My classmate, Philip Monagan, wrote a blog post about how Bain Capital has invested in and acquired 50% of Toms Shoes. Philip explores how this move can be viewed in two ways: Bain Capital is either trying to become more socially responsible, or it’s using Toms Shoes to give it the appearance of being socially responsible.
In my opinion, it doesn’t have to be either-or. Toms Shoes’ one-for-one value proposition is an example of shared value. Through giving shoes to impoverished children, Toms Shoes is helping society battle poverty. Meanwhile, their proposition also allows them to charge a premium price which maximizes profits.
Toms Shoes. Source: Eco Bravo
I believe companies that are creating shared value are the future of business. Giving back should not be a side project any longer, but an integral part of the business model. Bain Capital is driving this notion forward through its decision to aid Toms Shoes in global expansion. So, while Bain Capital’s image may be boosted by this partnership, I think the main point to focus on is that Bain Capital has demonstrated how investment firms can play a role in the creation of shared value.
If investment firms support businesses that create economic value through implementing social values, everyone will benefit. Those businesses will grow quicker, investment firms will profit, and society will reap the benefits of a business world that doesn’t operate at the community’s expense.
The takeaway: By investing in Toms Shoes, Bain Capital is investing in the creation of shared value.
References:
Philip’s Original Blog Post: https://blogs.ubc.ca/philipmonagan/2014/09/09/blog1/
Source: http://www.waterhealth.com/sites/default/files/
Harvard_Buiness_Review_Shared_Value.pdf
Image Source: http://www.eco-bravo.ca/wp-content/uploads/2013/05/toms-shoes-600-1.jpg
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