Corporate Social Capitalism: Is the UN the Model to Emulate?

Today I'd like to welcome "Handsome Dan" to Spend Matters. Dan is a man about town, although he must wear a bullet proof jacket these days to protect himself from malcontents and detractors (not to mention deflecting potential industry and industry analyst critiques of his firm based on his unpopular views). Please join me in welcoming HD to Spend Matters ...

The other day, a reputable supply chain research organization released a document on what they call "Corporate Social Capitalism". Here are a few examples from their piece:

"ExxonMobil CEO Rex Tillerson: 'All our growth is in emerging economies. We have to invest in -- stability in these places to help them to advance. We have to tie this to our business goals.'
P&G's Dimitri Panayotopoulos, vice chair for global household care, explained the company has provided tetanus shots to millions of infants.
The Clinton Global Initiative showed that Henry Ford's spirit lives on in today's leading business leaders, who are using innovation to address global challenges."

To my ears, "Corporate Social Capitalism" sounds awkward. Only a few decades ago, when politicians and corporations walked hand-in-hand, they used a snappier moniker -- fascism. Not an entirely fair comparison perhaps, since the new version comes with few broken bones and less spiffy uniforms. Nonetheless, treating people and nations as resources to develop is essentially colonialism with a friendlier face.

If I could draw, I would illustrate this with Gregory Peck's "The Man in the Gray Flannel Suit" image and add an armband with a smiley face on it:

The example invoking Henry Ford's spirit is less persuasive, not because of Ford's political leanings, but because in his later years Henry himself formally disavowed corporate paternalism. Ironically, the study even contains a segment that argues against its own message:

"My friend, who is Kenyan, is a successful businessman who lives part time in Nairobi ... I talked to him about the opportunity to work ... on a philanthropic effort to bring supply chain capabilities to his country. His response was: 'The last thing we need is more charity ... we need businesses and jobs that will stay here for the long term. If we do this, we all make money, and everyone is happy.'"
In other words, local businesses prefer that companies focus on being well-run companies -- businesses that stay competitive over the long haul.

This leads me to the danger with these initiatives -- in case you wondered where this was headed. All stated corporate intentions are so exceedingly good that nobody can argue against any of them. Where will the fiduciary stewardship come from? Is creating a corporate UN really the best way to manage scarce resources? I don't see any Chinese, Japanese, or Russian participation ...

Additionally, are US corporations -- infamously unwilling to plan more than one or two quarters into the future -- suddenly capable of multi-generational infrastructure and nation building? Even the real UN hasn't proved particularly successful at this -- they're good at spending time and money though.

I can't help but think that these activities will only throw US companies farther off the path of simply delivering better goods and services more quickly and at lower prices. Equally alarming -- given historical precedent last century -- is the slippery slope of private / public sector forced collaboration.

Seems like I have more in common with the man from Kenya than the one on the New Haven line.

I'd personally like to thank Handsome Dan for contributing his thoughts to Spend Matters. His firm's voluntary UN contributions and AMR renewal check are in the mail, or so he claims. Although with the one caveat that cap and trade may reduce the amounts in future years ...

Jason Busch

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