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Business Ethics At The Intersection Of Local And Global Bayer, A Case Study


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A case study of the strategies that companies employ in order to manage ethical practices within a diverse and dialectical global market

A case study of the strategies that companies employ in order to manage ethical practices within a diverse and dialectical global market

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  • 1. Business ethics at the intersection of local and global 1 Business ethics at the intersection of local and global Bayer: Science for a better life Laura Domnescu Montclair State University
  • 2. Business ethics at the intersection of local and global 2 Business ethics at the intersection of local and global Bayer AG is a global enterprise operating across three independent subgroups and three service companies with core competencies in the fields of health care, nutrition and high-tech materials. Through its innovative products and services, Bayer intends to create value that benefits people and improves the quality of life. Thus, Bayer's three subgroups, Bayer HealthCare, Bayer CropScience and Bayer MaterialScience, improve people's lives through a broad range of essential products that help diagnose, prevent and treat diseases; protect crops and enhance yields; and advance automobile safety and durability. The Bayer Group has its headquarters in Leverkusen, Germany, but is represented throughout the world by 350 companies, with separate operating subsidiaries in Pittsburg, PA and Toronto, Ontario. It markets approximately 5,000 products and, on December 31, 2008, the Group had 108,600 employees worldwide. Bayer has developed a Corporate Compliance Policy that will guide its activity in pursuing a competitive, innovative, quality-driven, reliable and fair position in the world market. By bringing together both company-specific and statutory regulations, the Corporate Compliance Policy draws on a number of principles that are of particular significance in practice – such as fair competition, integrity, sustainability, equal opportunity, etc. In addition to the Corporate Compliance Policy, Bayer has drawn up a Group mission statement that lays out the principles underlying the company’s corporate strategy. It outlines the corporate philosophy and the framework for business activity, and it promotes common values and leadership principles as essential for all employees in their daily work. The values include: a will to succeed; a passion for all stakeholders; integrity, openness and honesty; respect for people and nature; and the sustainability of corporate actions. Reconciling local and global in corporate identity
  • 3. Business ethics at the intersection of local and global 3 In 2009, Bayer AG was named one of the Top 10 companies for global diversity by DiversityInc., a business magazine and a news website covering corporate and work place diversity. The specialists and evaluators at DiversityInc. have commended Bayer’s philosophy and initiatives that address issues of globalization and diversity, such as valuing different perspectives and cultures, human rights, cross-cultural training, generational training, etc. Amongst the criteria that brought Bayer the nomination are training employees and their families to be competent in foreign cultures, mandatory diversity training, the company’s refusal to do business in countries that have oppressive political regimes and efforts to change legislation in countries with questionable values and policies. Bayer thus acknowledges the fact that diversity integration helps the company to improve its business quality, increase productivity and human potential, and create a better life for both internal and external constituencies. The global context – business, but political, social and cultural wise as well – that Bayer is a part of has increased its sensitivity towards diversity and an extensive range of cultures. According to Featherstone (1995), business success in global settings is bound to “a shift in the balance of power” (p. 88) away from western imperialist institutions and the reconstruction of a polycentric world (Beck, 2000, p. 35) that has flattened previous hierarchies. Time-space geographies have been compressed (Featherstone, p. 93) into one encompassing locality that juxtaposes a myriad of local cultures without applying any evaluation grid or hierarchical distinctions. And this is indeed the philosophy that supports Bayer’s global success thus far. Greg Babe, the company’s CEO, when delivering his acceptance speech for the DiversityInc. award, recognized its centrality: “As a global enterprise, Bayer needs to understand a complex combination of domestic and foreign customers, markets and customs. We need to apply dynamic teamwork to big challenges and the more perspectives, the betterquot; (
  • 4. Business ethics at the intersection of local and global 4 One of the key-challenges that Bayer faces, together with all other companies seeking success on a global scale – is building an identity that recognizes and promotes diversity, but that maintains coherence and consistency at the same time. Just like Parker (1998), the discursive efforts companies engage themselves in as part of their identity management strategies need to have continuity and essence but allow for adaptation to changing circumstances as well. “Organizations are expected to emphasize their history and continuity while simultaneously updating and continuously fine-tuning their expressions of identity” (Parker, p. 109). Bayer has developed a mission statement that applies to all of its three subgroups – despite their functional independence – because its philosophy and values need to transcend any functional, spatial, or temporal divisions. Consequently, Bayer’s goals throughout the world are to create an enterprise that is keenly focused on its customers, its strengths, its potential and the markets of the future: a top international company renowned for product quality, employee skills, economic performance and innovative strength, and committed to increasing corporate value and achieving sustained growth. Playing on a strategy that proves to be discursively ambiguous (Parker, p. 129), the company’s vision and mission statement leave several grey areas of interpretation so that a multiplicity of stakeholder categories can generate their own interpretations and an alignment takes place between stakeholder and corporate values and goals. According to Wally Olin’s categorization (as cited in Parker, 1998), Bayer has constructed a monolithic corporate identity when employing one mission statement, one philosophy, and one set of values that run cross-divisionally and have global validity and application. This way, its publics have an easier way of identifying it as a distinct and stable organization and the company avoids any type of schizoid-related identity issues. Because of the need to integrate different and sometimes divergent cultures and thus touch upon different value systems, choosing a more specific set of principles to
  • 5. Business ethics at the intersection of local and global 5 guide the company’s business strategy may have ended in conflicts and discrepancies within corporate identity and undermined stability and success. Managing ethics globally Bayer AG defines itself as a socially responsible corporation that takes into account the economical, ecological, and social dimension of its business. Consequently, it has incorporated ethics as a key value in the corporate mission statement, with an acknowledgement and acceptance of its role as a socially and ethically responsible corporate citizen that is committed to the principles of sustainable development and with respect for people and nature and the sustainability of business actions as key corporate values. However, business ethics is highly subjected to the nuanced dilemmas and challenges of doing business globally. Hence, Bayer has invested extended effort into building ethical programs that respond to all its constituencies’ needs and specificities, with particular consideration for potential areas of divergence. In trying to keep with the corporate slogan, “Bayer: Science for a Better Life”, the company is involved in around 300 socially responsible projects worldwide, with an annual investment of approximately EUR 50 million. The projects focus on the areas of education and research, environment and nature, health and social needs, and sports and culture. According to Bayer’s corporate identity statements, the company plays an active role in fostering sustainable development through national and international networks – such as the Econsense Forum for Sustainable Development of German Business, the World Business Council for Sustainable Development and the United Nations’ Global Compact, of which Bayer is a founding member. Bayer was one of fifty companies worldwide that established the Global Compact in the year 2000 with the purpose of uniting the power of markets with the strength of universal ideals. Besides abiding by the rules of the Global Compact, Bayer undertakes its own initiatives to spread its message throughout the world. Thus, it has undertaken projects to
  • 6. Business ethics at the intersection of local and global 6 combat child labor in India and Brazil, it is an active part in projects involving the international chemical industry and embraces programs and agreements aimed at ensuring a corporate culture characterized by high labor standards and the strict rejection of corruption. Bayer has built an ethical identity that taps into universal principles and adapts them to the needs and the specificities of the local markets it is a part of. As Koller (2007) was arguing, “glocalisation renders the nation state obsolete by reinforcing supra-national entities” (p. 112). Thus, universal principles, such as those established by the UN, provide the company’s compass for ethical behavior and help it avoid engaging in imperialist or colonialist behaviors. Because ethics is a problematic and multi-faceted field and dilemmas are never clear cut, there is no unique grid for interpretation or mediation. Universal principles are thus statutory for an initial ethical reconciliation, after which negotiation between diverging localities comes into place. The global company needs to operate on a open-systems perspective that allows it to respond to the dynamics of its environment and mediate between its constituencies in a way that is inclusive and coherent. A permanent negotiation between localities is the norm because globalization not only juxtaposes different cultures, but it connects them in an ever-changing relationship. Globalization is fundamentally relational and is based on a permanent dialectic between the local and the global. In developing its social responsibility projects, Bayer acknowledges the importance that the relational dimension in building sound citizenship. Because a global identity is the integration and the interconnectedness of multiple local identities, Bayer has taken its corporate mission and philosophy as framework for building relationships with partners across the world. Thus, its values serve as basis for the partnerships it has built in trying to serve local communities. Bayer has partnered with a local university in Beijing in an effort to educate the population in relation to AIDS, it is trying to eliminate hunger and educate in Brazil, it offers entertainment for the disabled
  • 7. Business ethics at the intersection of local and global 7 in Germany, and conducts clinical efforts to find a vaccine against tuberculosis in South Africa. There are only some of the ways Bayer is trying to make a contribution to its communities and prove its value as a global citizen. The company makes extensive efforts in investigating the particularities the local cultures it serves so that it can turn every public category into a valued stakeholder
  • 8. Business ethics at the intersection of local and global 8 References Beck, U. (2000).The world horizon opens up: On the sociology of globalization. In What is globalization? (pp. 22-63). Cambridge: Polity Press. Cheney, G., Christensen, L., Zorn, T., & Ganesh, S. (2004). Communicating identity individually and collectively. In Organizational communication in an age of globalization (pp. 107-137). Long Grove, IL: Waveland Press. (2009, March 13). Bayer named one of DiversityInc's top 10 companies for global diversity. Retrieved March 22nd, 2009, from Featherstone, M. (1995). Local & Global Cultures. In Undoing culture: Globalization, postmodernism and identity (pp. 86-101). Thousand Oaks, CA: Sage. Giddens, A. (2000). Runaway world: How globalization is reshaping our lives. New York: Routledge. Kim, Y. Y. (2001). Identity development: From cultural to intercultural. In Becoming intercultural: An integrative theory of communication and cross-cultural adaptation (pp. 347-369). Thousand Oaks, CA: Sage. Koller, V. (2007). “The world’s local bank”: Glocalization as a strategy in corporate branding discourse. Social Semiotics, 17(1), 111-130. Marquardt, M. J. (1999). Creating a global corporate culture. In The global advantage: How world-class organizations improve performance through globalization (pp. 62-89). Houston, TX: Gulf Publishing Company. Parker, B. (1998). Global enterprises. In Globalization and business practice: Managing across boundaries (pp. 46-96). Thousand Oaks, CA: Sage.
  • 9. Business ethics at the intersection of local and global 9 Parker, B. (1998). Culture, subcultures, and organizational socialization. In Globalization and business practice: Managing across boundaries (pp. 75-106). Thousand Oaks, CA: Sage. Robertson, Roland. 1997. Glocalization: Time-space and homogeneity-heterogeneity. In Global Modernities, edited by M. Featherstone, S. Lash and R. Robertson. Thousand Oaks, CA: Sage.