Conscious Cultures and Management In Global Corporations

MBA502
Emotional Intelligence,
Cultural Intelligence and
Diversity
Workshop Week 10
Conscious Cultures and
Management In Global
Corporations

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Learning Objectives
• Understand the changing views of global
business in Corporate Social Responsibility
(CSR).
• Understand the four tenets of conscious
business.
• Understand the impact and spirit of conscious
business cultures to build cooperative,
humane and positive future environments for
all.

The (changing) role of
the business corporation
Two views:
1. The role of business is just business
• “The social responsibility of business is to increase its profits.”
(Friedman, M, 1970)
• Some scholars in management and economics believe firms should
focus on profits only, while it is the responsibility of the government
to provide public goods.
2. The role of business is beyond just business
• Many firms have started to assume social and political
responsibilities that go beyond legal requirements and fill the
regulatory vacuum in global governance.
(Scherer, A.G. and Palazzo, G., 2011)
Increased responsibilities of
business corporations
• No denying that business enterprises of today are powerful
institutions.
• Businesses have resources that pose them as double-edged
swords.
• They are capable of doing great good or sometimes even
great harm – quite literally on a global scale if they are
international operations.
• In a global economy, it is critical for leaders in business to rise
above national, political, ethnic, religious and all other social
divides, in their thought and actions especially when engaged
in international trade and cross-cultural ventures that go
beyond national identities and boundaries.

The dark side of business
• Although businesses play a crucial role in
the wealth of nations and are key drivers of
socio-economic and cultural
transformations, there is also a shadow side
to business prosperity.
• Businesses, including reputable large
enterprises, stand accused of many
devastating global issues, such as
environmental degradation and poverty.

Responsibilities of global business
• Since the year 2000, over 9000 business firms have
subscribed to the UN Global Compact’s call to
engage in self-regulation in order to fill the
regulatory vacuum that has emerged as a result of
the process of globalisation.
• It is a call to companies to align strategies and
operations with universal principles on human
rights, labour, the environment and anti-corruption,
and take actions that advance societal goals:
https://www.unglobalcompact.org
The Ten Principles of the
UN Global Compact
Human Rights
Principle 1: Businesses should support
and respect the protection of
internationally proclaimed human
rights; and
Principle 2: make sure that they are not
complicit in human rights abuses.
Labour
Principle 3: Businesses should uphold
the freedom of association and the
effective recognition of the right to
collective bargaining;
Principle 4: the elimination of all forms
of forced and compulsory labour;
Principle 5: the effective abolition of
child labour; and
Principle 6: the elimination of
discrimination in respect of
employment and occupation.
Environment
Principle 7: Businesses should support
a precautionary approach to
environmental challenges;
Principle 8: undertake initiatives to
promote greater environmental
responsibility; and
Principle 9: encourage the
development and diffusion of
environmentally friendly technologies.
Anti-Corruption
Principle 10: Businesses should work
against corruption in all its forms,
including extortion and bribery.

Activity
• Each group will be allocated one of the
principles from the previous slide.
• Answer the following questions:
– How does your allocated principle relate to the
concept of
emotional intelligence?
– How does it relate to
cultural intelligence?
– How does it relate to
diversity?
Unconscious business
• Also known as low-conscious business.
• It’s a form of operating that creates harmful, often
unintended consequences.
• These organisation see their purpose as profit
maximisation and treat all participants in the system
as means to an end.
• They fail to recognise the significant negative
impacts they’re having on people and the planet.
(Mackey, J. and Sisodia, R., 2014)
Conscious capitalism
• Conscious capitalism is an evolving paradigm for
business that simultaneously creates multiple kinds of
value and well-being for all stakeholders.
• It reflects a deeper consciousness about why
businesses exist and how they can create more value.
• It’s based on a management approach that prioritises
decentralisation, empowerment, and collaboration.
• There is also harmony with the interests of society
while simultaneously delivering strong financial
results.

Four tenets of conscious capitalism
Stakeholder
Orientation
Conscious
Leadership
Conscious
Culture
Higher
Purpose

Higher purpose
• A higher purpose goes beyond profit generation
and shareholder value.
• It is the difference a company is seeking to
make in this world.
• Purpose creates an extraordinary degree of
engagement and commitment among
stakeholders.
• Purpose must come before the formulation of
strategy.

Activity
• Look around the room you’re currently in and spot a
brand you recognise.
• For example, it might the brand of a drink on the
table, or the brand of someone’s shirt or phone.
• Once you’ve identified the brand of your choice, use
your smartphone device to find out if that company
has a higher purpose.
• If so, what is it?

Stakeholder orientation
• Stakeholders are all entities that impact or are
impacted by a business.
• Conscious businesses actively seek to optimise
value creation for all of their interdependent
stakeholders.
• When conflicts and potential trade-offs arise
between major stakeholders, they try to create
win-win solutions that transcend those conflicts
and create harmony of interests among those
stakeholders.

Activity
• Let’s stick with the brand you chose for the previous
activity.
• In 60 seconds, write down as many of that company’s
stakeholders as you can.
• What’s your tally?
• When compared to your peers’ lists, were there any
stakeholders you forgot about?
• What would the real-life impact be if the stakeholders you
neglected felt excluded?

Conscious leadership
• Conscious leaders are primarily motivated by service to the firm’s
higher purpose and in creating value for all stakeholders.
• They reject the zero-sum view of business and look for creative,
synergistic win-win approaches.
• They have finely developed systems intelligence that understands
the relationships among the interdependent stakeholders.
• Their key virtue is integrity, which includes authenticity, fairness,
trustworthiness and moral courage.
• They make a positive difference and make tough moral choices
with clarity and consistency.

Conscious culture
• The culture of a conscious business is a source of
great strength and stability for the firm, ensuring its
purpose and core values endure over time.
• Members of a conscious culture share traits such as
trust, accountability, transparency, integrity, loyalty,
egalitarianism, fairness, personal growth, love and
care.
• They create social, cultural, intellectual, physical,
ecological and emotional value in addition to financial
performance over the long-term.

Activity
• Let’s keep our focus on the organisation
you’ve been using for the past two activities.
• You’ve already determined whether it has a
higher purpose, but what about the other
three tenets of conscious capitalism?
• As before, conduct your research via your
smartphone device and then share your
findings with the class.

Activity
• In which of the following categories would you
situate your selected organisation?
Source: O’Toole and Vogel, 2011
Summary
• Conscious capitalism comprises four tenets:
– Higher purpose
– Stakeholder orientation
– Conscious leadership
– Conscious culture
• These are all interlinked with emotional
intelligence, cultural intelligence, and
diversity.