Marketplaces of the 21st century are increasingly conscious, the information society provides more transparency. With this the demand for more ethical business processes and actions. This has lead to major investments by large companies and the rise of many foundations (Shell foundation, McDonald’s). These ‘good deeds’ known as corporate philanthropy, are a very interesting alternative to fund a model to balance environment and economy. The Shell foundation’s total funds’ in 2008 were US$300 million which is the largest corporate ‘philanthropic’ foundation.
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3 Comments so far. Leave a comment below.Super interesting read! Truely..
“Corporations are the only entities in the world today with the technology, resources, capacity and global reach required to lead us toward a sustainable world in the years ahead” (Hart, 2007). Developing revolutionary technology with the potential to leapfrog currently unsustainable methods is not enough. Anti-globalization demonstrators have made it apparent that if corporate expansion is seen to endanger local autonomy, it will encounter vigorous resistance. As long as multinational corporations persist in being outsiders – alien to both the cultures and the ecosystem within which they do business – it will be difficult for them to realize their full commercial, let alone social, potential. Moreover, Simanis & Hart (2008) state that businesses strategies will almost certainly fail when businesses remain alien to the communities it intends to serve.
The next challenge will thus be for corporations to become “indigenous” to the places in which they operate. Doing so will require that the first widen the corporate bandwidth by admitting voices that have, up to now, been excluded; this means becoming radically transactive rather than just radically transparent. It will also entail the development of new “native” capabilities that enable a company to develop fully contextualized solutions to real problems in ways that respect local culture and natural diversity. When combined with multinational corporation’s (MNC) ability to provide technical resources, investment, and global learning, native capability can enable companies to become truly embedded in the local context.
To put in a historical perspective, the greening initiatives of the late 1980s and early 1990s were revolutionary, if insufficient, steps: they repositioned social and environmental issues as profit-making opportunities rather than profit spending obligations. More recent ‘beyond greening’ strategies are even more significant: They hold the potential to reorient corporate portfolios around inherently clean technologies and create a more inclusive form of global capitalism that embraces the four billion poor at the bottom of the economic pyramid. If narrowly construed, however, such strategies still position MNCs as outsiders, alien to both the cultures and the ecosystems within which they do business. The challenge is for multinationals to move beyond “alien” strategies imposed from the outside to become truly indigenous to the places in which they operate. To do so will require companies to widen their corporate bandwidths and develop entirely new “native” capabilities that emphasize deep dialogue and local codevelopment. A more inclusive commerce thus requires innovation not just in technology, but also in business models and mental frames!
Capitalism truly does stand at a crossroad. The old strategies of the industrial age are no longer viable. The time is now for the birth of a new, more inclusive form of commerce, one that lifts the entire human family while at the same time replenishing and restoring nature. The path to a sustainable world, however, will be anything but smooth. It will be a bumpy ride strewn with the remains of companies that variously dragged their feet, made promises they could not keep, bet on the wrong technology, collaborated with the wrong partners, and separated their social and business agendas. Only those companies with the right combination of vision, strategy, structure, capability, and audacity will succeed in what could be the most important transition period in the history of capitalism.
source / more info at: Hart, S. (2007). ‘Capitalism at the Crossroads.
Aligning Business, Earth, and Humanity’. (2nd
Ed.), Upper Saddle River: Wharton School.
Shouldn’t ‘we’ go beyond ‘doing good’ with some of the profit made. Shouldn’t we, instead, modify our core business in such a way that the core of our ventures activities take economical, social and environmental sustainability aspects into account?
Maybe if we stop looking at the poor (in comparison to 800 million rich people at the top of the socio- economical pyramid who enjoy prosperity and have many options to acquire income) as victims or as a burden and start recognizing them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity for mutual value will open up (Prahalad, 2004).
This principle of mutual value goes beyond economical value as value is related to what is conceived important (perception). One type of value should be aimed for in any case: sustainability to ensure endurement. Economic sustainability allows for continues activity and maybe even for scaling, also profit might me the necessary driver for profit organizations to engage in BoP ventures and it might alleviate (income-)poverty. Environmental sustainability offers a continuos use of all resources and Social sustainability, respecting cultural aspects and humanity, prevent initiatives from faling due to, for example, remaining alien to society.
Cheers!