Prelims

Francisco Gil-Díaz

Having management responsibilities assigned to me within the government and private sector did little to educate me in the tools available for improving workers conditions, increasing efficiency, and steering organizations toward certain goals and awareness of values and tools like the ones contained in the rich chapters of Strategy, Power and CSR: Practices and Challenges in Organization Management.

As a manager, I primarily received on-the-job training, which undoubtedly could have been improved upon with materials such as the ones contained in this important contribution. All I can say in my favor is that I surrounded myself with highly capable, independent individuals, and was willing to delegate to them.

This book contains chapters germane to every activity I have engaged in, whether administering a school, directing two telecom firms, as the non-executive president of a construction firm, as head of the department of economic research at the Banco de México, as head of the department responsible for tax reform at the Mexican Treasury, or later as under secretary for revenues and finally as treasury secretary.

All these jobs entailed managing resources, selecting personnel, coordinating and encouraging them toward certain objectives, and respecting human rights and the environment. The holistic compendium gathered here, to which I have the pleasure to offer a prologue, touches upon all of these elements.

I ask authors and readers to indulge me while I offer separate comments on each chapter. My training as an economist has not been completely superseded or improved upon by my management experience.

School management poses issues that are not far from those faced when tackling corporate management. It differs, however, in terms of how members interact with those they serve, namely students. Teachers have a delicate task that requires not only competency, but also a strong ethical framework. They must be fair, as well as careful to avoid excessive intimacy with students.

“The Meaning of the Management Function: Discourse from Educational Institution Directors,” emphasizes several abilities required of said directors: (1) identify opportunities, threats, strengths, and weaknesses that may impact organizational effectiveness; (2) carry out strategic relationship building and develop interfunctional cooperation; (3) openness to meeting the expectations of the different actors in the educational community, as well as (4) using resources efficiently; (5) striving to reach agreements; and (6) developing, maintaining, and using a wide network of relationships with key people within the organization and the educational sector.

The chapter on “Hospitality” stresses, like the common thread of this volume, human values. It deals with the need to accept differences and to resolve or avoid confrontations that arise from things like rejection, hostility, cruelty, and xenophobia, and to transcend mere tolerance, going beyond it and emphasizing three attitudes: listening, including respect for the person as unique, creating an atmosphere of trust and actively listening before advising, judging, excusing or even discrediting. Hospitality consists of welcoming the other who differs from the self. Hospitality is engendered when new hires are properly incorporated and can absorb the particularities of each of the different departments within an organization. Temporary rotation upon hiring is usually a powerful tool in this regard.

Using case studies, the chapter on “Value Systems” tackles firms that try to inculcate in their members a particular set of values. This approach can be efficacious, but must be done carefully in an effort to avoid provoking phony compliance with management-espoused values. This approach requires constant reinforcement to achieve “value congruence.” The two case studies of successful firms, namely Compartamos and Si Now, show how highly productive this approach can be.

“Burnout” is a worrisome syndrome that arises from driving employees too hard and is an important element to be on the lookout for. To date, it has not been adequately detected or managed. It can lead to ignoring individual orders and/or instructions and to an environment of long working hours, but little productivity. It is often found in hospitals and on trading floors. Besides caring about it from the point of view of individual health and well-being, organizations must take into consideration the risk that undetected burn out poses in terms of lower productivity; as the chapter notes, “It has been calculated that each case of stress-related ill health leads to an average of 30.9 working days lost.”

This problem has become prevalent in Mexico’s public sector, including 12-hour working days with weekends often spent in the office. Since the work of bureaucrats is hard to measure, working hours end up in unproductive, senseless presenteeism, or “ironing the buttocks,” as they say.

The presentation of “A Negotiation Diagram” is an important contribution in that, whether contracting a loan, appraising an individual’s productivity and hence her corresponding salary, buying an asset, etc., negotiation is a prevalent reality in business management. The proposed method is designed as a mathematical model using system dynamics. A formal approach to negotiation is proposed because “a lack of skills among players destabilizes negotiation.”

The chapter on “Narrative and Family Business Firms” presents another important topic, one that is usually considered pertinent for the ownership models typical of the Mexican economy. However, reality never fails to surprise and the content of the chapter is useful in many other contexts. In the United States’ economy, stock-listed firms generally considered to be controlled and managed by third parties are family firms to a considerable degree: Family owned businesses are central to the U.S. economy. “Family owned businesses contribute 64% of the U.S. GDP (i.e., $5.9 trillion), employ 62% of the workforce, and are responsible for 78% of all new job creation” (Astrachan & Shanker, 2003). Thirty-five percent of Fortune 500 companies are family-controlled. A study by Businessweek (2006) surprised readers by finding that over one-third of FORTUNE 500 firms are family owned and controlled and some are among the best managed. Their return on assets averaged 6.65% above non-family firms (Cornell SC St. Johnson College of Business).

“Redefining Power via Multidisciplinary and Interdisciplinary Alternatives for Corporate Social Responsibility” points out that corporations are more than profit maximizing machines; they interact with society in many different ways. Since their surrounding environment is complex, they should be aware of it and contribute to its improvement. The many issues they face include “the need to move to renewable energies, new diseases and resistance to antibiotics, artificial intelligence, migration problems, climate change, overpopulation, and extreme poverty, to name a few.” This chapter suggests the need to “see all these phenomena as interrelated.” Many corporations have the wherewithal to directly take on these social issues or can contribute resources to them. Their efforts are sometimes recognized and they thereby gain brand recognition and goodwill points. However, their actions seldom translate into greater market share and/or profits. Public awareness of corporate responsibilities is growing and manifests itself in preference for products from socially concerned firms and in their share holdings. Yet, most firms contend with the need to avoid committing too much lest their outlays cost them more profits and market share compared to their competitors. To avoid free riders, public awareness of the need for more socially conscious firms is needed.

The chapter on “Performance Measurement Systems in Organizations” shows that a good business strategy is essential, but poor execution can render it meaningless: “One study estimated that 70% of CEOs’ failures resulted not from poor strategy, but from poor execution.” Thus, proper metrics and goals are essential. In this effort, common mistakes include focusing on short-term results, excessively relying on accounting or financial information that, in turn, relies far too much on historical costs, concentrating on short-run cash management, and relying on leasing or shifting assets to REITS (FIBRAS).

“Should I Move Aside and Let a Professional CEO Run My Company?”

. The Peter principle takes effect when people are promoted above their competence level, which creates a problem for the organization and the individual. Another related challenge is determining the appropriate moment for a CEO’s replacement. These two important issues are the subjects of this chapter. Besides the above, CEOs have to ensure that they are not acting as micro-managers. Of course, information-related problems are always around the corner and generally seep into the organizations’ layers. This can result in frequent disregard for orders. Because of this state of affairs, CEOs have to be able to follow through compliance with instructions without undermining their subordinates and must frequently visit the different organizational layers to keep themselves informed.

“Koselleck’s View of the Crisis Concept”:

Crises come in many hues, whether personal, institutional, social, and external (global), and they can be viewed from different angles or perspectives, including physiological, psychological, religious, social–historical, and philosophical. Considering them is important because crises produce stress and anxiety, and understanding them is important for overcoming them as well as for deriving any benefits that may be obtained by getting through them. This chapter helpfully contains Koselleck’s analysis of the concept, as well as his portrayal of its historical evolution in texts dating back to the Greek philosophers.

“A New Protocol Based on Blockchain Technology for the Transparent Operation of Corporate Social Responsibility” details corporate social responsibility as an all-encompassing term that includes environmental concerns, working with organizations’ neighbors and associates to attend to issues like housing, health, food, etc., and contributing to worthy NGOs. The possibilities are endless and contributions to them can be fragmented and opaque; thus the need for “a transparent repository where anyone can track and keep accountable for companies and other organizations.” With the aid of Blockchain, a transparent repository of corporate social responsibility records can be created to enable a rewards system. Such rewards may come from motivated customers or from governments and institutions, such as multilateral ones (The World Bank, the Interamerican Development Bank, etc.).

The chapter “University Social Responsibility (USR) and Its Mission: The Case of the Universidad Panamericana in Mexico” presents several projects that Universidad Panamericana (UP) supports in surrounding communities. With its outstanding departments, projects centered on medical, nutritional, and legal assistance provide the university with a unique opportunity to apply its resources to diverse social projects. The text discusses the ways in which social responsibility can be responsibly organized. The university’s projects are so numerous and diverse that, to do them justice, I shall extract and quote directly from the chapter:

Six communities located in the State of Mexico (Atlacomulco, Chalco, Malinalco), Mexico City (Pueblo de Santa Fe), and the states of Morelos (Jonacatepec) and Guerrero (Tlapa) have been recipients of community service projects.

“My Project” built a total of 28 houses, and repaired 37 more in the state of Morelos, focusing especially on dwellings affected by the September 19, 2017 earthquake. One project that helps female entrepreneurs aims to support rural and indigenous women in their efforts to strengthen their financial situations and that of their community by starting businesses. The program currently works in Tlaxcala, the State of Mexico, Queretaro, Hidalgo, Jalisco, and Michoacan, and has directly supported 56 farmers and another 224 indirect beneficiaries, and 38 business plans.

Regarding health care, the university carries out projects through the Panamericana Health System (SIPASA for its initials in Spanish). SIPASA is the operational and financial arm of the Health Sciences School’s welfare and social work. It aims to provide medical care to low-income groups, as well as to promote prevention and education, by linking the UP with a variety of educational and health institutions. Its programs include early detection of kidney diseases, vision care, and early detection of glaucoma, otolaryngology, oral care, and comprehensive childhood checkups.

According to the data collected, during the 2009–2015 period, 125,000 primary care consultations were conducted, with 130 consultations on average per intern. 110 campaigns were carried out with the participation of 2,263 volunteers and 285 beneficiaries. 17,000 people benefited from health education and preventative care. The university currently maintains six clinics, including Mazahua (Atlacomulco, Estado de Mexico), MAS (Tlapa de Comonfort, Guerrero), El Buen Samaritano (Malinalco, Estado de Mexico), Educar (Acuautla, Estado de Mexico), Pueblo de Santa Fe, CdMx (MAPFRE Community) and Barrancas de Jalalpa, Mexico City (Universidad Panamericana, 2019).

The MAPFRE Community Center. In 2015, the UP and the MAPFRE Foundation inaugurated a community center in the Santa Fe area of Mexico City, an area that perpetuates significant social inequalities among its 750,000 inhabitants, of which 31% are in poverty. Funded and managed by the MAPFRE and UP-IPADE foundations, more than 400 UP volunteers and professionals operate the Center, including students and professors, providing medical assistance, psychological support, legal advice, and professional training to this vulnerable population. To date, it has attended to more than 6,000 people with limited resources. In addition, its food kitchen, the Santa María Dining Room, daily serves approximately 330 meals to babies, children, and young people, as well as pregnant women and older adults in extreme poverty.

The Center’s building houses a general medicine clinic for specific groups, a nursing home for vaccinations, nutrition guidance, and preventive medicine programs, as well as a pharmacy that supplies low-cost medications. Psychological support and free legal advice are also provided. The Santa María food kitchen is located on the first floor. It also has a library, multipurpose room, and an orientation space for people with disabilities and a development area that promotes the professionalization of household chores in order to give greater value to the work of disadvantaged men and women. Finally, on the third floor, educational workshops are carried out according to age groups and activities range from education in values or school support, to domestic work or reading. The impact on the well-being of the community served has been significant, as 2018 data reveals, especially in health and education.

COLABORE is a UP center that foments a culture of integration for people with disabilities. COLABORE PanAmerican Center started operating in 2009 on the Guadalajara Campus, and opened three years later in Mexico City. It recently inaugurated operations in Aguascalientes as well. COLABORE programs promote labor equality and disability awareness, as well as contributes to the integral development of disabled persons’ physical and mental capacities with the aim of achieving autonomy. All of this is done through synergies with companies, government, non-governmental institutions, and associations. COLABORE has developed various programs that foment social and economic development, all of which underscore the dignity of the person. Students of all majors participate in these programs through their social or volunteer service. They help people with disabilities, as well as collaborate with companies on projects and the development of activities, especially feasibility studies, design and equipment innovation, marketing campaigns, research, entrepreneurship models, training, strategic planning for human capital, education, foundation, legal advice, interviews, job descriptions, medical care, specialized psychological care, among others. Feasibility studies are extensive investigations carried out for companies in which the researcher determines the feasibility of disabled people working there. This includes adequacy of the infrastructure (accessibility, security), as well as the work environment and job analysis (selection and recruitment processes, accessibility, training, safety, health, equal remuneration and promotion opportunities). Although it has had its challenges, more than ten years after its creation, COLABORE has grown and strengthened. According to the 2010 population census, 5.7 million people have some kind of disability, representing 5.1% of the total population. A 2014 figure estimates that number at 7.1 million; approximately 60% of the disabled are unemployed (INEGI, 2016). Given this problem, COLABORE seeks to meet a social need and help disabled people live a productive life. COLABORE promotes inclusion awareness at companies and training, which helps place people with motor, hearing, vision, and other limitations in suitable positions.

The UP has several USR programs that address the environment. While all campuses have various environmental programs, the Guadalajara Campus appears to have made the most significant effort, followed by the Aguascalientes Campus and finally the Mexico City Campus.

“Teaching CSR at Management Faculties” addresses the need to recognize this type of education for managers within Mexico’s educational environment, and while this observation is valid, the chapter’s content and recommendations are applicable to any environment. Closely related to several of the above chapters, this one addresses how to approach management schools’ content and programing to incorporate CSR. It emphasizes the need to inculcate in future managers a spirit of and commitment to CSR not just as something inherently desirable, but also as a tool for meeting the challenges organizations face.

“Virtue Ethics: A Contribution to Family Firms” explores business ethics as it relates to family firms to fill the void that family firms that fail to develop an ethical culture leave. It tackles how virtues can be congruent with ethics. Family businesses are generally more inclined to have “unique ethical values, such as loyalty, respect, honesty, caring and trust, as well as family identification.” Since family firms are more likely to favor integrity, the concept is closely related to ethical values. The continuous exercise of ethical values leads to the creation of virtues. As such, a “virtue ethics approach is the strongest position from which to develop a genuine ethical culture that is capable of sharing values” whose continuous exercise “creates and improves a genuine ethical culture” that also improves organizational unity and stability with an added bonus found in improved competitiveness.

“Leadership and Social Responsibility in Business” emphasizes what it takes to be a leader. Organizations typically label the head of a department a leader, while leadership qualities are often rather innate and frequently quite different from the popularly held image of a leader. Organizations have to ask themselves how to identify leadership in a person, how to educate for leadership qualities, and, once acquired, how to nurture them. The 2001 book From Good to Great, which sold 4 million copies, presents the results of empirical research that sought to single out firms with truly outstanding and measurable market performance. It aimed to pinpoint the characteristics of the CEO’s responsible for such remarkable results. The conclusions could not have been more counter-intuitive. The corresponding leaders turned out to been discrete, hard-working, non-protagonist individuals who attracted a following through their personal example. None was “rock stars.”

“Corporate Social Responsibility and Human Rights” argues that values are not relative and that there are moral absolutes that must be widely known and respected. This approach implies, among other conclusions, the need to avoid harming others through corporate practices. In brief, a business has obligations regarding third parties beyond its shareholders. Legislation related to corporate responsibility already recognizes the need for mechanisms that monitor compliance with laws against money laundering, corruption, misuse of corporate resources and fraud, among other matters. However, there are many moral imperatives that legislation does not cover. Corporate leaders must be aware of and vigilant concerning their behaviour and that of their collaborators.

Final Remarks

The material contained in this collection should be required reading for anyone who has to coordinate and work with people. Writing this prologue has come as an enriching and welcomed learning opportunity, albeit at a late stage in life.

The content herein is varied, but shares a common thread in that its authors are all concerned with how to relate to people in such a way that their strengths are recognized and respected. These chapters contain profound insights that help us to reflect upon the many concepts one can take into account when managing an organization.

Francisco Gil-Díaz

Member of the UP-IPADE Board

Universidad Panamericana – IPADE

Jorge Gutierrez Villarreal

This book is rather unique because it embodies a new approach to the study of organizational management. While most business books are written by one or two experts who offer a singular perspective informed by their experience and research in a specific discipline, this publication offers readers innovative, research-based analysis from a large team of experts.

This format also eschews the comfort of a single, simplified narrative and instead relies on the curiosity and entrepreneurial spirit of readers, encouraging them to delve into each chapter, to expose challenging new ideas and to draw their own lessons from each proposal.

The effort is well worth the time. In my experience, innovation and creativity are most likely found in the place where fields of study intersect. This collection features contributions from experts in a wide range of topics, from philosophy to engineering, law to pedagogy, health care to humanities, among many others.

It is my hope that exposing readers to different perspectives on the topic will trigger new insights, and that, in turn, they will bring that spark to bear on the challenges they face in their organizations.

Each chapter is the result of significant and robust research from professional scholars who offer tangible conclusions that can improve results for organization management:

Value systems play an important role within all organizations and must be aligned to their vision and mission, which must in turn include a holistic view of society and the people therein to succeed.

Value ethics holds answers to many of the cultural questions that firms today face and is important to consider when teaching Corporate Social Responsibility at management schools.

A human rights perspective can significantly enrich the Corporate Social Responsibility initiatives that business firms embrace.

Experience alone does not make a good business manager. Training in technical knowledge, as well as in virtues and managerial competencies that pay attention to human resources, is critical.

When an organization faces a crisis, the human factor is critical to business success. Good judgment in the moment is a very relevant factor.

To achieve sustainable growth, entrepreneurs must choose between moving aside and letting a professional CEO run the company or following an action plan meant to help them become a professional CEO.

In addition, in these pages, readers will find many tools that help them address problems in their organizations:

Storytelling can be implemented as a tool to transmit knowledge and values, and to achieve sustained growth in family run businesses. In so doing, said businesses can reach and surpass the third generation of family ownership.

Negotiation is a famously challenging process; businesspeople can leverage system dynamics tools for better outcomes.

Many strategies fail during implementation because managers pay insufficient attention to performance measurement systems. A new measurement system with the acronym “STORY” is recommended.

Corporate Social Responsibility requires better tools for transparent operation; a new Blockchain-based tool can provide just that.

To prevent burnout syndrome, which is increasingly common, specific recommendations can help create a healthier relationship between an organization and its employees.

Hospitality can be used as a tool to foster a harmonious atmosphere that supports the complexity of managerial work.

New ideas, proposals, and tools constantly enrich the study of management when they use an interdisciplinary approach. This collection of insights and recommendations is particularly significant because it contains countless hours of dedication from professionals who have based their analysis on a wide range of data, fieldwork, and real-world case studies.

I encourage all readers to dig into the chapters of this book with a spirit of curiosity to discover the tools and strategies they propose. Although many challenge conventional thinking, each has the potential to provide an enriched and more rewarding future to those who study them and apply their recommendations.

Dr Jorge Gutierrez Villarreal

President Board of Governors

Universidad Panamericana – IPADE