Toy stories, how diversity improves businesses and the cradle-to-cradle approach
Managing the message
Today’s press is quick to jump on corporate ne’er-do-wells. The authors’ analysis in this paper of a decade’s worth of media coverage relating to product recalls in the toy sector categorically confirms this. Furthermore, if a firm is the sole guilty party, it can expect to “garner disproportionate condemnation”, the paper finds. Interestingly, if the reputation of the industry is already bad, the tone of the press is likely to be less negative. On the flip side, completely innocent companies can find their reputations smeared because of the malfeasance of an industry peer. The organisational research literature refers to this knock-on effect as “guilt by association” or “negative spillover”.
Drawing on insights from crisis management and impression management, the authors unpick the interdependencies among firms and the dynamics of corporate-media relations to indicate how companies might best respond. Firms typically opt for one of two strategies: a) technical responses, ie actions designed to address the wrongdoing, or b) ceremonial responses, ie actions aimed at stressing the company’s positive traits and influencing stakeholder perceptions accordingly. An example of the first would be Mattel’s monitoring of manufacturing facilities by involving an “independent monitoring council”. The same company’s decision to arrange a “Play-A-Thon” and have children raise money for charity would be a classic example of the second strategy.
So, which to choose? This is where insights to the first strategy come into play. Technical actions are a must if the company is itself guilty. Any attempt to respond ceremonially will merely heighten public scepticism. Yet a technical response when the fault lies exclusively with an industry peer may be counterproductive as it potentially identifies the innocent firm with its crooked industry. In such cases, an innocent company is better advised to engage in ceremonial actions. These can distance it from industry wrongdoers “by deflecting the attention of the media away from the transgressions of peers and toward the focal firm's positive actions and attributes”.
Zavyalova, A et al (Fall 2012), “Managing the Message”, Academy of Management Journal, Vol 55 (5): 1079-1101.
Virtue of diversity
Diversity has raced up the business agenda over the past two decades. Empirical evidence suggests that taking issues such as age and gender seriously makes commercial sense. Diversity leads to increased creativity, higher-quality decisions, more innovative solutions, and so forth. An open-and-shut case, you might say. It is and it isn’t. For what makes sense to a business manager (ie utilitarian instrumentalism) doesn’t necessarily coincide with how a business ethicist sees the issue (ie deontologicalism). For the latter, it all comes down to power, not profits. The diversity agenda, in their view, is a means to empower minority groups and transform perceived power inequalities.
To avoid the interminable discussions that surround the issue of diversity in business, the authors propose a third perspective: that of “virtue ethics”. The concept comes into its own in the recruitment and selection process. Companies must identify and prioritise “ideal-type virtues” for vacant roles, the paper proposes. So, take a nurse. Suitable virtues for candidates may be compassion, courage and respectfulness, for instance. Indicators of such virtues then need to be established, such as positive patient rating for respectfulness of being female. During the process of discussing and debating these virtues and indicators, “stereotypes can be addressed and corrected in order to create the profile of the ideal type”. Not only should such an approach improve an organisation’s diversity composition, but its overall performance should improve as well.
Van Dijk, H et al (Fall 2012), “Reframing the Business Case for Diversity”, Journal of Business Ethics, 111: 73-84.
The Desso case
Picture yourself as a foreman at Netherlands-based carpet manufacturer Desso. You’ve been in the job for 25 years. Then word comes from on high that the company is now pursuing a cradle-to-cradle (C2C) approach. First you need to establish what it means (“making products from such pure materials that you can endlessly recycle”). Then, you need to work out the practical details in terms of how you manage your supply processes. Questions about material flow, logistics and product retrieval jump into your head. Dilemmas over which tasks to prioritise and which organisations to partner with assail you.
This is the scenario laid out in a new case study by the University of Exeter’s Business School. The study forces students to rethink traditional notions of supply chain management, questioning established truths around “upstream-downstream” hierarchies, pricing models, open-loop logistics and the like. In their place appear concepts such as “upcycling” and “eco-effectiveness”. One message is clear: successful implementation of the C2C model centres on the co-evolution of change “across a wider socio-economic and technological system”. The right incentives, rules, relationships, infrastructures and so forth are required to “lock people into linear ways of doing things”. A fascinating and thought-provoking case for anyone interested in breaking with the old-style “take, make, waste” system of industrial production, student or not.
Howard, M et al (Winter 2012), “Desso and the Cradle-to-Cradle Challenge”, Exeter University Business School. Case study: 612-032-1
Campus news
The UK-based Doughty Centre for Corporate Responsibility at Cranfield School of Management provides details of its research activities during 2011-2012 in its new annual report. The centre’s recent output includes 19 academic papers and other publications.
Professor Veerabhadran Ramanathan has been appointed to the Unesco chair in climate science and policy at Teri University in New Delhi, India.