From much of my reading, I can see that the power of the NGO (non-governmental organization) is increasing. With regard to how that power affects business, my research shows that over the past decade NGO-influenced corporations are now becoming the norm rather than the exception. And from the projections I’ve read, it appears that that influence will only become greater over the next decade.

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

Continue reading The Marketplace Is Not Stupid