Honestly I do not like getting bogged down in definitions because you risk looking at things in a very narrow way in a sort of silos mindset that does not encourage cross sector collaborations.
How to deny the correlations and links between CSR, overall development (even traditional way of doing it), social entrepreneurship, ethical business and the last “baby”, venture philanthropy ?
Definitely we cannot mix up everything in one pot. Each of the above mentioned domains have clear features and characteristics but efforts should be made to maximize the “bridges” among them so that a new way of doing things is possible.
We cannot confuse the role and responsibility of a company (either a major blue chip or a small family run business) with the aims enshrined with a small social or ethical business that by constitution put “the common good” ahead of profit.
Both groups can only thrive and survive because of profit generated but then there are many ways to pursue it, depending on the nature of the company, its values and its mission in the society.
Look for example to the B Corps in the USA, a kind of hybrid business therefore for profit entity that put its interests in the society ahead of any other commercial considerations. (http://www.bcorporation.net.)
The concept of “shared value” is also very interesting, offering the right approach to maximize synergies and collaborations across the sectors.
Though not being anything revolutionary and with a clear catchy name, shared value offers a new theoretical and practical justification that can push further companies to pursue new venues of profit without neglecting the environment, the communities and the society at large.
Shared Value means something more than basic mantra doing well by doing good that encourages private companies to take into account also different from the mere profit. We all know that a company by offering employment opportunities contributes to the well being of the society. (But we also know that just employing people is not enough. How does it happen? Are basic safeguards and rights ensured? While ensuring a cost effective value chain, does the company try its best to protect the environment? )
Shared Values goes much beyond these lines. The concept is market driven first of all.
The term was conceived by Professor Michael E. Porter and Mark R. Kramer, the founder of FSG, one of the biggest consultancies for not for profit sector and it was launched through an essay published on Harvard Business Review in 2011.
“Shared value is a management strategy focused on companies creating measurable business value by identifying and addressing social problems that intersect with their business. The shared value framework creates new opportunities for companies, civil society organizations, and governments to leverage the power of market-based competition in addressing social problems” (from http://www.sharedvalue.org/about-shared-value#sthash.1LyKUfzg.dpuf)
For example, Shared Value could be offering profitable but healthy food for school kids. If what is sold to school kids is already considered as “healthy” ( it should not be otherwise, right?), shared value would push the company to go beyond the current products and make it healthier.
I am not sure if drinking companies like Coca Cola, despite its impressive philanthropic ventures, can qualify as ‘shared value” companies because we all know about the potential health risks of sugar rich drinks. Still Coca Cola is not selling poison like cigarette or alcohol companies but it is clear that the challenge ahead is to determine a fair balance between pros and cons of each single product.
Open mind, inquisitive attitude and transparency to public scrutiny should help companies like McDonald’s or Coca Cola to keep making profit while offering better products from the point of view of the consumers.
Back to Nepal, I feel that much more should be done to create a new understanding among companies and development players about the “crazy” opportunities of cross fertilizations among the different sectors.
Few months before elections, NBI, probably exploiting the “donation fear” among the private sector, had managed to come up with a very interesting Code of Conduct offering benchmarks and standards to be followed. I am wondering what it is going on with it.
Full of principles but also not shy of practical suggestions, the Code of Conduct is an excellent platform to start discussing a new way of thinking among all the national stakeholders regarding the common ground existing between private for profit, private but with a common interest component, traditional aid and the new dynamics of social entrepreneurship and venture philanthropy. More importantly the Code of Conduct offers a simple way to start understanding a bit better how companies should behave.
Philanthropy is not even mentioned in the Code of Conduct and probably better this way in order to avoid any misunderstandings.
Ultimately the implementation of the Code of Conduct should be monitored and findings must be made public. This could be a long term goal but we need to stick to it. We could start ensuring a mandatory reporting from all the companies who are parties of it with “smart” awareness and capacity building going along.
Yes it is true that we need to create more capacities and a better understanding of all the above related factors but this should not delete action for implementation.
A better understanding of “Shared Value” including its potential for partnerships with other sectors but also a clear awareness about its limitations can contribute to better business practices in Nepal.
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