The Dark Continent sits glittering on over 99% of world's gold reserves. Tanzania with the third largest reserves after South Africa and Ghana, rightly enjoys her position as the enviable cynosure of Chinese policy-makers. With economic aid worth Dollar two billion flowing quietly since 1960s from the land of the Mandarin, one wonders if India with her ever mesmerized eyes focused on the glamorous west has missed the opportunity. Just an Ocean way Tanzania, as the Indian Ocean divides the two countries, Tanzania can perhaps be a good way to gain access to the African markets. India with her burgeoning population and accelerated growth rate notwithstanding the economic meltdown needs to re-define its strategy of accessing the International markets. The Chinese policy makers with their foresighted vision could comprehend way back in 1960's the importance to lighten up the corridors to this dark land. Tens and thousands of Chinese Engineers and millions of dollars flew in as investment from China to Tanzania, as Chinese help built the 1860 km long Tanzania-Zambia railway, colloquially called the Freedom Railway in 1970's. An accessible trap into Africa's most rugged terrain helped Chinese tap the emerging African markets for raw materials and an unmet consumer appetite for goods and services available at affordable rates. The Chinese also sent over thousands of medical experts to Tanzania to provide medical services in the under-developed economy. And the camaraderie only seems to have strengthened over time. The Chinese Engineering Company with joint funding from the Chinese & Tanzanian Government built the new national Tanzanian stadium, wherein the two countries jointly hosted the Beijing Olympic relay Torch in April 2008.
Opportunities galore in this Emerging underdeveloped market. Mining, Agriculture, Pharmaceuticals, Infrastructure Development and Telecommunications are some of the most promising emerging industries in the region. China with over 40 years of investment of time, foreign aid and infrastructure into the region already seems to have captured the first mover advantage in terms of capturing the mindshare and heart share of the Tanzanians. But the train is not missed as yet. There are competencies to be leveraged from. Indian IT & Telecommunications players for instance having proven their mettle in one of the largest mobile phone & IT markets in the world, can transport the efficiencies to the African market. Airtel, India's largest mobile phone operator's vision to make a move into the African markets with the MTN deal was a step in the right direction. Zantel one of the first mobile phone companies in Tanzania to offer mobile banking provides an example of how mobiles could be an increased source of revenue for the Telecommunications company by looking at mobiles as not just a means of communication but also as an instrument to facilitate trade. Zantel's success emerges from its vision to forsee the fast emerging market of telecommunications growing at the rate of 20% and combine it with a low banking access of only 9% in Tanzania. Thus, m-banking model became a successful way of tapping the informal economy. Such innovative ways to reach those at the Bottom of the Pyramid in the blessed and cursed in size, widely dispersed population of Tanzania are interesting case studies.
With Tanzania emerging as the most favoured destination for Chinese economic aid, there is definitely more to this development then meets the eye. Africa and Tanzania neatly sit on those elusive resources, metals and a fast emerging market to be tapped that could well define the country to emerge as the winner with a sustainable access to these important resources, the key to development of trade and industry. It has always been and it will always be that for nations to be Competitive, the one with the best manpower resources, R&D, scientific and technological advances and sustainable access to resources will have the most sustainable competitive advantage. India on her part must draw lessons from her dragon neighbour and ride on the train to this rough terrain before she catches on the sneeze of lazing elephants.
In the following blog, we talk in multiple languages (English, French and German) about competition and strategy from an inter-disciplinary perspective by taking inputs from business strategy, law and economics. I am particularly interested in ICT, telecommunications, Industry 4.0 and the impact of convergence in ICT with other sectors such as pharmaceuticals and energy.
Friday, June 11, 2010
New Mining Law in Tanzania & implications for Good Governance
Strategically well connected to the African sub-continent with Indian Ocean on its east coast, Tanzania is well connected by land and water transport. Amongst its promising sectors, Mining Industry holds the greatest promise. Tanzania is Africa's third largest producer of Gold after South Africa and Ghana. The Gold mining industry grew at more then five percent in 2009 with gold exports worth $ 1.076 billion compared to $ 932.4 billion a year earlier. With tremors in the Euro zone and shaky Dollars, pessimistic investors pare back on riskier assets in favour of gold. Thus, investing in the rich and abundantly endowed Tanzania is the key to sustained growth. Seeing the importance of its burgeoning Gold reserves, the Tanzanian Government new mining law recently. The law has drawn mixed response from the industry. The law seeks to enforce the socially responsible image of investing in the mining industry. Traditionally, the mining companies have been seen resource hungry with no commitment to the needs of the local population. The new law envisions to change this. The new Act will cover gemstones like Diamond, Tanzanite, Emerland, Ruby, Sapphire, Turquoise and Ruby. With important changes like mandatory requirement to be listed on the Dar-es-Salaam stock exchange, higher Government stake in the Joint Ventures and increased royalty payment of four percent from the existing three percent to the Government; the new law seeks to strengthen the Corporate Governance regime in the mining industry. Tighter compliances and stricter regulation if followed in word,letter and spirit would only help boost the image of the mining companies. This is important as trading in these companies in developed markets are more profitable then trading in metals itself. And with an ethical image for your company, trading on the stock exchange of the more developed Dow Jones and FTSE only gets easier and more profitable.
Thursday, June 10, 2010
A gory story scrippted in Oil
From Valdez oil disaster to the Gulf of Mexico... the story of human destruction is written with the gory ink of oil. An intriguing question that stares us in the face with these mamooth disasters is 'Is CSR working'? Is it Corporates Shedding Responsibility!! BP's nail in the coffin with its post on the website asking readers to suggest if there is a way to cork the spill shows that plugging the continuing disaster is beyond the contemplation of existing technologies and the world's best Engineers available at BP. It almost sounds like the Obama campaign, hoping to come out with a solution- Change we are and change we can! Or perhaps someone reminded BP of the story of the cleaning boy at NASA research centre who after millions being spent on making a pen whose ink would not dry up in the space, innocently questioned why spend millions, why dont you take a pencil to the space?
Thursday, May 6, 2010
Blue Ocean Strategy
Every company endeavours towards one elusive goal and the goal is to conquer the market; to have greater profits and to last. Different players employ different strategies. Some fight on competition, whereas others endeavour to create a niche by differentiating from their competitiors. Kim & Mauborgnes' 2005 unprecedented work Blue Ocean Strategy emphatically questioned this conventional mind set of the Industry to approach competition and creating a niche. Kim & Mauborgne argue seldom does one look for untapped market, an unmet need and for those that successfully value innovate emerge as leaders, the market control that is sustainable with its niche market and can be sustained in the newly found uncontested space, till imitation gives way to crowding of the space.
Red Ocean Strategy focuses on competing in existing market, beating the competition, exploiting an existing demand, making the value cost trade off and aligning the whole system of a company's activities with its strategic choice of quality differentiation or low cost.
The Blue Ocean Strategy on the other hand emphasizes on creating uncontested market space, making competition irrelevant, creating and capturing new demand, breaking the value cost trade off and aligning the whole system of a company's activities with its strategic choice of quality differentiation and low cost.
Kim & Mauborgnes' 2005 Four Action framework, Red Ocean focuses on Eliminate and Reduce, Blue Ocean emphasizes Raise and Create.
In the Cost Structure Reduction, we need to see what costs a lot without adding a lot of value and hence, need to eliminate the same. We also need to look for places wherein we can reduce emphasis.
In terms of Buyer Value, there are avenues which may not cost much, however emphasizing and focusing on the same we can raise the perceived value in the eyes of the customer considerably.
For Creation, look for areas which are not presently focused upon in the industry at the moment; however, addition and/ or creation of the same, the customer would appreciate the same. Is there something unique, different, hitherto unthought of, not focused on before, however, addition, creation of the same, would be seen in a greatly positive light by the customer.
So the idea basically is innovate, Value Innovation. Value Innovation is the simultaneous pursuit of differentiation and low cost. We need to look at the whole picture holistically, referred to as the Ladder of Inference, in its entireity. Then we need to evaluate the Value Factors, we need to critically evaluate the present factors and look over the Halo effect. One needs to see what is it that we are assuming to exist, that which possibly does not exist. Value Innovation is the difference between Perceived benefit and cost. If the cost of adding a particular attribute is less then the value perceived by the customer; in other words value perceived is more then the cost spent in adding that particular attribute, then it is Value Innovation. The conventional Six Paths Framework, talks about reconstructing market boundaries, by focussing on Alternatives, Strategic Groups, Chain of Buyers including Strategic Network, Chain of Buyers including strategic network, Complimentary products and services, Functional or Emotional appeal to buyers and Time.
Structuralist view or environmental determinism works on the premises that a firm is competing within the given industry and the resources and environment for the industry are given. The dynamism or the constantly evolving nature of the surrounding environment is not taken into consideration. The proponents of Blue Ocean argue that the dynamism of the industry and the surrounding environment creates the need to value innovate and create blue ocean. The Blue Ocean views looks at the reconstructionist view by challenging the premises that the boundaries of the market are given and that the frontiers can not be redrawn. There is an extra demand out there which is untapped. The all enigmatic question is how to find that untapped market and create a demand. In other words, how to redraw the market boundaries that are taken as given in the minds of the managers atleast. When viewed from the Blue Ocean Lens, there is a tectonic shift in our approach to the market- from supply we look at the demand side; from competition, we look at Value Innovation, from a zero sum game, we look for ways of Harmonic Progression. The idea then is to innovate, to redraw, to re-create; hence the Blue Ocean approach is the reconstructionist approach.
In this world, where even the spiritualists say that nothing is permanent except change, Blue Ocean Strategy is one step closer to looking at this ever evolving world from the lens of reality. As old songs become classic, new hip hop music becomes a rage; as old fashions fade on the canvas of memory, new styles emerge; then in the ever evolving money chasing market dynamics; how can the analogy of a constant fight to look for hitherto untapped frontiers seem misplcaed. The key then is to create Blue Oceans. And sustainable competitive advantage is not a static, it is a Business strategy on the move.
Red Ocean Strategy focuses on competing in existing market, beating the competition, exploiting an existing demand, making the value cost trade off and aligning the whole system of a company's activities with its strategic choice of quality differentiation or low cost.
The Blue Ocean Strategy on the other hand emphasizes on creating uncontested market space, making competition irrelevant, creating and capturing new demand, breaking the value cost trade off and aligning the whole system of a company's activities with its strategic choice of quality differentiation and low cost.
Kim & Mauborgnes' 2005 Four Action framework, Red Ocean focuses on Eliminate and Reduce, Blue Ocean emphasizes Raise and Create.
In the Cost Structure Reduction, we need to see what costs a lot without adding a lot of value and hence, need to eliminate the same. We also need to look for places wherein we can reduce emphasis.
In terms of Buyer Value, there are avenues which may not cost much, however emphasizing and focusing on the same we can raise the perceived value in the eyes of the customer considerably.
For Creation, look for areas which are not presently focused upon in the industry at the moment; however, addition and/ or creation of the same, the customer would appreciate the same. Is there something unique, different, hitherto unthought of, not focused on before, however, addition, creation of the same, would be seen in a greatly positive light by the customer.
So the idea basically is innovate, Value Innovation. Value Innovation is the simultaneous pursuit of differentiation and low cost. We need to look at the whole picture holistically, referred to as the Ladder of Inference, in its entireity. Then we need to evaluate the Value Factors, we need to critically evaluate the present factors and look over the Halo effect. One needs to see what is it that we are assuming to exist, that which possibly does not exist. Value Innovation is the difference between Perceived benefit and cost. If the cost of adding a particular attribute is less then the value perceived by the customer; in other words value perceived is more then the cost spent in adding that particular attribute, then it is Value Innovation. The conventional Six Paths Framework, talks about reconstructing market boundaries, by focussing on Alternatives, Strategic Groups, Chain of Buyers including Strategic Network, Chain of Buyers including strategic network, Complimentary products and services, Functional or Emotional appeal to buyers and Time.
Structuralist view or environmental determinism works on the premises that a firm is competing within the given industry and the resources and environment for the industry are given. The dynamism or the constantly evolving nature of the surrounding environment is not taken into consideration. The proponents of Blue Ocean argue that the dynamism of the industry and the surrounding environment creates the need to value innovate and create blue ocean. The Blue Ocean views looks at the reconstructionist view by challenging the premises that the boundaries of the market are given and that the frontiers can not be redrawn. There is an extra demand out there which is untapped. The all enigmatic question is how to find that untapped market and create a demand. In other words, how to redraw the market boundaries that are taken as given in the minds of the managers atleast. When viewed from the Blue Ocean Lens, there is a tectonic shift in our approach to the market- from supply we look at the demand side; from competition, we look at Value Innovation, from a zero sum game, we look for ways of Harmonic Progression. The idea then is to innovate, to redraw, to re-create; hence the Blue Ocean approach is the reconstructionist approach.
In this world, where even the spiritualists say that nothing is permanent except change, Blue Ocean Strategy is one step closer to looking at this ever evolving world from the lens of reality. As old songs become classic, new hip hop music becomes a rage; as old fashions fade on the canvas of memory, new styles emerge; then in the ever evolving money chasing market dynamics; how can the analogy of a constant fight to look for hitherto untapped frontiers seem misplcaed. The key then is to create Blue Oceans. And sustainable competitive advantage is not a static, it is a Business strategy on the move.
Friday, April 30, 2010
A Dharma called CSR
One of the employees with Fairtrade Foundation recalls his decision of opting out of Barclays and instead choosing to work with Fair Trade. On being selected to work for the Barclays, he asked and so what are we supposed to do. To this, the Recruitment Manager replied, well, you have to sell credit cards to prospects who you would never be able to pay back. Cool! Said everyone in the room. But the protaganist of our story differed!! Rejecting the tempting offer, he murmured I definitely did not pursue an MBA from a top School to do this. Well how many of us have that protaganist in us? And for those few amongst us who have it, fewer still have the guts to do it. Fairtrade, Ethical Business, Social Responsiveness, Corporate Governance and the icing on the cake Sustainability! Interesting buzz words.... or an endemic necessity. It is essentially for our own good we need to question the way things are done, the manner in which the Corporations run, the Corporate Governance or the absence of it, is too big a question to ignored. The question essentially boils down to our survival and the survival of generations to come. Briefly put, the issue is one of Sustainability. It is not just about present, profit and progress... it is about a sustainable progress making progressive headway into the future.
Let the question begin with us. How we as individuals can contribute towards this march to Sustainability. The answer begins with a simple thougthfulness, a realization. We take our society, our environs, our work, our lives and the luxuries as given. We want to acquire more and more and more. There is nothing wrong about this desire to seek more. After all Dharma, Artha, Kama and Moksha are the four tenets of human aspiration in Sanatan Dharma. Literarly translated, Dharma refers to peforming one's duty; Artha refers to accumulation of wealth, Kama to fulfill the physical human desires and Moksha is attainment of Salvation.
Sanatan Dharma or sometimes we refer to it as Hinduism does not mean religion. Sanatan means that what is eternal, never ending. Dharma is often misconstrued to be Religion, but Dharma is not religion and interestingly enough Dharma is religion! However, it is Religion in the connotation to follow religiously that is what is my duty, my responsibility in other words my karma. Karma is the work that one is spiritually ordained to do. Though literally translated Karma means work in English but Karma is not just work. When we work, we do it with a certain thought. For instance if one works on an article with a desire to attain high readership, then there is a desire attached to the work one is pursuing. This desire is to be known, to attain a stature within the legal community. However, if the same action is performed with a desire for the good of the society with no expectations in return it is Nishkaam Karma .. the Karma as referred to in the aforemetioned four tenets. This Karma is then the Dharma.
Since we are all ordained to fulfill our respective responsibilities, each one of us has our own respective Dharma. As a Cardiologist, someone is ordained to treat his patients well and get them back to health. As a Lawyer, another individual's Dharma is to handle his clients well. Likewise a given individual will have different Dharma's at different points in life depending on what role is she playing. As a child, her Dharma would be to look after her parents when they need her. As an employee, her Dharma is to work well for the company and steer it towards an Ethical path. As a customer, the Dharma then is to use products that are ethical, that are good for her and her as a family. As a shareholder, her Dharma is to invest in Companies that invest ethically, that contribute to growth of the economy. Dharma then is the constant companion in each one of our lives and we have to understand in the different facets we have, different roles that we play what is our Dharma? In this ecosytem we are stakeholders, with varying shades of roles to be played in different plays. Somewhere we play the most central role, someplace sidelines, sometimes faded to the background, sometimes more, sometimes less, but we all play a role and the idea is to play the role well. This then is the Dharma.
Artha referred to as the second objective of Human life in Sanatana Dharma refers to 'money or material prosperity'. But this is not material prosperity as is commonly understood, for material prosperity does not mean a march towards materialism. Ever wondered why the richest people are not the happiest or why the most prosperous nations are not the happiest nations. Why there is no significant co-relation between wealth and happiness. The reason is that the material prosperity that we seek to attain may make us rich, but does not really make us prosperous. We are all running in the rat race to be rich to prosper, by all means fair or foul. Mostly, if not always, we do not see how our investments make money, whether we are investing in ethical companies; what work are we doing to make money … are we being robots run on power to generate endless papers called currency... are we just promoting the system... or adding a soul to the system. Is the organization we work with contributing to the growth of the society. Are we as stakeholders to our environment giving back to our society or are we only endlessly taking from it. Little acts of kindness, like a conscious decision to invest in ethical shares, work for an ethical company, taking a little share of our fortune to contribute to the growth of the society and acting ambitiously but not greedily to amass a fortune is Artha. Islam has the beautiful concept of Zakat in this direction to make one's money, one's Artha. Zakat is one of the five basic responsibilities every Muslim is ordained to perform. Zakat simply put means, that every Muslim must give two percent of his earnings in charity to the less privileged. He is encouraged to contribute more, but the minimum two percent is mandatory.
Kama is the third pillar which means fulfilling one's physical desires. In Santan Dharma, one is encouraged to enter into the Marital Bliss, referred to as the Ghrihasthaahrama to fulfill ones physical desires. Marriage is much more then that. But this is one of the important functions of Marital Bliss. Osho's critically acclaimed writing 'From Sex to Superconsciousness' provides interesting insight on the topic. Thus, it is perfectly Divine to fulfill one's physical Desires and then tread on the path to Moksha. If one's desire are fulfilled in a spiritual manner with a social sanctity, then it is easier to control one's wrong desires.
And finally the attainment of the Moksha is that one ultimate goal that is the quinteessential essence of spirituality. If one performs one's Dharma, Artha and Kama well, then the path to Moksha or salvation becomes much easier. The essence of Spirituality is not about reading scripture one after another, watching one religious channel after another to increase its TRPs(atleast this has become the trend in India of late!) or a race to engage in discussions that about the differences in religions and societies; the essence is to be spiritual, to be a good human, to fulfill one's responsibilities well, to be thoughtful, critical thinkers that we humans are ordained to be and to be a constructive stakeholder in the Sustainable development of the society.
Corporate Governace and Corporate Social Responsibilty is in essence then the modern day equivalent of Spirituality.
Let the question begin with us. How we as individuals can contribute towards this march to Sustainability. The answer begins with a simple thougthfulness, a realization. We take our society, our environs, our work, our lives and the luxuries as given. We want to acquire more and more and more. There is nothing wrong about this desire to seek more. After all Dharma, Artha, Kama and Moksha are the four tenets of human aspiration in Sanatan Dharma. Literarly translated, Dharma refers to peforming one's duty; Artha refers to accumulation of wealth, Kama to fulfill the physical human desires and Moksha is attainment of Salvation.
Sanatan Dharma or sometimes we refer to it as Hinduism does not mean religion. Sanatan means that what is eternal, never ending. Dharma is often misconstrued to be Religion, but Dharma is not religion and interestingly enough Dharma is religion! However, it is Religion in the connotation to follow religiously that is what is my duty, my responsibility in other words my karma. Karma is the work that one is spiritually ordained to do. Though literally translated Karma means work in English but Karma is not just work. When we work, we do it with a certain thought. For instance if one works on an article with a desire to attain high readership, then there is a desire attached to the work one is pursuing. This desire is to be known, to attain a stature within the legal community. However, if the same action is performed with a desire for the good of the society with no expectations in return it is Nishkaam Karma .. the Karma as referred to in the aforemetioned four tenets. This Karma is then the Dharma.
Since we are all ordained to fulfill our respective responsibilities, each one of us has our own respective Dharma. As a Cardiologist, someone is ordained to treat his patients well and get them back to health. As a Lawyer, another individual's Dharma is to handle his clients well. Likewise a given individual will have different Dharma's at different points in life depending on what role is she playing. As a child, her Dharma would be to look after her parents when they need her. As an employee, her Dharma is to work well for the company and steer it towards an Ethical path. As a customer, the Dharma then is to use products that are ethical, that are good for her and her as a family. As a shareholder, her Dharma is to invest in Companies that invest ethically, that contribute to growth of the economy. Dharma then is the constant companion in each one of our lives and we have to understand in the different facets we have, different roles that we play what is our Dharma? In this ecosytem we are stakeholders, with varying shades of roles to be played in different plays. Somewhere we play the most central role, someplace sidelines, sometimes faded to the background, sometimes more, sometimes less, but we all play a role and the idea is to play the role well. This then is the Dharma.
Artha referred to as the second objective of Human life in Sanatana Dharma refers to 'money or material prosperity'. But this is not material prosperity as is commonly understood, for material prosperity does not mean a march towards materialism. Ever wondered why the richest people are not the happiest or why the most prosperous nations are not the happiest nations. Why there is no significant co-relation between wealth and happiness. The reason is that the material prosperity that we seek to attain may make us rich, but does not really make us prosperous. We are all running in the rat race to be rich to prosper, by all means fair or foul. Mostly, if not always, we do not see how our investments make money, whether we are investing in ethical companies; what work are we doing to make money … are we being robots run on power to generate endless papers called currency... are we just promoting the system... or adding a soul to the system. Is the organization we work with contributing to the growth of the society. Are we as stakeholders to our environment giving back to our society or are we only endlessly taking from it. Little acts of kindness, like a conscious decision to invest in ethical shares, work for an ethical company, taking a little share of our fortune to contribute to the growth of the society and acting ambitiously but not greedily to amass a fortune is Artha. Islam has the beautiful concept of Zakat in this direction to make one's money, one's Artha. Zakat is one of the five basic responsibilities every Muslim is ordained to perform. Zakat simply put means, that every Muslim must give two percent of his earnings in charity to the less privileged. He is encouraged to contribute more, but the minimum two percent is mandatory.
Kama is the third pillar which means fulfilling one's physical desires. In Santan Dharma, one is encouraged to enter into the Marital Bliss, referred to as the Ghrihasthaahrama to fulfill ones physical desires. Marriage is much more then that. But this is one of the important functions of Marital Bliss. Osho's critically acclaimed writing 'From Sex to Superconsciousness' provides interesting insight on the topic. Thus, it is perfectly Divine to fulfill one's physical Desires and then tread on the path to Moksha. If one's desire are fulfilled in a spiritual manner with a social sanctity, then it is easier to control one's wrong desires.
And finally the attainment of the Moksha is that one ultimate goal that is the quinteessential essence of spirituality. If one performs one's Dharma, Artha and Kama well, then the path to Moksha or salvation becomes much easier. The essence of Spirituality is not about reading scripture one after another, watching one religious channel after another to increase its TRPs(atleast this has become the trend in India of late!) or a race to engage in discussions that about the differences in religions and societies; the essence is to be spiritual, to be a good human, to fulfill one's responsibilities well, to be thoughtful, critical thinkers that we humans are ordained to be and to be a constructive stakeholder in the Sustainable development of the society.
Corporate Governace and Corporate Social Responsibilty is in essence then the modern day equivalent of Spirituality.
Saturday, April 24, 2010
In search of a business for business....
Is doing business the only business of the business? From Milton Friedman to The Future of Industrial Man(Peter Drucker, 1942), the concept of responsibility and conscious of nations has come a long way. Why do corporations have to be socially conscious. Is it a mere legal compliance or a philanthropic attitude of Companies is well taken by its stakeholders?
David Packard, co-founder of Hewlett-Packard remark perhaps seems to answer this beautifully, “I think many people assume, wrongly, that a company exists simply to make money. While this is an important result of a company's existence, we have to go deeper and find the real reasons for our being. As we investigate this, we inevitably come to the conclusion that a group of people get together and exist as an institution that we call a company so that they are able to accomplish something collectively that they could not accomplish separately- they make a contribution to society, a phrase which sounds trite but is fundamental.”
And Hewlett-Packard is not a not for profit Organization. It makes profit like any other company. It is after all in the business of making money. But it is in the business of making something more then money and that is 'contribution to the society'. The important question is does this responsive behaviour has any value for the company.
Organizations do not work in vaccum. They work in a dynamic environment wherein the various elements of the environment inter-play and interact. A pro-active and responsive behaviour by corporations is not just a good PR exercise, it can also be a great value-creator. The concept then is to visualize Corporate Responsibility as social in essence and strategic in content. Examples galore of Companies that have successfully implemented this strategy and leveraged from it. Working on its mantra of triple bottom line: profits, people and presence, Cicso has successfully managed to meet the shortfall of talented IT professionals by collaborating with local schools and universities and providing industry-relevant education.
The concept of Triple Bottom Line refers to the three important elements and value creation for them: The People, The Planet and The Profits.
From Adam Smith to Milton Friedman, it was largely believed the only people that a corporation was answerable to was its shareholders; but with the changing times, increased public awareness and business impact increasingly felt on the everyday functioning of society, the presence of Corporations was no longer confined to boardroom decisions or shareholder meetings, 'people' other then shareholders too seemed to become important. These people other then shareholders involved the employees, the suppliers, the local community, the consumers. The vast ambit of this people was collectively referred to as the stakeholders. Stakeholders are people who simply put effect and are in turn influenced by the presence and functioning of the Organization. Thus, the organization must be seen to benefit them or atleast not harm them through its presence.
The Second P... that is the Planet... refers to the Environmental Impact that the activities of an Organization has on the Environment. Thus, with this second P in the Triple Bottom Line, emerged the concept of Eco Labelling and Fair Trade Companies.
The Third P is the Profit.. with Milton's eternal mantra, that profit is the only business of the business, the importance of a profitability of a business can not be overemphasized.
Thus, today for an Organization to exist it must not only exist in harmony with its Balance Sheet, it has an even larger and more accountable role to play.... the profitabilty of an Organization must resonate in terms of contribution to its stakeholders and environment as well. Simply, we need organic organizations that are soulful in spirit and humane in approach.
David Packard, co-founder of Hewlett-Packard remark perhaps seems to answer this beautifully, “I think many people assume, wrongly, that a company exists simply to make money. While this is an important result of a company's existence, we have to go deeper and find the real reasons for our being. As we investigate this, we inevitably come to the conclusion that a group of people get together and exist as an institution that we call a company so that they are able to accomplish something collectively that they could not accomplish separately- they make a contribution to society, a phrase which sounds trite but is fundamental.”
And Hewlett-Packard is not a not for profit Organization. It makes profit like any other company. It is after all in the business of making money. But it is in the business of making something more then money and that is 'contribution to the society'. The important question is does this responsive behaviour has any value for the company.
Organizations do not work in vaccum. They work in a dynamic environment wherein the various elements of the environment inter-play and interact. A pro-active and responsive behaviour by corporations is not just a good PR exercise, it can also be a great value-creator. The concept then is to visualize Corporate Responsibility as social in essence and strategic in content. Examples galore of Companies that have successfully implemented this strategy and leveraged from it. Working on its mantra of triple bottom line: profits, people and presence, Cicso has successfully managed to meet the shortfall of talented IT professionals by collaborating with local schools and universities and providing industry-relevant education.
The concept of Triple Bottom Line refers to the three important elements and value creation for them: The People, The Planet and The Profits.
From Adam Smith to Milton Friedman, it was largely believed the only people that a corporation was answerable to was its shareholders; but with the changing times, increased public awareness and business impact increasingly felt on the everyday functioning of society, the presence of Corporations was no longer confined to boardroom decisions or shareholder meetings, 'people' other then shareholders too seemed to become important. These people other then shareholders involved the employees, the suppliers, the local community, the consumers. The vast ambit of this people was collectively referred to as the stakeholders. Stakeholders are people who simply put effect and are in turn influenced by the presence and functioning of the Organization. Thus, the organization must be seen to benefit them or atleast not harm them through its presence.
The Second P... that is the Planet... refers to the Environmental Impact that the activities of an Organization has on the Environment. Thus, with this second P in the Triple Bottom Line, emerged the concept of Eco Labelling and Fair Trade Companies.
The Third P is the Profit.. with Milton's eternal mantra, that profit is the only business of the business, the importance of a profitability of a business can not be overemphasized.
Thus, today for an Organization to exist it must not only exist in harmony with its Balance Sheet, it has an even larger and more accountable role to play.... the profitabilty of an Organization must resonate in terms of contribution to its stakeholders and environment as well. Simply, we need organic organizations that are soulful in spirit and humane in approach.
Friday, April 23, 2010
All religions talk about being good. All of humanity is laid on the foundation of being good and fair. Yet, there is so much of unfairness and so little fairness in us all. What accounts for this element of unfairness reflected in the present day materialism.
Whether religion is Divine or religions evolved as checks and measures to balance the human conscious as humanity developed is a question of law, ethics, society, sociology and the philosophers to contemplate. What is of greater significance and what is more important is the realization that all the religions have some basic common tenents on which their foundation lay. For those who do not believe in religion, they still have some basic principles which may be referred to as principles of humanity. And for those existing at an even more meta-physical level it is spirituality. The essence is the basic fundamental tenents spoken by different sages at different times, with the cardinal message remaining quintessentially the same. As borders become meaningless, multinationals ride high on the wave of globalization, leveraging from geographical competencies embedded in clusters across the world, as the brain drains on the modern day equivalent of Pushpak Vimans the Boeings and the Airplanes, as the inquistive mind questions the dogmatic religion and seeks solace in spirituality, the enigmatic question that rises like a wave is there an emerging wave of new age spirituality. The truth is one, the sages say it by different names. The moving mind thinks and having thought contemplates. In the shadows of Corporate Governance, as I see the buds of Corporate Social Responsibilty blossom, my heart cherishes the emergence of a new wave of spirituality.
Whether religion is Divine or religions evolved as checks and measures to balance the human conscious as humanity developed is a question of law, ethics, society, sociology and the philosophers to contemplate. What is of greater significance and what is more important is the realization that all the religions have some basic common tenents on which their foundation lay. For those who do not believe in religion, they still have some basic principles which may be referred to as principles of humanity. And for those existing at an even more meta-physical level it is spirituality. The essence is the basic fundamental tenents spoken by different sages at different times, with the cardinal message remaining quintessentially the same. As borders become meaningless, multinationals ride high on the wave of globalization, leveraging from geographical competencies embedded in clusters across the world, as the brain drains on the modern day equivalent of Pushpak Vimans the Boeings and the Airplanes, as the inquistive mind questions the dogmatic religion and seeks solace in spirituality, the enigmatic question that rises like a wave is there an emerging wave of new age spirituality. The truth is one, the sages say it by different names. The moving mind thinks and having thought contemplates. In the shadows of Corporate Governance, as I see the buds of Corporate Social Responsibilty blossom, my heart cherishes the emergence of a new wave of spirituality.
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