Values-Based Multinational Management: Achieving Enterprise Sustainability through a Human Rights Strategy

4. Partnering with Nongovernmental Organizations

101 C H A P T E R f o u r Partnering with Nongovernmental Organizations Both corporations and nongovernmental organizations must collaborate if each is to achieve its objectives in today’s information-rich, integrated world. Corporate managers are increasingly aware of the need to position their firms to serve social preferences well beyond what the basic market model requires. This awareness is reflected in burgeoning corporate social responsibility efforts. Many of the examples in chapter 3 of implementing an enterprise sustainability strategy involved interactions with nongovernmental organizations. As we move from rule-based to principles-based corporate behavior, the role of nongovernmental organizations as a key component of civil society is becoming central. Effective corporate social action is increasingly a function of NGO partnering. For their part, NGO managers see increased opportunities to leverage the extensive human and material resources of the business enterprise in order to achieve their desired social impact. 102 redefining the role of multinational enterprise These partnering opportunities will be assessed, first from the point of view of the business enterprise, and then from that of the nongovernmental organization.1 I. POSITIONING THE ENTERPRISE The driving force for corporate involvement with nongovernmental organizations can be analyzed in terms of uniform enterprise standards set against the nuances of local circumstances, managerial operating interactions with local communities, outreach beyond the firm’s operating environment , and donation programs. Enterprise Standards and Local Exceptions The business units of a multinational enterprise are located in diverse economic, political, social, and cultural environments. The importance of uniform societal and ethical standards for all of these business units has been emphasized. Just as each multinational establishes global product and production standards, with specific exceptions to fit unique local conditions , similarly, it must establish uniform social and ethical standards, with acknowledgment of local exceptions. Social and ethical standards are, of course, far more complicated than product standards due to the subtleties of cultural differences, the judgments involved, and problems of measurement. Still, each firm must have some set of rules that governs behavior across the enterprise network. Management must identify some universally accepted set of values to avoid being pulled in disparate directions by the many conflicting local demands. This is the critical step in implementing principles that define multinational sustainability. The firm must then establish a set of standards , drawn from the universal precepts, that fit the specific details of the firm. These standards are then applied to all business units across the multinational enterprise network as a form of corporate law, requiring adherence by all internal decision makers. Specific exceptions are submitted to corporate compliance management. On the other hand, reputational capital is not only a matter of determining which global concerns are most critical for legitimacy, but also partnering with nongovernmental organizations 103 a matter of local judgments, including how to minimize countervailing pressures at the local level. For the multinational enterprise, which operates on a cross-country and cross-cultural scale, the conceptual problem of relativism versus universalism becomes the pragmatic problem of local social judgments versus broadly communicated global legitimacy. (The distinction between relativism and universalism has been the topic of philosophical and theological debate over the centuries. In some respects, each culture and religion is unique, while in others, there is commonality across all belief systems. We will return to this issue in later chapters.) The linkage of multiple societies in different cultures creates a challenge for the multinational enterprise as an organization. The good of the person within his or her own culture can easily conflict with uniform standards of behavior established for all business units of the enterprise network. The issue is this: Which cultural characteristics of which society should be established as the standard for the multinational network, and which should be part of local managerial discretion for the individual business unit? Thus, a central task of global management is to identify a set of standards and translate these standards into policies that apply across the firm’s enterprise network. The role of the local business unit is to implement the spirit of these policies applied to local situations. Interpreting Local Communities From a grassroots, conflict-resolution perspective, Mary Anderson provides great insight into the importance of local exceptions to uniform standards.2 She makes a distinction between context and conflict: “context ” involves a comprehensive review of issues, while “conflict” focuses on key driving factors in a specific situation. Contextual analysis...