One of the biggest social-business stories in recent memory was the April 12, 2018 trespassing arrest of two African-American men in a Starbucks after they refused to make a purchase or leave. The matter was widely regarded as an issue of racial discrimination. Therefore, Starbucks made the decision to close all 8,000 of its stores on May 29 to provide “racial-bias education” to its nearly 200,000 employees.
Those are pretty big numbers.
And other businesses surely don’t want to be in Starbucks’ shoes, reacting to a public relations nightmare. They’d prefer to never be involved in such a crisis. So, you can bet that corporate executives are thinking about how they can proactively foster a culture of social harmony – even if it means spending money and sacrificing profit in the name of diversity and inclusion.
It serves as a reminder that where money is spent reveals the values that an organization supports.
So, let’s discuss that in context of international procurement.
In our course, “Exemplary Supply Chain Social Responsibility,” we talk about the issue of “conflict minerals.” Specifically, we cover how some minerals that are used as raw materials in manufacturing originate in mines operated by militias who are notorious for atrocities such as kidnapping, rape and murder. Responsible organizations and governments do not want to support those crimes and those militias, so they go to great lengths to ensure that they do not buy minerals whose supply chain involves these militias.
As the business world becomes wiser, I believe that organizations will increasingly look to ensure that spending decisions avoid rewarding those with atrocious values at any link in the supply chain. But this is more complicated than it sounds when you look at international procurement hotspots.
For example, ethnic discrimination is quite a problem in one certain global sourcing nirvana for goods. According to The Economist, two specific ethnic groups there are experiencing intense ethnic discrimination that “makes it difficult to find work in cities. As ethnic discontent grows, so too does the discrimination, creating a vicious circle.” The government of that nation is criticized for enabling this discrimination, putting forth only “token efforts” to combat it. The article goes on to describe how police treat one of those groups in a way that would certainly raise the ire in America, given the powerful rise of “intolerance of intolerance.”
So, should a company like Starbucks that preaches against “racial bias” source in a country that seems to permit a similar type of ethnic discrimination being combatted in its home country?
What about the nation many think of first when considering globally sourcing services? There, Fox News reports that Christians are systemically persecuted and that the government of their current Prime Minister “is often blamed for the growing religious violence?”
Because of the amount of money spent via procurement contracts, large corporations and the governments in their countries have the potential to wield very strong influence over social harmony – not just domestically, but internationally. World leaders such as U.S. President Donald Trump have shown that they are not afraid to stand up to their peers in other countries and essentially say “We’re no longer going to do business the way we have been.” Collectively, business and government leaders could demand that systemic ethnic and religious persecution end or else money for importing will be spent elsewhere.
However, not all big businesses are willing to force their ideas of equality on other nations. Another timely example comes in the form of World Wrestling Entertainment holding its first pay-per-view event in a middle eastern country this coming Sunday.
In recent years, WWE has chosen to associate its brand with equality for women. It changed the name of its all-female division from “Divas” to the “Women’s Division.” It has touted a “women’s revolution” in its programming.
However, this Sunday’s “Greatest Royal Rumble” event is featuring male performers only. The host country is notorious for providing fewer rights to women than men. Yet, the WWE decided that international revenue growth was a higher priority than pushing its women’s equality agenda and agreed to hold the event. WWE has been challenged in this regard, but still seems to believe that having its first event be an all-male event in a new country is a step in the right direction. Forbes quotes WWE vice president, Paul Levesque, as saying “I understand that people are questioning it, but you have to understand that every culture is different and just because you don’t agree with a certain aspect of it, it doesn’t mean it’s not a relevant culture. You can’t dictate to a country or a religion about how they handle things, but having said that, WWE is at the forefront of a women’s evolution in the world, and what you can’t do is effect change anywhere by staying away from it.”
Forbes opines that Levesque’s quote makes him “sound like a corporate wind-up doll” and calls WWE’s decision to hold the event sans female performers “hypocrisy.”
So, this last example illustrates that just because the idea of making social harmony a prerequisite for doing business could happen, doesn’t mean it will happen. However, with a raging sentiment behind the pursuit of social harmony – especially among millennials, the leaders of tomorrow – using procurement dollars to effect positive change in the world could become a very powerful business strategy in the future.