Archive for May/2006

Max Oliva, Associate Director of IE’s Social Impact Management

According to the Boston Consulting Group, 100 top companies from rapidly developing economies are changing the World. These are a group of emerging challengers that are becoming important players in both developing and developed markets throughout the globe.
The companies in the report have combined annual revenue of US$715 billion and grow at an average rate of 24% a year. Asia is home to the leading majority of companies, with 70 of them, mainly in China (44) and India (21). Latin America with 18 companies, from Brazil (12) and Mexico (6) follows. The remaining 12 are based in Egypt, Russia and Turkey.
The shareholder value they create is impressive; from 2000 to March 2006, their total shareholder return (TSR, 60/100 are public companies) increased by more than 150%; this while the TSR of companies listed in Morgan Stanley’s Emerging Market Index rose by 100% and that of S&P 500 declined slightly.
One of the early movers in the globalization of this list is Mexico’s Cemex, which has consistently generated superior returns compared with its international competitors. Other companies such as Johnson Electric, based in China is the world leader in small electric motors and Brazil’s Embraco is world leader in compressors.
The analysis considers different strategic models for globalization as well as their competitive strengths such as low costs, strong operating platforms, large local markets as well as their weaknesses among which innovation, supply chain management and going to market outstand.
BCG expects that by 2010 the RDE 100 have doubled their international revenue. Are these emerging market firms likely to outplace thier western counterparts?
See the full report here.

Santiago Iniguez, Dean of Instituto de Empresa Business School, has recently posted the following article on BizDeansTalk.
In her splendid novel “Les Belles Images”, Simone de Beauvoir the great café-philosopher and novelist of 20th Century Europe, describes a situation which could be transferable to present days. The protagonist, a conscientious mother, wonders why her daughter is worried about some inevitable evils that exist in the world but occur far from home –hunger, epidemics, natural disasters- and cause devastating effects among huge numbers of poor people of the third world, although these problems can not be solved solely by one person (if they can be solved at all). This impotence of the single individual to solve a given evil produces a natural, defensive reaction in many humans. People like “belle images” –beautiful images- and are not prepared to be constantly exposed to the image of horror or suffering. The natural reaction of the mother is, then, to change the TV channel or the subject in order to avoid the exposure of her beloved daughter to the cruellest aspects of life. The extreme version of the “belle image” syndrome is just to avoid talking or showing pictures of some particular disaster. I am sure you identify the syndrome I am talking about.
The El Pais newspaper mentioned yesterday that 435 illegal immigrants were able to reach the coasts of the Canary Islands. This episode is just part of a series published daily in the papers since the good weather conditions of late spring have prompted the marine crossing of “cayucos” –poor, small boats- crowded with immigrants who leave Africa’s Atlantic coast for the Canary Islands, the closest European territory. Indeed, one of those images hard to behold. The unprecedented scale of immigrant arrivals of the past weeks has driven Spain and other nine European countries of the European Union to increase the resources devoted to guard the sea frontiers between Europe and Africa, including patrol boats, satellites and controlling aircraft. Many people wonder, however, whether the actions taken will prevent the flow of boats in the coming weeks. Interestingly, the avalanche of illegal immigrants has driven the Spanish government to open diplomatic relations with many Northwestern African countries in an effort to stop illegal exodus at its origin. Illegal immigration is indeed a new facet of globalisation that is amplifying the meaning of neighbouring countries beyond the mere sharing of a joint border.
However, preserving the inviolability of frontiers is not enough nor is the best way to avoid illegal immigration. Incidentally, let me recommend an interesting article on the phenomenon of immigration in the US that I read some years ago in the New York Review of Books. It is a good summary of the findings of different research pieces on the topic of immigration, useful to avoid a superficial, unsound and demagogic view of this human drama.
How can business schools contribute to solve this serious, complex, humanitarian problem? Let me suggest three different ways that can be further developed in subsequent posts here:
1) Helping the process of creating more business schools in Africa, in order to increase the number of competent managers who can create wealth and value for their societies. Yesterday, the Financial Times published a piece of news on the African Association of Business Schools, a new network that we should welcome and support. Some months ago, Guy Pfeffermann of Businessweek also emphasized the need of more business schools in Africa, and referring to The Report of the Commission for Africa, presented by British Prime Minister Tony Blair and approved by the G8 last year, noted that it “rightly flags management weakness in nearly every sector: water, health, transportation, and education. Yet nowhere does the report mention the need to strengthen local management schools”.
2) Encouraging our students to learn more about Africa in management programmes. The best ally of evil is ignorance. Here, the promotion of social entrepreneurship at business schools can have very interesting results.
3) Increasing scholarship schemes for African students.
Education is probably the most effective way to cope with most problems of humanity. Let’s think creatively and implement effective plans.
Tags(clickable): Africa, Immigration, Pfeffermann, New York Review

Expansión en su edición de hoy, cuando cumple 20 años, publica el siguiente articulo escrito por Joaquín Garralda, Vice Decano del Instituto de Empresa Business School y Director del Centro PwC – IE de Responsabilidad Corporativa.
Los elegantes – en términos matemáticos – conceptos incluidos en los “Principia” , la célebre obra de Newton, han servido para explicar la realidad de la física durante muchos años. Sin embargo, que Einstein tuviera que desarrollar una teoría más compleja para explicar los comportamientos en las “fronteras” de la física – situaciones temporales con velocidades cercanas a la luz, distancias enormes medidas en términos de velocidad, etc. – o que la mecánica newtoniana no pudiera explicar la dinámica de las nanopartículas, el comportamiento en situaciones cercanas al cero absoluto (- 273ºC), por poner unos ejemplos, no quiere decir que haya que abandonar, por obsoleta o inútil, una teoría centrada en la fuerza de la gravedad. En la mayoría de las situaciones humanas, Newton sigue siendo la referencia para comprender la realidad que nos rodea y poder comportarnos racionalmente, logrando nuestros propósitos y evitando riesgos previsibles.
Haciendo un paralelismo con la economía, podemos decir que las afirmaciones de Milton Friedman, reduciendo el objetivo de la empresa a maximizar el valor para el accionista, sigue siendo en muchas circunstancias la brújula que ayuda a los directivos a tomar decisiones, eligiendo entre las opciones posibles, y produciendo indirectamente el bienestar general mediante una asignación eficiente de los recursos disponibles.
Sin embargo, desde el campo académico, algunos autores critican este planteamiento de atender únicamente los intereses de los accionistas, argumentando que no explica bien la realidad en entornos en los que los contratos implícitos, las inversiones específicas, los efectos externos y la información asimétrica – por citar algunos temas – son las circunstancias normales. Por tanto, según esta argumentación, si un directivo en este entorno toma sus decisiones maximizando sólo el interés de los accionistas, probablemente conducirá a su organización a una situación subóptima, incluso poniendo en peligro la supervivencia a largo plazo. Utilizando un concepto muy en boga, puede estar arriesgando su Sostenibilidad.

Read more…

Max Oliva, Associate Director of IE’s Social Impact Management

The Novartis Institute for Tropical Diseases (NITD) will initiate research on malaria, which together with HIV/AIDS and TB is one of the top three killer diseases in tropical countries.
“With 250 million people infected worldwide and more than one million deaths each year, malaria is one of the most pressing global health issues. This partnership will greatly increase our ability to fight the disease,” Dr. Daniel Vasella, Chairman and CEO of Novartis.

The Public Private Partnership is made up of the NITD, the Wellcome Trust, Singapore Economic Development Board (EDB) and Medicines for Malaria Venture (MMV).
Just as an example of the importance of this, according to the EIRIS Risk Briefing on access to medicines for the developing world and the pharmaceutical industry, in the last 25 years of R&D spending, only 1% was for tropical diseases. Only 10% of global health research is on diseases that account for 90% of the world’s disease burden.
Read more about Novartis on Corpooate Citizenship
Read through these great references from the World Heath Organization WHO
Learn more about Malaria

Max Oliva, Associate Director of IE’s Social Impact Management
Laila Iskandar has won the The Social Entrepreneur of the Year in Egypt, prize awarded by the Schwab Foundation for Social Entrepreneurship.
The innovation of CID’s project consists on helping communities set up sustainable waste recycling programs which have been replicated in Mogattam area (Cairo), Minia and Sinai. Through this project, CID saves resources and creates jobs while improving sanitary conditions of the involved communities.
Laila Iskandar Kamel introduced innovative social and environmental projects to the garbage collectors or zabbaleen. These have largely been creating non-formal educational models of learning in the context of recycling. They have helped the garbage collectors break the cycle of exploitation and receive proper compensation for their valuable work.
“Social entrepreneurship is not a discipline or a new field but is an approach to solving economic, environmental and social challenges that combines pragmatism, opportunity and sustainability. Social entrepreneurs may set up their organizations as for profit or not for profit entities, but their primary goal is social change.”
Next week the Elective on Social Entrepreneurship will be taught at Instituto de Empresa by Dr. Pamela Hartigan, Managing Director of the Schwab Foundation for Social Entrepreneurship, together with Professor Joseph Pistrui.

Max Oliva, Associate Director of IE’s Social Impact Management

The Club de Excelencia en Sostenibilidad, along with the Instituto de Empresa through the Sumaq Alliance, made up of seven of the top business schools in Latin America, have joined forces to bring forward the First Europe-Latin America Congress on Corporate Responsibility. This event will take place on June 26 and 27 of 2006 in Oviedo, Spain.

The Congress will feature sector-specific panels with CEO´s from leading firms based in Latin America and Europe, along with renowned scholars and members of important international institutions with Enrique Iglesias and Hernando de Soto just to name a few, which are at present involved in areas related with: Corporate governance, stakeholder dialogue platforms, socially responsible investment, intangible asset management, responsible innovation, responsible administration of human resources and responsible communication.
View here the Full Programme.
For further information, please click here.

Joaquín Garralda, Vicedecano de Ordenación Académica del Instituto de Empresa y Director General del Centro PwC & IE en Responsabilidad Corporativa, ha dado una cátedra en “Las Claves Estratégicas de la Responsabilidad Corporativa” a los Alumni del Instituto de Empresa, misma que pueden ver aquí.
Ya no es un debate al SI o NO de la Responsabilidad Corporativa, sino más bien al cómo de la RC, es decir, sí, pero… Debe de ser regulado o una iniciativa de la propia empresa? Es un gasto o una inversión? Se debe fomentar o limitar la comunicación? El Profesor Garralda abarca el tema de la RC desde un punto de vista estratégico de la empresa así como a nivel sectorial, incluyendo ejemplos prácticos dentro del IBEX 35.

Steven D’Souza, , Diversity and OD Manager, Leadership & Talent Management, EMEA
Monday 22nd May, 12.30pm, Merrill Lynch Financial Centre, St Paul’s London. Nick Williams one of the worlds experts on inspiration at work addressed an audience on the topic of ‘how to stay inspired at work’.
Quoting from Adele Collins from the Times 100 Best Companies to Work for Nick pointed out that Inspiration was seen as key to success “Inspiration rather than Perspiration is the key to a Successful Company with a Motivated Workforce”. He also cited Branson who talked about the quality in relation to being an entrepreneur “What is the most important quality of an entrepreneur? To be able to inspire people” Sir Richard Branson, Founder of the Virgin Group.
Nick shared 5 key tips on inspiration:
1. Know your own sources of inspiration
2. Remember to go to them often
3 Regularly discover new wells
4. Inspire yourself
5. BE inspirational

Nick also spoke about personal stories how often we do not nurture our own inspiration but expect others to, our manager, colleagues etc- and what is possible if we take responsibility for our own inspiration. As an entrepreneur I found a useful distinction he shared about asking about the opinions of others on creative projects. He quoted the Sufi mystic Rumi who said ‘ When consulting someone on leaving for an adventure, don’t ask someone who has never left the shore’! Too often it is easy to allow the opinions of others to strengthen our own resistance to following our own dreams. Sharing stories and learning from those who have followed their dreams in invaluable. Success often lies on the other side of resistance!
For more information on being inspired visit Nick’s site where there is a free 5 part course on overcoming resistance. You can also contact Steven’s site.

Max Oliva, Associate Director of IE’s Social Impact Management

The Global Business Coalition (GBC) on HIV/AIDS, an alliance of 212 multinationals destined to support the corporate commitment against HIV/AIDS, has just given the GBC Awards for Business Excellence. These awards, which recognize outstanding contributions from individual businesses and business leaders fighting HIV/AIDS, where granted this year to the following companies:
• Unilever, Business Excellence in the Workplace
• L’Oreal, Business Excellence in the Community
• National Basketball Association, Business Excellence using Core Competency
• Xstrata, Business Excellence in Counseling and Testing
• Merck, Business Excellence in National Action
• American Express, Business Excellence in Leadership
Richard Holbrooke, and Mark Moody-Stuart, both members of the GBC have just written an article on the Financial Times on which they argue how companies attitudes are starting to change in regards to the fight against HIV/Aids.
Therese Lethou, Director of GBC Europe will be at Instituto de Empresa on June 29th in an event organized by IE’s Net Impact Chapter. In order to attend this event or further information, please contact Imke Buttkus, 2006 IMBA candidate.

Max Oliva, Associate Director of IE’s Social Impact Management


The New York Times has gone green on their business section. They cover a broad range of news on sustainability, going from The Truth, Al gore’s initiative on climate change and which we have been giving coverage on this blog, to collaborations between companies and NGO’s, Eco-Intelligent architecture in NYC, among other stories.
It is worthwhile going through the articles in their business section and assess how these issues are being covered more and more from a professionalized standpoint.