April 08, 2017
Corporate Leaders and Change
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Over the past eighteen years, my research, writing and consulting work has and continues to address issues that are stretching the social fabric of our global society. The current actions and resulting responses we are currently witnessing in our world represent only a small percentage of critical issues that are negatively impacting people across the globe. As I have continued to posit throughout my journal articles, book chapters and books, our world is in crisis and it will take a very strategically focused series of deep change efforts to turn it around.
While governments are clearly responsible for taking aggressive change-oriented actions, many firmly believe that on a world-wide level, corporate business leaders also have a responsibility to produce change that will critically address how we view and value humanity. It is clearly an atrocity to have entities such as the United Nations in 2017 continue to address issues such as child labor, unfit working conditions in developed and undeveloped countries; damages to our climate, and the list goes on.
In December 2016, Palgrave Macmillan (New York) released my latest book: Leadership for Global Systemic Change: Beyond Ethics and Social Responsibility. This article is an excerpt from that book (pages 29-32). As I have listened to the news over the past few days, cried because of the atrocities that have been committed, I felt the need to share with you some of my thoughts regarding change and the role of business leaders in bringing about change, which are articulated in this book.
I also respectfully
"...employ you to walk with me as we vision a different world through a lens of business ethics and social responsibility that is moved to a higher level that we have previously encountered. Strategize with me as I suggest ways to take our present efforts to a higher level and build upon them, but most important, believe as I do that our world deserves better. You see, I truly believe as William Shakespeare posited many years ago that “it is not in the stars to hold our destiny but in our selves. “William Shakespeare [i] (Robinson-Easley, 2016, p. 12)
The Power To Produce Change
Many corporate leaders hold more power than their government counterparts. Their power and impact are immense and continues to grow. Let’s take a historical look at the growth of their power and impact; particularly their economic impact. Over fifteen years ago, Korten reported that the aggregate sales of the ten largest corporations in the world exceeded the aggregate GNP of the world’s hundred smallest countries. Equally interesting, the 133 billion sales revenues of General Motors (using GM as an example of corporate power), came close to the combined GNP of Tanzania, Ethiopia, Nepal, Bangladesh, Zaire, Uganda, Nigeria, Kenya, and Pakistan (2001).
What did these numbers mean in terms of world domination at that time? Very simply, the world’s 200 largest industrial corporations controlled 28.3 percent of the world’s economic output (2001). Additionally, the top 300 transnationals at that time (and Korten excluded financial institutions) owned close to 25 percent of the world’s productive assets (2001). In other words, corporations rather than abstract economic forces or governments are the entities that create and distribute most of the economy’s wealth, innovation and trade; and they have the ability to raise (or not) people’s living standards (Ghoshal, Bartlett, and Moran, 1999, as cited in Aranzadi, 2013).
Rethinking A Roadmap For Change
If we want to produce deep systemic change in our world, we should start with the people who possess the economic means to make a change that goes beyond programmatic initiatives and marginal social responsibility strategies.
“Rather than accept the assumption of economists who regard the firm as just an economic entity and believe that its goal is to appropriate all possible value from its constituent parts, we take a wider view. Our thinking is based on the conviction that the firm, as one of the most significant institutions in modern society, should serve as a driving force of progress by creating new value for all of its constituent parts.” (Ghoshal and Bartlett, 1997as cited in Aranzadi, 2013)
Leaders need a roadmap for change in order to understand, internalize and shift the relational boundaries of the systems they control. Understanding the interconnectivity of these systems can help leaders identify, develop and implement a strategy for bringing forth different outcomes. Yet, without a strategy and implementation processes that will move an organization beyond compliance, organizations will continue to grapple with ethical issues.
This need is global. For example, in the mid 1990’s Japan began to follow a model of compliance ethics, similar to the 1980’s US response to ethical issues, which focused on preventing scandals (Nakano, 2007). Japanese companies established business ethics systems that closely resembled the US compliance models after a series of corporate scandals, which included pay-offs to extortionists (2007). These efforts continued in response to scandals in 2000, such as the Yukijirushi milk-poisoning incident and Mitsubishi Motor’s defects cover-up (2007).
What was interesting about the Mitsubishi Motor issue was their proposition that it was unclear to them how such a pattern of deception could have gone on for so long without the knowledge of high-level executives. Yet the CEO, Mr. Kawasoe, said he had no knowledge of the cover-up until it was documented in an internal investigation submitted to the government.[ii] The internal investigation found that employees had repaired the defects and had initialed customer complaints with an ''H'' for ''hitoku,'' which meant conceal, or ''horyu,'' which meant defer or hold. In both cases, none of the complaints were reported to the government.[iii]
Nakano suggested that the largest cause of the failure of the ethics systems that were put into place in response to these issues was that Japanese culture, which is high context, does not support a compliance-orientation (2007). What this means is that in the culture, meaning and associated value propositions are inherent in actions and as a result are not required to be explicitly documented.
During a research study, Nakano noted as an example, the response of one of his interviewees who suggested ‘an organization that has to express the most important things by putting them down in writing is doomed to failure’ (2007). Taking this construct further, an organization that is high context internalizes the values and resulting ethical behaviors and as a result, they do not need to be relegated to compliance codes.
Yet, something seriously went wrong at Mitsubishi during this time, which suggests a flaw in that hypothesis. Somehow, the moral perspectives of that organization had internalized unspoken agreements—another high context issue—that it was okay to cover up serious mistakes.
Leaders always have to be aware and intentional in their understanding as to how they are perceived and what are the guiding praxes of the culture, and resulting norms and behaviors of their organizations. In other words, they have to understand how their organization perceives how they “walk their talk”. There should be an active intention to deconstruct the organization’s behaviors via an authentic engagement in dialogue. Yet, in many cultures, particularly those where leaders are the ultimate authority, this may be hard to do, so there is a need to be very intentional in understanding the organization and taking the time to authentically engage the people. Leaders cannot afford to articulate certain value systems and have their behaviors interpreted as representing something else. Leaders may not even be aware of how their behaviors are being interpreted, which is why understanding the power of dialogue within the organization, as suggested throughout this book, is important.
There are many organizations that have internalized the commitment to make a difference in our world and are living out their ideals. But there are many more that have not engaged in an intentional strategy to make a difference. Unfortunately, not every organization is taking the responsibility to live ideals that are consistent with valuing humanity. If we are to continue to grow as a productive global village that values each individual as an intricate and important contributor to our global society, there is much work to be done.
“Whether a corporate leader, head of an NGO, or government entity, can leaders afford to not look at the issues facing both their organizations and the social and economic contexts in which they live and work from a systems oriented lens? If leaders and their respective management teams are truly the moral agents of the organization, what do their actions say about these individuals when they fail to require their organizations and any tiered subcontractor to respect the humanity of those they employ? Is this any different from the diversity issues we face in our local environments?” (Robinson-Easley, 2014, p. 116)”
(C.A. Robinson-Easley, 2016, Leadership for Global Systemic Change: Beyond Ethics and Social Responsibility, New York: Palgrave Macmillan, pp 29-32),
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