Theme 7: Partnership Approaches to Involving Business

[Peace Through Commerce]

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A discussion moderated by Dean Krehmeyer, Executive Director, Business Roundtable Institute for Corporate Ethics Visit Biographies for more about presenters

How can partnerships help business in contributing to peace and stability?
One of the often recommended approaches for fostering peace through commerce is a partnership model. Because businesses may not have the expertise or capabilities to know how best to engage in a geographic area, they team with those who can provide them with such insights.

Presentations:
Partnership Approaches to Advancing Business' Contribution to Peace - with NGOs and Employees
Watch the four videos and join the discussion with presenters below.

	Norman Bishara, Assistant Professor of Business Law & Business Ethics, and Cindy Schipani, Professor of Business Law, Ross School of Business, University of Michigan "Complementary Alternative Benefits to Promote Peace " (6:12)			Kimberly Eaason, Director of Strategic Relationships, TransFair USA "Fair Trade Certification: Good Practice for Business and Increased Prosperity for Developing Communities" (7:03)

	Virginia Haufler, Associate Professor of Government and Politics, University of Maryland "New Institutional Models: The Kimberly Process" (6:37)			Michelle Westermann-Behaylo, Doctoral Candidate, George Washington University "Institutionalizing Peace Through Commerce: The Partnership Dimension" (3:06)

Resources

• Innovations in the Institutional Environment: The Kimberly Process Certification Scheme, Virginia Haufler
• Complementary Alternative Benefits to Promote Peace, Norman Bishara and Cindy Schipani
• Institutionalizing Peace Through Commerce: South African and Sudan Divestments, Michelle Westermann-Behaylo

Discussion: How can partnerships help business in contributing to peace and stability?

1. For the business partnership models presented, what are the unique strengths? Are these models replicable, and what are the hurdles to replicating?
2. Where should the discussion of business partnership models be initiated – is this primarily a management-led issue or a board/governance-led issue? Who could most make positive action happen?
3. Does the partnerships described in the presentations reduce risk? Create value? How would a newly hired MBA-graduate who has participated throughout the “Business Fights Poverty” eConference make the pitch for their company to “get on board”?

[Tim Fort]

I am delighted to welcome Dean Krehmeyer, who runs the Business Roundtable's Corporate Ethics Institute. Dean is a long-time supporter of the business and peace connection, contributing intellectually, financially, and logistically. Dean's work is critical - how to translate good research into workable, pragmatic applications: exactly what we are trying to do through this eConference. This particular week is a good example of scholars attempting to do this and that makes Dean an ideal person to moderate this week's theme.

Tim

Timothy L. Fort, PhD, JD
Exec. Director, Institute for Corporate Responsibility
Lindner-Gambal Professor of Business Ethics
George Washington University School of Business
Professorial Lecturer, George Washington Law School

[In Je Yeo]

The merging of two totally different corporations sounds wonderful. I agree with Devon Rose's comment about making a great enviorment for employees will help enriching the peace in workplaces. It is true that many of the employees, espeically sales people get huge pressures for their company objectives and monthly sales goal. That stresses lead people become careless about peace. It is not their fault that they consider less about peace as we all are living in competitive world. Like Devon Rose mentioned, Microsoft or Google's effort to make better work place will definitely help ensuring peace in society.

Thank you.

[Dean Krehmeyer]

Welcome to this week’s discussion on Partnership Approaches to Involving Business. I am really looking forward to our on-line exchange and learning this week. As an initial kickoff, I would first encourage you to briefly browse through the preceding sessions; many of which are connected to this week’s issue.

A key question that you see for the week is, “How can partnerships help business in contributing to peace and stability?” You may notice the implied assumption in the question, namely, that partnerships indeed do help business in contributing to peace and stability. I believe this assumption to be true. The examples of both individual companies and initiatives on behalf of groups of corporations are evidence of this. I’ll be providing some examples that I believe bear this out during the week, and I invite you to do the same.

Peace and stability are of crucial importance for leading businesses to create value broadly across their stakeholder groups. The discussions we have this week and throughout conference provide important insights for academic research, student exploration, and corporate action. For myself as well as likely for many of you who also work at business schools, this issue takes on even greater importance. Business schools have come under renewed criticism in recent months about what we can teach today’s students – tomorrow’s leaders – about ethics, values, and the role of business in society, including promoting peaceful and stable societies. We need dialogues and conference exactly like this that truly connect business leadership with these values, principles, and objectives.

I invite you to review the video presentations and materials in this week’s session and share your thoughts on this important and timely issue. I look forward to your contributions and our exchange of ideas.

Best,

Dean

[Joshua Birnbaum]

When public and private organizations agree on a partnership to ensure peace, I feel it is almost as if two corporations are merging to execute shared business goals. In this day and age, it's almost impossible to successfully execute a merger of equals. My question is, what does that mean for business and government? Do you need one or the other to maintain dominance in order to be successful? My initial feeling is that you would need one to be more dominant, but that one would need to be government. But, that's just my initial reaction.

Does anyone have any thoughts? Is my analogy even applicable?

[Dean Krehmeyer]

Joshua-
Thank you for your thoughts on the business and government partnerships. I think your mergers metaphor is appropriate and highlights key questions in the somewhat uncharted water we are seeing these days about business and government partnerships - whether they were originally intended to be "partnerships" or not. I'm thinking of the lessons that could be taken from the recent executives bonuses at AIG for one - as many folks noted in the media and elsewhere, the government was essentially an 80% "shareholder" in the entity. Yet, while most 80% owners or companies are represented in the boardroom for these type of compensation decisions, this lively discussion took place in the public forum of Congress and the very public pages of the media. Interesting lessons to be learned to avoid repeating the events, I believe.

I look forward to hearing the thoughts of others.

Dean

[Virginia Haufler]

I like the analogy with mergers, and the question about relative power within a public-private partnership. I haven't seen any analyses that looks at this question, and there may be too few of them yet for us to to detect any patterns. My impression, based on the ones I have studied, is that they tend to assign the different actors different roles, and in some cases no one partner is dominant. In other cases, the partners are constantly negotiating/ adjusting their relative dominance.

[Devon Rose]

Bishara's video and paper discussed how companies can inspire employees to positively impact their workplaces and consequently, society. This is new evidence which supports the efforts of companies such as Google and Microsoft, who go above and beyond to provide stress relief and other support to their employees. Benefits for the company go beyond motivating ethical standards and actions within employees and have long-term effects such as limiting absenteeism and premature turn-over. This is to say that companies can act as leaders in the private sector and hopefully establish new norms in society.

I think that shifts like this should be management-led, because implementing standards may be too difficult across industries. Companies that provide this support to employees will likely see the value add, as supported by Bishara's paper. A shift in norms, in my opinion, should be driven by the private sector and not the government; once companies are convinced of the benefits of such actions, they will be more inclined to support their employees in innovative ways.

[Lori Gera]

I did agree with Norman Bisharas statement that these added benefit programs will help to reduce stress in the work environment. Many companies that offer fringe benefits such as flexible schedules, babysitting centers, and even athletic facilities have demonstrated greater employee happiness which has translated into lower absenteeism and higher productivity and in effect reduced costs for the company. This being said, I definitely believe that this portion of Bisharas statement was true. I agree that this fosters a sense of community within their own business, but how does this in fact create a sense of community as a whole? Are there in fact concrete examples where this has in fact reduced discrimination and created more of a sense of a whole? I feel in our studies, we have seen that extra benefits are beneficial to a company but I would like to know if there is in fact research that indicates that this would be of benefit to the society as a whole. I think the idea of this extending into the broader society does support peace, however, I am curious as to what evidence has suggested that this will in fact develop into a societal trend.

[Joshua Birnbaum]

I definitely agree that CABs should be provided by the management of each company. Government cannot make a law or demand these CABs because, by definition, if everyone had them and they were mandatory then they would be EXTRA benefits. After a while they would become the norm and the cycle would start over again. However, is this cycle inevitable anyway? If there is significant research that these CABs save companies millions then it will become more widespread. But will it become so common that we will eventually have to move above or beyond these benefits? Will we enter a situation where a potential employee might not sign on to be a part of a new company if it didn't provide these benefits?

[In Je Yeo]

As I can answer and support my opinion and thoughts about having a great work place, I also think that having such a comfortable work place might reduce competibility of works as a whole. They can be reluctant about their work since there is no stress on pressure. Thus, in my opinion, companies like Google, Microsoft and other world top companies should always keep in mind that the control of employees and managing them are the key point for success.

Thanks.

[HeeJung Bae]

I agree with this idea of reducing stress in the workplaces so that the employees can work more efficiently and productively, which will benefit the company in large amount because of the extra spillovers by reducing turnover costs. I thought that Google's idea of providing wireless program in employee's car was very interesting and thoughtful. Many companies are currently providing retirement benefit, childcare, health and wellness benefits to their employees. All of these benefits are giving positive influences to the employees so that the employees can contribute themselves better on their works. However, I thought that there might be negative impacts on theses benefits in the future where the employees would believe that those benefits are not actually the "benefits" but the rights what the companies must provide to the employees. Therefore, the employees would be more demanding to get more advantages from the company while the companies will have to cost more to get those employee's needs.

I really enjoyed watching the video about the fair trade certification. This is a really great idea because it not only gives the economic benefits to the producers but also it actually provides those producers an apportunity to directly participate in the business. Even though there are many companies who hold businesses in the third world, the buyers of the product do not know if the producers in the third world are treating farily with dignity. However, because of this fair trade certification, the producers can now have more hope which will bring better future by creating peaceful community. This program brings success in the triple bottom line: economic, social, and envrionmental aspects as well as in the sustainability that we seek mostly in today's world.

[Lori Gera]

In response to question two, I believe that the business partnernships must in fact be management-led. As Bishara stated and even Kimberly Eaason in their presentations, companies must set examples for the community to follow. Management are the individuals who are visible to the rest of the community. Their actions to establish partnerships, be it through offering company additional benefits as suggested by Norman Bishara or offering Fair Trade Products to help promote the growth of countries in need, if these actions are observed by others they are more likely to not only trickle down the individual company itself, but hopefully out into the broader community. Because employees look to management for guidance in actions, I believe that it is imperative that management take a strong position in leading the development of partnernships.