Michael Diamond, President of World Resources Chicago, talks to students about corporate social responsibility. (photo by Beth Rooney) |
From the Chicago Booth website:
Is It Feasible to Do Well by Doing Good?
Once a target of various critics, McDonald's has become a good global citizen, according to Michael Diamond, president of World Resources Chicago, a consulting firm. In fact, it's an excellent example of a company that underwent "transformational thinking," he said. "McDonald's turned out to be the poster child for the anti-globalists, but McDonald's is really concerned about its consumers, its work force, and the animals and potatoes they use," he said. "They've got actually the highest standards in the business."
The story of the fast-food giant was one of several Diamond described when he spoke to students November 8 at the Hyde Park Center about how innovative strategies build stronger economies. The event was cosponsored by student-led Chicago Global Citizens and Net Impact. "I want to talk about this kind of development in business terms," Diamond said. "This is about doing well by doing good."
Sustainable development can be defined as social, economic, and environmental development that meets the needs of the present without compromising the ability of future generations to meet their own needs, he said. "Most of us look at these kinds of concerns from a humanitarian perspective."
McDonald's uses some of the world’s best standards for training its employees and experiences very few problems with food poisoning, Diamond said. "In fact, their mark is so well-known that in places like Russia, McDonald’s hamburger meat is sold raw in the supermarkets because the McDonald’s brand is synonymous with extremely high quality," he said.
Diamond said he coined the phrase the "normalization of deviance" to describe the trend that occurs when the business pendulum swings against higher principles. Such a shift was demonstrated dramatically in Arthur Anderson, which once set the standard for accounting principles, he said. "Little by little, they got rid of all those old-timers who were compliant with those kinds of rules," Diamond said. "The company began to bring in new people who kept pushing the envelope, and the relationship those people developed with Enron is one part of that. The pendulum slowly started to swing, and Arthur Anderson as a company couldn't find a way to bring it back. What normally was not acceptable at all became the standard. They ended up losing the whole company."
Strong business leaders must fight conventional wisdom that tells them to "race to the bottom," such as Wal-Mart's search for the cheapest materials and cheapest wages with no consideration of the social and environmental impact, he said. Such a philosophy is taking its toll very dramatically in China today, where people staged 350,000 social protests last year against the government taking their land and giving it to private enterprise, Diamond said.
"The Chinese government has done a great job of suppressing this information," he said. "It's coming out more, but even more dramatic are some of the environmental impacts, where whole rivers are being polluted. It's not just a Chinese problem anymore. All that polluted air gets carried off from the gulf stream and where does it end first? California, and then it begins to work its way east. So the whole world is now being affected in lots of ways by what's happening in China."
Second-year student Faisal Khan, co-chair of Chicago Global Citizens, said he invited Diamond to speak to Chicago Booth students after hearing him tell an audience that business ethics are not taught enough today. "I think it's extremely relevant because you're seeing consumers become more aware," Khan said. "Shareholders want companies to be more socially responsible. They’re voting along those lines and consumers are buying along those lines. With the rise of India and China, it’s very important that companies do things the right way."
—By Phil Rockrohr
Originally published:
http://www.chicagogsb.edu/news/2006-12-07_diamond.aspx
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