challenges for the foreign company

CSR Asia's Weekly journal (www.csr-asia.com) is a fascinating read, and I highly recommend it (even if you are not in Asia). Although some of the news may not be that interesting many of the analysis and articles are. Recently there was a piece about South Korean businesses operating in a special industrial zone just across the border into North Korea.

Although the examples are quite extreme they do show many of the typical problems companies have when operating in another country. In these cases they found they had to have 2 security guards, since it was normal practice to need 1 to check up on the other. They found the employees don't like training videos, but since they read the newspapers on walls, the company puts the training in newspapers and puts them on the wall! These are 'cultural issues'.

There are also extreme examples of choosing between local and imported materials/people. In this case there is no water or electricity (it all comes from South Korea) and very little food. Thus the companies have to import goods, whereas traditionally foreign companies find it cheaper to buy goods locally, and it also helps stimulate the local economy -there is not much choice in North Korea though.

Companies are setting up there because there are so many unemployed workers that salaries are low and taxes and land even cheaper; is this exploitation? Are companies able to help the economy through their investments, by creating jobs and brining in health resources (for example) for the workers? Normally its good CSR to pay taxes and this is of huge benefit to local economies (benefit of globalisation), but what about in this case, where the government of North Korea is so bad, most of the country survives on food handouts from the UN, where China and South Korea provide almost all the utilities and where the few state owned companies that are operating do so by using forced workers (prison populations). North Korea is interesting since so little is known of it. Although people might argue that a lack of freedom in the press in China is hindering its development (in terms of CSR, having NGOs or media criticising companies), in North Korea there is total censorship... in fact noone will ever know what most of the foreign companies setting up there are doing with their labour practices etc. (maybe thats a reason to set up there, since foreign NGOs cannot get in to criticise them?)

This throws up many conundrums for the 'responsible leader' -aiming to contribute towards the local economy of one of the world's poorest countries is admirable; although indirectly supporting such an oppressive regime is normally not supported by Multinationals (for example, most of them have withdrawn from Myanmar/Burma because of this). Where there are such extreme cultural differences, how can you manage your company with the same values and policies as elsewhere? How much do you adapt to local conditions (how much will that cost)?

Disconnectedness

Some of you may have heard of the G8 (Group of 8 wealthiest nations) who meet yearly, and on occasion of their meeting in Scotland recently, there were several concerts around the globe organised to raise awareness of some key decisions those Leaders (India and China are also invited as observers) could make and their impact on poverty.

A recent online discussion took place with some comments on what these concerts did or did not achieve and why; and by taking on some of the thoughts I have developed some thoughts around the idea of disconnectedness which explains a lot of things, and is an important aspect for responsible leaders to bare in mind.

The example I will use is Climate Change and poverty. For climate Change, none of the people who are causing it (the 'west') are actually witnessing its consequences on them (more flooding in Bangladesh doesn't affect them, for example), and if some of the consequences do (for example a hurricane in Florida, USA) then there are always externalities that can be blamed -in the case of the weather, this is always unpredictable and it cannot easily be correlated with climate change, and the changes happening are gradual (not instant). All of this means people do not see the consequences of their actions.

With poverty, there are many charities showing videos of poverty in rich countries and these have an impact on people; who donate money. But, the amounts they donate have little real impact. What might have a bigger impact is buying products from those countries, changing trade rules and so on. Not only do people not donate more money (because although the pictures are horrific, they are only pictures) but they do not change other lifestyle/business options (since the impacts of these only indirectly affect them).

This idea, I believe, is universal; that unless you see a strong correlation (ie. relationship) between your individual actions and either individual or larger consequences then you won't change your actions in order to change the consequences. In a business concept one of the obvious applications to this idea, is how 1 person contributes to an organsiation.

Someone may steal some stationery, not seeing any impact, or they might make a decision with an impact on someone else, or in the future (so not affecting them). For the individual these actions make no difference, but for the organisations they do. Similarly when designing a business plan, the individual should see how they contribute to the whole, and how non-performance affects the bigger results.

Its important then to motivate people with incentives that are directly related to the individual's contribution. Its important for mutual accountability so that when someone does something, the results are noticeable (positive or negative). Think about what other situations this 'disconnectedness' occurs in and how you could remedy it -how can you change processes so that the inputs and outputs are closer aligned?

And if you can think of any ways of making poverty less disconnected for rich people, maybe we can find solutions to those kinds of problems too!

choose your words carefully

Transparency is an important (well, crucial) part of responsible leadership, so is trust. In the center of both is communication. Although not a post about communication per se, one important issue came to my mind when reading this about framing.

The concept is that what you say affects what someone hears (obviously); but its not that simple. Of course, what you don't say also affects what someone hears, what order you say things affect how the brain interprets what is says, how you stress certain words affects the emphasis that is placed on words and so on... In fact, spare a thought for the fact that non-native speakers of a language may not pick up most of the aspects of the communication (emphasis, slight difference in meaning between say 'large' or 'massive' etc) and will thus misunderstand you. In fact, this also applies to people with different accents -so communication affects everyone and everything you do.

As a person communicating to another, you must try to accurately convey your message and take into account these externalities. Any good public speaker or someone used to speaking to foreign audiences will have experience in this. In a leadership role, how you communicate is even more important, since the message may have large implications. And you may be communicating by sound, by letter, by action, by video...

Have a thought about how you can communicate your message effectively, and always bear in mind how people will interpret it: how can you convey your message most effectively: what media should you use?, how long should the message be?, what words/sounds/images should you use? do you need to repeat yourself or speak slower? what choice of words should you use?

Remember how many times ineffective communication has made a difference when you were on the receiving end. Its your responsibility to make sure when you want to be an effective leader, you communicate well.