November 2014

Social Enterprise & The United Nations

The United Nations is an omnibus framework, whose size is essential to its mission of international cooperation, but inhibitive to smaller scale humanitarian activities. It is for this reason that I believe that Social Enterprise, ARC, and similar initiatives are important, even if the UN was fully funded.

UNICEF, and the UN’s humanitarian programs focus on alleviating poverty by increasing access to basic needs, essential medicine, and improving infrastructure.The issue–not all that dissimilar to disruptive innovators versus entrenched entities–is that an established bureaucracy limits experimentation, and cannot act efficiently on a smaller scale.

Image from Comunitá San Patrignano

Image from Comunitá San Patrignano

Thus, Social Enterprise can focus its efforts on campaigns and activities that improve quality of life for a specific demographic or population. These actions should involve ongoing contact with the people being helped, giving them the opportunity to create their own success. For instance, the UN is unlikely to create and market a brand that employs the impoverished in developing nations, but there are numerous examples of Social Enterprises that do this. Furthermore this type of action is a sustainable loop, where the proceeds of sales can be reinvested into employees and communities, while the humanitarian actions by the UN do not directly recoup the money invested.

I think that in this way the organizations can coexist and improve outcomes, but through clearly defined missions with distinct objectives and operations.

Politicization & Business Ethics

In an increasingly politicized world, where facts are eschewed for fear, and partisanship is exacerbated, the boundaries of business ethics are being redefined. In class we have primarily discussed these topics on a corporate level, where the practices of the firm are being evaluated.

As an extension to this, I see a trend of the social and political beliefs of a firm’s principals and leadership becoming public, which can have bearing on firm performance. Examples include the publicly organized embargo on Chick Fil-A because of its founder’s homophobia, and a former Mozilla CEO’s political donations resulting in him being fired after only eleven days on the job.

Chick Fil-A Founder Truett Cathy – Image from GCM Watch

The question then, is how to evaluate competency versus the costs of controversy in the course of personnel decision making. I believe that an application of Milton Friedman’s belief in maximizing shareholder value is the best way to address this issue. The level of public outcry and the likelihood of persistent media coverage must be weighed against the individual in question’s unique ability to excel in their position. In cases where the former is stronger than the latter, the individual should be fired, because their harm to the firm’s value is greater than their positive impact.

Colleague Comment: Dove’s Authenticity

Image from Huffington Post

Stav’s blog post outlines an important contradiction that can occur between brands within the same conglomerate.

I believe that branding is especially important in this category, because creating meaningful points of difference can be difficult. Instead positioning within a consumer’s mind must come from packaging, price, product variety, and advertising.

On her point about consumer backlash stemming from a lack of authenticity, I disagree. While coexistence between contradictory messages may seem impractical, I doubt that this is a circumstance where many consumers will make the correlation. The reason for this is that Unilever minimizes its branding on its products, meaning that consumers may not understand that Dove and Axe are part of the same entity.

Image from Brand Media Week

In contrast, I feel that Unilever’s strategy is prudent and necessary. To reach a broad spectrum of consumer segments, it must appeal to the sensibilities of those demographics, and the optimal way to do so is to market products under different names with different messages. Were the firm focus on a single message, it would have to concede some demographics to competitors, which would have more tangible harm on income than the issue of contradiction.

In summation, her core premise that conglomerates can have incoherent positioning between similar products is true; however, in this instance the sacrifice in authenticity is necessary to allow the firm to sell to more demographics.

Colleague Comment: Apple Pay Vs. Current C

My colleague Keegan discussed the recent launch of Apple Pay, specifically its barring from certain retailers. He cited Apple’s early mover advantage and convenience as reasons to declare it the winner against yet to be released competitor Current C.

I disagree with his assessment as well as his prediction. His premise that early mover advantage will be a deciding factor is directly contradicted by Google Wallet’s failure–which has been available for over three years without much adoption. His point on convenience’s core relevance is stronger; however, an essential element of that convenience is being universally available at popular retailers. Only at that point can Apple Pay truly realize its value proposition of “leaving your wallet behind”.

Photo from Cult of Mac

I think that Current C’s viability is less dependent on Apple Pay than it is on the ability of its partner retailers to market the product to their enormous customer base. The reasoning being that Apple is pursuing a differentiation strategy with its seamless convenience, while Current C is focused on a specific subset of consumers. Current C is trying to modernize reward redemption for retailer specific loyalty programs. Ultimately, I believe that the differences in customer segments, and value propositions are sufficient to allow the technologies to coexist.