The World Business Council for Sustainable Development (WBCSD) publication Responsible Business in Poland (2009) gave an overview of the transitioning business climate from that of social responsibility through support of non-governmental organizations (NGO) to sustainable development and mentality of a Base of the Pyramid (BoP) approach. This presentation will hi-light the differences between some of the literature from BoP supporters with that of the WBCSD publication.
The Responsible Business in Poland (2009) report from the WBCSD has multiple articles addressing corporate social responsibility (CSR) trends, the UN National Global compact, and the responsibilities of companies within the global supply chain.
WBCSD’s article A Global Business Perspective on Sustainable Development in 2009 stated that the organization is the leading advocate for sustainability. Overlapping efforts currently exist, thus creating inefficiencies. Through the use of the WBCSD’s 60 partner organizationand ongoing support from company donations, goals to create sustainable development will be realized through a systems approach. Prahalad and Prahalad (2005) believe it is the governments of receiving contries that are limiting access to these funds and thus limiting the efficacy of the efforts.
C.K. Prahalad is the father of the BoP movement. In this video retrieved from youtube he explained the transition in thinking of businesses and the role they play in assisting the developing countries and global poor.
“Eradicating Poverty through Profits”“Enabling dignity and Choice Through Markets”C. K. Prahalad’s book The Fortune at the Bottom of the Pyramid (2005) offers a number of statistics about income and population represented in this chart.
The WBCSD’s (2009) report discussed the recent trends in CSR. The focus continues to be on giving by companies and the notion of responsibility of companies. With a recession companies may have been forced to spend more time and attention on their own existence rather than place any focus on the needs of others. The reduction in the allocations from companies along with the global recession meant the world had a great need to be met with fewer dollars.The BoP view is that countries will benefit more from development dollars that aid dollars.
The UN Global compact established business practices to assist companies in maintaining corporate responsibility. 91% of companies reported progress throughout the recession toward meeting these goals (WBCSD, 2009).
Report is contradictory in a sense regarding the CSR activity in Poland specifically. The Polish Prime Minister formed a committee to address CSR and great progress is being made although it is also reported that CSR in Poland is not doing well.
Slide 9 Global supply chain ResponsibilitiesThere is the most agreement among CSR and BoP approaches about the existence of corruption among governments as well as many organizations in the developing world.45% of companies do not have policies in place to assure labor standards are met throughout the supply chain.For CSR, profit maximization is not the main goal of the firm and social as well as environmental metrics are also measured. These three measurements make up the triple bottom line.
Wilkinson (2012) cited many sources of widespread support for the work of the WBCSD in the movement toward sustainable development.Overlap developed between futures methods and sustainability in research through the agreement that we should be looking to the future potential outcomes to guide our current actions.
To many people, developing countries may appear to need help, and the concept of selling high priced items such as automobiles and cell phones may not seem like assistance but more like companies are preying on the poor. There are numerous examples of how individuals are using technology to establish a business and therefore improving the lives of many. The concept of teaching a man to fish that feeds him for a lifetime rather than giving him a fish whereby he will only eat for a day may very well be in effect through BoP methodology. CSR and support of NGO’s address more infrastructure and public health initiatives and are greatly needed, the BoP initiatives create a better climate for sustainability. Development of standard measurements may help to assure measurement of success is reflecting actual improvements.The G8 countries grew without many of the standards that are required of new companies today. Are these standards helping people or are the limiting progress within developing countries prolonging the success of development?
International business assignment 3
Brining the World Into Focus Corporate Social Responsibility Vs. The Bottom of the Pyramid
WBCSD 2009 Responsible Business Report • Global Perspectives on Sustainable Development • International Trends in CSR • UN Nation Global Compact • Government Action on CSR • Responsibility in the Global Supply Chain • Research
Global Perspectives on Sustainable Development • WBCSD reported overlaps on efforts in the areas of : – Climate Change – Poverty – Natural Resource Scarcity • Call for systems thinking • BoP view that corruption exists within existing governmental systems
Transition of Please wait while video loads, then click to playBusinessPerspectives1. Not my problem2. Support of Nongovernmental organization’s efforts to improve developing countries living conditions3. View developing countries as markets with potential Click here to skip video customers as well as profits
Base of the Pyramid• The top of the pyramid includes Tier 1 >$20,000 people with an income of only Tier 1 75 to 100 million $20,000 or greater.• 40 times more people live in the two bottom Tiers 2-3 $1,500 - $20,000 tiers of the pyramid than are currently in the top. Tiers 2-3 1,500 – 1,750 million• BoP is turning the pyramid upside down to realize profits from Tier 4 $1,500 the huge population Tiers 4-5 4 billion Tier 5 <$1,500
International Trends in CSR • Recent global recession put companies commitments to CSR to a test • CSR organizations reported consistent membership but drop in budgets • Development as the means to social transformation
• Initiatives held strong through economic downturn • Record Turnouts reported in 2009 at local forum events• Additional 1,500 businesses and non- business organizations were welcomed into the Global compact in 2009.
Government Action on CSR • Avoid separation of long term economic and sustainable development goals • In Poland initiatives continue to grow addressing CSR • Programs emphasizing responsible investment to promote CSR
Global Supply Chain Responsibilities• Where does the responsibility lie?• What role do Businesses play in global society?• What are the effects on the Triple Bottom Line? People Product Planet
Research Corporate Social Responsibility Bottom of the Pyramid • Support evidenced for role • Debate among scholars of WBCSD in advancing as to feasibility of BoP global sustainable model development • Has been called a • Sustainability Futures “mirage”
Conclusions Advantages of CSR Advantages of BoP • Support NGO efforts • Forces Companies to be • Focus on infrastructure value conscious and public health • Requires Product projects Innovation • Holds companies and • Benefits of established governments to value and innovation recognize standards often flow back to the developed world