Tomorrow's Global Company - Section 4 - Embedding Values
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Summary

Putting values to the test


Unilever’s Code of Business Principles commits the company to “recruit, employ and promote employees on the sole basis of the qualifications and abilities needed for the work to be performed.” In Saudi Arabia, society discourages women from working outside the home on cultural grounds. However, in order to uphold company values and to respect local customs, the company’s local managers secured permission from the authorities to employ women in the business, by arranging for them to work in a separate office.46

Luc Zandvliet, Director of the Corporate Engagement Project at the Collaborative for Development Action, questions whether Sudan's civil war would have caught the world's attention had it not been for the presence of a publicly-traded, Western corporation. He finds the sale of controversial holdings in countries like the Congo, Burma, and Sudan to non-Western companies troubling. "When Talisman entered Sudan, it turned a spotlight onto the socio-political conditions facing the Sudanese. It asked the questions that non Western companies typically don't ask. I can't help but think that the Government of Sudan would be relieved by the exit of Talisman and the attention of the Western media.” 47

Many companies, including BP and Shell, faced opprobrium for years for working in apartheid South Africa. Yet they would argue that their presence provided a focus of enlightenment and tolerance which would otherwise have been absent, as well as helping to create wealth for workers, families and communities. The stance of such companies appeared vindicated years later when Nelson Mandela visited them and thanked them for remaining in South Africa at that time.  For Anglo American - at that time a South African company born and bred - there were also real pressures. The company was the operator of many large mines using thousands of black migrant workers. At the same time the company used its influence through its ownership of the leading opposition newspapers, funding the constitutional opposition, encouraging the recognition of black trade unions and investing in black education. The Chairman of Anglo led the first business delegation to meet the ANC in Lusaka in 1986 and provided the facilities for the first meeting in South Africa of the ANC once it was no longer banned. The company’s scenario planning exercise was also influential in persuading the white community that they needed to find a new way forward in South Africa.

Standard Chartered – “As well as opportunities, we also encounter the costs of turning business away, a risk we also have to manage. For example, we decided not to back a proposed $55 million petrochemical deal in Asia because it carried high sustainability and governance risks.”

In 2004, Ikea cancelled its grand opening of its shopping center in Chimki, outside of Moscow, Russia. Lennart Dahlgren, Ikea's chief in Russia said the real reason for stopping the opening ceremony was that Ikea refused to pay bribes. According to Mr Bengtsson, a few days later Ikea got permission to open the shopping centre after Swedish founder Ingvar Kamprad appealed to the Russian president Vladimir Putin and the 200 shop owners that were to be established in the centre complained to the authorities.48

Dr Reddy’s in Hyderabad shared with others a Common Effluent Treatment Plant (CETP). They discovered that it was only partially treating effluents. Regulations merely required Dr Reddy’s to send effluents to this CETP: the company pulled out of the co-operative that maintained it and built its own Zero Liquid Discharge Facilities. This is an example of the ‘Environment First’ philosophy, embedding positive environmental action not as a choice but as a non-negotiable.

Since completing a series of mergers around the turn of the century, BP has been seeking to embed consistency across a diverse set of businesses around the world through adherence to a single set of values, management framework and code of conduct. Business units such as refineries or upstream production projects are required to work to standards laid down by experts in functional subject areas such as safety or IT. This creates an inevitable tension and the company’s challenge is to ensure that global standards are followed while maintaining a strong sense of accountability among the business units.
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