BS

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Readings:

"Social Entrepreneurs Go Mainstream" (attached above)

"A new kind of company"  

http://www.inc.com/magazine/20070701/priority-a-new-kind-of-company.html

 

"Who will rule?"

http://www.yesmagazine.org/article.asp?ID=1827

"Living wealth: Better than money" 

http://www.yesmagazine.org/article.asp?ID=1834

 

"Natural capitalism" - an excerpt

 

http://www.natcap.org/sitepages/pid69.php

 

Question;

Before I open our final topic, I want to add a few remarks about our last topic in which we read about the Global Village as Stakeholder.  As with most things we have looked at this semester, there are good and bad sides to globalization as we know it.  On one side of the discussion, people argue that globalization is the tide that lifts all boats. On the other side, critics argue that globalization is the tide that lifts only yachts.  Although we are increasingly called a "global village", some people argue against this phrase, calling it misleading as the processes and outcomes of globalization are uneven throughout the world. For example, statistics suggest that global equality remains and will continue to remain largely unrealized and that the economic growth of the past few decades has benefited the rich far more than it has the poor.  Investment and growth have been unevenly concentrated in certain sectors and regions, while others are almost entirely neglected (e.g., SubSaharan Africa), thus, the alleviation of poverty and the growing ranks of middle classes are occurring unequally throughout the world.  Although there is general consensus that actual global poverty levels have decreased in the era of globalization, inequalities—both between and within countries-- in access to education, health care, nutrition, safe infrastructure, and healthy ecosystems have increased. Furthermore, the global income gap segregating the rich from the poor, both between and within countries, is growing significantly and is likely larger today than it has even been in history, serving to increase the relative poverty of poor populations (UC Atlas of Global Inequality).  Despite the reduction in actual levels of poverty, the World Bank estimates that 1.4 billion people still live in extreme poverty (approximately $1.25/day).  If we are to truly be a "global village", the "playing fields" (as Thomas Friedman refers to it) must truly be leveled and all village members must have equal opportunities and support from other "village" members.

 And now onto our topic, The Stakeholder Model for Change...

Throughout the course, we have discussed many of the challenges associated with the market economy and the values and implications of the market logic and our historic focus on the shareholder to the near complete exclusion of all other stakeholder groups.  I especially like this topic because we focus on potential and real-world solutions to many of the problems we have been concerned with this semester. If you recall from our course syllabus, this course challenges you to consider the ethical obligations of corporations and their employees to a wide variety of societal stakeholders. Most significantly, this course encourages you to critically examine the relationships among organizations and their surrounding social and natural systems so that you can ultimately use the information and skills gained to contribute to positive social change. 

To succeed in this goal of contributing to positive social change, it is necessary for us then to spend a good deal of concentrated time discussing potential solutions to the very serious dilemmas we’ve encountered throughout the semester. Although we have integrated solutions to the dilemmas throughout the term, I hope in this final segment you will seriously consider alternative models to the current status-quo of profit-minded business as usual. 

In other words, throughout the term we have extensively studied and discussed the traditional economic rationale upon which we have historically relied (e.g., Friedman’s philosophy of the business of business is business). Using the examples from this week’s readings and videos, I want you to seriously ask yourselves if we really have to (or even if we can) continue using this economic rationale. There is no natural law that mandates profit maximization as the fundamental goal of business. The fundamental pursuit of profit originated from man-made social systems. Why can’t our philosophical and moral groundings change so that businesses are expected to contribute to society overall and not just to their shareholders' bottom lines? In other words, why can’t businesses have dual pursuits— to do well (financially) and to do good (for society)? Can we realistically continue to rely upon the same economic rationale that guided us through the industrial revolution? Do not the complexities and challenges of the 21st century require this philosophy to evolve?

While it is unlikely that the solutions to the challenges we have discussed this semester require the end of globalization or of the market structure, it is critical to examine the assumptions and processes of these systems with the intention of contributing to and elevating the importance of examining organizations in light of their sociological and natural contexts.  In other words, we should consider using the stakeholder perspective to examine businesses. Moreover, we need to focus on taking a holistic view of the Western history of industrialization and apply our hard-learned lessons to the contemporary progression of globalization and the spread of market and shareholder logic throughout the world.

  

To guide our thinking this week, I want to present you with this quote from Zygmunt Bauman in his article The Ethical Challenges of Globalization (2001:8):

“ The question is not how to turn back the river of history, but how to fight its pollution and to channel its flow toward more equitable distribution of the benefits it carries.”

As Bauman suggests, the answer does not lie in denying the potential life improvements of contemporary technological and scientific advancements to the world’ s poorest communities.  The fruits of the global market must be more evenly distributed throughout the global stakeholder groups, not simply among the official shareholders of organizations.  There must be a more fair and just way to operate markets and to redistribute the global imbalance of power between the global citizenry and the powerful patrons of globalization.  Or, as another business researcher, Gardels (1997:2) refers to as a “ tempering of the insecurities and inequities of the invisible hand.”

Businesses, international organizations, governments, communities, and individuals need to adopt a long-term perspective and a commitment to social responsibility. 

Finally, research into the triple bottom line in which economic, environmental, and social performance are deemed as equal priorities show preliminary evidence that a holistic perspective has the potential to be profitable for organizations in the long-term and can provide needed change in the profit oriented business environment of today. 

I look forward to hearing your thoughts inside… 

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