The sun blazed down on me while the inspector walked slowly around the car. “I can only price out what I can see is damaged. There may be more once we take the bumper off”, said Elizabeth. “It’s so hot today. I don’t know how people did it without air conditioning”, she then remarked. After mentally picturing a historical Savannah, GA scene briefly, I mumbled mildly in agreement and alluded to the days of yore when clothing was wool and full dress was the norm year round. She then went on to tell me it was probably not so bad back then because global warming was causing it to be hotter now. Acknowledgment of global warming is not something one hears often in the Deep South at least until more recently, but times and opinions are changing. Technically, she’s right even if that measurement is over the course of a longer timespan than a single day which brings me to the point; climate change and its impacts are something that we can only address as an organization of humans beings living on this planet in partnership with multinational organizations by social learning accompanied by change. Both of these require leadership.
Climate Change and Water
Strong evidence points to human involvement in the escalation of climate change and negative impacts on freshwater sources as well as the need for our help in the remediation of the same is presented by the IPCC (2007). In short, our social actions got us into this mess, and we need social learning and social actions to get us out of it. First, humans are innately social creatures therefore learning in a social context is fundamental to our growth. Second, change can be executed using actions and behavior shifts derived from social learning. The topic of climate change is a ready example of a problem that is truly global and must be addressed by human (organization) behavioral shifts as well as business organizational shifts.
Mindsets and How They Change – Mechanism
Moran, Abramson, and Moran (2014) describe mindsets as how we see ourselves, our companies, and how business should be done as well as the driver for overall strategy (p. 113). As mindsets cement themselves into corporate or human culture, they become very difficult to change as evidenced by Phillips and Panasonic (Bartlett, 2011). The need for social learning and change, however, is critical to the survival of corporations and cultures as learned by Blackberry’s inability to see past themselves and where the market was trending (Gustin, 2013). How do affect change in nations or multinational companies? Through individuals.
Companies are made up of individuals, and if you are lucky enough to find those who are like-minded, you work with them and support them – that’s how to get things moving.”
– Per Carstedt (Senge, 2008, p. 62)
The famed psychologist, Albert Bandura (1986), skillfully demonstrated the phases groups progressively move through as social learning is applied. First, we focus our attention on the actions of others and observe. Second, we retain what we’ve seen so that we can refer to that model for use in similar situations in the future. Third, we assess situations to evaluate if the motivation is right to act such as the need to impress others or if we find the action beneficial to ourselves. Lastly, we reproduce the behavior should the motivation be sufficient. The key element Bandura (1986) showed was that a totally new action was learned and performed by a subject put in a similar situation simply by watching another ‘modeler’ first. While Bandura (1986) showed how social learning is applied to an individual, the same methods can be used to alter behavior on a macro level as well.
Mindsets and how they change – Action
Moran et al. (2014, pp. 113-123) cite Perlmutter’s (1969) conclusion of three possible mindsets as ways to deploy change throughout a group of individuals be it a multinational company or any other group; ethnocentric, polycentric, and geocentric. First, ethnocentric mindsets are summed up by the ideology that “my way is the right way, and everyone else must conform”. Knowledge and adjustments are propagated the least in this approach. Polycentric mindsets are slightly better because autonomy is given to local groups (within group) however knowledge is not passed well between groups (between group) as described by Pennsylvania State University (2015a). Lastly, due to its’ global aggregation and application of the best ideas, geocentric mindset is highlighted as the most effective of the three by Moran et. al stating, “[leaders and organizations adopting the geocentric mindset] achieve the most effective and performance enhancing learning” (p. 122).
Combining Bandura’s (1986) mechanisms of social learning with Perlmutter’s (1969) method of finding and applying the best lessons to learn, we finally get to implementation. Schein’s (1980) planned change theory works from the platform of Lewin’s (1952) three stage model which includes unfreezing current behaviors, attitudes, and actions by showing people there is a flaw in the current system and change is necessary or beneficial (motivation) then changing individuals to the desired behaviors, attitudes, and actions then refreezing to achieve the end result. Pennsylvania State University (2015b) sums up the leaders role in this by stating, “The leader must motivate people in the organization to want change (by overcoming the perception of threat and pain), help them unlearn old behaviors, help them learn new behaviors, as well as make sure that there is a support system (infrastructure, training, people, etc.) to make sure the change actually goes beyond lip service.”.
What does this look like in real life?
Peter Senge (2008) walks through multiple examples of multinational corporations changing their underlying views, culture, and behavior, but we’ll focus on Coca-Cola and the World Wildlife Fund as examples. As Dan Vermeer, a member of Coke’s water and environment staff, says “Coca-Cola has been focused on water management for about 120 years, really since the origin of the business. But in the past, the emphasis has been on operational performance: efficiency, wastewater treatment, managing water within the plant.” (Senge, 2008, p. 77). As of 2007, Coke’s guiding principles have moved beyond their interior walls and they have taken a global perspective as then CEO and Chairman E. Neville Isdell put it, “We should not cause more water to be removed from a watershed than we replenish.” (Senge, 2008, p. 77).
What makes Coke and WWF great examples is that they are truly multinational corporations with Coke having bottling plants and WWF having field offices in local markets across the world. After backlash from a Coke bottling facility running smoothly throughout a three year drought in Kerala, India by tapping into an aquifer while local farmers suffered, Coke figured out it was time to rethink their view on water which is a key ingredient of their product therefor their business. First, Coke started with performing interviews with more than 250 individuals across the company to obtain their perspective on water where they found friction points in local communities, but there was also an eagerness to discuss water usage. (Senge, 2008, pp. 81-83). There was also very polycentric views of people saying, “You’re telling me about water risk in Southeast Asia. I don’t manage plants in Southeast Asia, I manage them in Rungsit, Thailand.” (Senge, 2008, p. 81). Coke also found that many local operators assumed that the water they were getting from a municipality was ensured and that knowledge about where the municipalities got their supply wasn’t being considered (Senge, 2008, p. 82). Lastly, the survey showed that local management did have awareness of watershed issues, didn’t have any framework or support to address them. Instead of going down the typical route of having local managers provide feedback to corporate then being disengaged (ethnocentric method), Coke had the corporate water team instead created local workshops based on the business units’ feedback to the survey. Once people saw the data and risk combined, Coke had their motivation for change and local leaders took proactive approaches to discussing with their own teams to build this social change [Schein’s (1980) 1st and 2nd item of Planned Change Theory] using a geocentric approach.
As one of the world’s thirstiest crops, sugarcane has a significant environmental impact—particularly when it comes to water use and quality—on many critical regions, from Southeast Asia’s Mekong River Delta to Central America’s Mesoamerican Reef. Yet it can be produced in environmentally, socially and economically sustainable ways.
To highlight that the multinational culture can change socially, Coca-Cola has reached outside its walls yet again, and their relationship with the World Wildlife Fund has grown as well. Both entities had to push past previously conceived ideas to be standoffish with each other. Typically, companies like Coke and WWF are at odds. One is removing fresh water for profit while the other is trying to protect the same resource. For example, Senge (2008) correctly states that simply by partnering with WWF, Coke acknowledges a very real water crisis which could have an impact on the whole soft drink industry while also noting WWF put its credibility on the line by partnering with ‘big business’ (p. 92).
In this case, around 2005 Coke and WWF were able to see the bigger picture. Coca-Cola had a keen interest in understanding their use of and risk to key water resources, but they didn’t understand watersheds like WWF. WWF realized that they could partner with Coke to affect even more change than Coke’s dollars donated to WWF alone would facilitate through mechanisms like helping Coke spend non-water related dollars on items like tea, sugar cane, and other products in a sustainable manner (Senge, 2008, p. 84). Coke and WWF engaged at the people level by having regional meetings which at first were uneasy and distrustful but through leadership in both groups grew into an effective partnership at every level of both organizations enhancing the goals of each group and creating new opportunity (pp. 87-89). As WWF coordinator Suzanne Apple said, “We had to shift our thinking to focus on why we should work together and how we might really accomplish more together than separately.” (Senge, 2008, p. 84).
See for yourself:
We can see clearly that there are needs for global organizations to change not simply for the sake of change. They must do so through leadership initiation of change, providing reasons that make sense, motivating people to do so, allowing room for the best ideas to be harvested and implemented, then creating and freezing the new culture. One final point, social learning and change are not one time events. They are ongoing and will continue on their own unless we as global leaders steer them in the right directions, we just have to be vigilant and humble enough to do so.
For more info on the Coca-Cola/WWF parthership:
Bandura, A. (1986). Social foundations of thought & action: A social cognitive theory. Upper Saddle River, NJ: Prentice Hall.
Bartlett, C. A., and Ghoshal, S. (1991) Managing Across Borders: The Transnational Solution. Harvard Business School. Boston, MA
Gustin, S. (2013, September 24). The Fatal Mistake That Doomed Blackberry. Time.com. Retrieved from http://business.time.com/2013/09/24/the-fatal-mistake-that-doomed-blackberry/
Intergovernmental Panel on Climate Change, (2007). Climate Change 2007: Impacts, Assessments, and Vulnerability. Cambridge University Press. Retrieved from https://www.ipcc.ch/pdf/assessment-report/ar4/wg2/ar4_wg2_full_report.pdf
Lewin, K. (1952): Field Theory in social Science. Social Science Paperbacks: London.
Moran, R.T., Abramson, N.R. and Moran, S.V. (2014) Managing Cultural Differences. Routledge, New York.
Pennsylvania State University. (2015a) Lesson 1: Introduction to Leadership in a Global Context. The Pennsylvania State University. .P. 4. Retrieved from https://courses.worldcampus.psu.edu/fa15/olead410/001/content/01_lesson/04_page.html
Pennsylvania State University. (2015b) Lesson 04: Global Communication. The Pennsylvania State University. .P. 5. Retrieved from https://courses.worldcampus.psu.edu/fa15/olead410/001/content/04_lesson/05_page.html
Perlmutter, H. V., (1969). The Torturous Evolution Of Multinational Enterprises. Columbia Journal of World Business, Vol. 1, No. 1, PP. 9-18.
Schein, E. H. (1980). Organizational psychology. Englewood Cliffs, NJ: Prentice Hall.
Senge, P. M. (2008). The necessary revolution: How individuals and organizations are working together to create a sustainable world. New York: Doubleday. PP. 1-92