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Brands drive action on tough global issues

Michael Jarvis's picture

Sebastian Mallaby (of “The World’s Banker" fame) suggests that today’s big corporate players are tackling pressing global challenges without waiting for government to take a lead. In Monday’s op-ed “A New Brand of Power” in the Washington Post, Mallaby suggests that firms are driven by the need to protect their brands, prompting action in response to public concerns from everything from junk food to climate change.

No regulation compels Nike to pay more than the prevailing wage in the poor countries it works in. But the value of Nike’s brand dwarfs its costs of manufacturing, so it wisely chooses to do so.

Winning support is crucial in the board room as in the legislature. In terms of gaining commitments to ambitious social and environmental targets, Mallaby suggests corporate leaders are proving more successful than their political counterparts.

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The World Bank Special Washington, Year 2004, Dear Colleagues, On the corner of K Street and 18th, one bloc away from the World Bank, they are today serving a World Bank special, made up of chicken breast, onion, green peppers, bacon, and Brie cheese. Not bad, but some questions beg for answers. Are they really authorized to use the term “The World Bank” in their marketing? Do we not have the copyright of our own trademark? Can we not strike a deal with them, or any other users that could help us to scale up? Do we all concur in the recipe? Could there be reputation risks if the food is not liked? You know have I often have expressed amazement at France’s marketing capabilities, as when our many diverse multiethnic coffees all get reduced to being just French Roast. Well, now they’ve done it again. Not only have they been able to place their Brie cheese on The World Bank Special, but they also got it all placed on “a whole French wheat roll” Chapeau to them! Per From Voice and Noise http://teawithft.blogspot.com/

The interesting aspect of all this is that all the screaming about "sweatshop wages" might be far more important than the average middle of the road development economist takes into account. After all, the brand can´t be hurt if the publication of labor practices does not ellicit a strong public backlash. On the other hand, one could argue that this is just another protectionist measure that keeps MNCs in 2nd poorest countries (Indonesia vs. say Uganda or Laos).

Submitted by Sean Dickieson on
Sebastian's comments make good sense. Especially with regard to the ability of corporations to act faster than governments. The only exception I take to his op-ed is his comment that "The next stage may be for companies not merely to outpace government but to pull government along." That process simply cannot be allowed - at least in the United States. As a representative republic, it is the people who choose their representation and the direction of government, not the interests of corporations. When the day comes that corporate interests overshadow the interests of the American citizens, this grand experiment in liberty is lost and our Constitution will eventually be sidelined by the pursuit of profit. Corporate leadership and corporate success is a great thing, but never at the expense of human liberty. If we allow that to fail, we have failed the future for our own children.

It's generally true that foreign companies pay higher wages. But in most cases it doesn't have anything to do with calming down potentially angry consumers. Efficiency wage thinking is probably the most important. It is however something quite different when there is subcontracting and not direct ownership. With regards to the idea of the influence of the ethical or political consumer, I have my doubts about how much big corporations can or should be expected to spearhead wage rises in developing nations. Maybe some market segments in OECD markets respond strongly to knowledge about wages or working conditions in developing countries, but the majority probably doesn't. Wage rises will come as the countries become richer, not because of charitable multinationals. And just my last little comment to whoever might read this thread - we shouldn't overlook the potential hazards when multinationals (and Aid agencies) pay much, much higher wages than the normal. And thereby completely distort the labor market, sometimes making drivers and gardeners out of engineers and economists, etc. Best wishes Lars, Denmark

Submitted by Anonymous on
John Varley, Group CEO of Barclays, explains why business ethic are so important to branding and maintaining good relationships with stakeholders - customers, employees, regulators and investors. Barclays sets out how these considerations have made an ...

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