Grupo Empresarial Antioqueño: A colombian Keiretsu

www.keiretsu.com

Keiretsu: "is a Japanese word which, translated literally, means headless combine. It is the name given to a form of corporate structure in which a number of organisations link together, usually by taking small stakes in each other and usually as a result of having a close business relationship, often as suppliers to each other."1

noticieroconfidencial.com

"[The GEA] doesn't have a juridical person as a group, but they share the same corporative philosophy as a group, and why not to say it, similar political interests, as well as social control and economic expansion common strategies. The companies [that conform the group] are owners of each other, this is what makes them share their potentialities and interests."2

 As we can see in both quotes, the GEA (Grupo Empresarial Antioqueño/ Antioquia's Empresarial Group) is exactly as what the Japanesse call Keiretsu. The GEA doesn't have a head, they cross small stocks from each other and they have close business relationship, as it will be developed further. The GEA is a link between Antioquia's (one of the states of Colombia) most powerful companies that where not influenced or dominated by other family groups in Colombia as Ardila-Lulle, Santodomingo or Sarmiento Ángulo. 

www.imagesfood.com

This prominent Colombian group was "conformed" in 1978 after some families started to buy shares of big companies in Antioquia, making some leaders of the companies reunite to counter this movement so they could "maintain" the control of Antioquia over its companies. As Fabio Rico said in a letter:

"... what it has been called 'Sindicato de Empresas Antioqueñas' as such, as organization, as constituted entity has never existed. That name wasn't elected by us. Rather someone had a belief that Antioquia's enterprises were syndicating to avoid that the lost of our very own, appreciated and important institutions would have continued. (...) We wanted to avoid the loss of Antioquia's capacity of decision. And that the determinations were made here, thinking about the problems, necessities and aspirations of our people. Twelve enterprises decided to join upon an idea and they inmediately started to search for paths that conducted them to asure one another, to protect each other, but without following share controls that benefited some persons and, still less, without trying to take advantage of the circunstances to assure some profits (...)"3

After this quote, we can understand that the GEA indeed worked as a Keiretsu, a regional Keiretsu that tried to mantain the power of decision within the region above all. But we still miss one piece of the puzzle to asure this, and Carlos Felipe Londoño can fill our gap:

fierros.com.co

"When the history of the three key enterprises in the actual conformation of the GEA is reviwed, (...) it can be found that since the initial periods of those companies, and even before the formation of the GEA, an horizontal and vertical integration was being made with many enterprises that make part of the GEA. It could be, then, said that solid ties and share crossing of the enterprises of Antioquia existed already before the formation of the GEA in 1978"4

After this fragment it can be seen that not only the enterprises tried to work as a "family" defending their inner space, but they were and are also integrated in an horizontal and vertical way, creating a somewhat of the spider web that characterizes the Keiretsu. It is interesting that a regional affinity can develop so strong ties among big enterprises of different sectors to defend theirselves of "external" control over a legacy of the region. Some can conclude that this "headless combine" is a reflection of a cultural horizontal collectivism thinking that is shared in the region, and indeed is more than a Keiretsu a regionalized form of it, because of self interests of the group (Antioquia's companies) rather than those of the whole (Colombian companies).

www.underconsideration.com

Quotes

1  The Economist (2009). Idea: Keiretsu; Paragraph 1, Lines 1 to 4. The Econimist. The Economist Webpage. Access 06/03/2011 Retrieved from http://www.economist.com/node/14299720

2 Noticiero Confidencial (2010). Conozca a los grupos empresariales colombianos; Paragraph 2, Lines 1 to 8. Noticiero Confidencial. Noticiero Confidencial Webpage. Access 06/03/2011 Retrieved from http://noticieroconfidencial.com/?p=11

[Personal Traduction]

3 Londoño, César F. (2004). GRUPO EMPRESARIAL ANTIOQUEÑO. EVOLUCIÓN DE POLÍTICAS Y ESTRATEGIAS, 1978-2002; Page 6, Paragraph 4, Lines 1 to 20. Revista EIA Nro. 1 pgs. 47 to 62. Escuela de Ingeniería de Antioquia Webpage. Access 06/03/2011 Retrieved from http://revista.eia.edu.co/articulos1/5.pdf

[Personal Traduction]

4 Londoño, César F. (2004). GRUPO EMPRESARIAL ANTIOQUEÑO. EVOLUCIÓN DE POLÍTICAS Y ESTRATEGIAS, 1978-2002; Page 6, Paragraph 5, Lines 5 to 14. Revista EIA Nro. 1 pgs. 47 to 62. Escuela de Ingeniería de Antioquia Webpage. Access 06/03/2011 Retrieved from http://revista.eia.edu.co/articulos1/5.pdf
[Personal Traduction]

Bibliography

The Economist (2009). Idea: Keiretsu. The Econimist. The Economist Webpage. Access 06/03/2011 Retrieved from http://www.economist.com/node/14299720

Noticiero Confidencial (2010). Conozca a los grupos empresariales colombianos. Noticiero Confidencial. Noticiero Confidencial Webpage. Access 06/03/2011 Retrieved from http://noticieroconfidencial.com/?p=11

Londoño, César F. (2004). GRUPO EMPRESARIAL ANTIOQUEÑO. EVOLUCIÓN DE POLÍTICAS Y ESTRATEGIAS, 1978-2002. Revista EIA Nro. 1 pgs. 47 to 62. Escuela de Ingeniería de Antioquia Webpage. Access 06/03/2011 Retrieved from http://revista.eia.edu.co/articulos1/5.pdf

D'Amato, Gina (2011). Management Styles: Convergence and Divergence Lecture. EAFIT University, Medellín Colombia.

Ethical Behavior: A solid ethical culture, the key for a solid company

Do you think that strong ethical cultures in a company doesn't do any good? Well, KRI (Kenexa Research Institute) can prove you wrong. But before we go on to that topic, let us talk a bit about Ethics and its implementation on companies. Ethics are, in the most basic sense, the implicit norms or rules followed by a society because of their values. Ethics are the way you should behave in society to be accepted. Done with that, for a corporation to implement a strong ethical base it requires, more than rules, a culture which normally needs high amounts of time and money to be implemented.

www.kenexa.com

KRI handed up some statistical data where it showed which specific ethical behaviors where being followed in the United States, and which were the implications of these ethical behaviors in the employees of those organizations. We can see then, that some items like serving stake holders, the administration support for ethics, and corporate values where highly scored by workers. So, the percentage of favorability represented the commitment of an employee with its enterprise when it followed one of these components. This also inspired them to work with the company.  As mentioned in the last entry, the company cannot serve only for stockholder capital accumulation, it also has to deal with further goals, not only because of the customer satisfaction, but also because of overall efficiency.

www.kenexa.com

But, what makes the real difference when an organization has a strong ethical culture instead of a weak one? Well, the data on the right shows us an answer to this question. Pride, confidence and satisfaction grow deeply in a strong ethical culture, while they do not grow so much in a weak platform. These values are very intagible, but they can be linked with more tangible aspects as the intention of an employee to stay within the organization, his commitment, and his performance. Also happiness can be related to these values. Ethics, then, are making the difference and for instance a solid company, as Jack W. Wiley (the executive director of KRI) observes: "Employee’s feelings about ethics are closely related to their beliefs or perceptions about how an organization is performing, their overall satisfaction and their intent to stay or leave". Ethics are very related to beliefs or perceptions, and for every person, these two key aspects, determine everything. If a person believes in something it will be more willing to do it.

www.kenexa.com

But, lets not stay only in people, lets see how can a company be influenced by having a strong ethical culture. The image above shows three key items for an enterprise: performance, reputation, investment. In constast with a weak ethical culture company, a strong one can raise all of these items over 35% more. So, is not only about employees, is about the company as a whole. Ethics are now a reality needed in corporations if they want to succed in the market. Ethics are no longer something that companies can ignore without repercussions. The era where unethical organizations held a place on the market is ending, so are you willing to take the risk?

Bibliography

Meyer, Jennifer (2010). Creating an Ethical Culture... Looking Beyond Sarbanes-Oxley Compliance. Kenexa Webpage. Access 06/03/2011 Retrieved from http://www.kenexa.com/getattachment/0fd92403-cc61-4934-9bb3-17d3a31a8373/Creating-an-Ethical-Culture-Looking-Beyond-Sarba.aspx

Thorne Linda, Bartholomew Susan (2003). The Socio-Cultural Embeddednessof Individuals' Ethical Reasoning in Organizations. Journal of business ethics 35:1-14

D'Amato, Gina (2011). Decision Making & Ethical Behavior in IB Lecture. EAFIT University, Medellín Colombia.

The Corporation

www.thecorporation.com

What are corporations doing with our world? This is a fascinating question, with so many responses that not even the amusing film called "The Corporation", can summarize; and all the answers aren't good nor bad. Corporations have made a lot for people, but at the time, as they seek for revenues to satisfy their stockholders, they have been using not so ethical things. These actors of international relations have been acting for one sole end, in what perojatively is called machiavelism: "profit maximization".

And though I do not believe that "the end justifies the means" is necessarily bad, I do believe that there are individual egocentric "ends" and collective community enhancing "ends". And at the same time, the end, I believe, cannot be achieved by a mean that will do less global good that the end itself. So, let me try to develop my thinking: a) if a company says that its ultimate goal is to maximize profits for only a small group of capitalists, the goal of this company is badly issued because it will serve all its stakeholders only as far as the profits are achieved; and in the same way the means, while the direct stockholders are not vulnerable to a bad action, will include everything, even lying, killing or doing any dirty action just to comply with the objective. b) if a company says that its end is to maximize stakeholder return (community wellfare, products that enhance life, environmental health, and others) but it uses any mean to accomplish it, even the final destruction of a religious community for example, then the means are not satisfying the end itself, and are even violating the final objective.

For instance, I have to items in consideration initially, a wrong "end" and a "mean" that doesn't comply with the "end" or that is doing more damage that the benefits entailed by the "end" itself. A corporation deals with many stakeholders, all of them contributing to the corporation because they assume that is better for them if it exists. If the corporation, then, is using all of its stakeholders to just satisfy an elite coinstrained circle, then this actoris attempting against itself. If we want to understand a corporation, the corporation isn't just about the stockholders, and for instance, profit maximization cannot be a goal nor an ultimate mean.

The mindset has to be changed, a corporation is like a state, and for instance it has to contribute with all that composes a part of it, from its external system (customers, suppliers, environment, government) to its internal system (employees and shareholders). If the corporations want to survive, then is time for a deep change in their organizational culture.

Bibliography

Achbar Mark, Abbott Jennifer, Bakan Joel (2004). The Corporation. The Corporation Webpage. Access 06/03/2011 Retrieved from http://www.thecorporation.com/index.cfm

Kline, John M. (2006). MNCs and Surrogate Sovereignty." Brown Journal of World Affairs 13, no. 1: 123-133

D'Amato, Gina (2011). Multinational Corporations Lecture. EAFIT University, Medellín Colombia.