{"id":518,"date":"2011-10-17T09:07:55","date_gmt":"2011-10-16T23:07:55","guid":{"rendered":"http:\/\/blogs.unsw.edu.au\/knowledgetoday\/?p=518"},"modified":"2011-10-17T09:07:55","modified_gmt":"2011-10-16T23:07:55","slug":"occupying-wall-street-movement","status":"publish","type":"post","link":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/blog\/2011\/10\/occupying-wall-street-movement\/","title":{"rendered":"Why the Occupying Wall Street Movement Hates Business"},"content":{"rendered":"

\"\"<\/a><\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

Peter Shergold<\/strong><\/p>\n

The American media, somewhat belatedly, is now asking the question:\u00a0 how big can the \u2018Occupying Wall Street\u2019 campaign become?\u00a0 What began as a relatively small group of protestors in New York\u2019s Lower Manhattan a month ago has now spread to around 150 cities in the US.\u00a0 As unionists, environmentalists and students join the so-called \u2018leaderless movement\u2019, the broad-based anti-corporatist sentiment that has fuelled the agitation seems to be growing.\u00a0 Numbers are swelling.\u00a0 Media interest is increasing.\u00a0 Politicians are positioning.<\/p>\n

Amped Status<\/a>, which claims responsibility for the birth of the \u201899% Movement\u2019 which prompted the \u201cground-up grassroots decentralised movement\u201d, sees the protest\u2019s origins in the growing inequalities of wealth and power perpetuated by the \u201cneo-liberal economic domination\u201d of corporate America.<\/p>\n

I\u2019m not persuaded that all of the protestors, let alone their many sympathisers, would recognise such an ideological presentation of their beliefs.\u00a0 Nor is it clear that the increasing range of grievances being brought to the protests can sustain collective cohesion amongst the disparate groups involved in \u201cdirect and transparent participatory democracy\u201d.\u00a0 The future of the protests is uncertain.\u00a0 The increased organisation of spontaneity may either undermine the movement\u2019s appeal or else \u2013 less likely I think \u2013 mould it into a more enduring form of political protest.<\/p>\n

What is certain is that the concerns that underlie the street occupations are real.\u00a0 The diversity of opinions, and the lack of political sophistication with which they are often expressed, should not lull observers into the complacent belief that the protest is just the latest day out for the usual \u2018anti-globalisation\u2019 suspects.<\/p>\n

Something serious is going on.\u00a0 It was the Harvard Business Review, no less, that earlier this year published an article premised on the prescient view that the \u201ccapitalist system is under siege\u201d.\u00a0 The article, by Michael Porter and Mark Kramer on \u201cCreating Shared Value<\/a>\u201d, pointed to the fact that companies are \u201cwidely perceived to be prospering at the expense of the broader community\u201d, that the legitimacy of corporate activity is falling and that trust in business is now much diminished.<\/p>\n

A couple of years ago, at the height of the GFC, I reflected <\/a> on what impact the severe economic downturn might have on corporate social responsibility (CSR).\u00a0 I argued that the fundamental causes of the financial crisis \u2013 the unconstrained pursuit of high-risk short-term profits \u2013 represented the antithesis of the ethical values of corporate citizenship which community and environmental programs were intended to exhibit.<\/p>\n

My concern in 2009 was (and remains) that CSR and corporate sustainability are too often located at the periphery of business strategy.\u00a0 They are embraced as a matter of good corporate relations which can bring the economic benefits of reputational integrity.\u00a0 Unlike those sleeping on Wall Street, I am persuaded that the community and environmental initiatives of companies really are of significant social benefit.\u00a0 Their influence is weakened, however, to the extent that they are pursued and reported upon as if they are a peripheral \u2018bolt-on\u2019 to core business activities.<\/p>\n

This structural weakness helps feed the angry cynicism of the Occupy Wall Street movement.\u00a0 Corporate responsibility and sustainability are portrayed by protest leaders as little more than a low-cost sop to \u2018the 99%\u2019:\u00a0 a \u2018launch, lunch and logo\u2019 designed to present brand identity in a favourable light and a self-serving ploy to \u2018greenwash\u2019 products for unwary consumers.\u00a0 It seems to the protestors that business leaders lack any genuine concern or empathy for society at large.\u00a0 At best CSR is perceived as a strategy to win political support on Capitol Hill.<\/p>\n

The challenge for those of us who believe in market economics is how to restore business legitimacy. \u00a0\u00a0The \u2018licence to operate\u2019 needs to be rearticulated.\u00a0 Business must be able to exhibit its societal value, not to trade-off against the social and environmental costs of economic success but as integral to the supply-chain by which goods and services are produced.\u00a0 \u2018Giving back\u2019 is no longer sufficient.\u00a0 Charity won\u2019t save capitalism.<\/p>\n

This is the provocative thesis that lies at the heart of the arguments propounded by Porter and Kramer.\u00a0 Companies, they propound, need to demonstrate that, through their policies and practices, they simultaneously advance both economic and societal value.\u00a0 They need to recognise that they create \u2018shared value\u2019 through their business.<\/p>\n

Of course companies must return economic value or their financial viability is at risk.\u00a0 Yet they also need to focus on the societal value they can create through the investors they attract, the suppliers from whom they buy, the employees who work for them and the consumers to whom they sell.\u00a0 Sustaining a financial return to shareholders requires businesses to take account of their impact on multiple stakeholders.<\/p>\n

Crucially, companies need to build into their strategic planning an explicit awareness that long-term economic returns can be accrued through the pursuit of societal value.\u00a0 Improving value in one area gives rise to opportunity in the other.\u00a0 The future of capitalism, according to Porter and Kramer, lies in corporations creating a \u201cvirtuous cycle of shared value\u201d.<\/p>\n

Business needs to get serious about establishing trust in business itself.\u00a0 Corporate philanthropy alone won\u2019t win the hearts and minds of the public.\u00a0 Companies need to show, right along the value chain, how societal needs are being embodied in their products, benefits being achieved and harms mitigated.\u00a0 They need to\u00a0recognise that they\u00a0pursue societal impacts because, in a competitive market, they are integral to sustaining long-term project profitability.\u00a0 Creating shared value is a matter of corporate self-interest.<\/p>\n

None of this is likely to persuade those engaged in the Wall Street sit-ins to go home and embrace capitalism.\u00a0 Their anger will take longer to assuage.\u00a0\u00a0 Nor will the virtues of shared value convince those business and political leaders who continue to argue, channelling Milton Friedman, that the only responsibility of business in a capitalist society is to make a profit on their investment of private capital.<\/p>\n

The battle for hearts and minds needs to be fought.\u00a0 An increasing number of hard-nosed multinational companies \u2013 such a Google, IBM, Intel, Johnson and Johnson, Unilever and Wal-Mart \u2013 have begun to embark on important shared value initiatives.\u00a0 Indeed in a recent edition of Social Business<\/a>, I interviewed Peter Kelly, Director of Corporate and External Relations at Nestl\u00e9 \u00a0on the way in which the company was embracing the new approach.\u00a0 From the support they offer to their agricultural producers in the developing world to the care with which they market their products, Nestl\u00e9 has become a market leader.<\/p>\n

What about Australia?\u00a0 Do we have companies that are starting to present their business in terms of the shared economic and societal value they are creating?\u00a0 The answer, I\u2019m pleased to say, is in the affirmative.\u00a0 Over the next few weeks I\u2019ll blog about a few of our own \u2018shared value\u2019 companies.<\/p>\n

Peter Shergold<\/a> is the Macquarie Group Foundation Professor at the Centre for Social Impact (CSI) at UNSW.\u00a0 This blog post first appeared on the CSI Blog<\/strong><\/a>. <\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

      Peter Shergold The American media, somewhat belatedly, is now asking the question:\u00a0 how big can the \u2018Occupying Wall Street\u2019 campaign become?\u00a0 What began as a relatively small group of protestors in New York\u2019s Lower Manhattan a month ago has now spread to around 150 cities in the US.\u00a0 As unionists, environmentalists and […]<\/p>\n","protected":false},"author":336,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12673],"tags":[12766,12765],"class_list":["post-518","post","type-post","status-publish","format-standard","hentry","category-social-impact","tag-corporate-responsibility","tag-csr"],"_links":{"self":[{"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/posts\/518","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/users\/336"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/comments?post=518"}],"version-history":[{"count":3,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/posts\/518\/revisions"}],"predecessor-version":[{"id":522,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/posts\/518\/revisions\/522"}],"wp:attachment":[{"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/media?parent=518"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/categories?post=518"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/tags?post=518"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}