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Publisher: Haymarket Books , This specific ISBN edition is currently not available. View all copies of this ISBN edition:. Synopsis About this title This work lays bare corporate actions both domestic and international, under the guise of legal "personhood," and shows how corporations flaunt laws and act as controlling powers beyond the constraints imposed on legal state citizens.
About the Author : Laura Westra, Ph. Buy New Learn more about this copy. Customers who bought this item also bought. Stock Image. Published by Haymarket Books, United States New Paperback Quantity Available: Seller Rating:. Instead, they made their no bribes policy clear up front.
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In one country, Celtel found that there was no way to avoid paying a bribe if they wanted to operate there. Rather than do so, Celtel withdrew from the country and forfeited a sizeable initial investment in infrastructure Jones and Campbell, His actions have inspired other managers and their firms to follow in his footsteps, and he is now a highly influential thought leader on corporate governance in Africa. On the basis of our review of the literature and first-hand case studies and interviews, we propose that MNE practices around managing complex challenges follow something of a normal distribution.
On one end of the distribution, there are firms engaged in war profiteering or are operating in such a way that managers knowingly benefit from and contribute to an increase in violence and conflict. For most firms in the distribution, however, we expect that they are neither consciously working toward peace nor intending to foster instability or conflict.
In some cases, business as usual can actually have a large positive impact on a country simply by providing jobs and promoting economic growth Fort, To the extent that businesses generate employment, offer a fair wage, good working conditions, etc. If all businesses met these most basic of standards, the economic life of millions of people could be transformed.
At the far end of the distribution, there are firms that are actively formulating strategies and business practices aimed at minimizing risk at is source and promoting peacebuilding. Nevertheless, by taking into account the environmental and social impacts of its business, the company has increased the economic, social and health-related well-being of those in its supply chain.
In turn, these actions may reduce the likelihood of conflict in the areas where Unilever operates and enhances the prospect for long-term stability and peace. Another example is the case of Starbucks.
In response to the international refugee crisis, Starbucks announced a pledge in January of to hire 10, refugees worldwide over the next five years Spary, Doing so is expected to reduce the rate of social unrest, help refugees to better integrate into their new home country and reduce the need for government assistance — outcomes that enhance stability and promote peaceful societies. Interestingly enough, a non-profit organization called Duo for a Job in Belgium has received international attention doing similar work.
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Unlike Starbucks, the organization does not directly employee program participants. Brexit will lead to a shortage of 40, baristas by It appears that the long-term financial, reputational and humanitarian benefits of the policy are significantly greater than short-term threats to the business. Doing business as usual, however, can unintentionally worsen peace dynamics in fragile places. While firms can help to grow markets and thus contribute to improved conditions for peace, they can also exacerbate underlying conflict dynamics when they do not understand the context in which they do business and the impact of their operations.
Businesses may also be ignorant of, turning a blind eye to or considering themselves not responsible for, the actions of their local partners. At times, local partners may engage in activities that contribute toward conflict and may violate national and international laws.
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In this section, we briefly explore a few cases where MNEs, doing business as usual, have threatened peace and stability in the countries where they operate. These cases illustrate how the seemingly benign practices of partnering with local firms and outsourcing certain business activities to local providers can have serious consequences. Following the case examples, we discuss alternative strategies for dealing with the complex problems raised in these cases. The first examples focus on Microsoft and Coca-Cola in Myanmar.
While businesses are generating economic growth in the country, the unevenness of the distribution of wealth and opportunity has worsened societal cleavages.
The Supranational Corporation – Beyond the Multinationals | brill
This is a serious concern as Myanmar still has 18 ongoing conflicts with most rooted in the uneven division of economic opportunities and civil rights, along with the heavy-handed rule used to maintain stability. There is little indication that economic inequality in the country will improve in the near-term.
Also, because of a government policy requiring MNEs to form joint ventures with local partners, these same elites who are highly politically connected have become the natural local partners for foreign firms entering Myanmar. For Microsoft, the policy that required MNEs to form joint ventures with local firms has meant launching a multimillion dollar joint venture in with the Shwe Taung Group, led by Aik Htun.
Shwe Taung Group is the sole licenser for Microsoft products in Myanmar. For Coca-Cola, this meant launching a partnership in with Daw Shwe Cynn, a jade kingpin under sanctions and barred from selling in the USA and other countries Peel, b. Located in Kachin, it is also the site of an ongoing civil war between the government and Kachin Independent Army.
The Supranatural Corporation: Beyond the Multinationals (Studies in Critical Social Sciences)
In response to the allegations, Coca-Cola conducted:. While our original assessment was based on the best information at the time, new findings were consistent with our original due diligence [ The Coca-Cola Company, ]. While both firms and many others in similar situations in the country argue that they have followed proper due diligence procedures and are thus not legally liable for the actions of their partners, the fact remains that both firms continue to partner with conflict-inducing actors.
These partnerships only legitimate and empower such actors. Thus, standard benchmarks for due diligence when selecting local partners in conflict settings have failed to consider such actors as sufficiently risky and left the companies exposed to major reputational and operational risk.
Why do these situations occur? During the process of selecting a local partner, Coke and Microsoft may have felt that they could only choose between potential partners who had ties to government and private sector elites. It is also possible that partnering with these firms may have paved the way for foreign firms to gain a quick foothold in Myanmar.
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For example, elites in Myanmar have not only consolidated their control of revenue and trade streams but also garnered increasing support for the expansion of ethnic cleansing campaigns. By engaging in such campaigns, elites are better positioned to secure new operational monopolies Miklian, a. However, getting the beer from the production plant to the farthest reaches of the country can be a challenge, especially so in conflict regions with poor infrastructure and battles over transport lines between conflict actors.
The cases of Heineken in the Democratic Republic of Congo and AB InBev in Colombia show how firms outsource risk by outsourcing business activities to conflict actors knowingly or unknowingly to gain and maintain access to markets.
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To minimize risk and maximize profits, managers will, at times, use subcontractors for the most difficult or sensitive tasks Miklian and Schouten, ; Miklian, c. In continuous operation since and bought by Heineken in , Bralima has successfully negotiated their way through dozens of DRC conflicts. The primary sources of revenue for rebels are the ubiquitous checkpoints placed on nearly all rural roads throughout the country.
The checkpoints themselves are often little more than a wooden log or rope thrown across a muddy trail, perhaps with a shack nearby sheltering armed rebels Miklian and Schouten, For example, Mr. If such payments were directly made by Heineken, they could be considered a violation of several laws in Holland, the USA and UN-supported sanctions. Thus, the firm uses a subcontractor model whereby independent truck drivers pick up the beer and are responsible for delivering it across the country.
Any expenses, damages or conflict along the way is considered the sole responsibility of the drivers. These checkpoint revenues generate a substantial revenue stream that is used to fund insurgent activities. Like most firms tasked with distribution in Colombia, Bavaria chose to pay both rebel and paramilitary groups in rural areas to continue operations throughout the s and s. Eventually, Bavaria settled on a solution. In conflict regions, it would continue to produce beer but turn over sole responsibility for distribution to subcontractors.
As one Bavaria senior distribution executive working in the conflict zone explained Bull and Miklian, :. There were times when distributor trucks were incinerated. Let me be clear — Bavaria was never going to let themselves be formally tied to anything illegal. Often, the Bavaria distributor had to pay extortions and the rebels made a lot of money, becoming very important regional players.
Still, the company sees itself as unrelated to the conflict. Delivery drivers subcontracted by Bavaria support this assessment.
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So, how might a conflict-sensitive approach improve the above cases? We recognize that leaving a market entirely is not always feasible or realistic. In addition, managers may focus more on the opportunity cost of leaving a potentially lucrative region rather than on the risk of staying.
In addition, doing so may actually be counterproductive to business interests and even to peacebuilding if firms with less interest in conflict sensitivity and human rights take the place of those that leave. However, firms hold a significant amount of untapped political and social capital that can be unlocked through incorporating peacebuilding into risk frameworks. For example, nearly all firms entering Myanmar have stated their support of international human rights aims and established corporate social responsibility norms for operating in the country.
The joint venture partners of these MNEs, however, may not share the same concerns. Alternatively, managers can step back and leverage the substantial economic and reputational power of their MNEs. For example, both Coke and Microsoft could demand to choose a local partner whose practices are consistent with its stated values and whose actions do not violate international or MNE home country laws.
In fact, they may have more leverage now than when first entering Myanmar given the global power of their brands and lack of precise substitutes. Rather than decreasing its political risk by partnering with unsavory local partners, MNEs will actually increase their risk exposure. The resulting damage to the global brand may not only hurt the MNE internationally but also undermine its reputation and threaten its long-term social and legal licenses to operate in the host country. This outcome is not hypothetical. After the fall of Suharto in Indonesia in , and the overthrow of Mubarak in Egypt in , it became clear that many MNEs were complicit in the widespread corruption in both countries and turned a blind eye to the behavior of their local partners.
Although these MNEs benefitted from the favors of these regimes while they lasted, the ultimate outcome was devastating in many cases. MNEs lost millions of dollars in investments in some cases and the countries as a whole suffered from substantial divestment by foreign firms UNCTAD, These firms are paying rebel groups and paramilitaries millions of dollars with full knowledge at the national, regional and often global executive levels, that this money funds wars and terrorizes citizens.