Conflicts are inevitable in all situations .In the business world they are therefore bound to occur. There are scarce resources but infinite wants and this brings about the idea of opportunity cost. Investment can be a risky venture especially in unstable countries. Such countries face the challenge of being exploited by dubious companies whose main aim is to increase their profits at the expense of local citizens. They transact business with delicate and conflict prone items like timber and oil. They also support local repressive governments to ensure their survival through corrupt deals.
As an investor one should be keen not to invest in such countries of operate like the exploitative companies. A social responsible entrepreneur ensures reduced conflict in his or her region of investment. Though the essence of business is profit making through reduced costs and maximized revenues some responsibility to the society is vital.
With the wake of globalization, trade liberalization has enabled foreign direct investment has risen at unprecedented rates. There is need for improved global framework to promote collective eradication of exploitative business ventures that sustain conflict.
Investments in areas where such is likely to perpetuate conflict should be discouraged. Instead investment should be geared towards restoring peace.Liasing with the United Nations will enable one know which countries are prone to corruption and consequently have much conflicts. It also ensures conflict is managed through creation of rules and regulations that are eliminate dubious exploitative companies.
Developing a pro-active approach can reduce operational risks and promote stability while ensuring improved relations with the communities one is operating around. Cost incurred to companies that invest in conflict prone zones include higher security costs, insurance and other risk management costs like transport and staff training. Destruction of property and disruptions in flow of inputs and exports would also arise. The staff or the personnel also face problems as they could be kidnapped. Conflicts may also see a company reduce its social capital or loss of its markets.
A conflict-sensitive business practice will enable communities develop legitimate procedures towards promotion of peace and stability. Conflict is as a result of the belief that interests of two people or groups are incompatible. A company can perpetuate a conflict by selective hiring procedures where by some people may feel left out and their response to that situation may cause tension between the two parties. A company may also create conflict between two communities if they relocated their operations. In the event of a conflict a company stands to loose from destruction of infrastructure if such was the target.
Before relocating ones company a clear survey should be done and the locals should be informed so that conflicts do not arise. Again an equal employment opportunity approach will be very beneficial in reducing conflict between communities. Location of a company which was initially inhabited by other people may create conflicts. Proper compensation should be done so that such people do not do not create problems to the company on dislocation. The hiring policy used should be sensitive enough to enable equal opportunities for people regardless of their background.
A company should be sensitive to the environment so as not to create conflict with people in the neighborhood. Effective waste disposal mechanism can reduce the crisis that can arise if for instance a company drains its waste products into a river that supplies locals with water for domestic use.
Historical sites or sacred places have very strong impact on the people. Before enacting its policies, a company should be very careful so that it does not affect the locals negatively. Locating a sausage or pork related business in a Muslim dominated region may create a lot of conflict in the region. Again, constructing a company on a land deemed to be sacred will cause chaos for society.
Investing in delicate goods like timber may see a region deforested. With increased run-off, the effects may be adverse with time. Since global warming will affect all people in society a company should be keen not to invest in such an industry.
Regardless of whether host countries are implementing international standards, a company should comply with them. A company should remit all relevant revenues to the government to ensure the conflict free environment in the long run.
Some communities tend to be more developed in terms of education. This makes them better placed in acquiring employment in companies or enterprises. Care must however be taken to ensure that the hiring process of a company does not create conflict in society. Affirmative action can be incorporated and the company can introduce training programs to enlighten their employees.
A company should also be neutral regarding the politics of the day. Supporting a certain candidate materially would evoke conflict between the supported person and his or her opposers. Instead it should focus more on civic training or awareness programs. An investor should not offer his or her vehicles for campaigning purposes. Appropriate measures would be involvement in discussions with other companies about politics.
Mitchell J.1999: Companies in a world of conflict. Royal Institute of International affairs and Earthscan.