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government regulation to these more collaborative efforts often ignore the fact that
strong rules imposed against the will of farmers end up being weakly enforced…or not
enforced at all。
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What is in this for McDonald's？ It is a huge opportunity to improve its global brand
by acting as a good global citizen。 Yes； this is； at root； a business opportunity
for McDonald's。 Sometimes the best way to change the world is by getting the big
players to do the right things for the wrong reasons； because waiting for them to
do the right things for the right reasons can mean waiting forever。 Conservation
International has struck similar supply…chain collaborations withStarbucks； setting
rules for its supply chain of coffee farmers； and Office Depot； with its supply chain
of paper…product providers。
What these collaborations do is start to 〃break down the walls between different
interest groups；〃 said Prickett。 Normally you would have the environmentalists on
one side and the farmers on the other and each side trying to get the government to
write the regulations in the way that would serve it。 Government would end up writing
the rules largely to benefit business。 〃Now； instead； we have a private entity saying；
'We want to use our global supply chain to do some good；' but we understand that to
be effective it has to be a collaboration with the farmers and the environmentalists
if it is going to have any impact；〃 Prickett said。
In this same vein； as a compassionate flatist； I would like to see a label on every
electronics good state whether the supply chain that produced it is in compliance
with the standards set down by the new HP…Dell…IBM alliance。 In October 2004； these
three giants joined forces in a collaborative effort with key members of their
computer and printer supply chains to promote a unified code of socially responsible
manufacturing practices across the world。 The new Electronics Industry Code of
Conduct includes bans on bribes； child labor； embezzlement and extortion； and
violations of intellectual property； rules governing usage of wastewater； hazardous
materials； pollutants； and regulations on the reporting of occupational injuries。
Several major electronics manufacturers who serve the IBM； Dell； and HP supply chains
collaborated on writing the code； including Celestica； Flextronics； Jabil；
Sanmina…SCI； and Solectron。
All HP suppliers； for instance； will be required to follow the code； though there
is flexibility in the timing of how they reach compliance。 〃We are completely prepared
and have terminated relationships with
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suppliers we find to be repeatedly nonresponsive；〃 said HP spokeswoman Monica Sarkar。
As of October 2004； HP had assessed more than 150 of its 350 suppliers； including
factories in China； Mexico； Southeast Asia； and Eastern Europe。 It has set up a
steering committee with IBM and Dell in order to figure out exactly how they
collectively can review compliance and punish consistent violators。 Compliance is
everything； and so； again； it remains to be seen just how vigilant the corporations
will be with their suppliers。 Nevertheless； this use of supply chains to create
values…not just value…could be a wave of the future。
〃As we have begun to look to other ＇offshore＇ suppliers to do most of our manufacturing；
it has become clear to us that we have to assume some responsibility for how they
do that work；〃 explained Debra Dunn； HP's senior vice president of corporate affairs
and global citizenship。 First and foremost； that is what many of HP's customers want。
〃Customers care；〃 said Dunn； 〃and European customers lead the way in caring。 And human
rights groups and NGOs； who are gaining increasing global influence as trust in
corporations declines； are basically saying； 'You guys have the power here。 You are
global companies； you can set expectations that will influence environmental
practices and human rights practices in emerging markets。'〃
Those voices are right； and what is more； they can use the Internet to great effect；
if they want； to embarrass global corporations into compliance。
〃When you have the procurement dollars that HP and McDonald's have；〃 said Dunn；
〃people really want to do business with you； so you have leverage and are in a position
to set standards and ＇therefore＇ you have a responsibility to set standards。〃 The
role of global corporations in setting standards in emerging markets is doubly
important； because oftentimes local governments actually want to improve their
environmental standards。 They know it is important in the long run； but the pressure
to create jobs and live within budget constraints is overwhelming and therefore the
pressure to look the other way is overwhelming。 Countries like China； noted Dunn；
often actually want an outside force； like a global business coalition； to exert
pressure to drive
new values and standards at home that they are too weak to impose on themselves and
their own bureaucrats。 In The Lexus and the Olive Tree I called this form of value
creation 〃globalution；〃 or revolution from beyond。
Said Dunn： 〃We used to say that as long as we complied with the local law； that was
all we could be expected to do。 But now the imbalance of power is so huge it is not
practical to say that Wal…Mart or HP can do whatever they want as long as a state
government or country does not stop them。 The leverage HP would leave on the table
would be immoral given its superior power 。 。 。 We have the power to transmit global
governance to our universe of suppliers and employees and consumers； which is a pretty
broad universe。〃
Dunn noted that in a country like China there is an intense competition by local
companies to become part of the HP or Dell or Wal…Mart supply chain。 Even though it
is high pressure； it means a steady volume of considerable business…the kind that
can make or break a company。 As a result； HP has huge leverage over its Chinese
suppliers； and they are actually very open to having their factory standards lifted；
because they know that if they get up to the standards of HP they can leverage that
to get business from Dell or Sony。
Advocates of compassionate flatism need to educate consumers to the fact that their
buying decisions and buying power are political。 Every time you as a consumer make
a decision； you are supporting a whole set of values。 You are voting about the barriers
and friction you want to preserve or eliminate。 Progressives need to make this
information more easily available to consumers； so more of them can vote the right
way and support the right kind of global corporate behavior。
Marc Gunther； a senior writer for Fortune magazine andthe author of Faith and Fortune：
The Quiet Revolution to Reform American Business； is one of the few business writers
who have recognized how global corporations can be influenced by progressive politics。
〃To be sure；〃 wrote Gunther in an essay in The Washington Post （November 14； 2004）；
〃there are plenty of scoundrels out there； indifferent to the rights and wrongs of
corporate behavior。 And some executives who talk of