Peace through Commerce: Responsible Corporate Citizenship and the Ideals of the United Nations Global Compact

Multinational Enterprises

C H A P T E R 2 0 Multinational Enterprises Interacting with Nongovernmental Organizations Lee Tavis As has been demonstrated in this volume, it is to the advantage of both corporations and nongovernmental organizations to collaborate if each is to achieve its objectives in today’s information-rich, integrated world. Corporate management is increasingly aware of the need to position their firms to serve social preferences well beyond the basic market model. This awareness is reflected in the burgeoning corporate social responsibility (CSR) efforts. For their part, managers of NGOs see increased opportunities to leverage the extensive human and material resources of the business enterprise in order to achieve the social impact desired by the NGO. These partnering opportunities will be analyzed in this chapter, first from the point of view of the business enterprise and then from that of the NGO. Both will be demonstrated through cases discussed elsewhere in this volume. The relevance of the literature on conflict resolution as reflected in this volume and the possible roles of NGOs with regard to issues in multinational management are extensive, including reassessing the unanticipated development of global policies; enhancing the possibility of dialogue and coalition building; and understanding the nuances of local issues. POSITIONING THE ENTERPRISE The driving force for corporate involvement with NGOs can be analyzed in terms of operations, outreach beyond the firm’s operating 413 414 Lee Tavis environment, and donation programs. The business units of a multinational enterprise are located in diverse economic, political, social, and cultural environments. Each of these settings provides a unique situation that can challenge the uniform standards and policies a firm attempts to apply across its enterprise network. The most difficult component of this managerial tension has to do with the interpretation of local cultures and communities. Policy Effectiveness Management must position each firm to compete in its core business operations . Beyond the overall economic/political/social positioning, when operating in different cultures the enterprise must reassess assumptions about the impact of its standard policies. Mary Anderson posits caution in this regard. Her comments, although directed toward “destructive, often violent, intergroup conflict,” apply to all situations of multinational corporate presence, particularly in developing countries (chap. 6).1 Anderson begins with a distinction between context and conflict, where context is a comprehensive review of issues while conflict focuses on key driving factors in a specific situation. Contextual analysis can be related to corporate policy formulation while conflict analysis would be the implementation of these policies. A central premise 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 then to apply these policies to local situations.2 The Anderson challenge is to emphasize how destructive the blind application of network-wide policies can be. This does not mean that the universal policies are not appropriate to an enterprise, but it does mean that some policies may be totally inappropriate for local circumstances. As an example, standard corporatewide policies to hire on merit, invest in infrastructure, or pay premium wages in developing communities as a means of contributing to development may create local tensions and conflict.3 Again, this does not mean that the enterprise policies are not valid. Nevertheless, it indicates that these policies must be modified or set aside in specific local situations. How does the manager know when to depart from a corporate policy? This involves an understanding of local nuances. The larger the firm as a presence in a community, the more critical this understanding becomes Multinational Enterprises 415 (see chap. 8). The nuances of local communities are always complex. This is abundantly clear in situations such as the informal sectors across Latin America, in slums everywhere, or when local people are under oppression , as was the case in South Africa during apartheid. This caveat applies to a manager from the local community as well as one promoted into that position from another assignment in the enterprise network. The local person is a member of a specific relational group and influenced by its viewpoint, while the outsider may simply miss the point. Interpreting local uniqueness as a basis for policy application is a role that could be fulfilled by the local NGO in the NGO-business partnership . Beyond...