In a situation like this, what’s that “common goal?” For the NGO, the goal would be the achievement of, perhaps, a social agenda objective that they have pursued for years, often via an adversarial relationship with the corporation. For the corporation, what’s the goal? What motivates the corporation to take on such a “strange bedfellows” relationship? Well, as a recent article in the Christian Science Monitor commented, corporations often approach NGOs to partner on a common project so that those same NGOs don’t turn around in the future and spread bad press about the corporation. A “common goal?” Seems more like a protection racket.

Imagine this scenario. Corporation X is concerned that future bad press could negatively impact their expected future revenues. So, to preclude the threat of negative press, an implicit threat at least, the brass at X dial up their historical foes at NGO Z and play let’s make a deal. The brass over at Z aren’t going to say, “Hey X, thanks for calling, but no thanks.” No. Z’s ship just came in. The pressure that the folks at NGO Z have been applying to Corporation X all of these years has just paid off.

Didn’t I see a scene something like this in at least one episode of The Sopranos?

Now, when the NGOs and the corporations get together like this, at least according to the previously mentioned Christian Science Monitor article, no money changes hands. The article stated that the NGO doesn’t receive any fees from the corporate partner. But isn’t there an exchange of value here? Isn’t this somewhat like a scene from The Sopranos? Let’s look at it this way.

The Sopranos Example – Paulie, grey slicked-back side wings and all, goes into a shop and “tells” the proprietor that the shop could “have some trouble” in the future. This “implicit threat” means that the shopkeeper might lose some of his or her “expected future revenues.” But, Paulie and his problem-resolution specialists can “protect” the shop and make that trouble “disappear,” for some consideration of course. In this Sopranos example, that consideration is money.

Paulie and his problem-resolution specialists get what they were looking for, i.e., they reach their direct objective. The shopkeeper avoids that “implicit threat” and gets to keep his or her future revenue stream.

The NGO Z/Corporation X Collaboration Example – The presence of NGO Z represents an “implicit threat” to Corporation X, the threat of future negative publicity. Corporation Z recognizes that this “trouble” is possible. The presence of this “implicit threat” means that Corporation X might lose some of their “expected future revenues.” But, the problem-resolution specialists of Corporation X realize they can “protect” the corporation and make that problem “disappear,” for some consideration exchanged of course. In this NGO Z/Corporation X example that consideration is collaborating with NGO Z to allow NGO Z to achieve one of their social agenda objectives.

The Corporation Z problem-resolution specialists get what they were looking for, i.e., they get to keep their future revenue stream. NGO Z gets what they were looking for, i.e., they achieve their direct objective of “social concern,” which, of course, is defined by them.

Weird, isn’t it?

And once this “partnership” is established, where is the line drawn? How far does this relationship go?

In The Sopranos Example, Paulie keeps returning to the shopkeeper saying there are always “other” troubles on the horizon and that an increased payment is needed to keep those troubles away.

In The NGO Z/Corporation X Collaboration Example, the management of Corporation X realizes that there is always the possibility that NGO Z could spread bad press, regardless of how much or how well they work together on any selected project. What happens after that project is complete? Corporation X knows that NGO Z will always have “other” future projects of “social concern” on their horizon.

Are these NGO/corporate collaborations a good way to run a company?

How far does it go?

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To go along to get along with this trend, multi-national corporations (MNCs) are moving, seemingly together as if in lock step, to establish corporate social responsibility (CSR) programs in order to meet the demands and expectations of NGOs, whether it be on environmental, social, labor, or cultural issues. And to help them craft their CSRs, MNCs now regularly collaborate with NGOs, bringing NGOs to the table as trusted advisors and de facto consultants. And when MNCs do this, which is increasingly often, they seem to do it with a “mea culpa” attitude.

Mea culpa attitudes belong only on the truly guilty. MNCs don’t give themselves enough credit. They suffer from a poor self-image. Paraphrasing Jessica Rabbit, “MNCs aren’t ‘bad.’ They’re just drawn that way.” Their “We’re so guilty” attitude is unjustified. MNCs should not sit themselves in a corner.

Yes, it’s true that MNCs are guilty of doing some “bad” things. Aren’t you? MNCs are operated by humans. Imperfect humans who make mistakes. But I fear their mea culpa is overdone because most, if not all, MNCs indeed do more “good” than “bad.” One doesn’t need to perform extensive quantitative analysis to realize this.

If the MNCs were not doing more good than bad, then such behavior would be obvious to the marketplace, which is not stupid contrary to the belief of many activists. The marketplace is not stupid. We can use the activist’s own thought process to address this issue. Ask any activist how “stupid” the marketplace was in electing Barack Obama to the White House and the majority response will prove this point. So, if the “bad acts” of any MNC outweighed the “good acts” performed to support the economy and society, then the marketplace would know that; the people would “vote” with their dollars, numbering the days of any wayward MNC.

Given this automatic economic voting mechanism, where “election day” for the MNC is every day, is the current and projected level of NGO influence upon MNCs really justified? Which party receives more legitimization?

Yes, MNCs make mistakes. I accentuated the obvious above. MNCs are operated by humans. But so are NGOs. NGOs are run by humans, imperfect humans. NGOs, as well-intentioned as most probably are, are not exempt from making mistakes, and performing “bad acts,” whether by accident, or by intention, or by just plain ignorance. But how is the influence of these imperfect organizations counter-balanced? Unlike MNCs, NGOs are not subject to the same automatic regulatory mechanism of the “vote.” NGOs are not subject to the same daily “election day” as are the MNCs. The motivations and the acts of the NGO are not examined and evaluated with the same frequency as are those of the MNC. Neither are the acts of the NGO supported with the same number of votes from the public.

For example, according to their IRS Form 990, a publicly-available document filed by all non-profit organizations operating within the United States, for the fiscal year ending in 2008 both the Rainforest Action Network (RAN) and the Friends of the Earth (FOE), two of the most powerful environmental advocacy groups in the world (read that as NGOs), received less than $5 million each in revenue, i.e., fewer than 5 million votes of support. Each. (You may see these documents by going to Guidestar.org and searching on each NGO.) You can plainly see how this vote tally would compare to the annual vote tally of any MNC with which any NGO might collaborate or against which any NGO might compete.

Yet, the MNCs embrace these largely uncontrolled NGOs. NGOs. Organizations who do their best to compete daily for the image of the corporations they target (Note: I deal with this concept of corporate image competition in my newest and forthcoming book, Insidious Competition – The Battle for Meaning and the Corporate Image. Due out Spring 2010). Organizations who by the number of votes collected possess far less legitimatization than do the MNCs who do their best to incorporate NGO agendas. Organizations who pride themselves on “democratic” principles and acting for the “public good.”

Show me the votes. Show me the democracy. Without legitimization, how do these collaborations make sense?

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From pages 148 to 149 Paul presents an interesting concept: that there will be an increase in activism because of the Baby Boom. He doesn’t say it in quite this way, but he does say that because of the aging of the U.S. population that there will be a decrease in the number of employees working for the American government. Paul hypothesizes, from the perspective of the publication year of 2005, that these retiring employees would likely not be replaced at a rate that would equal the attrition. The reason he gives is that government employment is not as attractive as that in the private sector, and that because of this handicap the attrition rate may exceed the replacement rate.

Of course, that viewpoint was from 2005, before the stuff hit the fan in Fall 2008. Currently, with government being one of the few employment sectors that is expanding its hiring, Paul’s theory may not be entirely sound. Yet, analyzing from a current perspective, there are valid take-aways that may be had from this line of reasoning. Paul’s theory relates to the quantity of government workers, but he says little to nothing about the quality. Having worked for the federal government at one time, I could say something about the quality of federal workers. But that’s material for a different post. For now, let’s extend Paul’s thinking into present circumstances.

Because the aging U.S. population will cause more and more employees to retire from the ranks of federal employment, there will be progressively fewer experienced workers to carry out the regulatory mandates set down by the feds. Right now, because of government’s mania to hire more workers, the issue isn’t so much about the quantity as it is about the quality, i.e., the experience factor.

So, my point is that due to the Baby Boom the quality of federal regulatory enforcement may likely decrease because less experienced employees would need to takeover for those with decades of experience in regulatory matters. And if there are fewer experienced regulators, then businesses might be less likely to adhere to federal regulations than if the feds were fully staffed with experienced regulators.

How does this problem create more activism? Well, when activists see this situation, and believe me they won’t miss this, there would likely be an increase in their efforts. Activists and NGOs would increase their efforts to regulate business because those activists and NGOs would see that the feds weren’t staffed to do a “quality” job.

Thus, going forward with Baby Boom retirements which are now in progress, businesses should “gird their loins” and ready themselves for increased actions from advocacy groups.

It’s all in the demographics. And those numbers don’t lie.

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