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 / Spring 2007 / Issue 46(originally published by Booz & Company)


Recent Research

The second stage is termed “engaged.” At this stage, budding leadership support helps the organization become more reactive to issues involving corporate values, and the company begins to improve its public relations. However, the organization lacks the infrastructure or capability to go much further. As an example of this, the authors cite Home Depot’s decision to give preference to loggers who practice responsible harvesting.

At the next stage, “innovative,” organizations embrace a more comprehensive concept of corporate citizenship by taking a “stewardship” role. The authors cite the example of the global health-care company Baxter International Inc., which faced a crisis in 2001 when six Spanish dialysis patients using equipment that contained a Baxter filter died. The company immediately recalled the equipment and publicly apologized. The incident cost the company $189 million. Baxter’s CEO requested that his bonus be reduced to cover some of these costs.

Next comes an “integrated” stage, in which the emphasis within a company moves from coordination to collaboration. The authors use the petroleum company BP, which has a board-level ethics and environmental assurance committee, corporate directors of social policy and business ethics, oversight bodies at group level, corporation-wide and regional corporate values coordinators, and a variety of accountability measurements and audits, as an example. Additionally, the company’s CEO, Lord John Browne, has repeatedly emphasized his personal commitment to corporate citizenship.

At the final stage, “transforming,” the organization’s leaders take on a visionary role and apply their corporate values as a means of creating new markets or achieving social change. The authors point to the examples of pharmaceutical companies donating drugs to African countries to treat river blindness, leprosy, and diabetes, and Hewlett-Packard Company’s investment in digital communities in Brazil, India, and South Africa.

Interestingly, the paper cites research showing that 92 percent of organizations are driven to embrace corporate citizenship only after their customers and end-customers demand it. The authors say that organizations should preempt these pressures by adopting corporate values as a strategic imperative. Those that do so will not only be doing the right thing, the paper claims, but also achieving greater financial success in the process.

Nano Inc.
Stine Grodal ([email protected]), “The Emergence of New Industries: Contestation and Negotiation Between Nanotechnology Communities,” Danish Research Unit for Industrial Dynamics (DRUID), Summer 2006 conference.

It is tempting to think that the industrial landscape is relatively unchanging. But it is actually in a never-ending state of flux, with new industries constantly appearing and old ones falling away.

Rewind just 30 years, for example, and many of the products and industries that we take for granted today didn’t exist in any meaningful way. (Consider computers, software, gas-fired electricity plants, and cell phones.) Yet, according to Stine Grodal, a Ph.D. student in the department of management science and engineering at Stanford University, management literature has largely ignored the process by which new industries emerge.

The conventional approach to analyzing the creation of a new industry uses the industry itself as the starting point. Yet this approach fails to consider precursors to the industry that helped lead to its development. In particular, the traditional approach overlooks three important points:

  • Government officials, service providers, scientists, consumers, and other participants play an important role in the early development of an industry. For example, previous studies examining the development of the automobile industry focus on the manufacturers but largely ignore the impact of engineers who developed the combustion engine and the hobbyists who experimented with early prototypes.
  • Industries are not isolated from other technologies. Witness the overlap between the telecommunications and television cable industries as they now compete to provide broadband Internet access.
  • Interested parties such as scientists and journalists create rhetoric that defines a new industry. In the early days of nuclear power, for instance, nuclear scientists and government officials promoted the technology as a solution to air pollution. But protests against nuclear energy created a competing rhetoric that eventually curtailed the sector.
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