Question: If the United Nations was fully funded why would we need the Arc or social enterprise”?

Even if the United Nations (UN) was a fully funded organization, social enterprises like the Arc initiative would still be a vital part of the business landscape. The reason being is that the UN’s focus is predominately on encouraging international diplomacy and therefore requires any initiative to clear a mass of bureaucratic red tape before any boots can touch the ground and any real work can truly be done. However, initiatives and social ventures such as the Arc initiative are not bound by the same international regulations and can quickly get on the ground and start doing their work without the major bureaucratic hassle.

Social enterprises are also far more effective at organizing resources then the UN. Seeing as the UN relies heavily on the donations of financial capital and equipment from its member countries it can be very difficult for the UN to quickly mobilize and carry out an initiative. Social enterprises however have to be, for the most part, completely independent in terms of the money they spend and the equipment they use, therefore they can organize the various factors of their service quickly and effectively. Looking at the scale of most social ventures in comparison to the initiatives undertaken by the UN you can see that the UN focuses on national issues which require more moving parts and therefore take more time, energy, and money to organize then the smaller, local initiatives taken on by social enterprises.

It is because of these three key reasons that social enterprises, regardless of if the UN was fully funded or not, remain an important part of the social business landscape and are very effective at filling in the gaps overlooked by the United Nations.

Social Venture Partners logo.

Businesses are becoming more socially aware and responsible across all industry sectors, most notably in Finance where a whole new type of venture capitalism that focuses on investing that is not based off of returns, but off of impact has taken root. Take Social Venture Partners (SVP)[1], a social enterprise that combines the best of both philanthropy and venture capitalism to create a unique “virtuous capital” approach that provides the necessary start-up or maintenance investment to local, community based charity organizations that perpetuate SVP’s social vision. So far the SVP idea has been taken across the globe with localized SVP branches in 38 cities from Boston to Bangalore and with more and more investment and capital management firm shifting their focus from high return to high reward.

Corporate social responsibility (CSR) has for sometime been a very important point of difference in the consumer goods industry, however this difference has never truly been explored in the buy low sell high world of finance. But, with the emergence of groups such as SVP and financial institutions that focus on CSR it is finally time for CSR and the capital rich industry of finance to be combined and create real change in communities across the globe.

[1] http://www.socialventurepartners.org/

[2] https://www.youtube.com/watch?v=Ai8rUSsDeog

This is a response to Talise Tsai’s blog post, “The Face of Loblaw’s”

https://blogs.ubc.ca/talise/2014/10/04/loblaws-regional-positioning-strategy/

The main portfolio companies owned by parent company Berkshire Hathaway.

Loblaw’s, as with many large scale retailers and holdings companies such as Cerberus Capital Management and Berkshire Hathaway Inc. implement the use of varying brand names for its stores and subsidiaries in order to ‘break up’ the companies image allowing different stores owned by the same umbrella corporation to specialize within the market. This idea of varying company names makes sense from both a business and marketing perspective. Imagine if all of the companies owned by Berkshire Hathaway all shared the same name. Not only would this be a very overwhelming experience for consumers who would purchase everything from their Heinz ketchup to their GIECO insurance from one company. This would also be a very difficult situation from a marketing perspective because marketing one big conglomerate effectively would be next to impossible. Therefore by breaking up the company’s image you can effectively market each individual product in its own respective market, stressing the products unique points of difference and market value.

From a financial point of view a parent company is an effective way to maintain a companies status as a secure investment because of its diversified subsidiaries. Meaning that because a large holdings company such as Berkshire Hathaway is very well diversified and owns companies that compete in a variety of industries so if one industry or market crashes it won’t bankrupt the parent company.

Understandably with the business landscape becoming more and more competitive companies are turning to unique –and in some ways morally questionable- methods to gain that competitive advantage over the rest of and industry. Take the North American retail giant Target as an example. In the early 2000’s Target unveiled a comprehensive “Guest ID” program that comprised all of a shoppers relevant user data under a single Guest ID, this information included the competition Target faced in the customers geographical area, the type of items they purchased, how they purchased them, etc. Target then used this data to predict what the consumer would purchase in the future and then send user specific coupons and flyers based off of that analysis.

Soon this Guest ID program was so effective that Target wanted to know even more about what consumers where going to purchase before they wanted to purchase it. Specifically they targeted expecting mothers, a group that statistically spent the most per visit at target. In order to achieve this Target created a ‘pregnancy index’ that analyzed consumer-buying habits in order to determine if an individual consumer was an expecting. Eventually, Target’s analysis got so specific that Target, to the surprise of a very concerned father, had predicted a woman’s pregnancy before she even knew she was pregnant [1].

It is this unruly obsession with data that raises some questions about the morality of major companies tracking customer data. To some extent these programs are an unfair infringement on consumers who just want to complete a shopping list and do not want to be apart of some corporate analysis that looks to exploit their wants in order to boost sales and consumer retention. However, these monitoring programs to provide some marginal benefits to the consumers that they monitor, In the case of Target, the Guest ID program provided consumers with coupons they would actually use decreasing consumer search time for a good at a lower price. As with most business ethics issues there it is not a matter of right or wrong but a matter of degree and we as consumers have to, on a case-by-case basis, evaluate how much we want participate in these consumer analysis programs.

[1] http://www.forbes.com/sites/kashmirhill/2012/02/16/how-target-figured-out-a-teen-girl-was-pregnant-before-her-father-did/ 

Usually technology startups focus on building a cheap, and in some ways “people-less” organizational structure in order to cut salary costs and to scale growth far quicker and with fewer employees. That however, is not the case for Florida based startup OpenEnglish, which is a peer-to-peer learning platform that teaches English to Spanish speaking individuals. The unique problem faced by OpenEnglish is as mentioned above, because they required more and more teachers in order to scale up the company, thus increasing the company’s employee costs and bringing down the companies overall profit.

In order to maintain the companies profits OpenEnglish has turned to a unique venture capital and advertising approach that allows them to generate substantial consumer buzz through unique marketing purchased through the use of there venture capital funds. This approach is a major disruption in the tech start-up industry and the success of OpenEnglish is a testament to the effectiveness of a people oriented organizational structure in the technology world. The true disruptiveness of OpenEnglish’s business model has many technology companies that look to provide a similar service to consumers reevaluating their automated and people-less services and attempting to adopt the OpenEnglish business structure.

The very nature of the technology industry is disruptive to the rest of the market, however the scale of disruption has usually been focused on some new advancement in social networking or computer services. Therefore it is very unique that OpenEnglish’s point of disruption is in its organizational structure and not necessarily in the service it offers.

This is a response to Heidi Upham’s blog post, “Ben and Jerry’s – More Than Just Ice Cream”

A worker at Foxconn.

Ben and Jerry’s, and the Unilever criticism highlights the importance of corporate responsibility and the value that consumers put on a concise and ubiquitous brand image, even when it comes to that companies suppliers, subsidiaries or parent companies.

In recent years it has become of greater importance to the consumer that from idea to production a consumer good, weather it be ice cream or an iPhone, has to be ethically and morally unimpeachable. Take the Foxconn scandal that blindsided Apple when dozens of Foxconn employees committed suicide. Surprisingly, instead of directing the majority of criticism at Foxconn for its poor working standards consumers and the media targeted Apple stating that the company should be insuring that its manufacturers are using proper working conditions[1]. This may have come as a shock to Apple seeing as they were relatively powerless when it came to drastically changing another companies internal operations however, when faced with the criticism Apple was quick to save face and initiated a campaign to enforce worker safety in Foxconn factories.

This idea of a through and through corporate social responsibility from idea to production should be of the upmost importance to consumers. By holding not only major companies such as Foxconn accountable, but also holding those who employ Foxconns services, such as Apple, accountable the business landscape will shift and more individuals will benefit from increased worker safety and socially responsible products.

[1] http://www.forbes.com/sites/susanadams/2012/09/12/apples-new-foxconn-embarrassment/