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Final Reflections on Business Sustainability

Kenneth R. Knight eMBA 2015

29 August 2015

MGMT S915 Sustainability Management

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Sustainablecorporatemanagementandstakeholderengagementresonateslikeabellechoingofftheeffectsoftheindustrialrevolutionthatpermeatedmylife,thelivesofmyfamilyandmyfriendsinhistoricallysignificantways.Icameofageamongapeoplewhowheretrappedinathree-wayargumentbetweentheirownprotestantworkethics,perceptionofcorporategreed,anddailyobservationsofunion-mandatedinefficiency.Thisargumentintractablyplayedoutinmytownovermanydinnersofmeatandpotatoes,pastafagioliandpierogi;itbeggedananswer,awaytosatisfyallpartiesinvolvedwhobreathedthesameair,labor,managementandtheinnocent.Theanswerwasalwaystherebutneverspokenbythosewhoseabilitytoinfluenceendedattheskilledlabortheyperformedandwhichtheycouldwithholdonlytoperilofthosemostdependentuponthem.Theanswerwasamiddleway,wheregreedwassupplantedbymoderationandfearbytrust.Theunspokenanswerwassustainablemanagementpracticesandstakeholderengagement. IgrewupinPittsburghPennsylvania'sMonongahelaRiverValley,thelocationofseveralnotableevents(amongmany)thathighlightedtheneedforstakeholderinclusionincorporatepracticesandillustratedthedamagetoallstakeholderswhensomevoicesareignoredorsuppressed.Theincidentscouldhavebeenavertedhadthecorporationsandstakeholderscommunicatedopenlyfromthebeginning,insteadtheresultsweredeath,eventualmillclosingsandexportofAmericanjobsalongwiththeirassociatednegativeenvironmentaleffects.HomesteadSteelStrike ThefirstnotableeventwastheHomesteadSteelStrikewhichbeganonJune30,1892,

culminatinginabattleonJuly6betweenAmalgamatedAssociationofIronandSteelWorkersUnionmembers(AA)andandprivatesecurityagentshiredbytheCarnegieSteelCompany(CSC).ThedisputeoccurredattheHomesteadSteelWorksinthetownofHomestead,Pennsylvania,lessthanfivemilesfromPittsburgh.TheAArepresentedanarrowclassofmostlyEnglishspeakingskilledlaborerswhomhadpreviouslybargainedarespectablewagefrommanagement.Withtheircontractupforrenewal,HenryClayFrick,CSC'sdeputymanager,deignedtoreduceAAmembersalariesby22%;talksbrokedownwithacombinationlockout-strike.ThetownspeopleofHomesteadbackedtheAAandsupportedthemindefeatingtheprivatesecurityagentssenttoopenthemillgates.IntheendthegovernordispatchedarmedPennsylvaniaMilitiawhomclearedthemill'sentrancefornewlyhiredworkers.TheresultwasamajordefeatfortheAAunionandatemporarysetbackforsteelworkers.ThebattlewasoneofthemostseriousdisputesinU.S.laborhistory(Wikipedia,n.d.). IftheCarnegieSteelCompanywonthebattlewiththe

AssociationofIronandSteelWorkersUnion,theylostthecooperationandtrustoftheworkersandthecommunity,afeelingwhichpermeatesthePittsburghregiontothisday.Thetacticalgainswereshort-livedtoo;by1909andonly10milesaway,non-Englishspeakingimmigrantlaborfinally

PinkertonmenleavingabargeaftertheirsurrendertoworkersinHomesteadPA.

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organizedintheMcKee'sRocksStrike,spellingtheendofindustryexploitationoflanguagedifferencesamongworkers(AFL-CIO,2015). Bythe1930'slaborwasnotapartnerbutaswornadversary,makingUSindustryahousedividedagainstitself.Withmanagementclearlydemonizedastheenemytobothskilledandunskilledlabor,anyinnovationsorprocessimprovementswouldforeverafterneedtobe"topdown,"ratherthan"bottomup."Thesuppressionoflabor-derivedinnovationbyunionslikelycontributedtolockingtheUSsteelindustryintoalow-costproviderposition.Apositioneventuallyattackedbysteelcompaniesincountriesfurtherbehindonthedevelopmentcurve,suchasJapan,KoreaandeventuallyChinaandEasternEurope.ButintheUSPostWWIIera,withlaborratesfinallyrisingasaresultofcollectivebargaining,theindustryfoundotherwaystolowercosts…exploitingthecommons.TheDonoraPennsylvaniaSmogTragedyof1949 Afatalfogcontainingsulfuricacid,nitrogendioxideandfluorine,blanketedDonorainthelastweekofOctober1948.Asthedayspassedandmorepollutantswerereleasedintothe

stagnantair,thesmoggotworse.Despitethepoorvisibilitythathamperedbothmotoristsandpedestrians,manycitizenswentabouttheirusualroutine.However,theelderlyandseriouslyillbeganexperiencingrespiratorytrouble.Physiciansworkedaroundtheclocktotreatthesickandwereassistedbyothervolunteerswhowentdoortodooradministeringoxygen.Thosewhomadetheroundsreportedonthedifficultyoffindingtheirwaytothehomesduetonearzerovisibility.Ultimatelythesmogleft20dead,about6,000ill,andcatapultedtheworking-classDonoracommunityintotheUSconsciousness(Maher,2015),(DonoraSmog.com,2015). Thestateandfederalgovernmentsinvestigatedto

determinetherootcausesofthetragedy.BothtracedthedisasterchieflytothecombinationofatemperatureinversionandsmokefromDonora’sindustrialplants.Amillion-dollarsuitwasfiledagainsttheoperatoroftheDonoraZincWorks’AmericanSteelandWireCompany.Thesuitwassettledoutofcourtforabout$250,000inAprilof1951.Thefirmdeniedanyresponsibilityforthedisasterdespitethegovernment’sfindings,howeveritdidinstallaweatherstationandotherairpollutiondevicesasprecautionarymeasures.ThedisastertouchedoffanationwidecampaignagainstairpollutionandprovidedtheimpetusforstudiesresultinginmajorUSfederalcleanairlaws.ItalsobegantheUS’senvironmentalmovementbyfocusingthenation’sattentionontheharmfulandsometimesfatalsideeffectsonlifeandtheenvironmentfromindustrialpollution.TheenactmentoftheCleanAirActandcreationoftheEnvironmentalProtectionAgencyarealegacyoftheDonoratragedy(DonoraSmog.com,2015). Butdidanyonewin?Didanyonelearn?NineyearsafterthesmogtragedytheDonoraZincWorksclosed,putting900outofwork.Tenyearsafterthat,U.S.SteelCorp.closedallitsDonorafacilitiesforatotallossofnearly5,000jobs(Yatsko,2015).Wheredidthosejobsgo?WhileIdon'thaveaccesstoglobalsteelproductiondataI'mconfidentthatsince1950thetotalamountofsteelproducedontheplanethascontinuallyincreased.Myguessisthosesteelplantsmovedtoareas

LookingtowardtheZincWorksinDonora,PAfromWebster,PA,1948

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withcheaperlaborandlessenvironmentalregulation,therebyignoringthesustainabilitylessonsofferedbyDonoraandfallingbackonthecomfortableargumentof"profitaboveall."OneonlyneedstodoaGoogleimagesearchfor"ChinaAirQuality"toseewherethepollutionandthebulkofDonora'sjobsmaybetoday. Unfortunately,Chinaandtherecentlydevelopedworldmyopicallyfocusedonthenegativeaspectsofwesternindustrializationandassumedthosewereworthygoals.BusinessandpoliticalleadersintherecentlydevelopedanddevelopingeconomieseitherignoredorwereunawareofthethepoliticalunrestofHomesteadandMcKee'sRocks,peeredthroughthepoisonousairof1949Donora,andrecreatedthesamenon-sustainablebusinessstructures.Leadersinmanyofthesecountriesallowedcorruptiontosupplanttheruleoflawjustsolongaseconomicgrowthwasn'thampered.Instead,leaderscouldhavelistenedtothewordsofKingBhumibolofThailandwhowiselysaid,"Sufficiencyismoderation.Beingmoderatedoesnotmeantobestrictlyfrugal;luxuriousitemsarepermissible,butshouldbemoderateaccordingtoone'smeans."Byfollowingthissageadvice,leaderscouldhavecreatedmoreresilienteconomiesthatgrewatasustainablepace,thereforeallowingothernation'shard-learnedlessonstobeintegratedalongthepath. OnenationthatstrovetoadvancetooquicklywithbusinessandlocalleadersignoringtheirstewardshipresponsibilitieswasKorea.Itpaidthepricethroughlossoflifeandenvironmentaldegradationuntilitspopulationhadenoughandheldelectedofficialaccountable.ThecatalyticeventwastheSampoongDepartmentStorecollapsein1995.Theupscaledepartmentstoreinoneofthecountry'swealthiestneighborhoodscollapsedunderthelayersofnon-codeconstructiondemandedbythebuilding'sChairman,LeeJoon,killing500peopleandinjuring937.ThisawoketheKoreanpublic'simmediateconcernedaboutotherbuildingsconstructedduringtheeconomicboomofthe1980'sand1990's,andademandforreviewofthecountry'ssafetyregulationsandinvestigationsintocorruptofficialswhotookbribestooverlookbuildingcodes.IwaslivinginKoreaonlytwosubwaystopsawayfromtheillfateddepartmentstorewhenitcollapsedandrealizedthatfocusingonwealthaccumulationaboveallelsecameattheexpenseofinnocentlives(Wikipedia,n.d.). Thesetragedies,likesomanyothers,couldhavebeenavoidedwiththebalanceofmoderationandtrust.Ivowthatanyprojectundermyfuturestewardshipwillbesafe,profitableandsustainable,withtheviewsofeachstakeholderwelcomedfordiscussion.

CollapsedSampoongDepartmentStore,SeoulKorea.http://b99901055.pixnet.net/blog/post/265073233

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BibliographyAFL-CIO.(2015,August22).KeyEventsinLaborHistory.RetrievedfromAFL-CIOAmerica'sUnions:

http://www.aflcio.org/About/Our-History/Key-Events-in-Labor-HistoryDonoraSmog.com.(2015,August22).DonoraSmog.RetrievedfromDonoraSmog:

http://www.donorasmog.com/Maher,K.(2015,March16).TheWallStreetJournal-DonoraSteelsItselffortheLossofItsBridge.

RetrievedfromTheWallStreetJournal:http://www.wsj.com/articles/donora-steels-itself-for-the-loss-of-its-bridge-1426536848

Wikipedia.(n.d.).Wikipedia-HomesteadStrike.RetrievedAugust2015,22,fromWikipedia:https://en.wikipedia.org/wiki/Homestead_Strike

Wikipedia.(n.d.).Wikipedia-SampoongDepartmentStoreCollapse.RetrievedMarch22,2015,fromWikipedia:https://en.wikipedia.org/wiki/Sampoong_Department_Store_collapse

Yatsko,R.A.(2015,August22).DonoraSmog,Industry.RetrievedfromDonoraSmog:http://www.donorasmog.com/