#Chandler, Geoffrey "consensus politics"
Enron ethical business #ethical shares
PFI #philanthropists #privatisation
#worker-owned enterprises #worker representation on boards
Describe the key features of mid-twentieth century capitalism and its business institutions, values and practices.
Identify differing opinions on the social responsibility of Business.
Demonstrate an awareness of the changes in business practices and the parallel changes in ideas of CSR/SRB.
Summary: (Ctrl + click to go to headings)
1. The Twentieth Century - second half: consensus politics.
1950s & '60s: "never had it so good": "consensus politics".
The consumer movement - a "safe issue"?
Pollution awareness, pressure groups.
Worker dissatisfaction: job enrichment programmes.
New slums, corruption in local government.
2. The early 70s:
Social audit (external).
1976: Body Shop – an ethical company?
Ben & Jerry's “ethical ice-cream”!
3. 1979 & the eighties:
Thatcherism, monetarism: the free economy and the strong state?
Financial scandals: junk bonds etc.
Company environmental statements and annual social reviews.
Ethical evaluations: KPMG Peat Marwick, Arthur Andersen.
4. the nineties: Privatisation, board-room pay etc. Body Shop criticised. Royal Society of Arts report: companies must earn "licence to operate"
1. Second Half of the 20th century: Consensus politics:
After the Second World War (ended 1945) and until the late 1970s, the period of British politics is often characterised as “consensus politics”. By this is meant that there was much agreement between the major political parties on a range of issues: The Welfare State, NHS, Council Housing, de-colonisation, and the Hydrogen Bomb were all promoted by both Labour and Conservative governments. Harold MacMillan, who was to become Conservative PM, when campaigning even boasted that they would build more council housing than labour! Keynesian economics (see last chapter) was largely accepted by both sides of the political divide: government should play an active role in the economy, especially creating demand, as well as ensuring a safety net for the poor or sick or unemployed. There was no problem in those days, in advocating “public spending”!
Another of Harold MacMillan’s slogans, which reflected the optimism of the post-war period was: “You’ve never had it so good!”. Rationing had ended, there was a consumer boom, and young people had a new spending power. It may seem incredible, but the first portable and later transistor radios and record-players were coming onto the market during this time, so young people, could develop their own “lifestyle” – the Mods and Rockers, Teddy Boys etc…
The consensus breaks down:
On the other hand, beginning in the 1960s, there was increasing popular
discontent, which eventually broke the consensus, and which was focussed on
two concrete issues: the Vietnam War, and Nuclear weapons. The “sixties” are
particularly remembered for a widespread youth
revolt – affecting
Much of this opposition was aimed not only at government, but at “big
business”: such companies as Dow chemicals were
implicated in supplying chemical defoliants (to remove the jungle the
guerrillas were hiding in) that were dropped on
Among students – especially in
See my book review of Feenberg, and Freedman, (2001): Review, and a contemporary account: May 68. See also: Social Movements: Youth and the Counter-Culture.
Much of this was based on an increase in the wider availability of
education and of information generally, since television showed people across
the world what was happening in
In workplaces, too, attitudes were changing: a more educated workforce demanded more satisfying work. The first “job enrichment” programmes were brought in. The “shop stewards” movement grew, as rank and file workers became disillusioned with the slowness of their trade union bureaucracies. At the same time, automation at work was endangering jobs – though in those days the promise was held out of “more leisure time”! Some talked, optimistically even, of a post-industrial society.
Disillusionment with bureaucracy was strengthened when it was found that leaders of local government (T. Dan Smith) were corruptly working with property developers to make money out of the growing demand for housing. Tower blocks were built, to save on the cost of land, and soon turned into new slums, or even (Ronan Point) began to fall down!
J.K. Galbraith wrote of “private affluence in the midst of public squalor”, as public spending on roads etc failed to keep up with booming private affluence.
Rachel Carson’s book “Silent Spring” warned of coming environmental breakdown, as she documented how wildlife was being destroyed by excessive use of pesticides and artificial fertilizers. By the 1970s the group of industrialists and scientists called the Club of Rome had published “Limits to Growth” which questioned the whole basis of industrial growth: pollution or population crashes or exhaustion of natural resources were the inevitable outcome if we did not limit our growth. See also Chapter 6: the Natural Environment
As can be seen, many of these movements were quite radical in their demands. It might be argued that some felt the need to take up a “safer” issue, and the “consumer movement” met this need: this was targeted at producers, such as the automobile industry, who were seen to be making unsafe goods. Ralph Nader (more recently a Presidential candidate standing for a green politics) made his name here, with his book “Unsafe at Any Speed” attacking the car industry. These demands required no fundamental change in the social order, and no reducing of the power of large companies. There was not even much criticism of whether the products being supplied were necessary (a critique that was to come later – see Chapter 5: The Consumer). However, there was some criticism of the role of advertising – and J.K. Galbraith did write The Affluent Society, questioning the excessive power of producers.
So there were by the early 1970s several pressures operating to restrict business: an environmental movement, the trade union and left-wing workers’ movements, hostility to MNCs, and finally a consumer movement, pressing for controls over advertising and more reliable safer products.
Two specific developments can be noted that demonstrate the effects of these movements on business:
(a) the idea of a “social audit”, as practised by Social Audit plc. Here an independent organisation approached businesses to offer to carry out a social audit, attempting to weigh up the social benefits against the social costs. This idea eventually was taken up by businesses and would be done “internally”, whereas Social Audit were operating externally (see the example of headings for a social audit given below).
Definition of a social audit:
"... an attempt to develop criteria for measuring corporate performance in areas of broad social concern" (S. Prakash Sethi, in Heilbroner and London: Corporate Social Policy, 1975).
Sethi further notes that one will need to:
(i) define what is socially responsible behaviour
(ii) decide how it can be measured (e.g. by establishing a scale of performance). Note that you may on some aspects be concerned with impact on "quality of life", rather than quantifiable matters such as pay/rewards, costs/benefits.
(iii) assign various weights and priorities to various elements of social responsibility - to give an overall evaluation.
Further, since a social audit is
also a "reporting device" (David F. Linowes,
in Heilbroner and
(iv) at whom is the report aimed?
(v) who is to be held accountable for the issues raised?
(vi) who is expected to bring about change, and how?
R. Bauer, D. Fenn: The Corporate Social Audit, Russell Sage 1972
D. Blake et al: Social Auditing, Praeger 1976 etc.
(b) the founding of “ethical businesses” especially, in 1976: The Body Shop started up, with its range of “natural” cosmetics, and its opposition to animal testing and support for workers in the third world. Then came Ben & Jerry's Ice-cream, described in a book by its founders as “a value-led business” with its apparently socially or environmentally friendly flavours: rainforest crunch, peace pops. However, as noted already, Body Shop’s ethical stance has been questioned on a number of fronts (see the list of points John Entine raised), and Ben and Jerry’s seems no different to any other ice-cream maker in practise.
Update: To complicate matters, there is a movement to boycott Ben and Jerry’s because of founder Ben Cohen’s support for the Free Mumia Abul-Jamal campaign. This black broadcaster and former Black Panther was jailed for the murder of a police officer. He has always protested his innocence (claiming his brother did the shooting and ran off) and his supporters see his jailing as part of ongoing victimisation of black radicals. See www.officer-com, and the links given there, for both sides of the story.
Workers on the board: in 1975 Harold
Wilson’s government set up a commission to respond to a European commission
directive on worker representation, and in 1977 the Bullock Report on
industrial democracy came out in favour of employees on the main board. As Nils Pratley pointed out (Guardian
Pratley does add, though: ‘Critics will also argue that the German model is not a shiny as it once seemed. Boardroom pay appears as wild in Germany as it does in the UK and the emissions scandal at Volkswagen has exposed a cosy set-up in which the executive class secured mega-bucks bonuses by sweet-talking the unions.’
Pratley’s piece came after Theresa May became prime minister (July 2016), and made an extraordinary speech promising, among other things, to deal with boardroom inequality. Further comment on the worker representation idea: https://www.theguardian.com/business/2016/jul/11/theresa-mays-plans-curb-boardroom-excess-receive-mixed-reaction
Further comments on Theresa May’s speech
It is interesting to note how, over time, when one “social responsibility problem” has been confronted and (partially) resolved, another new kind of problem often arises (see my article on the “social politics of business ethics”).
With her election victory in 1979, Mrs Thatcher began to re-orient British politics, at first in the direction of monetarism. It has been aptly said (Andrew Gamble) that she stood for the free economy and the strong state. That is, the market would be allowed as much freedom as possible, with the state acting to remove “barriers” – such as over-powerful trade unions! – and at the same time the state would ensure a higher standard of personal morality (and it would need to be “strong” to remove barriers to the free market!).
It is well known that the first to benefit from her reforms were people working in money, in the City, and it is not surprising that a new area of concern over business social responsibility and ethics took the limelight, namely financial scandals, and (later) excessive pay packets.
Background: only large companies had sufficient financial strength to issue corporate bonds, (so smaller companies were not “in on the act”) and investment managers are legally bound only to hold investment-grade bonds.
If a company gets into trouble, the value of its bonds could fall extremely fast to become “junk bonds”. Some of these were known as “fallen angels” i.e. originally rated, but no longer considered worth getting a rating from ratings agencies.
Prices of junk bonds were therefore low (lower than true value), and not usually traded on public exchanges. The knack was to buy junk bonds when they were cheap and sell when the original price has been restored, and then the real winners are the dealers (and that very much in the short term).
Part of the problem that arose was that the investment managers of small companies were less well regulated, and bad deals would be made. Moreover, junk bonds require interest payments twice a year and have to be paid off within ten years, so debts can accumulate.
With Enron, (see 5. below) the whole company collapsed, in part because it had got involved in debt through buying junk bonds…
Another scandal over junk bonds involved Ivan Boesky – and he broke regulations over insider trading as well. Boesky was someone who believed that “greed is good”.
On the other hand, these and other misdemeanours did not go uncontested, and at the same time a number of companies were at least giving the appearance of an awareness of social responsibility. Thus, a number of companies began to publish regular environmental statements (300 companies…); others published annual social reviews (e.g. General Motors, Colgate, Sears), and accountancy firms began to carry out ethical evaluations (e.g. KPMG Peat Marwick, and Arthur Andersen – though the latter were to be implicated in the Enron scandal!).
And, as noted earlier, there were new opportunities for “ethical investment”.
Despite the change of government, with “New Labour” returned to power with a massive majority, many would argue that “Thatcherite” economic policies continued. New Labour professed to be developing a “third way”, but this meant retaining some aspects of the “free market” whilst encouraging the public sector to work with private companies, and to develop market-type competition.
Thus we had PPPs (Public-Private Partnerships) – e.g. to run the London Underground. Another acronym was PFI (Private Finance Initiative) e.g. with foundation hospitals, that were to be freed to acquire finance in the private sector. Needless to say, both of these “systems” are highly controversial. Accusations have been made of companies like Jarvis being incompetent and making money out of it! Hospitals given foundation status have turned out to be more costly to run (not to mention the spread of MRSA infections because contract cleaners do not have the dedication of previous public sector employees).
See: http://www.guardian.co.uk/commentisfree/2012/jul/16/who-thinks-outsourcing-works? – and ‘updates’ to these notes (not uploaded yet...).
Outsourcing (Toynbee goes on) left Somerset council and police with losses of £31.5m, and Ealing saved £5m by bringing its housing back in-house.
Another area of contention has been the excessive pay of executives of large companies – many being given large settlements on their leaving a company that they had damaged!!
Running parallel to these scandals and problems, public awareness of SRB issues has stayed at a high level. Serious criticisms have been made of both the Body Shop (see Chapter 1: Body Shop) and Ben & Jerry's (see Jon Entine’s piece “Rain-forest chic” in Hoffman, W.M. et al 2001). Entine claims that such enterprises are not actually doing anything much – so that in comparison, if a large company makes a small step to improve its environmental record, say, it is doing far more good than small so-called ethical businesses. In other words, the level of discussion about SRB is now quite high and sophisticated.
Moreover, even some quite “staid” bodies such as the RSA (Royal Society of Arts and Manufacture) have tried to increase the demands on business to adhere to higher standards of social responsibility. One of their “Tomorrow’s Company” Reports (1994 – 6) argued that companies must earn from society a "licence to operate."
However, business does not stand still! New ways of conducting business produced new problems and scandals, and the most striking of these was ENRON.
5. Enron: (notes from “What went wrong at Enron” by Fusaro, P. C. and Miller, R.M., 2002).
US Government and criminal investigations start, involving accountants Anderson as well.
repercussions went beyond the
Main Issue: Enron was founded on an “idea” (rather than producing actual products) – the idea of the free market. It was primarily involved in trading, in the movement (not the production) of gas, and then in working out complex financial deals, (the movement of money!?) with itself as “middle-man”. Enron then overextended itself, becoming a trading firm in markets where it had no business being. Likely to have been involved in illegal accounting procedures – covering up debts and making false declarations about its profits and balance-sheet.
Enron kept making new investments in order to keep up its rapid growth, but this created more debt; and to keep its share value high whilst always acting as “middle-man” meant that creditworthiness was essential. To give the appearance of creditworthiness it:
(i) got involved in more and more deals and contracts – leading to more debt!!
(ii) covered up its real situation.
Further Background on ENRON:
Enron was originally Houston Natural Gas – its major asset was thousand of miles of pipelines. The demand for energy began to outstrip supply in the 1960s – gas was seen as “clean” in comparison with oil. And then in the late ‘80s and ‘90s there was deregulation of the gas and electricity markets.
With over 200,000 miles of pipeline (cf. interstate highways in US: 42,000 miles), the problem was how to transport gas around the country (which route). This is a complex logistical problem, needing mathematical techniques to solve. So, it created an opportunity for anyone who could deal with the complexities. Lay believed that taking advantage of the free, deregulated, market, and new financial techniques being developed for it, would work. Thus a new kind of business was created, based on moving goods around, and with it new and complex accounting techniques were developed.
Ken Lay – originally an economics lecturer – joined HNG in 1984, when it was a small company. He then increased its size by acquiring two others. He was politically skilful, also seen as intolerant of rivals in the company (VCs came and went!). Lay used $230 million excess funds from pension fund, to buy the stock back after a takeover bid, and borrowed money from Michael Milken, known as the junk bond king of Drexel Burnham Lambert. The latter collapsed in 1990 and Milken was sent to prison.
Update: according to websites originating in the USA, and some UK Newspapers, Milken was made a scapegoat, and his “crime” was insignificant at least, and maybe not a crime at all, given the complexity of the technical rules that were involved. See www.capmag.com for a pro-capitalist view, from an organisation that believes Social Responsibility of Business is a left-wing plot!
The heavy interest on the borrowed money meant that the company had to grow quickly or die.
Another problem was that pipelines could not gain in value. However, deregulation offered new opportunities:
Enron used an accounting technique called “mark-to-market” to get round the difficulty, i.e. this way you keep adjusting the price of assets, rather than keeping them on the books at the price of acquisition. But as some assets do not have unambiguous prices, this can lead to lack of accurate valuation – which is what happened with Enron.
Other new financial approaches used (and these are but some of the complex practices!!) that eventually led to Enron’s collapse.
(i) “slice-and-dice”: this was first used in mortgages – at a time when there was a shortage of loan money available (either because not enough people were saving, or because there was too high a demand for mortgages), investors could be attracted by turning mortgages into registered financial securities (like bonds). This was called securitization”.
To cover a further risk, that a house-buyer may want to pay off early, which could cause a problem with the cash flow, payments could be arranged in “tranches” (slices) and securities found for each tranche (primary, and so on…). (The only problem here was that later tranches would be less attractive, as they were a higher risk and gave less good returns).
Another of Enron’s innovations was to apply the same slice-and-dice process to investing in securities.
(ii) “hedge fund”: Moving gas around pipelines requires “hedges” – i.e. offsetting possible losses with planned profits. Hedge funds were also a spin-off of deregulation.
Because is possible to buy good stock, but then find it is in a bad market (e.g. buying stock in one healthy biotech company, when the stock in all biotech companies goes down) – investors need a “hedge”. One hedge method is “pairs trading”, e.g. borrowing shares and then selling them short (i.e. shares which you expect to go down – you will have to buy them back later, because you have borrowed them, but you will be able to buy at a lower price).
Hedge funds by their nature must operate in a secret environment – and to avoid oversight by US securities laws – so they go offshore e.g. Cayman Islands or Bahamas.
PS: The saga goes on: the first criminal trial involving former Merrill Lynch and Enron executives, accused of conspiracy fraud opened in 2004!
These notes were written over a period of time, and before the crisis of
2008 and the political upheavals since then... The rise to prime minister-ship
of Theresa May in July 2016 has reminded me of many of these issues – since her
speech called for capitalism to work for all of us. A letter in the Guardian
http://bcorporation.uk/what-are-b-corps-uk This is ‘a body of businesses that have voluntarily committed to putting societal and environmental needs alongside financial ones with equal priority.’ The movement includes Ben and Jerry’s (see above!) and other multinationals, as well as start-ups. The writer (Simon McEvoy) suggests May should look at the ‘mission-led business’ review led by the Cabinet Office, where ‘many B Corps have submitted their views on how to make the system fairer for good businesses, and better for customers and employees.’ http://bcorporation.uk/blog/mission-led-business-review-submission-b-lab-uk.
Original conclusion (updated 2016)
To conclude this brief survey of the historical context, it seems to me, as I have argued in my article on business ethics, that whilst there are always new issues to be dealt with, many of the “old” ones have not gone away. Price-fixing, cartels, insider dealing, production of shoddy goods, false marketing claims, environmental damage (especially in the third world), exploitation of the workforce (especially in the third world!), etc, etc are still around. So we must not be misled into thinking that “everything is always new”.
Nor should we be fatalistic: whilst new technologies, new marketing opportunities etc do seem to throw up new problems of business irresponsibility, to deal with them there have always sprung up (to use one of J.K. Galbraith’s expressions) “countervailing powers”. Thus “social audits”, and ethical codes – and more recently shareholder activism (see http://www.theguardian.com/business/2014/aug/01/new-breed-shareholder-activists) have been developed – as has government and international regulation. Pressure groups are still acting. Social movements such as the anti-globalisation or anti-capitalist movement are still strong. Business has therefore been kept in check - though there is no one way of doing this that is clearly the most successful. My view is that we need a “multi-track” approach to ensure that business is more socially responsible.
The final lesson to be learned from this survey is that problems are interconnected: the power of big business, together with the competition it always faces, can too often lead it to cut corners when trying to maximise profits. The squeeze is then put either on the workforce, or the consumers, or the environment. Whoever suffers, the underlying cause is the power of business being used irresponsibly. It can be argued, of course, that the main problem is the economic system – capitalism itself... since the whole basis of capitalism is competition for growth and profits. Ideally I would like to see capitalism superseded. However, waiting for ‘the revolution’ can be an excuse for not doing anything about present injustices – and I am not prepared to stand by while so many people suffer for the irresponsibility of business.
7. More Updates:
Topics in alphabetical order:
Sir Geoffrey: Obituary,
reminded me of my earliest work on Corporate Social Responsibility: Corporate Social Responsibility - Contents Page. Peter Donaldson’s television programmes, based on his book Economics of the Real World, were a strong influence on me, (and I used recordings of them in my teaching) and if I remember rightly, Donaldson interviewed Chandler about the ‘social responsibility of business’ (as CSR was known then) – and I was struck by his strong, clear argument that business simply had to do good for society.
Of course, he was no revolutionary – not a socialist by any
stretch of the imagination, but the presence in business of people like him
probably convinced me that to stick narrowly to a radical and/or revolutionary
line was not going to have much effect on the real world. Undoubtedly
- Rupert Jones writes in the Guardian on ethical investments. See e.g. https://www.theguardian.com/money/2016/jul/16/carbon-free-banking-ethical-investment-fossil-fuels
– Money Gdn, 080809 questions investment in Tesco and other supermarkets. Jupiter Ecology doesn’t, but many others do (incl. F & C Stewardship Growth, the biggest of the ethical funds). But Tesco has sales of £1 bn a week, and an investor can put pressure on them to be more ethical – e.g. Co-operative Investments’ Sustainable Leaders Trust. See also Guardian’s book: Green Money: how to save and invest ethically by Sarah Pennells. £7.99
Multinationals: April 17th 2011, Observer: lists ‘invisible giants’ – i.e. business multinationals which try to keep a low profile: Glencore (trades in minerals and metals, grain and energy, plans biggest stock exchange flotation ever: $60 bn, creating 485 instant millionaires…); Saudi Aramco (controls ¼ of world’s oil reserves, 55,000 + employees, may have exaggerated amount of oil reserves); Cargill (US agribusiness – 80% owned by descendents of founder WW Cargill – including 7 billionaires); ISS (Danish outsourcing company, cleans RAF bases, provides security at hospitals etc – 250,000 employees); INEOS (UK/Swiss: chemicals – part-owner of Grangemouth refinery); Bridgewater Assocs (hedge fund, focuses on currency speculation, trading govt bonds, and fixed-income debt); Permira (UK private-equity, owns: Hugo Boss, Birds Eye, the AA, Saga, New Look – capital of L18 bn); Noble Group (Hong Kong – trading company); Koch Industries (US 2nd largest private cy in the US, employs 70,000 and made $32 bn acquisitions since 2003); Sinopec (China – petrol group 7th in Fortune list of biggest companies, revenue $187 bn).
Philanthropists and business leaders, to support campaigns to preserve environment (etc). Article G 28.12.2011 – Juliette Jowit on how campaigns such as ending slavery involved a well-known figure e.g. from the world of business. With slavery was Charles Grant, chair of East India Company
Who declared his support for William Wilberforce. British lawyer Polly Higgins wants ‘ecocide’ to be made illegal – by making it a fifth crime against peace in the international criminal court. Need to open an amendment to the 1968 Rome Statute that established the court and with two-thirds of the statute’s signatories in agreement it would become law. (Ecocide is illegal in war but not in peace-time!). Higgins believes she needs a prominent figure to back the campaign – e.g. Bill and Melinda Gates (have spent more than $26bn on their foundation, promoting development and health – but acknowledging that climate change is part of this). Or Warren Buffett who has also given away billions to good causes and opposes new coal-fired power stations. Even the chair of Nestle, Peter Brabeck-Letmathe, who has said charges for water ought to be increased (presumably only in the developed world!!!).
Privatisation (see on PFIs in CSR3). Polly Toynbee article Guardian 17.07.12:
Notes Cameron’s determination to privatize, but also the difficulty of comparing private with public/in service provision – though the latter is public and transparent...
Worker-owned enterprises: Letter Guardian from Andrew Gunn former Chair Employee Ownership Assn. says what a pity Cadbury didn’t follow John Lewis, Ove Arup, Tullis Russell, Scott Bader and Baxi Group into employee ownership.
References and further reading (an asterisk * indicates a book or website that should be of use for other parts of this course):
See also: Booklist on CSR.
Feenberg, A. and Freedman, J. (2001) “When Poetry Ruled the Streets. The French May Events of 1968”, State University of
New York Press (reviewed
by Ian Pirie in Democratization, Vol 9 No 2, Summer 2002, published by
Fusaro, P.C. and Miller, R.M., (2002): “What went wrong at Enron” (Wiley).
Galbraith, J.K. (first published 1958) “The Affluent Society”, Pelican.
Galbraith, J.K. (first published 1967) “The New Industrial State”, Pelican.
Gamble, A. (1988) “The Free Economy and the Strong State” – the Politics of Thatcherism”, Macmillan.
*Hartley, R.F. (1993) “Business Ethics: Violations of the public trust”, Wiley – has a chapter on Nader, General Motors and the
Corvair, entitled Triggering the Age of Consumerism.
*Hoffman, W.M. et al (4th edition 2001) Business Ethics, McGraw Hill, apart from the piece by Jon Entine mentioned, also has
a study of the Ford Pinto, and a section on the securities market.
Mills, C. Wright (1956) “The Power Elite”, Oxford University Press.
Nader, R. (first published 1965) “Unsafe at any speed”, Knightsbridge Publishing Co. 25th edition 1991
*Punch, M (1996) “Dirty Business”, Sage, has a study of the Guinness affair, also the Banco Ambrosiano, and a section on
white collar crime.
A Few Websites:
*Guardian Unlimited: www.guardian.co.uk has a number of articles on Enron e.g. a Special Report by Frank Partnoy: “When
greed is fact and control is fiction”,
Royal Society of Arts and manufacture: www.rsa.org.uk
On Rachel Carson: www.rachelcarson.org
NOTES FOR FURTHER DISCUSSION:
1. see chapter 1 for criticisms of Body Shop International
2. SOCIAL AUDIT
Possible areas to be reported on:
[These headings are taken from:
(a) J. Humble: Social Responsibility Audit, a Management Tool for Survival (Foundation for Business Responsibilities, 1973).
(b) Social Audit magazine (1973/4)]
1. Stewardship, role in the economy:
2. External environment:
community: employment, assistance
investment, R & D
other stakeholders: shareholders, suppliers, contractors
relation with government: import/export, military, third world
3. Internal environment:
4. Machinery for evaluating social impact.