faulker031

Both Crane and Matten are in Europe right now. And witnessing one of the most severe disruption of airtravel since 9/11. The closure of large parts of the European airspace has caused a lot of havoc here. Eurepean cities are full of stranded passengers and there is no train and no bus left to take them home. Even the German Chancellor or her Defense Minister had to put up with a 3 day hitchike from Lisbon and Istanbul, respectively. What a democratizing catastrophe, we are all in it together... What is instructive about this incident is that this little volcano in small Iceland had such far reaching impacts. This place did not only start the ‘Financial Crisis’ recently, but now puts Europe out of the game. In the first chapter of our book we essentialise globalization as ‘deterritorialisation’ – and we know, its a hell of a term. But this situation makes it evident. Cheap, reliable and easy air travel has made territory irrelevant – where to relax, where to do business or where to cele...

A few weeks ago we discussed the B Corporation phenomenon which certifies firms that formally amend their corporate governing documents to incorporate stakeholder interests beyond those of shareholders.This week brings news of the first legal victory for B Corps with the signing into the Maryland legislation provisions for the legal creation of such "Benefit Corporations". According to the press release from B Lab, the outfit behind the B Corporation initiaitive: "Benefit Corporations must by law create a material positive impact on society; consider how decisions affect employees, community and the environment; and publicly report their social and environmental performance using established third-party standards. The legislation, sponsored by Senators Jamie Raskin and Brian Frosh and Delegate Brian Feldman, passed the Maryland Senate with a vote of 44 – 0 and the Assembly 135 - 5." The press release also states that "Maryland is the first state to pass Benefi...

In the current 3ED of our book (out this month) we have extended a bit the consideration of religion in business ethics. After all, religion is a source of ‘right and wrong’ for a lot of people on earth. However, the debate on religion has received an interesting twist recently with the way the Catholic Church has dealt with the child abuse cases, which have popped up recently in an unprecedented manner. The case shows that ‘business’ ethics, or more broadly, organizational ethics, is also a topic for a church. In some ways, one could see the Catholic Church as the oldest and one of the largest ‘multinational corporations’ globally, with roughly 2,800 subsidiaries (dioceses) and 1.5bn members in nearly every country of the world. In some ways it is to no surprise that ethical infractions occur in such an organisation. Albeit that the current problems of the church are going beyond the normal ethical problems of MNCs and consist of criminal actions and human rights violations commited b...

Microfinance - the design and delivery of specialist financial services to poor consumers - doesn't often make it onto the front pages of the global media. So it was no surprise that the front page story about microcredit on the International Herald Tribune (and the New York Times) today ended up focusing on some of the industry's more unsavoury elements. Prime among these are the sky high interest rates that some microcredit organizations charge their low income customers - in Mexico, for instance, the average rate is currently some 70%, although the global average is around 37% (which is still considerably higher than rates for "normal" lending). Neil MacFarquhar, the NYT reporter lays the blame squarely on the takeover of microcredit by "a raft of banks and financial institutions", which he claims has got microfinance advocates "wringing their hands over the direction it has taken" and created a "fracas over preserving the field's sai...

We have blogged in the past a couple of times about Google ’s business operations in China and in the fresh from the press 3 rd Edition of our book we have an entire case (in Chapter 5) on the issue. In recent weeks this story has gotten a new instalment with Google’s reaction to hacker attacks on their Chinese based servers. On the surface, Google’s decision to leave China and to base their operations in Hong Kong (which is not subject to the same censorship as mainland China) might make good business sense. After all China contributes only an estimated 1-2% to Google’s overall turnover and the attacks on their source code by (allegedly government employed ) Chinese hackers touches on vital commercial secrets of the company. And much of the lamented censorship in fact can also be seen as nothing more than a thinly disguised effort by the Chinese to favor local competitors against foreign providers, most notably the Chinese engine Baidu. However, last week’s edition of the German mag...