Opinion Sur
We seem to be facing a dilemma. On the one hand, the great priority given in management to what is measurable, tangible, and on the other, the difficulty many responsible practices face in proving measurable benefits. Also, a comment is added on the critical incidence the internal stimuli of a company have.This quote, commonly attributed to Einstein, reflects in a very graphic way the difficulty responsible practices face within companies, especially those stemming from the people who believe that benefits should be measurable and proved in the short run: they prioritize the idea that “only what can be measured can be managed”. They think that if we can not measure we can not manage. This would be bad news for responsible practices.
We seem to be facing a dilemma. On the one hand, the great priority given in management to what is measurable, tangible, and on the other, the difficulty many responsible practices encounter to prove measurable benefits. Unfortunately, the problem does not generally arise in the area of costs which can be measured, and this pressures those who encourage responsible practices in order to achieve benefits and results that can be measured. The argument of having to be responsible because it is the right thing to do, because it is what should be done, is weakened when facing entrepreneurial reality.
In order to convince the sceptics and begin or continue corporate responsibility programs, we very often need to resort to the business case that those practices bring benefits along, whether in the form of revenue improvements, cost reductions or risk reductions. For many supporters of these practices saying that the benefits are intangible and long term would suffice, yet the sceptical need to see them tangible and short term. They are both right.
Unfortunately, those who control the decisions are many times advocates of the second stance, particularly if their bonuses are tied to short term benefits. Some purists even take the accounting version, the one that requires that the results of the practices be reflected in the financial statements, under revenues and not only under costs, which are for the most part tangible and verifiable in the short term. For them the benefits that can not be measured do not count. It would be of great help if what can be measured was enhanced.
Many articles and books have been recently published to these ends. It appears that the recent crisis has made them more necessary. The crisis made people see more clearly the costs of responsible practices and made them compete, within the budgeting process, with other investments and expenses that have more tangible benefits. They may lose the battle but not the war.
Antonio Vives ([[email protected]>maito:[email protected]])
The critical incidence the internal stimuli of a company have (comment by Roberto Sansón Mizrahi)
As Antonio Vives points out well, the internal stimuli of a company –expressed through prizes (bonuses, promotions) and punishments- condition corporate behaviour. The crucial matter is that the impact of these internal stimuli transcends the sphere of the company as they induce decisions that affect not only the business itself but also the social and economic context in which it operates. A paradigmatic case is that of the financial system of the affluent countries that operated granting generous prizes for those who obtained extraordinary profits in a fiscal year although later, in the subsequent fiscal years, they failed with a din as happened with the outburst of the global crisis that is still under way. If what is awarded are only those achievements that affect the short term financial results, that is the yearly income, what is strategic for the company would be underestimated, such as, contribute to development and attain sustainable benefits in the mid and long term.
By focusing exclusively on the generation of tangible, short-term benefits, strategic short-sightedness distorts what is understood to be effective and efficient, alarmingly disfiguring and reducing the choices to which corporate energy should be allocated. A modern business concern does not just look at the immediate, the instantaneous; instead, it is used to handling alternatives capable of meeting its own or third parties’ goals, which take more than one exercise to ripen. Rather than on some merely philanthropic contributions, the social responsibility of a corporation is based on exercising meso-economic responsibility with its entire value chain and the community rendering its existence and operation possible.
Certainly, this should constitute no excuse for hiding the inefficiency or, even worse, the insignificant of certain allegedly responsible practices behind benefits that, given their intangibility and long-term maturity, end up being never verified or materialized. We would then be at the opposite end of the risk vector related with the new corporate responsibility practices.
The most advisable solutions might be to use criteria and practices acknowledging that, indeed, there are intangible benefits stemming from good responsible practices ripening in the mid and long-term; yet they should be sustained by making it clear how they are expected to impact upon the community, the market, the production network to which they are linked and, hence, the very firm, which very directly depends on the evolution of such spaces and the behavior of the players acting in them.
