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Reciprocity: A new way to manage community and license to operate issues effectively

More jargon? Maybe, but it is simple

“You behave badly, so I behave badly”

Or should it be: “why we must better understand reciprocity”

There are two ways to frame this post.

The first is the negative: “You behave badly, so I behave badly”

The second, the positive:  “why we must better understand reciprocity

First things first.

Lots of community relationships between business and their immediately surrounding stakeholders go wrong because of this notion of “you behave badly, so I behave badly”.

In practice this means stakeholders, let’s say members of a community near a mine site or factory, feel aggrieved.

This grievance may be 100% genuine, it may be partly created by those wishing to profit from its exaggeration.

Either way, the feeling can be that the company has done wrong, so that community, or a small part of it, can then justify behaving badly themselves.

This happens all the time. In China is may be some workers saying “working conditions are bad, so let’s blockade the gates” or in Peru it might be community members saying “our river is polluted, let’s obstruct the path of the mining trucks”.

Company management might then say to each other: “These guys are unreasonable, we can’t give in to blackmail. Call the cops”.

We know what can happen then.

This zero sum game approach is all too common.

But there’s another management paradigm to consider here.

Which is why we must better understand reciprocity as an attitude to inform how we work with a community, with stakeholders, with those who affect license to operate.

Before you stop reading, whilst thinking, “what kind of academic nonsense is this?”, give me a moment.

There’s a real business case for reciprocity, and the term doesn’t get talked about enough.

Wikipedia defines it thus:

“Reciprocity in social psychology refers to responding to a positive action with another positive action, rewarding kind actions. As a social construct, reciprocity means that in response to friendly actions, people are frequently much nicer and much more cooperative than predicted by the self-interest model; conversely, in response to hostile actions they are frequently much more nasty and even brutal.”

Does that sound familiar? The last part of that quote above sounds a lot like stakeholder responses to perceived problems they feel they have with companies every day.

If the community feels the company behaves badly, they feel a license to do so themselves. Their actions are justified by being what they see as the second mover.

So how do we shift from reacting to the common challenge of “you behave badly, so I behave badly” problems which can easily spiral out of control and cost companies a fortune?

Village in Indonesia: In need of some reciprocity

Reciprocity as an attitude, offers a solution.

Companies all want to be humanised, to be less anonymous through the actions of those who work there.

So why not think, and act, like popular people, who are often popular because they treat people well, pro-actively. Here’s some of the evidence. Note the Tim Horton’s example. Now that’s interesting for risk management.

What am I saying here?

It’s this.

Smart companies want to be pro-active in how they manage community and stakeholder relations.

The notion of reciprocity helps them do this.

It’s a simple way to train managers, whilst presenting evidence (see above) of the business case for engaged, listening based community outreach.

Thinking about reciprocity will help you manage risks better in frontier markets.

Understanding what reciprocity means at a local level, can help you do those kind of valuable deals with communities so important to everyone’s success.

It’s perhaps a little technical or academic as a term, but it beats the cloying and previously deeply underdeveloped notion of “shared value” in that it is clearly defined, has evidence behind it, and has a narrower application which can help define boundaries.

Reciprocity is not a substitute for a responsible business strategy, but it’s a useful part of it in that it is easy to understand, and remember.

In frontier markets full of busy yet unsupported managers, that can be very valuable.

Worth thinking about.


There’s a practical, case study driven executive education programme on engaging stakeholders in emerging markets, happening in London on June 17-18. Check it out here.

The key information about it is embedded below. Email for details