trump (for example, on the Paris agreement), and business is also playing a new role.  While corporate lobbying and political involvement is nothing new, what is different is that business is now engaging on a range of social and environmental issues that have little to do with their core business activities.  A few notable examples include:

Earlier this week, Patagonia’s homepage shifted from its usual backdrop of surfers and climbers to solely a black backdrop with writing in white stating:

The President Stole Your Land
In an illegal move, the president just reduced the size of Bears Ears
and Grand Staircase-Esclante National Monuments.  This is the largest
elimination of protected land in American history.

 

Patagonia – A Frontrunner in Opposing Harmful Governmental Policy Changes
Patagonia has a long and established history of progressive action both internally and externally.  But, its new efforts signal a move from lodging disagreements to using its corporate resources to actively oppose harmful and discriminatory governmental policy changes.  While in yesteryear government was the space where protections were afforded and business need only comply with relevant regulations, we are now in an era where business must step up to defend the greater good.

Hats off to you, Patagonia.  Corporate America, please take note and know that people everywhere are looking to you to use your power and resources to defend and advance the public good.  Now is your time.

Erin Leitheiser is a PhD Fellow in Corporate Social Responsibility and Sustainability at Copenhagen Business School.  Her research interests revolve around the changing role and expectations of business in society.  Prior to pursuing her PhD she worked as a CSR manager in a U.S. Fortune-50 company, as well as a public policy consultant with a focus on convening and facilitating of multi-stakeholder initiatives.  She is supported by the Velux Foundation and is on Twitter @erinleit. 

Pic by Erin Leitheiser, taken from Patagonia’s homepage Tuesday 5th 2017.

Need an SDG Solution? Hack it.

By Lara Anne Hale.

November 16 – 18, 2017 marked the beginning of a student-driven innovation era at Copenhagen Business School. The Student Innovation House – in collaboration with Oikos and PRME – hosted their first major event, the Sustainable Campus Hackathon 2017.

A Hackathon for more campus sustainability
Having received an impressive 120 applications to participate in the event, 66 students from universities across Denmark were invited to join an intensive 2.5-day spree of hacking sustainability ideas in four UN Sustainable Development Goal areas: Green Infrastructure, Healthy and Sustainable Food, Diversity and Inclusion, and Human Well Being and Mental Health. The goal? To come up with an idea that is feasible, implementable, scalable, and imparting a big impact; and the winning proposal will be further developed and implemented on the CBS campus next year.

Not all SDGs are created equally…
Perhaps not surprisingly, one of the first challenges was that not all SDGs are created equally, at least not in terms of student interest. Fully half of the students formed groups competing in the Healthy and Sustainable Food area, leaving Human Well Being and Green Infrastructure perfectly fitted with teams, but Diversity and Inclusion completely empty. I can’t help but wonder what this says about what is being integrated into students’ curriculum, especially in regards to sustainable development. Many students, during our “speed dating” for forming teams, remarked to me that they had recently had some courses relating to food systems and circular economy, and that this inspired them to innovate in this arena. Are we not giving gender equality the sustainability context – or even the examples of success and impact – that attract students to think critically and generate solutions for the future? Perhaps this in part is a reflection of Denmark’s rapid slide down the rankings.

Hacking the SDGs – with dedication, creativity & open minds
But by and by, teams drew from a hat, and we were sorted out. The next 36 hours involved input from experts, brainstorming, drafting, brainstorming again, and ultimately “hacking” the SDGs. My group’s subject area was Human Well Being and Mental Health, and my teammates hailed from Danish Technical University and Roskilde University. Their approach to the task was impressive: on the one hand they were hard-working and dedicated; and on the other hand they were playful with ideas and throwing around true creativity. It didn’t seem to bother them that the winning proposal would not directly, or at least immediately affect their universities. Rather, they were there to work on inspiration, on their own knowledge, and on collaboration. Beyond opening minds within teams, individuals across teams chatted over breaks, and mentors circled around, getting to know the breadth of people and ideas represented.

A playful approach to raise awareness around gender (in)equality
The hackathon was set up so that teams first presented for four minutes in a “heat”, and then were judged if they would be one of four teams proceeding to the finals. Notably, one of my favourite presentations was within the Diversity and Inclusion category. The team proposed circulating a quiz concerning “How much will you earn after your degree?” Respondents would enter their degree programs, age, experience, and so forth, and then be presented with their expected monthly wages. But then a pop-up would ask the user’s gender. If the response was male, the quiz would say “Sorry! We were mistaken. You will actually earn more than those who are not male!” and if the response was female, “Sorry! You will actually earn less than that, and less than your male counterparts.” This quiz idea is indeed a clever way to promote critical awareness, and hopefully more discussions concerning gender equality on campus (especially at CBS, where more than 80% of full professors are male).

And the winner is… Everyone!
Ultimately, the winners of the hackathon were Team Supo, who propose a student card-linked electronic point system for registering and incentivising sustainability actions, such as choosing to cycle to campus. Team Supo will be sent on a trip to New York, where they will expand upon their idea to the head office of PRME. Indeed I look forward to the implementation of their idea, but truth be told, the brilliance of a hackathon is the way it cracks open so many ideas, and brings together so many people. Supo will not be the only reason I’ll be back at Student Innovation House, as there are many more hacks – formal or informal – yet to come.

Lara Anne Hale is a former PhD student at Copenhagen Business School’s Governing Responsible Business World Class Research Environment. Her PhD focused on Experimental Standards in Sustainable Building as part of the EU Innovation for Sustainability project with VELUX. Follow her on Twitter.

Pic by Aafke Diepeveen, edited by BOS.

Where is the Space for Ethics in Rule Governed Organizations?

By Anna Kirkebæk Gosovic.

Imagine that you work in an organization where your choices, your knowledge and your thoroughness in your work could potentially impact the lives and health of people; for the better, yes, but also for the worse, if you make a mistake. Imagine then, that at any moment, someone could come and go through all your work, ask for all the details of your choices and demand proof that you made the right decision according to all the rules that you need to know. And then imagine that large investments are at stake and that the failure or success of these investments depend, partly, on the thoroughness of your work.

Strict rules and procedures
This is the reality that many employees in pharmaceutical companies operate in. Many organizations today are governed by policies and procedures to make things run smoothly but some organizations are – to a larger extent – characterized by strict monitoring and reporting procedures, high preoccupation with failure and commitment to organizational resilience. Weick and Sutcliffe name such organizations “High Reliability Organizations” (HRO) (Weick & Sutcliffe, 2007). HROs are organizations working in fields where mistakes can have severe consequences and which, as a result of this, have strict procedures for ensuring compliance with processes and policies.

Studying HROs, scholars have focused on organizations such as air craft carriers (Weick & Roberts, 1993), nuclear power plants (Schulman, 1993), hospitals (Chassin & Loeb, 2013) and military units (Bierly & Spender, 1995; Demchak, 1996); all of which operate in environments rich with potential for error but where the consequences of such are too severe to allow them to happen (Cf. Weick, Sutcliffe, & Obstfeld, 1999, p. 32).

With their close attention to monitoring, following procedures and regimes for registering data, actions and decisions, pharmaceutical companies can be defined as HROs.

Is following the rules enough?
Organizations preoccupied with reliability may spend more time and effort organizing for controlled information processing, mindful attention and action than other organizations. Weick and Roberts call this “mindful organizing” (Weick & Roberts, 1993, p. 357). But with such elaborate legislative frameworks in place as in the pharmaceutical industry, how do employees experience their room for maneuvering and for acting ethically? And how do staff and managers perceive the ethical dilemmas they meet? Is it enough to have followed the rules? And what happens in situations when there is a wider space for interpretation of such rules? How does moral reasoning take place at the intersection between legislative frameworks, financial considerations, scientific possibilities and human lives? And what domain outweighs the others at which points in time?

These are the questions that I hope to answer by studying within – and in partnership with – a pharmaceutical company. The project only started in January, so if you are interested in the answers to this, be patient, and stay tuned!

Anna Kirkebæk Gosovic is a PhD student at the Department for Management, Society and Communication at Copenhagen Business School. She is working on business ethics within a multinational pharmaceutical corporation.

Pic by G. Crescoli, Unsplash.