Simulation Of A Socially Innovative Enterprise Globalisation A Goldmine For Corporates

Simulation Of A Socially Innovative Enterprise: Globalisation A Goldmine For Corporate

Contents

TOC o “1-3” h z u 1.0 Introduction PAGEREF _Toc376342405 h 12.0 Brief Overview of the Article PAGEREF _Toc376342406 h 13.0 Evaluation of the Article Using Systems Thinking Theory PAGEREF _Toc376342407 h 24.0 Evaluation of the Article Using Corporate Social Responsibility Concept PAGEREF _Toc376342408 h 45.0 Conclusion, Reactions and Recommendations PAGEREF _Toc376342409 h 5

1.0 Introduction

A socially innovative enterprise draws on the strengths of its immediate community to create solutions to organisational, social, and environmental challenges. Such approach to solving societal challenges draws on the systems thinking theory which posits that organisations forma crucial part of the broad system, the universe, where several parts/components work in concert and interact amongst themselves to make the world a better place to live in (Ackoff, 2010). In essence, the systems thinking theory forms a strong basis on which the social theory that houses the concept of corporate social responsibility is anchored (Adam, 2004). The gist of the systems thinking theory as approached through the corporate social responsibility lenses is that, each element, that forms the broad system, the universe, must show some advanced level of care to other elements, must work in unison with other elements, and most importantly, must build strong relationships and structures to address the dynamism that characterise the universe (Gharajedaghi, 2005). Unlike the traditional thinking approach that lends itself to simplicity, isolation, statics, and specificity (Ackoff, 2010), the systems thinking approach attempts to reshape the human face, by creating an atmosphere of hope and prosperity for everyone.

This essay analyses an article titled “globalisation a minefield for corporate(s)” written by Andrew Hammond and published in the New Zealand Herald on May 29, 2013. The essay employs core theories such as the systems thinking approach and social corporate responsibility to explain how multinational corporations operating in foreign countries can employ social innovation practices to solve social issues such as unemployment, poor wages, poor healthcare systems, and poverty.

2.0 Brief Overview of the Article

In his scathing corporate governance article, Hammond (2013) contends that globalisation of commerce has opened Pandora’s Box for corporate entities. Pushed by the long-term strategic plans to maximise profit margins, large multinational corporations find the alternative path presented by globalisation attractive in their quest for building empires. Yet, Hammond feels that most multinationals rush to make a mark in foreign markets without undertaking an objective analysis of their core competencies and capabilities related to the sensitive area of foreign policy. While using the example of Google “diplomatic” row that drew perennial rivals, Israel and Palestine, Hammond shows that Google’s inadvertent decision to change its name on its “Palestine territories” homepage to “Palestine” has opened a new turning point for business decisions. Though Hammond acknowledges the fact that Google, and in extension, any other multinational for that matter, is not a diplomatic entity, the company has a duty to maintain friendly ties with the host nation governments. The gist of the article blurs the otherwise traditional thinking that business entities should not take part in charting the path for political, human rights and even legal matters.

Hammond links this turn of events to globalisation and technological innovations. He also draws on the example of the Egyptian revolution where multinational companies played a central role in shaping the developments that led to the protracted demonstrations and the subsequent ouster of Hosni Mubarak. Specifically, Google and Twitter collaborated in creating a forum that allowed demonstrators to express their frustrations and communicate amongst each and to the world in real time. Such direct involvement by the business community cannot be restricted to technological companies because companies representing mining, energy, and fast moving consumer goods have joined hands too to end abuse of basic human rights. However, these multinational corporations lack what Hammond boldly describes as “corporate foreign policy”, a receptive strategic framework that defines and packages their external affairs activities such as media relations, government affairs, corporate social responsibility, risk management, and operational planning, into one framework.

In a nutshell, Hammond believes that multinational corporations must embrace sound foresight and horizon scanning capabilities in order to accurately anticipate opportunities and threats in the social, economic and political environments in the host countries. Further, Hammond is convinced that multinational corporations, especially those in the fast moving goods and those operating in countries with prone to civil crises or even those with weak democratic structures, must formulate clearer internal guidance structures to aid in decision-making, delivering value to stakeholders, and to complying with conventional corporate governance standards.

3.0 Evaluation of the Article Using Systems Thinking Theory

Hammond (2013) offers a bold and sweeping analysis of the challenges that multinational corporations go through in foreign markets. He however contends that though these multinational corporations can choose to mitigate the challenges if they adopt receptive corporate foreign policies. Arguably, this way of mitigating diplomatic challenges lends itself to the systems thinking approach. The systems thinking approach acknowledges that components that make the universe or a society must work in concert with each other (Ackoff, 2010). Unlike the traditional approach, the systems thinking theory contends that components making a system interact and influence each other in making the system work well (Skyttner, 2006). For example, an organisation is made of many functions such as marketing, human resource, finance, and operations, many stakeholders such as suppliers, customers, employees and the community, and processes such as procurement, recruitment, distribution and product development. Arguably, these components interact with each other to help the organisation achieve its long-term profitability goals. According to Hammond (2013), a systems thinking approach, or an approach where multinational corporations package the component of their strategic plans in a receptive framework help them (multinational corporations) to align these functions, stakeholders and processes with best practices as part of collective efforts to mitigate risks. In nutshell, and as Skyttner (2006) posits, systems thinking approach considers a business enterprise to be only one of the many components that make the broader system, the universe, and therefore business enterprise must work in concert with other components such as the community, government agencies, and environmentalists.

Organisations must demonstrate a fine grasp of the implications of their actions no matter the situation. Hammond (2013) shows that organisations must be guided by the actions of its employees must demonstrate a fine grasp of issues that make up the broad system within which it operates. Hammond postulates that organisations must scan their horizons well, gather and process raw data into information, interpret information to create knowledge and ultimately convert that knowledge into wisdom. It is this wisdom that underlies broad decisions and policies that characterise organisational culture and activities (Tsoukas and Vladimirou, 2001). These broad decisions involve making a distinction “within a collective domain of action, based on an appreciation of context or theory, or both” (p.979). For example, Hammond (2013) shows that Google and Twitter made a broad decision to launch the “tweet to speak” initiative to encourage Egyptians to protest against bad governance during the Egyptian revolution that culminated in the ouster of the long-serving Egyptian leader, Hosni Mubarak. Arguably, this bold decision was as a result of Google and Twitter’s ability to objectively analyse the situation. The decision was bold because another mobile telephony company, France Telecom was forced by the regime to shut its network. Arguably, and while drawing from Ackoff (2010) F-Laws of management, the bold decision by Google and Twitter was advised by the realisation that oppressive regime was hindering the smooth interaction of other components of the Egyptian social, economic, and political system.

4.0 Evaluation of the Article Using Corporate Social Responsibility Concept

Corporate social responsibility entails the commitment to the tenets of sustainable economic development. These tenets entail working closely with employees, their families and the communities in general to enhance the quality of life experiences (Wei, 2011). Arguably, enhancing the quality of the lives of the masses can only be achieved by developing solutions for addressing societal challenges such as unemployment, poverty, disease, and ignorance. In his article, Hammond (2013) is convinced that multinational corporations can meet their corporate responsibility obligations by rolling out responsive corporate foreign policies that will chart their long-term sustainability development goals. In essence, multinational corporations must develop friendly ties with their host nation governments, civil society agencies, and community based organisations. These friendly helps to reduce duplication of efforts because they will result in wise prioritisation of corporate social responsibility programmes (Sacconi, 2004). However, Hammond (2013) is quick to clarify that such friendly ties must be charted within the provisions of the 1st and 2nd principles of the United Nations Global Compact. These principles require business organisations not to take part in human rights abuses and to respect and protect the internationally recognised human rights principles (Fialka, 2006). Both Israel and Palestine have been accused by the global community for perpetrating human abuses and therefore Google’s change of name only served to heighten the tensions between the two countries.

Multinational corporations must show a sense of awareness of the implications of their actions to the host countries. According to the United Nations Global Compact, multinational corporations must employ social innovations to solve social issues such as abuse of human rights and reduce the run-away unemployment issue that characterise most developing nations. Hammond (2013) reasons that in a technological age where large media houses such as CNN and Aljazeera work closely with community-based and environmental-watch organisations such as transparency international and Greenspan, there is every reason that multinational corporations should show care to the environment and the communities in which they do business. This is in tandem with the 7th, 8th, and 9th United Nations Global Compact principles which requires business entities to support environmental conservation initiatives, be environmentally responsible, and develop environmentally friendly technologies (Totikidis & Heenitigala, 2008). Though reservedly, and as Hammond (2013) reasons, Google and Twitter joint initiative to create a platform for the demonstrating Egyptian to share their experiences could be perceived to be an act of corporate social responsibility. In essence, the initiative could be described as socially beneficial to the Egyptians given the foregoing circumstances where the Hosni Mubarak regime was perpetuating human rights abuses.

Best corporate social responsibility and corporate governance practices require multinational corporations to structure their strategic plans around the United Nations Global Compact principles, especially the last principle on corruption. This principle requires that business enterprises must ensure that their operations are transparent and free from all forms of corruption, extortion and bribery (Wei, 2011). Most importantly, multinational corporations must promote social progress, must enhance standards of living and human rights (Fialka, 2006). This is in tandem with strong sentiments made by the former United Nations secretary general, Kofi Anan, who decried the increasing levels of ills perpetuated by business enterprises. According to the United Nations Global Compact (2013), Anan said that the world must choose between pursuing short-term profitability goals and adopt a human face, between condemning the human race to starvation and giving everyone an opportunity to realise their maximum potential in a safe environment, and most importantly, between an egocentric free-for-all business approach where losers are left to fend for themselves and a situation where the strong and the successful in the society conduct their activities in a responsible manner demonstrating sound leadership and care for the environment.

5.0 Conclusion, Reactions and Recommendations

In recommendation, Hammond (2013) reasons that multinational corporations can mitigate the challenges posed by diplomatic standoff between nation states at the international market arena by embracing dialogue and collaborate with stakeholders. As a matter of fact, Hammond quotes an example where Barry French then Nokia Siemens Networks appealed to members of the European Parliament to intervene so as to lift a ban European companies barring export of surveillance technology to Iran, following the country’s disputed elections in 2009. Nokia Siemens was already facing challenges doing business in Iran and was therefore appealing to European Union to consider resolving the diplomatic deadlock with Iran. The fact that this appeal was made in a human rights and new information technologies hearing convened by the European Parliament in June 2010 (Hammond, 2013), underscores the need for adopting sound corporate governance practices that recognises and respects the right of human beings to accessing modern information technology gadgets.

This is in tandem with the systems thinking approach where components making a system must interact with each other, consult each other and work in concert with each to allow for easy execution of the system goals (Ackoff, 2010). There should be a close exchange of ideas between organisations and other components that make the host country social, economic, and political system (Gharajedaghi, 2005). In a nutshell, multinational corporations operating in foreign markets must deploy systems thinking and corporate social responsibility theoretical assumptions to develop sustainable business practices.

References

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