This document discusses various ethical issues related to business operations in developing countries. It defines bottom of the pyramid (BOP) customers and outlines key principles for profitably serving this market segment. Social entrepreneurship is defined as addressing basic human needs through business models that create social value. Attributes of successful social entrepreneurs are described, including having a clear vision and commitment to sustainability. Different types of social entrepreneurs are identified. Seven principles of social business are outlined, focusing on addressing social problems rather than maximizing profits. Fair trade and human rights issues are also discussed, as well as poverty, hunger, and the UN Millennium Development Goals.

1. GROUP 8

2. ETHICAL ISSUES IN THE
DEVELOPING WORLD

3. WHAT IS BOP?
 BOP (bottom of the pyramid) refers to poor people
who are virtually ignored by most corporations
because they are perceived as high risk and low
risk customers.

4. ETHICAL ISSUES MULTINATIONALS FOCUS ON
WHEN DEALING WITH BOP.
 The appropriateness of the products
 The price points established by the firms
 The potential misuse of advertising and promotion
 Multinationals not required to maintain the profits
from their BOP in the local communities

5. SEVEN KEY PRINCIPLES FOR BEING
PROFITABLE FOR BOP MARKETS
 Create market opportunities
 Craft solutions with the BOP
 Orchestrate effective experiments
 Manage failures
 Establish or comingle competitive advantage
 Leverage and transfer social embeddedness
 Enhance mutual value.

6. WHAT IS SOCIAL ENTREPRENEURSHIP?
 Social entrepreneurship is organizations that
have created business models that cater to basic
human needs that are not currently being served.
 Social entrepreneurs
 can be considered as individuals who use their
drive and motivation as traditional entrepreneurs
and focus on a mission that can positively impact
society.

7. ATTRIBUTES A SOCIAL ENTREPRENEUR MUST HAVE
TO BE SUCCESSFUL.
 A specific vision of the purpose and goals and
objectives of the organization.
 The ability to use his or her leadership skills to
champion the implementation of his or her vision.
 The will and motivation to be committed to
developing the business so that it will be sustainable
in the long term.

8. TEN CHARACTERISTICS OF SUCCESSFUL
ENTREPRENEURS
 To try to disregard the constraints of ideology or
discipline
 Using innovation, resourcefulness and
opportunity to determine what practical
solutions are viable to solve the social problem
 Using innovation to focus on the development
of new products or services
 To focus on how the organization’s mission will
be used to create social value and be able to
share its knowledge with other social
entrepreneurs.

9. CONTINUING…
 To not wait until all resources are available to
capitalize on the opportunity
 To recognize everyone has the ability to contribute
to the economic and social development of the
organization
 Every entrepreneur is willing to take risk to succeed
 To make sure to balance the passion for the project
with the ability to measure and monitor social
impact of the project.

10. CONTINUING…
 They are good teachers so others can learn how to
achieve their social goals
 Entrepreneurs have to be patient when they do not
see the type of progress that is needed for a
successful competition of the project.

11. DIFFERENT TYPES OF SOCIAL ENTREPRENEUR
BY SHAKER ZAHRA
 Social bricoleur- focuses on addressing the social
needs of local communities.
 Bricoleur- the ability to use existing resources to
address the strategic issue.
 Social Constructionist – focuses on exploiting
the market gaps which do not serve certain
customers
 Social Engineer – identifies systemic broad
problems within the existing social structures and
addresses these problems with frame breaking
revolutionary change

12. SEVEN PRINCIPLES FOR SOCIAL BUSINESS
1. The business objective of the organization is to address a social
problem and not to maximize profitability
2. The firm will need to obtain both financial and economic
sustainability
3. Investors of the organization will only receive back their full
investment amount
4. When the investment amount is paid in full to all the investors,
the subsequent profits will be invested back into the firm

13. CONTINUING…
5. The firm is mandated to be environmentally
conscious and sustainable
6. The employees of the organization will receive
market wages with superior working conditions
7. The running of the organization need to be done
with joy!

14. FAIR TRADE
 Fair Trade is all about creating a win-win business
proposition for third world farmers and for U.S.
industry.
 It is trading partnership, based on dialogue,
transparency and respect that seeks greater equity
in international trade.

15. FAIR TRADE
 Core principles of fair trade:
 Providing market access for marginalized producers,
 Developing sustainable and equitable trading
relationships
 Developing knowledge and skills of the producers to
increase their empowerment
 Increasing consumer awareness and advocacy
 Develop a social contract with the buyers to do more
than the minimum expected of them in the marketplace.

16. HUMAN RIGHTS
 Human Rights can be defined as the “…rights held
by all individuals solely by virtue of their status as
human beings…human rights belong to everyone,
regardless of creed or nationality.”
 Human rights such as civil rights, property rights
and labor rights can have a direct impact on the
strategic focus of the firm

17. HUMAN RIGHTS
 Four positive reasons for promoting human rights
1. Respecting human rights enhances worker
productivity and management creativity
2. Promoting rights opens markets
3. Promoting respect for human rights goes hand
in hand with development of rule law
4. Promoting respect for human rights is good for
a company’s image, both at home and in the
host company

18. POVERTY AND HUNGER
 With the world’s population above 7 billion people,
poverty will continue to be a dominant discussion
point for countries and government leaders to
ponder.
 Poverty will lead to hunger and without food it is
difficult to financially support oneself (and other
family members) and, therefore, reinforces the
cycle of poverty

19. POVERTY AND HUNGER
What causes hunger?
 The Natural Environment
 War
 Poverty Gap
 Poor Infrastructure
 Over-Exploitation of the Environment

20. THE UNITED NATIONS MILLENNIUM
DEVELOPMENT GOALS
1. Eradicate extreme poverty and hunger
2. Achieve universal primary education
3. Promote gender equality and empower women
4. Reduce child mortality
5. Improve maternal health
6. Combat HIV/AIDS, malaria and other diseases
7. Ensure environmental sustainability
8. Develop a global partnership for development

21. THE END