Morning Advantage: Putting an End to Corruption

In 2010, the U.N. estimates, some $1.5 trillion in bribes wiped out more than 5% of global GDP. And by 2015, this Foreign Affairs article predicts, the total value of goods lost to counterfeiting and piracy will balloon from 2008's $650 billion to $1.77 trillion.

But businesses could fight back in the same way they’ve promoted fair labor practices worldwide — that is, by adding anti-corruption policies to their generalized standards of conduct (as Toshiba has already done); detailing behavior expectations for employees, contractors, and other value-chain partners; and instituting management systems covering training, proper contracting practices, supplier due diligence, security strategies, and the like. These would all be geared to answering how-do-you-know questions like “How do you know that one of your suppliers is not illegally obtaining intellectual property that’s ending up in your product?”

The return on this investment could be very high: The U.S International Trade Commission estimates that if protection for intellectual property rights in China (the worst offender) could be made as strong as they are in the States, the U.S. economy could add as many as 2.1 million full-time workers, $21 billion in exports, and $88 billion in sales to U.S. majority-owned affiliate firms in China.

ALL GLOBALIZATION IS LOCAL

Outsourcing Gets Personal (Harpers)

In 1996, then-Honeywell chairman Larry Bossidy held up an Autolite spark plug to argue for passage of NAFTA. When the 15% tariffs came down between Mexico and the U.S., he said, orders would pour into the Fostoria, Ohio, factory that made the spark plug, swelling the ranks of its 1,100+ employees. In reality, all but 86 jobs were shipped to Mexico, turning Fostoria into a ghost town, as a shrinking tax base led to a failing school system and a sea of for-sale signs. You can see what happened in this 10-minute film that eloquently chronicles the human side of globalization.

WHAT GOES AROUND

A Succession System Geared Toward Growth (The Globe and Mail)

B+H grew from two employees to one of the largest privately held architecture firms in Canada through a clever succession system, which its far-sighted founders put in place in 1980. When new principals buy into the firm, their retirement date is set. When they reach it, the only way they can get their capital back is to sell their ownership units to younger principals. If revenues stay flat, and they can’t bring in new blood, there'll be no one to sell to. This has spurred principals to find, nurture, and promote the new talent that has grown the business, expanding from 10 principals four years ago to 32, supported by a robust pool of bright planners and designers who can see opportunities to move up.

BONUS BITS:

Worth a Thousand Words for Sure

Wealth Distribution in America in One Mind-Blowing Video (Politizane)
The First Org Chart (McKinsey Quarterly)
Using the New Sim City, Six Urban Planners Build the Perfect City (Sort of) (Fast Company)

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