Much has been written about business actions in Russia over the past few weeks. Given the nature of this conflict, more will unfold for years. That’s because out of every conflict come the seeds of new orders.
Russia sees a democratic Ukraine and one potentially allied with NATO as a security issue. Russian President Vladimir Putin dreams of an empire, and Chinese President Xi Jinping would love a partnership assisting in his ambitions in Taiwan. There are plenty of tanks, bombs and other sharp power engaged in this conflict, but underlying all of these is the West’s sticky power — the economic system — which aims to strangle Russia and threaten China.
Yet, in addition to sanctions, two important seeds need to germinate to simultaneously counter an autocratically driven economic system and to foster a more value-driven approach of our own.
The first seed pertains to how we view business. The big companies that have left Russia are iconic brands. Pepsi, Coca-Cola and McDonald’s are geopolitical entities. When they decide to leave a country, the calculus is based on three things: the nature of their relationships with employees and customers, and to some extent, suppliers; the reputational, and therefore profit, impact; and leadership itself.
Leadership matters. Though it’s tempting to see businesses as profit-making monoliths, leaders make decisions on the basis of their own values and the values of the company’s culture and history, all of which can differ from company to company. Stakeholders matter. The companies that have left Russia have rightly expressed concern over the well-being of their workforces. Depending on the product they make — for example, medicines that might help alleviate suffering — there are good reasons for companies to place significant weight on their customers. Shareholders matter. The potential harm to reputation — especially for consumer-branded businesses — is a very strong reason for companies to shed themselves of any association with a regime bombing children’s shelters and hospitals.
Each of these considerations is affected by, but ranges well beyond, any given nation-state in a global economy. There is great risk in relying on one nation-state, or even a combination of nation-states, to cultivate the values that generate leadership, concern for at least some key nonshareholder constituents and corporate reputation. In addition to alliances such as NATO, there needs to be alliances with businesses themselves, businesses that also generate these values.
That leads to the second seed that needs to germinate. The strategy that promotes working in countries that are willing to squash human rights for the sake of profit leads to the tensions that we have seen in Russia this month. Does this mean that companies should shun Russia, China and others? Well, no. Just as having liberal democratic values can seep into autocratic countries — which is why they are so threatening to those countries — so can free market concepts, but only if those business practices authentically respect values that promote human rights, voice, gender equity and avoidance of corruption, which cut against the values of regimes willing to bomb hospitals.
The way companies as geopolitical entities do business not only can be beneficial for them, but it also can strengthen alliances for a kind of gentle commerce that stands as a further bulwark against autocratic efforts to make the global system even grimmer. This is not to say that the West’s shareholder-centric economic system is ideal. I have a career as a business ethics professor because businesses frequently suck. Yet one can envision a kind of gentle commerce emerging.
These seeds have been sown, and we’ve seen some germination. As the world endures this current conflict, the hope is that a gentler economic system might arise that stands against harsher systems — one that can reform the more problematic edges of our own system.
Timothy L. Fort is the Eveleigh Professor of Business Ethics at the Indiana University’s Kelley School of Business and is an affiliated scholar at the Kroc Institute for International Peace Studies at the University of Notre Dame. He has written four books on business and peace.
