March 9, 2004
Businesses can promote peace in global economy
ANN ARBOR, Mich.—Businesses can foster peace and help reduce violence in this time of increasing globalization, say researchers at the University of Michigan Business School.
"Businesses are engines of economic development, which can be beneficial to social harmony," said Cindy Schipani, professor of business law. "Through globalization, companies consistently reach across borders to create diverse work forces where members of different ethnic groups can work together on common projects.
"Occasionally, firms may be able to mediate conflicts between governments. Conversely, if businesses are viewed as exploitative, culturally undermining, greedy or socially insensitive, they can sow the seeds for potential violence."
In their study, "Ecology and Violence: The Environmental Dimensions of War," Schipani and colleague Timothy Fort examine how issues of violence manifest themselves in a global economy and discuss the business implications of tensions that arise from poverty, social injustice, corruption and environmental scarcity.
They argue that business people have an important stake in maintaining a stable allocation of natural resources and an environment that is relatively free from violent conflict. These conditions are increasingly difficult to achieve, they say, because violent contests for oil, water, gold, copper, timber and other natural resources still occur throughout the world, triggering spillover effects.
According to the researchers, to acquire or protect scarce commodities needed for economic development, many countries announce the "economization" of their foreign policy, intensifying competition between nation-states and, in some cases, multinational corporations seeking to maximize profitability. Further, industrialization of the global economy exacerbates existing social tensions tied to economic, social, ethnic and religious inequities, often leading to outbreaks of violence or terrorism.
Schipani and Fort say that the consequences of war, which bring the destruction of both human life and natural resources, directly impact business. For example, in the 1991 Gulf War, smoke and pollution from sabotaged oil wells reduced the life expectancy of 50,000 people and increased infant mortality 100 percent between 1990 and 1992.
"Today, human lives, public and private infrastructure and economic resources vital for the operation of business are being lost in Iraq and Afghanistan following U.S. intervention in the wake of terrorist attacks," said Fort, associate professor of business law and ethics. "The world is faced with a complicated, difficult ecological condition, which could provide the breeding ground for many kinds of violence, justified by those who believe the current system has not treated them fairly.
"It is unrealistic, however, to believe that governments alone can solve these issues without the engaged thoughtfulness of the business sector."
Corporations increasingly are targeted as responsible parties for a variety of perceived social, economic and ethnic injustices, the researchers say. Exxon, for example, faced protests from human rights organizations for not confronting human rights abuses perpetrated by security forces protecting the company's pipeline in Indonesia, and disgruntled consumers criticized McDonald's restaurants after learning its French fries were cooked in oil containing beef tallow rather than in vegetable oil.
Schipani and Fort propose that corporations assume a greater role in mediating the tensions caused by natural resource stresses by adopting a balanced approach of economic development, being open to external evaluation, building community and pursuing track-two diplomacy.
"Business people can contribute to sustainable peace and reduce the potential for violence," Fort said. "If they do not do this, then who will?"
Contact: Bernie DeGroat