How might one empirically assess the contribution of business actions to peace?

This written discussion is part a new month-long Challenge with Indiana University around the question: “What role can business play in pursuit of peace?”  The Challenge consists an online programme of written articles and online discussions, available on the Challenge homepage.

 

Despite the fact that broad macroeconomic connections between business and peace have long been acknowledged more needs to be done.  This Challenge aims to deepen understanding around the role that business can play in peacekeeping, peace making, and peace building.

This discussion focuses on how one might empirically assess business actions and how such quantification might be valuable for businesses and society alike.  A one-hour live panel will take place on Wednesday 26 October from 10am ET / 3pm UK.

The discussion will focus on three questions:

 

  1. What are some of the options for empirically measuring the contribution of companies to peace?
  2. What are some of the issues involved in measuring the contribution of businesses to peace?
  3. Some argue that we should rank companies on their contribution to peace, or alternatively certify them against some standard.  Which might be better and should they be made public or used to inform internal management decisions?  What role should business play in developing these approaches?

 

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Regarding the first question, I think that it is common for a charity party to rank companies depending on how much they contribute at the end of the party. It is a efficient way to evaluate the contribution of companies to peace becuase the result is direct and observable. Many companies donate much money to NGOs which contribute to fight poverty in poor areas like Africa. At the same time, NGOs may list names of companies on website. It is a way to measure the contribution of companies to peace. Moreover, social media play an important role on measuring the contribution of companies to peace. People will phrase companies which donate to fight poverty on social media. People will critize companies which only consider about profits without social responsibility.

I agree that one way for businesses to contribute to peace is through advertising. However, I think companies should start introduce peace from inside the company; make peace as a part of their corporate culture. Companies can do this by making sure each employee is treated equally in every aspect. Moreover, companies should also make sure that all employees' voices or opinions are heard and responded. Management of the company should start the culture of respecting all employees and all stakeholders related to the company. By doing this, the management has set the tone at the top. When employees see their management respect them and other stakeholders, employees are prone to do the same. Through this, companies will have peace internally. And when companies have peace internally, I believe they will start doing everything to promote peace, including to the society the businesses are in.

I am looking at the second question in the discussion, “What are some of the issues involved in measuring the contribution of businesses to peace?” One issue that arises is that many businesses have different views on peace. A business in the oil industry may view peace differently than a business in the clothing industry. Both businesses may think that they are contributing to peace, but their view on peace may not resonate with the public.

If a business wants to be environmentally friendly, there are many standards and examples that they can employ. However, the first question in the discussion also brings up another issue. Without having some kind of empirical measurement or benchmark that businesses can look at to view their contributions to peace, it is hard to know where they can start and what exactly a business should do.

Another point to consider is if a business is actually trying to contribute to peace. For example, if a business that produces plastic water bottles wants to be environmentally friendly, it may reduce the plastic needed to make the water bottle. On the other hand, by reducing the plastic needed to make water bottles, the business saves money by using less plastic per water bottle. The question then becomes, did the business have the intention to reduce costs in order to increase profits or was it to be environmentally friendly? This question will also come up when a business tries to contribute to peace. Do businesses actually want to contribute to peace or is their motivation to find a way to increase profits?

When it comes to business. One has to see the position they are in. Large business are in a position of power. If they say something people will hear it and it they do something people will react. With this, they are in the perfect position to make a difference. Specially in business there is alot of connection with people. This makes sense for businesses to affect and make a change in poverty around the world.

Jun, your example of giving the companies efforts a numerical figure and giving the efforts a quantitative result are extremely necessary. It does now raise a question of how much is enough? How much money, baskets, and resources need to be devoted in order for them to be able to advertise that they are a business of peace? It's very subjective, and I think that everyone would have a different answer to both questions. I agree that when they do the advertisements they should be fully disclosing how they are making their contributions and how many people they are helping. That is one of the good things that come from the Internet with advertising. It reaches the masses and then we as consumers and advocates can hold them accountable. 

Jun said:

I agree with Gong that advertisements are a good way to promote and contribute to peace. However, I do not think it can empirically measure the contributions each company has on peace. Are you just saying that the company made the most advertisements contributed the most to peace? I do not think so. I think a huge part in marketing is the conversion rate, meaning how many people actually did what the advertisements told them to do or how many people are actually being help by the projects. Taking Gong's BMW project for example, I think the only way to measure BMW's contribution are 1. how many baskets were sold? 2. how much money were raised? 3. how many African families were help in the project? I think by sampling using the amount of advertisement or marketing strategies a company used, it only tells the effort the company was contributing to peace. However, I think effort is not good enough. A devoted company who is contributing to peace should convert what they tell in their advertisement into actual numbers of financial figures.

To answer the first question, I think today, many companies are trying to help people improve their living by giving back to society or charity. Toms is a good example. They will donate money to people in need when they sell a pair of shoes. By this method, Toms not only gives back to the world, but also increases their company reputation. The good reputation will attract more people to shop at Toms. Many of companies are doing the same thing like Toms. We can know many companies has a section called "social responsibility" on their websites to show they are willing to give back and help people in need.

I agree with your Reiner. I believe that every good thing should start from the inside then out. As what I have read, ethics is not something that you learn in one night. It should be done daily and it will become a habit. For a business, it is really important to start a good thing from the top to the bottom because the employees will reflect on what their supervisors do and act. I can see your point that if peace does not start from the inside of the company, how come they can advertise about peace in the society. Surely, it will not reflect what a company believes in. If a company can be honest about themselves, they can do it in front of the public and it will be easy for them to generate profit and known as a peace support business.

Reiner Bennardo Riantan said:

I agree that one way for businesses to contribute to peace is through advertising. However, I think companies should start introduce peace from inside the company; make peace as a part of their corporate culture. Companies can do this by making sure each employee is treated equally in every aspect. Moreover, companies should also make sure that all employees' voices or opinions are heard and responded. Management of the company should start the culture of respecting all employees and all stakeholders related to the company. By doing this, the management has set the tone at the top. When employees see their management respect them and other stakeholders, employees are prone to do the same. Through this, companies will have peace internally. And when companies have peace internally, I believe they will start doing everything to promote peace, including to the society the businesses are in.

Some options to empirically measure the contribution of companies to peace is their annual donations to peace activist programs and charities. Many public companies donate to foundations or grants and this information is readily available to the public through their financials and their websites. When a company does choose to donate some of its profits to an organization that promotes peace, such as habitat for humanity, they directly contribute to peace by donating to the cause but also gain brand awareness in the consumer's eyes. This may in turn cause more consumers to choose their product/service because of its societal impacts. This positive impact on their operations generates a cycle where more donations can be given to a peace promoting organization and again increase the number of consumers the company transacts with.

This is a fantastic idea and study that has been conducted. I can not commend you all enough for putting this together. However, I am interested in a couple answers to various thoughts and potential snags (that I am under the impression have been considered but, not discussed yet).

A large part of the unease and lack of peace would be located in more impoverished areas, however, these impoverished areas generally have a larger portion of smaller and less profitable companies. How can you get these companies involved in more ethical behavior and particularly behavior that promotes peace? 

Leading more into my concerns, it has been known that the government in these areas can be corrupt and also can be in charge of some of the leading companies (potentially entire industries) in that area. If these corrupt governments (or companies) thrive in an environment that lacks ethics and peace, how can one overcome this and achieve the solutions proposed by Business Fights Poverty? Particularly (thinking about it from a more economic perspective) if external companies doing business with these unethical companies have a monetary incentive to cheat on being ethical and be the ones to conduct business with these companies and governments for their own benefit without 'directly' doing the wrong?

Not that I see these as detrimental or inevitable, I am simply curious on the thoughts from others to see if these problems are indeed relevant and if so, what are potential solutions?

I agree, however, this then leads into the more challenging question on how one would get a company to do this? A couple simple solutions would be mandate it (which most do not like and can easily be argued on why this could cause mass inefficiencies) or incentive it. My take away from some of the studies that are highlighted in this discussion is that there is already an incentive in terms of reputation, cost savings, productivity and so much more. Given most companies positions with a decision this simple they would all act as outlined from this discussion. However, it clearly is not. There are many factors that stand in the way. The ones I see most pressing are getting companies to see the benefits and  agree that they are indeed there and then to act on them (resistance to change plays a  part). The second one would be the large incentive for companies to revert to other ways of conducting business that would benefit them in the short run yet damage many others (accountability for third parties).

Kabir Bhullar said:

When it comes to business. One has to see the position they are in. Large business are in a position of power. If they say something people will hear it and it they do something people will react. With this, they are in the perfect position to make a difference. Specially in business there is alot of connection with people. This makes sense for businesses to affect and make a change in poverty around the world.

I'd like to share some opinions about the third question. I would say it is better to certify companies against some standard rather than rank them regarding to contributions to peace. 

Ranking is a good thing but sometimes it raises unnecessary competition and distorts the purpose of the behavior. If we rank companies, it is not doubt that company will try to win the best place in raking when making decisions. While putting a lot of efforts on this, they will also consider to earn back what they give from some other sources. Gradually, company will only focused what they are ranked and what they can earn form it rather than the purpose behind the ranking, which is encourage contributions to peace.

And in my opinion, there is no difference between being made public and being used to inform internal management decisions. Because the final result of internal use is making it public when companies advertise themselves. 

I like how you bring up about the viewpoint about how business actually decrease cost to increase profit or they are truly honest about being supportive of world peace. We cannot really say that all business are purely honest but I can say that we cannot truly judge about their intention in the first place. I believe that both thing can happen simultaneously, that a business can be a good thing for the society and be beneficial to their own profits. However, I also can see few businesses in real life that might use the word of supporting peace that turns out to be more of a selfish intention. Yet, I think that as long as the business has the real effort to help the world peace and fight poverty, we can be neutral and support them.

Vijay Kamath said:

I am looking at the second question in the discussion, “What are some of the issues involved in measuring the contribution of businesses to peace?” One issue that arises is that many businesses have different views on peace. A business in the oil industry may view peace differently than a business in the clothing industry. Both businesses may think that they are contributing to peace, but their view on peace may not resonate with the public.

If a business wants to be environmentally friendly, there are many standards and examples that they can employ. However, the first question in the discussion also brings up another issue. Without having some kind of empirical measurement or benchmark that businesses can look at to view their contributions to peace, it is hard to know where they can start and what exactly a business should do.

Another point to consider is if a business is actually trying to contribute to peace. For example, if a business that produces plastic water bottles wants to be environmentally friendly, it may reduce the plastic needed to make the water bottle. On the other hand, by reducing the plastic needed to make water bottles, the business saves money by using less plastic per water bottle. The question then becomes, did the business have the intention to reduce costs in order to increase profits or was it to be environmentally friendly? This question will also come up when a business tries to contribute to peace. Do businesses actually want to contribute to peace or is their motivation to find a way to increase profits?

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