Sunday, December 6, 2009

A (Noble?) Experiment to Move Business beyond Ideology

Last month I took Barack Obama to task for trying to turn a town hall meeting in China into an opportunity to promote his convictions about "universal rights." At that time I tried to offer evidence that just about any concept of universality was fundamentally contrary to human nature. I then suggested that, whatever value system we may embrace, this lack of universality was hardly the end of the world, at least from a mercantile point of view:

Yet business goes on, because business runs through negotiations, rather than agreements to accept universal truths. Those who succeed in business tend to be those who succeed in communicating; and communication involves engaging with a wide variety of interests (suppliers, partners, customers, competitors, etc.), each of which requires different communicative strategies, tactics, and actions. Like it or not, worldviews and value systems differ; and we probably understand more about how the diversity of life forms has evolved than we do about the emergence of such differing views of humanity itself. We should definitely see to our own interests and values, but that is likely to involve negotiation with those who do not share them. Negotiation, in turn, is more about being able to get things done, rather than whether or not one worldview can "win" over another.

According to a recent BBC News report, this position may currently be under a test of practice in Sweden. Here is the basic story:

A Swedish department store has pulled out of what was to be North Korea's debut in Western fashion.

Stockholm's PUB store has removed the sales space for Noko Jeans, made in the hardline communist state, shortly before they were due to go on sale.

The store said it did not want to be associated with "a political issue".

One of the three young Swedish entrepreneurs behind the brand said when he was told the news he thought it was "a joke".

"Everything has been removed from the store," said Jakob Ohlsson, who set up Noko with Jacob Astrom and Tor Rauden Kaellstigen.

"I sincerely hope (PUB) will remove everything labelled 'made in China' as well."

Rene Stephansen, PUB's director, said the store was "not the forum" for a discussion about North Korea.

"For us this is not a question of Noko Jeans - this is a question about a political issue that PUB doesn't want to be associated with," he said.

Designer price tag

Noko Jeans' founders say the idea of the project is to increase contact with isolated North Korea.

"It's a country that sometimes treats its citizens terribly, but we think our project is a way... to influence things," said Mr Ohlsson.

Needless to say, this is a situation where both sides have viable arguments; and it will be interesting to see how things progress.

Let's begin with the obvious let's-not-kid-ourselves reasoning: Whatever the representatives of Noko Jeans may say about influencing relations with North Korea, the company is a business like any other business. If you want to understand the business, you need to look at the business model. In this case that model involves offering the product (a pair of jeans available only in black to avoid any association with "American blue jeans") at a "designer" price tag, which comes down to a dollar equivalent price of $220. I cannot even begin to guess how far this departs from what a North Korean would pay for those jeans; but, if Noko wants to preach their doctrine of improving relations with an ideological opponent, then they may have some 'splainin' to do over questions of exploitation! Where this the case, then one might understand that PUB would invoke the specter of politics to avoid the appearance of quibbling over questions of money. Remember one of the fundamental rules of thumb:

Whenever someone tells you, "It's not about the money," it is about the money!

Cynic that I am, I would explore the hypothesis that PUB kicked up a fuss because they felt they deserved a bigger cut in what may turn out to be a scam using foreign relations as a smokescreen to conceal sweatshop worker exploitation, an "inconvenient truth" that could end up causing considerable embarrassment to both North Korea and Sweden.

I do not see this as a refutation of the position I cited at the beginning of this piece. Rather, it is just a matter that the principles behind that position are as subject to Murphy's Law as any other. The one lesson we should have learned from the current economic crisis is that there is no such thing as an approach to doing business that cannot be abused. Given the level of protestation on both sides of this story, my guess is that there is more than enough abuse to go around among all players involved. The long-term consequence may then be that it will be harder for others who try to take a more regulated approach to initiating business relations will North Korean. In other words Noko will have succeeded in "influencing things" but (in the tradition of Marx' understanding of how men make their own history) not in the way they wanted us to believe!

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