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The Bio & Power Spheres. BA635 Current Marketing Issues. Lecture Outline : The Meta-Convergence of Spheres. Increasing interplay between Bio & Power Spheres The rise of consumer/citizen eco-consciousness & environmentalism and the response of Business, NGO’s & Gov’t

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The Bio & Power Spheres

BA635 Current Marketing Issues


Lecture Outline:

The Meta-Convergence of Spheres

  • Increasing interplay between Bio & Power Spheres

  • The rise of consumer/citizen eco-consciousness & environmentalism and the response of Business, NGO’s & Gov’t

  • The Challenge of Commerce & Regulation in a Global market

  • The Collapse of Consensus


-just as the sub-spheres of the BioSphere…


Are interdependent…


SOCIO

POWER

PSYCHO

BIO

INFO

TECHNO

So too are the spheres of our society… Wherein: Change in one sphere….

impacts all other Spheres…


Accelerating

&

Intensifying

That Interaction among Spheres


Meta-convergence:“the tightening of connections among spheres that have hitherto been more independent”

"Culture, religion, politics, environment, ethics, are all going to interpenetrate one another to an extent never before seen, and they will, in turn, penetrate business in all sorts of strange new ways…“

Riding the third wave: A conversation with Alvin Toffler


  • Instead of the single "bottom line" on which most executives have been taught to fixate

  • the third wave corporation requires multiple bottom lines–

    • social, environmental, informational, political, and ethical bottom lines-- all of them interconnected."

      Toffler, The Third Wave--1980, p.240


Bio & Power-sphere Pressures on Today’s Corporation

Power

* Employment/ outsourcing;

  • Community/ Workplace

BIO

Corporate

Psyche

  • Responsibility- obligation

  • Health & Quality-of-life

  • Responsiveness- action

  • Performance- results

  • Environment / Global Warming


The 21st Century- Meta Convergence

  • Religious & Secular Groups

  • NGO’s- IMF, WTO, World Bank

  • Industry & Business Associations

  • Local, State & National Gov’t Agencies

Consumer Activists

Corporate, & activist – Shareholder organizations

  • Special Interest & Affinity groups


META-CONVERGENCE

The 3rd Wave’sRising Tide of Activism

60’s… 70’s… 80’s… 90’s


META-CONVERGENCE

The 3rd Wave’sRising Tide of Activism

  • 1965- Unsafe at Any Speed- Nader

  • 1969- April 22nd= Earth Day

  • 1980s Social investing becomes significant

  • 1990’s-corporate governance activists begin use of shareholder resolutions targeted at specific corporate practices


Activist Funds Make Waves

  • A new class of social investor doesn't believe in boycotting problem companies -- it's opting to reform them from within


By 2000- Shareholders put $2 trillion in socially responsible options


Initially- Consumer & Eco Activists- generally came from niche segment of society

  • Upscale-SES

  • Liberal in Attitude & Lifestyle


Accordingly Green Marketing Impact .. Early on –Not so much-

  • 41% of consumers - don’t buy green products because fear products won’t work as well

  • Only 29% of shoppers have recently bought a product because it was “green”

- March 6, 2002-

Green' Sales Pitch Isn't Moving Many Products


  • recycling rate of plastic soda bottles was ~1/3 of 1995 rate ….

  • single serve bottles on shelves - more then doubled to 18 billion

… circa 2000…

70% of baby food buyers preferred convenience of plastic to glass jars


  • Phillips billed it’s energy-saving bulbs as“EarthLight” & sales never materialized

  • Phillips repackaged & relaunched as convenient, seven yearMarathon bulbs

  • Sales went up 12% ….


Today

Eco- consciousness has become mainstream


Roper Starch WorldwideProfile of Consumers has tracked 5 Green Consumer segments since the 1990’s

LOHAS


Consumer & Eco Activists-


Sprouts

Swing group- May participate in conservation/ recycling-& look for green products– But will buy only if price not higher


Doggedly Indifferent


~mid ’90’s


NEW YORK–August 22, GfK Roper Green Gauge® study

  • found vast majority (87%) consumers agreeing --are seriously concerned about the environment.

http://www.gfkamerica.com/news/gfk_roper_environment_companies.htm


Roper and Starch

Product purchasing & consumption

= #1 way-Americans act upon their environmental concerns


And if the-Consumer cares

….Companies care


BENTONVILLE, Ark., Oct. 24,2005 - Wal-Mart's chief executive announced a set of sweeping, specific environmental goals

  • “Mr. Scott's announcement signals that the nation's largest retailer is joining the nation's largest manufacturer, General Electric, in pursuing policies that set specific goals for environmental performance, while advertising those goals to shareholders and customers and the public as strategic business decisions.”


The New Red, White & BlueFront lines of a green revolution.


  • “This is not bleeding-heart liberalism.

  • This is about managing risks in a challenging global context

    -- Equity analyst


… reporting of a company’s reputation is now on par with the reporting of finances.

Corporate Social Responsibility (CSR) – has become part of the bottom line…


Most Important Thing a Company Can Do to Be Seen as Socially Responsible

Source: Globescan 2005


70% of global investment managers surveyed believe that integrating environmental, social and governance issues into analysis will become mainstream in 3-10 years” -- Mercer Consulting, 2005


Stark Contrast w/ 2nd wave Mantra:

The only business of business is business--Milton Friedman

A successful business satisfies enough customers at a high enough price so as to return a profit to those who have invested in the entrepreneurial activity…

…to the extent that customers express satisfaction in a product or a service, in continued purchases, the producer serves the "public interest."


Ford’s Model T Mentality

  • “Business is not designed/staffed/equipped for addressing social issues

  • The over-riding responsibility of business is to maximise the profits of its owners & shareholders

  • The advancement of the Social welfare – best handled by gov’t, church & charitable institutions”

The Model T Requires

7,882 tasks requiring:

  • “949 strong men

  • 3,338 ordinary men

  • 670 legless

  • 2,637 one legged

  • 2 armless

  • 715 one armed

  • 10 blind men”*


By 2002

  • Just 2%still believed that the only business of business is business.

    Do more, say the peopleMurray ArmstrongMonday November 25, 2002


QWhen forming a decision about buying a product from a particular company - how important or unimportant is it to you that it shows commitment to social responsibility?

. . and 1 in 5 would be very willing to pay more

Don’t know

Very important

Not important

Fairly important

- September 2000 - MORI


  • Gen Y --

    • 89% likely to switch brands if linked to cause

    • 83% trust company more if socially responsible

    • 79% want to work for company that contributes to society

    • 78% believe companies have responsibility for making a difference in the world

    • 74% more likely to pay attention to a company’s overall messaging when they see that company has deep commitment to cause they care about

    • 69% consider companies’ CSR reputation when deciding where to shop

    • 61% feel personally responsible for making a difference in the world

    • 56% would refuse to work for an irresponsible corporation

Source: 2006 Cone Millennial Cause Study


Generation Y Workforce

  • 97% believe companies should offer employees opportunities to volunteer

  • 80% identify themselves as volunteers

  • 62% prefer to work for companies that give them opportunities to volunteer

Deloitte’s 2007 Volunteer IMPACT Study


Also the Company

And Position

Not just Product

The New Competition


Indeed- the monitoring of your Company’s Reputation & Social Responsibility has now been taken up by the United Nations…


Regulation

Global Compact

Company

Codes

Created to fill the void…

  • A corporate social responsibility program

  • A multi-stakeholder platform

  • Based on principles:

    • Human Rights

    • Labour Conditions

    • Environment

    • Anti-Corruption

  • Universally recognized


UN Corporate Responsibility Program

Business Participation today

  • ~ 2000 Global, large domestic, SMEs

  • All business sectors

  • In Developed & developing world

  • 45 country networks


http://www.unglobalcompact.org/Portal/Default.asp?

30’ spot

2 hour panel-How Can Business Contribute to the Global Compact?


Today's Managers must balance the bottom-line against the ideals –

“--- want max profit for shareholders…with honesty in business practices,…safety in the workplace, ..and also serve larger environmental & social issues.”


The “Paradoxes” of Business Today

…but try not to let customer service cut too deeply into profit margins

Treat customers well...

Create a diverse workforce...

…but hire people from most

prestigious & expensive universities

Develop codes of ethics...

…even if the corporate culture

mainly rewards those who “make their numbers”

Go global ...

…but maintain the cultural

values of the home office


The “Paradoxes” of Business Today

Network, network, network...

…but beware the Old Boys’ Club that can breed corruption

Empower employees...

…but monitor ‘em carefully because you’re legally liable for their behaviors

Play by the rules...

…but think outside the box.


Business Ethics; The Columbia Encyclopedia, Sixth Edition.  2001.

“Ethical issues in business have become more complicated because of:

the global & diversified nature of many large corporations……and because of the complexity of government regulations …”


The Power-Sphere-- authority allocated thru formal & informal political institutions


Today - No Shortage of Laws & Codes, Controlling Business & Marketing Practices


Nor – No Shortage of Agencies, Commissions & Administrations to Enforce those Laws, Codes, Guidelines

Rise of the Bureaucrats


Regulation Cradle to Grave

2006-The European Union has passed "end-of-life" legislation, requiring auto makers to recycle or reuse at least 80% of their old cars.

Computers & electrical gear were already covered

The European Eco-label


And its only going to get worse

has gotten

As we transform to a global economy---

  • There’s Emerging consensus that we need some global governance to avoid chaotic & divergent national & local regulation.

Herein-Cited from: Stuart S. Malawerhttp://www.global-trade-law.com/


Trade & Foreign Policy Issues for the 21st Century --

  • Uniform Commercial Code for eCommerce

  • Customs & taxation.

  • Electronic payment systems.

  • Intellectual property protection.

  • Privacy (data transfers).

  • Cyber Security.

  • Content.

  • Technical standards.

  • Telecommunications Infrastructure, Information Technology & Internet.

    • Telephone access, connection charges & other restrictions as trade issues …FDI into domestic telecom & Internet industries. (Many foreign telecoms are still state owned.)


Key Debate & Discussion

  • Global trade institutions are only now beginning to address dramatic challenges of Internet trade & eCommerce.


Major Players

  • WTO- World Trade Organization

  • ITU-International Telecommunications Union

  • WIPO: (World Intellectual Property Organization

  • UNCTAD: United Nations Conference on Trade and Development

  • GBDe (Global Business Dialogue on Electronic Commerce),


IP protection a strategic issue…

  • Established sentiment --nothing wrong w/sharing music/video files …

  • The China syndrome (“Brand-Jacking”) flooding global market w/ illegal copies --& knockoffs


Six Emerging Principles.

  • Private sector should lead.

  • No undue market restrictions.

  • Simple legal environment.

  • Recognize uniqueness of Internet.

  • The Internet changes everything, business models & government.

  • Facilitate globalization of E-Commerce & E-Trade via Internet


Principles reflect the fact that the world has become an interactive, blurred, fluid & MULTIFACITED LANDSCAPE …

Ethno

Techno

Media

Finance

Ideo


  • an ethno-scape of mobile populations of businesses, workers, students, refugees…

  • a techno-scape of diffusion & adoption of mechanical & informational technologies;

  • a finance-scape of global capital;

  • a media-scape, which includes not only global spread of media channels, but images they carry;

  • an ideo-scape of political discourses re: democracy & human rights.


So what thehell does that mean??


DEFINED

A process in which:

  • Societies, cultures, polities & economies in the world are coming together

  • & world is shrinking in space, time & relations.


Globalization is a complex topic

… can be interpreted many different ways,

each of which reveals different facets of its complexity”


a complex topic

….leads to

  • Confusion

  • Controversy

  • Conflict


What “it” meansdepends on your perspective:

Corp. Executive Marketer

An IT worker in India

Politician

Activist

Consumer

A Chinese Laborer

Anthropologist


What is Globalization?

  • Is it Good or Bad?

  • Is it a Threat or Opportunity?

  • Does it have Positive or Negative Impacts?

  • Is it a Corp. Strategy or Social Phenomenon?


What “it” is depends on who you are…

  • Business Exec - sees new Markets & Sources of Raw Materials & Labor

  • Consumer-seesmore & Cheaper products

  • Social Scientist-sees Acculturation – Assimilation….

  • Activist-sees Exploitation, Moral Corruption & Environmental Degradation


Cultural Impacts

Domination

Assimilation

Polarization


Domination


Consequence of Cultural Imperialism


Poland


BeijingReal Estate


From Beijing to Bangladesh


“M-fluences” on indigenous cultures…

  • Multi-Nationals

  • Movies

  • Music – MTV

  • McDonald’s


Jerusalem

McD’s

Istanbul

Guangzhou

Beijing


Backlash to Cultural & Economic Imperialism=

Backlash to Cultural Imperialism=


But-Keep it in Perspective!

  • Most trade still regional

  • “Local” still matters

  • Few global brands

  • Global Influence- mainly in big cities


Cultural Assimilation is most prevalent

Globalization often results in a melding of foreign & domestic product forms & functions


Kentucky Fried Moose-Toronto


http://babelfish.altavista.com/: “I will explain it to you at Mcdo”


Brand Preference is Superficial

One can pay too much attention the kinds of consumer goods that people buy.

That's a superficial aspect of culture


Example:Cola Turka

  • Multinational corporations don’t always get their way

  • Local cultures respond on their own terms


Yet- Regardless of the citizens’ reaction to “foreign” products

  • Globalization is slowly but surely eroding the preeminence of the nation-state…


  • The implications of globalization for the future of the nation-state…


The Nation State – pressured from all sides

From Above: global communications, global economy, worldwide environmental repercussions

From W/out:Non-governmental Organizations

From Within: Multi/Trans-nationals own agendas- loyal to themselves, play countries against each other

From Below: -- mounting sectarian pressures –


Circumstances differ from country to country…

but what does not differ is the revolutionary challenge posed by the 3rd Wave…

…to obsolete

2nd Wave

institutions –

…too slow to keep up w/ the pace of change &... to cope w/ new levels of social & political diversity.


  • "As we race into the Third Wave era, those of us who want to expand human freedom will not be able to do so by simply defending our existing institutions.

  • We shall -- like America's founding parents two centuries ago -- have to invent new ones."


“In all likelihood it will require the radical overhaul –or even scraping-of:

  • Congress, Politburos, Houses of Common & Lords, Bundastags, Diets…

  • The giant ministries and entrenched civil service… and systems—

  • In short all the unwieldy & unworkable apparatus of supposedly representative governments”…


2nd WavePowerSphere~Collapse

  • "As the Second Wave produced a mass society, the Third Wave de-massifies us,………. moving the entire social system to a much higher level of diversity & complexity.

  • This revolutionary process, much like the biological differentiation that occurs in evolution, helps explain one of today's most noted political phenomena - the collapse of consensus."

Toffler, The Third Wave, p. 408


Toffler, The Third Wave, p. 410

the collapse of consensus

  • In 2nd Wave society a political leader could glue together half a dozen major blocs, as Roosevelt did in 1932, …..& expect the resulting coalition to remain locked in position for many years.


Toffler, The Third Wave, p. 410

the collapse of consensus

  • Today it is necessary to plug together hundreds, even thousands, of tiny, short-lived special interest groups… that cleave together just long enough to elect a president, then break apart again the day after the election, leaving him without a base of support for his programs


In a de-massified society, we not only lack national purpose, we also lack regional, statewide, or city-wide purpose. ...

  • In a mass industrial society, when people and their needs were fairly uniform and basic, consensus was an attainable goal.


What, then, happens to the very notion of 'representative democracy?'

The elected representative cannot represent the general will

for the simple reason that there is none!


“The onward march of individualism - either through choice or fate - is still probably the major force shaping our world”

http://www.guardian.co.uk/2020/0,15047,1299021,00.html

The central question is: Will the slow collapse of institutions that have been vehicles for our shared identity mean collapse of identity itself?


Vid-Clip Outline:

  • Timberland- (~10’)

  • Frontline- The Persuaders - Segment (~15’)

  • Toffler-2nd vs. 3rd Wave PowerSphere (~15’)

  • McDonald’s CSR progress(~5’)

  • Corporate Social Responsibility (~5’)

  • UN Global Compact-


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