After the 1980s, even the international development agencies themselves started questioning their development programs and the intervention strategies they have put in place. Thirty years after World War II's economic reconstruction of Europe, the world was still plague by the same social inequities and global woes of unemployment, disparities in gender equality, racial discrimination, etc. Governments of Third World countries were questioning the development agenda and the intentions of development agencies like World Bank and the United Nations. The questions were shifting from what intervention strategies can development agencies manage to making intervention strategies sustainable.
The most universal definition of sustainable development comes from the Organisation for Economic Co-operation and Development or OECD that simply seeks to respond to a fundamental challenge: "How can we meet the needs of today without diminishing the capacity of future generations to meet theirs?"
According to OECD, "Sustainable development implies a broad view of human welfare, a long term perspective about the consequences of today's activities, and global co-operation to reach viable solutions." This statement however was not framed by the OECD but by the United Nations through the Brundtland Report of 1987. The OECD definition was more popular because of the public relations program waged by TNCs or MNCs to sidetrack efforts to make the UN Code of Conduct on Transnational Corporation of 1976 mandatory among global corporations of UN member countries.
In a document entitled "Sustainable Development Strategy: 2004-2006" prepared by the Canadian International Development Agency (CIDA) it states that more than 30 years of development cooperation have taught and has established a consensus in the international community about certain principles in effective development.
The following are principles of effective and sustainable development:
· local ownership and local priorities;
· improved donor coordination;
· stronger participation with well-defined responsibilities;
· greater policy coherence between aid and non-aid policies; and
· taking a results-based approach to programming.
The same CIDA document added that a number of key factors also contribute to sustainability, as follows:
· good governance, which is the most important determinant of aid effectiveness and development progress;
· building capacity to ensure progress is sustained after donor countries have left; and
· engaging civil society to help meet the needs of the people and ensure local ownership at the grassroots level.
Saturday, December 09, 2006
The Reluctant and Turbulent Birth of Corporate Social Responsibility
For more than five decades, TNCs have not only affected economies of Third World countries, it has also held sway in the direction of national policies and in more sinister ways the deployment of their police and military forces. The clandestine involvement of these TNCs in the governments and economies of Third World countries have become so acute and so damning that the United Nations eventually had to convene a special program and a body to look into if not mitigate the adverse impact of TNCs on host countries.
1960-1976 developing countries in support or with appreciation of Western labor unions and social activists were demanding a "New International Economic Order" to exert pressure on governments to tightly regulate the activity of Transnational Corporations or TNCs.
When pressures from their own countries have not moved these TNCs to take a more responsible view of their operations, a group of 77 developing countries took matters into their own hand and formed an international vehicle within the UN to address the operations of TNCs. This vehicle in the UN became known as the Group of 77 or G-77.
In 1974 the United Nations set up the Commission on Transnational Corporations with the UN Centre for Transnational Corporations (UNCTC) as its special research and administrative body. The Commission was given the task of monitoring and reporting activities of TNCs, propose frameworks for the activities of TNCs and strengthen the capacity of developing countries to deal with TNCs.
The UN Commission on Transnational Corporations drafted a UN Code of Conduct on Transnational Corporation in 1976. TNCs viewed the introduction of this code as a possible international code to limit or restrict the operations of their businesses overseas. If approved the code covers a comprehensive sets of activities and more worrisome to TNCs was the code becoming legally binding.
1998 to today mass anti-globalization demonstrations and high profile corporate scandals the likes of Enron and WorldCom are forcing governments to legislate business conduct. Corporate governance is a concept that is becoming an interest to global corporations and governments alike.
The TNCs now becoming known also as Multinational Corporations or MNCs have to accept certain concessions to lessen the pressure from the G-77. They opted for a voluntary code of conduct but based their compliance on the OECD Guidelines on Multinational Corporations.
The intense scrutiny, hostility, litigations, dwindling confidence in large corporations have forced TNCs to take proactive action to lessen the impact of these developments not only in the host countries they operate but even on the homefront.
There was a growing fear that the attack on TNCs or MNCs in the international forum may become inadvertently an attack on the free market or free enterprise ecosystem. The creativity and aggressiveness of activists and special interest groups powered by a professional media machinery and a concerned population of consumers, will eventually have an impact on the bottomline. Evidence was also mounting that there is correlation between market share and perception of misconduct by companies. Consumers were clearly avoiding products manufactured and distributed by companies known for their misconduct at home and abroad.
The more influential groups among the TNCs or MNCs were starting to play around a concept of a focus and concerted public relations campaign to make the defensive posturing into an aggressive pursuance of opportunity. Public and discrete debates in many boardrooms were taking place about "self-regulation" or "mandatory government" regulations. Somehow a consensus was building that working with UN is not a viable option for TNCs or MNCs.
1960-1976 developing countries in support or with appreciation of Western labor unions and social activists were demanding a "New International Economic Order" to exert pressure on governments to tightly regulate the activity of Transnational Corporations or TNCs.
When pressures from their own countries have not moved these TNCs to take a more responsible view of their operations, a group of 77 developing countries took matters into their own hand and formed an international vehicle within the UN to address the operations of TNCs. This vehicle in the UN became known as the Group of 77 or G-77.
In 1974 the United Nations set up the Commission on Transnational Corporations with the UN Centre for Transnational Corporations (UNCTC) as its special research and administrative body. The Commission was given the task of monitoring and reporting activities of TNCs, propose frameworks for the activities of TNCs and strengthen the capacity of developing countries to deal with TNCs.
The UN Commission on Transnational Corporations drafted a UN Code of Conduct on Transnational Corporation in 1976. TNCs viewed the introduction of this code as a possible international code to limit or restrict the operations of their businesses overseas. If approved the code covers a comprehensive sets of activities and more worrisome to TNCs was the code becoming legally binding.
1998 to today mass anti-globalization demonstrations and high profile corporate scandals the likes of Enron and WorldCom are forcing governments to legislate business conduct. Corporate governance is a concept that is becoming an interest to global corporations and governments alike.
The TNCs now becoming known also as Multinational Corporations or MNCs have to accept certain concessions to lessen the pressure from the G-77. They opted for a voluntary code of conduct but based their compliance on the OECD Guidelines on Multinational Corporations.
The intense scrutiny, hostility, litigations, dwindling confidence in large corporations have forced TNCs to take proactive action to lessen the impact of these developments not only in the host countries they operate but even on the homefront.
There was a growing fear that the attack on TNCs or MNCs in the international forum may become inadvertently an attack on the free market or free enterprise ecosystem. The creativity and aggressiveness of activists and special interest groups powered by a professional media machinery and a concerned population of consumers, will eventually have an impact on the bottomline. Evidence was also mounting that there is correlation between market share and perception of misconduct by companies. Consumers were clearly avoiding products manufactured and distributed by companies known for their misconduct at home and abroad.
The more influential groups among the TNCs or MNCs were starting to play around a concept of a focus and concerted public relations campaign to make the defensive posturing into an aggressive pursuance of opportunity. Public and discrete debates in many boardrooms were taking place about "self-regulation" or "mandatory government" regulations. Somehow a consensus was building that working with UN is not a viable option for TNCs or MNCs.
Friday, December 08, 2006
The Dawn of Modern Philanthropy
Philanthropy comes from the Latin word philanthropia which means "love of man". History will reveal many manifestations of philanthropic impulse in many ancient societies in Rome and Greece. Several thousand years ago social responsibility was a vocation that the church took upon itself. Great religions like Islam, Hinduism, Christianity, Judaism, and Buddhism have nurtured a culture of extending aid to those living life of deprivation. Many religious orders eventually became more organized in the way they extend these aids in the form of giving food, shelter, clothing, education, and in many occasions organizing communities. When monarchies started to disappear and the church wielded less and less influence over royal families, wealth was no longer the sole dispensation of a few families. The French and the Bolshevik revolutions have introduced new political order and the world had to contend with a new form of power: the power of the mob or the power of elections.
Governments have started to put in place social support structures like welfare services, public education, health services, and others where centuries before came exclusively from the church.
After World War II and during the height of the expansion of economies of the Allied countries between the 1950s to the very late 60s, tremendous wealth were created and with these a growing affluence swept the upper and middle classes of industrialized societies. This excessive wealth created enough surplus for the wealthiest of families to set aside funds for philanthropic purposes. Our world have received more than $300 million from Andrew Carnegie, the American industrialist. You can add a few more hundred millions from Henry Ford, John D. Rockefeller, Bill Gates, and a lot more.
Philanthropy was not a monopoly of wealthy families, fraternal organizations also started initiating fund-raising for the same purpose. Greek letter fraternities from Ivy League universities played quite a part in philanthropic work for many years.
Since the early 90s deliberate efforts have been initiated to put focus and integrate programs of the different philanthropic organizations. Initially the efforts were towards creating a network to communicate and share sentiments about philanthropic work. Later on these efforts moved towards concerns about organizational development, integrating programs with other programs for synergy, sharing best practices, instituting standards of measuring outcomes, and in more concrete terms the creation of guidelines for implementing programs and projects.
It was also in the era between the last World War and the early 90s that the impact of the operations of Transnational Corporations or TNCs was put in the limelight. Bulging surpluses of cheap goods from highly industrialized countries have not been absorbed by their existing population so that consumers from other markets outside their home countries were explored. In nations still crawling to find their place among their neighbors and still reeling from the impact of a world war and from their own civil wars, the prospect of jobs and cheaper source of goods became irresistible.
The changing climate of business and the pressing problems of energy, environment, geo-political crisis, increasing impact of labor unions, and the increasing number of nations seeking independence and national identity have put both philanthropic work and corporate response to these problems on a crossroad.
Governments have started to put in place social support structures like welfare services, public education, health services, and others where centuries before came exclusively from the church.
After World War II and during the height of the expansion of economies of the Allied countries between the 1950s to the very late 60s, tremendous wealth were created and with these a growing affluence swept the upper and middle classes of industrialized societies. This excessive wealth created enough surplus for the wealthiest of families to set aside funds for philanthropic purposes. Our world have received more than $300 million from Andrew Carnegie, the American industrialist. You can add a few more hundred millions from Henry Ford, John D. Rockefeller, Bill Gates, and a lot more.
Philanthropy was not a monopoly of wealthy families, fraternal organizations also started initiating fund-raising for the same purpose. Greek letter fraternities from Ivy League universities played quite a part in philanthropic work for many years.
Since the early 90s deliberate efforts have been initiated to put focus and integrate programs of the different philanthropic organizations. Initially the efforts were towards creating a network to communicate and share sentiments about philanthropic work. Later on these efforts moved towards concerns about organizational development, integrating programs with other programs for synergy, sharing best practices, instituting standards of measuring outcomes, and in more concrete terms the creation of guidelines for implementing programs and projects.
It was also in the era between the last World War and the early 90s that the impact of the operations of Transnational Corporations or TNCs was put in the limelight. Bulging surpluses of cheap goods from highly industrialized countries have not been absorbed by their existing population so that consumers from other markets outside their home countries were explored. In nations still crawling to find their place among their neighbors and still reeling from the impact of a world war and from their own civil wars, the prospect of jobs and cheaper source of goods became irresistible.
The changing climate of business and the pressing problems of energy, environment, geo-political crisis, increasing impact of labor unions, and the increasing number of nations seeking independence and national identity have put both philanthropic work and corporate response to these problems on a crossroad.
Thursday, December 07, 2006
The Age of Charity and Chivalry
Four decades ago, the concept of social entrepreneurship was a subject better discuss in the classroom and among our selves. Anything that helps development or humanity was lump in a singular concept called philanthropy or charity. Several thousands years ago, it was the Church or other religious entities who were expected to have some form of social engagement with communities. Just like anything, the concept of philanthropy, corporate social responsibility and social entrepreneurship went through its respective evolutions.
There are three Theological Virtues listed in the Bible: Faith, Hope and Love (or in Biblical context "charity"). Charity in the Biblical context is the perfection of the human spirit because acts of charity glorify and reflect the nature of God. Acts of charity are really driven more by personal action and the need for one person to come to the aid of another. Religious orders and like organizations around the 1400s have begun efforts to help the poor and in those times in Europe meant widows and orphans, the sick and the handicapped. Judaeo-Christian values have influenced warrior societies or fraternal organizations to take on responsibilities of protecting the Church, the Monarch and the communities who were constantly vulnerable to attacks from marauders and "pagan" tribes. The age of chivalry allowed Christian pilgrims to come to the aid of neighboring communities to either provide food or help rebuild communities damaged by war.
The concept of chivalry in the medieval ages must also be put in perspective. There's so much romanticized versions of chivalry in movies and books about knights and princes protecting "damsels" in distress, or fighting for their land or even their king. What most of these literature don't reveal is that it only works if the damsel in distress or the king is a Christian and the land is owned by one. In almost all likelihood the land is probably owned by the knight himself or by his principal, his king or his prince. In medieval ages, if one is not a Christian, you are really just another pagan to be tortured, burned, crucified, enslave or disemboweled.
Almsgiving, the act of giving money, material or personal time is the most common and visible form of charity. In the medieval times and quite surprisingly even today, this can also come in the form of taking care of the sick, visiting prisoners, checking on old people in their homes or paying ransom for prisoners. Charity was a risky business even in the Medieval ages. Institutions eventually evolved from these efforts of assisting the poor and these institutions were naturally and collectively called charities. In hindsight, you can observe that charities have responded directly on the adverse effects or pains of economic failures, war, political repression, ethnic cleansing, plagues, and a host of other social problems mainly consequences of human adventure (or misadventures to some.)
There are three Theological Virtues listed in the Bible: Faith, Hope and Love (or in Biblical context "charity"). Charity in the Biblical context is the perfection of the human spirit because acts of charity glorify and reflect the nature of God. Acts of charity are really driven more by personal action and the need for one person to come to the aid of another. Religious orders and like organizations around the 1400s have begun efforts to help the poor and in those times in Europe meant widows and orphans, the sick and the handicapped. Judaeo-Christian values have influenced warrior societies or fraternal organizations to take on responsibilities of protecting the Church, the Monarch and the communities who were constantly vulnerable to attacks from marauders and "pagan" tribes. The age of chivalry allowed Christian pilgrims to come to the aid of neighboring communities to either provide food or help rebuild communities damaged by war.
The concept of chivalry in the medieval ages must also be put in perspective. There's so much romanticized versions of chivalry in movies and books about knights and princes protecting "damsels" in distress, or fighting for their land or even their king. What most of these literature don't reveal is that it only works if the damsel in distress or the king is a Christian and the land is owned by one. In almost all likelihood the land is probably owned by the knight himself or by his principal, his king or his prince. In medieval ages, if one is not a Christian, you are really just another pagan to be tortured, burned, crucified, enslave or disemboweled.
Almsgiving, the act of giving money, material or personal time is the most common and visible form of charity. In the medieval times and quite surprisingly even today, this can also come in the form of taking care of the sick, visiting prisoners, checking on old people in their homes or paying ransom for prisoners. Charity was a risky business even in the Medieval ages. Institutions eventually evolved from these efforts of assisting the poor and these institutions were naturally and collectively called charities. In hindsight, you can observe that charities have responded directly on the adverse effects or pains of economic failures, war, political repression, ethnic cleansing, plagues, and a host of other social problems mainly consequences of human adventure (or misadventures to some.)
Sunday, March 19, 2006
The Social Entrepreneurship Society
What is an Entrepreneur?
You will get a formal introduction about this person we call the entrepreneur in your basic management class and your introduction to economics. Both subjects consider the role of the entrepreneur as essential in driving business and the economy.
Entrepreneurs are individuals who are always seeking out and taking on the challenge of responding to change. They are risk takers but not the wanton kind but the kind that take "calculated risks".
The concept of social entrepreneurship three decades back would have been place in the same category as communism, socialism, and a long list of "ism" in your political and sociological books. It was a good topic for discussion but not really the kind you would discuss with executives coming from the mining and petrochemical industries in a golf course especially with someone holding the "iron".
Today, social entrepreneurship is seeping (some would use the word "creeping") in to business courses, seminars and even management systems compliant with ISO. For the more socially conscious organizations, social entrepreneurship practically defines what or who they are.
What is a Social Entrepreneur?
In one statement: "Social entrepreneurs are entrepreneurs with a social mission."
Don't think for a second that social entrepreneurs don't have the creation of wealth in mind when they manage their "enterprises" or programs. They do create wealth. The difference is how they see the concept of creating wealth.
Social Entrepreneurs take mission-related impact as their priority not the creation of wealth. If generating wealth accomplishes the mission, social entrepreneurs naturally create wealth to achieve the mission.
Business can teach us a lot about entrepreneurship. In business, you have to be market-oriented. You have to be disciplined, innovative and determined to serve your customer. You have to be customer-driven. You design products, improve internal processes, train people, and use technology to be able to serve your customers cost-effectively. Business is results-oriented. Your eyes should be focus on outcomes and not inputs or even process. You should be enterprising by being able to generate revenues and not merely spending them. You must also be leveraging change rather than controlling it meaning you should be market-oriented.
So how is a Social Entrepreneur different from Business Entrepreneurs?
If you are going to be a Social Entrepreneur, you must be able to play the role of change agent, by being able to:
You will get a formal introduction about this person we call the entrepreneur in your basic management class and your introduction to economics. Both subjects consider the role of the entrepreneur as essential in driving business and the economy.
Entrepreneurs are individuals who are always seeking out and taking on the challenge of responding to change. They are risk takers but not the wanton kind but the kind that take "calculated risks".
The concept of social entrepreneurship three decades back would have been place in the same category as communism, socialism, and a long list of "ism" in your political and sociological books. It was a good topic for discussion but not really the kind you would discuss with executives coming from the mining and petrochemical industries in a golf course especially with someone holding the "iron".
Today, social entrepreneurship is seeping (some would use the word "creeping") in to business courses, seminars and even management systems compliant with ISO. For the more socially conscious organizations, social entrepreneurship practically defines what or who they are.
What is a Social Entrepreneur?
In one statement: "Social entrepreneurs are entrepreneurs with a social mission."
Don't think for a second that social entrepreneurs don't have the creation of wealth in mind when they manage their "enterprises" or programs. They do create wealth. The difference is how they see the concept of creating wealth.
Social Entrepreneurs take mission-related impact as their priority not the creation of wealth. If generating wealth accomplishes the mission, social entrepreneurs naturally create wealth to achieve the mission.
Business can teach us a lot about entrepreneurship. In business, you have to be market-oriented. You have to be disciplined, innovative and determined to serve your customer. You have to be customer-driven. You design products, improve internal processes, train people, and use technology to be able to serve your customers cost-effectively. Business is results-oriented. Your eyes should be focus on outcomes and not inputs or even process. You should be enterprising by being able to generate revenues and not merely spending them. You must also be leveraging change rather than controlling it meaning you should be market-oriented.
So how is a Social Entrepreneur different from Business Entrepreneurs?
If you are going to be a Social Entrepreneur, you must be able to play the role of change agent, by being able to:
- Adopt a mission to create and sustain social value.· Recognize and pursue new opportunities to serve that mission.
- Engage in a process of continuous innovation, adaptation, and learning.
- Act boldly without being limited by resources currently in hand.
- Exhibit a heightened sense of accountability to the constituency you serve and for the outcomes you have created.
If you appreciate the reality that not all business people are entrepreneurs, then you can easily accept the fact that not all people with a mission can be social entrepreneurs.
What will you need to be an effective Social Entrepreneur?
Let me give you a slightly long list of traits I have witnessed so far: self-confidence, integrity, perseverance, commitment, diligence, energy, hard work, foresight, perceptiveness, dynamism, charisma, optimism, initiative, positive response to change, and leadership.
The above traits can be acquired and nurtured.
If you are student of business, you have already read by now lessons explicitly telling you that good businessmen are not born, well, at least we don't clone them yet like cows, sheep and mice.
There are also traits that seem innate to an individual. Possessing these traits or qualities could be a plus but unfortunately this list is quite short. Here's the list:
- The ability to see a better future or a better picture of the world and a capacity to inspire others to see this future or picture.
- Creativity and a natural innovativeness.
- High energy, emotional stability and robust health.
- High intelligence and ability to grasp concepts.
This blog site is dedicated to those who are born to be a social entrepreneur and to those who have deliberately and consciously made a decision to be one.
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