A growing number of people purchase bread from neighbourhood bakeries who use locally-sourced organic grains. We do it because we love the taste and for sustainability reasons. Based on some preliminary analysis I found that each loaf purchased represents about $2.03 per loaf in terms of social and ecological benefits!* First, choosing bread with organically grown grain can improve externalities by 20 cents per loaf, which includes 6 cents for avoided costs related to using pesticides (e.g., effects on human health, related clean-up costs, environmental damage), 7 cents for avoided costs due to GHG emissions associated with creating, transporting and applying off-farm fertilizers, and about 7 cents thanks to positive externalities from carbon sequestration (from using practices like no-till agriculture). Second, choosing a locally-owned and sourced bakery creates about $1.66 per loaf in terms of positive externalities for the local economy. This includes about 3 cents per loaf for avoiding GHG expense for transporting grains and another $1.62 for hiring local suppliers, accountants, lawyers, subcontracting, marketing and so on (vs. sending money to have these services performed in a faraway headquarters). Third, about 18 cents of positive externalities are created if even 10% of the staff had faced multiple barriers to employment (e.g., previously on social assistance). This does not include benefits of paying a living wage, of job satisfaction working in a local artisanal vs industrial bakery, of nutritional advantages associated with sourdough breads, and so on. It also does not measure possible energy efficiencies of baking bread at different scales. * Note: Figures are based on a loaf that is 675gram (1.5 lb) and in Canadian dollars.
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Anna Hunter has a passion for connecting people with local food and clothing production. In 2016 she and her husband Luke started Long Way Homestead, a 140-acre fiber farm and wool mill near Winnipeg that operates as a sustainable closed-loop system raising Shetland sheep. Long Way’s mission is “to work regeneratively with the land and with our animals to produce sustainable soil-to-soil textiles and yarn” as it seeks to fill a void in the Canadian-grown wool infrastructure. Long Way takes its own wool and that of other sheep farmers across the prairies and processes it into yarn, fiber and other textile products. Anna prioritizes the transparency and traceability of the wool supply chain and explains how she interacts with the farmers from whom she buys wool: “Farmers in Canada don’t make a good rate on their wool. Typically, it doesn’t even cover the cost of raising those animals. So, I have prioritized doubling or tripling the price that farmers get through the wool growers … I go to those farms, I meet with those farmers, I see their operations, I see how they interact with their land base or with their animals. And then they know they’re valued because I pay them a rate that is honouring how hard they work for that wool.” Along with its fiber products, the farm also promotes connection to the land, to the animals, and to regenerative agriculture processes that contribute to improving ecosystems. For example, Long Way’s SponsorSHEEP program allows someone to sponsor a sheep for a year, name it, receive its wool at the end of the year, and thereby become more educated and aware. Long Way’s farmland is a biodiverse, circular system, and Anna notes that wool is a significant carbon sink since it’s made up of almost 50% carbon: “the more wool that we’re growing, the more carbon we’re sucking out of the atmosphere, so I feel like it’s a direct connection to fighting climate change.” Long Way Homestead’s approach to management is firmly aligned with the SET management approach. Anna explicitly views growth from a sustainable rather than financial perspective, sees the farm as a vehicle for change, and hopes that it will grow in order to add social, environmental and economic resilience to the local rural community. This sense of community includes other wool mills, whom Anna refuses to see as competitors because the market is large enough for everyone to have enough. A truly unique and inspiring organization, Long Way Homestead is a pertinent example of a SET-managed firm. *This short blog post on Long Way Homestead—one of dozens of SET firms being studied by a research team at the Asper School of Business—was written by Master’s student Savanna Vagianos. For more information, visit https://www.longwayhomestead.com
Imagine a home renovation business that began in a global pandemic, that pays employees to cycle to their job sites year-round, and is located in the cold winter climate of Winnipeg, Canada. This is the story of Velo Renovation, a SET-run business started by passionate cyclist, Nathaniel (Nate) De Avila. In addition to promoting ecological well-being via cycling, Velo actively presents clients with sustainable renovation alternatives (e.g., promoting the use of natural materials like linseed oil paint and up-cycling existing materials) and uses sustainable practices (e.g., Velo avoids the use of aggressive and harmful chemicals whenever possible). Velo’s revolutionary management and leadership style also foster social well-being: employees set their own hours and their own pay, and Nate ensures that “the books are open to everyone” enabling employees to look at Velo’s revenues and expenses. Additionally, Velo’s mission emphasizes the value of friendship over profit. The Velo team has remained consistently diverse with the inclusion of women, ethnic minorities, and individuals with barriers to the workforce. Employees describe Nate as “an incredible teacher”, someone who is “extremely gracious and patient,” and is “always trying to push safety, or happiness and well-being” on the job rather than efficiency, speed or productivity. A number of employees mentioned that Velo has given them a sense of stability in a time where everything seemed to be up in the air. Because of its emphases on cycling and spending time outdoors, one employee enthuses that working at Velo “feels like an adventure, it doesn’t feel like work.” An exemplary SET firm, Velo Renovation explicitly prioritizes people and the planet over profit. *This short blog post on Velo Renovation—one of dozens of SET firms being studied by a research team at the Asper School of Business—was written by Master’s student Savanna Vagianos. For more information, visit https://velorenovation.ca
In this article from The Manila Times, Patch Aure, a proponent of business education based on SET principles, believes the time is ripe to renew our humanity by "putting authenticity, sustainability and integral human development in business.” PATRICK ADRIEL H. AURE, MBA Vice Chair and Assistant Professor, Management and Organization Department Head, Social Enterprise Research Network - Center for Business Research and Development Ramon V. del Rosario College of Business De La Salle University In the fourth week of July, we celebrated online the 10th anniversary of the Ramon V. del Rosario College of Business at De La Salle University. This celebration felt a bit surreal to me; after all, the pandemic is still here. A year and a half of teaching online, faculty, students and administrators have struggled with unstable internet connections, dealing with the coronavirus disease 2019 (Covid-19), and caring for our well-being. Nevertheless, there is still reason to keep faith and hope. Choppy internet connections should not stop our drive for authentic learning and community building.
With this premise, I realize that an effective response to the pandemic should be more than "restarting," Instead, the pandemic can be an opportunity for a "great renewal." In business and management education, this means: setting social and ecological outcomes as the primary goals of business; framing education as a platform for both learning and facilitating relationships; and rethinking higher education pedagogy. Prior to Covid, workplace choirs were becoming increasingly popular, including at many businesses whose names appear on “best places to work” lists. With the onset of Covid, it became popular for people to step outside of their homes in order to participate in music-making with their neighbours. Finally, it has been suggested that many environmentalists are also part-time musicians. Might there be a relationship between key SET values—a great place to work, fostering community, environmentalism—and music? Arran Caza and I recently published a study that examines the relationship between corporate singing and organizational culture. We found that, as predicted, compared to organizations where members listened to music, organizations where members sang together had more prosocial behavior (i.e., members were more likely to volunteer to serve each other). We also examined whether different types of singing (e.g., chanting, versus unison, versus harmony, versus combination) were related to different levels of prosociality. As predicted, compared to the other types of singing, firms where members sang together in harmony exhibited greater prosocial behavior and values. Singing in harmony may help members to be more attuned to and welcoming of differences with others (e.g., harmonious music would not be possible if everyone was singing in unison). That said, ours was an exploratory study, and thus our results should not be seen as definitive. However, akin to SET management, they suggest that being sensitive to and appreciative of differences among stakeholders can result in outcomes more pleasing than any one of the stakeholders can achieve on their own. Dyck, B., & Caza, A. (2021). An exploratory study of corporate singing: Relationships of rhythm, melody, and harmony with culture. Journal of Management, Spirituality and Religion, 18(2): 74-99 I’ve been told that there is more money spent on marketing than is spent by governments on K-12 education worldwide. Marketing has a lot of influence in shaping how we live and perceive ourselves. If the purpose of marketing is to convince people to buy more, then we will never feel like we have enough. If marketing appeals to our self-interests, then we won’t be as inclined to care for the interests of others. Raj Manchanda (a friend and a Marketing scholar) and I recently published a paper in which we describe the hallmarks of SET marketing. In the paper we describe how the "profit-first" focus in conventional marketing has contributed to the social and ecological problems facing humankind. We then go on to describe what the classic 4 Ps of marketing—product, price, place, and promotion—look like from a SET perspective. This paper will be of interest to the growing number of business people and consumers who willingly compromise financial well-being and instead choose to optimize social and ecological well-being.
Springer Nature: Dyck, B., & Manchanda, R.V. (2021). Sustainable marketing based on virtue ethics: Addressing socio-ecological challenges facing humankind. Academy of Marketing Science Review, 1-18. While still very early, over the past two months countries have begun to administer vaccines for COVID-19, and the world has breathed a collective sigh of relief with cautious optimism that we would begin to turn the corner on the epidemic. The investment of considerable financial resources and scientific knowledge has shown impressive results. We wonder what the new “normal” will look like post-COVID and if there are any lessons society has learned that might help us to cope with other looming crises facing humanity. Have we learned that science will come to the rescue, or have we learned the importance of being prepared and acting responsibly and proactively to reduce the impact of things like climate change and systemic racism? Put differently, are we now less likely to suffer from an illusion of invulnerability?
Two months before the world’s first suspected case of COVID-19, the Global Health Security Index had published a scorecard that ranked 195 countries on their preparedness to tackle a serious outbreak: USA was ranked #1, and UK #2. However, as the world turns the corner on the pandemic, both countries were among the six worst worldwide in terms of COVID-19-related deaths per capita.[1] There are many possible reasons for this, but one might be that these two countries and/or their leaders suffered from having an illusion of invulnerability, which is something that occurs when people think that they are better than others.[2] It seems that even when you have more resources and are better prepared than others, you may get a false sense of confidence that leaves you more vulnerable to failure. Question: When it comes to the businesses dealing with issues like climate change and pandemics, do you think that the world’s leading corporations—who have the most resources to deal with them—are in danger of suffering from an illusion of invulnerability? [1] Yamey, G. & Wenham, C. (2020, July 1). The U.S. and U.K. were the two best prepared nations to tackle a pandemic—What went wrong. Time. Mortality analyses, John Hopkins Coronavirus Research Center. [2] Darío Páez & Juan A. Pérez (2020): Social representations of COVID-19. International Journal of Social Psychology. There are 500 million small-scale farms in the world, making it by far the most frequent type of organization on the planet.[1] About 70% of the world’s 1 billion chronically-malnourished people are small-scale farmers, making this the neediest organization on the planet. Fortunately, we have the technology to double productivity on small-scale farms using eco-friendly methods like Conservation Agriculture (where food is grown in ways that enrich the soil without use of pesticides and costly fertilizers). Unfortunately, many high-income countries rely on modern “industrial agriculture” which is based on inputs like fertilizers, pesticides, pumped irrigation, and so on. Although it seems like industrial agriculture is efficient (e.g., only 3% of Americans are involved in farming), it is actually energy-inefficient and unsustainable (e.g., fertilizers need to be mined, transported, and applied with machinery). One study showed that, prior to the Industrial Revolution, farming yielded 40 times more energy outcomes than energy inputs, but this ratio was reduced to 2.1 units by 1971.[2] Today it can take 7 to 10 calories of energy to produce 1 calorie of food energy.[3] Moreover, hundreds of studies show that industrial agriculture widens the gap between rich and poor, and that it lowers the quality of soils and water. Even so, this highly unsustainable model is being promoted because it “efficiently” produces cheap food (e.g., direct fuel subsidies to agriculture in the USA amounts to $2.4 billion). So cheap, in fact, that on average 25% of food is wasted after being purchased from grocery stores.[4] Question: Do you think we are facing a food systems crisis? [1] This paragraph draws heavily from Dyck, B. & Silvestre, B. (2019). A novel approach to facilitate the adoption of sustainable innovations in low-income countries: Lessons from small-scale farms in Nicaragua. Organization Studies, 40(3), 443-461. [2] Bayliss-Smith, T.P. (1982). The ecology of agricultural systems. Cambridge University Press. See also Dyck, B. (1994). “Build in sustainable development, and they will come: A vegetable field of dreams.” Journal of Organizational Change Management, 7(4): 47-63. [3] Page 164 in Princen, T., Manno, J.P., and Martin, P. (2013). Keep them in the ground: Ending the fossil fuel era. State of the world 2013: Is sustainability still possible?, Worldwatch Institute. Ch. 14:161-71. [4] Gunders, D. (2012, August). Wasted: How America is losing up to 40 percent of its food from farm to fork to landfill. NRDC Issue Paper 12-06-B. New York, NY: Natural Resources Defense Council. The term “externalities” refers to positive and negative effects that businesses have on other stakeholders but which are not reflected on the firm’s financial statements. For example, a firm can have a positive externality if it hires ex-convicts and thereby reduces the likelihood (and social costs) of repeat offenders.
Unfortunately, in 2018 the negative ecological externalities of the world’s 1200 largest businesses were estimated to be about $5 trillion (a 50% increase from 5 years earlier),[1] an amount that is greater than the total profits of these firms.[2] Even if all these firms were to meet their greenhouse gas emission goals, this would represent merely 25% of the amount required from them to meet the 2°C goal of the Paris Agreement.[3] In other words, these firms on average cause over $600 of negative externalities per each of the almost 8 billion people on the planet. That is a lot of damage, especially considering that one-third of the planet earns less than $2 per day.[4] While the costs of these externalities are often borne by especially by those who can least afford it, the profits from these firms’ activities benefit the relatively rich who can afford to purchase shares, thus further widening the gap between rich and poor. Question: What sorts of businesses give you hope when it comes to creating positive social and ecological externalities? [1] Note that figure in this paragraph are US dollars. Makower, J., et al. (2020). 2020 State of Green Business. Oakland, CA: GreenBiz Group. [2] The largest 500 companies in the world generated about $2.15 trillion in profits in 2018. “Global 500” Fortune. [3] Makower et al. (2020). [4] In all, 2.4 billion people lived on less than US $2 a day in 2010. Poverty Overview. The World Bank. Some people believe that the primary purpose of business is to maximize financial profits. We forget that this primary focus on financial well-being is relatively recent. For example, former CEO of RJR Nabisco, F. Ross Johnson—who in the 1980s “helped make the phrase ‘increasing shareholder value’ more than a buzzword”—notes that maximizing owners’ financial capture was not considered the primary purpose of business when he started out in the 1950s, nor can it be the primary purpose going forward.[1] For example, the Google Ngram below shows how: “profit maximization” is a socially-constructed phrase that started to be used in the 1940s, “shareholder value” started to be used in the 1980s thanks to people like Johnson, and “value creation” and “triple bottom line” started in the 1990s. The socially constructed nature of the purpose of business was in full view when the Business Roundtable—a group of 200 large corporations that includes giants like Apple and JPMorgan—issued a new “Statement on the Purpose of the Corporation” (https://opportunity.businessroundtable.org/ourcommitment/) that challenges the long-held view that corporations should primarily serve the interests of its shareholders: “we share a fundamental commitment to all of our stakeholders.”[2] Despite such changes, negative externalities and income inequality continue to rise, and research suggests that the social and ecological performance of signatories of the Business Roundtable during the early months of the COVID-19 pandemic was no better than other corporations in terms of protecting jobs, workplace safety, pursuing racial equality, and they were 20 percent more likely to announce layoffs or furloughs, and less likely to donate to relief efforts.[3] Question: Can you imagine a time when “profit maximization” and “shareholder wealth” will be replaced by “sustainable business” and “the well-being of the 99%”? [1] Cited in Bell, G.G., & Dyck, B. (2012). Conventional resource-based theory and its radical alternative: A less materialist-individualist approach to strategy. Journal of Business Ethics, 99(1): 121-130. [2] Wheeler, K. J. and 193 others (2019). Statement on the purpose of the corporation. Business Roundtable. https://opportunity.businessroundtable.org/ourcommitment/ Gelles, D., & Yaffe-Bellany, D. (2019, Aug 19). Shareholder value is no longer everything, top C.E.O.s say. New York Times. https://www.nytimes.com/2019/08/19/business/business-roundtable-ceos-corporations.html [3] Goodman, P.S. (2020, Sept 20). Stakeholder capitalism gets a report card. It’s not good. New York Times. https://www.nytimes.com/2020/09/22/business/business-roudtable-stakeholder-capitalism.html; Useem, J. (2020, Aug 6). Beware of corporate promises. The Atlantic. https://www.theatlantic.com/ideas/archive/2020/08/companies-stand-solidarity-are-licensing-themselves-discriminate/614947/ |
Bruno DyckBruno is an organizational theorist at the University of Manitoba. He loves being a management professor, scholar and teacher. Archives
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