But there is another fundamental force at work in the global economy that is accompanying this worldwide relocation of the manufacturing base. Even for those companies that are not directly involved with overseas markets, or thought at first that outsourcing production to low-wage foreign markets would essentially relieve them from good employment and environmental responsibilities, the last decade has brought new pressures for better behavior from the growing network of increasingly powerful and effective pressure groups.
In response to this process of globalization and these types of social and environmental exploitation issues, during the past 15 years there has been an explosive growth in the number of activists, pressure groups, and NGOs that now actively monitor both the domestic operations and extended supply chain behavior of corporations worldwide. There are approximately 30,000 NGOs operating in international markets, [14 ] including development agencies, single-activist groups, corporate watchdogs , labor rights advocates, and wide- ranging environmental agencies such as Greenpeace and the World Wildlife Fund. Importantly, as a group they have grown enormously in authority and sophistication over the past decade. Recently able to pay higher salaries and attract talented and dedicated workers ” reporters, advocates, lobbyists, lawyers ” NGOs today can compete with company public relations offices and corporate counsel in a way that was inconceivable a decade ago. Salaried employees of Amnesty International, Human Rights Watch, the World Wildlife Fund, or Greenpeace now form viable groups composed of a young, educated , and capable elite.
These pressure groups also have an unprecedented collection of new technologies at their disposal to quickly communicate and raise money for a particular cause. The most powerful of these, of course, is the Internet. A good example of the power of the Internet to mobilize worldwide support for an environmental cause was the 2001 attempt by Mitsubishi to develop a desalination plant in the San Ignacio Lagoon, in Baja California, Mexico. The factory itself was to be constructed in an area off the coast that served as a breeding ground to the endangered species of gray whales.
Campaigners and environmental activists mobilized an online petition via the Internet and managed to collect over one million signatures, capturing media attention and eventually forcing Mitsubishi to withdraw the construction proposal.
If people are easily swayed by advertising, they are equally swayed by real or created scandals reported in the press. A quarter-page advertisement spread in a national newspaper may cost $100,000, and may have marginal effect in terms of sales or brand recognition. A single headline article on exploitation of children, a dangerous product, or an environmental catastrophe, on the other hand, can cost a company millions by ruining its reputation at a stroke.
The journalists really hone in on any type of negative news, says Jim Kartalia, President of Entegra Corporation and a specialist in risk and reputation management. With the Internet a lot of that type of information is spread around the globe much more quickly and a lot more people are aware that corporations are falling down on a lot of these issues. And because of the technology, the impact is that much greater and that much faster. [15 ]
Increasingly, at least according to polls , the public is beginning to see the rise in authority and legitimacy of NGOs as a valuable counterbalance to the uncaring corporations whose drive for profits disregard human suffering and environmental exploitation in other countries . Moreover, NGOs are much more effective in projecting a favorable image to the public because their goals and motives are seen as less self-serving than traditional trade unions, the activist power base of the past. Unlike unions, pressure groups are much less susceptible to charges that they are attempting to blackmail management out of pure self-interest. NGOs themselves are not seen as the beneficiaries of their efforts, but instead are seen as working for the good of the environment, or for workers without a voice. And although there may be a legitimate argument that these NGOs depend for their existence upon being able to continually create media-worthy controversy, they are nonetheless broadly supported in their missions by the public.
Moreover, with the ascendancy of NGOs, tactics tend to be very different-than those employed by unions in the past. Pressure groups uncover things that could be hidden two decades ago, and where unions worked through threats of collective strike action, pressure group strategy usually focuses on exposing and discrediting companies publicly . This threat of public shame constitutes influence on an altogether new and unprecedented scale.
It is probably because of their relative independence that NGOs seem to be so highly regarded among the public. And although many of these pressure groups are still seen as fringe activists by American business leaders , they are actually becoming a powerful force in the global economy. Europe, in particular, has seen a significant leap in recognition and trust of NGOs among the public. In a recent survey by Edelman, the top three brand names in Europe in terms of trust were Amnesty International, the World Wildlife Fund, and Greenpeace ” all are NGOs and each receives public trust ratings of between 60 and 75 percent. The four highest ranked corporations in terms of trust, on the other hand, were Microsoft, Bayer, Shell, and Ford, which ranked only between 35 and 45 percent: only around half that of the trust factor associated with the NGOs.
We believe NGOs are now the Fifth Estate in global governance, concludes Richard Edelman, CEO of Edelman Research. The true credible source on issues related to the environment and social justice . [16 ]
As they have grown in popularity, NGOs have also learned to wield their power unmercifully. What every company executive dreads most is finding that their organization has become a target of a pressure group campaign. NGOs have become particularly effective at targeting high-profile companies with extensive media campaigns, hoping that improvements forced on industry leaders will then trickle down to other firms, allowing their influence to extend to small, privately owned companies with a low public profile. This approach, known as market-campaigning, has proven to be highly effective in forcing major companies to scramble to take actions to improve supplier activity that was once thought beyond their control or responsibility. In Europe, Oxfam, Greenpeace, the World Wildlife Fund, and Amnesty International have all focused on mobilizing public outrage through media campaigns that focus almost exclusively on well-known, market leading brands that are quickly picked up through the Internet, television, or the newspapers in the United States.
As Gary Gereffi, professor of sociology and director of the Markets and Management Studies Program at Duke University notes, Market campaigning, which focuses protests against highly visible branded retailers, is only about 10 years old, but in the words of one Greenpeace activist, ˜it was like discovering gunpowder for environmentalists.
The program by environmentalists to protect forests is a good example-of this policy in action. The firms that felt the pressure most keenly were not timber extractors such as Georgia-Pacific, Weyerhaeuser, and International Paper, suggests Gereffi, But retailers, specifically the big doit-yourself centers such as The Home Depot and Lowe s Home Improvement Warehouse stores. The Rainforest Action Network, Greenpeace, Natural Resources Defense Council, and other NGOs launched major grass-roots campaigns against these retail giants in the late 1990s. Ultimately, this type of pressure meant that both Home Depot (August 1999) and Lowe s (August 2000) declared their preference for Forest Sustainability Council-certified products. [17 ]
By targeting firms such as Gap Inc. or Home Depot ” firms at the retail end of the supply chain with direct links to customers ” NGOs, Gereffi concludes, are able to wield the power and vulnerability of corporate brand names to their advantage. [18 ]
[14 ] NGOs, Sins of the secular missionaries, The Economist, January 29, 2000, p. 25.
[15 ] Interview with Jim Kartalia, January 23, 2002.
[16 ] U.S. Attitudes on CSR Move Closer to Europe s, Holmes Report, April 25, 2002, at www.holmesreport.com.
[17 ] Gary Gereffi, Ronie Garcia-Johnson, and Erika Sasser, The NGO-Industrial Complex, Foreign Policy, no. 125, July/August, 2001, at www.foreignpolicy.com. Copyright 2001, Carnegie Endowment for International Peace .
[18 ] Ibid.