Class 10: Sustainability in

transition to peace
Jacobo Ramirez
16 November 2021

Introduction to Sustainable Business

 Theoretical Framework: Class 8:
The global-local nexus of
sustainable business
Energy
Injustices

Sustainable
Transactional Colonialism
Business
Stakeholder

Needs of the society SDGs

Environmental justice
 Stakeholders => Social Engagement
Environmental Justice
(Distributional, Recognitional,
Procedural, Cognitive)
Local pressures
Global pressures
Energy Justice
(Distributional, Recognitional,
Procedural, Capability)
• Needs of the society
• Needs NGOs
• Needs Governments
• Needs of international organism
• Needs of MNC
• Needs of MNC
• Needs of Government
• Needs of International organism
• Needs of the society
 Goal 16: ‘Peace, justice and
strong institutions.’
• Target 16.10: ‘Ensure public access to information and protect
fundamental freedoms, in accordance with national legislation and
international agreements.’

• Target 16.3: ‘Promote the rule of law at the national and international
levels and ensure equal access to justice for all.’

Reference: United Nations. Goal 16: Promote just, peaceful and inclusive societies, https://www.un.org/sustainabledevelopment/peace-justice/; 2016
 Stakeholders => Social Engagement
Dimension
External and internal resource
constraints
Local pressures for legitimacy
Global pressures for legitimacy
Relevance
Needs for local human capital and
knowledge
Parental largesse with resources
Local norms firms’ roles
Capacity to sanction non-compliance
Thoroughness of local regulation
Global visibility of corporation
Social expectations in MNE's home
country
Operationalization
Subsidiary strategic orientation
Corporate slack
Host-country collectivism
Local government influence
Host-country development
Corporate size
Home-country collectivism
Crilly, 2011
Today’s Readings
• Selsky, J. W., & Parker, B. 2005. Cross-sector partnerships to address social
issues: Challenges to theory and practice. Journal of Management, 31(6):
849-873.

• Albino-Pimentel, J., Oetzel, J., Oh, C.H. et al. Positive institutional changes
through peace: The relative effects of peace agreements and non-market
capabilities on FDI. J Int Bus Stud 52, 1256–1278 (2021).

• Case: Coca-Cola FEMSA’s Contribution to Peace (provided through Canvas)

• FEMSA Sustainability report
https://www.femsa.com/assets/2021/04/FEMSA_GRI_2020_Sustainability
_Contents.pdf
Firms using their own capabilities

• Firms relying on their political capabilities to invest in conflict-

affected locations may be driven by short-term, self-interest goals,
which potentially enhance conflict in the host country.

Albino-Pimentel et al., 2021

Cross-sector social-oriented partnerships (CSSPs)

The voluntary collaboration efforts of actors from organizations in

two or more economic sectors in a forum in which they cooperatively
attempt to solve a problem or issue of mutual concern that is in
some way identified with a public policy agenda item.

Selsky & Parker, 2005

Cross-sector social-oriented partnerships (CSSPs)

Cross-sector projects formed explicitly to address social issues and

causes that actively engage the partners on an ongoing basis:

- Transactional

- Integrative

- Developmental

Selsky & Parker, 2005

Cross-sector social-oriented partnerships (CSSPs)

Area 1: Business-Nonprofit partnerships

Area 2: Government-business partnerships

Area 3: Government-nonprofit partnerships

Area 4: Trisector partnerships

Cross-sector social-oriented partnerships (CSSPs)

Examples from the Industry Expert Groups

1. Arla Foods
2. Ferrero Group
3. British Petroleum Company plc (BP)
4. Royal Dutch Shell plc
5. BioNTech
6. Novartis International AG
7. Calzedonia S.p.A. Group
8. Hennes & Mauritz Group (H&M)
Cross-sector social-oriented partnerships (CSSPs)

Area 1: Business-Nonprofit partnerships

Formation: Mix of self interest and altruism

Implementation: Trust, power, and stakeholder relations –

development of a common culture

Outcome: Building capacity, knowledge & reputational

Cross-sector social-oriented partnerships (CSSPs)

Area 2: Government-business partnerships

Formation: New public management –privatization and outsourcings

Implementation: Legal procedures

Outcome: Distancing the government from its responsibilities

Cross-sector social-oriented partnerships (CSSPs)

Area 3: Government-nonprofit partnerships

Formation: Manufactures civil society –public services

Implementation: Common themes

Outcome: Setting and service delivery type of capacity needed –job

development and welfare.
Cross-sector social-oriented partnerships (CSSPs)

Area 4: Trisector partnerships

Formation: Cross-sectoral initiatives –complex and multilayered social

problems –global issues

Implementation: Multiple and complex interdependencies –

involvement of different stakeholders

Outcome: Standards, certifications –methods for measuring

Case: FEMSA

Reference: FEMSA Sustainability report

 Case: FEMSA

Reference: FEMSA Sustainability report

Case: FEMSA

Reference: FEMSA Sustainability report

The armed conflict in Colombia and the
Government’s responses
• Fuerzas Armadas Revolucionarias de Colombia (FARC, Revolutionary
Armed Forces of Colombia)

• Ejercito de Liberación Nacional (ELN, National Liberation Army)

• Autodefensas Unidas de Colombia (AUC, United Self-Defense Forces

of Colombia)
Colombia’s fragile peace, explained
References: Ramirez, J., Vélez-Zapata, C. and Madero, S. (2018), "Ambidexterity strategies in illegitimate institutional contexts: the role of informal
institutions", Management Research, Vol. 16 No. 2, pp. 197-218. https://doi.org/10.1108/MRJIAM-02-2018-0811
Challenges of reintegrating the demobilized
and the role of the ACR

Reinstatement Policy / ACR Management

Strengths: Weaknesses:
Increasing number of Economic reinsertion
demobilized

Failure – Consequences: Success – Key Factors:

New wave of violence Alliance with private sector
Discredit of the government (FEMSA)

Note: ACR –Alta Consejeria para la Reintegración, [High Council for Reintegration]
FEMSA
• Senior Management of Coca-Cola FEMSA Mr. Fernandez

• ACR –Alta Consejeria para la Reintegración, [High Council for

Reintegration] –Frank Pearl, High Counselor for Reintegration
Questions
Q1: To what extent do you think that the initiatives of the ACR –Alta
Consejeria para la Reintegración, [High Council for Reintegration], fit within
Coca-Cola FEMSA’s CSR policy?

Q2: To what extent do you feel that participating in the reintegration

programs can be aligned with the mission and the sustainability framework
of Coca-Cola FEMSA?

Q3: To what extent do you feel that the programs implemented by Coca-Cola
FEMSA in collaboration with ACR have been successful? Why?
Q1: To what extent do you think that the initiatives of the ACR –Alta
Consejeria para la Reintegración, [High Council for Reintegration], fit
within Coca-Cola FEMSA’s CSR policy?
 FEMSA’s Collaboration with the ACR
Arguments against:
• Retaliation of the armed groups against the
company and its employees.
• Negative opinion matrix towards the company
supporting “criminals”.
• It is not the company’s responsibility.
• The organization has been historically a victim of
the conflict.
Arguments in favor:
• The portfolio of collaboration possibilities
proposed by the ACR (allows risk management).
• It is an opportunity to solve a serious social
problem.
• It is an opportunity to improve the relationship
with the national government.
• It is a step in the direction of preserving suitable
market conditions.
Q2: To what extent do you feel that participating in the reintegration
programs can be aligned with the mission and the sustainability
framework of Coca-Cola FEMSA?
FEMSA’s Mission Statement

• To generate economic and social value through companies and institutions.

• We generate economic value through designing, building and scaling mass business
models, which enable us to meet our customers’ daily needs in a distinguished and
efficient manner.

• We generate social value contributing to the improvement of the communities we

serve through our actions, the comprehensive development of our employees, and
with value proposals that generate well-being.

Reference: https://www.femsa.com/en/about-femsa/organizational-culture/
FEMSA’s Vision
Our focus towards accomplish our mission can only be compared with our passion
to achieve our strategic goals:

• Be the best owner, partner and operator of our businesses in the long term.

• Aspire to double the value of our business every 5 years.

• Be leaders in the markets where we operate.

• Be the best employer and neighbor to the communities in which we operate.

Reference: https://www.femsa.com/en/about-femsa/organizational-culture/
 Three Pillars of Sustainable Development

Social (People)

Equitable Bearable

Sustainable

Economic Environmental
(Profit) (Planet)
Viable

Social + Economic = Equitable

Social + Environmental = Bearable
Economic + Environmental = Viable
 Sustainability development: Economic,
Environmentally & Socially
• Economically: profitability, safeguarding market conditions, creating
worthy jobs and income for suppliers and distributors.

• Environmentally: Guaranteeing the responsible use of natural

resources (water) and dispose of waste responsibly.

• Socially: Contributing to the satisfaction of the social needs of local

communities and society in general.
People, Community, Planet

Reference: https://www.femsa.com/en/sustainability/focus-topics/our-people/#
Q3: To what extent do you feel that the programs implemented by
Coca-Cola FEMSA in collaboration with ACR have been successful?
Why?
ACR (Alta Consejería para la
Reintegración, ACR, High-Council
for Reintegration)

ACR-
Psychologi micro-
Entrepreneu Evaluation
cal Basic Advance entrepr Access
rial eneurs
and
reintegrati schooling Training market
potential (Access monitoring
on
capital)

Peace is a public good and a precondition to satisfy market

development
 Leadership

Successful
model

Education
Information &
communication
and
training
Evaluation
Benefits and impact of Coca-Cola FEMSA’s operation
Benefits:
• Stronger relations with the Government, a key
stakeholder.
• Free publicity
• Development of new skills in participating
employees volunteers (learning to teach, handling
groups, public speaking, etc.)
• Improve of FEMSA’s public imagine.
Impact:
• It reaches a small fraction of the mobilization
population (Time Bank 321 participants out of a
total 53 thousand demobilized individuals).
• 60% of the attended in process of the economic
reinsertion.
• Low demobilization of volunteers (218/7800
employees).
Colombian Government

• To encourage others (companies and individuals) to collaborate,

• To counteract the fear of relating with demobilized persons,

• To ‘validate’ the message of the ACR.

Coca-Cola Femsa Colombia
• 9,500 employees
• 394,471 Points of sale
• 23 distribution centers
• 48 million consumers
• 7 Plants

Reference: https://coca-colafemsa.com/acerca-de/presencia/?pais=colombia
 Goal 17: ‘Partnerships for the
goals.’

• Target 17.7: ‘Promote the development, transfer, dissemination and

diffusion of environmentally sound technologies to developing
countries on favourable terms, including on concessional and
preferential terms, as mutually agreed.’

Reference: United Nations. Goal 17: strengthen the means of implementation and revitalize the global partnership for sustainable development, https://sdgs.un.org/goals/goal17; 2016
 Stakeholders => Social Engagement
Dimension
External and internal resource
constraints
Local pressures for legitimacy
Global pressures for legitimacy
Relevance
Needs for local human capital and
knowledge
Parental largesse with resources
Local norms firms’ roles
Capacity to sanction non-compliance
Thoroughness of local regulation
Global visibility of corporation
Social expectations in MNE's home
country
Operationalization
Subsidiary strategic orientation
Corporate slack
Host-country collectivism
Local government influence
Host-country development
Corporate size
Home-country collectivism
Crilly, 2011
Conclusions
• The importance of Cross-sector social-oriented partnerships (CSSPs), for the
solution of complex social problems such as social reintegration of the
demobilized combatants population in Colombia.
• The importance of join action in the business sector, the involvement of one of a
few companies is insufficient to solve certain problems.
• The social modeling potential of a leading company.
• The potential favorable impact of socially-minded initiatives on firm’s longer-
term sustainability.
Dark-side

Reference: https://www.youtube.com/watch?v=hqnUohxXV0I
Annexes
 Sustainability development: Economic,
Environmentally & Socially
• Economically
• Development of their stakeholders
• Government –pay taxes
• Hiring local employees
• Using supplies from the local community
• Creation of indirect & direct jobs

People, Community, Planet

Reference: https://www.femsa.com/en/sustainability/focus-topics/our-people/#
 Sustainability development: Economic,
Environmentally & Socially

• Social value
• FEMSA Foundation was created in 2008 on the premise that a sustainable
company can only exist with sustainable communities.

• FEMSA Foundation’s mission is to make social investments to have a positive

impact on people’s lives and build more solid and sustainable communities
where we operate. We work with more than 250 partners in 18 countries,
with whom we seek to identify, replicate and scale innovative solutions and
approaches.
People, Community, Planet

Reference: https://www.femsa.com/en/femsa-foundation/
 Sustainability development: Economic,
Environmentally & Socially

Sustainable Development
• We focus our actions in three areas: water and sanitation (we bring
sustainable access to safe water as well as improved sanitation
conditions to the communities where we operate), watershed
conservation (water sources), and applied scientific research.

People, Community, Planet

Reference: https://www.femsa.com/en/femsa-foundation/
 FEMSA

Reference: https://www.femsa.com/en/sustainability/sustainability-strategy/estrategy/
 FEMSA

Reference: https://www.femsa.com/en/sustainability/sustainability-strategy/estrategy/
 FEMSA

Reference: https://www.femsa.com/en/sustainability/sustainability-strategy/estrategy/
 FEMSA

Reference: https://www.femsa.com/en/sustainability/sustainability-strategy/estrategy/
 FEMSA

Reference: https://www.femsa.com/en/sustainability/sustainability-strategy/estrategy/
 FEMSA’ stakeholder engagement
process

1. Identification: In this step we define an integrated process, the premises or

criteria for inclusion and the main drivers for performing the materiality
analysis.

2. Prioritization: With the information derived from the previous step, it was
possible to identify the relevant aspects for FEMSA and its stakeholders.
Nowadays, these issues are part of the Sustainability Strategy.

3. Validation: Determining the Sustainability Roadmap.

Reference: https://www.femsa.com/en/sustainability/sustainability-strategy/estrategy/
Reference: https://www.femsa.com/en/sustainability/sustainability-strategy/estrategy/