Archive for E-Magazine Issue 1

Book Review: Social Innovation, Inc.

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A new book on social innovation will give businesses ideas for selecting the right social innovation strategy.

Ever since the game-changing launch of CK Prahalad’s The Fortune at the Bottom of the Pyramid, business leaders across the world have been searching for viable ways to enter untapped markets. Unfortunately, the “fortune” has been hard to come by, with many multi-national companies struggling to figure out how to make money from entering the “BOP” market. Jason Saul, author of the forthcoming book Social Innovation, Inc. (Jossey-Bass, Oct 2010), offers novel ways to think about responsible business, giving readers many largely unknown examples of innovative companies driving business growth through social change.

If you haven’t heard of Saul, you might want to tune in. He is the CEO and founder of Mission Measurement LLC. based in Chicago, and has consulted for America’s largest companies about how to measure impact for the last 4 years. He is a member of the faculty at Northwestern University’s Kellogg School of Management, is a graduate of Harvard University’s John F. Kennedy School of Government, and has a law degree from the University of Virginia. This combination of policy, law and business makes him an ideal proponent of incorporating social change into business models. » Continue reading “Book Review: Social Innovation, Inc.”

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Directory: E-Magazine Issue 1

Socially Relevant Businesses Mentioned in this Issue:

Accura Bikes:


Cummins Inc:

Dr. Reddy’s:


HMX Sumaya:


Mission Measurement:

Tata Group:


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By the Numbers: Quality of Death

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Social entrepreneurs spend a lot of time figuring out how to improve the quality of life for the poor, disadvantaged, and outcast. But, most of us rarely think about one’s quality of death. Leave it to the Economist Intelligence Unit (commissioned by the radical philanthropy, Lien Foundation) to get us thinking about end of life care.

Not surprisingly, many developing countries, occupied with trying to feed, shelter and provide healthcare to their citizens, rated poorly when it comes to ensuring a comfortable death. Below, we have extracted some of the results included in the report that relate to developing and emerging markets. » Continue reading “By the Numbers: Quality of Death”

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Eye On: Demographics: India and China: Twin Stories of Progress?

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Three decades from now, China and India will have vastly divergent demographics. Demography underpins every segment of what is termed development – it drives the choices people make in their everyday lives, whether a country’s resources can sustain its growing population, whether a larger population will lead to greater conflict or a readjustment in rural-urban migration, or even whether an aging population will add to the number of dependents. Only in accounting for and understanding the specificities of the population can the complex web of political, economic, and social issues be addressed, and ultimately, projected.

So, what outcomes will these divergent demographics create?

Today, with 1.4 billion and 1.2 billion people respectively, China and India account for 37% of the world population. In thirty years, they are expected to account for roughly the same percentage of the world population. The picture is not this simple, though. Fundamental changes lurk behind these numbers. » Continue reading “Eye On: Demographics: India and China: Twin Stories of Progress?”

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Research Snapshot: Leadership Lessons from India

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While corporate social responsibility is being questioned in the U.S., a recent Harvard Business Review study, featured in the recently published book  The India Way, reports that Indian businesses are reinventing the role corporations play in the welfare of its country’s citizens.

A quartet of researchers from the University of Pennsylvania’s Wharton School of Business interviewed CEOs from 98 leading Indian companies. What they found is that being responsible and sustainable are core values for Indian companies. CSR is not seen as a side project, like it is for many companies in the developed world, but rather as an integral component to their operations. » Continue reading “Research Snapshot: Leadership Lessons from India”

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Interview: The Contrarian, Professor Aneel Karnani

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University of Michigan professor Aneel Karnani recently started a webisphere kerfuffle with his anti-CSR column in The Wall Street Journal on August 23, 2010. Beyond Profit talked to Karnani about his column, the reaction, and what the role of private industry in reducing poverty should be.

Beyond Profit (BP): What was the reaction to your column?

Aneel Karnani (AK): There’s been a lot of reaction, just looking at blogs and chat rooms and Twitter. Lots of email, too. Unfortunately, CSR has become a politically correct stance to take, so it is very difficult to argue against it because it seems morally right. We should set aside political correctness and have a real intellectual well-informed debate. We should not make this into an ideological debate about whether you’re a capitalist or a communist or a socialist.

» Continue reading “Interview: The Contrarian, Professor Aneel Karnani”

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In Profile: Five Ways to Green a Business

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Five Indian companies have found a way to integrate responsibility into their business model, either by making themselves greener, making greener products, or making other companies go green.

Efficiency at Work: Chillibreeze

While the primary activity of Chillibreeze, based out of Shillong, is copy writing and editing, they have seamlessly integrated green values into their daily operations. Because of the nature of the work, most of the company’s employees work from home, but those that do work from a physical office space do so in the company’s Shillong space that has no air conditioning and no hot water. For lunch, most of the staff eats off of banana leaves, which reduces non-organic waste as well as saves water that would be used for dishwashing.

What’s remarkable is that none of this sustainable, responsible activity has hampered performance. They were ranked the top content creation company in India in April 2010. » Continue reading “In Profile: Five Ways to Green a Business”

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What Does it Mean to be a Responsible Company?

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Starting a responsibility wing has become somewhat of a fashionable trend among large corporations. But just creating a department that focuses on corporate social responsibility (CSR) activities—the extent of which can vary greatly—isn’t enough. In order to truly become a sustainable and responsible business, those values have to be integrated into the organization as a whole, from the intern to the CEO and from human resources to accounting.

There are those that doubt the value of CSR—the loudest of which currently is University of Michigan business professor Aneel Karnani—but companies hoping to succeed in the 21st century must find ways to incorporate sustainability into their business model itself. This will not only benefit the company, but society as a whole.

One of the most common arguments is that companies exist purely to maximize profits and shouldn’t be expected to do anything that would inhibit that mission. What most of these critics ignore is that being sustainable and responsible can, in fact, support that mission.

One of the most common areas of a company’s CSR wing is “going green.” Many of these strategies actually help companies save money. Small changes, such as installing energy-efficient appliances and using green data centers can positively affect society while also reducing operational expenses. In this case, what’s good for the company’s bottom line is also good for society.

Another situation critics tend to forget is that in this digital age, consumers are becoming more and more aware of corporate business practices. In cases where the practices are seen to be especially heinous, customers will stop buying the company’s products or using its services—just look at the number of BP boycotts after the recent oil spill. In this case, revamping its policies to become more responsible, which could have been seen as forfeiting profits, has actually become necessary to retain loyal customers.

A recent study found that consumers were willing to pay more money for something when they knew part of the profit was going to charity. Amusement park visitors in the U.S. were given the chance to purchase a photo after going on a ride at an amusement park. Riders were offered the following options: a fixed price; a fixed price with half going to charity; a “pay what you want” option; and, a “pay what you want” option with half going to charity.

The option that produced the highest overall profit was the last option. When asked to pay the fixed price of $12.95 for the photo, only 0.5% did. When allowed to name their own price, 8.4% bought a photo, but paid an average of $0.92 for it. When told half the price would go to charity, a mere 0.57% of riders shelled out the money for a photo—an increase of only .07% over the fixed price. But, when allowed to name their own price and told that half of it would go to charity, 4.5% riders bought a photo and paid an average of $5.33.

As with any new strategy, there are barriers to implementation on a large scale, but what this study further proves is that being a responsible company can have benefits. In this case, the benefit was directly to the traditional bottom line: profit. This also serves as a lesson in consumer behavior, in which consumers are willing to pay more for a responsible product.

CSR can be a great tool that not only improves society but allows a company to improve its standing with today’s informed consumers—provided it’s done right, of course.

Companies can, and many do, take the easy way out and implement CSR on a superficial level. Let’s look again at BP. After changing its name to BP from British Petroleum, BP used the slogan “Beyond Petroleum.” The campaign, although it involved only 4% of BP’s total budget at its highest point, seemed to work. In a 2001 survey by the Financial Times, BP was chosen as the “company that does most to protect the environment.” The year before, BP paid nearly US$50 million in environmentally related fines, court settlements and penalties. Sure shows you the power of a good marketing campaign.

This method, which is known as greenwashing, uses CSR as a mask to hide other, less positive truths. When used as a mere marketing tool, CSR becomes just that. The actual benefits to society are limited, and the unsubstantiated claims will eventually be revealed.

Those who criticize CSR as being against the primary responsibility of corporations are taking a narrow-minded view that doesn’t take into account all of the factors that go into profits. There are ways for companies to be responsible and sustainable without forfeiting profits. The challenge is to discover specifically what those ways are and implement them. Just saying no isn’t going to work.

What then, does the future of CSR look like? The future needs to be integration. And in that way, CSR will become irrelevant—like the critics argue—because being a responsible company will be a necessity rather than a choice.

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