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Corporations’ view on managing socio-political issues

McKinsey is a consultancy that provides excellent reporting on many managment issues. You can easily access their reports, often at no cost. A recent McKinsey study entitled From Risk to Opportunity – how global executives view socio-political issues is worth a read. The report looks at corporate, NGO (non-governmental organizations)  and other stakeholder perspectives on the role of companies in anticipating and responding to social-political issues.  There is some surprising information:

  • Companies are seeing socio-political issues more as an opportunity than a risk – upside not downside. Compliance clearly isn’t the primary motivator for corporations to anticipate socio-political issues and manage these impacts.
  • Executives at NGOs are more pro-business than business itself with 70% of their representatives describing corporate contribution to the public good as positive…meanwhile…only 12% of business executives describe NGOs as pro-business and 56% consider NGOs anti-business.
  • The environment remains as a primary socio-political issue, with privacy and security of data still a priority. Next in line in priority are demand for healthier/safer products and healthcare and other benefits for employees.

The findings of this report may explain why corporations and NGOs are sometimes reluctant to collaborate. Yet, it looks like there is upside potential for that collaboration.

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  • Hi Donna,

    reading the McKinsey report on socio-political issues and drivers, I first thought about the Christmas food presents mid/end 1800 (industrial revolution). That continued even into the early 60’s of last century. GHG is like the Christmas food gifts: it’s not the only (socio-political) issue, which cares.

    Second I read “socio-political” in economical terms. Like the message by Klaus Gabriel in his book “Sustainability at the FS capital markets”. Impressive is the responsibility of business on the topic of education. Especially business should have a high interest on best performed education from basic school up to university level. This, because our next generation should maintain the different achievables built by this generation, and extent them into new dimensions and domains. All kind of initiatives driving instances like private schools are typical exclusive and don’t serve on large scale to the society. Industry and business should be aware, that they attract people with a teacher career path. That means, the equivalents to the teachers of 60’s and 70’s are today employees in business and industry.

    With the “top issues over next 5 years” I got the impression that the respondents “became older”, because healthier and safer products, health care ranked higher.

    The “corporate communication tactics mismatch” was very interesting, especially in the combination with the “sources of stakeholder pressure” (Exhibit 5 and 7). The business channels (soundboards) also decide on socio-political as well.

    Bridging this survey into the domain of sustainability I’m interesting to know about the dimensions ecology (I don’t mean GHG) and biodiversity. Later dimension, I expect, is pretty unknown besides of the mammoth and other fossils. Perhaps the respondents take the time in-between to view the cinema film “the earth” (available on CD for the home cinema).

    As we discussed this already in our SAP TechEd Berlin session most of the socio-political initiatives have to come from the individuals, less by corporates or government. The key question is than, how corporates and NGO’s support that development in awareness. Some of current business leader organizations can function as big think-tanks with a interesting wide-spread on knowledge and expertise.

    Kind regards Paul

  • The report very nicely reinforces our faith in the efficacy of corporates growing as a responsible citizens of the society.
    The report also provides good direction for corporates.

    It becomes clear that it is now only a question of ‘To what extent a corporate has to meet the expectations of the society’ and not ‘Whether or not’.
    The mining industry is a standing example as to how to organize efforts in this direction.The history of “How ICMM Principles were formed?” is a good reading on this,

    starting as an off shoot from the effect of The Earth Summit 1992. Not a small effort; it is global and on going.

    As can be read at page 3, 79% feel ‘proactive’ about the work done by the corporates for public good.There is the 8% who seem to say ‘ Leave it to us; we will manage; after the

    damage’ .They are the ‘reactive’ type. The other 13% wants only returns for their share.They seem to feel ‘It is not my job’.They need education.

    Those interviewed seem to say that for the corporate’s own good of getting competent employees, they better help improve the education system. As the days are changing, each

    company to ‘look outside’ their glass walls and ensure outreach the benefits of globalization, so that glass remains intact. They also must ‘look inwards’ so that the cancer of

    corruption doesnot eat away the company from inside.

    The Financial Services people also may understand addressing of environmental issues as opportunity if they are given to to know that environment management  involves

    energy management, resource conservation, waste reduction,reuse,recycling and many more. Here again education seems to be the key.

    Pressure sources are, as per the report, regulators, consumers, media and NGOs – through out the year, at random. If the corporate goes beyond compliance, there would be

    freedom from the pressure and they could focus their energy on core issues.

    The way forward seems to be
    – make media and PR efforts more educative
    – develop and implement policies on ethics,and other corporate -responsibility issues (eg.human rights, environment)
    – use industry coalition to address the issues.

    Thanks very much.

    sam anbazhagan