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Sustainable Global Enterprise:

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Sustainable Global Enterprise:Sust

    Sustainable Global Enterprise: The Production of a New

    Approach to Business.

    The Kevin Roberts Sustainable

    Enterprise Scholarship Report Series

    Briefing Paper 2

    Nicky Black

    KRSES Scholar 2004-2006

SUSTAINABLE ENTERPRISE: THE PRODUCTION OF

    A NEW APPROACH TO BUSINESS.

    NICKY BLACK, DOCTORAL CANDIDATE, KEVIN ROBERTS SUSTAINABLE

    ENTERPRISE SCHOLAR 2004 PRESENT. WAIKATO MANAGEMENT SCHOOL,

    UNIVERSITY OF WAIKATO, NEW ZEALAND*.

    This report reflects work from the first year and a half of my doctoral studies at Waikato Management School, during my tenure as an inaugural Kevin Roberts Sustainable Enterprise Scholar. It is the second of a series of three briefing papers that aim to provide an overview of the theory and practice of Sustainable Enterprise, in particular the role of global business in alleviating poverty for the large proportion of the human population living at the „bottom of the social and economic pyramid‟. The first briefing paper described the theoretical framework of Sustainable

    Enterprise and this bottom-of-the-pyramid approach, the second provides an overview of the organizations and actors involved in the production of knowledge about this approach and its promotion to potential agents of change. The third paper applies an analytical lens to the transformational potential of this engagement of global business in the generation of sustainable livelihoods for the world‟s poor.

Abstract

    Sustainable Enterprise an approach to business in which some of the world‟s most challenging

    issues, such as environmental degradation and social inequality, are recast as profitable opportunities for the Private Sector- is generating considerable interest in the corporate, academic and policy spheres. A central focus of this emerging field is the role global business may play in alleviating poverty through considering the four billion plus people living at the „bottom of the social and economic pyramid‟ as an untapped, under-served market. Proponents of this approach

    (A. L. Hammond & Prahalad, 2004; S L Hart, 2005; Stuart L Hart & Christensen, 2002; Stuart L Hart & Milstein, 1999; London & Hart, 2004; Prahalad, 2004) argue that innovative technology and new business models should be developed by the private sector to actively engage „the poor‟

    in the global market-place. It is hoped that this approach of „business as unusual‟, in which social

    value creation is a central operational premise in previously invisible markets, will generate a more inclusive and environmentally sustainable form of global capitalism.

    This report presents an overview of the actors engaged in the emerging field of Bottom-of-the-Pyramid Sustainable Enterprise (BoP), particularly as they relate to the production of knowledge and expertise about this approach. The actors described include corporations and business enterprises, business associations, policy institutes, academic research and educational institutes, various levels of national and international government and intergovernmental agencies, and non-governmental organizations. After a brief introduction to the approach, the paper presents a map of the landscape of actors involved in the BoP concept. The main body of the paper describes in depth the actors involved in the production of knowledge about this approach and its promotion, corporate support for this model of business, and the actors involved in the „delivery‟ of BoP

    projects in partnership with the private sector, either as social entrepreneurs, development NGOs, or inter/governmental agencies. The paper concludes with reflections on the emergence and dynamics of this field, and a series of quick-reference appendices.

    Keywords: Corporate Responsibility, Sustainable Enterprise, Social and Economic Development, Bottom-of-the-Pyramid.

    *Nicky Black, Doctoral Candidate, Waikato Management School, The University of Waikato, Private Bag 3105, Hamilton, Aotearoa/New Zealand.

    Tel; +64 (0) 21 747 167, Fax: +64 (0) 7853 9698, E-Mail; nickyblack@paradise.net.nz. Fields of expertise: Sustainable Enterprise, Corporate Responsibility, Human Rights, Development and Water.

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    Table of Contents

    1. Introduction The Business of Doing Business at the Bottom of the Pyramid.

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    2. Market-based Solutions to Poverty - Key Actors. ......................................... 7 3. Researching and Promoting the BoP. .......................................................... 12 3.1 The Advocates. ................................................................................... 17 3.2 The Academy. .................................................................................... 33 3.3 Collaborative Initiatives and Other Ventures....................................... 38 4. Sustainable Global Enterprise: Corporate Support and Engagement. .......... 50 5. Sustainable „Local‟ Enterprise: Social Entrepreneurs. ................................. 52

    6. Conclusion. ................................................................................................ 54

Appendices

     Appendix 1a: Sustainable Enterprise Initiatives .................................................. 57Appendix 1b: Sustainable Enterprise Initiatives: Mission/Vision ........................ 61 Appendix 1c: Sustainable Enterprise Initiatives: Activities ................................. 67 Appendix 2a: Sustainable Enterprise Academic Initiatives: Description ............. 70 Appendix 2b: Sustainable Enterprise Academic Centers Research and Educational Focus .............................................................................................. 71 Appendix 2c: Sustainable Enterprise Academic Centers On-Campus

    Affiliations …………………………………………………………………………

    …………75

    Appendix 2d: Sustainable Enterprise Academic Centers Off-Campus

    Affiliations…………...…………………………………………………………..75

    Appendix 3: Corporate Support of SE/BoP initiatives and BoP engagement. ...... 78 Appendix 4a: Conferences on Sustainable Enterprise ......................................... 81

    Appendix 4b: Conferences on Topics Related to Sustainable Enterprise ............. 85

    Table of Figures

    Figure 1 The Landscape of Sustainable Enterprise at the Bottom of the

    Pyramid………………………………………………………………………...….9

    Figure 2. A Timeline of Sustainable Enterprise and BoP initiatives. ...错误;未定

    义书签。Error! Bookmark not defined.

    Figure 3 The Organizational Structure of BoP advocacy. ................................... 31

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     The Business of Doing Business at the Bottom of the 1. Introduction

    Pyramid.

    This paper is the second in a series of three briefing papers on Sustainable Enterprise at the Bottom-of-the-Pryamid (BoP). The first paper introduced Sustainable Enterprise and business at the BoP, outlining the key theoretical components of an approach that presents the challenges of environmental degradation and social and economic inequality as profitable opportunities for the private sector. The paper described how embracing Sustainability is re-cast by advocates of Sustainable Enterprise (Hart, 2005; Prahalad, 2004; Wheeler, 2004) as a strategic imperative for the preservation of the firm as the driver of the next round of creative destruction (Hart & Milstein, 1999), as an opportunity for sustained corporate growth through the development of disruptive innovations (Christensen, 1997) or through engaging fringe stakeholders to generate a „competitive imagination‟ (Hart & Sharma, 2004). Through tying broader

    sustainability issues to the sustainability of the firm at a conceptual and operational level within the language and theoretical landscape of strategy, Sustainable Enterprise can be seen to present a more open and inviting prospect for companies than formulations of Corporate Social Responsibility which are more peripheral to business operations. Whilst holding great promise as a way to engage the private sector in the challenges of sustainability, the approach does bring with it particular challenges and tensions which were introduced at the end of the paper, and are dealt with in greater depth in the third paper of this series.

    This paper approaches Sustainable Enterprise from a different angle. Instead of considering Sustainable Enterprise as a body of thought, it looks to identify the thinkers and promoters of this model of global business and the relationships between them. The report aims to describe the various actors who develop, promote, research, and undertake this approach and the web of relations that connect them. The report serves as a map to orientate oneself to key organizations and initiatives in the area of Sustainable Enterprise as a whole, including their organizational structure, mission and values, geographical location 4 4

    and activities. Lastly, the paper serves to illustrate how the theoretical concepts described in the first paper in the series are being developed and enacted in the academy and in „the field‟.

The next section provides a figurative „map‟ of the organizations involved in

    Sustainable Enterprise, particularly in its focus on alleviating poverty for the poorer communities in the Developing World through business engagement at the bottom of the social and economic pyramid. The map suggests some of the relationships that connect a broad range of actors drawn from across the public, private and civil-society sectors who are involved in the business of doing

    business at the BoP at the community, national and international levels.

    The third chapter introduces the actors primarily involved in the production and promotion of knowledge about BoP Sustainable Enterprise, and their involvement in the education of those who follow this approach. It begins by introducing three advocacy or policy organizations; the World Resources Institute, the World Business Council for Sustainable Development, and the Aspen Institute. These organizations work to raise the profile of Sustainable Enterprise and, to a varying degree, carry out pilot projects and produce research to support and advocate their position on the issue.

    The bulk of the research in this area is conducted by academics based in Business Schools, often in association with these advocacy/policy institutes. The chapter therefore goes on to describe a clutch of international research centers that have been established over the last 10 years, predominantly based in Business Schools in the United States of America. The type of research they undertake, and their central role in educating current and future managers about this approach is discussed. This chapter then closes with a description of a number of collaborative initiatives these policy, research and educational institutes are engaged in which aim to promote the approach to a wider audience through conferences, competitions, ranking systems and awards.

    Whilst Sustainable Enterprise as a conceptual framework can apply equally to small and medium sized enterprises, the primary focus at the international level,

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    and for the organizations described, is on how global companies can contribute to sustainability through engaging the BoP. As such, the fourth chapter goes on to discuss the participation of Global Companies in these efforts and their support for this approach. It also draws out the various roles for global companies that are articulated in this area by these different actors.

    Lastly, a key element of this approach is the need for innovative partnerships to generate enterprise at the BoP. The fifth chapter rounds out the overview of the actors in this field by describing a few of the organizations, including social entrepreneurs and development agencies, who are involved in generating sustainable „local‟ enterprise.

    The last chapter provides some reflections on this emerging field of academic work and corporate activity. It highlights key people involved in the development of this approach, how embedded the theory described in the first briefing paper is in the mission statements and activities of these initiatives, and how the area is evolving and what promise this may hold for its success.

    The actors involved in the production of knowledge in this area come from the academic, policy, advocacy and practical spheres, and represent a diverse range of motivations, roles, characteristics and capabilities. What emerges from this report is a picture of how a particular, potentially radical and contentious approach to business for those within and outside the private sector and on both sides of the globalization debate, has been and continues to be developed. It is too early to judge the ability of this approach to meet its stated goals, but it is certainly possible to say that a number of innovative, collaborative partnerships are evident in this report; the initiatives draw together the private sector, civil society and academia and the various traditions and disciplines within the academy to research, educate and promote business or market-facilitated responses to poverty. How those different value systems and motivations meet and collaborate, and the efficacy of the approaches that emerge, is of importance to us all. It is hoped that this report provides a useful orientation for those who wish to support the empowerment of the poor and are interested in the potential contribution that can be made through the engagement of global business.

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2. Market-based Solutions to Poverty: Key Actors.

    The range of actors involved in the Sustainable Enterprise, Bottom of the Pyramid approach is illustrated below to provide an orientation of the discussion which follows. In the figure the various actors are distinguished according to where they rest on a continuum of „thinking‟ (incorporating research, education and advocacy), to „doing‟ (those actors closer to the communities at the BoP) and whether they are International/Extra-local or Local/National/Community-based actors.

    As the central focus of Sustainable Global Enterprise, global companies are positioned at the middle of this system. However, they can be seen to function in each of the four quadrants; through their very nature global corporations are both national and international actors in their business operations. Equally, through their direct efforts to shape policy that affects their operations in advocating a particular stance at national and international levels, such as through the World Business Council for Sustainable Development and through membership of initiatives such as the United Nations Global Compact, Global Companies influence thinking around sustainability and business.

    The same applies to other actors featured. Non-governmental Organizations (NGOs) are far from a uniform breed, and International Development NGOs, such as CARE, also think and act across all four quadrants, as do governments. Equally, Corporate Foundations commission and/or produce research about market-facilitated development, but they may also fund particular development projects through their philanthropic departments, and social entrepreneur advocates and supporters can be classed as both „thinking‟ and „doing‟.

    The relationships between these various actors, including those of funding, education, research initiatives, advocacy, consultancy and other support are illustrated in the model and will be described in detail throughout the rest of the paper;

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    Corporate Foundations International e.g. The Shell Foundation

    Multilateral Institutions

    e.g. UNDP, The Global Business Associations Compact . E.g. The World Business Council

    Business Schools/ for Sustainable Development Research Centres

    e.g. Cornell‟s Centre for Social Entrepreneur Sustainable Global Advocates/Networks e.g. Enterprise Consultancies Ashoka, Schwabb Research/Advocacy NGOs e.g. Future 500 Foundation e.g. The World Resources

    Institute

    ‘Thinking’:

    Global Research/Advocacy ‘Doing’ /Education Companies

    Social RELATIONSHIP KEY

    Entrepreneurs Collaboration on

    BoP engagement

    Funding

     Education

    Governments Development Research initiatives

    NGOs* Advocacy

     Consulting

    Support/capacity

    building

    Local Communities

    /Entrepreneurs.

    THE BOP 2.1 The Landscape of Sustainable Enterprise at the BoP Local

    *Development NGOs can be found in all four quadrants, in multiple funding

    /researching/advocating and partnering relationships with all other groups i.e. 9 Oxfam. 9

    Figure 2 The Landscape of Sustainable Enterprise at the Bottom of the Pyramid.

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